MercoPress. South Atlantic News Agency

Caterpillar expands manufacturing operations in Brazil to cater Mercosur

The Illinois based US Corporation has been involved in Brazil for over half a century

Caterpillar Inc. (NYSE: CAT) announced Wednesday the expansion of its manufacturing operations in Brazil capitalizing on the expected growth of demand in the Mercosur regional block and Latin America.

The company has acquired an existing industrial facility in the country, located in Campo Largo, Parana State, which after upgrading will cover 538,195 square feet. The new facility will manufacture backhoe loaders and small wheel loaders, which are currently produced at Piracicaba and are part of the machine line up for Caterpillar's Building Construction Products (BCP) Division.

“This new facility is an important investment for the long-term growth and success of BCP, particularly as we meet the growing demand for Caterpillar's smaller, versatile machines that help our customers accomplish their work more productively and profitably,” said Mary Bell, Caterpillar vice president of the Building Construction Products Division.

In addition to the new facility, Caterpillar announced plans to increase its capacity at the company's flagship facility in Piracicaba for the manufacture of core products. Total investment of about 180 million US dollars is expected in both facilities over the next two years.

“The strategic decision to expand the operations in Brazil is part of Caterpillar's long-term global strategy for growing our business in key growth markets and this move will enable Caterpillar to meet demand from its growing base of customers in Latin America,” said Rich Lavin, Caterpillar group president with responsibility for growth markets and core products.

The present production facility of Caterpillar in Brazil, located in Piracicaba, employs 5,000 people. It currently produces wheel loaders, motor graders, backhoe loaders, track-type tractors, hydraulic excavators, compactors, underground mining loaders, generator sets and a number of components.

It is expected that the new facility will begin production in 2011 and will create up to 1,000 new jobs in Brazil when at full capacity.

Caterpillar Inc turnover in 2009 reached 32.4 billion US dollars.