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Paint maker counts on Asian sales

PPG Industries Inc, the world's second-largest paint and coatings maker, expects China sales to maintain double-digit growth this year as demand from auto makers grows and it expands market share.

The US-based company, which is reducing output and cutting more than 8 percent of its workforce amid weak demand, is counting on Asia, and China in particular, as its growth engine. "Every time there is a recession globally, Asia picks up more market share in the world," Viktor Sekmakas, president for Asia Pacific, said yesterday.

China already makes up 35 percent of PPG's sales in Asia Pacific last year against 25 percent in 2007, he said. Asia's proportion in its global sales also rose to 17 percent from 15 percent in the same period.

China sales jumped 35 percent last year in part because PPG acquired SigmaKalon Group, a coatings maker based in the Netherlands.

The demand for auto coatings and industrial coatings was difficult at the end of last year but the situation had improved in recent months. Last month's auto coatings demand was almost as strong as last year's, he said.

China's vehicle sales may grow 6 to 7 percent this year, after 3.8-percent growth in the first quarter, Sekmakas said. PPG will keep expanding market share as customers are looking for products that can add value amid a downturn, he said.

In August, PPG launched an auto coatings plant in Wuhu, Anhui Province, home to Chinese car maker Chery. That plant is running at 35 percent of capacity, up from about 10 percent at the end of last year, and PPG plans to add one more shift in six weeks in the plant which now has one shift in operation, he said.

PPG, which competes with industry No. 1 Akzo Nobel NV, generated 80 percent of its sales in China from coatings. It also produces optical materials and commodity chemicals.


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