News08/03/2012 - 05h17
Ge expects Latin America to lead growth drive as China slows down
General Electric expects revenue growth in its industrial business in regions such as Latin America to outpace that of its traditional growth engine of Asia, led by China and India, in 2012.
With China's growth decelerating from its peak of more than 10 per cent, GE said it expected its business in resource-rich regions such as Latin America, the Middle East, Africa and Australasia to grow 20 per cent to 25 per cent compared with 10 per cent to 15 per cent for Asia.
"From a small base we will grow a lot," said Reinaldo Garcia, head of GE's Latin America business. "When you think about Latam, with the 34 countries, we have now a lot in Brazil and Mexico. We have done less in the other countries - and now we are really putting efforts and resources into developing these opportunities in these other countries as well." GE, one of the world's biggest companies and a bellwether for the health of the global economy, said although China remained a vital market with robust growth across its main businesses, the trend underlined the growing importance of other regions as its economy matures.
China this week cut its annual growth target for the first time in eight years, recognising that the world's secondlargest economy will slow. Chinese premier, Wen Jiabao, said the government's target for growth in 2012 was 7.5 per cent, the first time it has dropped below 8 per cent since 2004.
GE, as part of its global growth strategy, is predicting 50 per cent of its industrial revenue will come from growth markets in the next 10 years compared with 37 per cent last year.
Latin America is already one of the company's biggest regions in terms of absolute sales outside of the developed countries and is one of its fastest growing, with revenue from its industrial business - its main focus - up 36 per cent last year compared with 29 per cent for China. Latin American revenue from its industrial business was bigger than that of China last year at $6.6bn against $5.8bn