GE Joint Venture to Manufacture IGTs in Russia

Sept. 20, 2011
Replacing generating capacity is part of strategy to capitalize on economic expansion in Russia

General Electric Corp. is establishing two new joint ventures in Russia, one of which will manufacture, sell and service 77-MW industrial gas turbines to the local market’s 50-Hz local specification. Construction will begin later this year for new plant near the city of Rybinsk, to produce 14 turbines/year at its initial capacity by 2013.

GE’s partners in this venture are INTER RAO UES, a Russian electric power supplier, and United Engine Corp., a Russian industrial group that manufactures aircraft engines, LV propulsion systems, industrial gas turbines for electric power generation, gas pumping units and marine engines.

The manufacturer described “a growing need in Russia for high-performance, mid-sized power blocks in combined heat and power applications,” and it pointed to the Russian Energy Ministry’s determination that the country needs to invest $80 billion over 10 years to replace and expand it electric generating capacity.

A second venture for GE in Russia involves Russian Technologies as a partner, aiming to manufacture CT scanners and other medical diagnostic equipment like angiographs, MRI, ultrasound, digital X-ray, PET, and gamma cameras.

GE will hold a 50% stake in each company, and have operational control of the organizations. It forecast that the two new ventures could yield sales revenues of $10 billion to $15 billion.

“The establishment of these joint ventures is a positive development for both GE and Russia,” according to a statement by chairman and CEO Jeffrey Immelt said. “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. Over time, this will create jobs in both countries.”

GE has had a longstanding presence in the Russian and Soviet market, and currently is active in multiple industries there. Examples include health care, transportation, aviation, electric power, oil-and-gas, water treatment, financial services, lighting and intelligent platforms. With a head office in Moscow, GE has over 2,700 employees and reported 2010 revenues of US $1.5 billion in Russia. GE has established training centers for Energy and Healthcare in Moscow.

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