When PPG Industries set out to find a location that could accommodate 500 people in a new headquarters for its North American architectural paints business, the company considered sites where it already operates in Western Pennsylvania and Ohio -- including its signature glass tower in Downtown Pittsburgh.
But it settled on a suburban office building in Cranberry because PPG believes that site will provide the most accessible base for all its workers as it combines close to 200 employees who already work Downtown or in the North Hills for the paints division, with about 300 workers who will relocate to the area from facilities in Ohio, Kentucky and Delaware.
Those coming from out of state previously worked for Dutch-based paints maker AkzoNobel, whose North American decorative paints unit was acquired by PPG earlier this year for $1.05 billion -- the second largest acquisition in the Pittsburgh company's history.
PPG announced Monday that the planned consolidation of its architectural paints headquarters staff will eventually employ about 500.
While most of the 300 people relocating to the Pittsburgh region have jobs in administrative and marketing functions that will be based in Cranberry, about 60 work in research and development for the paints division and will work in Harmar at an existing PPG technical facility that will be expanded.
The new architectural paints headquarters will be located in 120,000 square feet that is part of the Westinghouse Electric corporate complex on Route 228.
The move to consolidate the operations in one location "is a sign of the momentum of growth of the architectural coatings business," said Bryan Iams, PPG spokesman.
Indeed, PPG's coatings unit -- which also includes industrial, automotive, aerospace and packaging -- has swelled from 55 percent to 74 percent of the company's business portfolio over the past decade.
All coatings, including architectural, generated $11 billion of PPG's total global sales of $15.2 billion in 2012, up from $4 billion in 2002.
The Akzo deal, completed in April, was another in a series of steps the company has taken to position itself largely in paints rather than its traditional line of glass and chemicals.
In January, PPG spun off its commodity chemicals unit, which merged with Georgia Gulf to form Axiall Corp.; and in July it announced plans to sell its 51 percent interest in Transitions Optical to joint venture partner Essilor International. The Transitions sale is expected to close in the first half of 2014.
The Akzo acquisition is expected to generate $1.5 billion in additional revenue for PPG and make the combined companies' paints and stains available in 1,000 company-owned paint stores, 8,000 home product retailers and 6,000 independent distributors in North America.
Akzo's brands -- including Glidden, Liquid Nails, Sikkens and Flood -- will be added to the PPG line in North America, which already includes Pittsburgh Paints and Olympic brands.
Gov. Tom Corbett's office announced the headquarters consolidation in Cranberry because the state will provide a package of financing incentives for the project. The funding includes a $1.25 million Pennsylvania First Program grant, $618,000 in tax credits for job creation, a $42,750 workforce training grant, and a $2 million loan from the Pennsylvania Industrial Development Authority.
"We continue to see momentum building in the Pennsylvania economy, and businesses are moving here to grow," Mr. Corbett said in a statement. "Today is a win for southwestern Pennsylvania, proving that the best way to spur new job growth is to work with local leaders and businesses."
The state estimated the deal will generate $14 million-plus in new investment in infrastructure, equipment and employee training.
Besides the employees moving here from out of state, about 100 PPG employees now located in McCandless and fewer than 100 who now work at PPG headquarters Downtown will move to Cranberry, Mr. Iams said.
A small number of workers at the company's Springdale industrial paints center will also move to Harmar, he said.
PPG has about 800 employees at its global headquarters in PPG Place, Downtown. The relocation of some of them to Cranberry will not significantly alter space requirements in the city, said Mr. Iams, because some people currently based Downtown could maintain offices in both places.
Regarding the fate of former Akzo facilities in Strongsville, Ohio, and elsewhere where large numbers of employees will relocate to Cranberry or Harmar, PPG continues "to assess its facility needs for the newly combined business," said Mr. Iams.
"In many of these locations, there are other team members that remain working. Some of them are in manufacturing or distribution. We're really looking at the administrative components to those sites coming together in [the Cranberry] facility."
Relocation of all the affected employees is expected to take place over the next 12 to 18 months, Mr. Iams said.
If people in other states turn down the option to relocate to the Pittsburgh region, others could be hired for those positions, said Mr. Iams.
"This is the team and the jobs the business believes are important moving forward, and those jobs will have a home in Cranberry or Harmar. If [existing employees] don't take them, PPG would hire for those positions and they would be open for people in the region here.
"It's really good news for the Pittsburgh region that we're looking at at least 300 jobs from out of state coming here ... the fact it's close to our global headquarters really further creates a solid presence for PPG here."
Shares in PPG on Monday fell $2.86 to close at $163.42.
Joyce Gannon: firstname.lastname@example.org or 412-263-1580. First Published September 23, 2013 12:45 AM