The Hindu Business Line : GE integrates all healthcare units with Wipro joint venture

Merger implications
Acquired new units will be consolidated under the Wipro joint venture.
Aims to manufacture 50-70% per cent of products it sells domestically.

Kamal Narang

Growth push: Mr Jeffrey Immelt, Chairman and Chief Executive Officer, GE, and Mr Azim Premji, Chairman, Wipro Ltd, at a press conference in the Capital on Friday. —

Our Bureau

New Delhi, Oct. 2

To accelerate the growth of its $17-billion global healthcare business, General Electric (GE) on Friday announced its decision to integrate all its GE Healthcare units in India and South Asia with the existing Wipro GE Healthcare joint venture.

With this move, Wipro GE Healthcare will be the exclusive vehicle for all the company’s healthcare activities in India. The integration would include existing business and manufacturing units such as GE Healthcare Life Sciences, GE Healthcare Medical Diagnostics and GE Medical Systems India. The company however, refused to comment on the financial implications of the merger.

Wipro’s role

The GE global Chairman and Chief Executive Officer, Mr Jeffrey Immelt, said, “The simplification of our healthcare business will help us accelerate growth. This is the natural next step in our successful joint venture in healthcare with Wipro.”

Wipro GE Healthcare currently distributes about 85 per cent of GE Healthcare’s products and solutions. The joint venture was formed in 1990. Since then, GE Healthcare started and acquired new units in India. These will now be consolidated under the joint venture.

The Wipro Chairman, Mr Azim Premji, said, “We can now design and engineer products for new segments and price points for the domestic market. The integration will bring in more simplification for the customers.”

Mr Immelt also added that the company plans to manufacture in India more of the products that it sells here. “At the moment, about 20-25 per cent of the products we sell in India are manufactured domestically. But in the next 5-7 years, we plan to increase this number to 50-70 per cent,” he said.

Speaking at the sidelines of the press conference, the GE Healthcare India President and CEO, Mr V. Raja, said that it could take a year to complete the integration, “It will all depend on the courts’ approval, in my own assessment, it could take anywhere between 6 months and a year, depending on how fast you get the necessary approvals.”

About 1,200 employees from GE’s various healthcare units would be moved into the joint venture firm as part of the integration process. The venture already employs 800 people. Mr Raja said going forward, it would continue to add about 200 people annually, which is its average hiring rate.

“There is a huge potential in the Indian medical devices market which is worth about $3 billion and is growing at 12-13 per cent annually. It will continue to grow at this pace if not higher,” he said.

Expansion plans

While the company’s primary focus would be to expand the footprint of products for the domestic market, Mr Immelt said that it would also export products to the Western countries.

“The healthcare system in India is similar to that in the US. Even in the US, there is a need for quality healthcare products at low price. We are convinced that the models we create in India can easily be transferred to Europe and the US. I believe that in the future most of the global healthcare innovation will take place in India.”

Regarding GE’s overall India business, Mr Immelt said that he expects the business to double in the next 2-3 years. GE’s business in India is about $3 billion currently. “This is an exceptionally good time to invest in India. If the Indian economy keeps growing at around 7 per cent even during such a tough time then it would be very good for GE,” he said.

The company is present in India across various sectors such as technology, infrastructure, finance and consumer products.

On Thursday, Mr Immelt had met with the Prime Minister Dr Manmohan Singh and told him about the company’s plans for India.

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