Specialty coatings and paints giant
) has received the green light from the Indian regulatory
authorities to expand its coatings joint venture with Asian Paints
Ltd, the biggest coatings company in India. PPG has also secured
the necessary approvals to form a second joint venture with
Asian Paints is the 10
largest decorative paint company in the world with operations
across 17 nations. It has 24 manufacturing locations globally and
serves customers in 65 countries through its subsidiaries.
The regulatory clearance enables PPG and Asian Paints to expand
their existing 50-50 joint venture "Asian PPG Industries", allowing
them to serve industrial liquid, marine, consumer packaging and
transportation coatings customers in India. The entities will also
set up a second joint venture dubbed "Asian Paints PPG Limited" to
address the protective, industrial powder, industrial container and
light industrial coatings markets.
The joint ventures will leverage PPG's global scale, technology
and customer associations and Asian Paints' commanding presence in
the Indian market along with its manufacturing and distribution
capabilities to accelerate coatings growth in India. PPG will lead
Asian PPG Industries while Asian Paints will assume management
control in Asian Paints PPG Limited.
Pennsylvania-based PPG Industries is a leading supplier of
paints, coatings, optical products, specialty materials, chemicals
and fiber glass. It competes with the DuPont Performance Coatings
EI DuPont de Nemours & Co.
PPG Industries continued its positive surprise streak in
first-quarter 2012 with adjusted earnings of $1.81 a share beating
the Zacks Consensus Estimate by a couple of cents. The results were
aided by strong domestic demand and growth in emerging markets.
While the company foresees a weak European market, it expects
accelerated growth in emerging markets, buoyed by increased
industrial activity in China.
PPG Industries' strategy of diversifying its business across
various products and geographies has come in handy in testing
times. It has a strong cash position and continues to utilize cash
on growth initiatives. However, raw material costs remain a matter
of concern for the company.
Currently, we have a long-term Outperform recommendation on PPG
Industries. The stock retains a Zacks #3 Rank, which translates
into a short-term (1 to 3 months) Hold rating.
DU PONT (EI) DE (DD): Free Stock Analysis
PPG INDS INC (PPG): Free Stock Analysis Report
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