Caterpillar looks to future with R

A Caterpillar machine works at a construction site in Guangzhou. Caterpillar, which entered the China market in 1996, recently inaugurated its new multi-functional Asia-Pacific research and development center in Wuxi, Jiangsu province. Bloomberg News

New $26m center inaugurated in Wuxi, Jiangsu province

Research and development is an investment in the future, Tana L. Utley states emphatically.

"As Caterpillar continues to increase its manufacturing presence in China to support our growing Chinese customer base, it is strategically important to have world-class product development and validation facilities in the region," said Utley, chief technology officer and vice-president of the world's leading construction and mining equipment manufacturer.

"It's a significant and necessary part of our vision 2020: by that year, Caterpillar wants to be No 1 or 2 in every continent, as well the industry leader in China."

Caterpillar, which entered the China market in 1996, inaugurated its new multi-functional Asia-Pacific research and development (R&D) center in Wuxi, Jiangsu province, with an initial investment of $26 million for the first phase, earlier this month.

"Although Caterpillar was hit by the economic downturn like the rest of the world, we maintained our strategic investment in the Wuxi R&D center. Now as the world economy starts to recover, and especially in China, we are better positioned to leverage this comprehensive R&D center to support Caterpillar's business growth in China," said Utley.

According to Utley, in 2008, Caterpillar invested $1.7 billion on research and development, 3.5 percent of its total revenue.

As a company known for innovation, durability and reliability, Caterpillar has more than 3,800 active granted patents worldwide.

"The Wuxi R&D center underscores our commitment to technical excellence in support of our Chinese customers and manufacturing operations," said Utley.

The Wuxi center will be the hub for Caterpillar resources in China, in charge of product and process development, validation, localization and technological training.

Among its many functions, the new center will have an engine test facility with performance and emissions development capability, an advanced materials laboratory, an electronics lab, a system and machine integration facility and validation capability.

It will also coordinate another R&D center which it set up in Qingdao, Shandong province, in 2005 for product and process development, and a design center in Xuzhou, Jiangsu province which opened in 2003 focusing on product improvement.

Utley said the R&D center was established in Wuxi because the city's GDP has been consistently ranked in the top 10 in China for the past 10 years, and it is located in the center of China's most developed Yangtze Delta region.

Wuxi is close to most of Caterpillar's Chinese manufacturing facilities, including a new medium wheel loader and motor grader manufacturing facility in Suzhou, and home to two Caterpillar manufacturing facilities - a component manufacturing facility and an engine campus.

It is also close to China's largest talent pool.

Local Chinese talent, recruited and developed by Caterpillar, will provide the majority of the center's workforce. It will have 200 employees in the first phase. After completing phase three with more capability added, the center will have 600 employees.

"With this local center, with work carried out by Chinese engineers, we can be close to our customers and know and meet their requirements and needs," said Utley.

"As part of Caterpillar global research and development network, Wuxi leadership will be able to leverage global R&D resources for employee trainings and follow Caterpillar's R&D processes and standards for product development, while considering China's special requirement to develop products with the correct market value," said Utley.

By providing technical services in the region and on time, Wuxi R&D center will support both Caterpillar's business growth in China and other emerging markets, and China's economic development and environmental protection, thus playing a large role in realizing Caterpillar's long-range strategic plan, Utley added.

"For more than 30 years, Caterpillar and its dealers have been investing in China to support our customers and to help drive the unparalleled economic progress that has taken place during that time," said Zhu Jiming, vice-president and China chairman of Caterpillar.

Caterpillar has been building its China business footprint for over 13 years and now employs 5,800 staff across 11 manufacturing facilities and 10 business offices.

(China Daily 12/28/2009 page4)