GENERAL Electric Co, the world's second-biggest company by market value, may invest in property and set up factories in Malaysia's largest real-estate development, forecasting "explosive" growth in Southeast Asia.
GE will "potentially" buy properties in Nusajaya, a commercial and residential project in the south Malaysian state of Johor, Chief Executive Officer Jeffrey Immelt said in Kuala Lumpur yesterday. The US company may also spend money on manufacturing facilities at the development, he said.
General Electric, a maker of power turbines and locomotives, has said overseas revenue this year will exceed domestic sales for the first time as Asia's emerging nations buy energy, water and transport equipment. Malaysia, seeking to rejuvenate its south, has said it needs foreign companies to help generate 382 billion ringgit (US$112 billion) in investment for Johor.
"The more people come in, the more sentiment is going to improve," Kaladher Govindan, head of research at TA Securities Bhd in Kuala Lumpur, told Bloomberg News. "The plan looks for real."
General Electric International Inc, a unit of GE, yesterday signed a three-year collaboration agreement with state-controlled UEM Land Sdn, a unit of publicly traded UEM World Bhd, to develop infrastructure and security in Nusajaya. UEM World shares jumped 7.5 percent to 4.02 ringgit.
GE will provide technology to improve safety in UEM's Nusajaya, a development led by UEM. The two companies will work on projects, including water treatment, energy, aviation and transport, UEM said.
"It's going to be a substantial growth opportunity for us," Immelt said. "I would be surprised if we didn't look at putting some technology in Malaysia, over time, in some of our infrastructure areas. We see explosive growth across the region."
The Nusajaya project, tucked between a mangrove swamp and a forest of oil palms, will include homes, offices, a hospital, a university and a theme park. GE, which started in Malaysia in 1975 with a sales office, already services planes in the country and supplies equipment to companies, including Tenaga Nasional Bhd, the South Asian nation's largest power producer.
As much as 60 percent of GE's total sales will come from outside the US within five years, up from 50 percent now.