US-based construction and mining equipment giant Caterpillar Inc.'s China-based subsidiary Caterpillar (China) Investment Co. Ltd (Caterpillar China) and China's AVIC Liyuan Hydraulics Co. Ltd have signed a joint venture agreement to establish a company to design and manufacture medium- and heavy-duty hydraulic pumps and motors for the construction equipment industry.
AVIC Liyuan Hydraulics Co. Ltd acts as Chinese heavy industry company AVIC Heavy Machinery Co. Ltd's hydraulic pump and motor manufacturing subsidiary.
According to a Caterpillar statement, the joint venture will provide components for use in Caterpillar products as well as third-party machinery and equipment. The new business will begin operations in Wuxi located in the Chinese province of Jiangsu. Work will begin on Caterpillar's first key joint venture in China after the receipt of necessary government approvals.
Through their joint venture, Caterpillar China and Liyuan will support the Chinese government's goal of revitalizing the equipment machinery industry by providing state-of-the-art technology and products, Caterpillar said.