Caterpillar Announces Expansion Plans in China and Brazil
29 June, 2010
Caterpillar has revealed its expansion plans for China and Brazil. With 2009 sales and revenues of $32.396 billion, Caterpillar is the world’s leading manufacturer of construction and mining equipment, diesel and natural gas engines and industrial gas turbines.
The Chinese expansion, related to its large excavator business will be completed in 2014. This will increase its China-based excavator capacity by 400 percent. Caterpillar has also reached an agreement with Xuzhou Construction Machinery Group (XCMG) to acquire XCMG’s 15.87 percent ownership interest in Caterpillar Xuzhou Limited (CXL), a joint venture between Caterpillar and XCMG that was initially established in 1995. When complete, CXL will be a wholly-owned Caterpillar company. Caterpillar says that is not releasing terms of the transaction, which is subject to Chinese regulatory approval.
"In the next few years, we expect China to continue to invest heavily across the country in a wide range of infrastructure improvements, and it is critical for Caterpillar and its dealer network to continue investing in China to increase manufacturing operations, research and development, marketing and customer support for success in this growing market," said Rich Lavin, Caterpillar group president with responsibility for emerging markets. "Caterpillar has been doing business in China for more than thirty-five years," Lavin said, "and this investment is evidence of our growing commitment to the China market."
In addition, the company also has also celebrated the grand opening of another new facility in Xuzhou that will increase capacity for the production of small and medium excavators. CXL has become Caterpillar’s flagship for manufacturing operations in China with leading product quality, safety and employee engagement. "Caterpillar and its dealers have played an important role in the development and growth of the excavator market in China, and with these investments in our flagship facility in China, we are demonstrating our dedication and commitment to our growing base of Chinese customers," Zhu said.
Previously, Caterpillar announced its plans to build a new excavator production facility in the United States resulting from a global excavator sourcing study of its existing excavator manufacturing capacity in the U.S., Japan and China. The company says that the planned expansion of excavator production in China is an essential part of Caterpillar’s long-term strategy for supporting the global demand for excavators.
Latin America plant
Additional facility will increase manufacturing capacity in Latin America has been announced, too. Studies and site selection for the new facility are at advanced stages and are part of Caterpillar’s long-term global manufacturing strategy. A final location is expected to be announced later this summer.
The new facility will produce backhoe loaders and small wheel loaders, which are among the products currently made at Caterpillar’s Piracicaba, Brazil, operations. Once the manufacturing facility begins production, it will allow Caterpillar to increase capacity for the other machines produced in Piracicaba.
"The strategic decision to expand our operations in Brazil will position Caterpillar to meet customer demand, particularly considering the strong economic recovery that has taken place across the region in the last year," said Luiz Carlos Calil, Caterpillar Brazil president.
Construction of the new facility is expected to begin in late 2010 or early 2011, pending final site approvals."For Caterpillar to maintain its industry leadership, it is critical that we continue to invest in our operations in emerging markets to support our customers," said Rich Lavin.