Cat brand grows in trees; All its forestry equipment to carry company’s name.
Published in: Crain’s Chicago Business
Date: 2/27/2006
By: Tita, Bob
Caterpillar Inc. is converting its Timberking brand of forestry equipment to the Caterpillar name, increasing the lineup of Cat-branded equipment for forest work.
Cat dealers have been selling Timberking equipment since 2003, when Cat shifted production of some forestry equipment to Oregon-based equipment maker Blount International Inc. in an agreement that launched the Timberking brand name.
Blount will continue building the bunchers, loaders, harvesters and other tree-handling machines. But beginning this spring, the equipment will carry the Cat name, as does forestry equipment still built by Caterpillar at its LaGrange, Ga., assembly plant.
“From our end, we feel it strengthens our forestry business,” says a spokesman for the Peoria company. “We can now offer a full line of Cat-branded forestry equipment.”
Blount executives are enthusiastic about the name change as well, concluding that the more recognizable name will lead to increased sales at Blount, which also markets its own lines of forestry equipment under the names Prentice, Hydro-Ax, Fabtek and CTR.
“Using the Cat name around the world can only help us,” says Blount Chief Financial Officer Calvin Jenness. “We feel we can do more overseas (sales).”
Four basic types of forestry machines have been sold under the Timberking name, compared with one group with the Cat name. Going forward, all five machine types, covering about two dozen models, will carry the Caterpillar name.
Cat does not break out specific sales or profit figures for forestry equipment, but analysts say 2005 sales were likely $350 million to $400 million, or roughly 1% of Cat’s $34 billion in machinery and engine sales last year.
Retiring the Timberking name also might help prop up forestry equipment sales in a softening market, analysts say. Timber harvesting usually mimics the market for new homes. As higher interest rates cool home building, forestry equipment sales slow down as well.
Moline-based Deere & Co., Cat’s archrival, said in January that it would close a forestry equipment plant in Ontario, by September and move operations to Deere plants in Iowa. Closing the plant is expected to idle 325 workers.
“There’s consolidation going on,” says Eli Lustgarten, an industry analyst with Cleveland-based Longbow Research. “Demand has been good, but there are changes on the horizon.”