Caterpillar to Build New Large-Engine Manufacturing Facility in China

The company plans to produce 3500 series engines in Tianjin, China to supply customers in China and Asia

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Nov 18, 2010, 10:30 ET

BEIJING, Nov. 18, 2010 /PRNewswire-FirstCall/ -- 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.

About Caterpillar:

For more than 85 years, Caterpillar Inc. has been making progress possible and driving positive and sustainable change on every continent. With 2009 sales and revenues of $32.396 billion, Caterpillar is the world's leading manufacturer of construction and mining equipment, diesel and natural gas engines and industrial gas turbines and diesel-electric locomotives. The company also is a leading services provider through Caterpillar Financial Services, Caterpillar Remanufacturing Services, Caterpillar Logistics Services and Progress Rail Services. More information is available at: http://www.cat.com.

Forward-Looking Statements

Certain statements in this press release relate to future events and expectations and, as such, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to known and unknown factors that may cause actual results of Caterpillar Inc. to be different from those expressed or implied in the forward-looking statements. Words such as "believe," "estimate," "will be," "will," "would," "expect," "anticipate," "plan," "project," "intend," "could," "should" or other similar words or expressions often identify forward-looking statements. All statements other than statements of historical fact are forward-looking statements, including, without limitation, statements regarding our outlook, projections, forecasts or trend descriptions. These statements do not guarantee future performance, and Caterpillar does not undertake to update its forward-looking statements.

It is important to note that actual results of the company may differ materially from those described or implied in such forward-looking statements based on a number of factors, including, but not limited to: (i) economic volatility in the global economy generally and in capital and credit markets; (ii) Caterpillar's ability to generate cash from operations, secure external funding for operations and manage liquidity needs; (iii) adverse changes in the economic conditions of the industries or markets Caterpillar serves; (iv) government regulations or policies, including those affecting interest rates, liquidity, access to capital and government spending on infrastructure development; (v) commodity price increases and/or limited availability of raw materials and component products, including steel; (vi) compliance costs associated with environmental laws and regulations; (vii) Caterpillar's and Cat Financial's ability to maintain their respective credit ratings, material increases in either company's cost of borrowing or an inability of either company to access capital markets; (viii) financial condition and credit worthiness of Cat Financial's customers; (ix) material adverse changes in our customers' access to liquidity and capital; (x) market acceptance of Caterpillar's products and services; (xi) effects of changes in the competitive environment, which may include decreased market share, lack of acceptance of price increases, and/or negative changes to our geographic and product mix of sales; (xii) Caterpillar's ability to successfully implement Caterpillar Production System or other productivity initiatives; (xiii) international trade and investment policies, such as import quotas, capital controls or tariffs; (xiv) failure of Caterpillar or Cat Financial to comply with financial covenants in their respective credit facilities; (xv) adverse changes in sourcing practices for our dealers or original equipment manufacturers; (xvi) additional tax expense or exposure; (xvii) political and economic risks associated with our global operations, including changes in laws, regulations or government policies, currency restrictions, restrictions on repatriation of earnings, burdensome tariffs or quotas, national and international conflict, including terrorist acts and political and economic instability or civil unrest in the countries in which Caterpillar operates; (xviii) currency fluctuations, particularly increases and decreases in the U.S. dollar against other currencies; (xix) increased payment obligations under our pension plans; (xx) inability to successfully integrate and realize expected benefits from acquisitions; (xxi) significant legal proceedings, claims, lawsuits or investigations; (xxii) imposition of significant costs or restrictions due to the enactment and implementation of health care reform legislation and proposed financial regulation legislation; (xxiii) changes in accounting standards or adoption of new accounting standards; (xxiv) adverse effects of natural disasters; and (xxv) other factors described in more detail under "Item 1A. Risk Factors" in Part I of our Form 10-K filed with the SEC on February 19, 2010 for the year ended December 31, 2009 and in Part II of our Form 10-Q filed with the SEC on May 3, 2010 for the quarter ended March 31, 2010. These filings are available on our website at www.cat.com/sec_filings.

SOURCE Caterpillar Inc.