Johnson Matthey stayed away from batteries because the market became a commodity
JOHNSON MATTHEY (JM) has sold its battery materials business and will focus more on hydrogen technologies, with the CEO restructuring the company after a period of poor performance.
In November, the company said it would stop manufacturing battery materials after concluding that costs were too high and the chance of differentiation was too low as the market became a commodity. It has now announced a loss of 217 million pounds (272 million US dollars) after accusations of undervalued sales of its batteries and health business.
JM has sold its battery business to EV Metals for £50 million in cash and a minority stake in the London-listed company. EV Metals purchased the company to add a downstream link in its plans to become a full-fledged supplier of battery materials. Its assets include upstream mining of key battery materials, midstream chemical processing, and now with the purchase of JM’s battery business, it has subsequent production of cathode active materials for electric vehicle and battery cell manufacturers.
JM is developing a new battery cathode material called enhanced lithium oxide (eLNO) which the company said will expand the range of electric vehicles. EV Metals will take control of JM’s pilot plant and laboratories in Bellingham, UK, battery technology centers in the UK and Germany, and a cathode active material production plant under construction in Poland. JM’s battery business employs about 400 people, but EV Metals said it will accommodate the 100 technical staff for the unit needed to develop and carry out its production of cathode active materials.
A big change is required
JM CEO Liam Condon, who took over in March, restructured the company, noting that “it’s clear we haven’t done well in recent years and we’ve done a poor job of creating value.”
He added: “I have been deeply impressed by the depth of talent and experience within Johnson Matthey, but significant change is required to create a simpler, more focused group capable of better execution.”
The company will focus on four interrelated areas: Catalytic technologies for the chemical and energy sectors. AV catalyst technologies; Hydrogen Technologies and Platinum Metals Trading & Recycling Group. The auto catalyst business dominates the income in the company which contributed 70% of sales in the year through March. This market is under severe pressure as countries are phasing out combustion engine vehicles.
JM is seeking to expand into the growing hydrogen market and on May 25 announced it has invested €20 million (US$21 million) in a new partnership with Enapter, which is developing ionic exchange membrane (AEM) electrolysis for green hydrogen production. JM said electrolysis can be used in various applications including storing electricity, producing syngas or methane, or hydrogen for use in industry or in vehicles. The partners will work together to develop components for electrolysis stacks and will look for opportunities to recycle production scraps and components from expired products.
“By helping our auto, chemical and energy customers decarbonise, we will unlock huge growth potential for Johnson Matthey,” Condon said.
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