XUZHOU, CHINA-Caterpillar, the manufacturer of construction andmining equipment, is expanding its reach in emerging markets hereand in South America. The Peoria, IL-based company broke groundthis week on a new manufacturing building for large excavatorshere, and also announced plans to build a new production facilityin Brazil.

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Here, the company has reached an agreement with XuzhouConstruction Machinery Group to acquire the 15.87% interest inCaterpillar Xuzhou Ltd., a joint venture that was established in1995. The purchase makes CXL a wholly-owned subsidiary. The companyalso recently opened a new facility here that will host themanufacture of small and medium excavators.

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“In the next few years, we expect China to continue to investheavily across the country in a wide range of infrastructureimprovements,” said Rich Lavin, group president with responsibilityfor emerging markets, in a statement.

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Studies and site selection are in the advanced stages in Brazil,according to the company. A final location will be announced thissummer, and construction is expected to begin by early 2011, saidthe company in a statement. The new plant will produce backhoeloaders and small wheel loaders, and should take allow anotherplant in Piracicaba, Brazil to increase capacity for otherproducts, the company said.

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Luiz Carlos Calil, Caterpillar Brazil president, said that thenew plant is part of the company’s long-term global manufacturingstrategy, and will position the plant to meet customer demand inthe country. He said in a statement that the country has seen astrong economic recovery in the past year. Brazil is seen by manyglobal investors, including Equity Residential chairman Sam Zell,to be the strongest current emerging market.

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