GE ($GE) has finalized agreements to set up two new joint ventures in Russia--one in healthcare, the other in energy--which could drive $10 billion to $15 billion in sales.
The healthcare JV agreement was signed by Russian Technologies Deputy General Director Dmitry Shugayev and GE Chairman and CEO Jeff Immelt. This JV will manufacture, assemble, sell and service a range of high-tech medical diagnostic equipment. Russian Technologies, Reuters notes, is run by Vladimir Putin's ally Sergei Chemezov and assists companies by providing support in domestic and foreign markets and attracting investments to different industries, according to its website.
The JV will initially start producing CT scanners and then expand to other diagnostic equipment, including angiographs, MRI, ultrasound, digital X-ray, PET and gamma cameras. The government plans to spend more than $30 billion between 2011 and 2014 on healthcare, and GE estimates current Russian demand for CT scanners to be 3,000 units, the company says in a release.
Product assembly will occur in Russia using components from GE international facilities and will eventually source parts from qualified suppliers in that country. GE will hold 50% of each JV.
GE has more than 2,700 employees and reported 2010 revenues of $1.5 billion in Russia. It also has established training centers for energy and healthcare in Moscow.
GE hasn't been the only company involved in life sciences expanding in Russia. Earlier this year, AstraZeneca ($AZN) announced plans to spend $150 million on a Russian drug manufacturing plant. The drugmaker said the facility is slated to produce cancer treatments, cardiovascular drugs and other products by the spring of 2013. And Novartis ($NVS) pledged late last year to invest $500 million in Russian manufacturing, R&D and public health. Included in its plans is a manufacturing plant in the city of St. Petersburg.
- check out the GE release
- see the Reuters report