PPG to Increases Silica Production Capacity

2011-09-26

Sep. 23, 2011 - In response to growing global demand, PPG Industries announced to increase its global precipitated silica production capacity by more than 18,000 tons per year. The capacity expansion includes projects at PPG's Lake Charles, La., and Delfzijl, Netherlands, manufacturing locations.
The expansion will begin during the fourth quarter of 2011 and will be completed by the end of 2012. Employment at each site will increase slightly as a result of the expansion.
On July 21, 2011, PPG announced its second-quarter 2011 results. Net income was $340 million or $2.12 per share compared with $272 million or $1.63 per share in the year-ago quarter. The results were at par with the Zacks Consensus Estimate.
Net sales in the quarter were $4.0 billion, up 15% from $3.5 billion in the second quarter of 2010. It also outperformed the Zacks Consensus Estimate of $3.8 billion. The outperformance was attributed to demand improvements, higher pricing in each of its coatings businesses, successful cost reduction initiatives and a gradual industrial recovery worldwide, partly offset by rising raw material costs.
PPG Industries had cash and cash equivalents worth $982 million as of June 30, 2011 compared with $784 million as of June 30, 2010. Total debt was $3.61 billion as of June 30, 2011 compared with $3.02 billion as of June 30, 2010. Inventories at the end of the quarter amounted to $1.82 billion versus $1.54 billion as of June 30, 2010.
PPG Industries has a short-team Zacks #2 Rank (Buy). Currently, we hold a long-term Neutral recommendation on the stock.
PPG faces stiff competition from the DuPont Performance Coatings segment of EI DuPont de Nemours & Co.