PPG Industries (PPG) Invests $1.4M in R&D Facility in France

Zacks Equity Research Published on December 05, 2017

PPG Industries (PPG - Free Report) completed a $1.4-million investment at its automotive adhesives and sealants manufacturing and research and development (R&D) center in Saint-Just-en-Chaussee, France.

The facility has been upgraded with new structural adhesives and waterborne liquid applied sound damper (LASD) manufacturing cells, improved laboratory and testing space, upgraded equipment to simulate automotive body shop conditions, and improved technical capabilities.

Updated equipment at the facility cuts the number of steps between laboratory formulations and manufacturing batches prior to trials at customer facilities. Also, it improves the link between the company’s R&D efforts and customer requirements with integrated services and enhanced resources.

PPG Industries’ shares have moved up 8.5% in the past six months, underperforming the industry’s 15.3% growth.

PPG Industries expects continued moderate global economic growth. Post the mayhem caused by the recent natural disasters, the company doesn’t anticipate any further decline in the level of raw material cost inflation for the balance of this year.

The company also sees an additional selling price increase. Along with addressing the inflationary environment, it remains on track with its restructuring program which is expected to deliver full-year savings of more than $45 million.

PPG Industries expects the recent natural disasters to unfavorably impact fourth-quarter earnings by up to 5 cents per share.

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.

However, PPG Industries faces macroeconomic challenges. Some of its end-markets including marine still remain sluggish. It is also exposed to raw materials cost pressure. Moreover, lingering impacts of natural disasters may continue to affect sales volume and margins in the fourth quarter.

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