General Electric Co. expects its sales growth in resource-rich countries in Latin America and the Middle East to outpace that in China and Asia, which has been a major focus for the largest U.S. conglomerate.
The world’s biggest maker of jet engines and electric turbines has stepped up its focus on fast-growing countries outside the United States and Western Europe.
“We think that within the next 10 years, the growth markets will contribute 50 per cent of the company’s revenue,” up from about 37 per cent currently, said John Rice, a GE vice chairman who runs the company’s foreign operations, at an investor briefing in Rio de Janeiro on Wednesday.
Mr. Rice also confirmed GE’s target for overall corporate profit to rise at a double-digit percentage rate this year,
The company forecast 20 per cent to 25 per cent sales growth in what it calls the “resource rich” regions of Latin America, Australia, the Middle East and Africa, outpacing forecast 10 per cent to 15 per cent growth in Asia.
China’s slowdown has become a concern for GE and its major industrial peers, including Caterpillar Inc. and 3M Co. . On Monday, Beijing cut its gross domestic product growth forecast to 7.5 per cent from the 8 per cent target rate it predicted for the past eight years.
Mr. Rice argued GE’s big energy and healthcare equipment will remain a significant priority for emerging markets, even if their economies slow.
“As GDP rates get revised, there is still tremendous pressure on governments and companies to build out the infrastructure and we believe that’s the last thing that will get cut,” said Mr. Rice, who last year relocated to Hong Kong as part of GE’s drive to move top managers closest to its biggest markets.
About 56 per cent of GE’s 301,000 employees work outside the United States, according to filings with the U.S. Securities and Exchange Commission. The company generated 53 per cent of its $147.3-billion (U.S.) in 2011 sales outside the United States.
GE competes with some of the world’s largest businesses, including Germany’s Siemens AG, French industrial group Alstom SA and Swiss engineering company ABB Ltd .