GE Healthcare Looks to Low-Cost Solutions for Emerging Markets

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General Electric

GE Healthcare, the health care arm of industrial major GE (NYSE:GE), is looking at emerging markets to drive future growth. The company is developing innovative technologies with the intention of capitalizing on the growth of healthcare needs in emerging economies. This will also act as a hedge against the expected flat sales from the U.S., Europe and other developed markets. GE competes with companies like Medtronic (NYSE:MDT), Abbott Labs (NYSE:ABT) and Johnson & Johnson (NYSE:JNJ) in the medical devices market.

The company aims to grow its sales by 10% in Latin America and Eastern Europe, 13% in China and 15% in India in the coming year. For the developed markets, it anticipates a flat to slightly positive sales growth as the ongoing sovereign debt crisis continues to put brakes on consumer spending. GE Healthcare is one of the more valuable divisions of GE, accounting for nearly 15% of the stock’s value.

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GE’s Investments in India and in Low Dosage Radiation Technologies

As an example of its commitment to emerging markets, the company invested $50 million in India last year to develop a variety of low cost products for India and other emerging markets. The company has utilized this investment well and is believed to have a pipeline of 30 products in various categories such as PET-CT, MRI scanners and ventilation, which will be launched in India over the next three years. The company has already released 14 products for the Indian market, many of which are focused on technologies managing the radiation exposure during CT scan and X rays.

As part of this effort in November 2011, the company invested $300 million to develop low dose radiation technologies for CT scans, X-ray system as well as education for healthcare professionals globally. Low doses help in cutting costs and making healthcare more affordable in the emerging markets. With this investment, the company has now spent over $800 million on these technologies in the past 15 years.

The company’s previous investments were utilized to launch innovative technologies such as DoseWatch, a novel multi-modality dose monitoring solution; Veo, a pioneering image reconstruction technology that has enabled CT imaging under 1 millisievert with profound clarity; and dose-alert upgrades that go further across the installed base.

The company expects these new devices and technologies to start yielding annual sales revenue of over $1.5 billion this year onward. The new devices are more comfortable with patients and require less time, thus increasing the volume for healthcare providers and driving down costs without impacting quality.

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