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General Electric considers making Indonesia regional business hub

Publication Date : 19-05-2014

 

The local wing of American technology giant General Electric (GE) Co., GE Indonesia, is exploring the possibility of turning Indonesia into the hub for its parent company in Southeast Asia, given promising domestic business opportunities for the company’s future operations.

GE Indonesia CEO Handry Satriago said Indonesia, which is now GE’s largest market in Southeast Asia, could potentially be the company’s business hub in the rapidly developing region.

“Indonesia makes up 30 percent of GE’s overall business in Southeast Asia. So, we definitely want the country to be GE’s business hub in the region,” Handry said during his recent visit to The Jakarta Post office.

He said, however, that the lack of potential leaders for GE’s business in the country could hinder that plan. “While the country is undoubtedly a huge market for us, 70 percent of leaders are based in Singapore,” Handry said, adding that his company was striving to create leaders from local talents.

Each year, GE Indonesia recruited dozens of young professionals and fresh graduates to be trained to become future leaders of the company, he said, adding that his company would also expand its production hub to position the country as GE’s regional business hub.

He said that in Indonesia alone, GE’s revenue had more than tripled in the last five years, from only US$300 million to more than $1 billion last year, mostly driven by the surge in infrastructure business, such as aviation, health equipment, power generation and oil and gas.

“Aviation has become one of the strongest contributors to our business,” he said, adding that GE Indonesia’s aviation business had even recorded $1 billion in revenue on the back of the country’s strong demand for new aircraft and maintenance services.

According to data from the Center for Aviation (CAPA), Indonesia’s largest carrier Lion Air has ordered over 500 aircraft, with delivery up to 2028.

Most of the aircraft ordered by local airlines are made by American aircraft maker Boeing, which uses GE engines.

Handry said that besides aviation, the oil and gas industry had also partly contributed to GE’s oil and gas revenue of between $18 billion and $22 billion per year. “We also have a good market for locomotives and consumer products here,” he said.

GE Indonesia received orders for 150 locomotives in the last three years, with 100 of them already delivered, he said.

“Meanwhile, for consumer products, our factory in Yogyakarta produces 50 million light bulbs per year and exports them all to the US and European markets,” Handry said, adding that the country had already become one of GE’s production hubs for consumer business.

GE vice chairman John G. Rice also said previously that Indonesia became increasingly important for GE’s global business.

The company, which has been present in Indonesia for over 70 years, expressed in February its commitment to launch part of its $1.4 billion-distributed power business here.

Rice said that Indonesia was “the perfect” place to develop distributed power technology given that roughly a quarter of the 240 million people living across the archipelago of at least 9,000 islands had no access to electricity.

 

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