3M, a US-based Fortune 500 multinational company, yesterday began building its first high-tech manufacturing base in South China's Guangzhou Development District.

The facility, involving a total investment of more than US$30 million, will cover an area of over 80,000 square metres. The first phase of the project, with an investment of US$17.6 million, is scheduled to begin operation in a year.

"The new venture is a major step in 3M's development in South China and it is part of our strategy to get closer to our business partners and further tap the business bonanza in this lucrative South China market," Kenneth Yu, managing director of 3M China, said.

"The proximity to our key clients, the improving supply chain in Guangzhou and the high efficiency and support of the local government are all important reasons for the location of a major base in Guangzhou."

The firm will launch high-tech product lines for electronic, industrial, commercial and consumer products from the facility in the initial phase.

Eighty per cent of its products are expected to meet the market in South China, particularly in the Pearl River Delta region.

"With the new facility, 3M will be able to economically provide products and quicker services to local clients," he added. "More than half of our clients on the mainland are in South China."

The firm has invested a total of US$300 million on the mainland since it entered China in 1984, when it established a solely owned company in Shanghai.

It has set up five manufacturing facilities in Shanghai and Jiangsu Province and one research and development centre in Shanghai in the Yangtze River Delta region.

"It is definite that we will continue our investment momentum consistently on the mainland and we are looking for a location for our seventh manufacturing base," Yu said.

Over the next five years, he said, 3M will pump US$300 million of capital into the mainland, equal to the firm's investment in China over the past two decades.

He said 3M would have over a dozen manufacturing facilities across the nation in the long term.

The company aims to do US$1.9 billion of business on the mainland, Hong Kong and Taiwan this year.

Yu expected a 25 to 30 per cent rate of revenue growth in the next few years.

Editor: Yan