Caterpillar Inc.
(
CAT
) is planning to expand its manufacturing facility in Sumter, South
Carolina for a total investment of $20 million. On expansion, the
plant will be the primary source for small and large hydraulic
cylinders that are used in Caterpillar products in North and South
America.
The Sumter facility is currently engaged in the production of
small hydraulic cylinders. Once the expansion is completed,
production of larger hydraulic cylinders will be shifted from
Caterpillar's Joliet Illinois facility to the Sumter facility. The
Joliet facility will then focus on other components that are being
currently produced there.
The expansion is slated to be completed by the fourth quarter of
2012. The expansion will add 170,000 square feet, tripling the
Sumter facility's total footprint to approximately 275,000 square
feet. Post expansion, Caterpillar will add more than 80 jobs over a
two-year period.
The company is doggedly adding production capacity for many of
its products. Caterpillar's recent string of investments includes
expansion in Tosno, Russia for off-highway trucks, new mining truck
facility in Indonesia and expansion of existing facility, capacity
expansion of mining trucks produced in Illinois, expansion of
mining truck capacity and a new small engine facility in India, and
a new small excavator and tractor facility in Georgia. A new parts
distribution center in California and expansion of an R&D
center in Wuxi, China are also in the pipeline.
We believe the top line at the company will continue to grow on
the back of torrid demand for construction and mining equipment.
Caterpillar's expansion plans of opening new facilities and
furthering existing operations, particularly in the emerging
markets, will boost its long-term potential.
Furthermore, its biggest acquisition to date, Bucyrus, will not
only enhance its product line and increase its presence in the
emerging markets, but also strengthen its position as the top
mining equipment manufacturer in the U.S. Accordingly, the company
currently retains a Zacks #2 Rank on the stock, equivalent to a
short-term rating of Buy.
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 two
divisions - Machinery and Power Systems (M&PS) and Financial
Products. Caterpillar competes with the likes of
CNH Global NV
(
CNH
),
Komatsu Ltd.
(
KMTUY
) and
Volvo AB
(
VOLVY
).
CATERPILLAR INC (
CAT
): Free Stock Analysis Report
CNH GLOBAL NV (
CNH
): Free Stock Analysis Report
VOLVO AB ADR B (
VOLVY
): Free Stock Analysis Report
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