China's National Development and Reform Commission (NDRC) has signed a letter of intent with Caterpillar Inc., under which both sides will join hands to promote the development of China's emerging remanufacturing industry.

"I am particularly excited because this letter of intent marks what will be the beginning of the development of a new industry in China," said Stu Levenick, Caterpillar Group president, at the signing ceremony.

In the letter of intent, Caterpillar will provide expertise to assist the NDRC and Chinese research institutions in supporting the development of the remanufacturing industry in China.

Caterpillar and the NDRC have also agreed to form a Joint Working Group on Remanufacturing Programs to discuss the remanufacturing cooperation program in detail and to coordinate and promote further cooperation in sustainable manufacturing and other areas.

Remanufacturing is a highly sophisticated form of recycling that takes end-of-life components and turns them into like-new products for a fraction of the cost.

Zhao Jiarong, director general of the Resources Conservation and Environmental Protection Department of the NDRC, said the concept of remanufacturing was not widely recognized in China, but the country had great potential to develop the new industry.

Taking the example of nearly one million end-of-life automobiles in China last year, Zhao said the large amount of used mechanical and electronic components in China under the country's rapid economic development had offered favorable conditions to develop remanufacturing industry.

With more than 30 years of experience, Caterpillar is a global leader in remanufacturing technology. In 2005, customers from around the world returned 61.2 million kg (135 million pounds) of components to Caterpillar Remanufacturing Services. Close to 70 percent of those 2.2. million end-of-life units were remanufactured to produce Caterpillar products, and the remainder was recycled.

Caterpillar Remanufacturing Services is the first wholly owned foreign entity to receive a remanufacturing license in China. To support its Chinese customers, dealers and other customers in the Asia Pacific region, Caterpillar recently opened a regional remanufacturing center in the Lin'gang Industrial Area in Shanghai.

Levenick said the remanufacturing industry is good for the customers who benefited from lower operating costs by using remanufacturing products, and it had a positive impact on the environment as it saved landfill space and reduced the use of raw materials.

"The profitable growth of this sustainable business should also lead to the creation of new jobs in new industries. That is what we expect to happen as we work with the NDRC to help promote and develop the remanufacturing industry in China," he added.

Zhao said the Chinese government is working to issue documents to support the development of remanufacturing industry, and the NDRC had put on the table a set of policies targeting on the automobile components remanufacturing industry, with trial projects to be launched imminently.

Source: Xinhua