GE Infrastructure keeps forecast and eyes Asia

John Rice, chief executive and a GE vice chairman, said he expected rising inflation and higher commodity prices to be challenges, but noted demand for GE's products and services was still strong.

"We are providing critical products and services to companies and countries who are mining and selling commodities. Demand for these products has surged with the increase in commodities costs," Rice said in an e-mail interview on Monday.

Prices of commodities such as copper, steel and gold have risen steadily this year due to increased demand from China and high oil prices.

"Demand for our products continues even as we have to raise prices due to raw material costs going up," Rice said, ahead of his visit to Singapore for an industry conference on Tuesday.

"We are focusing on reducing our expenses, and ... finding ways to cut costs by managing our supply chain, controlling costs and improving efficiencies," he said.

In April, GE Chief Executive Jeffrey Immelt increased the group's 2008 cost-cutting target by $1 billion.

GE is the second-biggest U.S. company by market value after Exxon Mobile and its infrastructure unit -- which makes engines, electrical turbines and water purification plants, as well as providing financial services -- is its largest unit, contributing $57.9 billion to total revenue last year.

ASIA GROWTH

GE Infrastructure is looking to expand and invest in Asia, with Southeast Asia singled out as a high growth market, rising 25 percent in the first quarter of the year.

"Asia is a very important market for us. It is approximately $20 billion and growing around 20 percent per year," Rice said. "For Infrastructure business specifically, Malaysia and Singapore are the two biggest markets in terms of infra revenue."

Earlier this year, Rice said he expected about two-thirds of 2008 revenue growth to come from outside the United States, helping offset the effects of a slowing US economy.

GE shares have fallen 26 percent this year after the firm shocked Wall Street in April with an unexpected drop in first-quarter profit.

Some analysts have argued the firm should sell off some of its units as it has become too complicated for investors to understand.