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BusinessCEO of paint-maker PPG says predicting sales is a challenge because of...

CEO of paint-maker PPG says predicting sales is a challenge because of supply chain woes

Global supply chain disruptions had a much-larger influence on PPG Industries’ third-quarter sales than initially anticipated partly because key prospects can hardly present the corporate with their very own correct projections, CEO Michael McGarry instructed CNBC on Wednesday.

“Normally, for our automotive customers, when they give us a 90-day forecast, they’re about 90% right. When they’re at 60 days out, they’re at like 95%, almost 98%,” McGarry stated in an interview on “Mad Money.” “They haven’t even been able to give us forecasts for a week or two, so they’ve been off a lot. They’re not the only ones. We see the same thing in the appliance segment.”

PPG, which makes paints, coatings and different specialty supplies, entered the third quarter anticipating a roughly $150 million dent to sales as a outcome of supply chain points and buyer manufacturing challenges, McGarry stated final week on the corporate’s earnings name. The precise influence ended up being greater than $350 million, he stated.

The issues aren’t simply with auto and equipment prospects, McGarry instructed “Mad Money” host Jim Cramer. He stated PPG’s suppliers are working into hurdles, too.

“We see that in a number of our other in-use segments, especially think about traffic paint. I mean, we’re out there trying to paint roads but don’t have the paint, and so that’s been a challenge for us,” McGarry stated. “Our suppliers, which are major suppliers, they’re having troubles getting their factories back in the kind of shape it was back in 2019” earlier than the coronavirus pandemic hit.

Despite the present woes, McGarry stated he has a favorable outlook for subsequent yr due, partially, to his perception that commodity prices will begin to stabilize.

“Raw materials are going to start to flatten out. That’s going to be good for us because we’re getting a lot of price,” the chief govt stated. “But more importantly, we have a strong order book so when I look at demand whether it’s cars, whether it’s planes, there’s going to be a lot of latent demand that we’re going to see in 2022 that we haven’t been able to fill in 2021 because of raw materials shortages.”


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