* Already has independent dealer in country
* With sanctions suspended, will bring finance arm to bear
By Scott Malone
May 18 Following the U.S. move to lift trade
sanctions that had limited investment in Myanmar, Caterpillar
Inc aims to use its financial services arm to boost its
presence in the poor Southeast Asian nation.
The world's largest maker of earth-moving equipment had
already sold its bulldozers and excavators in the country
through an independent dealer, but had to maintain an
arm's-length distance from that company due to the rules that
prohibited direct U.S. investment.
"The opening up of opportunities with the decision on
sanctions is something that will allow us to have a more
traditional relationship with the dealer there," said Jim Dugan,
a spokesman for the Peoria, Illinois-based company.
The biggest change is that its finance arm -- which
accounted for 4.6 percent of its $60.14 billion in revenue last
year -- will now be able to lend money to its local dealer to
help finance sales of Caterpillar equipment and expand its
footprint in the country, which has huge natural gas reserves
but an under-developed infrastructure after two decades of
military rule, which ended after elections last year.
"There had been prohibitions on financial-services support,
and as we understand it these would be lifted (with the
suspension of sanctions) and we believe this will give us an
opportunity to support that dealer better, to better allow them
to expand and grow and support the customers in the market,"
Like many big industrial companies, also including General
Electric Co, Textron Inc and Harley-Davidson Inc
, Caterpillar operates a financial services unit intended
to make it easier to sell its products.
Asia has broadly emerged as a weak spot for Caterpillar
sales this year, largely due to slowing Chinese investment in
construction and infrastructure. The company said in a filing
with the U.S. Securities and Exchange Commission that its
dealers' sales in the region grew at just 5 percent in the three
months ended in April, down from 20 percent in the three months
ended in February.