PPG still seeks glass-unit sale

PPG Industries Inc. still wants to sell its automotive-glass business this year, which includes its Creighton plant in East Deer, CEO Charles Bunch told shareholders at the company´s annual meeting Thursday.
As PPG seeks to sell the original equipment and replacement-glass businesses, as well as related services, it will restructure the unit to cut costs, Bunch told shareholders at the David L. Lawrence Convention Center, Downtown.

Last year, PPG agreed to sell the business to Platinum Equity LLC of Beverly Hills, Calif., for about $500 million; however, the turnaround-investment firm withdrew from the deal in December. Platinum Equity then sued PPG in New York Supreme Court in January, claiming that PPG overstated profit and sales projections for 2008.

Bunch said yesterday that PPG has been contacted by potential buyers, both domestic and foreign, but there are no negotiations at this time. The sale of the business would affect about 4,400 employees in the United States and Canada, including about 230 at the Creighton plant, 230 at its Tipton plant north of Altoona and about 257 at a Meadville facility. The company will keep its glass-research center near Harmarville.
PPG´s divestiture plans are part of the company´s goal to strengthen its business portfolio by focusing on coatings, optical products and emerging regions, Bunch said. The company is not looking at any major acquisitions for 2008 but will focus on integrating Dutch coatings and paint company SigmaKalon into its operations, Bunch said. PPG closed on the $3.2 billion purchase of SigmaKalon in January.

PPG reported yesterday that first-quarter earnings fell 48 percent because of weak demand in the United States and Europe and the cost of buying SigmaKalon. Earnings fell to $100 million, or 61 cents a share, compared to 2007 first-quarter net income of $194 million, or $1.17 a share. First-quarter sales of $3.7 billion -- a record for the period -- were up from $2.6 billion a year ago.

The company showed strong growth as it integrated 12 acquisitions from 2006 into the company, Bunch said.

The acquisition of SigmaKalon -- the largest in PPG´s 125-year history -- was "a transformational step" that should increase coating sales by 40 percent this year compared to 2007, Bunch said. With the acquisition, the proportion of coatings and specialty products in PPG´s portfolio will increase from 66 percent to 80 percent by 2010, he said.