Still working to secure its global supply of titanium dioxide, PPG Industries has agreed to license some of its chloride-based technologies to Henan Billions Chemicals Co. Ltd. and buy back the finished product from the Chinese company.
The world’s No. 2 paint and coatings company announced Tuesday (June 26) that it had signed a Memorandum of Understanding with Billions to license the technology for use at that company’s titanium dioxide (TiO2) refinement facilities in China.
Henan Billions Chemicals Co. Ltd.
|Henan Billions Chemicals is China’s top exporter of titanium dioxide.|
PPG has also signed a long-term purchase agreement for titanium dioxide with Billions and says pigment produced under the partnership will be available for sale to third parties.
Terms of the deals were not disclosed.
Paint and coating producers are the largest consumers of titanium dioxide, which is valued for its hiding, durability and whiteness characteristics. PPG previously manufactured titanium dioxide using the chloride process at its chemicals facility in Natrium, WV. The company also sold the pigment.
Billions is China’s largest exporter of titanium dioxide and produces 120,000 metric tons of the pigment annually. Located in Jiaozuo City, Henan Province, Billions had 2011 sales of about $300 million.
PPG has had operations in China since the 1980s, and the Asia/Pacific region is critical to the company’s growth. Sales in Asia/Pacific exceeded $2 billion in 2010. Last year, PPG created PPG Management (Shanghai) Co. Ltd. to serve as its country headquarters in China.
Like all coating manufacturers, PPG has been scrambling to develop a stable, affordable pipeline for titanium dioxide as supplies have tightened and prices have soared in recent years.
Competition for the $17 billion global market has led to shortages, constant price increases for and by coating companies, and even industrial espionage.
|In April, PPG announced a licensing and purchase agreement for titanium dioxide production with Argex Mining of Montreal. Cheap and abundant just a few years ago, the pigment is now in historically short supply.|
In December, PPG announced that it would scour the globe for new sources of titanium dioxide.
That was followed by an April announcement of a “technical collaboration” between PPG and Argex Mining Inc., of Montreal, to develop a new TiO2 product for paints and coatings. Under that deal, Argex would use PPG’s technology to produce the product, the parties said.
The new agreement with Billions “provides further evidence of PPG’s commitment to utilize our existing expertise to expand and secure additional global supply of titanium dioxide,” said Charles F. Kahle II, PPG chief technology officer and vice president, coatings research and development.
Other Expansion Efforts
DuPont Chemical, the No. 1 global producer of titanium dioxide, has also been working for the last year to expand global production by hundreds of millions of pounds annually.
And in June 2011, AkzoNobel, the world’s largest paint and coatings company, announced a partnership with Guangxi CAVA Titanium Industry Co. Ltd. to build a new TiO2 plant in Qinzhou, China.