Have You Seen what General Electric is Doing in India?
John is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Sometimes in the midst of this global slowdown we watch some of the larger global companies go down in value like the smaller ones. General Electric (NYSE: GE) is one of those conglomerates with hands in many things on a global scale and yet the stock has receded and risen like many other companies. Recently it may just have broken out of its downward trend. But sometimes it is good to look at a stock and see what it is doing around the world to remind one’s self why this company will continue to be a good dependable income investment for years to come.
One of those places to look at right now is India. GE global has many projects going in this country. It is a remarkable consumer driven market that many companies are also in. In fact, a direct competitor (at least in the healthcare field) for GE is Johnson & Johnson (NYSE: JNJ) which (itself) has 2000 employees in the country. GE is looking at developing product in India and possibly uses it as a central hub for emerging markets. Let’s take a look at some of the things it has recently been involved in.
GE’s Zero Liquid Discharge Technology in India
GE has a technology called ‘zero liquid discharge’ that the company is introducing to India. Realizing that wastewater treatment regulations and reducing water usage have become one of the most critical considerations in industry today, this (ZLD) system eliminates liquid waste streams from plants and produces high purity water for reuse. With its use, water consumption can be reduced by up to 90%! At the POSCO Cold Rolling Mill Steel Plant in Maharashtra, India in the second quarter of 2013 this technology will be installed. This is significant for GE in a nation of so many people, and especially in a region where water consumption is a big issue. The reduction in water consumption by the steel mill will lead to other sales as this and water pollution are big on the minds of local governments right now.
GE’s Solar Work in India
In the Unites States, most developers have trended away from solar thermal technology and have gravitated toward cheaper silicon based panels—but not India. The country has planned an additional 1500 megawatts of solar capacity by early 2013. This technology concentrates sunlight too boil water to power steam turbines. These large turbines are being order from GE, but also other companies like Siemens (NYSE: SI) are also picking up order. Siemens is the larger of the two in India because it started early with the correct sixe turbines India needed.
GE Healthcare in India
GE Healthcare (the medical equipment & manufacturing arm of GE) has plans of launching 20 new products in India this year. There has been long term investment in the country to the tune of $50 million annually in R&D and it are looking to see the investments start to pay off. There is a reason that so much (R&D) has been invested in India. First of all, R&D costs in India are low and development times are much shorter than in the U.S. where a drug could take up to 18motnhs to develop. Well, India has the population to create a pool of patients a lot quicker and it could take as little as 3 months.
The country is also a good central hub for regional emerging markets. When we look at regions around like China, the Middle East, African regions, GE considers India the most ‘consumer driven’ market and thus a good jump off point to reach other regions. So the (R&D) investment here helps India but it also is good for GE. It has a product, a molecular breast imagining product, which can detect breast cancer much better than a mammogram can. This could be a bread winner for the company as it moves these into emerging markets.
It helps looking at a company we depend on for yearly dividends and knowing what it is involved in that will help it weather hard macroeconomic times like this. GE is well situated in India and preparing to generate revenue for years to come in the emerging markets of the world while this country becomes a central hub.
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