PPG standing by glass business

PPG said, during the presentation of its first quarter results that it will continue to be patient with its glass business, even if it is no longer its core business as the company now focuses on coatings, optical and speciality materials.

PPG Industries Inc. will continue to be patient with its glass business – a segment that is no longer the core as the company focuses on coatings, optical and speciality materials – but is not ruling out a sale, Chairman and CEO Charles Bunch told industry analysts while discussing the company’s first quarter results.
The segment had the lowest operating margin in the first quarter at 3.1% versus the highest margin business, optical and speciality materials, at 32.6%. Bunch described the segments first quarter performance as disappointing but said the company would wait for more of a recovery in the market.
“Absent a really attractive offer that creates value we are going to be patient and wait for what we think is the good timing,” he told an analyst that posed the question of a possible sale. “We don’t need the cash right now, but, we are open to listen to opportunities if there are really interested parties in the business, in either business.”
The company’s glass segment consists of fiberglass and flat glass production. In 2008, the company, which was founded in 1883 as a plate glassmaker, sold its auto glass business as part of a larger diversification strategy.
Bunch said this diversification has been the focus of the company for the last four to five years as it works to be recognized as a coatings and speciality company.
Looking at the overall economy, Bunch said he is optimistic about the economic recovery in the US especially looking at PPG’s customers in the aerospace and automotive markets. The low cost of natural gas in the US is also a benefit to the company, he said, adding that natural gas has been “the gift that keeps on giving.”
For every dollar saved in natural gas the company benefits about USD 50 million to USD 60 million, he said.
In terms of the European market, Bunch said he expects the overall market to be down slightly depending on which country and which market. “There are more countries that are weaker than are stronger,” he said.