PPG Industries, Inc. PPG
Q3 2011 Earnings Call Transcript

Operator: Bob Koort, Goldman Sachs.

Robert Koort - Goldman Sachs: Chuck, I was wondering if you could talk a little bit about the European optical business. It seems like it was maybe a larger than normal erosion and even if we looked back to the recession, so there is something specific to healthcare spending or what caused that sort of anomalous declines?

Charles E. Bunch - Chairman and CEO: There has been no overall change in healthcare remuneration systems in Europe. It has been weaker, however, for us in this past quarter. We have one new competitor entry in Europe, in the German market. Principally, this is (Zice), but overall we think that the impact in Europe for volume is minimal and we should be recovering, we think over the coming few quarters our momentum in terms of positive volume.

Robert Koort - Goldman Sachs: Could you touch on chlor-alkali? It seems like the death of chlor-alkali has been greatly exaggerated, but there is a still concern out there about new capacity and obviously slowing chlorine demands. What your crystal ball say for chlor-alkali in 2012?

Charles E. Bunch - Chairman and CEO: In 2012, Bob, we're still optimistic for our chlor-alkali business. We are seeing in – as we begin the fourth quarter a lower seasonal demand. Some of that is anticipated, but we also have seen some weakness on the chlorine side, a little lower export activity in the PVC chain, a little over activity in a number of our chemicals end-use markets like MDI, TDI. Pulp and paper, however, has maintained its momentum and we think that the offset of the stronger pricing on caustic side, which we're seeing here in the fourth quarter and is being supported globally by what we see as price improvements in caustic soda globally, we remain optimistic for our chlor-alkali business in 2012.

Robert Koort - Goldman Sachs: My last one, Chuck, thanks for the time. The Dyrup acquisition, can you just sort of explain to us again the strategic rationale in getting better in Europe and/or what Coatings – why that shouldn't be more daunting to hear about what are the positive reasons to get into that business?

Charles E. Bunch - Chairman and CEO: Well, we have what we think is a strong architectural Coatings business in Europe today. The market has been weaker over the last two years than we anticipated, but we're trying to build on what we think are already strong positions for our Coatings businesses there, including the Continental Western Europe even though the growth rates aren't, I would say, attractive here in the short term, we think we're going to get excellent synergies, position ourselves with what we think a great brand in the woodcare market. I think this will allow us to improve our overall competitive position, our offerings in the market and even if the growth rates are ranked exciting at this point. We think overall with the attractive purchase price, this is going to be an excellent acquisition for us.

Operator: Frank Mitsch, Wells Fargo.

Frank Mitsch - Wells Fargo: Let me start with the obligatory congrats on a good quarter. Transitions Europe, what percent of our transition sales are in Europe?

Charles E. Bunch - Chairman and CEO: About 20% to 25% Frank.

Frank Mitsch - Wells Fargo: That's really the only area that you've seen the consumer slowdown, is that correct?