Capitalizing on the expected growth in Latin America, Caterpillar Inc. (NYSE: CAT) this week announced the expansion of its manufacturing operations in Brazil. The company has acquired an existing industrial facility in the country, located in Campo Largo, Parana State, which after upgrading will cover 538,195 square feet. The new facility will manufacture backhoe loaders and small wheel loaders, which are currently produced at Piracicaba and are part of the machine line up for Caterpillar's Building Construction Products (BCP) Division.

"This new facility is an important investment for the long-term growth and success of BCP, particularly as we meet the growing demand for Caterpillar's smaller, versatile machines that help our customers accomplish their work more productively and profitably," said Mary Bell, Caterpillar vice president of the Building Construction Products Division.

In addition to the new facility, Caterpillar announced plans to increase its capacity at the company's flagship facility in Piracicaba for the manufacture of core products. Total investment of about $180 million is expected in both facilities over the next two years.

"The strategic decision to expand the operations in Brazil is part of Caterpillar's long-term global strategy for growing our business in key growth markets and this move will enable Caterpillar to meet demand from its growing base of customers in Latin America," said Rich Lavin, Caterpillar group president with responsibility for growth markets and core products.

The present production facility of Caterpillar in Brazil, located in Piracicaba, employs 5,000 people. It currently produces wheel loaders, motor graders, backhoe loaders, track-type tractors, hydraulic excavators, compactors, underground mining loaders, generator sets and a number of components.

It is expected that the new facility will begin production in 2011 and will create up to 1,000 new jobs in Brazil when at full capacity.

Peoria, Ill.-based Caterpillar Inc. is a leading manufacturer of construction and mining equipment, diesel and natural gas engines and industrial gas turbines.