General Electric said Wednesday it has chosen Korea as its global headquarters for offshore and marine business in light of the country’s burgeoning offshore plant industry.
GE, which supplies key parts such as propulsion systems, engines and distribution transformers for drillships, FPSOs (floating production, storage and offloading units) and LNG carriers, considers technological development near Korea’s major shipyards along the southern coast, acquisition of local firms or setting up joint ventures.
“GE’s global offshore and marine business will be led in Korea and a Korean CEO will be named in early May to head the global headquarters,” Khang Sung-wook, chief executive of GE Korea, said in a press conference.
Khang Sung-wook, chief executive of GE Korea
“Internal competition (to be chosen as the global HQ) with China, Brazil and Singapore was intense."
Korea has the world’s largest shipyards in terms of shipbuilding capacity and order backlogs, and hires some 130,000 people in the industry that posted about $400 billion in exports last year.
The size of the global offshore market amounts to $7 billion, about $3 billion of which comes from Korea.
The industrial giant’s offshore business grew through mergers and acquisitions, and its manufacturing facilities are scattered around the world -- drilling and turbo machinery in Italy and Houston in the U.S.
“While South America has the largest demand for offshore plants, Korea has the most promising companies with which GE can build partnerships,” Khang said.
It will be GE’s second industry-specific global headquarters after its mining headquarters in Australia.
Starting with the high-value-added offshore plants and subsea technologies, GE plans to eventually expand its business to components for commercial vessels, according to Khang.
Korean shipbuilders command some 80 percent of the global markets for drillships, LNG carriers and FPSOs.
“The choice of Korea as the global headquarters comes as GE set ’partnership’ and ’localization’ as the pivots of its globalization strategy,” the CEO said.
“It also comes as GE focuses on infrastructure R&D more than ever. Between 4 and 5 percent of GE’s sales are invested in R&D.”
GE has eight business areas including oil & gas, health care, aviation, transportation and lighting.
GE’s global revenue amounts to $147 billion and operating profit $16.1 billion.
By Kim So-hyun (
sophie@heraldcorp.com)
