3M (NYSE: MMM), the conglomerate with products ranging from sticky notes to phones and TVs, also makes films, adhesives, light-concentrating panels and other products for the renewable energy industry – and now it's putting them all under one roof.
Maplewood, Minn.-based 3M announced Monday that it's launching a renewable energy division. The news comes months after the company first floated the idea, and just days after it reported a 37 percent decline in fourth-quarter sales and a gloomier outlook for 2009.
The new division will focus on "products currently sold to the industry, new-to-the-world products invented for the renewable energy market, and products adapted from existing technologies," according to a Monday press release.
3M already sells films, tapes, coatings, sealants, adhesives and other products to the solar, wind and energy efficiency industries. Examples include panels that concentrate light, polyurethane tape to protect the edges of wind turbine blades and window films that block heat and light from entering buildings.
As for what "new-to-the-world" products might be emerging from the new division, 3M didn't offer many specifics, though it did say it would split the effort into separate energy generation and energy management units.
The focus on renewable energy comes as 3M is being pinched by the contracting economy. The company last week reported that its fourth-quarter profits fell to $536 million, or 77 cents a share, a 37 percent drop from $851 million, or $1.17 a share, in the same quarter in 2007.
The biggest sales declines came for 3M's electronics products, but the company reported declines for every line of business except health care and security and safety. It also lowered its 2009 earnings forecast to $4.30 to $4.70 a share, or sales declines of 5 percent to 9 percent, down from its earlier outlook of $4.50 to $4.95 a share on sales declines of 3 percent to 7 percent.
How quickly 3M's renewables business might pick up some of that slack remains to be seen. 3M has seen about $200 million a year in sales from its solar-related products, which have grown about 20 percent annually, according to comments by CEO George Buckley published in September by the Minneapolis/St. Paul Business Journal.
But with the economic stimulus bill now working its way through Congress calling for billions of dollars of support for renewable energy and energy efficiency, it's possible 3Ms new focus may bear fruit (see House Passes Stimulus Bill and Tax Credit Fix for Solar in the Works).
Beyond potential changes to the structure of tax credits now available for investments in solar, wind and geothermal projects, the draft stimulus bill includes $20 billion in tax cuts for renewable energy providers and tax credits for research and development in renewables, energy conservation and energy efficiency.
Another $6 billion is included to weatherize low and moderate-income homes – a line of business that may play well with 3M's energy efficient window coatings and other products that may emerge from its energy management unit.