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Plant firms shift emphasis to ex-communist states

MANUFACTURING GIANTS Caterpillar and Komatsu are targeting the markets of eastern Europe, the CIS and China in the face of collapse in Asian demand and slow growth in western Europe.

Kicking off Monday's opening day of Munich's Bauma 98, the world's largest construction plant exhibition, chairman of £12bn turnover manufacturer Caterpillar, Donald Fites, predicted 'fast growth in the CIS' and referred to China as 'a significant part of (Caterpillar's) growth'.

This view was echoed by president of Komatsu's European operations Kazuhiro Aoyagi, who described eastern Europe as a 'big opening' and said he was looking for distributors in the region.

Aoyagi added that plans to increase Komatsu's European market share and expand into the emerging East European market had been hit by a 30% to 40% drop in Japanese production caused by the crisis at home and in South East Asia.

Both companies said sales had fallen as a result of the Asian collapse but that the worst effects had been ridden out through continued strength in the Western economies. Fites predicted that Caterpillar's Asian market would 'come back in the next few months'.

Fites was speaking at the official launch of Caterpillar's new compact machine line - its first dip into the miniature machine market and part of a strategy to increase sales and revenues to £19bn in the next 10 years (NCE 22 January).

Komatsu also announced ambitious expansion plans as part of the its G2000 drive towards the new millennium. These include increased presence in Europe, reinforced distribution and new products such as the environment- friendly 'active' wheel.

Richard Thompson in Munich

Tens of thousands of visitors blocked auto-bahns on Munich's eastern outskirts on Monday morning as they struggled to Bauma 98. It was the first big test of the new Munich Exhibition Centre, built on the old Reim Airport site to improve the access problems at the old city centre Mnchen Messe complex. Actual visitor numbers are being kept a closely guarded secret until the end of the week, but judging by the vast crowds on the first day, it looks bigger than ever in its new home.

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