GE refines its Southeast Asia strategy

The company has made significant investments in the region as a whole to insulate itself from the volatility of the individual markets.

By Trefis Feb 14, 2012 4:47PM
Image: Wat Doi Suthep temple, Thailand (© Paul Edmondson/Brand X/Getty Images)General Electric (GE) has a new strategy to address opportunities in Southeast Asia. 

The company is going to focus on the region as a whole instead of its countries separately -- a move designed to insulate GE from the volatility of individual markets there.

The company also unveiled a new plan to make Thailand the service center for region's energy, healthcare, aviation and other businesses. GE's sales have grown by 40% in Thailand in the past year alone, and the company is expecting double-digit growth this year as well.  Most of GE's customers in the region are in Thailand. The company competes with United Technologies Corporation (UTX), 3M (MMM), Johnson and Johnson (JNJ) and other industrial conglomerates.

Among GE's notable deals this year was GE Energy group's sale of 50-megawatt wind mills to small companies producing electrical power for the Electricity Generating Authority of Thailand. GE Healthcare group also signed agreements to sell medical equipment to large-scale hospitals.


GE Aviation has been doing particularly well in this region, bagging orders from Lion Air (Indonesian Airline), Singapore Airlines and Garuda Indonesia. GE has also secured a preliminary agreement with the Indonesian rail company, PT Kereta Api, to supply 100 trains to Java.


GE Aviation Market Share

Southeast Asia is one of the fastest-growing regions of the world. It is attempting to build a region of free trade, which shall encompass over 500 million people and have an economy of $1.8 trillion, bigger than India's currently. Experts think that could happen by 2015.


GE's sales in this region have risen by 30% in 2010. GE said last April that it would invest close to $1 billion in this region in the next three years. This is on top of the $1 billion it has invested thre in the last three years. The company had also said it would invest $1 billion in 2015 in research and development in Southeast Asia to reduce energy use by 50% and water use by 25%.


See our full analysis of the General Electric stock here


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