(CAT) Caterpillar Plans Thailand Expansions

Caterpillar Inc. (CAT) plans to open a new manufacturing facility in Thailand to produce medium track-type tractors, which are used globally by Caterpillar customers for various construction applications. Construction will begin on the new factory in 2011 with production slated to commence from late 2013.

The 40,000-square-meter (430,000-square-foot) factory will be built on the Hemaraj Rayong Industrial Land in Rayong Province. The new facility will ramp up global production of medium track-type tractors to meet escalating demand for the product.

Once the facility in Thailand is fully operational and running at full capacity, it is expected to employ about 900 people. This new facility adds to Caterpillar’s investment in Thailand. Construction on Caterpillar’s Underground Mining facility at Hemaraj Rayong Industrial Land is currently underway.

The demand for Caterpillar’s heavy equipment is on the rise given improving economic conditions, particularly in the developing economies. Caterpillar is ramping up production to meet the surge in demand. Needless to say, Caterpillar’s strong brand name, pricing power and global dealer network place it in an advantageous position to exploit the growing need for infrastructure development worldwide.

We expect Caterpillar to maintain its revenue growth trajectory aided by growth in emerging markets as well as construction and mining activity in the developing countries. Increased domestic and international infrastructure spending, improved economic conditions and benefits from the yet-to-be closed acquisitions will support revenues over the next several years. The shares of Caterpillar presently retain a Zacks #1 Rank (short-term Strong Buy Rating).

Peoria, Illinois-based Caterpillar Inc. is the manufacturer of construction and mining equipment, diesel and natural gas engines, and industrial gas turbines. The company is one of the few leading U.S. companies in an industry that competes globally from a principally domestic manufacturing base.

Caterpillar operates three divisions – Machines, Engines and Financial Products. Caterpillar competes with the likes of CNH Global NV (CNH), Komatsu Ltd. (KMTUY) and Volvo AB (VOLVY).

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