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Expansion into South America

Expansion into South America. Origins. Benjamin Holt –credited as founder Caterpillar was formed in the merger of the Holt Manufacturing Company and the C. L. Best Tractor Company, in 1925. It has since become the world leader in heavy equipment production. What Caterpillar is known for.

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Expansion into South America

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  1. Expansion into South America

  2. Origins • Benjamin Holt –credited as founder • Caterpillar was formed in the merger of the Holt Manufacturing Company and the C. L. Best Tractor Company, in 1925. • It has since become the world leader in heavy equipment production.

  3. What Caterpillar is known for • Founder Benjamin Holt invented the “track system” for machinery in 1904. • An associate commented that “it moved like a caterpillar”, and the name stuck. • Almost all modern heavy equipment and most military vehicles (tanks, personnel carriers) depend on the track system in their design.

  4. Corporate Stats • Chairman and CEO Douglas Oberhelman • Total Revenue 2013: 55.7B • Net Income 2013: 3.8B • Number of employees: over 132,000 • Headquarters: Peoria, Illinois.

  5. Company Video • http://www.youtube.com/watch?v=IGvidk6kzGE

  6. Cat Ventures South

  7. Timeline of activity • 1951-1953 - VenezuelaCaterpillar machines help construct the 10.5-mile-long Autopista superhighway through the Andes Mountains. • 1962 - Santiago, ChileCaterpillar machines are the only machines in use on the construction of the La Paloma Dam. • 1963-1964 - PanamaSeveral Caterpillar machines help widen sections of the Panama Canal. • 1967-1968 - South AmericaCaterpillar machines and engines help construct the 193-mile long Trans-Andean pipeline. • 1969-1972 - ArgentinaCaterpillar machines help construct the Portezuelo Grande Dam.

  8. Timeline of activity • 1970 - PeruCaterpillar machines work on various reconstruction projects following a major earthquake and landslide that devastated areas of Peru. • 1970-1972 - EcuadorFifty-one Caterpillar machines help construct a 320-mile-long pipeline. • 1971 - BrazilSixty-two Caterpillar machines help construct the Salto Osorio Dam. • 1971 - PeruEighty-nine Caterpillar machines help construct the Chira-Piura Dam. • 1971 - PanamaTwenty-six Caterpillar machines help construct the Bayano Hydroelectric Project. • 1971-1973 - BrazilA total of 216 Caterpillar machines play a key role in the construction of 2,760 miles of new highways for Brazil.One of these highways was the Trans-Amazonica Highway. • 1973-1978 - BrazilCaterpillar machines help construct the Sao Simao Dam. • 1973-1978 - BrazilMore than 50 Caterpillar machines help construct the Agua Vermelha Dam. • Many more projects completed in the 80’s until now.

  9. Brazil • Main manufacturing plant located at Piracicaba. • In 2010, the company decided to build a second plant at Campo Largo and expand the existing plant. This Foreign Direct Investment cost Caterpillar around $180million.

  10. Brazil

  11. Supplying the region • The plants in Brazil allows Caterpillar to easily ship its products to neighboring countries. • Caterpillar has been able to dominate the South American market because they are able to mass produce their products cheaply on the continent and have eliminated most shipping costs.

  12. Problems in South America? • Competing with smugglers! • Theft most prevalent in Canada and U.S.A. • Most often occurs at construction sites

  13. Equipment Theft Put it on a ship, and it’s gone!!

  14. Equipment Theft cont • Equipment stolen in North America, shipped and smuggled into South America • Equipment keys are very similar to one another • 5% recovery rate • Equipment that costs a million dollars sold for $200,000 • Difficult to steal equipment in South America because owners usually sleep near equipment • CAT is essentially competing with its own equipment

  15. Overall Performance • Caterpillar is expanding rapidly in South America as a result of its foreign direct investment in Brazil • The manufacturing plants in Brazil enable it to supply the continent with heavy equipment while maintaining low costs • Despite competing with the smuggling trade, CAT has emerged the leading contender in South America

  16. References • http://www.caterpillar.com/en/careers.html • http://en.wikipedia.org/wiki/Caterpillar_Inc. • http://www.bizjournals.com/eastbay/stories/2005/02/07/focus2.html?page=all • http://www.fbi.gov/houston/press-releases/2009/ho122309.htm • http://www.marketplace.org/topics/life/construction-equipment-hot-property-thieves

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