Shanghai, July 1 (Gasgoo.com) Caterpillar Inc., the world's largest maker of construction and mining equipment, said this week that it would buy Xuzhou Construction Machinery Group's 15.87% stake in their joint venture and build a new excavator-making plant in Xuzhou, media reported.
The move to buy out its local partner's ownership interest in the Chinese venture, Caterpillar Xuzhou Ltd., is seen as part of Caterpillar's plans to expand production in Xuzhou city, eastern China. If Chinese regulators approve the transaction, Caterpillar will own the JV company, which was established in 1995.
Caterpillar Inc, base in Peoria, Illinois, U.S., said on Monday that it had broken ground in Xuzhou, for a plant that would build large excavators and that it had opened a plant there to make small and medium sized excavators. The new factory will help increase Caterpillar’s excavator capacity in China by fivefold through 2014.
"In the next few years, we expect China to continue to invest heavily across the country in a wide range of infrastructure improvements," Rich Lavin, Caterpillar group president with responsibility for emerging markets, said in a statement. "It is critical for Caterpillar and its dealer network to continue investing in China."
Earlier this month, media also reported that Anhui Jianghuai Automobile Co. (JAC) was finalizing a 4 billion yuan ($586 million) truck and engine joint venture deal with Caterpillar Inc. and truck maker Navistar International Corp.
