3M hopes fortune will shine on new renewable energy unit

3M sees the light.

The Minnesota manufacturing giant announced Tuesday that it will create a new business unit to focus on renewable energy and increase its tiny stake in the business.

3M generates about $200 million a year making Fresnel lenses, mirrored solar panels, mirror films and other components for the $20 billion solar-energy industry. Company officials told investors Tuesday that they want a bigger share of the industry, which has the potential to grow to $50 billion by 2012.

The company hasn't named a director for the new renewable energy unit yet, even though it officially launches next month.

3M CEO George Buckley said he will greatly expand 3M's solar line with products that help lower electricity and maintenance costs while increasing wattage usage.

"There are breakthrough products already in the pipeline," Buckley said.

The company will need them as it competes with renewable energy powerhouses like General Electric and Dow Chemical.

Putting them into a business unit is like focusing the technology with a magnifying glass. Buckley said 3M will expand its core adhesive, tapes, films, lens and coatings technologies into products that capture light and heat.

For example, he said, 3M already makes conductive and insulation tapes, protective resins and light-concentrating plastic panels for the industry. These can be enhanced for new solar applications.

Joe Harlan, vice president of Electro & Communications for 3M, said the solar energy sector is growing by about 30 percent a year and represents a "massive opportunity."

"The objective is to become the preferred global solar solutions provider," Harlan said.

3M's renewable energy unit will also sell 3M's electrical products for use in more wind farms. The company already makes about $12 million a year selling electrical tape and components for wind-power plants. And the market is growing about 20 percent a year, officials told analysts.

"There will be other smart companies out there like Dupont and GE that work hard to get a piece of this pie. But there is a demand for those small parts that are underappreciated by you and me, but highly in demand by high-tech firms," Ortwerth said.

"The way you could look at it is that you don't want to be the gold miner in this industry. You want to be someone who sells the picks and shovels," he said. "A few will strike gold and a few will go home poor. If I'm 3M, I really don't care. They all buy picks and shovels."

While 3M's plans for solar and wind beamed brightly, its news on other fronts was dimmer.

Buckley said third-quarter sales of liquid crystal displays and optical films -- former moneymakers -- will be about 10 percent lower than a year ago. Flat-panel TV makers are using less expensive, energy-saving technologies to brighten their screens. The company said it would delay the opening of a display and graphics factory as it restructures that business.

The news is the latest blow to a division that was once a 3M star, producing about 25 percent of quarterly earnings. Optical profits fell 50 percent during the first quarter this year, and revenue dropped 36 percent during the second quarter. In July, 3M announced it was cutting 300 optical-film workers after lowering prices to stay competitive.

The company said it expects solar energy, electrical components, high-capacity conduction cables and strong international sales to drive sales growth in the months ahead.

Dee DePass • 612-673-7725