Make in India: US heavy machinery maker Caterpillar bullish on India, in contrast to its global outlook

MUMBAI: US heavy machinery maker Caterpillar is bullish on India, in sharp contrast to its outlook of the global markets, where it has closed 20 plants and slashed workforce to reduce costs amid a deepening slowdown.

The global heavy machinery industry is going through a rough patch as industrial demand has been muted and mining activity has slowed down. Softening commodity prices have only made matters worse.

India, too, has seen a slowdown in the equipment industry as projects got derailed, but Caterpillar’s India head says the country is now bucking the trend. “Globally, there’s a significant slowing of demand, especially for mining products, leading to capacity consolidation. India is the only bright spot that offers significant opportunity,” Vivekanand Vanmeeganathan, managing director, Caterpillar India, told ET. The company has invested $500 million in setting up manufacturing units in India. While it’s bullish on India, it doesn’t have any new investment plans.

“Due to the global meltdown, everyone has excess capacity. The first thought is that we should not be investing too much until utilisation of capacity reaches an optimal level. Now with the government’s push, we feel industry will gain momentum and reach optimal utilisation, going ahead,” he said.

The company is present in three broad businesses in India — resource industry, which primarily refers to mining, construction industry and energy. The group’s global revenue was $47 billion last year, with the three businesses contributing equally.