3M Co, a US-based maker of diversified products, will invest US$40 million to set up a research and development center in Shanghai to tap the creative spirit of Chinese researchers.

The five-story, 16,000 square-meter center, located in Caohejing High-Tech Development Zone in southwestern Shanghai, is due to start operation in May 2006 as the Minnesota-based firm's fifth global R&D facility. The others are in the United States, Japan, Germany and France.

"It will provide an important base for us to tap into the creative spirit of local Chinese researchers and so will play a crucial strategic role in enhancing our R&D resources and capacity in the region," Jay Ihlenfeld, senior vice president of 3M, said yesterday at the center's groundbreaking ceremony.
"We made the decision to build the R&D facility in Shanghai not because talent costs lower here but also to capitalize on the rapid growth of the country," Ihlenfeld said.

The center is seen as a milestone in 3M's commitment to China, Kenneth C. H. Yu, managing director of 3M China, said, adding that the new facility will be a center to train local talent in research.

The firm now has 180 technical people in China and the figure is expected to grow to 270 in 2007.
The inventor of Post-it notes has also built three technology service centers in Beijing, Guangzhou and Suzhou and an innovation center in Shanghai.

The firm will double its investment in China soon to boost its expansion in the world's fastest-growing economy.

"We made our first US$300 million investment over the past 20 years, and the second US$300 million will materialize in the next five years," he said.
3M entered China in 1984 and has since then established 11 companies and 19 offices nationwide employing 2,800 employees.
Yu said the firm will maintain an annual sales growth rate of 25 percent to 30 percent in the following years in China.

3M's revenue in China is expected to top US$1.7 billion this year as the third biggest market for the firm after the United States and Japan.

3M, one of 30 companies in the Dow Jones Industrial Average, generated a revenue of US$20 billion in 2004 globally and its earnings last year hit US$2.99 billion.