Revenue at General Electric's Latin American operations surged 30 per cent in the first quarter of this year from the same period in 2010 and should continue to climb as the rapidly growing region rushes to improve its creaking infrastructure, the U.S. industrial group has told the Financial Times.
Emerging market countries, and especially Brazil, which is preparing to host the soccer World Cup in 2014 and the Olympic Games two years later, are increasingly being seen as a strategic base for GE as it looks to slim down its financial businesses and focus more on industrial projects.
"Just about everywhere in this region you have the right fundamentals, stable governments, and things are being done in the right way," said Reinaldo Garcia, GE's chief executive officer for Latin America.
"Infrastructure is a challenge that exists throughout the majority of the countries in Latin America. It's a challenge for the population but it's a wonderful opportunity for GE."
For the next five years, GE's revenue from the region should grow at a minimum annual rate of 20 per cent after averaging out at about 12 per cent over the past five years.
Brazil is GE's largest market in Latin America followed by Mexico, but smaller countries, such as Peru, offer some of the best opportunities for investment, the company said. The Andean country's economy grew at 8.8 per cent last year, one of the fastest rates in the world, attracting the attention of investors who are looking for niches in the continent.
Last year, GE's revenue in Latin America increased 7 per cent to $8.2-billion, compared with 2009, even as sales across the whole group dipped 3 per cent to $150.2-billion.
Energy projects should continue to be one of the most important sources of revenue in the region, as Latin America looks to capitalize on its natural resources and make the most of the global commodity boom.
As well as hosting the world's two biggest sporting events in the next five years, Brazil's recently discovered vast oil reserves off the coast of Rio de Janeiro also make the country a top target for GE.
The group has formed partnerships with Brazil's state oil company Petrobras and in November last year announced $500m of investments in the country, including the construction of a research and development centre in Rio de Janeiro.
GE has also been active in alternative energy and won more than 800 megawatts of wind turbine commitments in Brazil's first two wind energy auctions.
As more consumers move into the middle class and demand better services, health care should also be one of the key drivers of growth in the next few years, the company said.
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