Document 6BbgDOgDqg7ZkdV8YNBj338G6

PPG Industries Inc. Annual Report 1974 75 | BB 0001549 1 PPG Industries Inc. .r Annual Report 1974 : tv..*; v. | BB 0001550 | T-* s-cce*vts -PG 'viV^:t- ;r-_ ab.c :: :c".c .e ra.Os znz c(`j::s cf -;s i- LCC erop z^c-.-s j: PPG sUS, faci..:ies, Net Sales Income Taxes Earnings Before Extraordinary Items Net Earnings Earnings--Per Cent of Sales Earnings Per Share Before Extraordinary Items **et Earnings Per Share Cash Dividends Per Share Expenditures for Property and Investment Working Capital Number of Employees Number of Shareholders Average Common Shares Outstanding Financial Highlights 1974 SI.744,003,000 48,200.000 93.728.000 93.728.000 5.4 4.51 4.51 1.70 198,787.000 393,800.000 38.000 47.851 20,791.000 1973 S1.512.607.000 54.000.000 93.126,000 104.448.000 6.9 4.48 5.02 1.60 132,382,000 393,061,000 38.000 41,588 20.787.000 2_flB 0001551 | PPG People One of the messages we hope to convey with our 1974 Annual Report is as simple as it is true: people are PPG's most valuable and important asset. When the books are balanced at the end of each year, this fact is sometimes left unstated, although it never is forgotten. PPG's present and future success in the marketplace must be measured by how well it is able to bring together product and process technology, production and dis tribution skills, and the management and business know-how necessary to provide customers with the goods and services they require. This body of skill and knowledge exists in, and is carried forward by, PPG's (people. | PPG is particularly fortunate to have a group of employees in a rich variety of jobs who continue to grow with the Com pany. They represent a wealth of human resources which demonstrates that talent and ability make no distinction in matters of race, creed, color or sex. Unlike machines or factories or furnaces, people think, create, dream. Also, of course, they sometimes fail, but the people who are PPG have given the Company posi tions of leadership in all of our major areas of business because, like a champion ship team, they try a little harder, give a little more. An extra five per cent of effort can make the difference between a cham pion and an also-ran in business, just as it can in sports. PPG people make things happen, find new ways of doing things better, and at less cost. A vital element of continuity also is rep resented as qualified people are brought along within the organization to fill posi tions of added trust and responsibility. We are firmly committed to make certain that as we continue to grow as a Company, our employees are rewarded and given the opportunity to go as far as their skills and energies can carry them. Our recognition of the vital role of PPG people would be less than candid were we not to acknowledge that economic conditions at year's end, particularly in the automotive and residential areas of busi ness, required the closing of some of PPG's older manufacturing plants and curtailment of production at others. Where possible, a placement program and existing employee benefits were utilized to the fullest extent to minimize the impact on the lives of individuals who have been unavoidably affected. Our 1974 Annual Report is more than a review of the Company's performance. Its covers, which actually are a printout of the names of PPG employees in the United States, are one small way of stressing that without the people who work for us, we are little more than a very expensive array of factories, offices, machines and equip ment. We wanted to put that fact on the record. PPG: a Concern for the Future 2 V To Our Shareholders: l PPG's 1974 operating earnings of $93.7 million, or $4.51 per share, slightly exceeded those of 1973, thus establishing a new high for the fourth consecutive year. This was accomplished in spite of a series of unusual market conditions, rising levels of inflation, shortages of raw mate rials, and adoption of the last-in, first-out (UFO) method of inventory valuation beginning in 1974. Two of the Company's major areas of business were affected adversely by the economic downturn in 1974. Domestic auto production was down 25 per cent from 1973 levels, while residential housing starts slipped 35 per cent compared with the same period. Our glass business was affected severely by the softness in these market areas. However, the decreasing demand provided the Glass Division with an oppor tunity to accomplish a major consolidation of its operations. This included streamlining of the internal organization as well as elimination of obsolete, higher-cost sheet glass manufacturing operations. These steps, together with completion of the highly efficient float glass plant at Wichita Falls, Texas, in 1974, put the Company in a strong position to take advantage of an anticipated return to a normal demand. PPG's chemical business reached record performance levels in 1974. Demand re mained strong for virtually all of our chemi cal products, and a satisfactory profit was accomplished in the face of substantially increased energy and feedstock costs. 4 Major progress also was made in im proving the reliability of our Puerto Rico operations. PPG's wholly owned complex, together with the Company's share of a joint- venture olefins operation, caused a drag of $19.5 million on pre-tax earnings, com pared with $28 million in 1973. The loss in the fourth quarter, however, was the smallest since operations began in Puerto Rico in late 1971, and in the last six weeks of the quarter operations were at a utilization rate above the break-even point. Key markets for the Company's other main lines of business--coatings and resins and fiber glass--remained firm until late in the year, with new areas of business and increased market penetration taking up some of the slack caused by declines in the automotive and construction markets. Significantly, PPG's capital spending reached a record level of $199 million in 1974, reflecting the Company's confidence in the viability of its lines of business. Since most of the funds were earmarked for plant expansion and modernization, the program insures that each of PPG's four major operating units will continue to enjoy highly competitive positions in their selected market areas when more normal economic conditions prevail. The effective management of energy and raw materials was a critical factor in our success in 1974. Careful planning insured that production at most manufacturing facilities was not seriously affected. Although raw materials shortages had eased signifi cantly by year's end, adequate supplies of energy continued to be a major concern. During the four new off of directors. F. Keating,; of Minneapc Robert F. dent of gen sion, and th in the Coat Marco Wise of research Bittle beca and Freder president-? PPG's pc measure bt economic ofjhe govt flation ana energy res tainty prev that devel date. Althc r likely to t. ! 1975, the i. and mode 1 in an excc " turn quick begins to Febrc SuDit Q>; ROOT During the year, one new director and four new officers were elected by the board of directors. The new director is Stephen F. Keating, chairman of Honeywell, Inc., of Minneapolis. Robert F. Wells was elected vice presi dent of general sales for the Glass Divi sion, and three vice presidents were elected in the Coatings & Resins Division. Dr. Marco Wismer was elected vice president of research and development; Harold G. Bittle became vice president-international; and Frederick F. Rhue was elected vice president-automotive finishes. PPG's performance in 1975 will in great measure be determined by the timing of an economic recovery, as well as the success of toe government's efforts to control infl^^feand assure a fair distribution of eral^ resources--all areas where uncer tainty prevails. The market weaknesses that developed in 1974 continue at this date. Although earnings records are not likely to be set for a fifth straight year in 1975, the Company's long-range building and modernization program has placed it in an excellent position to regain momen tum quickly when an economic recovery begins to take shape. February 3. 1975 Submitted on behalf of the Board of Directors G?.7 Robinson F. Barker. Chairman of the Board r Joseph A Neubauer, President X- LfiLfooJisp- Chemicals PPG's chemical business achieved record performance levels in 1974. Demand was strong for nearly all the Company's chem ical products, and chemical personnel played a significant role in producing maximum product volume at high quality to satisfy customer needs. Nearly all PPG's chemical plants oper ated close to rated capacity in 1974. To fill urgent market demand, these plants increased production by eliminating bottle necks and utilizing capacity at the highest possible rates. Major progress was made in 1974 in improving the reliability of the Company's Puerto Rico operations. Sup plies of energy and feedstocks now are adequate, and many of the operational problems have been resolved. Greater quantities of PPG's agricultural chemicals were used to help bolster world food production in 1974. Demand con tinued strong for the fine quality potash fertilizer produced at PPG's Kalium Chem icals Limited operation in Saskatchewan, Canada. Earnings of the Kalium operation, however, were significantly reduced by the retroactive imposition of a new reserve tax by the Saskatchewan government. Based on a complicated formula, the tax imposes a costly levy on favorable potash selling prices. Greater involvement in the growth and earnings of the Saskatchewan potash industry by the provincial govern ment is expected in the future. Sports are popular on the island of Puerto and Palmiro Figueroa, a process techmcia runs the refrigeration and compression uni the chlorine plant at PPG's Guayanilla cr complex, likes to play basketball in his sc, time. Puerto Rico's enthusiastic and capa people, together with its geographical toe. make it an ideal place tor companies like to grow and develop. For Mr. Figueroa, it the opportunity to "do different things, me different people, and take your career as you want it to go." A satisfactory profit was achieved a long period of depressed prices in chemical industry. This was true esc for industrial chemicals, which indue PPG's core products --chlorine, caus soda, ethylene glycol and their deriv chemicals--as well as for agriculture chemicals. Price increases for these ucts reflected substantially increase! energy and feedstock costs, and the creased cost of investment in new pi tion capacity. Although some softem in demand for certain chemicals is a pated in 1975, prices are expected tc 1 reasonably firm, and should support cost of increased capacity. The record chemical performance enabled the Company to support sue capital investment commitmeiits, par larly in the area of basic chemicals, appropriations for chemicals increas significantly in 1974. Announcement of a SI 50 million-p expansion of chlorine and caustic sc capacity at the Company's Lake Ch< Louisiana, complex reaffirmed PPG's term commitment to this basic chem business. Construction of the new pi which ultimately will double that fac chlorine-caustic soda capacity, is uway. Start-up is scheduled for mid-: CR-39 monomer is the principal material from which plastic prescription eyeglass lenses are made. The PPG product also has a number of other specialized applications. Paper, from stationery to newsprint, benefits from the use of silica pigments from PPG's chemical operations. Hi-Sil 404 pigment improves brightness and opacity of various papers, and is used to improve printabihty and other qualities of newsprint, Furloe Chtoro IPC herbicide helps increase farm productivity with effective weed control The herbi cide provides specific control, for example, of Smartweed, a serious problem in soybeans--the second most valuable cash crop in the United States The new complex will utilize the latest available technology, including the Glanor electrolyzer, a new type of chlorine-caustic soda production cell jointly developed by PPG and the DeNora Company of Italy. The Glanor cell, which provides a number of energy-saving, economic, production and environmental advantages, is being licensed by PPG and DeNora in many areas of the world. About 6,000 tons per day of worldwide chlorine production capacity, utilizing Glanor cell technology, were in the planning stage at the end of 1974. Progress continued in the area of pro prietary, specialty, and upgraded chemical products. Two new biodegradable pesti cides developed by PPG await government registration before going on the market. The Industrial Chemical Division, re sponding to continued growth in the market for bead caustic soda, announced sched uled completion in mid-1975 of a new caustic beads facility at the Natrium, West Virginia, complex. The new unit, and com pletion of a major expansion of an existing facility at Lake Charles, will boost Pels caustic soda bead production capacity to more than 120,000 tons a year. 7 Chemicals Late in 1974, a new chloroformates plant was completed at the Barberton, Ohio, chemical facility, and production of chloro benzenes was expanded at the Natrium complex. Chloroformates are used in plas tics and agricultural chemicals, and chloro benzenes are used in a variety of chemical and solvent applications. Standard Chemical Limited, a Montrealbased PPG subsidiary, announced plans for a two-phase modernization and expan sion that ultimately will double production of sodium chlorate, a wood pulp bleaching chemical, at its Beauharnois, Quebec, plant. The first phase is expected to be completed early in 1977. Houston Chemical Company, a unit of the Chemical Division, announced in December a joint venture with Amoco Production Company to produce two million pounds of iodine from underground brines in Oklahoma. Nearly all of the 7.5 million pounds of iodine used in the United States currently is imported. Based on engineering studies made in 1974, plans were made to double ethylene glycol capacity through modernization at Houston Chemical's Beaumont, Texas, plant. Safety, health, and welfare measures both inside and outside the Company's chemical units continue to be matters of high priority, and are receiving increasing shares of the capital budget. An environ mental affairs department was established to increase the scope of already extensive environmental programs. Pipelines of many lengths and sizes, c\ materials, intermediates and finished pr-_ a major part of any chemical complex: \r is formed by pipes in an area of the Puerto Rico. ' | BB 0001558^ PPG's chlorinated solvents are used by metals manufacturers and fabricators in degreasing and cleaning operations, as well as by professional and coin-operated drycleaners across the country. Drycleanmg is the major market for perchlorethylene solvent. Resembling a giant waffle iron is the chlorine pro duction cell room at the Beauharnois, Quebec, facility of Standard Chemical Limited, a PPG sub sidiary. Plans are being completed for a major expansion of the installation's sodium chlorate plant. Much of the ethylene glycol produced by PPG in Texas and Puerto Rico is used to make polyester fibers, which in turn are made into highfy popular women's and men's fashions. PPG joined with other producers of tetraethyl lead fuel additives and the National Petroleum Refiners Association in a suit contesting an Environmental Pro tection Agency ruling that would phase lead out of gasoline. PPG and the other plaintiffs argued that the EPA had not demonstrated health dangers from lead in gasoline. In December, the U.S. Circuit Court of Appeals in Washington, D.C., ruled in favor of the plaintiffs. In the meantime, PPG continued develop ment work on its highly effective particulate emission control system for automobiles, as well as evaluation of promising alterna tives to the present catalytic exhaust sys tems that require lead-free gasoline. PPG's work in this area recognizes the benefits that antiknock compounds in gasoline contribute to the national energy conser vation program. PPG's chemicals operation moves into its 75th anniversary year with pride in its achievements in 1974 and with anticipation of continued strength and growth. I BB 0001559 | X- Glass Prolonged softness in the residential and automotive markets, coupled with rapid cost inflation, dramatically reduced sales and profits for PPG's glass business in 1974. Domestic housing starts fell to about 1.3 million units, in sharp contrast with the slightly more than two million new homes built in 1973. Likewise, only 7.3 million new automobiles were produced in the United States in 1974, compared with nearly 9.7 million in 1973. PPG's auto replacement glass business, however, remained strong, the Company being one of the larger sup pliers to this non-cyclical market. Further, brisk sales of high-performance architec tural glasses helped offset, to some extent, the weak housing market. As the energy shortage became more acute, demand increased for upgraded architectural glass products that make possible well-insulated, energy-efficient buildings without sacrificing comfort, appearance and the psychological bene fits of large vision areas. Sales of PPG's medium-price Solarcool glass continued strong. This architectural glass, which is produced on the continuous float glass ribbon, is a versatile and durable reflective product that may be cut and fabricated like clear float glass without damaging the permanent reflective surface. A new product was added in 1974 to PPG's family of high-performance insulating glass units, Solarban 485 Twindow glass. This double-glazed unit has a bronze tone and subtle level of reflectivity preferred by many architects. 10 PS f ***.**# c Sloped glass base adds distinction to the . Fort Worth National Bank Building--the Texu tallest. The building's LHR Solarbronze re; glass sheathing reduces air-conditioning ice improves indoor : n, .. x m j BB 0001560 Recognizing the critical need to develop alternate sources of energy in the United States, PPG began production of solar energy collectors for hot water and heating systems for homes, schools and office buildings. Based on the Company's exten sive glass technology, the collectors were cited by Industrial Research magazine as one of 1974's top 100 new technical developments, The flat, tray-like solar collectors, produced at the firm's Ford City, Pennsylvania/*^*"plant, include two clear, tempered glass panels and an insulated black aluminum absorber plate enclosed in stainless steel. The sun's energy falling on an array of collectors heats fluid which is circulated to a heatexchanger. This fluid transfers the he^^ha building's water heater, heating sys^^or thermal storage unit for later use. The market potential for economical, non-polluting solar energy systems is large. It is estimated that about 75 per cent of the nation has a climate suitable for practical solar heating. In the next five years, as many as 800,000 homes, in addi tion to thousands of multifamily and com mercial buildings, could be using solar energy for heating, cooling, hot water, or all three applications. To take advantage of this potential, PPG has formed a new marketing group within the Glass Division to merchandise the Company's solar systems. Progress was made in 1974 in converting production capabilities to the more efficient float glass process, as PPG took steps to enhance its position as.the No. 1 flat glass producer in the United States. \ At work on the leading edge of a promising new marketing development --solar collectors--is Raymond G. Gallagher, assistant manager ot solar system sales. Working closely with research and production teams, Mr. Gallagher, who joined PPG in 1Q60 as a glass physicist, likes to see research ideas translated into marketable hard ware. "Practical solar energy systems for homes and other buildings are available now, today," he says. "Harnessing the sun's power is one of the fastest, most economical ways to achieve energy self-sufficiency in the United States." Production began in 1974 at Wichita Falls, Texas, PPG's newest and most modern flat glass plant, which was built to serve the commercial and residential construc tion industry in the west and southwest. The new facility has a production potential of approximately 400 million square feet of glass a year. Engineering work began to convert PPG's Fresno, California, sheet glass manufactur ing plant to production of float glass to serve west coast glass customers. In expectation that the energy shortage will stimulate a continuing demand for insulating glass by home buyers, PPG broke ground at Marshall, Minnesota, for a second Glass-Edge Twindow glass fabricating plant. When completed, the new facility will provide high-volume fabrication lines for production of improved Glass-Edge Twindow Xi insulating units. Demand for insulating glass is expected to be particularly strong in northern sections of the country, where double glazing in new homes is projected to increase from today's 70 per cent to nearly 100 per cent in 1978, PPG's aircraft transparency business remained strong throughout 1974. Plans were announced to expand the Huntsville, Alabama, plant by 50 per cent to meet growing demand for sophisticated aircraft components. The expansion is scheduled for completion in 1975, and will extend PPG's fabricating capabilities further into the rapidly growing area of transparent plastic aircraft components. ii Glass Growing public awareness of the injury potential of ordinary glass in hazardous locations in homes and other buildings, and enactment of safety glazing laws in 31 states in the past five years have spurred the demand for PPG tempered glass. To provide faster service for non standard sizes and replacement orders of Herculite tempered glass, medium capacity regional tempering centers were completed in 1974 at Dallas, Texas; Westboro, Massachusetts; and Cockeysville, Maryland. PPG now has five such regional tempering facilities, with additional units scheduled for construction in 1975. To provide a broader range of building materials, PPG obtained distribution rights for three mineral panel products used for architectural cladding and a variety of internal cladding applications. The rein forced mineral panels, which presently are used widely in Europe, will be distributed nationally by independent distributors, as well as through PPG's distribution outlets. The panels are manufactured by Eternit, S.A., of Belgium. Together with a minority shareholder, FEAL S.p.A., an Italian company, PPG organized a U.S. subsidiary, PPG-FEAL, Incorporated, for the design and construc tion of mid-rise office buildings using FEAL S.p.A. building systems. The company's building program has particular value to developers desiring a quality building with life-cycle cost advantages. 12 >v Shielded from heal by a protective technician monitors the coating of e conductive glass at the Huntsville, Aiaoa cation plant. The glass will be part of a c-' defogging aircraft ,v | BB 0001562 | Thinner auto glass, shown at left compared with previous size, contributes weight savings to many 1975-model cars. Improved fabrication technology at plants producing tempered side and rear windows provides up to 17 per cent weight reduction. Sunshine not only makes plants grow, but also helps heat, cool and furnish hot water for a solar energy home in Columbus, Ohio. PPG's flat plate solar collectors, seen through the skylight, are the heart of the home's solar system. Laser beam helps a technician check the optical quality of a fabricated glass part. The use of laser beams and other advanced technology assures high quality control at plants producing fabricated glass products for transportation, construction and other markets. New production technology at the Tiptc Pennsylvania, and Crestline, Ohio, plants has made it possible to produce thinner automotive tempered glass. Weight reduc tion of as much as 17 per cent has been achieved for Herculite safety glass win* dows for some 1975-model cars. Merger of PPG's subsidiary glass opera tions in Italy with Vetreria di Vernante, S.p.A., a glass manufacturer in Italy, was completed in 1974. With the phase-out o` the Glaces de Courcelles fabricating unit in Belgium, PPG glass manufacture and fabrication in Europe became concen trated in Italy. Production also began at the new Vernante float glass facility near Turin, giving PPG its first interest in a flo. glass plant outside the United States. Market conditions at year's end causec temporary curtailment of operations at ths Company's sheet glass plant at Mount Vernon, Ohio, and at PPG's oldest float glass installation at Cumberland, Marylan The softness in demand provided an opportunity for a major consolidation of glass operations. This included stream lining the internal organization and elimi nation of obsolete facilities with the per manent shutdowns of higher-cost sheet glass operations at Henryetta, Oklahoma, and Clarksburg, West Virginia. With this consolidation, PPG remains in a strong position to take advantage of a return to normal level of demand. | BB 0001563 | Coatings & Resins PPG achieved record coatings and resins sales in 1974, surpassing industry perform ance for the seventh consecutive year. In this area of business, the Company enhanced its position as a progressive, creative, technically oriented unit able to meet environmental requirements as well as the needs of customers. This high level of performance, in a year marked by un certain business conditions, acute short ages and sharply rising costs, reflects the blending of sales, marketing and technical skills of the people within the organization. PPG's technical competence was spot lighted when raw materials shortages re quired reformulations in most product lines. This technological leadership enabled the Company to make the reformulations with the assurance that standards of quality expected by customers would be maintained. Last year also saw progress in the devel opment and customer acceptance of a more complete line of consumer and indus trial water-base coatings. While some of these products contain small amounts of solvents, they meet increasingly stringent environmental standards. A series of programs to expand research and production capabilities accelerated in 1974. A new research center was dedicated at Allison Park, near Pittsburgh, reflecting PPG's commitment to highly sophisticated polymer chemistry in the area of coatings and resins. The new facility houses more than 100 scientists engaged in a variety of advanced research projects. Allison Park represents only one important segment of 14 Research associate Roger Scnven helped velop Durethane 200, a flexible coating lor bumper systems, and is now at work on err mg PPG's line of watenbase coatings, "Co research," he says, "is based on highly so: cated polymer chemistry." Dr. Scnven see: Company's new Allison Park Research Cer as more than /ust a pleasant place to won discover. "It indicates to me." he says, "th PPG is dedicated to its role of innovation ,, leadership in the coatings and resins fielc. an area with a bright future, and I want to part of it." PPG's coatings and resins research a technical activities, and supplements research and development laboratory, nearby Springdale, as well as up-to-c technical laboratories at each of sevc domestic coatings and resins manufa' turing plants. Construction of two new plants--at Oak Creek, Wisconsin, and Dover, De --was under way in 1974. Segments c Oak Creek plant, on a 160-acre site f miles south of Milwaukee, were comp in 1974, and by early 1975 production begun for all product lines. The three building complex is PPG's largest pa plant, with an annual capacity of mo13 million gallons, and will replace th Milwaukee facility, which was acqum from the Patton Paint Company in 19 The year 1975 thus marks the 75th Ar sary of PPG's entry into the paint but The Dover plant, scheduled for coi tion in mid-1975, initially will produce Company's line of water-base consu paints, with a resins plant to be addt later. At capacity, Dover will be capa of producing five million gallons of Pittsburgh Paints each year. Designed to be a high-efficiency, volume plant, Dover will utilize pre-c persed raw materials to achieve low* manufacturing costs. The new facili: strategically located to serve major coast metropolitan markets. Intensive research and developme programs paid off in a number of pro areas in 1974. In industrial coatings, stantial progress was made in custor conversions from solvent-base to waterbase coatings formulated to meet federal and state emission standards. There was acceptance of a significant PPG breakthrough, Environ 1776, the world's first water-borne interior coating commercially approved for beer and soft drink cans. The new product is a sprayabi formulation that substantially reduces the amount of hydrocarbons emitted into the atmosphere during the spraying process. The Environ 1776 coating is clear, does nc transmit flavor, and protects cans from cor rosion. It is expected to capture a large share of the beverage and beer can mark*, in 1975. PPG continued to maintain its competi tive edge in the electrodeposition busi ness, A new development, cationic elec trodeposition, was cited by Industrial Re search Magazine as one of the world's IOC most significant technical advancements of 1974. Cationic electrodeposition is an electro lytic dip coating process which deposits a protective coating that provides at least five times the salt spray resistance of conventional anionic electrodeposition systems now in use. The new cationic systems hold great promise in the appli ance and automotive fields. There was increased acceptance by automobile manufacturers of water-base topcoats in 1974, and a new water-base flowcoat primer was used successfully in the appliance field, on farm machinery and in other areas where large surfaces must be coated. Coatings & Resins Environ III. a water-base primer and topcoat system for galvanized steel and aluminum, is gaming acceptance in the metal building industry. It was introduced late last year and is expected to capture a significant portion of that important market in 1975. In the area of resin products, the first successful pigmentable polyester resin compounds for sheet molding applications were introduced, and already have achieved acceptance for use in housings and frames for computers and electrical switchgear. In trade paints, there also was emphasis on the introduction of new lines of water- base finishes to meet customer demands and satisfy environmental considerations. Some 80 to 90 per cent of flat interior paints and 50 to 60 per cent of semi-gloss interior paints sold in the United States today are water-base coatings. Waterbase paints are capturing an increasing share of the exterior paint market. Three new water-base trade paints were introduced at year's end. Pitt-Glaze waterbase acrylic-epoxy coatings are intended for use in place of the older solvent-base product where durability and high resis tance to stain and chemical attack are required. Demand for the water-base product is expected to increase in such buildings as hospitals and schools, where minimal odor during application is partic ularly important. Restoration of nearly 600 century-old homes is a continuing project for the Lafayette Square Restora tion Committee, Many of the homes in this area of St. Louis already have been refurbished with Pittsburgh Paints. PPG introduced Environ 1776 coating, the world's first interior water-borne liner commercially approved for beer and soft drink cans, It is a sprayabie formulation that reduces air pollution during the coating process REZ stains and wirnisnes nave been u . sively in Colorado, wnere new con construction has been increasing A P>rsb,,r product. REZ finishes are used on virtually .. of wocc - Lift trucks made by Towmotcr Corooration based subsidiary of Caterpillar Tractor C are flow-coatee witn PPG s water-basea pu" 16 I BB 0001566"! The new coatings and resins research center in suburban Pittsburgh features the most modern tech nological equipment available. PPG also announced a water-base interior and exterior high-gloss enamel Keeping with the new 'wet look'1 in inter decorating, and a water-base varnish th.-` matches the properties of traditional higr grade varnish. Earlier in the year, the Company intro duced a second line of less expensive Pittsburgh Paints in response to custome- demand for a quality paint at lower cost With these new product introductions. PPG now has commercialized a matchir water-base formulation for nearly every solvent-base paint in its trade sales line Penetration of foreign markets continu-. in 1974, as record sales were achieved. Sales outside the United States account for more than 20 per cent of the Compar coatings and resins business. Significant progress was made worldwide in both sales and technical innovations in auto motive and appliance finishes as well as coil coatings and electrodeposition PPG is a ma/or supplier in the world market fo' these industrial finishes through manufac turing operations in France, Italy, Mexico Venezuela and Canada, and through worldwide licensing of its coatings and resins technology. | BB 0001567 | Fiber Glass PPG's fiber glass business continued to demonstrate the .pacity for real growth in 1974, and operated at high levels in most areas. The sharp decline in new car production affected markets for reinforced plastic auto components and fiber glass tire cord, but this was offset partially by a strong demand for corrosion resistant materials, particularly piping. To help meet the demand for a wide variety of PPG products, plant capacity was increased significantly during the year, with another expansion project scheduled for completion in 1975. A multimillion dollar expansion was completed at the Shelby, North Carolina, Icomplex for textile yarns and plastic and fcbber reinforcements. Going on stream was rnew melting tank--one of the largest in the world, with an annual capacity of 35 million pounds of fiber glass. The tank was installed with a computer-controlled glass melting system, and can produce more fiber glass than the combined production of the first 16 tanks built at the complex. An additional 35 million pounds of fiber glass yarn capacity will be added to PPG's production volume in 1975 with completion of the expansion of the Company's Lexing ton. North Carolina, plant. 18 One of the world s largest meihna glass is part of a 1974 expansion at tie - Carolina, plant The facility's annual . -. capacity was increased to 150 nii. -o - I SB 0001568 1 Worldwide Manufacturing Locations DOMESTIC Glass Carlisle, Pa. Flat Glass, Tempered Glass Creighton, Pa. Automotive and Aircraft Glass Fabrication Crestline, Ohio Automotive and Specialty Glass Fabrication Crystal City, Mo. Flat Glass Cumberland, Md. Flat Glass Ford City, Pa. Architectural and Insulating Glass Fabrication, Coated Glass, Tempered Glass, Solar Collectors Fresno, Calif. Flat Glass, Tempered Glass Greensburg, Pa. Automotive Replacement Glass Fabrication tsville, Ala. Aircraft and Specialty ansparency Fabrication Kokomo, Ind. Architectural Metals Lincoln, III. Insulating Glass Fabrication Meadville, Pa. Flat Glass Mount Vernon, Ohio Flat Glass, Tempered Glass Mount Zion, III. Flat Glass, Tempered Glass Tipton, Pa. Automotive Glass Fabrication Wichita Falls, Tex. Flat Glass Chemicals Barberton, Ohio Chlor-Alkalies, Silica Pigments, Fine Chemicals, Hydrogen Peroxide, Portland Cement. Beaumont, Tex. Antifreeze, Ethylene Glycol, Fuel Additives Corpus Christi, Tex. Chlor-Alkalies, Chrome Chemicals El Dorado, Ark. (50%) Bromine Guayanilla, P.R. Chlor-Alkalies, Ethylene Glycol, Vinyl Chloride Monomer Lake Charles, La. Chlor-Alkalies, Chlorinated Solvents, Silica Pigments, Vinyl Chloride Monomer Natrium, W. Va. Chlor-Alkalies, Chloroben zenes, Sulfur Chemicals, Ammonia Penuelas, P.R. (50%) Ethylene, Propylene, Butadiene Coatings & Resins Baltimore, Md. Brushes and Rollers Circleville, Ohio Resins Cleveland, Ohio Original Equipment Automotive Finishes, Industrial Coatings Delaware, Ohio Industrial Coatings, Automotive Refinishes East Point, Ga. Trade and Industrial Coatings Farmington, Mich. Modular Electrocoating Equipment Houston, Tex. Trade and Industrial Coatings, Polyester Resins Milwaukee, Wis. Trade and Industrial Coatings Oak Creek, Wis. Trade and Industrial Coatings, Resins Plainfield, III. Radiation Curing Equipment Springdale, Pa. Trade and Industrial Coatings, Polyester Resins Torrance, Calif. Trade and Industrial Coatings, Automotive Refinishes, Polyester Resins Fiber Glass Lexington, N.C. Continuous Strand Textilt and Plastic Reinforcement Products Shelby, N.C. Continuous Strand Plastic Reinforcement Products, Tire Cord Other Columbus, Ind. Injection Molded Components for Home Furnishings and Industrial Applications Newton, N.C. Decorative and Structural Furniture and Factory-Built Home Components Port Allegany, Pa. (50%) Cellular Glass Products, Glass Block Sedalia, Mo. (50%) Cellular Glass Insulation, Modular Glass Products For marine and land transportation uses, fiber glass 'emforced plastics play an important role because rey are light, strong and durable. As many as 6.000 fiber glass filaments are drawn through bushings at the Shelby and Lexington, North Carolina, plants, The filaments are gathered into strands for use in textiles, plastics and as rubber reinforcements X-rays of radial tire sections reinforced with Hycor fiberglass tire cord are part of the testing and eval uation program designed to help tire manufacturers take advantage of the performance qualities of fiber glass. New product applications include the use of fiber glass as a reinforcement medium for cement and other inorganic structural materials. PPG research and development efforts in this area are focusing on the formu lation of low-alkali cement systems that permit the use of production fibers. Fiber glass carpeting became a semi commercial reality in 1974 with approval by the Navy for shipboard use. Fiber glass carpeting has inherent fire safety character istics that make it especially suitable for use in such areas as hospitals and aircraft. In 1974, the Mycrodyne process, a new method of forming fiber glass, moved from the developmental to the scale-up stage. The Mycrodyne process utilizes a pressure rather than gravity system to form the fiber, vastly increasing the yield. Because of continued favorable marketing conditions, export sales of PPG fiber glass continued at high levels throughout many parts of the world. In addition, significant interest has been generated in PPG's fiber glass manufacturing technology, and opportunities to license that technology are being explored. Fiber Glass Last year saw substantial growth in PPG's fiber glass yarn markets--industrial and decorative fabrics, tape and film reinforce ment, non-woven electrical products, scrim, cordage, twine and carpet sealing tape. The possibility of new federal flammability standards for drapery fabrics, as well as introduction of new novelty yarns, is expected to increase the market for fiber glass decorative fabrics. Particularly prom ising is the outlook for fine fiber required for the laminates that make up many elec tronic printed circuit boards. Fiber glass continues to compete with steel for the growing radial tire market. There now are more than 20 brands of fiber glass radial tires on the market. A key advantage of fiber glass tire cord over petitive materials is cost. At equivalent gn strengths, fiber glass is the lowest cost tire cord available, and is likely to remain so. In addition, tire manufacturers have found that an all-fiber glass radial tire can be built on an existing bias tire mold. Fiber glass radial tires, which currently sell for about 15 to 20 per cent less than steel belted radial tires, are expected to be a factor in the 150-million-unit-a-year replacement tire market. This is about three times the size of the original equipment tire market. 20 \v - Stylish furniture molded from fiber glass reinforce plastic is one of the many decorative applicant}for fiber glas I BB 0001571 I Construction began on a basic research center at a 16-acre industrial park in O'Hara Township, near Pittsburgh. Scheduled to be in operation by mid-year, the center will be equipped with a full-scale melting tank that will enable researchers to conduct round-the-clock experiments in such areas as melting techniques, binder development, bushing environments, and winder control. Previously, it was necessary to borrow pro duction bushings for many such experiments. At year's end, there was a significant reduction by the supplier in the contracted natural gas supply at the Shelby and Lex ington plants, resulting in a temporary cut back in production as well as work force. The natural gas reductions were expected ontinue at least into the spring of 1975. unately, however, standby systems e been installed, a process that is con tinuing now, and substantial quantities of alternate fuels have been procured to mini mize the effect of these cutbacks. There was substantial growth in 1974 in two of the three primary fiber glass markets -- reinforced plastics and textile yarns. The remaining major market--rubber rein forcements--was affected by the slump in automobile production, but signs con tinued to be encouraging in the radial tire business. David S. Banks likes people, one reason he ha the ;ob o1 manager of employee benefits at PPf Shelby, North Carolina, fiber glass plant. He sec his fob as more than the administration of in surance, retirement and other benefits program. "Shelby and PPG need each other," he says " When this plant and the community grow to gether, everyone benefits." In his job, Mr. Bank likes to stress the human aspects ol this relatic ship. "People have got to know you really care he says. "There's no way you can fake that. Ar PPG has shown it's a company that cares abou people." ) In the reinforced plastics market, which accounts for the largest share of the Com pany's fiber glass production, user require ments are expected to grow from an esti mated 479 million pounds in 1974 to 755 million pounds by 1978. Accordingly, the Company's reinforced plastics marketing organization was revamped to provide flexibility to meet current and anticipated market needs. Five market umts-marine, land transportation, construction, corrosior and electrical --were set up within the organization, and represent the areas where the most growth is expected to occur through 1978. Marine applications continue to be the largest single end use of fiber glass rein forced plastics. Reinforced plastic is used as the hull material on about 40 per cent of all outboard boats, 88 per cent of all inboards, 96 per cent of all inboard/out board combinations, and 98 per cent of all sailboats. The land transportation market, which includes parts for cars, truck cabs and trailers, buses, recreational vehicles, tank trucks, and railway, subway and urban transportation vehicles, is expected to grow significantly. Principal advantages or fiber glass reinforced plastic parts for thes uses include high strength-to-weiqht ratios, greater design and styling flexibility lower tooling costs, and proven durability including resistance to corrosion. FOREIGN Glass Caracas, Venezuela (49%) Automotive and Architectural Glass Fabrication Cuneo, Italy (69%) Flat Glass, Architectural Glass Hamilton, Ont., Canada Architectural Metals Fabrication Hawkesbury, Ont., Canada (66%) Automotive Glass Fabrication London, Ont., Canada Mirror, Insulating Glass, Architectural Metals Fabrication Montreal, Que., Canada Insulating Glass, Architectural Metals and Mirror fabrication, Flat Glass H^se Jaw, Sask., Canada Insulating ^^Slass Fabrication Oshawa, Ont., Canada (66%) Automotive Glass Fabrication Owen Sound, Ont., Canada Flat Glass, Tempered Glass, Insulating Glass Roccasecca, Italy (69%) Automotive Glass Fabrication Salerno, Italy (69%) Flat Glass Strathroy, Ont., Canada Architectural Metals Fabrication Tejerias, Venezuela (49%) Automotive and Architectural Glass Fabrication Vancouver, B.C., Canada Architectural Metals, Fabrication Vernante, Italy (69%) Flat Glass Chemicals Beauharnois, Que., Canada Chlor-Alkalies, Sodium Chlorate Belle Plaine, Sask., Canada Potash Tokyo, Japan (50%) Chlorinated Solvents, Vinyl Chloride Monomer Coatings & Resins Milan, Italy (78%) Industrial Coatings Mississauga, Ont., Canada Trade and Industrial Coatings North Vancouver, B.C., Canada Trade and Industrial Coatings Saultain, France (62%) Industrial Coatings Tialnepantla, Mexico (59%) Trade and Industrial Coatings Toronto, Ont., Canada Trade and Industrial Coatings, Polyester Resins Valenciennes, France (62%) Trade Coatings Fiber Glass Candiac, Que., Canada (32%) Insulation Products Edmonton, Alta., Canada (32%) Insulation Products Guelph, Ont., Canada (32%) Continuous Strand Textile Products, Chemical Resir Hoogezand, The Netherlands (50%) Continuous Strand Textile and Plastic Reinforcement Products Sarnia, Ont., Canada (32%) Insulation Products Other Burlington, Ont., Canada (33%) Plastic Containers Georgetown, Ont., Canada (66%) Electrical Devices Montreal, Que., Canada (33%) Plastic Containers Tessenderlo, Belgium (50%) Cellular Glas Insulation (Includes subsidiaries and affiliates in which PPG has at least 30% equity. The percentage of equity in those not wholly owned is shown in parentheses.) B ard f Dir ct rs f Robinson F. Barker, Chairman of the Board and Chief Executive Officer, PPG Industries, Inc. Charles M. Beeghly, Retired Chairman of the Board and Chief Executive Officer. Jones & Laughlin feel Corporation x /I. Paul Desruisseaux, Chairman. Melchers Distilleries Ltd. (Canada) W. H. Krome George, President and Chief Operating Officer, Aluminum Company of America 'James F. JungA, President. Pitcairn Incorporated Stephen F. Keating, Chairman of the Board, Honeywell. Inc. 'John A. Mayer, Retired Chairman of the Board and Chief Executive Officer. Mellon National Corporation and Mellon Bank, N.A. Thomas J. McHugh, Senior Vice President and Investment Director. Pitcairn Incorporated Robert W. Morse, Associate Director. Woods Hole Oceanographic Institution 'Joseph A. Neubauer, president and Chief Operating Officer. PPG Industries, Inc, *$Jack W. Robbins, Senior Vice President and General Counsel, Pitcairn Incorporated Julio A. Torres, Executive Vice President, Banco de Ponce Offic rs Robinson F. Barker, Chairman of the Board and Chief Executive Officer Joseph A. Neubauer, President and Chief Operating Officer W. F. Newton, Vice President, Marketing William Carpenter, Vice President, Corporate Relations W. Parmer Fuller III, Vice President, Western Region David D. Ogilvie, Vice President. Corporate Development L. Stanton Williams, Vice President. Finance Edward H. Eaton, Vice President and Treasurer Robert H. Mitchel, Vice President and Controller R. Wayne Oates, Assistant Vice President, Finance Cyrus V. Anderson, Vice President, Law David A. Cort, Vice President and Secretary Donald G. Griffin, Vice President, Traffic and Transportation Edward J. Slack, Vice President, Employee Relations Richard F. Sperring, Vice President. Supply lk V. Breeze, Vice President and General .anager, Glass Division , John L. Baldwin, Vice President. Contract and Supply Department. Glass Division Charles P. BlahouS, Vice President, Research, Glass Division Francis B. O'Neil, Vice President. Planning and Foreign Operations Group, Glass Division Robert C. Perry, Vice President, Automotive and Aircraft Group. Glass Division John H. Strome, Vice President. Sales, Marketing and Distribution Group, Glass Division Robert F. Wells, Vice President. General Sales, Glass Division John B. White, Vice President. Flat Glass Group, Glass Division Elmer C. Larsen, Vice President and General Manager. Coatings and Resins Division Harold G. Bittle, Vice President. International. Coatings and Resins Division Richard P. Cook, Vice President. Trade Paint Sales, Coatings and Resins Division James A. Kassekert, Vice President, Manufacturing, Coatings and Resins Division Howard J. Mather, Vice President, Industrial Products, Coatings and Resins Division Frederick F. Rhue, Vice President, Automotive Finishes, Coatings and Resins Division Marco Wismer, Vice President, Research and Development. Coatings and Resins Division J. Earl Burrell, Vice President and General Manager, Chemical Division Richard H. Blair, Vice President and General Manager, Chemical Division, PPG Industries (Caribe) William R. Harris, Vice President and General Manager, Organic Chemicals Department, Chemical Division John M. Robinson, Vice President and General Manager, Houston Chemical Company Vincent A. Sarni, Vice President and General Manager, industrial Chemical Division Hobert C. Twiehaus, Vice President, Technical Director, Chemical Division Robert E. Widing, Vice President, Manufacturing, Industrial Chemical Division Boyd R. Willett, Vice President and General Manager, International Department, Chemical Division George NLZapp, Vice President, Marketing, Industrial Chemical Division Robert A. McLaughlin, Vice President and General Manager. Fiber Glass Division John E. Brownell, Jr., Vice President, Sales and Marketing, Fiber Glass Division Franklin H. Green, Vice President, Manufacturing, Fiber Glass Division John W. Morris, Vice President, Technical Services, Fiber Glass Division Chairman. Executive Committee "Member, Executive Committee Member. Management Committee ^Chairman, Audit Committee Member, Audit Committee Annual Meeting TRADEMARKS The Annual Meeting of Shareholders will be held on These registered trademarks ot PPG Industries, Inc., J Thursday, April 17.1975. beginning at 2 p.m., at the are used in this report: PPG Industries (monogram). William Penn Hofei. Pittsburgh, Pa. CR-39. Furloe. Hereunto. Hi-Sil. Hycor, LHR, Pels, Pitt-Glaze. Pittsburgh Paints, PPG: a Concern tor the j Future. REZ. Sotarban, Solarbronze. Solarcool. Twindow, Twindow Xi. Transfer Agent and Registrar Another trademark of PPG Industries. Inc., appearing! Pittsburgh National Bank in this report is: Environ. P.O. Box 340746-P Glanor is a trademark of PPG Industries. Inc., and 24 Pittsburgh. Pa. 15230 Oronzio de Nora Impianti Elettrochimici S.p.A. I DB 0001574 1