General Electric (NYSE:GE) expanded its footprint in Russia, finalizing two new joint ventures in that country’s growing health care and energy markets.
According to GE officials, the new ventures could drive $10 billion to $15 billion in sales, along with creating jobs in the U.S. and abroad. The agreement was signed by Russian Technologies deputy director Dmitry Shugayev and GE chairman & CEO Jeffrey Immelt.
The healthcare JV will manufacture, assemble, sell and service a wide range of medical diagnostic equipment, starting with computed tomography scanners and expanding to devices for angiography, magnetic resonance imaging, ultrasound, and positron-emission tomography scans as the venture grows. The Russian government plans to spend more than $30 billion on health care through 2014, said GE, estimating that the current Russian demand for CT scanners alone is 3,000 units.
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"The establishment of these joint ventures is a positive development for both GE and Russia," Immelt said in prepared remarks. "We are very excited about this long-term opportunity that firmly establishes GE’s business in Russia and reaffirms our global leadership in the energy and healthcare sectors.
"Our expansion in Russia reflects GE’s global approach to growth. It draws on leading-edge R&D, engineering, and manufacturing expertise from GE centers throughout the world even as it meets the needs and creates value in our customers’ home markets," Immelt added.
The venture will assemble products in Russia using components from GE’s international facilities, though the company said it eventually plans to source parts from Russian suppliers.
General Electric will hold 50 percent of each venture and exercise operational control over both the energy and healthcare businesses.