Print“We welcome the signing of the agreement with GE, which provides for the future large-scale localization of production of high-tech medical equipment in Russia.”
General Electric is expanding its presence in Russia with the establishment of a healthcare joint venture that could drive billions in sales of medical diagnostic equipment, part of the firm’s strategy to expand its presence in emerging markets.
The joint venture with Russian Technologies, a government entity set up to help develop Russia’s high tech industry, will focus on modernizing Russia’s medical diagnostic equipment to improve healthcare in the country. GE and Russian Technologies will each have a 50 percent stake in the venture.
GE will exercise operational control of the businesses, with shared decision making by both partners on strategic matters. As is the case with most foreign companies seeking to establish a Russian presence, manufacturing will take place in Russia using GE parts, which over time will be sourced from qualified Russian suppliers.
At the end of 2010, Russian Prime Minister Vladimir Putin promised $3.9 billion in federal funding before 2020 to modernize and develop the country’s pharmaceutical and medical industry. He attended the signing ceremony, which took place during the 10th International Investment Forum in Sochi, Russia. The healthcare joint venture agreement was signed by GE Chairman and CEO Jeffrey Immelt and Russian Technologies Deputy General Director Dmitry Shugayev.
“We welcome the signing of the agreement with GE, which provides for the future large-scale localization of production of high-tech medical equipment in Russia,” says Shugayev.
The venture will start with the production of CT scanners, relying on GE’s recently established CT manufacturing facility in Moscow. Production will eventually expand to other diagnostic equipment such as angiographs, MRI, ultrasound, digital X-ray, PET, and gamma cameras. GE Healthcare installed the first Russian-assembled 16-slice CT scanner in one of Moscow's hospitals in May 2010 and plans to supply 60 more CTs to hospitals all over Russia by the end of the year.
The Russian government has targeted more than $30 billion over the next four years to modernize its healthcare facilities. GE estimates current Russian demand for CT scanners alone at 3,000 units.
GE is no newcomer to Russia, with more than 2,700 employees and 2010 revenues of $1.5 billion from operations there across a wide spectrum of industries. It has also established training centers for energy and healthcare in Moscow.
GE joins a growing list of health-related companies setting up joint ventures in Russia in the past year, including AstraZeneca, Novartis, and Indian pharmaceutical Aurobindo.
September 23, 2011
http://www.burrillreport.com/article-ge_establishes_joint_venture_in_russia.html
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