Rebecca Liebert, PPG senior vice president, automotive coatings, came from a two-decade career in oil, gas, petrochemical and specialty chemical businesses. Liebert, 50, has a global perspective on the supply chain. She spoke with News Editor Lindsay Chappell about the pressures and challenges.
Q: Is it a volatile time for coatings prices?
A: The prices of raw materials going into the chemical chain have all escalated in the past two years. Crude oil prices have risen from the lows of the 2015 era, and that's lifting the tide of everything.
You have a lot of political uncertainties in the heavy oil-producing nations, like Iran, Libya, Algeria and Venezuela. That's keeping prices higher.
What else is causing price pressure?
Another big ingredient we need is TiO2, titanium dioxide. We've seen supply interruptions of TiO2 around the industry. The Chinese have really cracked down on regulations and have forced shutdowns of plants that didn't have the right environmental compliance. So that has shut down the feed stock that comes into our industry. We were also hit pretty hard on the availability of epoxies from China, which additionally raised prices.
Has PPG passed along those higher prices to its auto customers?
We've announced some increases, but it in no way covered the raw material price escalation. You've seen that our industry has had some degradation to our margins. We strive for year-over-year productivity improvements, but there's not enough productivity to be gained to offset the increases in this most recent round of raw material escalation.
This is occurring as the coatings industry is under new r&d pressure, right?
Yes. PPG spends about $500 million annually on r&d. And about 35 percent of our sales come from products we only produced in the last five years. One of the reasons we have to pass along increases is that we have to invest a lot to keep up with what our automotive companies need.