Wouter Van Wersch (GE)

General Electric (GE), a Boston-based industrial giant that entered Indonesia in 1940, is set to focus on electrifying Indonesia for the next six years. It is a rather optimistic view despite the company’s headquarters acknowledging in its latest 2017 annual report that competition was “far more challenging than anticipated”, and that it expected the market to “deteriorate further into 2019”. With challenges ahead, how does the company view its current position in Indonesia and arrange its future strategy? GE Asia Pacific president and chief executive officer Wouter Van Wersch sat down for an interview with The Jakarta Post’s Norman Harsono in Jakarta recently to talk about its plans, including its focus on the country’s electricity sector.

Question: What are some of GE’s biggest milestones in Indonesia?

Answer: Indonesia is one of the countries where GE has been performing well and built a solid footprint in recent years.

Today, about 25 to 26 percent of the power generated in Indonesia is generated through GE’s main equipment and we are even part of the country’s electricity transmission with our electric component manufacturing UNINDO plant in East Jakarta [that is a joint venture with state-owned electricity company PLN].

If you look at aviation, Indonesia is a booming market with two of our biggest worldwide customers: [low-cost airline] Lion Air and [national flag carrier] Garuda Indonesia. Altogether, we have about 1,000 engines on airplanes in Indonesia and expect this figure to grow over the years.

Meanwhile, in transportation, we have about 350 locomotives in the country as the leading supplier of [state-owned railway operator] PT KAI.

Then you’ve got the healthcare sector, where we experienced year-on-year growth in Indonesia. We’ve even developed some solutions, such as our portable Vscans, an ultrasound device for pregnant women in remote areas that was originally developed for Indonesia but now being sold around Africa.

What are the company’s growth prospects this year?

There’s a strong push from the government to continue on the electrification path. I think Indonesia is about 95 percent electrified while the target is 100 percent by 2025. We will work with PLN, leveraging local capabilities, to achieve this target.

However, it’s also the election year when there tends to be a slowdown in the decision-making process running up to the elections. But Indonesia’s medium and long term goals are clear and thus, I’m very confident growth will continue to be positive.

I always emphasize electricity because it is the foundation for growth, but power plants need fuel, so the energy sector will also be a key.

We are now implementing our gas turbines in the Tambak Lorok [Central Java] [power plant] and Java 1 thermal power plant [in Karawang, West Java], which will come online in 2020 and 2021. We expect growth in coal-related technology because it’s an abundant resource while pushing for the usage of more efficient technology. But, there’s also a push for renewable energy through solar, wind and hydroelectric.

Meanwhile, aviation will continue being a driving sector although we aren’t expecting orders for new airplanes at the moment because our clients have recently made huge investments.

Healthcare growth has been stable and I’m very bullish [on that area] because it’s a great market all around, especially in Indonesia.

An interesting thing to mention is that we are a big investor in digital technology and 3D printing. We’ve developed applications that enable more preventive maintenance such as our digital twin technology, which is already available in Indonesia.

How do Indonesia’s growth prospects compare to other Southeast Asian countries?

In Southeast Asia, we’ve got developed countries like Singapore, but also some countries with huge potential like Indonesia and Vietnam. Between the two, I see us more materializing in Indonesia, but of course our approach is different because Vietnam is more centralized.

Furthermore, Indonesia is big. It has a huge population, which is a key asset, and I like the entrepreneurial spirit in Indonesia, which I think Indonesia is now ahead of compared to other Southeast Asian countries.

The government is now focusing on developing human resources in anticipation of the digital era. What are GE’s efforts to build human resources?

We are looking at how we can support and bring the right expertise into Indonesia such as with 3D printing, digital technology and capacity building. We do leadership sessions with our key clients such as PLN and [state-owned energy holding company] Pertamina and invite them to our internal university, Crotonville [in New York, United States].

And we reskill people at all levels to play key roles in new ways of manufacturing and management. There’s always a question of whether or not digital technology will reduce the workforce but I think it’s going to push them to upskill.

GE had some bad press the past few years as stock prices fell and earnings slipped. What is GE Asia Pacific’s strategy to reverse these poor numbers?

We will continue to work with our customers in the region and bring the right technology. GE’s fundamentals are strong and we are transforming the company to make them stronger.

We did spin-off some sectors, its public knowledge, but that was to make them stronger, which is well understood by our customers.

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