GE expands in Myanmar, but not at expense of Thai operations
Myanmar's rapidly expanding economy has helped General Electric to grow its sales in the country quickly from zero to an equivalent of 10 per cent of GE Thailand's sales last year, said the company's president and chief executive officer for Thailand,
The US conglomerate expects its business in Myanmar to expand further to a size equivalent to 20 per cent of its Thai business this year, he said.
GE’s Myanmar growth has not come at the expense of its Thai operations, which registered revenue growth of “several dozen” per cent, and nearly double-digit growth in orders last year, said Kovit, who succeeded Pornlert Lattanan as the chief executive of GE in the three Indochinese countries at the beginning of 2012.
Among the deals sealed in Myanmar are the leasing of two aircraft, the sale of power-plant turbine generators, and hospital equipment sold to government and private hospitals.
GE has also recently started up an office in Myanmar, which will be officially opened by the end of this month.
Speaking during an exclusive interview with The Nation, Kovit said he saw the potential for GE to grow its Thai business further, keeping it in the top range of its Asean operations, where the US giant achieved overall growth of 30 per cent last year.
“I would like to enlarge our footprint and utilise Thailand as a base to extend our businesses. For instance, we may build a maintenance centre for locomotives here, or we can export locomotives to neighbouring countries,” he said.
Kovit, the former head of GE Energy in Thailand, took the helm at GE Thailand as the corporate unit had been transformed from a support office for business units into a full-function organisation.
GE’s business units
The oil and gas units of the US conglomerate have grown rapidly from a business worth between US$2 billion and $3 billion (about Bt60 billion to Bt90 billion) just a few years ago into an operation worth $14 billion to $15 billion now, thanks in part to the company’s acquisitions worth tens of billions of dollars.
Kovit said GE had identified the oil-and-gas business as promising, since new petroleum fields are increasingly hard to find and develop, and thus large oil and gas operators prefer to make deals with large companies like GE to ensure the successful execution of their increasingly complicated projects.
Power and water are another major business for GE, which is involved in a wide range of power-generation technologies, from coal, natural gas, wind and solar, to nuclear and biomass.
The only exception is hydropower, an area from which the company has exited.
Kovit said GE had joined with Toshiba to bid for combined-cycle power projects, utilising its FE50 technology that offers a breakthrough 62-per-cent generating efficiency and agility solution.
GE is looking to take part in Thailand’s new round of tendering for independent power producers, which is slated for this year, and also to offer its latest wind-power technology.
“We just announced the commercial production of a 2.5-megawatt wind-turbine system. It has a 120-metre-long blade, which is even longer than a football field. It is very suitable for Class 3 wind, which is not as strong as it is in our country,” he added.
GE commands a share of 40-50 per cent in the Thai energy market, similar to the company’s share globally.
The conglomerate is also looking to take part in the Provincial Electricity Authority’s project to change 500,000 street lights into LED (light-emitting diode) bulbs, as well as in the State Railway of Thailand’s procurement of locomotives.
Energy business currently accounts for about 60-70 per cent of GE’s sales in Thailand.
If the company wins any of the SRT locomotive contracts, the proportion of energy business to total sales could fall, but it is not expected to drop below 50 per cent in the foreseeable future, Kovit said.
