Coatings World - JULY 2013

PPG Industries
Pittsburgh, Pennsylvania/USA
www.ppg.com

PUBLIC COMPANY
YEAR ESTABLISHED: 1883
REVENUE: $11.48 Billion s (2011: 10.888 bn)

SEGMENT BREAKDOWN

• Aerospace coatings
• Automotive OEM coatings
• Automotive refinish coatings
• Architectural coatings
• Packaging coatings
• Industrial coatings
• Protective and Marine coatings

Sales of PPG Industries’ three coatings business segments – Performance Coatings, Industrial Coatings and Architectural Coatings EMEA – combined for $11.28 bn in revenue in 2012, up from $10.888 bn the year before.

Performance Coatings, which includes aerospace, architectural coatings Americas and Asia Pacific, automotive refinish and protective and marine coatings reported 2012 sales of $4.8 billion, three percent higher than 2011. U.S. architectural coatings were aided by early signs of a construction market recovery in the U.S. and mild weather early in 2012.

Industrial Coatings, which includes automotive OEM coatings, industrial coatings and packaging coatings, reported sales increased to $4.4 bn, up five percent from the prior year. The segment sales growth was driven by automotive OEM coatings growth especially in North America, due in part to the recovery from the 2011 Japanese tsunami, as well as continued strength in China, offset by European economic weakness.

Architectural Coatings – EMEA segment sales were $2.147 billion in 2012, up two percent versus 2011. The acquisition of Dyrup in January 2012 contributed eight percent sales growth. However, sales were negatively impacted by seven percent due to the impact of the foreign currency translation.

PPG recently reached a definitive agreement to acquire Spraylat Corp., a privately-owned industrial coatings company based in Pelham, NY (ranked 59 in last year’s report). Spraylat holds a strong position in industrial markets such as automotive parts, architectural powder coatings, transportation and general industrial niches, including mirror, electronic device, metal office furniture and storage, and sign coatings. Spraylat Corp. was founded in 1936 and now serves a customer base spanning more than 50 countries. Spraylat had annual sales of approximately $125 million in 2011. The company operates production facilities in the U.S., Europe and China, and it employs approximately 300 people.

By far the largest acquisition was that of AkzoNobel’s architectural coatings business. The deal, valued at $1.05 billion, will add brands such as Glidden, Flood, CIL, Sico and Liquid Nails to the company’s roster and includes all AkzoNobel North American architectural coatings manufacturing and distribution facilities, paint stores, product lines and employees related to the production, sale and distribution of architectural coatings in the U.S., Canada and the Caribbean.

KE Y EXECUTIVES
Charles E. Bunch, chairman and CEO;
Michael H. McGarry, executive VP; Viktor
R. Sekmakas, executive VP; Cynthia A.
Niekamp, senior VP, automotive OEM
coatings; Bryan Iams, VP, corporate
communications, marketing, and
government and community affairs;
Charles F. Kahle II, VP, coatings research
and development and C TO; Barry N.
Gillespie, VP, Aerospace Products;
Timothy M. Knavish, VP, Protective and
Marine Coatings; John R. Outcalt, VP,
Global Automotive Refinish; Douglas S.
Pegg, VP, Packaging Coatings; Michael
Horton, president, PPG Asia Pacific and
VP, Automotive Refinish and Architectural
Coatings, Asia Pacific; Jean-Marie Greindl,
president, PPG EMEA and VP, Automotive
Coatings, EMEA; Gregory B. Benckart, VP,
Automotive Refinish, Americas; Gary R.
Danowski, VP, Automotive Refinish, EMEA;
John C. Richter, VP, Operations, Coatings,
Asia Pacific; Vincent Robin, VP, Automotive
Coatings, Asia Pacific; Scott B. Sinetar, VP,
Architectural Coatings, North America;
James G. Stutelberg, VP, Automotive
Coatings, Americas; Ram Vadlamannati,
VP, Architectural Coatings – EMEA; Willie
Wu (Chunping), VP, Industrial Coatings,
Asia Pacific; Pauline Yuen, VP, Refinish
Coatings, Asia; Richard J. Zoulek, VP,
Industrial Coatings, Americas.

Key Achievements in 2012

• PPG acquired European coatings company Dyrup, which has expanded PPG’s product offerings in Europe.

• PPG acquired Colombian coatings company Colpisa, which continued PPG’s coatings growth in Latin America.

• To capitalize on regional long-term economic prospects, PPG and Asian Paints expanded their current India joint venture and created a second venture. As part of these changes, PPG gained effective management control of the original venture.

• In July 2012, PPG announced plans to separate its commodity chemicals business and subsequently merge it with Georgia Gulf Corporation to create a new company, Axiall Corporation. This transaction, which was successfully completed in January 2013, significantly accelerated the company’s portfolio transformation.

• PPG acquired U.S.-based Spraylat Corp., which is contributing to the global growth of PPG’s industrial coatings business and product offerings.

• In December, PPG announced an agreement to acquire AkzoNobel’s North American architectural coatings business. When finalized, this transaction will further expand PPG’s coatings portfolio and establish the company as the clear #1 architectural coatings company in Canada and the Caribbean and the #2 in the United States.

• PPG entered into a technology license agreement with China-based Henan Billions that would provide Henan Billions the right to use PPG’s technology for the manufacture of chloride-grade titanium dioxide on a worldwide basis.

• As a proactive measure in response to weak economic conditions and to ensure the company’s cost structure remains in line with current business realities, PPG initiated restructuring activities during the second quarter within its global architectural coatings businesses and in other businesses and functions primarily in Europe. After completion in 2013, these programs are expected to generate full-year pretax savings of $140 million.