Despite Economic Downturn, PPG Expects Benefits

Compiled ByPeter Strozniak Despite the weak U.S. manufacturing economy, PPG Industries Inc. Chairman Raymond W. LeBoeuf says the company generally emerges from economic downturns stronger because of its long-term strategic direction. "I believe our strategic focus positions us to benefit very well from economic recovery whenever it occurs," LeBoeuf said recently before industry analysts and investors in New York. "We're hopeful that there is a meaningful comeback in the second half of the year, but we're not necessarily expecting one." The Pittsburgh-based manufacturer of coatings, glass, fiber glass, and chemicals earned $620 million on sales of $8.6 billion last year. The primary driver of growth for PPG has been improving its business mix, says LeBoeuf. For example, the company has increased its focus on less-cyclical, higher-margin businesses, such as automotive aftermarkets, while sustaining margins in automotive original equipment businesses and reducing reliance on cyclical markets such as construction. LeBoeuf says this was accomplished in part by divesting weak performers and making progress on integrating 23 acquisitions PPG has made since 1997. With the exceptions of three, PPG's acquisitions are in line with expectations, he notes.