Caterpillar Expanding in China, Again

Equipment builder to develop new R&D center, manufacturing plant by late 2012

Caterpillar Inc. has outlined another expansion of its Chinese operations, this time to include a testing center for machines produced in China and the Asia Pacific region, and a new factory to manufacture large wheel loading machines for the local and regional mining and construction sectors.

The value of these two projects was not announced. Representatives of Caterpillar and the Xitong Technical Industrial Park Administrative Committee this week executed an investment agreement for both construction programs. Caterpillar said its new Asia Pacific Proving Ground (APPG) should be in operation by Q3 2012, and the new large wheel loader plant at Tongzhou, in Jiangsu Province, should start production in Q4 2012.

Caterpillar recently indicated its global capital investments will total $3 billion this year as it pursues strategic capacity expansions in North and South America, Europe, and Asia. At present, Caterpillar has 16 manufacturing plants in China, three R&D centers, and three logistics and parts centers there.

The APPG will be an expansion of Caterpillar's research and development presence in Asia. It will develop and validate Caterpillar machinery produced in China and the Asia/Pacific region.

"The Asia Pacific Proving Ground will be critical for Caterpillar to develop and validate the right products for growth markets quickly and cost effectively," stated Caterpillar vice president and chief technology Tana Utley, of the group’s Product Development and Global Technology Division. "After this new proving ground is open, Caterpillar will be better positioned to compete and support its growing customer base in China and across Asia.”

The new manufacturing plant will produce a new model of large wheel loader that Caterpillar’s Wuxi Research and Development Center in China has developed, supporting local and regional customer demand.

The Tongzhou site is near to several of Caterpillar's other plants, and near to most of its Chinese suppliers.

"The large wheel loaders we are going to make in Tongzhou will give customers a new option that has been designed to suit the needs and requirements for mining applications in China and growth markets," stated vice president Luis de Leon, who is with Caterpillar’s Mining Products Division. "By locating the wheel loader facility with the proving ground and near several other Caterpillar operations and our supply base, we will leverage Caterpillar's total business model to speed product development cycle times with unmatched engineering and supply chain support."

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