PPG Industries, the world leader in the production of optical hard resins, has bought Intercast Europe, the leading Italian manufacturer of hard-resin plano lenses and solar filters for sun and sports eyewear, along with its manufacturing facilities in Thailand. Intercast had invested €12 million in the latest of its Thai plants, which started up just five months ago, concentrating on the production of Intercast's new NXT lenses.
A preliminary agreement has also been signed for the acquisition of some other production facilities and distribution subsidiaries of Intercast in Hong Kong and Italy, indicating perhaps that Intercast's operations in the USA and Japan are excluded from the deal. More details of this second operation will be given at a press conference at MIDO later this week. Terms of the deal were not disclosed. The buying process should be completed by the end of this month.
The transaction gives PPG control of Intercast's top product, its patented NXT monomer for photocromic and polarizing lenses, which has a similar chemical composition as Trivex, the patented monomer recently launched by PPG for use in corrective lenses. The two products are both based on a light-weight and impact-resistant polyurethane material. Evidently, some synergies may be envisaged for the marketing and the sale of NXT and Trivex.
Intercast owns the exclusive global production rights for NXT lenses for use in sunglasses, sports glasses and goggles. Developed in the second half of the 1990s by Intercast together with Simula Technologies, an American company specialized in personal defense and safety technologies, the NXT polymer was introduced by Intercast experimentally at the end of 2001 after investments of €15 million to develop it and to put it on the market. It became a commercial product in 2003. By 2004 it represented 7-8 percent of Intercast's global revenues, which have not yet been revealed, and 12-15 percent of its turnover by 2005. NXT is already used by major manufacturers of sunglasses including Luxottica, Safilo, De Rigo, Allison and Rudy Project.
The Italian company will keep its name and its structure, with Paolo Baiocchi remaining as president and Gian Giuseppe Giani as vice president, reporting directly to Rick Elias, vice president of PPG in charge of its optical division.
Meanwhile, PPG is introducing a kind of club for the customers who use only its CR-39 monomer in their products instead of a blend of materials, certifying in effect the quality of their lenses. Members will have a section of PPG's internet site dedicated to them and benefit from special events and promotions.
In an unrelated process, PPG is moving its European headquarters from France to Switzerland. The European management of the group's optical business, which includes its monomers and its majority controlled Transitions Optical joint venture with Essilor, will remain unaffected by the change.
In publishing its results for the 1st quarter, PPG said its optical division generated a record sales increase of 20 percent during the period. Total sales grew by 4 percent to $2.6 billion. Net income climbed by 93.7 percent to $184 million for the Pittsburgh-based company. The result came after tax charges of $23 million for business restructuring and $6 related to the revaluation of an asbestos settlement. During the year-ago period, the company had post-tax charges of $95 million for a legal settlement, while the cost of the asbestos issue was $5 million.
PPG Industries introduced the world's first hard resin lens material, CR-39TM monomer, back in 1945. One year ago it bought International Polarizer, the world's largest manufacturer of sunglass polarizer film. In addition to optical coatings and materials, PPG is a leading global supplier of specialty and industrial chemicals, coatings, flat and fabricated glass, and fiberglass. It has 110 manufacturing locations and equity affiliates in more than 20 countries.