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Caterpillar Plans to Expand Excavator Production Facility in China

In support of its long-term global strategy for meeting customer demand for excavators, and recognizing the rapid expansion of opportunities in the key growth markets of Asia, Caterpillar Inc. (NYSE: CAT) announced today its expansion plans for the company's excavator facility in Xuzhou, China.

As a part of its overall excavator sourcing plans, 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 is not releasing terms of the transaction, which is subject to Chinese regulatory approval.

Caterpillar Wheel Excavator

"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."

Lavin, along with Caterpillar China Vice President Jiming Zhu and Caterpillar Excavation Division Vice President Gary Stampanato, attended a groundbreaking ceremony in Xuzhou today for what will become a new manufacturing building for large excavators.  In addition, the company also celebrated the grand opening of another new facility in Xuzhou that will increase capacity for the production of small and medium excavators.  Once the CXL excavator expansion plans are completed in 2014, Caterpillar will have increased its China-based excavator capacity by 400 percent.

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.

In recent years, the company and its independent dealers have made significant investments to expand the range of products and components produced in China, increase and improve customer support services, and expand and enhance dealer coverage in every province.

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 planned expansion of excavator production in China is an essential part of Caterpillar's long-term strategy for supporting the global demand for excavators.


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