Caterpillar Inc. (CAT) said Monday it will open a plant in Thailand to produce underground mining equipment in the midst of increasing demand for mined commodities by developing countries.
Construction of the 645,000-square-foot plant at the Hemaraj Rayong Industrial land in Rayong Province will start this year. Production at the plant is expected to begin in late 2012. The factory will eventually employ about 800 people. The Rayong plant is the company’s first production site in Thailand.
It will manufacture articulated trucks and loaders used in hard-rock underground mining work. The company already produces mining equipment in Australia and Brazil, both major producers of mined commodities for developing economies. Demand for copper, coal, iron ore and other commodities has been rising in recent months even as economic growth in the US, Europe and Japan remains sluggish.
“The on-going infrastructure development plans for the world’s growth markets combined with a long-term trend toward urbanisation and growing wealth in emerging economies should continue to help drive long-term demand for commodities,” said Steve Wunning, Caterpillar group president responsible for mining.
Caterpillar, the world’s largest producer of construction equipment by sales, announced the purchase of mining equipment company Bucyrus International Inc. (BUCY) in November. The $7.6 billion acquisition is the largest purchase in Caterpillar’s history. The addition of Milwaukee-based Bucyrus will greatly expand Caterpillar’s offering of mining equipment to include hydraulic shovels, drag lines and blast-hole drills.
Caterpillar’s stock was recently trading down 30 cents at $93.43 a share.