GE plans to invest more in manufacturing

By agencies   |   Friday, 27 May 2005, 19:30 IST
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NEW DELHI:General Electric is charting its third coming in India. The $150 billion giant is looking at investments straddling both manufacturing and service sectors, which include acquisitions in the banking and industrial segments in the country. GE’s president & CEO, Jeffrey Immelt, who is in India on a two-day visit, announced that after limited success in the first phase of GE’s investments in India as a “market”, followed by the successful second phase where it invested in the BPO side of the business, the U.S. based conglomerate is looking at India as a market again. Immelt said, “It’s probably the most optimistic time in India.” The global chief said that GE has gone through two phases in India in the past. “In the first phase in the early ’90s, we came here to sell our products, but we met with limited success. In the second phase, we invested in the people with phenomenal success in Gecis. We are just short of being a $1 billion company in India and now is the right time to go back to the market in India with investments including manufacturing,” he said. “We are looking at acquisitions in the banking, as well as industrial sectors,” he added. Talking about his view on India, Immelt said there are encouraging signs. “Last year when I visited the country, there was a new government and there was trepidation about stability. But the growth has been sustained and it’s looking very progressive with a stable environment.” “With a continuing growth of middle-income class, there are more consumers and more demand, which makes it a very exciting market to be in. In the third phase, we are going back to the market with more investments in manufacturing,” he said. He added that GE is looking at more localization of technology and manufacturing capability as it tries to pursue the market. “Anytime we have invested in the people of India, we have benefited, and anytime we have invested in the market in India, we have lost. What is important is that we have to be as bold in the market side as we have been in the cost side,” Immelt said, referring to GE’s experience in the BPO space. However, the GE boss seemed a bit disappointed with the slow progress on the Dabhol Power project. “We need to resolve the issue with a flexible and constructive approach and move on,” he said. Comparing India and China, he said that he saw the two countries as inverse of each other. “China has been a macro-economic success with a strong central government and unbelievable effort in infrastructure, but the market at the micro level has been a challenge. India, on the other hand, has a great financial and legal system with a great pool of entrepreneurial class, but wrapped in an inequitable infrastructure.” “For GE, it’s India and China, rather than India or China. Though I must add, in 1997, GE had the same size of business in both countries. But today, in China, we have a $5 billion business against about $1 billion in India,” he said. Immelt said GE is targeting 8 percent growth globally to reach sales of $165 billion in ’05. Given that India and China are part of the growing global economy, he felt they are critical for attaining such growth. “We must have access to big markets,” he added. In his message to global leaders on how to tackle India, he said, “Flexibility and patience is the key. When we came to India, we had certain plans and nothing in India has happened the way we thought it would. There has to be a sense of adaptability and flexibility if you want to grow here.”

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