Dive Brief:
- PPG Industries announced Thursday it will invest $380 million to establish a new aerospace coatings and sealants facility in Shelby, North Carolina.
- The 198,000-square-foot building will initially include warehousing and manufacturing units to produce PPG’s full line of aerospace products, according to the press release.
- The factory will create more than 110 jobs, with an average salary of $66,861, Gov. Josh Stein said in his news release. Construction is set to begin in October and be completed in 2027, the company said.
Dive Insight:
As part of PPG’s plans, the upcoming facility will be strategically located near Interstate 85 and Charlotte Douglas and Greenville-Spartanburg International Airports, which the paint company said will improve its supply chain and shipping logistics.
The new factory will install advanced manufacturing technologies and processes aimed at reducing its environmental impact while maintaining quality and safety, PPG said in the release.
PPG’s first quarter net sales dropped 4% year over year to $3.7 billion due to unfavorable foreign currency exchange rates and divestitures, according to an April 29 earnings release. However, its performance coatings segment’s net sales, which aerospace coatings is a part of, increased 7% YoY to $1.3 billion.
The increase was driven by PPG’s aerospace products, which the company said resulted in record sales for Q1 with double-digit percentage sales growth and a $300 million backlog. The growth was due to higher selling prices and sales volumes, the company said in a securities statement.
Demand for its aerospace products has progressively increased over the past couple of years. This was driven in part by aerospace manufacturers depleting their inventories at the height of the COVID-19 pandemic as production decreased, Chairman and CEO Tim Knavish said on the April 30 earnings call. Now, the aerospace industry is gradually rebuilding its aftermarket and original equipment manufacturing pipelines.
“Military, commercial, general aviation aftermarket, strong, strong, strong, strong,” Knavish said. “The backlogs are years in these segments, not months, not quarters, years.”
Knavish used Boeing as an example, which reported last month that it had a backlog valued at over $500 billion.
PPG expects the aerospace product demand to grow in Q2. Thus, the paint maker has been spending money to gain incremental output as well as make its manufacturing processes more efficient, particularly for aerospace, Knavish said.
“I would just say, stay tuned for kind of larger capital investments that are under engineering analysis now that would position this business for even better growth in rewards for our shareholders long term,” Knavish said.
PPG has 177 manufacturing facilities worldwide, including three aerospace coatings and sealants manufacturing plants in Mojave, California; Gonfreville-l'Orcher, France; and Shildon, United Kingdom, according to its website.
