General Electric Co.’s energy unit, GE Energy, plans to increase its’ growth in India through some domestic alliances and localizing production in key businesses such as wind power.
“We can do partnerships, we can do licensing, we can do this in many areas, and we are looking at all these different possibilities,” Kishore Jayaraman, GE Energy’s president and chief executive for the India region, told Dow Jones Newswires recently. GE Energy’s efforts to accelerate growth are in line with the recent statement of Jeffrey Immelt, CEO of the U.S.-based General Electric, that he was frustrated with GE’s growth in India and the group had missed opportunities here.
Mr. Jayaraman added that GE Energy is looking for tie-ups in the power transmission and distribution sector and for its optimization control products, which help maximize the economic performance of systems. “We are also looking for partners for the industrial products that we have,” he added.
Mr. Jayaraman said GE Energy’s goal in 2009 was to ensure execution of projects, position products in the market and create a platform for growth. “The next step in the whole equation is to make sure the products I sell in this country are applicable to this country.” He said wind turbine generators, gas turbines and power transmission and distribution will be GE Energy’s main focus initially in India. The company is aiming at a market share of 20% to 25% for these products in three to five years.
He also said order intake for the company’s existing products is “as healthy as it can be.” He expects order size to increase due to a “healthy and robust business” in India. “There is a lot of demand-supply gap in this country in the power generation and distribution segments,” said Mr. Jayaraman.
In its attempt to go local, GE Energy–through a joint venture–acquired in May a majority stake in Indo Tech Transformers Ltd., a power transformer manufacturer based in the southern Indian city of Chennai. GE’s joint venture with Mexico’s Xignux–Prolec-GE–owns a 74.35% stake in Indo Tech, according to data from the Bombay Stock Exchange Web site.
Mr. Jayaraman said transformers are GE Energy’s first step in capacity building in India and it is looking for similar tie-ups in other areas. “As generation ramps up, I think there are going to be a lot of opportunities for growth in the transmission and distribution sector,” he added.
India’s current five-year economic plan aims to add a generation capacity of 78,700 megawatts by 2012 to meet rising demand in the fast-growing economy. Also, GE Energy, one of the largest makers of wind turbines in the world, has begun the construction of a wind turbine assembly unit in Chennai. The company is looking to create a local supply chain to source components such as blades, towers and gear boxes. The plant will start production in the second half of 2010. It will have a capacity of making 300 wind turbines, or 450 MW, a year.
Mr. Jayaraman added that India is now giving generation-based incentives and the lobby to drive wind energy has strengthened.
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