PPG announces performance glazings price increase

Date: 21 May 2008
Source: PPG Industries
PPG Industries (NYSE:PPG), citing higher raw material, energy and transportation costs, on May 16, 2008 announced a 13-percent price increase for all clear, tinted, coated and tempered glasses from its performance glazings (formerly flat glass) business and an 8-percent increase for all Starphire ultra-clear glass products, both effective June 16. “PPG continues to experience double-digit cost increases in the costs of raw materials associated with the production of our glass and coated glass products,” said Scott Follett, director, marketing and new product development, PPG Performance Glazings. “In addition, the increases in costs associated with diesel fuel and natural gas have far outpaced our ability to recover costs through current energy surcharge practices.” Follett said that in the past five years, costs for glass batch materials including sand and soda ash have grown dramatically, and the price of natural gas that powers glass melt tanks has skyrocketed.

In the last year alone, he said, diesel fuel used for transportation of raw materials and glass products has increased more than 40 percent.

“PPG has implemented ‘Lean’ practices and ‘cost-out’ initiatives to minimize inflationary impact to our costs for the past six years, but these efforts are not enough,” Follett said. “We remain committed to investing in technology and capacity to support the performance glazings business, but in order to do so, a price increase is now necessary.”

The company will continue to offset energy cost inflation with a surcharge that will be updated on a quarterly basis, Follett said. Also, where the company has contract pricing in place, he said pricing will be renegotiated upon expiration to include either open pricing or inflationary quarterly adjustments similar to those used for other basic construction products.

About PPG

Pittsburgh-based PPG is a global supplier of paints, coatings, chemicals, optical products, specialty materials, glass and fiber glass. The company has more than 150 manufacturing facilities and equity affiliates and operates in more than 60 countries. PPG’s sales in 2007 were $11.2 billion. SigmaKalon, a worldwide coatings producer based in Uithoorn, Netherlands, that PPG acquired Jan. 2, 2008, had 2007 sales of $2.9 billion. PPG shares are traded on the New York Stock Exchange (symbol: PPG). For more information, visit www.ppg.com.

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