The hottest R & D and acquisition drive PPG's cont

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The two driving forces of R & D and acquisition drive PPG's continuous transformation

the two driving forces of R & D and acquisition drive PPG's continuous transformation

September 21, 2011

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[China coatings information] before arriving in Pittsburgh, we always thought that what we were about to see was a "steel city" full of a sense of modern industry

because it is located at the intersection of Allegheny River, Monongahela River and Ohio River, it has historically been the center of the American steel industry and is known as the "steel capital of the world"

however, when I really stepped into the city, I found that the spacious and tidy streets, sparse and bright pedestrians, strange and harmonious architectural complexes, as well as the long historical memory and modern urban scene, surprised me from time to time

in September 2009, the third G20 summit was held in Pittsburgh. This is the first time that the G20 summit is held in a city other than the capital of a country. At that time, the White House explained that Pittsburgh was chosen as the host city of the summit because its advantages in these two aspects are very important for this utilization. Pittsburgh is a successful example of the transformation from an industrial base to a multi industry base because of the high intrinsic value of heavy aluminum waste, which makes its recycling economically attractive. It is a typical case of rebirth from the crisis

all this reminds us of the difficult transformation being carried out in Guangdong. In the interview, it was found that the details of Pittsburgh's urban transformation after World War II were too strikingly similar to that of Guangdong at present. During the 2008 U.S. economic recession, Pittsburgh not only did not suffer much from the subprime debt crisis, its economy developed steadily, but also its unemployment rate fell instead of rising. Pittsburgh became one of the few cities in the United States that could still maintain a fiscal surplus during the global economic recession, which strengthened our confidence in the transformation of Guangdong

before entering Pittsburgh, our car passed through a tunnel, and the roar in the dark seemed to indicate the prelude to a wonderful chapter. Sure enough, it suddenly opened up in front of me. A full glass curtain wall building with four corners like a magic castle jumped into my eyes, and the whole car was surprised with a wow

this is the global headquarters base of PPG industries. It is composed of a tall and slender main building and five auxiliary buildings with the same design style. In the center of the square is the monument and fountain of PPG company. What is more incredible is that this post-modernism style building was completed in the 1980s and won several architectural design awards at that time

just as the headquarters building with advanced design concept is unforgettable, the development process of PPG company is also forward-looking: from the initial flat glass manufacturer to the later suppliers of coatings, glass fibers, chemicals and special materials, the transformation process of PPG and the transformation of Pittsburgh City promote each other and complement each other

China is the top priority of the Asia Pacific market

on the information introduced by PPG, I see a map, which is the location of PPG's office buildings, R & D centers and factories in China, covered with red dots, all over the eastern coast and central and western provinces

many Chinese people may be unfamiliar with the name of PPG, but they are familiar with PPG's customers. In China, the main customers of PPG automotive coatings include Volkswagen, general motors, Mercedes Benz, Dongfeng Citroen, Peugeot, Chery, etc. almost all automotive manufacturers in the world use PPG automotive coatings products or technologies

Richard said that over the past decade, PPG's sales in the entire Asia Pacific region have increased at a double-digit rate every year, with the Chinese market being the top priority. Last year, China accounted for 48% of the Asia Pacific market, and this year it will exceed 60%

there is no regret for enterprise transformation so far

although PPG's name was the abbreviation of "pittsburghplateglass" at the beginning of its establishment, coating is already the main business in the product structure of PPG Industrial Company, whose surface coating, industrial coating and architectural coating businesses add up to more than 74%, while the glass business on which PPG started only accounts for 7%

Richard told that this transformation of PPG was mainly completed from the late 1990s to 2000. "Because we are a company that prefers technology research and development, but at that time, all the equipment produced by glass and window products has a certain guarantee, and it is more and more commercialized. It is difficult for innovative technologies and products to create greater value, so we continue to focus on chemical coatings that can create high added value, and provide customers with overall solutions in order to add more value."

nowadays, PPG has taken the lead in many subdivisions of coatings in the world, among which automotive original paint and automotive repair paint rank first, marine paint and industrial protective paint rank second, but glass products are only widely involved. Richard said that a large amount of business growth of PPG in the last decade came from acquisitions and investments, a considerable part of which was in China

Richard said that it was relying on the huge profits obtained by the transformed business department and generating a lot of cash flow that he was able to invest more money in the research and development of paint and optical products. Now 80% of PPG's profits come from paint and optical products. "We are making great strides on the road of transformation." He suddenly came up with a very "Chinese" expression

but where does the driving force of transformation come from? Richard said that they have a strong technical R & D force, and will invest 3% of global sales in R & D every year, and R & D can bring new market share. When they find a vacancy in the business, they will make an acquisition. R & D and acquisition have become two forces to promote the continuous transformation of PPG business

talking about the ongoing transformation of Guangdong enterprises, Nanfang asked Richard whether there was such a "give and take" game? Is it a pity to withdraw from the familiar traditional manufacturing field of glass manufacturing? Richard said easily, No

he said: "for large companies, we should always think about the future development, which is the best part to promote development, and also consider the contribution to the community, provide a good working environment for employees, and repay shareholders. We should always maintain a forward attitude."

PPG transformation is inseparable from Pittsburgh

in fact, as long as you study the history of Pittsburgh, you will find that PPG transformation is only a microcosm of the nirvana and rebirth of Pittsburgh, an "old steel city"

Richard said with emotion that what happened in Pittsburgh from 1865 to 1945 was a bit like the first 20 years of China's reform and opening up. At the end of the 19th century, Pittsburgh was dominated by the steel industry, rich in coal resources and developed river transportation. PPG flat glass company, established in 1883, was the first glass factory in the United States. In the first half of the 20th century, Pittsburgh, as an important steel production town in the United States, accounted for more than 1/3 of the steel production in the United States. But Pittsburgh also paid the environmental price for the high energy consumption and heavy pollution of the steel industry

in 1955, the situation began to change. Pittsburgh people have found that a clean environment and air are more important. They hope that the city can become cleaner. Especially with the development of the world economy and science and technology, the traditional steel industry has declined sharply, a large number of steel mills have closed, the number of unemployed has surged, and Pittsburgh has slipped into a trough

in the late 1970s, Pittsburgh witnessed the greatest changes. The steel industry continued to move to Asian countries with more efficient production and lower costs, just as the United States shifted the textile industry from the east to the north to the south in the early 20th century. Subsequently, the city launched a "Renaissance Movement" and carried out large-scale urban transformation. Investors in other industries have emerged one after another. After decades of efforts, Pittsburgh has become a comprehensive industrial base covering many high-tech fields, such as steel, electromechanical, medicine, finance, education, new energy, information technology and so on

at the same time, Pittsburgh also brings together more than 30 well-known universities such as the University of Pittsburgh and Carnegie Mellon University, and has a famous Pittsburgh Medical Center in the United States. Gradually, Pittsburgh changed from a production-oriented city to a service-oriented city

"that's why you can't see the smoke here now." Richard said that the population of Pittsburgh also reached its peak in 1945 and has never surpassed it

PPG also benefited a lot from the transformation of Pittsburgh. Richard said that Pittsburgh's strong university research and development capabilities have transformed the results into the products of many large companies operating around the world. PPG also took the opportunity to gather a large number of high-tech talents and attract many talented scientists. "The transformation of PPG is inseparable from Pittsburgh." Richard said

PPG: with more than 38000 employees, PPG Industrial Company was founded in 1883, headquartered in Pittsburgh, USA. It is a global manufacturing enterprise, producing and operating coatings, glass, glass fiber and chemicals

ppg currently has more than 140 factories and scientific research institutions in 60 countries, with more than 38000 employees. It is the world's leading manufacturer of paint for transportation, industry, aerospace and packaging. PPG invests hundreds of millions of dollars every year to develop and improve products and procedures, and develop the latest technology to meet the needs of the market

PPG manufactures and sells seven categories of products in China, including automotive coatings, industrial coatings, automotive touch up paint, packaging coatings, aviation coatings, architectural coatings, and glass fibers. PPG has 17 factories in Tianjin, Jiangsu, Shandong, Shanghai, Guangdong and other places

high end interview

richardalexander, executive vice president of PPG, received an exclusive interview from the South:

there is a lot of room for the development of China's traditional manufacturing industry

richardalexander, executive vice president of PPG, received an exclusive interview from the south. He was surprised by his familiarity with Guangdong, and he fully affirmed the transformation and upgrading of Guangdong at present. In the interview of more than an hour, he readily shared the transformation story of PPG and Pittsburgh with us

South: after listening to the transformation story of PPG, we are very moved. In fact, this has always been what the Chinese and Guangdong provincial governments want to do, that is, to have a clean and comfortable environment while promoting economic development. What suggestions do you have for this

Richard: at present, China is promoting a great development strategy, which is to strengthen the development of second and third tier cities and develop westward. This is not only good for the Chinese people, but also for PPG, which will enable PPG to obtain more development opportunities. There will be opportunities to increase our investment in these places from the coast to the second and third tier cities and even the west, and also make China the largest investment opportunity for PPG

acquired Foshan Bairun chemical last year

South: you mentioned that the Asia Pacific region, especially the Chinese market, accounts for an increasing proportion of PPG's global market share and plays an increasingly important role. What changes will PPG's business distribution in China have in its future strategy

Richard: for PPG, Asia Pacific is the largest market, of which China is a region with long-term development strategy and the largest business volume in the Asia Pacific region

up to now, most PPG products have been produced and sold in the Asia Pacific region. Especially in South China, we will

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