Honeywell outspends 3M to tap Asia's safety concern

Honeywell International Inc. is poised to overtake 3M Co. as the world's biggest maker of protective gear, buoyed by $3 billion in acquisitions since 2008 and stronger workplace-safety rules in developing countries.

Annual personal safety-products revenue at Honeywell may rise past $2 billion in 2012 once it closes on last month's $338 million purchase of Singapore-based shoemaker King's Safetywear Ltd.

3M posted safety sales of $1.85 billion in 2010 and projects growth of more than 10 percent this year.

The companies are vying for sales in a market that may already be $20 billion worldwide.

Demand for equipment such as protective glasses and fall-protection harnesses is growing twice as fast as the global economy as regulators worldwide seek to cut a toll of 321,000 on-the-job fatalities a year, said Bill Hayes, Honeywell's president of safety products.

"The regulations are moving so fast and advancing so quickly," Hayes said in an interview. In Asian factories where employees once wore traditional street attire, "it's literally moving from slippers to protective footwear."

Buying King's Safetywear adds to three years of similar investments by Honeywell, starting with the $1.2 billion acquisition of Norcross Safety Products. That put Honeywell into competition with a variety of small manufacturers and one global company: 3M, which entered the field 40 years ago by inventing the disposable safety mask.

3M, which made its last major safety-related acquisition in 2007, has boosted development spending on protective equipment to help drive sales growth in the past five years. Newly introduced products made up 19 percent of sales in 2010, compared with 6 percent in 2005.

"We tend to emphasize that a little bit more, but we're not averse to going out and getting what we need," Frank Little, chief of 3M's occupational health and environmental safety division, said in a telephone interview.

Honeywell and 3M compete for sales of hard hats, safety glasses, ear protection, respirators, welding helmets and other personal protection gear. 3M's safety business includes gas-detection equipment that Morris Township, N.J.-based Honeywell doesn't count in its safety-sales data.

Potential markets exist in Africa, low-income countries in the Americas, the Eastern Mediterranean and Southeast Asia -- the regions identified in an International Labor Organization (ILO) report as having the most workplace deaths.

3M and Honeywell benefit from efforts such as an ILO initiative for less-developed countries to form regulators like the U.S. Occupational Safety and Health Administration, said Seiji Machida, who runs a safety program for the ILO, a United Nations agency.

Honeywell's Life Safety unit, which includes protection gear as well as fire and gas detection systems, may account for almost 10 percent of an estimated $36.7 billion of sales this year, Honeywell said.

Personal safety products made up 56 percent of $3.3 billion in revenue for 3M's safety, security and protection services unit last year.

That division, the fifth-largest by sales among 3M's six businesses, accounted for 12 percent of the company's sales in 2010. Revenue at the division may climb to as much as $4.1 billion in 2012 from an estimated $3.8 billion this year, 3M said in a Dec. 6 presentation.