The Pittsburgh-based, US company PPG Industries is “poised for yet another performance breakthrough” with the potential to double earnings by the end of the decade, board chairman and chief executive …
The Pittsburgh-based, US company PPG Industries is “poised for yet another performance breakthrough” with the potential to double earnings by the end of the decade, board chairman and chief executive officer Jerry E. Dempsey told shareholders. Achieving “unparalleled” performance will require, he said at the company“s annual meeting, yearly sales growth of 5% exclusive of acquisitions, improving profit margins, sustained productivity gains, and continued global expansion and profitable acquisitions. Sales of the global producer of coatings, flat and fabricated glass, fibre glass and chemicals, grew 11% in 1995, to US$ 7.1 billion, and earnings climbed 49% to US$ 768 million. PPG“s gross profit margin was a record 40.3%. Productivity improvement was only 1% last year, but has averaged nearly 7% annually since 1992. PPG reported first-quarter 1996 earnings of US$ 172.3 million, or 90 cents a share. Sales of US$ 1.75 billion were a record for any first-quarter. Year-ago earnings of US$ 219.2 million, or US$ 1.06 a share, included a US$ 24 million gain, 12 cents a share, from settling a glass technology dispute with Pilkington Plc. First-quarter 1995 sales were US$ 1.74 billion. “Looking toward the rest of the year,” Dempsey said, “we remain optimistic about our performance, although uncertainties remain in Europe. However, recent improvements in North American and European vehicle sales are among the encouraging signs, and we expect 1996 will be yet another good year for our company.” He added that acquisitions since early 1995 will add US$ 120 million in annual sales by 1998. In addition, PT Danapaints Indonesia of Jakarta has been appointed as the distributor of PPG“s automotive original, automotive refinish and industrial coatings in Indonesia. “Indonesia is a growing market for coatings, as activity expands there among global automotive producers and other manufacturers,” said Richard Zahren, PPG“s vice president of automotive coatings. “Partnering with Danapaints, one of the leading paint manufacturers in Indonesia, strengthens our ability to support our Indonesian customers and reinforces our commitment to customers throughout the Asia-Pacific region.” PPG will supply coatings products and technical know-how to Danapaints, and train its personnel. According to Zahren, PPG and Danapaints are also investigating the feasibility of establishing an Indonesian joint venture.