Caterpillar enters into a Joint Venture with China Liyuan

Caterpillar Inc is going to be in partnership with china’s AVIC Heavy Machinery Co to plan and manufacture medium and heavy duty hydraulic pumps and motors.

Caterpillar hasn’t disclosed yet to the nature of the tie up, the size or shareholding between Caterpillar China and AVIC Liyuan Hydraulics.

The components made by the partnership will be supplied to Caterpillar and other big construction equipment producers.

The deal is under approval by Chinese regulators. Global industry giants are investing in China as the country is investing heavily on Beijing’s infrastructure.

Before this Caterpillar had a small venture with XCMG Construction Machinery Co, and had withdrawn the invested 15.9 percent share from the company.

Hans Haefeli, Caterpillar vice president says that the company is looking forward to mark its presence in China and through this venture Caterpillar wants to be the leading supplier Caterpillar products and OEM customers as China is considered to be growing market.

The alliance will also make Caterpillar’s supply base strong and increase key component capacity which will ultimately support Caterpillar’s machine capacity expansion in China.

Both of the parties have agreed to bring their broad distribution capability, technology and expertise to the joint venture.

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