US chemical firm on merger trail

US-based PPG, the world's No 1 producer of vehicle coatings and specialty chemicals, is seeking merger opportunities to quickly expand in the Chinese market.

PPG was the first global coating company to enter China in the late 1980s, and currently holds a 15 per cent share of the automotive coating market.

It has five production facilities in Tianjin, Suzhou and Kunshan as well as offices, laboratories and training centres in Beijing, Shanghai, Guangzhou, Shenzhen and Nanjing.

Last March, PPG moved its Asia-Pacific headquarter from Malaysia to Shanghai, and turned its marketing focus from global car makers in China to both domestic and foreign auto manufacturers.

PPG customers include SGM, SGM DY, DACA, BJC, Nanjing Fiat, Hainan Mazda, Xiamen Gordon Dragon, Geely and Cherry.

Vincent Robin, managing director of PPG Asia-Pacific Automotive Coatings, said PPG is actively looking for partners to set up a joint venture. The company is seeking to merge with domestic counterparts to realize quick expansion.

PPG is facing several robust competitors in China, including BASF, Dupont, Kansai and Nippon Paint.

But Robin said PPG had its own market advantages.

The company will introduce new technologies and products into China, and provide high quality training and technical services to customers.

PPG is a manufacturer of coatings, flat glass, continuous-strand fiberglass, industrial and specialty chemicals.

Robin said PPG's wide range of products can cover 100 per cent of a paint shop's needs, which includes pretreatment, sprayable, PVC underbody, booth cleaners and detackification.

"Recognizing our broad knowledge of automotive paint, we have developed the skills to be able to deliver a side range of services associated with the products," said Robin.

These services are offered to paint shops as a package called total paintshop management.

The auto coating giant recently signed a contract with new Chinese car maker Wuxi Auto Body Co Ltd to provide a chemical and process management programme. PPG will provide all indirect materials and chemicals associated with the coatings application process, including paint line cleaning solvents, consumables and lab equipment.

PPG is also supplying all the materials required for the coatings application process.

"This programme enables PPG to demonstrate its broad product portfolio and expertise in processing and coating vehicles by implementing a service programme and providing coatings materials," says Robin.

The chemical and process management experience of PPG total service solutions was seen as a perfect match for this start-up car company.

600450 US chemical firm on merger trail
Date: 22 June 2004

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