p>PPG Industries Inc. hopes to expand further in Asia in the coming years by acquiring small and midsize paint and industrial-coating manufacturers, the company's top executive said Thursday.
Charles E. Bunch, PPG's chairman and chief executive, said the maker of paint, coatings, glass and chemicals would consider growing in Asia after completing its acquisition and integration of SigmaKalon Group, Europe's second-largest coatings maker.
PPG said in October it was buying the Dutch company from private equity group Bain Capital LLC for $3.1 billion. The deal, slated to close in January, will be the 124-year-old company's biggest to date and will significantly extend its global reach.
The company's merger and acquisition strategy will now shift more toward Asia, and the company hopes to consider buying certain small and midsize firms there, he said.
Bunch said PPG will focus mostly on establishing a better position in Asia, particularly China and India, and "grow with those economies and also participate in the consolidation" of the paint and coatings industries.
"The key markets for the next 10 years will be China and India," Bunch said in an interview with The Associated Press. "That's where you're seeing the most economic development. Paint follows economic development, especially manufacturing."
PPG already supplies the automotive industry in China and India, as well as industrial markets that produce everything from tractors to appliances, he said.
"We're painting more consumer electronics today than we ever have," he said, referring to products such as computers and cell phones.
Smaller markets, such as Malaysia, Indonesia and Vietnam, may grow further, he said. Growth in Asian countries with more developed economies, such as South Korea, remains weaker than China but strong compared with western countries, Bunch said.
PPG made inroads into developing markets in Asia and Eastern Europe in the early 1990s, setting the stage for further acquisitions, he said.
Acquisitions will likely be concentrated in the markets for industrial coatings, such as paint for appliances, and architectural paint. "These are two segments where you have smaller to midsize companies that are focused on a particular niche," he said.
PPG has been on a buying spree in recent years, a trend Bunch attributed to the company's ongoing attempts to transform itself from a diversified business to one focused on coatings and specialty products, like materials for lenses.
The Pittsburgh-based company expects to see an additional $750 million in sales from its 2006 acquisitions this year, he said.
The 58-year-old chief executive, a 28-year veteran of the company who took the helm two years ago, said the company began changing course about 10 years ago.
He said he had accelerated the process, but that the company would take a break in early 2008 to concentrate on bringing the Dutch SigmaKalon businesses into the fold.
PPG had been firmly entrenched in the North American market, and its roots in Pittsburgh stretch back more than a century. Its corporate offices are located in a cathedral-like building, built with PPG glass, that is a key feature of the city's skyline.
Among the changes made in recent months are agreements by PPG to sell two of its automotive glass businesses to a private equity firm for about $500 million.
The sale was announced in September, and company representatives said it would help tighten the company's focus on coatings and specialty products and reduce its exposure to the U.S. automotive market.
PPG also agreed to sell its fine chemicals business to a subsidiary of Italy's Zambon Group SPA.
PPG is an $11 billion company with about 34,000 employees in more than 25 countries.
Shares of PPG rose $1.12, or 1.6 percent, to close at $69.81 Thursday.