GE keeps its future in the local market
Choi, 50, who took office last October, said in an interview with the JoongAng Daily yesterday that those companies would include not only smaller suppliers for large conglomerates’ renewable energy businesses but also producers of fuel-efficient parts for traditional energy businesses.
The head of the U.S.-based General Electric Co.’s local lending arm also said he was not concerned about possible bubbles that might emerge from the faster than expected recovery of the local financial markets because local companies will pay more attention to risk management now and because of the experience companies gained through the Asian financial crisis 10 years ago.
Directly before taking his current position, Choi served as the head of GE Healthcare Financial Services Asia. In the early 2000s, he worked for IBM Global Financing as its senior executive.
Q. What is your opinion about Korea’s financial market compared with those of other counties, and what is GE Capital Korea’s general business plan in this market?
A. Korean financial markets are not so different from U.S. and European markets. Only the regulations are different, as regulations will differ from country to country. Korea’s government regulation system is systematic. Financial companies attach great importance to regulations without uncertainties when they invest in a certain country. Accordingly, the parent company GE has concluded that it should continue its investment in Korea. On the other hand, there are many more uncertainties in the Chinese and Indian markets.
We, GE Capital Korea, will promote both organic and inorganic growth. [Inorganic growth is growth through mergers and acquisitions.] I have been seeking chances for M&As since I took office but have not yet found a suitable partner. We are looking for companies that can complement our business. The ideal partner will be a company that knows the Korean market and Korean clients well and can reach the customers that we cannot reach.
With the current administration emphasizing green industries as the nation’s next-generation growth engine, are you also interested in eco-friendly businesses?
Our parent company, General Electric, has actively been making investments in the wind power business. The company also focuses on making general power generation and distribution processes more eco-friendly, by developing more energy-efficient turbines and grid management technologies for more efficient power distribution.
We have recently begun to look at parts suppliers for wind power businesses and developers of software and technology for power distribution in Korea [for investment].
It is a difficult job to assess [such companies’] new technologies and know whether they can be commercialized. In this aspect, we have an advantage over other financial institutions in green financing, because we can make inquiries about these technologies with GE’s industrial affiliates operating related businesses. We have industrial knowledge.
There is a concern that the faster-than-expected recovery of the local market might cause a loss of chances for restructuring of the market and companies needed for long-term growth. What do you think?
The crisis has led all financial companies, including us, to realize that something we had never imagined can become a reality. The global financial system could have collapsed without government intervention, which was something most people could not have imagined. Therefore, from now on, financial companies will be more cautious in providing loans and doing other kinds of business, reflecting the risks they had not imagined before the crisis. Governments are also tightening regulations, considering the risks and providing a framework, within which financial companies will do business.
Korean companies, large firms in particular, are going through this crisis more easily [than other countries’ firms do] thanks to their experience with the Asian financial crisis 10 years ago. Therefore, local companies, especially big ones, can make use of the crisis to extend their global market shares. Still, it will take more time for small- and medium-size companies to emerge from the current crisis. As we focus on small- and midsize companies rather than large ones, we will help them find new opportunities in the crisis.
By Moon So-young [symoon@joongang.co.kr]
with the Korea JoongAng Daily
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