GE targets $8 bn India sales by 2010
The company is also going to focus to dramatically increase the footprint in financial services in India.india Updated: Jun 01, 2006 12:52 IST
General Electric Co, the world's second most valuable company, is targeting $8 billion in revenues and $8 billion in assets in India by 2010 as its economy expands, its chief executive said on Tuesday.
Chairman and Chief Executive Jeff Immelt, who was addressing members of the city's Chamber of Commerce & Industry, said GE also planned to invest $250 million in Indian infrastructure and healthcare projects in Asia's third-largest economy.
"The second big focus we are going to have is to dramatically increase the footprint in financial services in India," he said.
"We believe it's a particularly good time to increase our financial services capability ... We've got about $2 billion in assets today in our commercial and consumer finance business. We think we can quadruple that in the next four-five years," he said.
GE would look for a partner and take a small equity stake in the tightly controlled financial services sector, he said.
GE India had revenues of about $1.1 billion in 2005.
The Fairfield, Connecticut-based company, whose businesses range from water purification technology to jet engines to NBC Universal entertainment, had said last year it expected revenues from India to rise to $5 billion by 2010.
GE has said 60 percent of its revenue would come from outside the United States within a decade, particularly from China and India. On Monday, Immelt said he expected sales in China to double to $10 billion by 2010.
"Every year for the last 10 years, I've visited these two countries (India and China)," Immelt said.
"In 1996, GE in both India and China was roughly the same size ... The market hasn't grown in India the way it has grown in China, but we made just as much money because over that time we developed great capability. The initial market didn't work the way wanted it to, but ... we didn't cry and go home," he said.
GE owns a minority stake in Genpact Ltd, India's largest independent back-office firm, and GE Money has a joint venture with top lender State Bank of India for a credit card.
GE Commercial Finance Real Estate last year committed $63 million in a $220-million fund for developing technology parks.
GE has a joint venture in real estate which Immelt said he expected would allow it to grow substantially in that area.
GE also stands to gain from a deal to permit US civil nuclear technology sales to India for the first time in three decades, which awaits ratification from the US Congress.
GE has said it would resume fuel sales, offer technical and maintenance services, and eventually bid to build new reactors.
Immelt said he expected India's rapidly growing economy to boost demand in areas that play into GE's strengths.
"The growth of wealth in the middle class -- not just in the big cities but also in the smaller towns -- is very important," he said. "Once people have tasted an economy that grows at 8 percent a year, they get used to it."
Immelt said a part of GE's future strategy would be to adapt its research and development capability for India.
"We have 36,000 engineers in India, but we do very little R&D for India ... We're going to reorient that to develop products, everything from ultrasound to CT scanners, at lower price points for India," he said.
Building capability and long-term collaborations with big customers would be key to GE's growth in India, he said.
"Eight billion is a start in India, but it's not where we will finish," Immelt said.
"A country like India, that has so much potential, the mistake that companies make is to act grandiose, but the trick is to think big and take the practical step every day," he said.