In support of growing market potential and an expanding product portfolio, Caterpillar is speeding up the investment in the Shandong SEM Machinery Co. (SEM). An additional US$ 5 million has been allocated for the first half of 2010, and part of that fund will be used for new construction of a fabrication workshop and a parts distribution center.

Paul Blackburn, SEM Chairman and General Manager, said the new investment was part of a 5-year expansion plan for the Qingzhou facility, noting “the SEM facility is a long-term investment for our company.”

As China’s economy leads a worldwide recovery from the worst recession in decades, SEM achieved a 67 percent rise in sales during the first four months of this year, which set a new record for the company. SEM recorded an annual sale of more than RMB 2.5 billion in 2008 and managed to maintain a profitable growth in 2009 despite one of the most challenging business environment in years.

The company marked another milestone on April 8 with the groundbreaking for a new Axle and Transmission building. Now that the foundation backfill has been completed, work begins for the next stage of the construction of main building piles. By taking into consideration of such aspects as safety, manufacturing and logistics capacity and contamination control management, the new facility will be set up to meet the CAT world-class standards. It is expected to have an annual capacity for 30,000 transmissions and 40,000 axles when the project is completed at the end of this year.

In accordance with Caterpillar’s Mid-tier Strategy, SEM has been positioned as the regional brand with an expanded product lineup. Earlier this year the first mid-tier product – the soil compactor – was launched to the market, and more products are expected to come in months and years ahead.