Chemical maker PPG Industries (NYSE: PPG) came out with its fourth-quarter results recently, and neither the 5.4% increase in net profits nor the 4% rise in revenues impressed me much. But I still believe the company can turn out to be a superb long-term bet, as it is up to something not many know. Let me first tell you why I didn't like the fourth-quarter numbers.

How far can prices take PPG?
PPG managed to beat the Street's earnings per share estimate of $1.28 by $0.11, but did you know that a one-time tax gain contributed almost $0.19 to the EPS?

As far as revenues are concerned, I like equations where product volumes grow as much or more than prices. Sadly, this isn't the case with PPG. Declining volumes have been bothering the company for quite some time. Its fourth-quarter top-line growth came almost entirely on the back of higher prices, with volumes in most segments (including its largest, performance coatings) slipping. And it's not that higher prices are adding a lot to the top line, because a large part goes toward offsetting rising input costs, particularly those of key raw material titanium dioxide (TiO2). In fact, PPG has plans to further raise prices in 2012 to make up for the hit taken previously. But with major TiO2 producers like DuPont (NYSE: DD) not willing to jump off the price-hike wagon yet, costs are only going to go north. This leaves me wondering how long PPG can pursue this strategy.

Now, can PPG pull a rabbit out of its hat?

I bet you didn't know this
PPG caught my attention last month when it revealed its "innovative supply solutions" initiative for TiO2 through possible collaborations or joint ventures with pigment producers. The curious Fool that I am, I did my own homework, and what I stumbled upon is very interesting.

PPG operated its own TiO2 manufacturing unit some decades back, and according to a Chemical & Engineering News archive, it was shut down in 1971 because of unfavorable market conditions. Apparently, PPG is now thinking of using this expertise again to add to TiO2's global supply. This can turn out to be a big bonus for PPG, considering that players like DuPont are viewing the TiO2 supply-demand gap as a good opportunity to expand capacities.

The possible foray into TiO2 production makes PPG a delectable stock in the long run. Though we might have to wait a bit to see how the company goes about the entire thing, there are other things to look forward to as well.

The company has been expanding aggressively. From launching products with features like better finish and higher durability to lapping up several coatings companies, PPG did it all last year. It even bagged good deals from biggies such as Toyota Motor and Caterpillar. Going forward, the thrust on growth is set to continue with a greater focus on emerging markets

The Foolish bottom line
PPG remains a strong and growing company. Softening of volumes dents my optimism a bit, but the way the company is expanding is great. Moreover, the company returned almost $1.2 billion last year to shareholders in the form of dividends and buybacks (PPG currently has a good dividend yield of 2.6%). A superb all-around use of cash, I must say! Above all, the TiO2 initiative looks quite promising.

Stay updated on PPG as it embarks on its new ventures by adding it to My Watchlist. It's free, and it helps you constantly stay updated on news and analysis on your favorite companies. Click here to add PPG.