Insider Media Limited

The decision to transfer the production of a line of diggers to Leicestershire-based Caterpillar UK has paid dividends for the company, new financial accounts reveal. In the year that US parent company Caterpillar Inc decided to move the manufacturing line to the UK, the subsidiary posted a turnover increase of more than £372m.

Caterpillar UK, which produces construction and mining equipment, posted a £607.4m turnover for the year ending 31 December 2010. In 2009, a £235.2m turnover was recorded. The production of the centre pivot backhoe loaders was transferred to the company's Leicester factory in April 2010.

The company said that as well as huge demand for the loaders, it experienced a sales drive for its other existing products throughout the year. It said this increase resulted in higher build rates and the recruitment of more temporary and permanent workers.

Over the year, Caterpillar UK also reported a pre-tax profit boost from £3.8m to £26.2m.

But the company accounts revealed the amount it owes creditors has soared over the past 12 months. At 31 December 2010, Caterpillar UK owed £101.4m compared with its 2009 result of £49.2m. The amount to be paid in taxes and security increased from £1.9m to £12m while trade creditors were owed £29.8m at the end of 2010.

However, the company said it was aware that it faced "an increasingly competitive market" for construction and material handling machinery going forward. Caterpillar UK said it would implement "lean manufacturing techniques and the Caterpillar Production System (CPS) to target the minimum possible order fulfilment time and reduce costs across the organisation".

The company has two manufacturing locations in Peterlee and Leicester. Peterlee is responsible for the production of articulated trucks while the Leicester site manufactures backhoe loaders, mini excavators, small wheel loaders and compact wheel loaders.

Over the year, 99.6 per cent of the Leicester and Peterlee products were exported – a decrease on its 2009 result of 99.99 per cent. According to the company's statistics, £330.5m worth was exported to North America; £273.7m to Europe and £1.1m to the rest of the world. Just £2m worth of turnover was generated from UK sales.

Up to 31 December 2010, Caterpillar UK was owed £208.7m from various debtors, compared with £140.6m at the end of 2009. Of this, the company will claw back £182.7m in amounts owed by group undertakings.