GE Sees Potential in Africa, expanding into Mozambique and Ethiopia
General Electric Company is looking to expand its business in African countries i.e. Ethiopia and Mozambique. Jay Ireland, president at GE Africa, expects revenue and headcount to double following the expansion, which will require investments in power, transportation, and healthcare segment.
At the Bloomberg Africa Business and Economic Summit, held in Cape Town on Wednesday, Mr. Ireland discussed opportunities in the oil and gas sector in Mozambique, and aviation in Ethiopia, along with opportunities in rail and healthcare sector in both. He expects revenue to double within five years. “We’re very optimistic about Ethiopia, we’re also optimistic about Mozambique, and expanding our footprint in both of those countries,” he reasoned.
In 2014, GE had announced plans to invest $2 billion in Africa by 2018. The number has already increased more than threefold i.e. from 800 to 2600 at present. Mr. Ireland expects it to further rise to 5,000 employees. “That would be the goal, which would be double from where we are today,” he said.
General Electric’s current move did not come as a surprise since the company is focused on its long term strategy to expand industrial operations. The conglomerate wishes to expand operations in every major country, which boasts of demand for industrial segments, including transportation, healthcare, oil and gas, power, or aviation. With the current expansion, the company expects to earn revenue from international industrial operations.
As part of its strategy, the company also reduced the size of its GE Capital financial unit last year. Going forward, it plans to further sell its assets this year. However, it has not yet announced any deal requiring sale of assets since the start of fiscal year 2016. Analysts expect it to sell $100 billion worth of assets this year.
The sales of assets is expected to take its toll on revenue. However, GE may be able to more than offset the decline through industrial-based expansions.
GE’s strategy seems to have positively affected its stock price. It swelled after the announcement in April last year. Over the last 12 months, the stock has surged 14.84%. GE stock closed down 0.92% at $28.95 on Wednesday.
