US PPG sees better conditions in first-half 2014

17 October 2013 23:09  [Source: ICIS news]

HOUSTON (ICIS)--Inevitable fourth-quarter declines in US architectural coatings demand will be moderated by a slowing rate of market softness, prompting “cautious” near-term optimism, US-based coatings and specialty chemicals producer PPG Industries said on Thursday.

“All the economists are predicting modest GDP growth next year …”, the chief financial officer, Frank Sklarsky, said during the company’s quarterly earnings call, “but recent trends have pointed very clearly to dramatically reduced decline rates."

PPG’s previously reported a third-quarter net income drop of 33% year on year, but said sales were higher by 17% for the period.

“We don’t have any major differences with the major economic assumptions,” Sklarsky said, “but we are a bit more bullish on Asia”, particularly in the packaging sector. In Europe, however, PPG’s packaging business is down modestly, he added, and in the US it is solid – “a GDP-growth business”.

As for fourth-quarter pricing, “we expect that to be relatively modest as long as the raw material environment remains relatively benign, stable,” he said. “If freight costs go up, that would be a factor.”

Among its principal raw materials, titanium dioxide (TiO2) costs were lower year on year as PPG began to use more sulphate-route pigment, which is cheaper than chloride-based material and is more plentiful.

($1 = €0.74)

By: Larry Terry
1 713 525 2653

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