General Electric (GE) said yesterday its power subsidiary had acquired majority ownership of one of China's biggest suppliers of hydropower equipment. GE Power Systems had taken over Kvaerner Hangfa, an equity joint venture established in 1995 with registered capital of US$24.7 million, an official said. The joint venture, of which Kvaerner Energy of Norway held 61 per cent and Hangzhou Equipment Works (HEW) 39 per cent, employs about 600 people. The company will be renamed GE Hydro Asia, with GE holding 90 per cent and HEW's parent, Hangzhou Industrial Asset Management, 10 per cent. Kvaerner is withdrawing completely from the venture. The official declined to say how much GE paid for its stake. 'Kvaerner Hangfa has a great history of supplying quality equipment to China's hydro market,' GE Hydro president and chief executive Tracy Moore said. 'This acquisition illustrates our ongoing commitment to provide cost-competitive and industry-leading technologies to our customers worldwide.' GE Power is participating in major infrastructure projects related to the Three Gorges Dam, the west-east natural gas pipeline and the 2008 Beijing Olympics. GE Asia chief executive Yoshiaki Fujimori said last week that China contributed only a small part of the company's business. Last year, sales in China were US$1.7 billion, an increase of 30 per cent from 2001 but just a fraction of the company's sales in Asia-Pacific. Its two biggest businesses in China are medical systems, with sales last year of US$600 million, compared with US$100 million in 1998, and plastics. Mr Fujimori said revenue from these two businesses in China would exceed US$1 billion by 2005. Another high-growth area is infrastructure, including airports, railways and industrial projects. The missing piece in GE's China business is finance, which accounted for 40 per cent of the company's worldwide revenues last year. Last year, GE set up a research centre in China, which still has a long way to go to catch up with the one it established three years ago in India, where 230 specialists are working on the development of plastics, medical equipment and lighting technologies.
