PPG Industries Inc. announced a memorandum of understanding with Henan Billions Chemicals Co. Ltd. (Billions) licensing certain chloride-based technologies to Billions for use at Billions’ titanium dioxide (TiO2) refinement facilities in China.
|Titanium dioxide pigment is widely used in paint and coatings for its hiding (opacity) property, durability and whiteness.|
In addition PPG signed a long-term purchase agreement for titanium dioxide with Billions, the company said. Commercial terms of the agreements and license proceeds from Billions to PPG were not disclosed.
Based in Jiaozuo City, Henan Province, Billions produces and sells TiO2, zirconium and aluminum sulfate. It had 2011 sales of approximately $300 million, PPG said.
PPG intends to use the chloride-based TiO2 manufactured by Billions for various end-use applications, including paints and other coatings. The TiO2 also would be available for sale to third parties, the company said.
| Charles F. Kahle II|
“This 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.
PPG previously manufactured titanium dioxide using the chloride process at its chemicals facility in Natrium, W.Va., and sold titanium dioxide pigment for coatings and other end-use applications.
Titanium dioxide is a raw material widely used in the paint and coatings industry as a pigment to provide hiding, durability and whiteness characteristics.
The Global TiO2 Sweepstakes
The licensing agreement with Billions comes on the heels of the company’s recent deal with Montreal-based Argex to develop TiO2 pigments for use in paints and coatings. PPG said the Argex agreement was a response to the “volatile” supply and price situation affecting the TiO2 market; see D+D coverage: PPG and Canada’s Argex Announce Pigment Development Agreement.
TiO2 manufacturers have enacted sharp increases in TiO2 prices over the past two years as global demand has risen and economic activity has accelerated. Industry sources say prices rose more than 10% in 2010 and another 30% to 40% in 2011.
In late 2011, PPG announced a “strategic initiative” to address the global supply issues related to TiO2 pigments, a key raw-material in the supply chain and a major contributor to cost pressures that have cut into profits of coatings manufacturers.
PPG is not the only major paint and coatings maker pursuing strategies to address the TiO2 supply situation. In mid-2011, AkzoNobel announced a partnership with Guangxi CAVA Titanium Industry Co. Ltd. of China to build a new TiO2 plant in Quinhou, China. The 100,000-ton-per-year plant is expected to begin operation in early 2014.
AkzoNobel, the world’s largest paint and coatings company, said the move will help to secure its “growing titanium dioxide raw-material needs for the Asian market.” CAVA Titanium Industry is a new arrival in the TiO2 marketplace.