Coating success

PPG's Tianjin factory

The rise of China's latest State-level industrial zone, the Binhai New Area of Tianjin, will be a driving force for the development of coatings maker PPG Industries over the next decade, the company's newly appointed Asia-Pacific manager tells China Business Weekly.

"We foresee robust development potential in Tianjin and its Binhai New Area. Personally I would like to compare the current Binhai New Area with the development stage of the Yangtze Delta area 10 years ago," says Cathy Yan, general manager of PPG for government affairs and business development, Asia-Pacific.

"The rapid development of Binhai New Area of Tianjin will offer many business opportunities for us and the nation's booming building sector will create the need for more construction coating products," she adds.

Yan says an important reason for expanding in Tianjin is PPG's Tianjin production and research facilities are near to its customers and it benefits from the locality's mature infrastructure. Efficient administration by the local government also helps PPG's business performance, Yan says.

She adds that the opportunity of developing along with Tianjin and the New Binhai Area means PPG plans to fund more resources in the city in the coming years.

The company has expanded its facility at the Tianjin Economic and Technological Development Area from 40,000 to 100,000 sq m to meet the nation's growing demand for automotive and industrial coatings.

PPG will spend $10 million on the first phase of its expansion, later followed by additional $40 million. Total investment in the facility is expected to reach $100 million.

To further fuel its development in Tianjin and China at large, Yan says PPG this year will begin operation of a core research and development (R&D) center in Tianjin .

The facility will develop products for not only China, but the wider Asia-Pacific region.

"We now have six research teams working in Tianjin on auto and industrial coating products. In 2008, we will formally establish an integrated R&D center in Tianjin," Yan says.

The company already has an R&D center for the Asia-Pacific market that it opened in 2007 in Suzhou. With its planned Tianjin facility, PPG will have two Asian R&D centers in China.

PPG researchers will contribute to the production of environmentally responsible products, Yan says, now an important trend in the coatings industry.

Cathy Yan

"Twenty five percent of PPG's revenue comes from environmentally friendly coating products, but the ratio may be lower in China," she says. "But we expect environmental friendly products will flourish in the future, and we will produce more of them in our Tianjin facilities," Yan says.

PPG's production in Tianjin includes coating products for automobiles, cell phones and other electronic devices, high-performance coatings for petrochemical facilities, anti-corrosion coatings for ships and its pivotal business in structural coatings.

The Tianjin plant will continue to be PPG's largest production facility in the Asia-Pacific region. Its success has given PPG continued confidence to invest in China and the Asia-Pacific region, says William A Wulfsohn, company senior vice-president .

Expanding the Tianjin plant will help PPG provide better services to some of its key customers, including Airbus, Motorola and local automotive companies, he notes.

PPG began operation in China in 1994, with the Tianjin factory as its first investment . The company had revenue of $100 million in the single month of September last year in the Asia-Pacific region, 23 percent of which was generated in Tianjin.

PPG industries recently reported record sales for the fourth quarter of $2.9 billion, surpassing the prior year's fourth quarter results by 15 percent.

(China Daily 03/03/2008 page7)