All change as Johnson Matthey hit by assault on batteries
Johnson Matthey, the Cambridge-based sustainable technologies group, is scrapping its battery materials business because it cannot compete with established Asian players in the market – principally from China and South Korea. It has lost its highly valued CEO Robert MacLeod in the process.
JM computed the high cost of maintaining the battery technology capability given its market disadvantage and has decided to bow out. It could now focus on hydrogen-based technology opportunities instead.
Several global science parks, for example – including Cambridge – are assessing hydrogen-powered capability for their environments.
JM’s share price took an absolute battering yesterday when the announcements were made but had started to recover today as stakeholders saw the sense of not throwing good money after bad.
The company has been working to commercialise its range of high nickel cathode materials, principally for the automotive industry.
Following a detailed review and ahead of reaching a number of critical investment milestones, it concluded that the potential returns from the Battery Materials business would not be adequate to justify further investment.
“Whilst demand for battery materials is accelerating, so is competition from alternative technologies and other manufacturers. Consequently this is rapidly turning into a high volume, commoditised market,” a company statement to London Stock Exchange read.
It added: “In recent months, as JM has been exploring strategic partnerships, it has also become clear that our capital intensity is too high compared with other more established large scale, low cost producers.”
The board has decided to sell all or parts of the business with the ultimate intention of exiting.
It said the company was making good progress in its other growth areas, such as in hydrogen technologies, circularity and the decarbonisation of the chemicals value chain.
“These are attractive opportunities which we will now accelerate with greater focus and investment. In addition, in a world that increasingly needs solutions to address the challenges faced by climate change, we will continue to pursue opportunities across other areas that are closely aligned to our core capabilities.”
In a parallel announcement, JM said that Robert MacLeod had advised the board of his intention to retire as chief executive and will step down from the board in February.
Liam Condon takes over. He will join JM as chief executive on March 1; he is currently a member of the board of management of Bayer AG and President of the Crop Science Division, a role he has held for nine years.
Bayer Crop Science is the global leader in agricultural innovation and sustainability with circa €20 billion revenue. He has served in senior roles at the former Schering AG and then Bayer HealthCare.