By Alwyn Scott
NEW YORK (Reuters) - General Electric Co's (N:GE) recent purchase of part of Doosan Engineering & Construction Co Ltd (KS:011160) of Korea will sharply boost the U.S. manufacturer's revenues from its $9.5 billion purchase of Alstom (PA:ALSO) power assets last year, a senior GE executive said on Tuesday.
GE's purchase of Doosan's heat recovery steam generator (HRSG) unit for $250 million provides critical engineering and manufacturing capacity that GE needs as its Alstom-linked sales increase, Joe Mastrangelo, Chief Executive Officer of GE's gas power systems business, said in an interview.
New equipment orders in GE's power division, excluding Alstom, fell 11 percent in the second quarter. But since the Alstom deal closed last November, GE has added 30 orders for heat recovery steam generators to its backlog, Mastrangelo said, noting that the company typically sold 14 per year before the acquisition.
An HRSG is part of a combined cycle plant and provides about one third of its power.
The purchase of Doosan's HRSG business, which closed Tuesday, will help GE fill those new orders while also gaining after-sale service revenue and project management capability, Mastrangelo said.
"This allows us to double the output of the product into our business," he said.
The Alstom deal increased revenue from each massive gas power plant GE's sells. Before the purchase, GE's sales totaled about $175 per kilowatt of capacity in a typical large plant. Now, the figure is more than $300 per kilowatt.
"Even if you had a flat market, we'll still grow because of the Alstom capability," Mastrangelo said.