Hyundai Heavy Industries recently signed a memorandum of understanding with the state of Rio de Janeiro and the municipal city of Itatiaia to build a construction equipment factory in Brazil.

Hyundai Heavy said it will make an investment of U.S. $150 million for the 562,000-square-meter factory in Itatiaia, Rio de Janeiro. The state of Rio de Janeiro and the municipal city of Itatiaia will develop infrastructure including laying down electricity, water and gas supply lines, and paving the entry road.

Upon completion by the end of 2012, the plant will be capable of producing 2,000 units of construction equipment a year, including excavators, wheel loaders and backhoe loaders. Hyundai Heavy also plans to extend its annual production capacity to 4,000 units by 2014.

The Ulsan, South Korea-based company expects the new Brazilian plant will serve as the South and Central America base helping Hyundai Heavy secure market share, and provide better service to clients in the region.

The Brazilian construction equipment market is expected to continue growing as various infrastructure projects such as express train, express highway, and hydroelectric power plant projects are expected to win approval in the run-up to the 2014 World Cup and 2016 Olympic Games.

Hyundai Heavy Industries is the world’s largest shipbuilder and a leading construction equipment manufacturer.