Bunch said that PPG's sales in coatings and specialty products have more than doubled since 2001 and now account for more than 80 percent of total company revenues. In addition, he said PPG's overall sales in emerging regions have grown to account for about 26 percent of the company's portfolio.
"In 2012, we plan to continue to pursue growth in key technology-driven businesses, notably aerospace, automotive refinish and optical, as well as in faster-growing emerging regions," Bunch said. "In addition, we intend to maintain our keen focus on cost and operations. PPG today is a technology leader in the coatings sector, and we aim to enhance our position by delivering additional innovative solutions to our customers."
PPG's portfolio and geographic growth through bolt-on acquisitions continued in 2011, Bunch said, as the company completed the purchases of Equa-Chlor, a U.S.-based chlor-alkali manufacturer, and Ducol Coatings, a South African automotive refinish coatings company, and announced agreements to acquire Dyrup A/S, a European architectural coatings manufacturer, and Colpisa, an automotive original-equipment and refinish coatings manufacturer based in Colombia. Bunch said that he anticipates further consolidation in the $92 billion global coatings industry, and that PPG plans to continue to evaluate growth opportunities.
"Our outlook for global economic conditions in 2012 includes growth in global industrial activity, including increased global automotive OEM industry production, and we believe global growth rates in the coatings industry will outpace gross domestic product," Bunch said. "We expect that lower natural gas costs will continue to be a benefit to PPG in 2012. We also anticipate a continued slow recovery in the developed regions in residential and non-residential construction markets, and that uncertainty in the European region will result in subpar growth there."
Regarding current business conditions, Bunch said that most PPG businesses are performing in line with normal, seasonal fourth-quarter trends. Commenting on PPG's recent declaration of force majeure for certain optical products because of flooding in Thailand, Bunch said that it would likely have a negative impact of about 8 cents to 14 cents per share on fourth-quarter 2011 earnings but that there would be "minimal carryover effect into 2012." Bunch also said that the company's Commodity Chemicals segment could experience a 20 percent to 40 percent decrease in fourth-quarter 2011 earnings sequentially over third-quarter 2011 results, due in large part to "chlorine customer inventory management."