Caterpillar Announces Key Components Joint Venture With China Liyuan

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18th October 2010, 02:19pm - Views: 989

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Caterpillar Announces Key Components Joint Venture With China Liyuan

BEIJING, Oct. 18 /PRNewswire-AsiaNet/ --

    Caterpillar Inc. (NYSE: CAT), through Caterpillar (China) Investment Co.,

Ltd. (Caterpillar China), and AVIC Liyuan Hydraulics Co., Ltd. have signed a

joint-venture agreement to establish a company to design and manufacture

medium- and heavy-duty hydraulic pumps and motors for the construction

equipment industry. The joint venture will provide components for use in Cat

products as well as third-party machinery and equipment. Hans Haefeli,

Caterpillar vice president with responsibility for Advanced Components &

Systems, and Jiming Zhu, Caterpillar vice president with responsibility for

China, took part in the signing ceremony.

    "We look forward to expanding our components presence in China through

this venture and leveraging our expertise to become a leading supplier for

Caterpillar and OEM customers in this growing market," said Haefeli. "This

strategic alignment will also enhance Caterpillar's supply base and key

component capacity in support of Caterpillar's machine capacity expansion

plans in China."

    Both parties bring expertise, technology and broad distribution

capabilities to the joint venture. This new business will begin operations in

Wuxi, Jiangsu Province, after receiving necessary government approvals.

    AVIC Liyuan Hydraulics Co., Ltd., a wholly owned subsidiary of AVIC Heavy

Machinery Co., Ltd. (600765.SSE), is the leading producer of hydraulic pumps

and motors in China.

    "We are looking forward to achieving our new enterprise development

target through the cooperation, which will enable us to become an OEM and

piston pump/motor supplier to Caterpillar, facilitating Caterpillar's effort

to localize production of key hydraulic components," said Mr. Ji Suchun,

general manager of Liyuan. "This alignment is also significant in serving the

customer needs in China and reaching industry development."

    The Caterpillar / Liyuan joint venture, once approved by the applicable

regulatory authority, will be the first key components joint venture for

Caterpillar in China. Through this, Caterpillar China and Liyuan will support

the Chinese government's goal of equipment machinery industry revitalization

by providing state-of-the-art technology and products.

    "Over the last 30 years, Caterpillar has made significant investments in

China to support a growing base of customers in the region," Zhu said. "The

joint venture is a clear indication of Caterpillar's commitment to our

customers and to the China market."

    "A good beginning is half way to success. I believe the alignment will

lead to further and broader cooperation going forward," said Ji.

    About Caterpillar:

    For more than 85 years, Caterpillar Inc. has been making progress

possible and driving positive and sustainable change on every continent. With

2009 sales and revenues of $32.396 billion, Caterpillar is the world's

leading manufacturer of construction and mining equipment, diesel and natural

gas engines and industrial gas turbines. The company also is a leading

services provider through Caterpillar Financial Services, Caterpillar

Remanufacturing Services, Caterpillar Logistics Services and Progress Rail

    About AVIC Liyuan Hydraulic:

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    AVIC Liyuan Hydraulic Co., Ltd., a wholly owned subsidiary of AVIC Heavy

Machinery Co., Ltd. (600765.SSE), is a professional enterprise to research

and develop the military and civilian hi-pressure piston pump/motor. It is an

authorized National High and New Tech enterprise for the national basic

components industry.

    Liyuan Hydraulic has successfully developed the products of 40 series 700

items to be widely used for the national aviation and spaceflight,

engineering, architecture, mining, shipping, railway engine, metallurgy and

agriculture machinery. It has a large sales and service network in the

domestic market. The products are exported to North America, South America,

Europe, Asia and beyond. For more information, please visit

    Forward-Looking Statements

    Certain statements in this press release relate to future events and

expectations and, as such, constitute forward-looking statements within the

meaning of the Private Securities Litigation Reform Act of 1995. These

statements are subject to known and unknown factors that may cause actual

results of Caterpillar Inc. to be different from those expressed or implied

in the forward-looking statements. Words such as "believe," "estimate," "will

be," "will," "would," "expect," "anticipate," "plan," "project," "intend,"

"could," "should" or other similar words or expressions often identify

forward-looking statements. All statements other than statements of

historical fact are forward-looking statements, including, without

limitation, statements regarding our outlook, projections, forecasts or trend

descriptions. These statements do not guarantee future performance, and

Caterpillar does not undertake to update its forward-looking statements.

    It is important to note that actual results of the company may differ

materially from those described or implied in such forward-looking statements

based on a number of factors, including, but not limited to: (i) economic

volatility in the global economy generally and in capital and credit markets;

(ii) Caterpillar's ability to generate cash from operations, secure external

funding for operations and manage liquidity needs; (iii) adverse changes in

the economic conditions of the industries or markets Caterpillar serves; (iv)

government regulations or policies, including those affecting interest rates,

liquidity, access to capital and government spending on infrastructure

development; (v) commodity price increases and/or limited availability of raw

materials and component products, including steel; (vi) compliance costs

associated with environmental laws and regulations; (vii) Caterpillar's and

Cat Financial's ability to maintain their respective credit ratings, material

increases in either company's cost of borrowing or an inability of either

company to access capital markets; (viii) financial condition and credit

worthiness of Cat Financial's customers; (ix) material adverse changes in our

customers' access to liquidity and capital; (x) market acceptance of

Caterpillar's products and services; (xi) effects of changes in the

competitive environment, which may include decreased market share, lack of

acceptance of price increases, and/or negative changes to our geographic and

product mix of sales; (xii) Caterpillar's ability to successfully implement

Caterpillar Production System or other productivity initiatives; (xiii)

international trade and investment policies, such as import quotas, capital

controls or tariffs; (xiv) failure of Caterpillar or Cat Financial to comply

with financial covenants in their respective credit facilities; (xv) adverse

changes in sourcing practices for our dealers or original equipment

manufacturers; (xvi) additional tax expense or exposure; (xvii) political and

economic risks associated with our global operations, including changes in

laws, regulations or government policies, currency restrictions, restrictions

on repatriation of earnings, burdensome tariffs or quotas, national and

international conflict, including terrorist acts and political and economic

instability or civil unrest in the countries in which Caterpillar operates;

(xviii) currency fluctuations, particularly increases and decreases in the

U.S. dollar against other currencies; (xix) increased payment obligations

under our pension plans; (xx) inability to successfully integrate and realize

expected benefits from acquisitions; (xxi) significant legal proceedings,

claims, lawsuits or investigations; (xxii) imposition of significant costs or

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restrictions due to the enactment and implementation of health care reform

legislation and proposed financial regulation legislation; (xxiii) changes in

accounting standards or adoption of new accounting standards; (xxiv) adverse

effects of natural disasters; and (xxv) other factors described in more

detail under "Item 1A. Risk Factors" in Part I of our Form 10-K filed with

the SEC on February 19, 2010 for the year ended December 31, 2009 and in Part

II of our Form 10-Q filed with the SEC on May 3, 2010 for the quarter ended

March 31, 2010. These filings are available on our website at

SOURCE: Caterpillar Inc.

CONTACT: China, Crystal Sui of Caterpillar China, +86-10-5921-0581,, or North America, Bridget M. Young, Corporate Public

Affairs of Caterpillar, +1-309-675-8463,


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