India’s infrastructure woes will continue, feels top GE exec
25 Nov 2013
US engineering giant General Electric Co (GE) feels that complex software and sensors that improve a machine's performance will be big business for the company in the coming years; and India will primarily serve as a source of low-cost, high-technology solutions for GE till infrastructure activity picks up.
"GE is a software giant, we already are. It is embedded in our business, people don't notice it," said John G Rice, vice chairman of GE and president and chief executive of global growth and operations, who is currently visiting India.
"The opportunity this unlocks is enormous. Because in the past we were just squeezing productivity out of an engine, such as lower noise, higher fuel efficiency, etc. Now that is certainly very valuable but a relatively small piece of the whole system. Now we are starting to get into the rest of the system. Think about the downtime on a big pipeline if one compressor goes down," Rice said during interviews to sections of the media.
Rice, who is based in Hong Kong to emphasize the multinational company's interest in emerging economies, also spoke on how its new Pune factory, which will manufacture aviation components and wind turbines among other products, will become a model for the firm globally.
He told Livemint that the business environment in India is better than what the headlines suggest. ''When I talk to our team, customers and officials in India, I see a case for optimism that doesn't always come across in what's reported by the traditional news media,'' Rice said.
''We are quite happy with some businesses (in India) and want to make others bigger. But that's not the whole story. The other side of the story is what happens in Bangalore where our 5,000 engineers are working on solutions for India as well as rest of the world.
The multi-modal manufacturing facility that we are building in Pune is going to benefit our company in significant ways. So you cannot just draw a conclusion about whether you are happy or not in India based on revenues and orders,'' he said.
On areas where GE was seeking growth in India, he said, ''Some of our oil and gas-related businesses, some of our energy management businesses like transmission and distribution, within our healthcare business, there are pieces that can be bigger.
''It also depends on how you define the market. he traditional ways of defining the market in businesses like healthcare or power generation don't really work in a country like India, because they leave out the underserved.
So the population in India that doesn't have access to electricity today would be out of a traditional market metric and your share calculation. I prefer to define a market share based on what it would look like if everyone in the country had electricity and then figure out how to help with that.''
In a telling comment on India's perennial power shortage, Rice added, ''The main transmission and distribution grid isn't going to reach everyone in India in my lifetime. So how do you come up with distributed power of small generation sizes that can run off fuel other than diesel to facilitate electricity for people who don't have it? But in the future they will have it and how do we get to the point where we've got exactly the right products and technology to reach that?''
