Johnson Matthey battery exit blow to UK’s green hopes
Big hopes rest on battery power
Investors dumped shares in British chemicals group Johnson Matthey after it surprised the market by announcing its withdrawal from battery technology.
The FTSE 100 company’s shares plunged 19.1%, wiping almost £1 billion from its value, after it also announced a profit warning and the departure of its chief executive.
Its exit from the battery materials business comes just as battery power is being touted as a major tool against global warming and is seen as a setback in Britain’s hopes of becoming a leader in the business.
The company said it felt it was too far behind rivals in China and Korea who are already making batteries on a large scale. Supply chain problems were a factor in its expected profits shortfall.
The decision puts a question mark over 400 high-skilled jobs, mostly in County Durham and Oxfordshire.
Its switch into batteries in 2012 was considered a prudent move as the company makes most of its money from producing catalytic converters to clean exhaust emissions from petrol and diesel cars.
The company was on track to start building a new factory in Finland to build as many as 300,000 automotive batteries a year. It may now write down £340m in assets in that business.
Johnson Matthey’s decision could concern the broader UK industry. A number of gigafactories are planned, including one by Thurso-based battery manufacturer ATME Power which is considering a site in Dundee.
The market, however, is dominated by Asian companies with just companies controlling 58% of global battery supply, according to Benchmark Minerals, a data company.
Johnson Matthey is to switch its focus to hydrogen and decarbonising chemical production, though the retirement of CEO Robert MacLeod, is likely to see a strategic review of the whole business. He will be replaced in March by Liam Condon, an executive at the German chemicals company Bayer.