3M Co has signed a five-year commercial pact with a relatively new stainless steel and aluminum distributor to create a stable of so-called disruptive products, including technology that could eliminate the need for paint on automobiles.
The partnership, being announced on Monday with Chicago-based Shale-Inland, is the latest in a consistent string of acquisitions and joint-ventures that 3M has assembled in pursuit of reaching $50 billion in revenue. The Minneapolis diversified conglomerate wants to grow twice as fast as its fastest-growing competitors.
3M announced a plan in September, for instance, to jointly develop adhesives with International Business Machines Corp to create so-called 3D packaging for semiconductors that could enable faster smartphones, tablets, computers and gaming devices. In October, 3M completed the acquisition of GPI Group, which makes do-it-yourself home improvement products.
This new partnership with Shale-Inland will be specifically tied to 3M's adhesives and tapes division, which is a core part of 3M's massive Industrial & Transportation business, 3M said. 3M estimates it will bring in more than $3 billion in adhesives and tapes revenue in 2011.
SCRATCH-LESS MIRRORS, PAINT-LESS CARS
The global metals market, meanwhile, is estimated to currently be in excess of $2 trillion, according to Shale-Inland. 3M hopes to combine its expertise in adhesives and decorative films with Shale-Inland's relationships and expertise in the metals market.
Shale-Inland meanwhile, is looking to use 3M's research prowess to beef up innovation in the steel industry.
"The thing that we're missing in the steel industry is research and development." Craig Bouchard, chief executive Shale-Inland said. "One of my strongest desires has been to bring technology back."
Over the coming five years, the partners will work on a suite of technologies, including a new film that will debut in 2012 as a protective barrier for highly reflective stainless steel mirrors. The product will allow buyers of the mirrors -- including restaurants or jails -- to peel back the film and replace it in the event someone writes on the mirror or damages it in some other way, the companies said.
Bouchard said other innovations further in the pipeline include developing higher-strength tape that could take the place of traditional welding.
One of the innovations on the wish list for 3M and Shale-Inland is the creation of steel or aluminum products -- such as washing machines, refrigerators or even automobiles -- that no longer require painting. To do this, the partners plan to work together to perfect the process of coating steel with a rainbow of various colored adhesives that would take the place of paint and have the capability of essentially self-repairing scratches and other blemishes.
"If you scratch this tape, three days later the scratch is gone," Bouchard said.
During a presentation to analysts and investors in New York last week, 3M Chief Operating Officer Inge Thulin said that 3M's "addressable market" in the auto industry will grow from a $19 billion opportunity in 2011 to $24 billion by 2016. (Reporting by John D. Stoll in Detroit. Editing by Carol Bishopric)