"User controls are created and then cached". Which type of caching does this scenario talk about.

Often, caching an entire page is not feasible, because certain parts of the page are customized for the user. However, there may be other parts of the page that are common to the entire application. These are perfect candidates for caching, using fragment caching and user controls. Menus and other layout elements, especially ones that are dynamically generated from a data source, should be cached with this technique. If need be, the cached controls can be configured to vary based on the changes to its controls (or other properties) or any of the other variations supported by page level output caching. Hundreds of pages using the same controls can also share the cached entries for those controls, rather than keeping separate cached versions for each page.