3M to stop making 'forever chemicals', to take up to $2.3 billion charge

[December 20, 2022]   (Reuters) - U.S. industrial conglomerate 3M Co on Tuesday set a deadline of 2025 to stop making PFAS, also known as "forever chemicals", that are used in everything from cell phones to semiconductors and have been linked to illnesses ranging from cancer, heart problems to low birthweights.

The 3M logo is pictured on products at an Orchard Supply Hardware store in Pasadena, California U.S., January 24, 2017. REUTERS/Mario Anzuoni/Files

 

The per- and polyfluoroalkyl substances are known as forever chemicals because the substances do not break down quickly and have in recent years been found in dangerous concentrations in drinking water, soils and foods across the country.

The move comes amid rising legal pressures over damage caused by the chemicals. Last month, 3M and DuPont de Nemours Inc were among several companies to be sued by California's attorney general to recover clean-up costs.

Pressure on companies to stop producing the chemicals has increased in recent years, with investors managing $8 trillion in assets earlier this year writing to 54 companies urging them to phase out their use.

3M's current annual net sales of manufactured PFAS are about $1.3 billion with estimated earnings before interest, tax, depreciation (EBITDA) margins of about 16%.

The company expects to incur related total pre-tax charges of about $1.3 billion to $2.3 billion over the course of its exit from PFAS.

In the fourth quarter, 3M expects to take an estimated pre-tax charge between $0.7 billion and $1.0 billion, primarily non-cash and related to asset impairments.

In August this year, the Biden administration said it will propose designating certain "forever chemicals" as hazardous substances under the nation's Superfund program.

(Reporting by Aishwarya Nair in Bengaluru; additional reporting by Simon Jessop in London; Editing by Shounak Dasgupta and Shailesh Kuber)

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