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Patrick Campbell told analysts at a New York investor conference that 3M will pursue a "China for China strategy," which includes "developing local capability around technical capability."
Besides expanding its existing businesses in China, Campbell said 3M will look at acquisitions that "could help kick-start us in a few selected businesses that will give us either distribution or give us product capability that we don't currently have."
He emphasized that 3M's business in China has been "highly profitable since day one," but he said that growth there has been developed at a pace that allowed leaders and organizations to develop their capabilities. "We don't want to take shortcuts," he said. "We've been building up our infrastructure."
About two-thirds of 3M's revenue is generated outside the United States, and Campbell said Thursday that the economies in the United States and Western Europe are recovering at a "more modest" rate than in Asia.
"We still see very solid double-digit growth potential in China," as well as "huge growth potential" in India, Campbell said during the Goldman Sachs Global Industrials Conference.
3M recently reported a third-quarter profit of $971 million on sales of $6.2 billion. The company's operating income margin was 24.3 percent, with its health care business producing a margin of 31.3 percent.
Campbell expressed a higher priority on expanding revenue than margins. "Our balancing act is if we can get the top line going, then obviously we can keep the margins," he said.
In addition to growing its traditional businesses, Campbell said he anticipates 3M will do several acquisitions during 2010.
"The reality is we are not always the best at everything," he said. Purchasing companies or lines of business from others allows 3M to enter certain markets sooner or better than if it attempted to build those enterprises from the ground up, he said.
3M's stock closed Thursday at $75.46 a share, up $1.39 or nearly 2 percent.
Liz Fedor --612-673-7709
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