Invest KOREA

So Much More Than Post-Its

3M Korea has enjoyed near-consistent growth throughout its 35 years through technological evolution and localization

As part of its introductory Powerpoint presentation file, the company 3M has a slide that uses a periodic table of the elements theme. “Ab” stands for abrasives. “Di” stands for “display.”

A PR gimmick? Not quite. The company started with minerals.

Short for “Minnesota, Mining & Manufacturing,” 3M was founded in Minnesota in 1902 as a mining business for minerals including moissanite, which is carborundum, a compound used to make abrasives. 3M’s pioneers thought, how can we use this material to develop a product line? How can we combine minerals and people? The answers initially were paper and adhesives. Today, 3M produces everything from Post-it notes to the thermal interface materials used in smartphones for a total of more than 60,000 products.

“What they thought was aggressive,” said Byung-Kook Jung, president and managing director of 3M Korea Ltd., of 3M’s early leaders.

While the average consumer may think of Scotch Magic Tape and Scotch-Brite sponges when they think 3M, the majority of the company’s business is in the industrial sector, with business-to-customer sales accounting for just 15 percent of total revenue.

3M Korea, started in 1977 as a joint venture between 3M and Doosan Group, focuses on the seven areas of industrial and transportation; electronics and communications; safety, security and protection services; health care; display and graphics; consumer and office; and optical systems. It became wholly invested by 3M in 1996.

“We saw the growth potential of the Korean market,” said Jung. “3M Korea is the 48th subsidiary of 3M, and 3M was on the way of expanding [into the] global market. Naturally they could see the growing trend of the Korean economy.”

About 70 percent of 3M Korea’s business comes from Korean conglomerates, including Hyundai Motor Company, Samsung Electronics and LG Electronics. With annual sales of 1,567 billion won ($1.34 billion) in 2011, 3M Korea ranks in the top 5 of 3M’s 70 subsidiaries in terms of revenue.

“Our customers grew and succeeded in the global market, and consequently we could also succeed,” said Jung.

With a research and development (R&D) center in Gyeonggi Province, three plants, a distribution center and a branch in Busan, the Yeouido-headquartered company maintains a highly localized way of doing business. Domestic product development and exports account for 15 percent of total revenue, with exports last year accounting for 19 percent.

Localization is one of Jung’s three areas of emphasis. All of the company’s 1,700 employees are Korean, and Jung became the first Korean to assume the position of president last year.

“I think that once a foreign-invested company comes here, in order for them to succeed, they should be local in terms of local R&D, local manufacturing, local people,” Jung said. “Otherwise it’s not easy for them to properly handle the big Korean OEMs.”

The president, who has been with the company for about 20 years, also stresses the importance of human resource development and creating a comfortable work environment. He has even created what he calls the Fun Fun Project, which includes coffee/snack breaks twice a month and sending 15 employees (five chosen at random, two for best essay and eight for best performance) on all-expense paid family vacations.

“We need to make our company as fun as possible,” Jung said. “That could lead to increased productivity as well as improved personal lives.”