China ‘important’ to Caterpillar’s success, says company president

CHICAGO — “China is important to Caterpillar’s global success,” said Ramin Younessi, a group president of the US equipment manufacturer.

Caterpillar sold 38 pipe-layers to the China National Petroleum Corporation 40 years ago and started its business in China.

“We established our first manufacturing site in Xuzhou, Jiangsu province, to build hydraulic excavators because it’s critical for us to be close to the local customers and to manufacture near the market,” said Younessi, who is the person in charge of Caterpillar’s Construction Industries Group.

Back in the 1990s, Caterpillar only had five suppliers in China. Now the number has surged to about 400. Some of the suppliers have gone global, serving not only Caterpillar, but other manufacturers around the world.

“We have strong power in research and development, supply chain, operations and product sales and support in China,” Younessi said. “We saw the need from Chinese customers for high-quality construction equipment as the country’s economy continued booming.”

Younessi said that Caterpillar’s strategy in China emphasizes local leadership development, end-toend business model establishment, long-term sustainable growth, and corporate citizenship.

For years, Caterpillar has been upgrading its manufacturing facilities in China in a bid to make them leaner, more efficient, focused on high safety standards, digitally advanced and sustainable.

The Illinois-based construction and farm machinery maker is also investing in digital technologies to upgrade its service offerings in China.

Caterpillar launched its first e-commerce retail platform to address the growing demand of Chinese customers at an international exhibition of construction machinery in Beijing in early September.

“Chinese customers are advanced in digital applications, and we see rising interest in digital services,” said Younessi.

The 94-year-old company is ranked 58th on Fortune’s 500 in 2019. Its 2018 revenues reached $54.7 billion, a year-on-year increase of 20 percent. Profits climbed more than 700 percent to $6.15 billion.

At this time, Caterpillar has about 20 facilities and more than 10,000 employees in China. “Caterpillar is proud of its more than 40-year history in China,” said Younessi.