GE Fine Tunes its Southeast Asia Straetgy as Growth Beckons

General Electric (NYSE:GE) is taking concrete steps to monetize the opportunity emerging in the countries of Southeast Asia. GE has decided to adopt a strategy of looking at ASEAN (Association of Southeast Asian Regions) region as a whole instead of its countries separately. This move is intended as a measure to insulate itself from the volatility of the individual markets. It has unveiled a new business plan which will make Thailand the service center for region’s energy, healthcare, aviation and other businesses. The company’s sales had increased by 40% in Thailand in the past year, and the company is expecting double digit growth in sales this year as well. Since most of GE’s customers are in Thailand, it makes sense for GE also as it will be close to most of its customers. GE competes with other industrial conglomerates like United Technologies Corporation (NYSE:UTX), 3M (NYSE:MMM) and Johnson and Johnson (NYSE:JNJ).

Among GE’s notable client acquisitions this year was GE Energy group’s sale of 50 megawatt wind mills to small power producers who are producing electricity power for 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.

ASEAN is one of the fastest growing regions of the world. It is attempting to build a region of free trade, which shall encompass over 500M people and have an economy of $1.8T, bigger than India’s currently. It is expected that by 2015, such an arrangement be an economic reality.

The company’s sales from this region have risen by 30% in 2010. GE declared in April last year that it will aim to better serve these markets by investing close to $1B in this region in the next three years. This is on top of the $1B it has invested in the region in the last three years. The company had also declared that it will be investing one billion U.S dollars in 2015 for research and development in Southeast Asia to reduce energy use by 50 percent, and water use by 25 percent.

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