PPG Consolidation of Comex: Rife with Opportunity

Since PPG purchased Comex last fall, the Mexican company has taken on a large role in the Latin American operations of the parent. Michael McGarry, the president and chief operating officer of PPG responds to Coatings World questions about how integration of the company will play out:

Coatings World: How will the blend of PPG/Comex products available in Mexico change over the next year or two?

Michael McGarry: First and foremost, we’re focused on continuing to deliver to customers what they’ve come to expect from the Comex business. Comex also has a stores network in Central America. We look forward to growing that segment of the overall stores network, bringing the successful products from Mexico into Central America and augmenting that with our Glidden brand, which is the top brand in Panama. The Glidden brand will be handled by PPG-Comex in Central America.

Over time, we hope to continue growth in Mexico and Latin America, across all our coatings segments. We currently supply automotive coatings in the market and maintain a manufacturing facility in San Juan del Rio, Querétaro. As we continue the integration of Comex, we will look for opportunities to introduce products from other coatings segments, such as protective and marine coatings, to ensure our customers in Mexico have access to the best possible product array.

CW: What plans do you have for changing the store network in Mexico or the CentAm/Carib region?

McGarry: Comex’s business is very well run, and has a number of practices that we regard as best-in-class that we plan to replicate in other areas of the world where we have architectural coatings businesses. Comex also has strong marketing practices and ideas that we hope to utilize in our existing architectural coatings businesses in the U.S., Canada, Europe, Australia and Brazil.

In addition, Comex products are sold through a network of approximately 3,800 stores that are independently owned and operated by more than 700 concessionaires. We believe that the network of stores can continue to grow further and potentially reach upwards of 6,000 locations. We continue to be excited about the prospects of growing the Comex business.

CW: What else is notable about the Mexico/LatAm market involving Comex?

McGarry: Mexico is an expanding economy and we look forward to growing in the region with Comex customers and employees. If you look at the coatings market in Mexico, about half of the sales are architectural and half are non-architectural. The country’s per capita consumption of paint is about half that in the U.S. Right now, the architectural side of the coatings market has a lot of room for growth.

In addition, Mexico has an expanding oil and gas market and as this market opens up, we expect this to be a very robust segment for PPG. We have a number of products in our protective and marine coatings business that will be poised for growth in the petrochemicals segment.

We also expect the growing automotive market in Mexico to represent a number of opportunities for PPG. As automotive companies continue to build manufacturing facilities in Mexico, this represents opportunities for our architectural and industrial coatings products to be incorporated into these facilities. And in addition to increased demand for our automotive coatings for new vehicles, the increased amount of automobiles on the road will lead to increased demand for PPG’s refinish products that are used in auto body repair shops.

Due to our widespread exposure across the coatings segments, we see Mexico as a very favorable market for PPG. We are already the top supplier of coatings for automotive manufacturers and we are the number one supplier of industrial coatings in Mexico. With Comex, we can be a better and more innovative supplier to the market.

On a global basis, the coatings market is in the midst of continued consolidation. The top 10 suppliers in the coatings market account for only about 50 percent global market share. The market continues to consolidate because our global customers demand solutions that can protect their business. Customers are interested in innovative solutions that help to reduce energy use, enhance resistance to corrosion and protect their high-value assets. Successful coatings companies need to rely heavily on developing innovative technologies to meet this demand. PPG is driving growth in the segment through innovation and products. We look forward to bringing new innovations to the market.