Bangkok. US conglomerate General Electric sees strong growth potential in Southeast Asia, especially Indonesia and Vietnam, and will boost its presence in fast-changing Myanmar to meet urgent electricity and health care needs there, its regional head said on Thursday.
The world’s biggest jet engine and electric turbine maker would benefit from the high percentage of the region’s population living in rural areas, where demand was high for electricity and health care, said Stuart Dean, chief executive of GE operations in the Association of South East Asian Nations.
GE expects double-digit growth across the 10 ASEAN countries for the next three years, fueled by demand in power, oil and gas, aircraft engines, land transportation, heavy duty freight locomotives and health care.
“Countries like Indonesia, the Philippines, Thailand, Malaysia, they continue to invest heavily in infrastructure to meet demands of people and investors, so we’re growing at double-digit rates there,” Dean told Reuters in an interview. “And if you look at what governments spend on health care, they’re significantly underspending and populations are demanding more, so a big initiative for us is rural health care.”
GE is also keen to capitalize on Myanmar’s emergence from decades of isolation and the suspension of many United States sanctions on the country following economic and political reforms under the new civilian government that took office just over a year ago after 49 years of military rule.
Myanmar has a vastly undeveloped health care system and a dire shortage of electricity. Constant power cuts triggered rare street protests in several towns and cities last week, including the biggest city, Yangon.
Dean said GE would open an office in Myanmar as soon as the US government was ready to issue the licenses required to do so, which he expected before the end of this year, but it was “years away” from having a big manufacturing operation there.
Myanmar’s government had expressed a preference for buying equipment, rather than leasing, he said, and GE was keen to take advantage of some $120 million that Myanmar had made available for medical devices. A probable surge in air traffic would also open up opportunities.
“We want to help. It’s a great way to get started in a country by helping with a major public policy issue, like providing health care and electricity,” he said. “They want to get electricity generation stabilized as soon as possible. We’re ready to supply those needs and we think we can do it quite quickly.”
In the face of mounting protests over the power outages, Myanmar’s government promised last week to quickly buy two 25-megawatt gas turbines from GE, a deal Dean said was still being negotiated and “has yet to be determined.”
“Politicians are quick to say they’ll solve the problem easily, but it’s not that easy. But there are things that can be done in the short term,” he said.
If the deal for the two turbines went ahead, they could be easily moved to other locations once permanent facilities were built, he said, adding that Myanmar had at least four GE gas turbines that had not been used in years, which the company could get working again this year.
GE, which posted revenue of $3 billion from ASEAN last year, anticipated demand for power would drive growth in Indonesia, Dean said, noting 30 percent of the population was still without electricity. He also saw “enormous opportunities” in offshore oil and gas there.
GE’s $60 million investment in Vietnam, which centers on the manufacture of wind turbine generators, had gone well and it was likely the company would develop more products, increasing its workforce there from 600 to about 1,000, he said.
“It’s a very, very successful start-up. The workforce is outstanding — great vocational schools, very productive, with great skills. We want to do more there,” he said, without elaborating.
Dean likened Myanmar’s opening-up to that of Vietnam two decades ago, when GE was one of the first US companies to operate there.
“That paid big dividends to us. It showed we were committed to making things happen,” he said. “I see similar things in Myanmar, but in this case, they have emergency needs.”