Caterpillar Grows Indian Operations in Global Strategy

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--A $210 million investment in Caterpillar Incorporated's (NYSE:CAT) (Peoria, Illinois) Indian operations is part of the company's global corporate strategy to invest between $2 billion and $3 billion over the next five years.

The India project will cover the setting up of an engine manufacturing facility for electric power generator sets (gensets) and an expansion in the off-highway truck manufacturing facility in Chennai.

Currently, Caterpillar has three manufacturing plants, a logistics services base, and a research and development center in India. To date, the company has invested about $1 billion in its Indian operations.

A new $150 million engine manufacturing plant will produce Perkins brand 4000 series engines, which will be used for 750- to 2,500-kilovolt power gensets. The company is identifying a site for the plant, and production is scheduled to start in two to three years.

The plant will be set up through Caterpillar's subsidiary Perkins and will have an initial annual production capacity of 3,000 units, which could be increased to 5,000 units.

Kevin R. Thieneman, India and ASEAN country manager, said that the 4000 series engines are currently produced in the United Kingdom. "The Indian facility will be the first outside the U.K., and 50% of the production will cater to parts of Asia and other markets," said Thieneman.

The existing four-decade-old off-highway truck manufacturing plant in Chennai will be expanded with a $62 million investment. A previous $108 million project investment is near completion, and the new investment will assist in developing technology and customer services.

Thieneman said that the company has already made investments in Southeast Asia, the U.S., Brazil and India.

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