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Ppg Industries, Inc. Business Information, Profile, and History

glass company coatings paint

One PPG Place
Pittsburgh
Pennsylvania
15272-0001
U.S.A.

Company Perspectives

Our Vision: We will be recognized as a preeminent global engineered-materials and services company that fully engages our people, passionately embraces new ideas, seeks out transforming technologies and operates with unbending ethical standards.

History of Ppg Industries, Inc.

PPG Industries, Inc. is a global producer of protective and decorative coatings, adhesives, sealants, flat glass, continuous-strand fiberglass, fabricated glass products, and industrial and specialty chemicals. PPG is a leading supplier of products for the aerospace, automotive, building, chemical processing, electronics, optical, packaging, pharmaceutical, and numerous other industries. The company operates about 100 production facilities in Argentina, Australia, Brazil, Canada, China, France, Germany, India, Ireland, Italy, Malaysia, Mexico, the Netherlands, the Philippines, Singapore, South Korea, Spain, Taiwan, Turkey, the United Kingdom, the United States, and Venezuela; and supports six main research and development facilities, four of which are located in Pennsylvania, with one each in North Carolina and the Netherlands. PPG has grown from the dream of two men into a global corporation that derives more than 35 percent of its revenues from outside the United States.

Founding in 1883 As a Plate Glass Manufacturer

Captain John B. Ford and John Pitcairn created the Pittsburgh Plate Glass Company (PPG) in 1883. The first financially successful U.S. plate glass manufacturer, the company was located in Creighton, Pennsylvania, northeast of Pittsburgh. It moved its headquarters to Pittsburgh in 1895. Prior to the 1880s over a dozen plate glass makers had tried unsuccessfully to compete with their European counterparts. Despite American technical ability, plate glass for America's growing cities continued to be imported from Belgium, England, France, and Germany.

Manufacturing profits on glass were inconsistent partly due to the independents who controlled glass distribution. In 1896 Pitcairn established a commercial department and PPG became its own warehouser and distributor. Because of disagreements with Pitcairn regarding distribution, John Ford's sons sold their PPG interests and formed the Edward Ford Plate Glass Company. During the Great Depression, Ford merged with Libbey-Owens Sheet Glass to form Libbey-Owens-Ford Glass Company, now Pilkington North America Inc., a subsidiary of Pilkington plc of the United Kingdom.

Pitcairn became president of PPG, and in 1899 he built the Columbia Chemical Company at Barberton, Ohio. This independent company produced soda ash, a major raw material used in making glass. This plant was a forerunner of PPG's chemical group. By the following year PPG was selling 13 million square feet of plate glass a year and had become the nation's most successful plate glass maker.

Expanding into Paints by Early 20th Century

Pitcairn continued to expand PPG's product line. Because paints and brushes were distributed through the same channels as glass, they were a logical addition to the company. By the end of 1900 PPG had acquired a major interest in Milwaukee, Wisconsin-based Patton Paint Company, the precursor to PPG's coatings and resins operations. In 1902 PPG established operations in Europe, becoming one of the first U.S. manufacturers to do so.

In the early years PPG had manufactured only plate glass. It marketed but did not produce window glass, or sheet glass. In 1907, however, the first window-glass factory was added to company operations, in Mount Vernon, Ohio. In 1915 a second plant was opened in Clarksburg, West Virginia. Pitcairn's strong interest in innovation and diversification led to the opening of the company's first research and development facility in 1910.

The first stage of PPG's development came to an end in 1916 with Pitcairn's death. In 33 years he had led the company through economic panics, foreign competition, and restrictive distribution channels to become the nation's largest plate glass manufacturer. He was also the force behind diversification of the company's product line as well as the development of raw material sources and expansion of marketing outlets for its many products.

In 1919 subsidiaries yielded more than 50 percent of net return for the year. In November 1920 PPG stockholders voted unanimously to fold the company's subsidiaries into the parent company, making them divisions.

Becoming Automotive Supplier

The 1920s were prosperous for PPG. As steel-cage and concrete-reinforced construction became the standard for building, architects were able to design structures with larger window units, and glass consumption reached record levels in the United States. During this decade, the automobile industry also began using more glass. The switch from the open touring car to the sedan caused an expanded need for glass, and PPG met the demand.

PPG also made several technological innovations during the 1920s. In 1924 the company switched from the batch method of making plate glass to the straight-line conveyor-based ribbon method. With this revolutionary PPG innovation, molten glass from a constantly replenished melting furnace flowed through water-cooled shaping rollers. The glass was then cooled and cut into large plates.

In 1928 PPG first mass-produced sheet glass, using the Pittsburgh Process, which improved quality and sped up production. For the first time PPG became a major supplier of window glass. The Pittsburgh Process, invented by PPG, involves drawing a continuous sheet of molten glass from a tank vertically up a four-story forming-and-cooling line. In 1928 the Creighton Process was developed. An economical process for laminating glass for automobile windshields, PPG introduced Duplate laminated safety glass through a glass-plastic unit.

In 1924 PPG produced its first auto lacquer, which the company marketed in only a limited number of conservative colors. By 1929 PPG supplied "no less than 500 harmonious hues" to 40 automakers. The company had also begun using a long-lasting, fast-drying finish developed by the Ditzler Color Company, a subsidiary acquired in 1928.

Always seeking to diversify, in 1923 PPG began to use limestone screening, a waste product of soda ash, to manufacture Portland cement. During the Great Depression, PPG developed new paint and glass products. In the 1930s the company developed titanium dioxide pigments, which greatly increased the opacity of light colors. It also created fast-drying Wall-hide flat paint, which made it possible to apply two coats of paint in one day. In 1934 PPG introduced Solex heat-absorbing glass. Also in 1934, it perfected a glass-bending technique that made the production of car windshields easier. In 1938 PPG introduced Herculite tempered glass. Herculite glass was several times stronger and more shatter resistant than ordinary plate glass.

Diversification paid off again for PPG during World War II. In 1940, the year before Japan attacked Pearl Harbor, the glass division had developed Flexseal laminated aircraft glass. During the war, when production of automobiles was temporarily halted and building was curtailed, PPG converted much of its production into materials for military use. Because of the shortage of raw materials during the war, PPG worked hard to develop synthetic resins, which inspired the development of plastics and high-performance paints and industrial coatings.

Explosive Postwar Growth

During the 1950s car production and construction of new homes and glass-and-steel buildings exploded. PPG stepped up production to meet demand, and continued to diversify. Fiberglass had been a laboratory novelty until the 1930s. By 1950, however, it was being used in decorative fabrics and for insulation. In 1952 PPG opened its fiberglass business, making both textiles and reinforcements.

Also during the 1950s, PPG developed lead-free house paints. In 1951 the company created the first latex-based interior paint and three years later brought a latex exterior house paint to the market. PPG was also one of the first companies to produce a no-wax car finish, and its chemical division introduced several new products, including a swimming pool purifier.

In 1955 PPG's sales topped $500 million. The company employed 33,000 people in seven glass plants, three glass-fabricating plants, two specialty plants, two fiberglass plants, 17 coating and resins plants, and five chemical plants. In the early 1960s PPG produced materials for the building, transportation, appliance, container, boating, textile, paper, television, and chemicals industries. In 1963 it became the first U.S. company to manufacture float glass, used in place of plate glass by architects. In the same year, PPG introduced Herculite K, glass three to five times more shatter resistant than ordinary window glass. Herculite K became popular for residential storm- and sliding-door units because of its low cost.

During the early part of the 1960s a heavy capital-investment program moved the company toward $1 billion in sales, a goal it reached in 1968. In the same year, the company changed its name to PPG Industries, Inc., to reflect its size, diversification, and global presence.

During the mid-1960s the company developed a coating process called electrodeposition. Electrodeposition involves submerging positively charged metal parts in a tank containing negatively charged paint particles suspended in water. The opposite charges attract each other, and the metal is coated more uniformly than if it had been sprayed or dipped. In 1969 the chemicals group won the Kirkpatrick Chemical Engineering Achievement Award for developing a process for the simultaneous production of perchloroethylene, widely used in dry-cleaning, and trichloroethylene, a degreaser.

The oil embargo, the increased price of oil, natural gas, and electricity, and the dwindling production of fuels in the United States revived interest in solar energy in the 1970s. PPG was the first major corporation to develop a flat-plate solar collector, a unit first marketed in 1975. PPG also continued to work on high-luster, long-life automotive finishes. It improved its acrylic lacquers and developed acrylic dispersion topcoat finishes with lower solvent emissions during baking, which are less harmful to the environment. In the early 1970s more Americans began to repair and refinish automobiles in order to extend their cars' lifespan. PPG's Ditzler unit developed easy-to-apply primers and topcoats that matched factory-applied coatings in performance and appearance.

During the 1970s tinted, insulated, and reflective plate and float glasses came to be known as "performance" glass, or "environmental" glass, as the energy efficient and attractive glass became the preferred material for curtain walls. In 1973 the last plate glass production line was phased out and was replaced by the float glass production method. Also in 1973, Wallhide Microflo consumer paints were introduced. The Microflo process created air pockets in paint films that helped reflect light more efficiently as well as producing easy-to-apply paint with a smooth, washable surface. In 1975 PPG continued to broaden its color line by introducing a new custom-tinting system for consumer paints called the DesignaColor System.

In 1975 PPG established a fifth division, plastic fabricating, and closed several outmoded plants. The corporation also restructured its marketing organization, disbanding the merchandising division established by John Pitcairn in 1896, and continued to develop high-performance glasses, coatings, and fiberglass products. In 1976 PPG reached $2 billion in sales.

The year 1985 was the end of a chapter in PPG's history as the heirs of Pitcairn sold their remaining stake in PPG back to the company for $530 million. PPG's biomedical systems division was established in 1986 and 1987 with the acquisition of medical-electronics operations from Honeywell Inc., Litton Industries Inc., and Allegheny International Inc. The group produced computer-assisted cardiac recording equipment, patient-monitoring systems, electrocardiogram instruments, defibrillators, and related products for the healthcare industry. In 1989 PPG significantly expanded its standing as a leading producer of architectural finishes (in layperson's terms, house paints) with the acquisition of Olympic stains and paints and Lucite paints from the Clorox Company for $134 million.

The drop in the U.S. auto and construction markets during the late 1980s hurt PPG's sales. Automakers were PPG's largest customers, and fluctuations in that market reduced the company's profits. In 1989 the company's earnings dropped 1 percent, interrupting a six-year upward trend. Nevertheless, Vincent A. Sarni, who became chairman in 1984 and CEO in 1983, felt PPG was making progress toward goals set for the ten-year period from 1985 to 1994. On February 26, 1990, Barron's reported that "The company has stayed consistently ahead of a goal to show an average annual return on equity of 18%." Sarni believed that by 1994 PPG would reach targeted annual sales of $8 billion even without acquisitions.

Difficult Stretch Giving Way to Recovery

PPG fell far short of Sarni's ambitious sales goal as growth was derailed by the recession of the early 1990s, which hit the construction and automotive sector particularly hard. Following the peak of $6.02 billion in 1990, revenues actually declined to $5.75 billion by 1993. Nevertheless, PPG did manage to stay profitable throughout the recession, despite the difficult environment.

Sarni was more successful with his aim of expanding PPG globally. About one-quarter of the company's revenues came from outside the United States in 1986, but by the early 1990s the figure had grown to more than one-third. Much of this growth was accomplished through acquisitions. In 1990 the company acquired its partners' interests (the two-thirds not already owned by PPG) in Silenka B.V., a Dutch fiberglass producer, bolstering its already strong position in the European fiberglass market. That same year, PPG also bought Finland's Tamglass Automotive OY, which gave PPG a significant presence in the European replacement glass business, and Etablissements Robert Ouvrie S.A. of France, a maker of surfactants and paper specialty chemicals. In June 1991 PPG acquired the automotive coatings business of ICI Canada.

In September 1993 PPG's board surprised many when, for the first time in company history, it appointed an outsider, Jerry E. Dempsey, as chairman and CEO, to replace the retiring Sarni. The board evidently felt that none of the in-house candidates were quite ready to assume the leadership mantle. Dempsey, an engineer by training, had been president and COO of auto parts maker Borg-Warner Corporation from 1979 to 1984 before heading Chemical Waste Management, Inc. Meanwhile, the company decided in 1993 to sell its Biomedical Systems Division. This noncore operation was completely divested by January 1995. The move left PPG with its three core segments: coatings and resins, glass, and chemicals.

Under Dempsey's leadership, PPG enjoyed sales growth of 10 and 11.5 percent in 1994 and 1995, respectively. Profits grew even faster, highlighted by a 50 percent increase in 1995. Fueling this revival was Dempsey's emphasis on heightened marketing efforts, with a particular stress on seeking out new niches for PPG that required skillful marketing. For example, by 1995 Dempsey had transformed Transitions Optical, Inc., a troubled joint venture (formed in 1990 with France's Essilor International SA) that made color-changing sunglasses, into a $100 million business growing at a rate of 40 percent per year. Dempsey also sought out new ways to leverage PPG's existing expertise, as for example in the coatings unit's running of entire paint operations in auto plants. During this period, growth was also achieved through acquisitions, including the 1995 purchases of the American Finishes refinish coatings business of Lilly Industries, Inc. and of Matthews Paint Company, a leading manufacturer of paints for outdoor metal signs.

Dempsey retired in late 1997, with PPG on the upswing and his having overseen an orderly leadership succession. In December 1995 Executive Vice-President Raymond W. LeBoeuf, who had joined the company in 1980 as treasurer, became president and chief operating officer. LeBoeuf subsequently succeeded Dempsey as CEO in July 1997 and as chairman in November 1997. LeBoeuf immediately set lofty goals for PPG for the year 2000, aiming for $10 billion in sales (compared to $7.22 billion in 1996) and a doubling of net earnings from the $744 million of 1996.

Into the New Century on the Heels of an Acquisition Spree

LeBoeuf's targets proved too ambitious as PPG's late 1990s performance was undermined by the economic crises that hit certain Asian markets and Brazil and by the start of a deflationary trend in the manufacturing sectors of Europe and the United States. The 2000 results, net income of $610 million on revenues of $8.63 billion, were aided by an acquisition spree that LeBoeuf directed in the late 1990s. One of the aims of the deals was to make the company less dependent on the more cyclical and mature portions of its portfolio, namely the chemical and glass businesses, while bolstering faster-growing operations, such as coatings and optical products. Thus, in 1998, PPG sold its European flat and automotive glass businesses to the Belgium firm Glaverbel S.A. for $266 million, while acquiring Courtaulds plc's packaging coatings and U.S. architectural coatings businesses in a deal valued at approximately $285 million. Included in the Courtaulds deal was the architectural coatings firm Porter Paints, a paint retailer in the southeastern United States mainly catering to paint contractors. PPG had flirted with exiting from the architectural paint sector, but elected not only to stay in the business but to expand its operations in this area. Architectural paints had great potential for growth, and because it was an area in which PPG dealt more directly with the end customer, executives viewed the firm's presence in the sector as a way to balance out PPG's industrial side.

The acquisitions pace quickened in 1999, when PPG spent more than $1.34 billion on a string of deals, two of them major, both concluded in July. PPG paid $677 million for the bulk of Imperial Chemical Industries plc's automotive refinishing and industrial coatings businesses in Europe, Asia, Latin America, and the United States. It spent another $524 million to take over PRC-DeSoto International, Inc. from the Dutch firm Akzo Nobel N.V. Based in Glendale, California, PRC-DeSoto produced coatings and sealants for aircraft and sealants for architectural insulating glass units. These blockbuster deals were followed by two smaller deals that bulked up PPG's architectural coatings operations: Atlanta-based Wattyl Paint (July 1999) and Houston-based Monarch Paint Co. (February 2000).

PPG largely curtailed its acquisition program in 2000 as concerns grew about an economic slowdown and executives elected to preserve cash, in part to pay down debt. Between 2000 and 2004, long-term debt was cut from $1.81 billion to $1.18 billion, even as working capital jumped from $550 million to $1.83 billion. As its earnings continued to be flat, PPG launched restructurings in both 2001 and 2002 that aimed to cut annual operating expenses by a total of about $150 million. These overhauls involved the layoff of approximately 2,500 workers and the closure of a number of plants.

In 2002 PPG suffered a net loss as a result of an asbestos-related settlement. PPG and Corning Incorporated had been 50-50 partners in Pittsburgh Corning Corporation, which was formed in 1937 and made pipe insulation containing asbestos from 1962 to 1972. Lawsuits against Pittsburgh Corning alleging personal injury from its asbestos-laden products began proliferating in the 1970s, eventually forcing the company to file for Chapter 11 bankruptcy protection in April 2000. PPG, Corning, and the companies' insurance companies announced in May 2002 that they had agreed to pay a total of $2.7 billion to settle all the litigation relating to Pittsburgh Corning. PPG consequently took an after-tax charge of $484 million, which led to a net loss of $69 million for 2002.

Strong results from four businesses--aerospace coatings and sealants, architectural coatings, optical products, and Asian coatings--helped push PPG's revenues past the $10 billion mark for the first time in 2005. Despite an economy on the upswing, profits were under pressure because of surging energy and raw material costs. Midyear, LeBoeuf retired from PPG. During his tenure, he accelerated PPG's shift from a focus on glass and chemicals to paints, coatings, and optical products. By 2005, fully 55 percent of revenues were generated by the coatings operations.

Taking over as chairman and CEO was Charles E. Bunch, who had been president and COO and had joined PPG in 1979 as assistant to the corporate controller. Bunch's biggest immediate concern was the ongoing increases in raw materials expenses, and he began investigating alternative sources to cut costs. While not promising the types of blockbuster deals that his predecessor pulled off, Bunch aimed to pick up the acquisition pace, concentrating on smaller companies with annual revenues of as much as $250 million. PPG completed a string of smaller deals in China, Thailand, and Hong Kong in the later months of 2005 and the first half of 2006 toward meeting Bunch's goal of generating $2 billion in annual sales in Asia within five to seven years. In April 2006 PPG beefed up its optical products side, another key area for growth, by acquiring Parma, Italy-based Intercast Europe, S.p.A., the world's leading maker of nonprescription hard-resin sunglass lenses. Around this same time, PPG agreed to pay $60 million to settle a lawsuit alleging it had conspired with other glass makers to overcharge for flat glass products.

Principal Subsidiaries

LYNX Services, L.L.C.; PPG Architectural Finishes, Inc.; PPG Auto Glass, LLC (66%); PPG Industries Fiber Glass Products, Inc.; PPG Kansai Automotive Finishes U.S., LLC (60%); PRC-DeSoto International, Inc.; Stan-Mark, Inc.; The CEI Group, Inc. (75%); Transitions Optical, Inc. (51%); PPG Canada, Inc.; Bellaria S.p.A. (Italy); HOBA Lacke und Farben GmbH (Germany); PPG Coatings B.V. (Netherlands); PPG Coatings SA (France; 99.85%); PPG Holding SAS (France); PPG Holdings B.V. (Netherlands); PPG Holdings (U.K.) Limited; PPG Iberica, S.A. (Spain); PPG Industries Chemicals B.V. (Netherlands); PPG Industries Europe (France); PPG Industries Europe Srl (Switzerland); PPG Industries Fiber Glass B.V. (Netherlands); PPG Industries France SAS; PPG Industries Italia S.r.l. (Italy); PPG Industries Kimya Sanayi ve Ticaret Anonim Sirketi (Turkey); PPG Industries Lacke GmbH (Germany); PPG Industries Lackfabrik GmbH (Germany); PPG Industries Netherlands BV; PPG Industries Poland Sp. Zo.o.; PPG Industries (UK) Limited; PPG Ireland International Financial Company Limited; PPG Kansai Automotive Finishes U.K. LLP (60%); PPG Luxembourg Finance S.R.L.; PPG Luxembourg Holdings S.R.L.; PPG Optical Holdings Ireland; PPG Service Sud S.r.l (Italy); PPG-Sipsy SAS (France); Transitions Optical Holdings B.V. (Netherlands; 51%); Transitions Optical Limited (Ireland; 51%); PPG Coatings (Hong Kong) Co., Limited; PPG Coatings (Malaysia) Sdn. Bhd.; PPG Coatings (Thailand) Co., Ltd.; PPG Coatings (Tianjin) Co., Ltd. (China); PPG Industries Australia PTY Limited; PPG Industries New Zealand Limited; PPG Industries (Singapore) Pte., Ltd.; PPG Japan Ltd.; PPG Packaging Coatings (Suzhou) Co., Ltd. (China; 90.4%); PPG Paints Trading (Shanghai) Co., Ltd. (China); PRC-DeSoto Australia Pty Ltd.; Taiwan Chlorine Industries Ltd. (60%); Transitions Optical Philippines, Inc (51%); PPG Industrial do Brasil - Tintas E Vernizes - Ltda. (Brazil); PPG Industries Argentina S.A.; PPG ALESCO Automotive Finishes Mexico, S. de R.L. de C.V. (60%); PPG Industries de Mexico, S.A. de C.V.; EPIC Insurance Co. Ltd. (Bermuda).

Principal Operating Units

Aerospace; Architectural Coatings; Automotive Coatings; Automotive OEM Glass; Automotive Refinish; Automotive Replacement Glass; Chlor-Alkali and Derivatives; Fiber Glass; Fine Chemicals; Industrial Coatings; Insurance and Services; Optical Products; Packaging Coatings; Performance Glazings; Silicas.

Principal Competitors

Akzo Nobel N.V.; The Sherwin-Williams Company; BASF Aktiengesellschaft; E. I. du Pont de Nemours and Company; Imperial Chemical Industries plc.

Chronology

  • Key Dates
  • 1883 John B. Ford and John Pitcairn form the Pittsburgh Plate Glass Company (PPG), based in Creighton, Pennsylvania.
  • 1895 Headquarters are moved to Pittsburgh.
  • 1896 Ford's sons sell their interest in PPG, leaving Pitcairn as president.
  • 1899 Pitcairn builds a soda ash plant in Barberton, Ohio, the first PPG chemicals business.
  • 1900 PPG acquires Milwaukee-based Patton Paint Company, the foundation of its coatings operations.
  • 1924 Company revolutionizes plate glass making with the straight-line conveyor-based ribbon method.
  • 1952 PPG enters the fiberglass business.
  • 1968 Company is renamed PPG Industries, Inc.
  • 1985 Heirs of Pitcairn sell their remaining stake in PPG back to the company.
  • 1989 The Olympic and Lucite paint brands are acquired.
  • 1990 PPG and Essilor International SA form Transitions Optical, Inc. joint venture.
  • 1999 Two major acquisitions are completed: PRC-DeSoto International, Inc. and the bulk of Imperial Chemical Industries plc's automotive refinishing and industrial coatings businesses.
  • 2002 PPG takes an after-tax charge of $484 million to cover its part of a $2.7 billion settlement of asbestos-related litigation involving Pittsburgh Corning Corporation.
  • 2005 Revenues surpass $10 billion for the first time.
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