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General Electric, the widely diversified U.S.-based global
conglomerate, is upbeat about the global business environment, saying
that 2007 will be the first year that businesses outside the U.S. will
account for a higher proportion of its revenues than that of its base.
In that regard, the company plans to double its business in Southeast
Asia within the next three years, with Indonesia and Vietnam targeted
as its new stars of growth after Thailand, which now contributes about
35 percent of the region's revenue.
GE, which has run businesses since the 1930s in Indonesia and invested
about US$700 million in such sectors as financial services, aviation,
locomotives, healthcare and energy, is eying 25 percent growth in the
country this year. The company gains about US$400 million in revenue
annually from the country.
It is also hopeful that it can participate in government infrastructure
projects, including the planned installment of 10,000 megawatt power
plants and water treatment facilities.
During a GE Day exhibition in Bangkok recently, a small group of
Indonesian journalists, spoke with GE International president and CEO
Nani Becalli-Falco about business prospects in Indonesia. He is
responsible for directing GE's strategies for growth outside the United
States. Indonesia is the largest economy in Southeast Asia and it now
plans to build more power plants to help accelerate growth while it is
also committed to providing clean water for all its citizens. What do
you think about this opportunity? The things you have mentioned are the
things we are particularly strong in: water treatment and the oil and
gas industry. Infrastructure business opportunities are really things
that we are particularly strong in. And that's where we want to develop
and participate.
Now, Indonesia is the largest and a very important economic entity in
Southeast Asia. I believe that there is a resurgence of Indonesia.
There were a lot of manufacturers in Indonesia before they went to
China and now they have started thinking of coming back to Indonesia.
So I would say the prospects for the future of the country are
promising. The price of the technology offered by GE is said to be
expensive. The cost of the coal-gasification technology for instance is
30 percent higher than the conventional coal-burning technology. What's
your take on this? The coal-fired power plant is definitely cheaper,
but on the other side, it doesn't meet the requirements for
environmental protection. So GE is really working on many parts of
technology that are perhaps more expensive on one side, but they are on
the other side certainly taking care of the environment.
Apart from the gas, we're developing nuclear energy, that is very
important. And today, I would say nuclear is the technology that offers
the best compromise between cheap energy and respect for the
environment. The Indonesian government is also planning to build a
nuclear power plant in 2011. It's going to be difficult to have a
nuclear power plant by 2011 unless something has already started being
organized quickly.
It's difficult because of the process of technology pertaining to its
installation, the execution of the project as well as the whole process
of permits and rules behind the installation of a nuclear facility.
2011 is a very aggressive date. Hopefully, it can be done. We are one
of the biggest providers of nuclear technology in the world. How much
investment is required to build a nuclear power facility? I can relate
to the number of the most recent nuclear power plant that we
commissioned, which went for a bit over US$1.4 billion. It can produce
electricity of about 1,600 megawatts. Many people are worried about
maintaining the technology of a nuclear power facility. Well, it needs
training. This is one reason that 2011 is a very aggressive date.
Because you need to have a large team of people who are well trained to
operate those kind of facilities. And that training does not happen in
a short period of time.
But I hope it's going to be short. How do you see the economy globally
and in the ASEAN region in particular in the next few years? We are
enjoying a period of time of exceptional growth in the world, which is
driven by the reallocation of wealth into countries that are rich in
natural sources of minerals, oil and gas.
And it also goes to countries with a lot of people. Consequently,
countries like China and the group of Southeast Asia, which has about
five hundred million people, are now economies with the possibility of
growing very fast. China is growing at 11 percent, India is growing at
9 percent, overall Southeast Asia is growing at 6 percent, and so on.
Despite the fact that we have experience in raw material increases,
such as in oil and gas and iron, we have never experienced something
like this in the past; the economy in the world continues to grow very
quickly.
You are too young to remember that in 1984, when there was the first
oil crisis, when the price of oil didn't even reach the price it is
today, the whole economy of the world stopped. Today we're experiencing
the opposite, the prices are going up and staying up and the economy
keeps growing.
It is because of the phenomena of the redistribution of world's wealth
and these countries (such as China and India) are becoming powerful
economic entities. As you can see everybody is benefiting in this
overall world growth.
In this context, you can imagine that a country like Indonesia, with
about 220 people, is a country in a very good position to grow. GE is
eying 20 to 25 percent growth in Indonesia in 2007 How do you plan to
do that? A lot of work, a lot of sweat and a lot of customer contact.
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