by Charles W. Thurston
Latin America Correspondent
thurstoncw@rodmanmedia.com
PPG is expected to introduce some prod- ucts new to Mexico and the surrounding Latin American region once it has consummated the announced plans in late June for
the $2.3 billion acquisition of Comex, expected
to gain approval from the Mexican anti-trust
agency soon.
“The transaction will have, as a potential
benefit, that PPG will introduce into Mexico
state-of-the-art technology, as well as new architectural products that currently are not sold
in Mexico,” said Mark Silvey, a spokesman for
the company, in Pittsburg.
Technical sales and support of the combined
brands will be a primary strategy in architectural, automotive and industrial sales, according to
a post-acquisition announcement comment by
Diane Kappas, PPG vice president for the marine coatings business in the Americas.
A clear key to Comex’ success in the region is its massive store network. The company
sells in Mexico and Central America through
some 3,600 stores, largely owned and operated
by over 700 concessionaires. Comex has some
3,900 employees, eight manufacturing facilities
and six distribution centers, and had sales of
approximately $1 billion in 2013. PPG expects
acquisition-related synergies of up to four percent of Comex sales – or some $40 million –
will be achieved over a two-year period, along
with double-digit increases in revenues, according to PPG CEO Charles Bunch, speaking in an
analyst conference call in mid-July. “The majority of the synergies will arise from the purchase
of materials and basic inputs from powerful international suppliers,” says Silvey. Overall, the
company’s Latin America sales are projected to
rise to 11 percent of global sales from a current
five percent, with Comex sales added.
Architectural Segment to
Expand Most
PPG officials say it has “no footprint” in the
country’s architectural market, but the company
expects sales to be boosted by the rapid rate
of new home construction in Mexico, that are
typically hitting 400,000 units per year, accord-
ing to company COO Michael McGarry, also
on the conference call.
PPG’s architectural presence in Latin
America is primarily in the South America region. It now operates its Tintas Ideal business
in Brazil in Gravataí, Rio Grande do Sul state,
producing architectural, industrial and marine
coatings and operates in Argentina, in Pilar,
Buenos Aires province, where it manufactures
architectural and industrial products.
PPG also manufactures architectural coatings in Paramaribo, Suriname, for export to
the Francophile Caribbean, the EMEA, and
other country markets; PPG has a presence in
French Guyana, Guadalupe and Martinique,
where it markets its La Seigneurie and
Geuthier brands.
Automotive and Industrial
Strength in the Region
Although PPG holds a majority share of the
Mexican automotive market, it will not run
as much risk of forming a monopoly as did
Sherwin-Williams in attempting to purchase
Comex, since the latter holds only about two
percent of the Mexican automotive market.
PPG operates an automotive and industrial
coatings plant in San Juan del Rio, Queretaro
state, Mexico, where it recently announced $27
million in new investments. New PPG sales in
the Mexican automotive paint aftermarket are
expected to grow particularly, thanks to the
Comex store and technical support network.
“This demonstrates PPG’s commitment to
Mexico and its intention to support the economy of Mexico,” says Silvey.
In Brazil, PPG manufactures industrial
and marine coatings in Sumare, in Sao Paulo
state, where some $40 million in new investments are underway. In Medellin, Colombia,
PPG acquired Colpisa in 2012, a licensee of
PPG’s automotive, industrial and architectural coatings technology, marketed in Colombia
and Ecuador.
PPG also purchased a distributorship in
Panama earlier this year. CW
PPG is expected
to introduce some
products new
to Mexico and
the surrounding
Latin America
region once it
has completed
its acquisition of
Comex.
PPG To Build Brands In Mexico & Region
