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Caterpillar looks ahead to new 'Silk Road'

By Mu Chen (chinadaily.com.cn) Updated: 2015-03-30 17:41

Caterpillar Inc, the world's largest heavy machinery maker, remains upbeat about its future in China and hopes to cash in on opportunities arising from the Beijing-led "One Belt One Road" initiative.

Doug Oberhelman, the company's chief executive, said that despite China's economic transition to slower but more sustainable growth, it will remain a key market for Caterpillar.

"We see long term the size of China's construction equipment market to be the largest in the world and we intend to participate in that," he said. "Our concentration on China for the last decade or so will continue."

Looking ahead, the company will focus on ensuring its distribution model better supports its customers in China.

However, Oberhelman believes the China-led vision, a new "Silk Road Economic Belt", on the horizon would provide vast opportunities for Caterpillar and the construction machinery market as a whole.

"At this point the vision, idea and strategy to imagine a road from the South China Sea almost to the North Sea is something that is really, really exciting for everyone," he said.

"It is a road which means lots of building of infrastructure for those several thousand miles and we would certainly like to think we would be participant in that and make that road into reality."

The "Silk Road Economic Belt and 21st Century Maritime Silk Road" were regional development strategies put forward by President Xi Jinping in 2013.

Earlier this year, the company cut its 2015 revenue outlook to around $50 billion, about 9 percent lower than in 2014, as a result of low oil prices and lower expectations for construction equipment sales in China due to a weaker market.

Oberhelman said that although he did not expect the construction industry to bounce back in the near term, the company was happy with its prospects and the state of investment in China and also pointed to the country's large mining market as another reason for optimism.

With this year marking its 40th anniversary in China, Caterpillar currently has 29 factories, four research and development centers, and three logistics and parts centers across the country

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