Caterpillar Sees Growth Opportunities in Japan and N. America

Caterpillar (NYSE:CAT) is looking to increase sales in Japan and North America by strengthening its product offerings in industries that are expected to drive growth in these geographies. In Japan, Caterpillar is ramping up production capacity to meet higher demand to meet the rebuilding efforts following last year’s earthquake. In North America, the company is sharpening its focus on the waste management industry with its recent Exodus alliance that use its distribution network for materials handling machinery.

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Caterpillar Japan increasing its production capacity

Caterpillar Japan has decided to boost its production of excavators by 25% in the coming year to service the demand arising from infrastructure rebuilding after the devastating earthquake which hit the country last year. Their will also be an increase in the production of wheel loaders and bulldozers whose production is expected to increase by 15% in the coming year.

According to a presentation by Tokyo based construction equipment major, Komatsu, the sale of construction machinery makers has gone up by 32% in the fourth quarter of last year. Caterpillar, along with other players in this industry, are expecting to cash on this boom.  According to Nikkei newspaper, Caterpillar Japan will reconfigure three production lines at the Akashi plant to increase its monthly excavator capacity from 1,500 to 2,000 units. This plant is operated by a joint venture between Caterpillar (NYSE:CAT) and Mitsubishi Heavy Industries.

Caterpillar signs agreement with Exodus in North America

Caterpillar has signed an exclusive agreement with Exodus Machines Incorporated to design and supply their wheel and track material handlers through Caterpillar’s dealers. Although initially their machines will be sold under the Exodus brand, they are expected to transition to the Cat brand by the end of 2013. These machines will be available for sale immediately in North America and are expected to complement Caterpillar’s own range of material handlers above 25 tons.

This alliance will follow Catepillar’s formation of a new strategic business unit, called Caterpillar Industrial and Waste Group. As the name implies, it will be serving customers globally in the waste material handling industry. Caterpillar will use Exodus’s design along with its own distribution network and support capabilities to make a significant impact in this sector. Caterpillar has also picked up a minority equity stake in Exodus’s new entity, Exodus machines which is looking to expand manufacturing in the Superior area.