(CAT) Caterpillar Opens New Facility

Caterpillar Logistics Service Inc., a wholly owned subsidiary of Caterpillar Inc. (CAT), intends to open a new parts distribution center in Spokane, Washington. The company is now the industry’s leading global service parts distributor.

The new facility in Spokane, which forms a part of the company’s North American multi-year expansion and enhancement program, will extend to more than half a million square feet, replacing the existing 125,000 square -foot facility. The new facility adds greatly to the company’s position in the industry by enhancing its capacity for growth and demand along with further optimizing the supply chain.

The construction is likely to begin in 2011 summer and is expected to be operational in 2012. Depending on market demand, the Spokane Distribution Center may offer employment to 100-150 people and thus develop the economy of the area, which is one of the company’s top priorities. During the second quarter, the company achieved a whopping 66% and 52% year-over-year improvement in April and May sales, respectively.

Besides, the new facility will also assist in the overall development of Spokane. The unit will cash in on the improvements achieved with the recently added one million square foot parts distribution center in Clayton, Ohio, in 2011. It will be the fourth parts facility to utilize Service Parts Management (SPM), a global solution replacing age old softwares supporting the company. We currently have a Zacks #1 Rank (short-term Strong Buy recommendation) on the stock.

Peoria, Illinois-based Caterpillar Inc., is the manufacturer of construction and mining equipment, diesel and natural gas engines, and industrial gas turbines. It 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. The company competes with the likes of CNH Global NV (CNH), Komatsu Ltd. (KMTUY) and Volvo AB (VOLVY).

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