US-based 3M, a Fortune 500 multinational company, yesterday announced the establishment of a US$30 million material technology company in Guangzhou Development District.

Called 3M Material Technology (Guangzhou) Co Ltd, the company will be 3M's first manufacturing facility in South China and its sixth plant in the Chinese mainland.

Since 1984 when it set up its China headquarters in Shanghai, 3M has set up five manufacturing bases in China, four in Shanghai and one in Suzhou, East China's Jiangsu Province.

The initial phase project entails an investment of US$17.6 million.

Set for completion early next year, the initial phase of the facility will launch products lines related to electronic, industrial and optical fields.

When finished, the manufacturing base will cover an area of over 80,000 square metres.

"The new facility is a milestone of 3M's development in China and it is part of our strategy to get closer to our business partners and to further tap the business bonanza in this lucrative South China market," Kenneth Yu, managing director of 3M China, told China Daily.

"More than half of our clients are located in South China," he said. "The new facility will enable us to align ourselves more closely with their needs, providing them with products and services tailored specifically to the requirements of local markets."

Among 3M's core long-term business partners in Guangdong alone are domestic electronics giants TCL and Konka, Guangzhou Highway Co Ltd, Guangzhou Power Supply Company and domestic airline giant China Southern, Shenzhen's Yantian Harbour, Shenzhen Metro and Shenzhen Airport.

So far, 3M has poured a cumulative investment of US$300 million into China.

The managing director said 3M is also planning to set up a manufacturing base in Southwest China, with an investment scale similar to the Guangzhou facility.

He said that 3M's investment plan will enable the firm to offer better services to its clients and tap the huge market potential in the Chinese market.

He said 3M aims to do US$1.9 billion of business in the mainland, Hong?Kong and Taiwan this year, a lion's share of the market.

He expects the growth rate of revenue to be 25-30 per cent in the next few years.

Over the next five years, he said 3M will pump in US$300 million of capital in the mainland equal to the capital input the firm has poured in over the past two decades.

And the company is also expected to pour generous investment into the research and development facilities.

Involving US$40 million in capital input, 3M's new R&D centre will begin operation in Shanghai in May.

The new R&D centre, which began construction last August, is expected to become one of the most important global bases for 3M's technology development as well as one of its top five R&D centres globally.