The multinational conglomerate 3M Co said it will continue its involvement in China's photovoltaic solar industry and will invest around 120 million U.S. dollars in research and development in the country over the next five years.
Kenneth Yu, president of 3M China Region and chief executive officer of 3M China, said that in five to 10 years, he expects the company's annual sales in China to exceed those in the United States, the company's home country.
The company started building a manufacturing site for PV solar materials and renewable energy products in Hefei, Anhui province, in September 2011.
With a total investment of 1 billion yuan (160 million dollars), which is the industrial group's largest single investment in China, the project is due to be completed by the end of this year.
However, due to the development of local PV solar companies, sluggish solar energy consumption, over-production of related products, and anti-dumping investigations by the U.S. and the European Union since last October, China's PV solar industry is facing difficulties and concerns are being expressed about the prospects for the Hefei facility.
"We will continue our Hefei project, which includes 12 big buildings. I believe, as a clean and stable energy, solar must be promising in the future. I don't think the behavior (of the EU and the U.S.) is proper," said Yu.
Amid these challenging conditions, the consolidation of the PV solar industry is inevitable and big companies are more likely to survive, he said.
"I also believe the domestic consumption of solar energy will exceed that in the overseas market."
Around 90 percent of Chinese solar products are exports, which were worth 35.8 billion U.S. dollars last year, according to statistics from the Ministry of Commerce.
The revenue of China's PV solar industry rose 31 percent year-on-year in 2011, well below previous years' growth rates, which sometimes doubled or even tripled.
Concerning 3M's 120 billion dollars investment in local R&D, Yu said the money will mainly be put into infrastructure, including plants and equipment.
China is one of 3M's four global R&D centers. Its R&D operations in China are in Shanghai, Beijing, Guangzhou, Chongqing and Suzhou.
Yu said 3M's object in strengthening its R&D in China was to maintain annual sales growth of 15 to 20 percent in the country over the next five years, adding that the figure was likely to reach 5.5 billion U.S. dollars by 2015.
He said that 3M's turnover in China may increase only around 10 percent year-on-year in 2012 due to the global economic downturn.
The company's recently released third-quarter report shows that its global turnover slid 0.4 percent year-on-year to 7.5 billion U.S. dollars, compared with 0.1 percent in the Asia-Pacific region.
3M has a business portfolio covering special materials, graphics and healthcare, mainly for industrial clients.
New product innovation is aimed at stimulating 3M's sales in China, as local industrial clients, especially large ones, now prefer high-quality products, said Song Bin, an industry analyst at TX Investment Consulting, adding that many international companies have noticed the trend and have started to introduce their newly developed products and solutions to China, or are even developing them locally.
"Chinese companies are now seeking high-quality supplies," said Olof Faxander, president and CEO of the Sweden-based industrial