Caterpillar (China) Investment Co. Ltd., a wholly owned subsidiary of Caterpillar Inc., and AVIC Liyuan Hydraulics Co. Ltd. this week 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.
"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 Hans Haefeli, Caterpillar vice president with responsibility for Advanced Components & Systems. "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., a wholly owned subsidiary of AVIC Heavy Machinery Co., 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 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.
Headquartered in Peoria, Ill., Caterpillar is a 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 Services. For more information, visit www.cat.com.
