Green giant

The recently launched ‘ecomagination’ initiative is the latest move by global giant General Electric in its battle to address environmental issues, and make a large profit along the way. Andrew Mernin meets Nabil Habayeb, president and CEO of GE in the Middle East and Africa, to discover how the company is getting rich by going green

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By  Andrew Mernin Published  June 6, 2006

|~||~||~|The cautious way that Habayeb explains the GE ethos, choosing his words carefully while throwing nervous glances across to his colleague, suggests that image is a very touchy subject for the company. “We are going to make green by being green,” he says in rehearsed fashion, referring to GE’s struggle to shed its reputation as an electrical goods manufacturer to become an eco-friendly corporation. “When people think of GE they think light bulbs, washing machines and refrigerators, but we are a lot more than that,” he says. “The biggest challenge for me has been educating people and changing their perception of the business,” the GE Middle East and Africa CEO adds. This commitment, to all things green, however, isn’t just squeaky-clean corporate-speak. The recently launched ‘ecomagination’ initiative displays a genuine effort by the company to develop eco-friendly, yet profitable products. Last year, GE generated US $10 billion in global revenue from eco-friendly technology, a figure that certainly reflects Habayeb’s view that “there’s nothing wrong with making money from the environment.” In the Middle East GE struck a US $2.5 billion deal last month with Emirates Airlines to supply its GE90-115B engines to 42 Boeing 777 aircraft, while the group also agreed a Memorandum of Understanding worth US $1.6 billion to supply Qatar Airways. With more efficient fuel consumption and lower noise levels, GE’s latest jet engine (the Genx) has cutting-edge combustion technology, which reduces Nitrogen Oxide emissions by 15%. But this is just one example of GE’s global ‘ecomagination’ mission to invest US $1.5 billion into cleaner technologies and breach the US $20 billion mark for revenue generated by eco-friendly solutions by 2010. In Kuwait, GE’s Sulaibiya plant – the world’s largest water filtration project of its kind – purifies over 375,000 cubic metres of waste water a day, with similar GE projects expected in the Middle East in the coming years. “We are investing a lot of money in new technology to address the problems of the world, and we are going to make money out of it,” says Habayeb. “In the past we used to say I have a product and then ask how can I sell it in the Middle East? Now we say I have a market, these are the growth drivers of the market, and ask how can I bring in the whole GE portfolio to meet the market’s needs?” Founded by Thomas Edison in 1876, GE has had a lengthy historical presence in the region since 1933 and today, has several Gulf-based units including commercial finance, transportation, energy and infrastructure development. As GE leads the way in providing eco-friendly products, Habayeb believes that more and more Middle Eastern businesses are finally facing up to their duties to protect and preserve the environment around them. “While the region changes from being oil and gas reliant, there is more awareness over the need to protect the environment and more companies are realising they have a social responsibility to be eco-friendly,” he says. “In fact, a group of different companies including ourselves, got together in Abu Dhabi recently to address environmental issues and the future of energy throughout the region, and we will be working closely with the Abu Dhabi government in the future,” he adds. Under the umbrella of the ‘Masdar’ initiative referred to by Habayeb, GE are working alongside other major partners such as Shell, Mitsubishi and Fiat, to help Abu Dhabi to retain and grow its share of the global energy market and provide expertise in the government’s US $100 million fund to develop cleaner technology. As well as preserving the environment, GE is also playing a huge contribution in preserving the health of the region’s population. GE Healthcare’s CV, which includes medical imaging, information technology, diagnostics, patient monitoring systems, disease research and drug discovery, is “being re-imagined from diagnostics to prevention,” according to Habayeb. In Saudi Arabia, General Electric El-Seif Medical Services, a joint venture between GE Healthcare and El-Seif Development Group, provides a GE-supported online service to Saudi hospitals for equipment maintenance. And GEs ‘Centricity’ radiology system is the first bilingual system in both English and Arabic to be installed in the Middle East. Habayeb has devoted his entire working career to General Electric, and helped the Middle East to contribute US $8 billion to the company’s US $78 billion non-US revenues in 2005.“GE was the first company I ever had a job interview with and 24 years later I’m still here,” he says proudly. Drawing attention to a picture of himself with ‘Jeff’ - that’s Jeffrey Immelt, chairman of GE worldwide to us non-GE folk - Habayeb is clearly excited by the future prospects for the company in the region. “There is a huge cash investment coming here as the oil-based economy diversifies, which means more tourism and other new industries,” he says. “Just imagine GE’s portfolio in relation to these growth drivers – we are an industrial company, an infrastructure company, we are a consumer and commercial finance company and, with our ownership of NBC Universal, we are also in media and entertainment.” The level of Habayeb’s excitement over GE’s potential in the Middle East is equally matched by his enthusiasm over the company’s commitment to corporate social responsibility. “As part of our funds for Africa program we took a village in Ghana that had a high infant mortality and high illiteracy rate and we gave them medical equipment, power and clean water,” he says. “Sure enough, what happened was that doctors moved there, health improved, people stopped migrating out of town, and because of the power we gave them, we started a literacy program in the evening.” Such is the range of GE’s portfolio it seems that Habayeb may have lost count of the company’s diverse range of products. “We have 40 products at the moment,” he says, before his colleague corrects him, explaining “it’s actually 22 products.” Rather than being a sign of being numerically challenged, however, perhaps this honest mistake could be another indicator of Habayeb’s passion and future vision for the numerous avenues that GE could potentially explore in the region. “We are focusing very heavily on the Middle East and Africa and the company is constantly changing as we look to adapt to new industries,” he says. “In the past we were in some industries that made sense, but then we had to make the transition into industries that are more important for today and for tomorrow. For example, we have now exited the insurance business, but we have built new platforms in water treatment and security.” As well as GE’s global insurance arm, discontinued businesses include ‘Genworth,’ a once wholly owned financial subsidiary of GE whose sale contributed to losses of US $994 million and global loss of earnings in 2005 of US $3.1 billion following the sale of GE Insurance Solutions. Despite the losses, there is no doubt that GE is one of the biggest businesses in the world. It employs 300,000 people, has operations in over 100 countries and its capital arm holds assets of around US $500 billion. Habayeb insists, however that the Middle Eastern market is essential to GE’s future growth strategy. “We have made the transition from focusing on developed markets to developing markets such as the Middle East,” he says. He also envisages consumer finance as a future driver of growth in the region. “We are not as active in consumer finance in the Middle East as we are in Europe and the US, but we are looking to expand and address the commercial and consumer finance markets in the region. In the Middle East we have been more active on the aviation side of things where we finance a lot of private jets and lease out jet engines to aircraft,” he says. In deepening GE’s roots in the Middle East, Lebanon-born Habayeb, is conscious of his role as an ambassador for the Arab world. “We are trying to get the world to understand what the true Middle East is all about, and change all the negative perspectives that some people have about the area. “The wealth of the region is not just in cash, oil and gas, it’s the human resources and the youth that is available here. It is our challenge to tap into it and hire people who can be GE representatives with a local flavour,” he adds. Summing up his GE career as he glances over at the contents of his office cabinet that contains a myriad of photographs and trophies, Habayeb says: “It hasn’t been a challenge, it’s been an energising experience.” It is during this experience that Habayeb has witnessed the shift of GE from a manufacturer of electrical products to a global green giant, and one that is awakening the entire Middle East to the need to protect the environment for future generations to come.||**||

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