Caterpillar, Peoria, Ill., plans to expand its manufacturing operations in Brazil. The company has acquired an existing industrial facility located in Campo Largo, Parana State, that after upgrading will cover 538,195 sq. ft. The new facility in Campo Largo will manufacture backhoe loaders and small wheel loaders, which are currently produced at Piracicaba, Brazil, and are part of the machine lineup for Caterpillar’s Building Construction Products (BCP) Division.

“This new facility is an important investment for the long-term growth and success of BCP, particularly as we meet the growing demand for Caterpillar’s smaller, versatile machines that help our customers accomplish their work more productively and profitably,” said Mary Bell, Caterpillar vice president of the Building Construction Products Division.

In addition to the new facility, Caterpillar is announcing plans to increase its capacity at the company’s flagship facility in Piracicaba for the manufacture of core products. The company expects to invest about $180 million in both facilities over the next two years.

“The strategic decision to expand the operations in Brazil is part of Caterpillar’s long-term global strategy for growing our business in key growth markets and this move will enable Caterpillar to meet demand from its growing base of customers in Latin America,” said Rich Lavin, Caterpillar group president with responsibility for growth markets and core products.

“In selecting the new manufacturing facility, we considered a number of Brazilian cities over the last six months,” said Luiz Carlos Calil, president of Caterpillar Brasil. “Campo Largo was selected due to the site characteristics and the possibility of increasing capacity sooner. The geographic location of this new facility will enable Caterpillar to improve its supply chain efficiency and expand its operations flexibility aligned with the Caterpillar Production System principles,” Calil said.

The new facility is expected to begin production in 2011 and will create up to 1,000 new jobs in Brazil when at full capacity.