PPG opens auto coatings plant in Chery home

PPG Industries Inc on August 7 opened an auto coatings plant in Wuhu, Anhui province to supply local Chinese carmaker Chery Automobile and it plans further investments across the nation.

The plant, with an initial investment of US$10 million, underscores the world's second-largest paint and coatings maker's continuous confidence in China's economic growth and its car market, the world's second largest, said Charles Bunch, chairman and chief executive officer of Pittsburgh-based PPG.

PPG is already the leading player in China's car coatings market, and the new facility, in Wuhu, a city about four hours drive from Shanghai and home to Chery Auto, China's fourth-largest passenger car maker, is expected to further expand its market share.

The capacity of the plant, now capable of producing 6,000 metric tons a year, will reach 30,000 tons over the next five years with at least two expansions, to keep pace with Chery's growth, said Raj Lall, PPG's operations director for Asia.

Chery Chairman Yin Tongyao said a nearby plant would cut costs. Yin said the number of Chery's suppliers overall is declining as sourcing becomes more concentrated.

Bunch said the firm's sales in China have grown more than 15 percent in each of the past 10 years thanks to the nation's industrial expansion and car sales. PPG, which competes with industry leader, Dutch's Akzo Nobel NV, is counting on Asia and some emerging markets in East Europe as its growth engine, while North America now accounts for less than half of its sales, Bunch said.

The world's leading manufacturer of transportation coatings, PPG was one of the first global coatings companies to invest in China in the 1980s. PPG produces automotive coatings in China for customers such as General Motors, Mercedes-Benz, BMW, Dongfeng Peugeot Citroen, Chery and Hainan Mazda. The new plant is PPG's 14th in China.