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PPG Industries

PPG Industries (NYSE: PPG)

Company Description

PPG is the largest US paint company and has been a major producer of glass. (Pittsburgh Plate Glass Co.) It is a leading supplier of glass and paints to the automotive industry and is especially well known for its Uniprime electrodeposition primers. It also offers a full range of paint products including Olympic Stain and Lucite house paint, and auto refinish enamels, used in auto repair. PPG is a global player with subsidiaries and/or operations everywhere.

In December, 2012 PPG announced the acquisition of the North American consumer paints business (usually called "trade sales") from Akzo Nobel. Akzo presumably got it with the portion of ICI they acquired. This includes the Glidden brand name, which has a long history (at one time owned by SCM, but makers of Smith Corona typewriters and Durkee dressing). According to a Wall Street Journal article, this will make PPG the world's largest paint company followed by Akzo and Sherwin-Williams. Sherwin-Williams is still the largest in the North American architectural paints business, followed by PPG and then Masco, maker of Behr paints. Sherwin Williams has 3500 company paint stores; PPG will have 1000.

In July, 2012, Georgia Gulf announced plans to merge with the commodities chemicals business being spun off from PPG Industries. The PPG products are primarily chlor-alkali. The combined companies will be the third largest producer of chlor-alkali in the US after Dow Chemical and Occidental. PPG will own 50.5% of the combined companies.

Chlor-alkali consists of the production of chlorine and usually sodium hydroxide (aka caustic soda or lye) by electrolysis of salt. Chlorine is used primarily to make PVC plastic; caustic soda is a major source of sodium in a variety of industries. This is the classical co-product situation in that chlorine cannot be stored and the two products have different demand/growth cycles. Keeping them in balance is usually accomplished by raising prices on one and cutting on the other, but it's a roller coaster for all involved.

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