In his role as director of marketing for PPG Industries' architectural coatings business in North America, Tom Dougherty tries to make sure the company's paints are in the shopping carts of do-it-yourselfers and professional contractors across the U.S. and Canada.
One of his biggest challenges, though, comes when he's socializing in and around Pittsburgh and has to explain that, yes, PPG sells paints in its headquarters' hometown.
Even when he mentions one of its major paints labels, Olympic Paints & Stains, which has wide distribution through the Lowe's home retail chain, many consumers don't connect the brand with PPG. The company's name and logo aren't displayed prominently on the cans. Adding to the confusion, PPG doesn't operate any of its company-owned stores in the Pittsburgh region.
But the issue of identifying PPG's paints and where to buy them may become easier in coming months, as the company works to integrate brands and stores acquired as part of its April purchase of AkzoNobel's North American decorative paints business.
The $1.05 billion deal to buy the Dutch paints maker's North American architectural unit added mega-brand Glidden to PPG's portfolio as well as Liquid Nails, Flood, Devoe, Dulux and Sikkens. The acquisition -- the second-largest in the company's history -- pushed PPG into the number-two market position among North American paint makers, behind Sherwin-Williams.
In addition to Olympic, PPG already had the Lucite, PPG Porter and Pittsburgh Paints brands.
As the company consolidates the marketing and administrative functions of its North American paints business at a single operations base in Cranberry, PPG is conducting research with consumers, professional painters and paint dealers to determine the best way to leverage its name across all its brands.
"The good news is we have a lot of good brands. The challenge is we need to unify them under one brand banner and in a few months, we will know what that banner will be," Mr. Dougherty said.
Whether the company decides to pop the PPG logo on paint cans that don't already carry it or incorporate the PPG name in all its stores across the continent, "It's safe to say the PPG brand will play a role," said Scott Sinetar, vice president, architectural coatings, North America.
The paint division's parent company -- which also makes glass and specialty chemicals -- has committed to investing in brand development, although Mr. Sinetar declined to disclose how much PPG will spend on the effort. It is likely to be a priority for top executives at PPG, which in recent years has touted the aggressive growth of its coatings business as it sheds chemicals and some glass operations.
The Akzo deal is already helping PPG's bottom line. For the third quarter that ended Sept. 30, the acquisition added $400 million-plus to net sales, which totaled a record $4 billion. Six months into the acquisition, the company said it had already realized more than 50 percent of its targeted $200 million in cost synergies.
Annually, the acquisition is expected to generate $1.5 billion in additional revenue for PPG.
And sales are likely to grow as the economy emerges from recession and consumers buy paint as they invest again in new homes and existing home renovation projects.
The American Coatings Association, in a published analysis of all U.S. paint segments including industrial coatings, said the market should grow to $23.6 billion by 2015, with the architectural-decorative paints segment accounting for more than 50 percent of demand.
The PPG-Akzo acquisition is among several recent, strategic deals that are "true game changers" for the industry, according to a report on consolidation in the North American coatings market by Milwaukee-based investment firm Grace Matthews.
Through its Akzo purchase, PPG added about 600 company-owned stores, bringing its total store count to about 950 in the U.S., Canada and Puerto Rico. The deal also bumped up its network of independent dealers from 2,000 to 6,000 and increased the number of retail home centers like Lowe's and Home Depot where its paints are sold from 2,000 to 8,000.
Since Akzo held the top store position in Canada -- where PPG previously had a relatively small presence -- the company will likely keep the Dulux brand name on those 236 stores, and add more PPG products to the inventory, said Mr. Dougherty. In Puerto Rico, stores formerly owned by Akzo "will continue to fly under the Glidden banner," he said, although there's chance of adding the PPG name as a co-branding initiative.
The 400 or so company-owned stores PPG had before acquiring Akzo are called PPG Pittsburgh Paints or PPG Porter Paints stores, while the former Akzo U.S. stores operate as Glidden Professional Paint Centers.
In the Pittsburgh market, PPG's paints have been sold mainly through independent dealers including Masterwork Paint & Decorating, Westmoreland Supply, and independent hardware stores including Rollier's in Mt. Lebanon, and Pleasant Hills Hardware.
Perhaps the biggest gain for PPG is that its paints now will be for sale in all major U.S. home retail centers. Besides Lowe's (which has the Olympic line) and Menards (a Midwest chain that carries Pittsburgh Paints), PPG can now claim a presence in Home Depot and Walmart, which both carry Glidden.
As for the plants that produce those brands, PPG plans to keep all of them operating.
Together, PPG and Akzo operated 14 plants in North America, including three former Akzo facilities in Canada and one former Akzo plant in Puerto Rico.
Employees have already begun moving into the new North American paints center in the Westinghouse corporate complex on Route 228. By the end of this month, about 75 employees will occupy the space, and all three floors leased by PPG are expected to be hold close to 500 workers by the end of 2014.
About 200 of the total 500 jobs are currently held by PPG employees who will move from the company's Downtown headquarters and a customer support center in McCandless.
The other 300 are positions currently held by people who work at operations in Strongsville, Ohio; Louisville, Ky.; and Dover, Del. For jobs held by employees who choose not to relocate, PPG will hire new people, said Mr. Sinetar.
"All spots from now on will be filled in Cranberry," he said.
Another 100 workers from PPG and Akzo who work in research and development will be housed at PPG's existing research center in Harmar. Space formerly used as glass laboratories is being renovated.
Joyce Gannon: firstname.lastname@example.org or 412-263-1580.