JOYG Joy Global Inc. (MM)

Heavy equipment manufacturer Caterpillar Inc. (CAT) decided to expand its existing work tools business in Wamego, Kansas. The 3,716 square meter (40,000 square feet) extension will take the total manufacturing space of the plant to a quarter of a million square feet and create 120 new jobs at the plant.

Caterpillar manufactures buckets, blades and other work tools at the Wamego plant that are used on a wide range of Caterpillar machinery. The company’s decision to expand the plant emanated from increased demand for its products in both the domestic U.S. and international markets.

Keeping in mind the company’s long-term vision, for 2015 and beyond, of spurring production to meet increasing demand for its products, Caterpillar has systematically planned to construct new facilities besides the upgrade and expansion of existing plants spanning North America, South America, Europe and Asia. Such an expansion curve also reinvigorates employment, creating more and more jobs.

Beginning August Caterpillar decided to expand its plant in West Fargo, North Dakota. The company will add another 20,903 square meters (225,000 square feet) to the plant by investing $50 million and additionally creating 250 jobs.

The company's international expansion of operations includes among other endeavors the beginning of a new facility in Xuzhou, in the Jiangsu Province of China. This strategic move would help meet the increasing demand for its products in the Asia-Pacific region.

Caterpillar's growth goals are supported by a capital expenditure budget of $3 billion earmarked for 2011 alone. The company hopes to equally invest this sum of money on domestic as well as overseas operations.

Caterpillar currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. Its peer Joy Global Inc. (JOYG) presently has a Zacks # 1 Rank, equal to a short-term Strong Buy rating.

Peoria, Illinois-based Caterpillar Inc. is a manufacturer of construction and mining equipment, diesel and natural gas engines, and industrial gas turbines. The company is also a leading U.S. exporter with more than half of its sales being generated outside the United States.

 
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