Caterpillar Excavates China, Brazil Markets

XUZHOU, CHINA-Caterpillar, the manufacturer of construction and mining equipment, is expanding its reach in emerging markets here and in South America. The Peoria, IL-based company broke ground this week on a new manufacturing building for large excavators here, and also announced plans to build a new production facility in Brazil.

Here, the company has reached an agreement with Xuzhou Construction Machinery Group to acquire the 15.87% interest in Caterpillar Xuzhou Ltd., a joint venture that was established in 1995. The purchase makes CXL a wholly-owned subsidiary. The company also recently opened a new facility here that will host the manufacture of small and medium excavators.

“In the next few years, we expect China to continue to invest heavily across the country in a wide range of infrastructure improvements,” said Rich Lavin, group president with responsibility for emerging markets, in a statement.

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

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