PPG to build new paint and coatings manufacturing facility in Tennessee as part of $300 million investment in advanced manufacturing in North America

Rhea-AI Summary

PPG (NYSE: PPG) is investing $300 million in advanced manufacturing in North America to meet increased demand for paints and coatings in the automotive sector.

A new 250,000-square-foot plant will be built in Loudon County, Tennessee, marking PPG's first new manufacturing facility in the U.S. in over 15 years. Construction will start in August 2024 and complete in 2026, eventually employing 130 full-time workers and producing over 11 million gallons annually.

Investments will also enhance existing facilities in Cleveland, Ohio, and San Juan Del Rio, Mexico to improve manufacturing efficiencies and meet growing demand for sustainable solutions like waterborne coatings.

This strategic move aims to modernize PPG's operations without altering their overall capital investment spending levels. CEO Tim Knavish emphasized the focus on quality and operational efficiency, while Governor Bill Lee highlighted the positive economic impact on Tennessee.

Positive

• PPG is investing $300 million in advanced manufacturing, a sign of significant growth.
• The new Tennessee facility will be the first U.S. plant built by PPG in over 15 years, reflecting a strategic expansion.
• The plant will produce over 11 million gallons of paint and coatings annually, boosting production capacity.
• The new facility will create approximately 130 full-time jobs, benefiting the local economy.
• Investments in Cleveland, Ohio, and San Juan Del Rio, Mexico, will enhance production efficiencies and capabilities.
• The focus on sustainable solutions like waterborne coatings aligns with growing environmental concerns.
• The strategic location in Tennessee will enhance supply chain efficiency for automotive customers.

Negative

• The four-year investment plan may delay immediate financial benefits.
• The substantial $300 million investment does not represent an increase in overall capital spending, potentially limiting other growth opportunities.
• The new facility's construction will not be completed until 2026, causing a delay in operational benefits.

Financial Analyst

PPG's $300 million investment in advanced manufacturing is strategically significant for several reasons. First and foremost, it signals a commitment to expanding their $18.2 billion revenue base, particularly in the automotive coatings sector. The development of a new 250,000-square-foot facility in Tennessee is noteworthy as it is PPG’s first new U.S. manufacturing plant in over 15 years. This move could enhance their competitive edge by reducing supply chain complexities and improving operational efficiencies.

Moreover, this investment comes at a time when the automotive industry is undergoing substantial changes, including the shift towards electric vehicles and sustainable solutions like waterborne coatings. By modernizing facilities and introducing new processes, PPG can align itself better with these industry trends, potentially capturing a larger market share. The company’s plan to complete the new facility by 2026 indicates a long-term vision.

On the financial side, the fact that this investment does not change the company's overall capital expenditure levels, aligning them with previous years, suggests fiscal prudence. Investors should consider how these enhancements can lead to improved margins and revenue growth over time.

Market Research Analyst

For retail investors, understanding the implications of PPG's investment in new manufacturing capabilities is crucial. The choice of Tennessee for the new facility is strategic. This location provides proximity to many automotive manufacturing hubs, reducing logistical costs and improving service delivery efficiency. Moreover, with the facility expected to employ around 130 full-time employees and produce over 11 million gallons of paint and coatings annually, this investment is likely to have a positive economic impact on the region.

The enhancement of facilities in Cleveland, Ohio and San Juan Del Rio, Mexico, also underscores PPG's commitment to maintaining and improving its production capabilities across North America. Importantly, the focus on sustainable solutions like waterborne coatings aligns with growing consumer and regulatory demands for environmentally friendly products. This can open up new revenue streams and improve brand loyalty among eco-conscious consumers.

Investors should also note that such investments often lead to better manufacturing efficiencies and reduced processing times. This could make PPG's product offerings more competitive in terms of quality and cost, thereby potentially boosting sales and market share.

• Aimed at driving growth and operational efficiency in automotive coatings
• Investments in PPG’s Cleveland, Ohio and San Juan Del Rio, Mexico facilities will enhance production capabilities

PITTSBURGH--(BUSINESS WIRE)-- PPG (NYSE: PPG) today announced it will invest $300 million in advanced manufacturing in North America to support increased demand for paints and coatings in the automotive industry. These investments will commence in 2024 and span a four-year period.

As part of the initiative, PPG will build a new paint and coatings manufacturing plant in Loudon County, Tennessee. The 250,000-square-foot facility, PPG’s first new manufacturing plant to be built in the U.S. in more than 15 years, will initially produce paints and coatings products and solutions for automakers and automotive parts suppliers. The facility could eventually supply other industrial segments, including transportation, heavy duty equipment, building and construction, and consumer products. Once fully operational, the facility will employ approximately 130 full-time employees and produce more than 11 million gallons of paint and coatings annually. Construction of the facility will begin in August 2024 and is expected to be completed in 2026.

PPG’s advanced manufacturing investments will also enhance and expand activities at existing facilities in Cleveland, Ohio and San Juan Del Rio, Mexico. The investments cover new equipment and processes that will increase manufacturing efficiencies, resulting in improved processing times, and will expand PPG’s capabilities to meet growing demand for sustainable solutions, such as waterborne coatings. The investment represents a strategic, growth-focused investment for PPG, but does not represent a change in the company’s overall capital investment spending levels, which will be consistent with prior years.

“Innovation is at the forefront of PPG’s purpose in protecting and beautifying the world. These investments continue to modernize and digitize our manufacturing capabilities, and demonstrate PPG’s continued focus on quality and service to our customers as the premier single-source coatings supplier for every vehicle surface,” said Tim Knavish, PPG chairman and chief executive officer. “As we continue to see a resurgence of manufacturing in the U.S., PPG will leverage this new facility and our other site investments to maximize quality, improve operational efficiency, and reduce product complexity within our manufacturing footprint.”

“As the automotive industry continues to transform, we’re excited to expand our manufacturing capabilities to meet the evolving needs of our automotive customers,” said Alisha Bellezza, PPG senior vice president, automotive coatings. “The strategic location of PPG’s new facility in Tennessee also creates a more efficient and effective supply chain with close proximity to many automotive manufacturing facilities, which will further enhance the service experience for our customers.”

“Tennessee is leading the nation in attracting top global brands like PPG. I welcome PPG and thank this company for its commitment to creating greater opportunity for the Tennesseans across the Greater Knoxville region,” said Tennessee Governor Bill Lee.

To learn more about PPG’s automotive products, visit ppg.com/autocoatings.

PPG: WE PROTECT AND BEAUTIFY THE WORLD®

At PPG (NYSE:PPG), we work every day to develop and deliver the paints, coatings and specialty materials that our customers have trusted for more than 140 years. Through dedication and creativity, we solve our customers’ biggest challenges, collaborating closely to find the right path forward. With headquarters in Pittsburgh, we operate and innovate in more than 70 countries and reported net sales of $18.2 billion in 2023. We serve customers in construction, consumer products, industrial and transportation markets and aftermarkets. To learn more, visit www.ppg.com.

Forward-Looking Statements

The forward-looking statements contained herein include statements relating to the timing of and expected benefits of the new paint and coatings manufacturing plant in Loudon County, Tennessee and other manufacturing investments in Cleveland, Ohio and San Juan Del Rio, Mexico. Actual events may differ materially from current expectations and are subject to a number of risks and uncertainties, including the timing of the completion of these projects, the realization of the expected benefits of these projects, and the other risks and uncertainties discussed in PPG’s periodic reports on Form 10-K and Form 10-Q and its current reports on Form 8-K filed with the Securities and Exchange Commission.

CATEGORY Corporate

View source version on businesswire.com: https://www.businesswire.com/news/home/20240521466578/en/

PPG Media Contact:

Mark Silvey

Corporate Communications

silvey@ppg.com



PPG Investor Contact:

Jonathan Edwards

Investor Relations

+1-412-434-3466

jonathanedwards@ppg.com

investor.ppg.com

Source: PPG

FAQ

What is the significance of PPG's new manufacturing facility in Tennessee?

PPG's new facility in Tennessee represents a $300 million investment in advanced manufacturing to meet increased demand in the automotive sector and will produce over 11 million gallons annually.

When will PPG's new Tennessee plant be operational?

Construction of PPG's new Tennessee plant will begin in August 2024 and is expected to be completed in 2026.

How many jobs will PPG's new Tennessee facility create?

PPG's new Tennessee facility will create approximately 130 full-time jobs.

What are the benefits of PPG's investment in Cleveland, Ohio, and San Juan Del Rio, Mexico?

PPG's investments in Cleveland, Ohio, and San Juan Del Rio, Mexico, will enhance production efficiencies and expand capabilities to meet growing demand for sustainable solutions.

How will PPG's new Tennessee facility impact its supply chain?

The strategic location of the new Tennessee facility will create a more efficient supply chain, particularly benefiting automotive customers.