Pittsburgh-based PPG recently announced it expects third quarter sales volumes to be between $225 million to $275 million lower than forecasted at the beginning of the quarter.
The company said sales volumes are being impacted by a variety of factors including raw material inflation being approximately $60 million to $70 million higher than previously believed, continuing logistics and transportation challenges in many regions, reductions in customer production caused by parts shortages, and disruptions in commodity supplies.
Since the company’s earnings announcement on July 19, disruptions in the coatings commodity supply continued to deteriorate because of lower material allocations from certain suppliers and additional force majeure declarations.
The impact of Hurricane Ida could cause additional supply chain effects, the company said.
PPG withdrew previous financial guidance for the third quarter and for the full year citing uncertainty created by the disruptions.
To help offset elevated raw material costs, PPG is implementing price increases. During the quarter, price increases are estimated to be 5 percent.
Globally, aggregate economic demand is strong and inventories in many of the company’s end-use channels are at very low levels. PPG forecasts strong sales growth into 2022 once supply conditions normalize.
In 2020, PPG had net sales totaling $13.8 billion.