GE Healthcare expects growth of business in Middle East as countries expand sector

Saudi Arabia and the UAE will continue to drive GE Healthcare's growth in the Middle East as the Arab world’s largest economies further develop their health care sectors, a senior executive has said.

Oil-rich Kuwait and Iraq are among the other regional markets that have contributed to the company's high single- to low double-digit business growth over the past years, Rob Walton, president and chief executive of GE Healthcare in the Europe, Middle East and Africa region, told The National.

The company plans to maintain the pace of growth in the regional markets as it prepares to be spun off as an independent entity.

“Obviously, the UAE is a very big market for us, with a significant number of healthcare players and government institutions,” said Mr Walton, who took over the reins of the $4 billion business last year.

“Saudi Arabia is also [an] extremely important part of the region and one of the bigger growth markets.”

The pace of growth varies from year to year and market to market, which is very “characteristic” of the broader Middle East, Africa and Turkey region.

“It depends on which market is driving growth. Maybe Saudi one year and maybe the UAE next,” he said.

The faster economic growth registered by the Middle East and the hydrocarbon-rich GCC bloc, in particular, has helped fuel growth for GE Healthcare over the past years.

Prospects have brightened up further, with regional governments significantly boosting investment in the development of healthcare infrastructure. They are also encouraging the private sector to share the load in boosting the number of healthcare centres.

Saudi Arabia plans to invest 250 billion Saudi riyals ($66.67bn) in healthcare infrastructure and improve private sector participation to 65 per cent, from the current 40 per cent, by the end of this decade as part of its Vision 2030 development plan, the UAE’s Mashreq Bank and global research consultancy Frost & Sullivan said in their GCC healthcare sector report.

The UAE, the second-largest GCC economy, spends about 3.5 per cent of its gross domestic product on health care, with about 70 per cent of it from public spending and only 30 per cent from the private sector.

The government's healthcare budget has been increasing year-on-year and has grown at a compound rate of 7 per cent from 2015, the report said.

The flurry of activity at the Arab Health trade show in Dubai last week reflects a "strong sense of optimism" from many of GE Healthcare's customers and partners, who are bullish about growth opportunities across the region, Mr Walton said.

Kuwait and Iraq are also focus areas for GE Healthcare.

“We tend to have more orientation around the bigger markets … but we obviously try to be present in a broad range of markets,” Mr Walton said.

The broad range of markets in the region tend to grow at varying speed, “but, on average, it balances out in a nice, steady and consistent growth rate”, he said.

Even the high single-digit “type of growth rate” for a market over the years is good rate of expansion, he said.

Last November, General Electric announced that it would split into three separate companies, breaking up the conglomerate into standalone businesses, with its health unit being spun off in early 2023.

GE is combining its renewable energy, power equipment and digital businesses into a separate unit that will then be spun off in early 2024. The remaining company will consist of GE Aviation, the company’s engine-manufacturing operation, it said at the time.

Growth remains a major focus for GE Healthcare. The Middle East and Africa are a “strong engine” for the business and Mr Walton says he plans to continue to expand the company’s business.

“What we hope with becoming a stand-alone company is that it will give us more flexibility,” he said.

As a pure-play healthcare company, the business will have “more focus in terms of where to make investment and to expand”, Mr Walton said.

“It gives more focus and control over our capital allocation and that should help us to fuel growth at an elevated rate.”

GE Heathcare’s business Europe, Middle East and Africa has grown in the mid-single digit range historically.

Beyond the Middle East, Mr Walton said he sees Russia and central Asian markets as “high-growth" areas where GE Healthcare can expand its market share.