PPG Poised for Growth when Economy Rebounds, Chairman LeBoeuf Says
LeBoeuf, addressing a recent Morgan Stanley Dean Witter conference for chemical industry analysts and investors, said the company usually emerges from economic downturns even stronger, adding that the company’s strategic focus “positions us to benefit very well from economic recovery whenever it occurs.
“We’re hopeful that there is a meaningful comeback in the second half of the year, but we’re not necessarily expecting one,” LeBoeuf said. “We wouldn’t be surprised if the second half is only slightly better. But if it happens sooner, we’re prepared to take good advantage of it.” In 2000, PPG reported earnings of $620 million on sales of $8.6 billion.
LeBoeuf said PPG has benefited from changes in its mix of businesses that have increased the share of company sales from coatings to 54%, up from 36% in 1989. He said the company also has increased its focus on less-cyclical, higher-margin operations such as the automotive aftermarket. The company has completed 23 acquisitions since 1997, many of them in the coatings market.
The company also has introduced a number of notable new products that are proving to be commercial successes, including waterborne and high-solids automotive coatings, packaging coatings, ultraviolet-cure coatings, and powder coatings, he said.
LeBoeuf also said that due to the downturn in the U.S. economy, the company is accelerating restructuring programs that are expected to result in a first-quarter charge of $50 million to $100 million.