Caterpillar Inc. (NYSE: CAT) announced today that it will build a state-of-the-art manufacturing facility in Tianjin, China, to increase its worldwide capacity for large-engine production.
Once operational in 2013, the engine facility will become Caterpillar's third global source for the company's industry leading 3500 series engines. The facility in Tianjin will focus on producing engines for customers in China and the Asia-Pacific region.
For more than 20 years, Caterpillar 3500 series engines have delivered reliable power for Caterpillar machinery used in demanding applications worldwide. In addition, 3500 series engines have continuously satisfied difficult requirements for global customers in a wide range of industrial applications, including the oil and gas, marine and electric power industries.
Caterpillar China executives and leaders joined officials from Tianjin at a signing ceremony today to announce the $300 million (USD) project, which represents Caterpillar's largest new engine facility investment to date in China.
"For years, Caterpillar customers across China have been using machinery and gen-sets powered by 3500 engines to help drive sustainable economic progress and development," said Jiming Zhu, Caterpillar vice president with responsibility for China. "With the opening of this new engine facility in Tianjin, Caterpillar will be better positioned to compete and support its growing base of customers in China and across Asia," Zhu added.
Caterpillar's Large Engine Center in Lafayette, Indiana, will continue to produce the 3500 series engines as well as other large engines now made at Lafayette. The Lafayette facility will focus on supporting 3500 series customers outside of the Asia-Pacific region. As such, the company does not expect the opening of the new facility in Tianjin to have an impact on current employment in Lafayette.
"This is a long-term strategic decision to increase capacity for 3500 engines that will position Caterpillar to better meet customer demand for these engines in all regions of the world," said Gary Stroup, Caterpillar vice president with responsibility for the Large Power Systems Division.
In recent years, Caterpillar 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. Today, Caterpillar has more than 7,400 employees across China.