PPG Agilon Performance Silica for Goodyear Tires - Analyst Blog
PPG Industries Inc. PPG announced that it has entered into a contract with Goodyear Tire & Rubber Co. GT whereby the latter will utilise PPG’s Agilon performance silica to increase the fuel efficiency of its tires.
Goodyear plans to add Agilon performance silica into future high-value-added tire launches in other regions in 2015. The company will introduce Agilon in EFFICIENTGRIP tires, a line of high-performance sport-utility-vehicle (SUV) tires which will be launched in Latin America this month.
PPG Industries’ shares rose around 0.9% in the trading session following the announcement on Tuesday, before closing the day roughly 1.5% lower at $221.58.
Agilon performance silica is a chemically-modified precipitated silica, and a technology with greater value that can improve the performance of products in which it is used. Agilon performance silica can improve vehicle fuel efficiency, tire traction and treadwear by about 5% to 10% compared to conventional silica-silane.
Additionally, because of certain processes undergone at PPG, Agilon performance silica helps in reducing complexity while increasing manufacturing efficiency, saving energy and virtually eliminating rubber-mixing-related volatile organic compounds (VOCs).
PPG has also increased capacity at its Delfzijl, Netherlands, production facility, in order to meet growing global demand for Agilon performance silica.
PPG Industries is focused on developing new products and effectively deploying cash toward further earnings-accretive opportunities. The company has an active acquisition pipeline and expects share buybacks to remain a key part of its cash allocation.
PPG Industries currently carries a Zacks Rank #3 (Hold).
Better-ranked companies in the chemical industry include LyondellBasell Industries N.V. LYB and Trecora Resources TREC. Both of these carry a Zacks Rank #1 (Strong Buy).
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