SUPPLIER NEWS - Caterpillar expands Chinese R&D

Several hundred new engineers will boost the current 500-strong staff team in a major expansion of Caterpillar’s multi-functional research and development centre at Wuxi in China’s Jiangsu province. The world’s largest construction and mining machinery manufacturer says it’s anticipating a phase of robust growth in the Chinese market, and the expansion will make the centre its second largest.

Caterpillar has also started construction of an equipment testing area for the Asia Pacific region as well as a production site for its large-wheel loaders in nearby Nantong.

Caterpillar’s vice president Tana Utley says, “China is the largest construction-equipment market in the world, and is also where our future lies. Caterpillar continues to invest in China to help our Chinese customers succeed and to position Caterpillar for long-term leadership in China.” The company believes China’s heavy-machinery market will grow by 10% in 2012.

Caterpillar is remaining tight-lipped about the expansion plans prior to the release of its 2011 financial report, however, Tana Utley says the project will be similar to the initial $50 million phase completed in December 2009.

The Wuxi R&D centre will add a number of engine-test cells for light, medium and heavy duty equipment, as well as high-horsepower engines. It will also include more labs for fuel systems, electronics, hydraulics, cooling, roll-over protection and virtual reality, as well as other components and systems labs.

“Through the Wuxi center, we are committed to developing sustainable and cost-competitive local R&D resources to help Caterpillar compete in China and other growth markets,” says Caterpillar’s product development director Sun Xiaobo.

The US-based machinery company has so far invested more than $2 billion in the Chinese market, with 16 facilities established in the country and a further nine under construction.

This investment stemmed from the Chinese government’s $632 billion domestic economy stimulus package in 2008, of which 83% went into infrastructure construction. This led to a surge in production of construction equipment, with 234,000 units produced in 2010 – or more than half of Caterpillar’s global total. The country’s five year plan will see infrastructure spending grow by almost 160% by 2015.

“Caterpillar’s future is in China. So it’s likely that we will further add investment to expand Wuxi’s R&D facilities in China soon,” says Tana Utley

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