19 April 2012 22:14 [Source: ICIS news]
HOUSTON (ICIS)--PPG Industries’ top executive said on Thursday that despite its uneven economic recovery, the US continued to be a strong region for the chemical, coatings and materials company.
European demand remains muted, said Charles Bunch, PPG chairman and chief executive, in an earnings conference call. But in the US, most of PPG’s segments performed well in the first quarter, he said.
“There weren’t any weak stories, but some were obviously stronger than others,” Bunch said, in an earnings conference call.
One bright spot in the US, PPG’s aerospace business, delivered mid-teen percentage sales growth that exceeded industry growth rates.
“We’re not seeing anything here in the US that’s particularly weak,” Bunch said.
PPG’s architectural coatings volumes declined in emerging markets but showed sales growth of 20% in the US. The challenge for that segment remains rising raw material costs, particularly in propylene and ethylene.
Rising feedstock costs led PPG earlier this year to predict it would reduce consumption of titanium dioxide (TiO2), a major paint pigment, by 4-6% in 2012. Bunch said the company cut back by 1-2% in the first quarter.
“So we’re on track there,” Bunch said.
Bunch noted that the cost of one crucial feedstock, natural gas, had been declining recently and provided such a windfall that PPG no longer needs to hedge its gas costs.
“It’s been the gift that keeps on giving,” Bunch said, referring to natural gas prices that dropped to $1.902/MMBtu in mid-day trading. “We’re virtually unhedged now.”
($1 = €0.76)
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