One of the more successful OEM companies on our list of the top 50 employers in electronic design usually isn’t known for its electronics. But 3M leaped from 41st place on our 2009 list to 12th in our 2010 tally. Among OEMs, it placed fifth, improving nine slots from its 2009 OEM standing at 14th place.

3M produces everything from masking tape to asthma inhalers. The diversified company makes its products through more than 35 business units organized into six operating segments: consumer and office; display and graphics; electro and communications; health care (through 3M Health Care); industrial and transportation; and safety, security, and protection services.

Well-known brands include Post-it Notes, Scotch tapes, Scotchgard fabric protectors, Scotch-Brite scouring pads, and Filtrete home air filters. 3M has manufacturing and laboratory operations in more than 65 countries. In the U.S., it has operations in 28 states.

The company’s 45 technology platforms include adhesives, abrasives, light management, microreplication, non-woven materials, nanotechnology, and surface modification. About 63% of its sales are generated outside of the U.S. It sells products directly to users and through numerous wholesalers, retailers, distributors, and dealers worldwide.

Founded in 1902 as the Minnesota Mining and Manufacturing Co., 3M is based in St. Paul, Minn. It changed its name to 3M in 2002. Competitors include Avery Dennison, E.I. du Pont de Nemours and Company, and Johnson & Johnson.

By the numbers, 3M’s rise among our ranks may seem puzzling. From 2008 to 2009, its sales dropped by 8.5%, its pretax income fell by 9.3%, and its R&D funding decreased by 7.9%. But its overall sales grew by 25% in the first quarter of 2010 for the largest single percentage quarterly increase in the company’s history, with organic volume growth making up about 19% of the total increase and currency translation making up most of the rest.

The strong performance was across the board, with all business segments posting double-digit sales growth along with operating income margins of more than 20%. Its display and graphics, electro and communications, and industrial and transportation segments were particularly outstanding.

Success Around The World

Geographically, sales growth was strongest in emerging economies, where sales expanded by 47% versus the first quarter of 2009, with China posting a huge volume gain at 63%, Korea at 74%, and Taiwan at 88%. The momentum built as the quarter unfolded.

In March, 16 countries had sales growth of 50% or better. Korea and Taiwan grew 75% in March alone, and these are not small businesses. The United States was no slouch either, with sales up over 11% in the first quarter of 2010 and 18% in March.

3M committed to accelerate its R&D spending in 2010 by another $100 million. The company feels that over the next two years, this additional funding is going to accelerate growth rates substantially, as it is a proven formula for 3M.

While the economic recovery has helped, 3M believes it is gaining significant overall market share. The company did not reduce capacity during the recession, as many of its competitors did. Now as the economy improves and its competition scrambles to bring capacity online, 3M can react quickly and has been very successful in gaining incremental business that otherwise may have gone to the competition.

Nylonge, an acquisition, enabled the home care division to realize an increase in sales of 20% year-over-year by moving up the product pyramid with branded products. And this is a mature core business.

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In one of its new consumer and office businesses, labels, 3M completed the acquisition of a majority stake in A-One, which is the number one office and consumer label brand in Asia and the second largest worldwide. 3M feels this will jump-start its entry into the label market in Asia.

A Greener Approach To Energy

In January 2009 during the recession, 3M started its effort in renewable energy, bringing together technologies and products from all across 3M into one focused business unit to address nearly every facet of renewable energy components. Products range from tapes, adhesives, and composites for windmills to components for making and protecting photovoltaic cells.

Solar mirrors are showing strong growth, and sales in renewable energy are up 72% in the first quarter of 2010. A new coating line in Singapore was built for this business, which opened last September, and it is already sold out. 3M is currently working on the next line.

The electro and communication business is another example of 3M staying the course on investments for the future. Because it held firm when competitors shut down capacity during the 2009 recession, 3M is now in an advantaged position and taking share.

The company can meet surges in demand where competitors cannot. In fact, 3M may have to add capacity in the near future. Products in this business include a hugely successful, optically clear adhesive for use in touchscreen applications.

One example of reinvigorating its core industrial adhesives in its tape division is playing much more broadly across the entire product spectrum, and its first quarter growth of 31% was impressive. The long line of new inventions continues, with a new tape product that achieves the holy grail of adhesives, sticking to an oily surface.

Other areas of product growth include electronic display lighting, computer filters, touch systems, and precision optics. Geographically, 3M sees substantial future growth prospects in China, Russia, and India.

3M