PPG To Launch Revolutionary Secondary Fuel Vapor Barrier

PPG Industries (NYSE:PPG) said that it has developed a new sprayable secondary fuel vapor barrier that uses ultraviolet (“UV”) radiation to cure in seconds and can significantly lower production cycle time for commercial aircraft manufacturers and subcontractors. The revolutionary PPG eco-friendly sealant utilizes Permapol polymer technology and is expected to be commercialized in early 2018.

Aviation certification authorities made the application of a secondary fuel vapor barrier to the exterior of the center wing box fuel tanks in flights compulsory. The step was taken to ensure safety. The application of the vapor barrier will prevent any fuel or vapor from leaking into the cargo bay.

Conventionally, products used for these applications are two-part, chemical-cured polyurethanes. When applied in the production assembly environment, the material needs at least 24 hours for curing after application, limiting other assembly operations in the proximity.

The PPG UV-cured secondary fuel vapor barrier eliminates this problem. The material is spray-applied and a UV light is used to completely cure the coating in just a few seconds, following which, all assembly operations can be resumed immediately.

Apart from curing speed, the product has lower solvent content, is isocyanate free, and cures to a totally clear transparent coating that enables easy structural inspection.

PPG Industries has outperformed the Zacks categorized Chemicals-Diversified industry over the past six months. The company’s shares have gained around 9% over this period, compared with roughly 5.5% gain recorded by the industry.

The company has a diversified business, both in terms of products offered and geographical presence. The company’s strong presence in emerging regions has enabled it to deliver growth to shareholders by tapping opportunities there. PPG Industries is also taking initiatives to expand its business through acquisitions.

PPG Industries has announced certain restructuring measures to lower its cost structure globally. Special emphasis will be put on regions and end-use markets with the weakest business. The restructuring actions are expected to deliver $120–$130 million in annual savings, with $40–$50 million of savings expected to be realized in 2017.

The company also has an impressive record of returning cash to shareholders through dividends and share buybacks. PPG Industries expects to deploy $2.5–$3.5 billion cash in acquisitions and share repurchases for 2017 and 2018 combined.

PPG Industries is however, exposed to unfavorable currency exchange translation. The company also continues to face macroeconomic challenges. It sees moderate growth in emerging economies in 2017. The company’s operating results are also exposed to the cost of raw materials and energy.

PPG Industries, Inc. Price and Consensus

PPG Industries, Inc. Price and Consensus | PPG Industries, Inc. Quote

Zacks Rank & Key Picks

PPG Industries currently carries a Zacks Rank #3 (Hold).

Some top-ranked companies in the chemical space include BASF SE (OTC:BASFY) , The Chemours Company (NYSE:CC) and Kronos Worldwide Inc (NYSE:KRO) . All the three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

BASF has expected long-term growth of 8.6%.

Chemours has expected long-term growth of 15.5%.

Kronos has expected long-term growth of 5%.

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