Caterpillar in US$ 300 million China expansion

Caterpillar has announced a US$ 300 million project to build a large engine manufacturing facility in China.

Once operational in 2013, the Tianjin-based plant will become Caterpillar's third source for its 3500 series engines.

Caterpillar China executives met with officials from Tianjin on 18 November to close the deal, which would see the construction of Caterpillar's largest new engine facility in the country to date.

"This is a long-term strategic decision to increase capacity for 3500 engines that will better position Caterpillar to meet customer demand for these engines in all regions of the world," Gary Stroup, Caterpillar large power systems vice president said.

The new facility will focus on producing engines for customers in China and the Asia-Pacific region.

Meanwhile, the company's US-based large engine centre in Lafayette, Indiana, will continue to produce the 3500 series engines as well as other large engines, supporting 3500 distribution outside of the Asia-Pacific region.

The news comes days after expansive Caterpillar's 15 November announcement of its planned acquisition of mining equipment manufacturer Bucyrus International for US$ 8.6 billion.