Making his third visit to Vietnam on October 19, GE’s chairman and CEO Jeffrey R. Immelt showed his eagerness of expanding the global player’s operations in renewable energy, healthcare, and aviation following the growing country’s new engagements under global and regional free trade agreements. He affirmed VIR’s Hoang Mai that GE could do more in this small but very important Asian market after more than two decades of its presence here.
You visited Vietnam for the first time in 2007, when GE took its first steps in developing the $110 million GE Haiphong manufacturing facility, and then again in 2012 overseeing GE’s signing of important cooperation agreements with Vietnamese government agencies. What is the highlight of your third visit to the country?
I always have a number of things on my hands, with all that is going on in GE and in the world. From a business standpoint, the most important thing is that we are getting ready to close the acquisition of Alstom by GE. When you think about the power sector in Vietnam, we now can bring hydro, coal, gas, wind, and grid technology, so I am quite interested in meeting local teams to understand how we can do a better job of solving some of the power generation problems riddling the country and discover new opportunities in Vietnam. These are probably my top concerns. I would like to get a clear view on how the country is developing and evolving through the Trans-Pacific Partnership (TPP) Agreement and some of its new international engagements, thus Vietnam continues to be a point of interest for me. I would also like to see things for myself. I can compare this trip to the last trip and see the progress of the country. I always get out of my office and see what is really happening in the world. So I look forward to learning about Vietnam in that context as well.
With the TPP finally in sight, do you mean that GE will once again be leading a new investment wave to Vietnam from the US?
GE is a global company. We do not necessarily need a trade agreement to come to Vietnam. We came here, we invested and we built factories. I think in some ways a good side of trade agreements like the TPP, is that maybe smaller US companies will discover Vietnam for the first time. If they did not previously look at this place to invest, now they will feel like doing so and if they come to Vietnam, they can also do business in Indonesia and other places in the region. The value of the trade agreement I think is not so much for big companies but for the entire eco-system that always opens up new ways to think about investing for the future. I always think engagement is important and having Vietnam be a part of it is a nice thing.
On the regional scale, since the ASEAN Economic Community is coming to a reality at the end of this year, and in the context that GE has been present in all ASEAN members, what are the opportunities for GE’s regional development strategy?
This is the first time I can remember that the ASEAN members are actually growing faster than China. If you look at Indonesia, Vietnam, Malaysia, and different countries in the region they all seem like a good fit for us and we are substantially present in all of them. If you look at a country like Vietnam with more than 90 million people, the education system is good, so it opens up opportunities to do things like manufacturing and engineering not only on the local market but also more broadly in the whole region. I think that gives Vietnam an advantage if we look out in the next 5-10 years.
You have emphasised that the power sector is probably on the top of the list during this visit. Does this mean the sector will be soon GE’s focus in its Vietnamese operations?
I would say for us in Vietnam, the power sector is going to be important, but oil and gas, aviation, and healthcare will also be on our list of priorities. The benefit of GE is that we are broad. I think when we look at the big infrastructural needs of Vietnam and the Vietnamese people, GE can develop capabilities across many different sectors in the country. I mentioned power because we are just in the process of completing a very big acquisition with Alstom that also has presence in Vietnam. I am very keen to see how we can partner with customers like Electricity of Vietnam who are very strategic for us in the future. I would like the readers to see that the company is extremely broad and comes to fill a lot of the key needs of Vietnam, such as electrification, healthcare, and aviation. We think we can also place some newer sectors in the country.
GE is keen to develop the partnership with its strategic customers like Electricity of Vietnam
in an effort to grow the group’s presence in the country
Is that the “GE Store” concept that GE is bringing to Vietnam?
GE Store is just a way for us to describe the value of breadth. GE has more than a single business in mind. We try to bring the advantage of pushing one idea, one concept from one business to another. That is what we call the GE Store, where we can bring more than one business, more than one idea to a country. We think that is the value Vietnam should see. We are a broader company, we think that the Store concept can work anywhere, including Vietnam. Our GE’s Vietnam Engineering Centre in Ho Chi Minh City and Haiphong manufacturing facility are examples that can use that broad advantage.
Wind power is seen as an important business pillar of GE in Vietnam, where GE is supporting two local wind farms in Bac Lieu and Tay Nguyen. Do you have the intention to extend your cooperation with Vietnamese partners in this field?
We certainly hope so. I think there are some good wind regimes in Vietnam, so, wind has potential. There is a growing acceptance globally that wind can be economic. And what is most important for the wind project, I would say 50 per cent of the project is technical and the other 50 per cent is financial. So, from a technical standpoint, there is no reason why wind could not be substantially big in Vietnam. But then the question of how to secure good finances and how much of that is to be driven by loan guarantees comes into play. It is still a very fluid financing market for wind projects and we would like to do more.
Do you have anything specific in mind?
We have no specific announcement today. But we would definitely like to do more in the future.
GE has been growing very fast in Vietnam for more than 20 years now with its company-to-country strategy employed in Vietnam, do you feel satisfied with GE Vietnam’s global contribution to GE?
I do not think we can ever be satisfied about our performance. I say, when I come, I have some of my own ideas, but also I am very reliant on our local team to propose their own views on what Vietnam should mean for GE. I think we are now getting to the point where we have probably - between GE and Alstom – a thousand employees; we might make more in business. It is starting to become meaningful with any enterprise’s standards. We have good young people who have their ideas, we have customers who want us to do many things and we are gaining momentum.
This is a young country in terms of attitude, age, people’s thinking and opportunities. GE is a 140-year-old company: we need young thinking all the time to keep us energised in moving forward. I think what we have now is a good foundation to build more local capability with people that have their own ideas and can bring us new perspectives on what we should be doing.
I live in the US, thus it is not easy for me to see what we should be doing in Vietnam, but the local team can open our eyes up to new opportunities. We want to have passionate people on the ground in Vietnam who understand the company, what we do, who have the ears of customers who determine our success, but who also have their own dreams about what the company can be and should be doing. If all those come together, great things will happen.