By Scott Malone
CHICAGO (Reuters) - General Electric Co (GE.N: Quote, Profile, Research, Stock Buzz) expects about two-thirds of 2008 revenue growth at its infrastructure unit to come from outside the United States, a top executive said on Monday.
That will offset the effects of a slowing economy on GE Infrastructure, John Rice, a GE vice chairman who is chief executive of GE's largest unit, told the Reuters Manufacturing Summit in Chicago in a telephone interview.
GE Infrastructure, whose products range from jet engines to electricity-producing gas turbines, last year generated $57.9 billion in revenue and has forecast 15 percent growth this year.
"The question on everybody's mind in terms of the overall impact is how much the non-U.S. business strength will offset what happens in the United States, and we're still reasonably confident that there will be a lot of offset," Rice told the Reuters Summit. "We still expect to see reasonable growth in the U.S. We're expecting that we will book the first orders in a while for large gas turbines in the U.S. in 2008."
Rice said GE, the second-largest U.S. company by market capitalization behind Exxon Mobil Corp (XOM.N: Quote, Profile, Research, Stock Buzz), was building a factory in Vietnam.
"That's the largest industrial investment that we've ever made in that country," Rice said. "We'll use it as a manufacturing base and design it so that it's flexible enough to handle the demands of several of our businesses over time."
Vietnam is appealing as a manufacturing platform due to the large available pool of workers, Rice said.
"You have a country with 80 million people, a strong work ethic, positive government actions to support business there, and if you compare that with some other emerging market countries, you can't find people," Rice said. "It's as much in that case labor availability as labor costs."
GE also sees strong growth opportunities in Africa, particularly in Angola and South Africa, Rice said.
Rice also noted that GE saw strong growth ahead in the Middle East. It expects revenue there, which last year came to $6 billion, to reach $8 billion by 2010.
CHINA GROWTH SLOWS
Rice acknowledged that GE's growth rate in China, the world's fastest-growing economy, had slowed.
"Demand in China is still good," Rice said. "It's not maybe what it was two or three years ago."
He noted that GE's energy business in China grew exponentially early in the century -- from about $100 million in 2000 revenues to $1.5 billion within three years.
"We didn't expect that the $1.5 billion would be sustainable," Rice said. "So it's just a more normal growth rate." Continued...
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