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PPG Opens EUR 45M Paint and Coatings Facility in Russia

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PPG Industries (PPG - Free Report) said that it has opened a €45 million ($49 million) paint and coatings manufacturing plant in the Lipetsk region of Russia. The site will make 25 million liters (6.6 million gallons) of coatings at full capacity.

The plant houses administrative offices and technical laboratories in addition to having facilities for producing and distributing coatings for automotive, industrial, packaging, and protective and marine applications. The facility will employ around 200 people.

The company’s investment in the new plant underscores its sustained focus to improve services to its existing customers in Russia and Eastern Europe as well as expand its foothold in the Europe, Middle East and Africa (“EMEA”) region. The facility will allow PPG Industries to address rising demand for its paint and coatings products in that region.

PPG Industries has outperformed the Zacks categorized Chemicals-Diversified industry over the last six months. The company’s shares have gained around 16.2% over this period, compared with roughly 7.7% gain recorded by the industry.


PPG Industries is taking steps for growing organically as well as cutting costs. The company also remains committed to deploy cash on acquisitions and share repurchases. The company plans to deploy at least $2.5 billion to $3.5 billion of cash on acquisitions and share repurchases in 2017 and 2018 combined.

PPG Industries should also gain from its broad restructuring actions, particularly focused on the weaker end-markets. The restructuring actions are expected to deliver $120-$130 million in annual savings, with $40-$50 million of savings expected to be realized in 2017.

However, the company is exposed to currency headwind, which may continue to affect its top line. Moreover, PPG Industries faces macroeconomic challenges and some of its end-markets including marine still remain sluggish. The company sees moderate growth rates in emerging economies in 2017. It is also exposed to volatility in raw materials and energy costs.

PPG Industries currently carries a Zacks Rank #3 (Hold).

PPG Industries, Inc. Price and Consensus

 

PPG Industries, Inc. Price and Consensus | PPG Industries, Inc. Quote

Stocks to Consider

Better-ranked stocks in the chemical space include Huntsman Corporation (HUN - Free Report) , BASF SE (BASFY - Free Report) and The Chemours Company (CC - Free Report) , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Huntsman has an expected long-term earnings growth of 7%.

BASF has an expected long-term earnings growth of 8.9%.

Chemours has an expected long-term earnings growth of 15.5%.

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