PPG paints a global path
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In the early 1900s, the Pittsburgh Plate Glass Co. became one of the first U.S. businesses to expand operations into Europe, acquiring a glass plant in Belgium.
A century later, PPG Industries has operations in more than 60 countries, from Cameroon to Chile to China.
The 125-year-old company has also expanded far beyond plate glass. Nearly a third of PPG's $14.9 billion in net sales in 2011 were in performance coatings, in market segments such as automotive, aerospace and architectural coatings. Those coatings include name brands such as Pittsburgh Paints and Olympic paints.
Glass, in fact, made up only 7 percent of PPG's 2011 net sales. All categories of coatings (performance, architectural and industrial) combined for 73 percent of sales.
The rest of PPG's net sales are in optical products and commodity chemicals, including the well-known Transitions eyeglass lenses that darken in the sunlight.
PPG's presence in the coatings market expanded in a major way in 2008 with the $3.2 billion acquisition of Dutch company SigmaKalon, the second-biggest paint maker in Europe. With that acquisition, PPG became the world's second largest global coatings company.
In recent years, most of the company's acquisitions have been international, including deals in the last year to buy a Colombian coatings company and to form a joint venture with an Indian fiberglass manufacturer.
While international acquisitions have been a boon to PPG, worldwide expansion also means taking on worldwide problems.
During the company's most recent earnings call, for example, CEO Charles Bunch discussed the effect of an Asian natural disaster and the European financial crisis -- not to mention the German housing market, the Chinese New Year and Brazilian demand for house paint.
"We're all concerned with the macroeconomic environment in Europe," said Mr. Bunch, noting specific concerns about how the European financial crisis will affect construction and automotive markets.
PPG does much of its optical manufacturing in three locations in Thailand, and had to suspend operations at two of those factories because of massive flooding that affected two-thirds of the country's provinces and killed 600 people. The company's third factory remained open, but struggled because flooding had forced customers to stop their operations.
The company lowered its fourth-quarter earnings by 8 cents, to 14 cents a share because of the impact of the floods.
As of PPG's most recent earnings call, in January, executives were more optimistic about the impact from the flooding, saying that lingering impact would be at most, "minimal."
First Published March 20, 2012 12:00 am