with Dennis Snijders, Country Manager, PPG Protective & Marine Coatings
The history of PPG Protective & Marine Coatings (PPG) dates back to 1883; how would you sum up the history of PPG’s expansion in Russia?
PPG does have a long and prestigious history and, in fact, the roots of the company go back even further to 1772 when the origins of SIGMA COATINGS® were first established in the Netherlands. This heritage is very important and has led to PPG occupying the number two position in the international paint market. This success has been enhanced through the acquisition of two major brands: SIGMA COATINGS in 2008 and AMERCOAT® in 2006.
In Russia specifically, PPG has relied heavily on its strong partners: Farbatech in Saint Petersburg and Technokraska in Moscow, PPG’s oldest distributor. PPG has also recently established a distributor in the Far East in Khabarovsk: Tech Service Khabarovsk. As a result, the distribution network is now in place to cover all of Russia from the east to the west. PPG is also looking at the expansion of distribution to Sakhalin. Although PPG is currently relying mainly on distribution, the company is also establishing its own sales organization so that we can continue to support our distributors and at the same time develop sales for the large international projects in the oil and gas industry.
PPG offers ultra-low temperature epoxies for treating equipment and infrastructure. What is the value of these innovations to the Russian market?
PPG’s two main brands include the most high-tech, innovative and cost-effective solutions for surface coatings in the world. The particular relevance of some of these products to the Russian market is that they can be applied in extremely cold weather conditions. This is critical when we consider that 60% of Russian territory is frozen.
PPG’s ultra-low temperature curing technology is unique in the world and is extremely important for Russian industry, which seeks to work throughout the year. Clearly, Russian companies cannot stop protecting their assets just because of the onset of winter. Through its advanced products, PPG is extending the window of time where contractors and applicators can apply protective coatings. PPG’s technology allows companies to paint in winter at temperatures down to -18 degrees Celsius. At the same time, these coatings can be applied at +40 degrees Celsius, which prevents the contractor from having to buy different paint for various times of the year.
The cost saving to companies comes in two principal ways. Most of the coatings supplied by PPG are high-volume solids, meaning that paint can be applied through a one-, two- or maximum three-coat system, whereas other companies offer a three-, four- or five-coat system to deliver the same type of protection. This means that there is a saving in labour costs and production time when using PPG products because fewer coats are applied.
The cost saving also comes from the longevity of protection. These are high-tech coatings that, depending on the conditions, have a service life of between 15 and 25 years before first major maintenance should take place. Therefore, cost saving comes through extending maintenance-free timeframes.
Traditionally, Russians have not had a focus on longevity or innovative products. To what extent is the market changing for you?
In some industry sectors I would agree. However, PPG is focusing on the oil and gas market which has a different mentality to the infrastructure market or the civil construction market. Oil and gas is more focused on the long term. Russia’s oil and gas companies are not looking for a quick win and instead the focus is on high-quality products. Oil and gas is therefore an ideal segment for PPG’s products.
That said, PPG has also enjoyed great success in airport construction. Vnukovo airport, for instance, is entirely coated with PPG coatings including the PSX 700 used as a build- and topcoat, based on unique polysiloxane technology. This build coat and finish coat in one offers protection for over 25 years’ service life. PPG’s products are also adaptable to different requirements. For example, AMERCOAT 391 PC is a solvent-free epoxy pipe coating used for external as well as for the internal protection of pipes. AMERCOAT 391 PC is also used for the protection of water pipelines as well as crude oil pipelines throughout Russia.
This product is tested in the UK to Water Regulatory Advisory Scheme standards. PPG not only has European approvals, but also Russian authority approvals. In fact, the requirements of the Russian certification bodies are, in many cases, above and beyond the standards of those in Europe. Because of our adherence to these standards, Russians now recognise the quality of our products.
Aside from having innovative products, how do you promote business in Russia?
There are several key criteria to growth in Russia. First of all, a company needs to satisfy all levels of the value chain: project owners, fabricators, contractors and the Russian engineering institutes. If a company is able to provide the right products and the technical service and expertise required at each of these levels then it will be successful in the Russian market. The project owner looks at durability and long-term protection, whereas the applicator companies look at ease of application, curing properties and overcoating intervals.
The other key to success is to provide the right level of technical assistance in the field. PPG has a global team of technical specialists and or inspectors who are assigned to projects as standard, and for varying periods, depending on the demands of the clients. Their role is to supervise the approved process of surface preparation and application. PPG provides this assistance within 2-3 days of the customer’s request and this type of technical services is another key element of our success in this region.
There are international competitors within this market. How well is the company positioned to compete with these rivals?
PPG’s main advantage compared to the international providers of protective and marine coatings is that we can offer a total product package. PPG does not just provide anti-corrosion coatings or protective coatings. PPG has a full range of passive fire protection coatings that form, in the case of a fire, an isolation barrier between the steel and the heat of the fire, thereby preventing the steel from collapsing. PPG is one of the few companies with a total passive fire protection range, both for hydrocarbon as well as for cellulosic fires, which is also fully certified at the main fire institute in Russia. The company also has a unique range of internal solvent-free tank linings, providing optimal protection against a wide range of chemicals, crude oil, refined petroleum products and even biofuels, which are often stored at high temperatures. A good example is our NOVAGUARD™ 840, which is an innovative tank coating that combines the broad chemical resistance of phenolic and novolac DELTE epoxy systems with the environmental advantages of a solvent-free product.
By providing a full package, the client’s work is simplified as they do not need to move from one supplier to the next.
How is the company positioned to take advantage of Russia’s offshore expansion?
PPG has built up a long and successful track record in the offshore industry over the years, where our products have protected platforms from the hot climate conditions of the Gulf of Mexico to the extreme cold conditions of the Norwegian Sea and even the Caspian Sea. Our complete protective coatings range is Norsok approved in terms of their anti-corrosion properties. PPG’s hydrocarbon passive fire protection product, PITT-CHAR® XP is specifically suitable for low-temperature climactic conditions. It is a flexible coating, whilst all other competitors offer solutions that are brittle and prone to cracking. On an offshore platform there is a lot of movement in the structure and once a coating cracks it will allow moisture ingress and cause corrosion. PITT-CHAR XP, however, flexes with the structure.
Moving away from PPG, having worked in Russia for around 6 years, what would be your advice to other executives about doing business in Russia?
Looking from a distance, people often make the mistake of resorting to stereotypical Western views of the Russian people. Personally, I have found Russians very warm and approachable compared to the conventional image often presented.
Trust is extremely important in Russia. As a company, and as a person, you need to deliver what you promise. Once you cross the boundary in betraying trust you will lose your business and it will be almost impossible to regain it. For that reason, a lot of commitment needs to go into fulfilling promises and commitments.
One thing worth mentioning is that the education system in Russia is at an extremely high level. This offers a solid foundation of technically educated people to help grow a business. It is a real pleasure to work with these talented individuals and this enables the rapid expansion of technical and sales team. In addition, PPG is renowned for its extensive technical expertise, and this reputation for excellence is acknowledged in educational, training and industry-related establishments in Russia.
If we were to come back in 25 years, what would we see as PPG’s contribution to the Russian industry?
The company wishes to protect the most important infrastructure in Russia with quality products. There used to be a slogan for SIGMA COATINGS: ‘Protecting the future’. There is no doubt that the future of Russia lies in oil and gas. Russia’s oil and gas companies have huge infrastructure networks and PPG is providing solutions to them for the long term. Twenty-five years from now I would be proud to see the coatings applied today still protecting these assets, and also that PPG is recognized as the single most reliable partner for anti-corrosion solutions throughout Russia.