With a long-term view toward enhancing support for mining customers, Caterpillar Inc. announces new plans to build a mining truck facility in Indonesia and to invest to increase capacity at the company's large mining truck facility and large track-type tractor facility in the United States.
Caterpillar Chairman and CEO Doug Oberhelman and Group President Rich Lavin announced Caterpillar's latest capacity expansion plans while attending the 2011 Asia-Pacific Economic Cooperation Summit (APEC). The Summit brings business leaders, heads of state and other senior governmental officials together with the aim of improving trade and regional economic integration and cooperation between the 21-member nations. The United States is hosting the 2011 APEC Summit.
"It is important that we have announced our latest growth plans for mining at the APEC Summit because much of the global demand for commodities today is being driven by the positive economic growth and development that is taking place in the growth markets of the Asia\Pacific region," Oberhelman says. "The capacity expansion announced today is in addition to our previously announced investments to support our mining business, and it demonstrates our commitment to be the leader in this strategically important industry," Oberhelman adds.
New Truck Facility in Indonesia, Capacity Expansion at Existing Indonesian facility
To improve its support of mining customers in Asia\Pacific, Caterpillar plans to open a new mining truck facility in Batam, Indonesia. A range of mining truck chassis and bodies will be produced at the new facility and will be shipped to mining customers throughout Asia\Pacific. The company plans to invest about $150 million in the new facility, which is expected to be operational in 2012 for truck bodies, with the first trucks produced in the third quarter of 2013.
"The mining industry is a critical part of Indonesia's economy and plays an important role in many of the key growth markets in Asia\Pacific," Lavin says. "We have a long and successful history operating in Indonesia, and with this announcement, we continue to build out our full business model across Asia\Pacific to better position Caterpillar to compete and succeed in this region, and to maintain our global leadership position," Lavin adds.
The Batam facility will be the second manufacturing operation for Caterpillar in Indonesia. The company's existing production facility, located in Cileungsi, West Java, opened in 1982 and is focused on producing excavators and skidders. The company has also approved plans to triple excavator production at the Cileungsi location. The 20-ton class of excavators made in Indonesia are primarily sold into the mining, forestry, construction and agricultural markets across Indonesia.
Since the beginning of 2010, Caterpillar has announced a series of investments and capacity expansion plans for its operations across Asia, including a quadrupling of excavator production in Xuzhou, China, and a total of nine new facilities, which are now under construction in China. The company currently has 16 facilities in China, along with four research and development centers and three logistics and parts centers. Caterpillar also has previously announced the construction of two new manufacturing operations for Thailand.
Capacity Expansion Plans for Decatur, IL and East Peoria, IL
Caterpillar also is announcing plans for significant new investments at the company's existing manufacturing facilities in Decatur, IL, and East Peoria, IL. The company plans to invest nearly $300 million to further increase capacity for large mining trucks produced in Decatur. An additional capital investment of about $340 million is planned for production of large track-type tractors in East Peoria, which are used in mining applications around the world. The capacity expansion plans in Indonesia and the United States will be supported by other Caterpillar component facilities around the world, including the previously announced 850,000-square-foot, state-of-the-art manufacturing facility for the machining, assembly, test and painting of axle assemblies for large mining machines. The new axle assembly facility in Winston Salem, NC, is scheduled to open next week.
"More than 90% of the large trucks made in Decatur are exported, and more than 80% of the large tractors made in East Peoria are exported," Oberhelman says. "Beginning with capacity expansion plans announced in 2008, and once the plans announced today are fully in place, we will have nearly tripled our worldwide large truck capacity and doubled our large track-type tractor production capabilities in East Peoria," Oberhelman says. "It is fitting that we have announced these significant new investments for our operations in Asia and the United States while attending the APEC Summit because it demonstrates the importance of open and free trade between the United States and the Asia\Pacific region," Oberhelman says.
The company expects the additional truck capacity in Decatur to be installed by 2016. The work to expand large track-type tractor production in East Peoria is expected to be completed by 2015.