CHICAGO -(Dow Jones)- In a move that reinforces its commitment to China, Caterpillar Inc. (CAT) said Tuesday that it's moving its Asia Pacific operations headquarters to Beijing from Tokyo.

Caterpillar Vice President Rich Lavin, who has administrative responsibility for manufacturing operations in the region, will relocate to Beijing in conjunction with the move.

"Caterpillar is growing in China, and moving our Asia Pacific operations headquarters, a key element of our business model, to Beijing will provide a sharper focus for operational excellence for Team Caterpillar," Lavin said in a press release. "Operational and sales success in China is a critical success factor for the company's long-term growth and profitability."

The Peoria, Ill., maker of construction and mining equipment and other related products has a 31-year history in China. Caterpillar began selling products there in 1975, and it opened an office Beijing in 1978. It reached agreements in the 1980s that allowed Chinese manufacturers to begin building Caterpillar licensed products.

In "Vision 2020" that was introduced in October 2005, which describes Caterpillar's strategy and goals through the end of the next decade, China was listed as one of seven critical success factors needed for the company to achieve its goals.

Caterpillar has 13 production plants in China, including joint-venture and wholly owned facilities. In July it reached an agreement to build a 350,000- square-foot wheel-loader manufacturing facility in China, and construction is expected to begin early next year.

Caterpillar's announcement Thursday that it completed the acquisition of a former joint venture engine operation in India is another clear sign of its commitment to emerging markets. The joint venture, formed in 1988 as Hindustan PowerPlus Limited, is now a unit of Caterpillar and has been renamed Caterpillar Power India Private Limited.

The business makes heavy-duty diesel engines for machines and generator sets, and it produces engine components. Most of the products manufactured at the facility are sold in India.

"This engine facility is an important part of our strategy as we continue to grow our business in Asia," Lavin said in a release last week.

Caterpillar's Asia Pacific region sales increased 14% to $1.28 billion for the third quarter that ended Sept. 30. The company said in its Oct. 20 earnings release that it remains optimistic for the longer-term prospects of the markets that it serves, noting that there has been continued robust growth in China, India and developing countries.

Shares of Caterpillar recently traded at $62.14, up 2%, or $1.14.

-By Desiree J. Hanford, Dow Jones Newswires; 312-750-4135; desiree.hanford@ dowjones.com

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  11-21-06 1412ET
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