Cat aims to conquer Middle East plant equipment market

Last month, Caterpillar launched an impressive new range of plant machinery at Reveal 2006 — an annual press event held in Malaga, Spain. Our very own Conrad Egbert happily jumped onboard a flight to the sunny climes of Southern Europe, to report on Caterpillar’s efforts for domination in the Middle East construction sector.

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By  Conrad Egbert Published  February 11, 2006

Caterpillar unveiled its ‘Spring’ range of excavators at its demonstration centre in Malaga last month. And as the shiny new range of machinery went on parade, the group’s senior regional management outlined the group’s plans for expansion in the booming Middle East market — where an increasing number of plant manufacturers are seeking to stake their claim. The construction equipment giant launched the new range of C-series mini hydraulic excavators, E-series backhoe loaders, D-series medium-size excavators and H series medium-size wheel loaders, at the event. It also presented the new 30-tonne M325D MH and 36-tonne M325D LMH wheeled material handlers. “These new machines have been upgraded after months of research and development,” Sam Mottram, marketing consultant, Europe, Middle East and Africa (EMEA) told Construction Week. “Dubai is the largest outlet for skid steer mini hydraulic excavators, in the world. By the end of this year we are expecting to be the number one supplier of the product in the UAE.” Caterpillar, which has seen a boost in its rental business globally, is now focusing on the Middle East’s booming construction industry. It has even begun to promote it’s rebuilding arm called Caterpillar Remanufacturing (Cat Reman), by encouraging existing Cat machine owners to hand in their old machines to be rebuilt rather than disposing of them. “The Middle East is very important to us, especially the UAE, and we are very pleased with the way things are going there at the moment,” said Michael Baunton, vice president, Caterpillar product, EMEA. “Our rentals are growing all over the world and we hope and expect to increase our business in the Gulf as well. But I think the biggest problem we face at the moment is being able to live up to the demand for our machines. “Most people view that as a good sign but we are trying to meet those requirements as soon as possible. At the moment we have about 18 months’ lead time for Caterpillar trucks, which we are trying to better.” The group is now targeting several new developing markets around the world, including the massive Chinese market. “Markets where the standard of living is relatively low are the places where we are expecting huge growth,” said Baunton, “as they will certainly invest to raise that standard.” “In that respect, China is a huge opportunity for us so in the next couple of years we will have to pay close attention to it.” Baunton dismissed fears that the emerging Chinese plant manufacturing sector may pose a threat to the company. He said: “Chinese machines are much less sophisticated than our machines and do not pose a threat to us at all,” said Baunton. “At the moment there is a very high demand for sophisticated machines and that demand is only going to rise, plus, transport costs from China to the rest of the world are ridiculously high, so it doesn’t make good business sense for them.” Currently, Caterpillar invests over US $1 billion (AED3.6 billion) in new products and equipment each year. From 2005 to 2008, it plans to produce about 100 hundred machines.

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