3M will continue to expand its business in China next year by investing over 1 billion yuan (US$127 million) to enhance its manufacturing capabilities, the company announced yesterday.

According to Kenneth Yu, managing director of 3M's China Region, the company plans to build two manufacturing bases in Shanghai with combined investment exceeding 640 million yuan (US$81 million).

3M plans to build one base in Pujiang High-tech Park of Shanghai's Minhang District to target health care products.

"In the beginning, this base will make health care products for the domestic market and these products will later be sold outside of China," Yu said.

Gaoqiao Chemical Park in Shanghai's Pudong New Area will be the nest for the second new base, which will primarily produce tape and adhesive-oriented chemical products for the needs of domestic factories.

As tape and adhesives are one of the core products of 3M, "we can cut the cost by producing them in China instead of importing them from outside since they are heavy and not convenient for long-distance transportation," Yu said.

Meanwhile, 3M plans to add two projects respectively to its existing manufacturing bases, one in Suzhou, a neighbour of Shanghai, and the other in Shanghai's Xinqiao. Estimated investment in the expansion is 470 million yuan (US$60 million).

Optical products in LCD screens have become a lucrative business in recent years for 3M. That's why it started to expand its project in Suzhou, which has many LCD screen manufacturing companies.

At present, 3M has started to pick up its development pace since its entry into China in 1984. It has quickened its steps of adding more investment, building more plants and employing more local staff.

With total investment in China reaching about US$500 million, 3M China has established 11 subsidiaries, 20 offices, 6 manufacturing bases, 1 innovation centre and 3 technical centres.

Just one month ago, the company kicked off an expansion project at its Caohejing manufacturing base in Shanghai's Xuhui District, the investment of which, including construction and facilities, exceeded US$40 million.

3M China has more than 4,800 employees, the majority of which are local staff. "Eighty per cent of the management team and 99 per cent of the staff are Chinese," Yu said.

The number of staff will be increased from the current 4,800 to about 10,000 by 2010, and less than 10 of those will be foreigners, Yu said.

The combined sales of 3M on the Chinese mainland, in Hong Kong and Taiwan this year are expected to exceed US$2 billion, according to the company. "The next three years will see the fastest expansion of 3M in China," said Liu Yaoqi, head of 3M China's R&D centre.

(For more biz stories, please visit Industry Updates)