Globally, 3M, best known for its ubiquitous post-it note pads, has a track record of innovation resulting in a vast portfolio of products in healthcare, worker safety, and consumer goods. Ramesh Ramadurai, MD, 3M India, spoke to businessline about the company’s growth opportunities in the automotive and infrastructure segments as 3M India continues to report strong performance, especially in the last two quarters.
All the segments are on a growth trajectory with the safety and industrial business group and the transportation and electronics business group making 71 per cent of its sales, healthcare -17 per cent, and consumer -12 per cent, he added. In FY22, it posted revenues of ₹3,335.84 crore and its PAT was ₹271.97 crore. Edited Excerpts:
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What are the present business conditions and future prospects for 3M India?
The last two quarters have been quite good for 3M’s business. Of the 16 quarters in the last four years plus two quarters of this year, the last two quarters have been the best in terms of revenue. In Q1 and Q2 FY23, we generated ₹943.59 crore and ₹976.69 crore, respectively. We recorded growth of 16 per cent, along with improving PBT (profit before tax).
Transportation and electronics have grown well due to the growth in the automotive business. Last year, automotive production was around 3.5–3.6 million units; this year, production is going well and is estimated to pass the 4 million mark. Moreover, the mix of SUVs has increased substantially. Such model mix changes have led to greater penetration opportunities. Also, some of our newer products have also gained traction.
Additionally, we have launched new technology in the acoustics portfolio for automotive OEMs, such as products for reducing noise inside the cabin. These products will have a good play in the electric vehicle segment as well. In our EV portfolio, we produce thermal management systems that go in the batteries, and we expect thermal runaway to be our major concern in this space. Another opportunity for us lies in the interior of the cars—the dashboard or cockpit.
What are the opportunities in the next couple of years in the Indian market?
3M as a differentiated solution provider is focused on scaling opportunities – most of our products have a level of differentiation or premiumization and would be focused in the same area. With a greater emphasis on the PLI scheme, infrastructure is another opportunity for us. A lot of 3M’s product portfolio is around safety, including road safety, safety at airports, railway stations, and more.
What is 3M’s manufacturing footprint in the country?
We are well-placed in terms of having the capacity to grow. Our manufactured products are a combination of both, mostly in-house and a relatively small part through contract manufacturing.
3M has three factories in India - Bangalore- focused on the automotive sector, Ahmedabad – for developing corrosion protection products, targeted mostly towards the oil and gas industry, and Pune factory is more like a multi-product development factory – with a focus on healthcare specialized products, including respirator production, sanitisers, new investment is being done for ceramic materials for 3M’ catalytic converters too.
How is 3M’s R&D centre in India contributing to the science and innovation ecosystem?
We have a team of 100 engineers in our R&D Center working on a combination of application development, application engineering, and product development with a primary focus on the Indian market. We have prioritized some areas to direct our local teams for product development, such as traffic safety, different kinds of road furniture, and locally developed products for electrical markets because we work with power utilities, distribution centres, and so on. Similarly, a lot of the automotive aftermarket division is locally developed. We also leverage some of the global technology and capabilities for product development, the products also undergo local variations because the application conditions differ in segments, such as healthcare, and personal safety, including regulated products.
Some amount of research work for global projects is done in India. Moreover, 3M also tracks invention submissions internally, which contributes to the decision of whether to patent a product or not – these are internal metrics that help us to keep up the technical team’s energy and momentum of product development. The patents issued, invention submissions, papers written and published, and the participation of engineers in external forums, collaboratively create a culture of continuous energy and innovation.
What is the size of your export business?
It is a relatively small segment. We export some of our car care products, mostly to West Asia and Southeast Asia. We also have our pipe coating products for the oil and gas industry, which are exported depending on the project.
Apart from the state entity, does 3M have any other operating companies in India?
3M India, the listed entity, is our flagship company, and 3M Electro and Communications is a 100 per cent owned subsidiary of 3M India; the amalgamation of the two entities is in progress. In addition to these two entities, 3M Global has three other wholly-owned entities operating in India, viz., SAMCO, KCI, and Tri-Modal.