GE and Russian Technologies form joint venture to manufacture
medical devices
7 Jan 2011
GE and state corporation Russian Technologies (Rostekhnologii)
are to form a joint venture to manufacture, assemble, sell and service
medical diagnostic equipment in Russia. Financial details of the
transaction were not disclosed.
The framework agreement, signed by GE International President and
CEO Ferdinando Beccalli-Falco and Russian Technologies’ Deputy
General Director Dmitry Shugayev and witnessed by Russian Prime
Minister Vladimir Putin, supports the Russian government’s
priorities of attracting foreign investment, enhancing the country’s
aging energy infrastructure and modernizing its healthcare system.
The initiative, which was also signed with a gas turbine joint
venture with Inter RAO UES, is aligned with GE’s and its partners’
core industrial capabilities. Until local production of components
can be established in Russia, they will be imported from other GE
locations or qualified suppliers.
“These strategic partnerships are the latest examples of GE’s
long-term commitment to Russia and our ‘company to country’
strategy, in which we work directly with governments to satisfy
their needs in rapidly developing markets,” said Beccalli-Falco.
“We are working with our Russian partners to bring technology to
Russia and develop it locally. By harnessing GE’s wide range of
products and services in strategic growth sectors, we and our
partners can help to diversify Russia’s economy beyond natural
resources and increase energy efficiency. In addition, we can apply
innovative technology to help Russia reduce costs, increase access
and improve quality in healthcare.”
Building on a memorandum of understanding the parties signed June
4, 2010, the agreement reflects GE’s deepening commitment to Russia,
a major growth market for the company. The framework agreement
envisions production of GE’s medical and energy equipment in Russia,
as well as technology transfer, which will facilitate the
development of a local supply chain and later, production in Russia
of component parts for the joint ventures.
Healthcare Joint Venture
The healthcare joint venture is expected to start with production
of CT scanners, then expand to other diagnostic equipment such as
angiographs, MRI, ultrasound, digital X-ray, PET, gamma cameras and
medical devices. The joint venture may use the recently established
joint GE Healthcare-Medical Technologies Ltd CT scanner assembly
facility in Moscow. In May 2010, GE Healthcare installed in a Moscow
hospital the first Russian-assembled 16-slice CT scanner, and
through the end of November, it had been used to perform more than
2,000 exams.
Healthcare components initially will be sourced from GE, shifting
later to local production by qualified Russian suppliers in keeping
with GE’s requirements for quality, cost-effectiveness, design
specifications and intellectual property protection.
The government plans to spend more than US $15 billion from
2011-2013 on healthcare. GE estimates Russian demand today for CT
scanners alone at 3,000 units.
Shugayev said, “The medical joint venture, meanwhile, could
make a substantial contribution toward modernizing Russia’s
healthcare system. Establishing production in Russia will facilitate
not only the transfer of modern technology and local sourcing of
components, but timely and quality service, as well as the creation
of a wide regional system for the preparation of specialists.”
Russian Technologies and GE will each hold a 50% stake in
the healthcare joint venture. GE will exercise operational control
over the joint ventures, with joint decisions by the partners on
strategic matters.