Firm eases hard times for parent

Jun 5 2009 by Karen Dent, The Journal

THE nebusiness North East company of the year has helped its parent company boost profits but there are concerns the slump in the car market will hit the larger group’s sales.

Speciality chemicals company Johnson Matthey employs about 300 people at award-winning Tracerco in Billingham and has a further 600 employees at its Process Technologies headquarters, also in Billingham, and Davy Process Technologies in Darlington.

Group annual profits increased 1% to £267.9m and revenue rose 5% to £7.8bn in the year to March 31. Sales were driven by growth of 24% in the first half. The Process Technologies wing was one of the group’s best divisions, with an 11% sales rise. The Teesside operation, which mainly makes catalysts for the oil and gas industry, also has a strong order book.

Johnson Matthey spokesman Ian Godwin said: “It’s good that the business can grow in very challenging economic times. It is focused on two major drivers – environmental concerns and energy security. We are doing a lot of business in China to turn coal into methanol to be used as fuel for transport. It is good for the business and good for the region.”

The North East division has not been hit by the car market crisis, which the group predicts will drag down its overall sales next year.

Johnson Matthey chief executive Neil Carson said: “After a strong performance in the first half of 2008/09, the credit crunch and global downturn had a major impact on the group’s second-half results.

“So far we have seen no real signs of improvement in demand for automotive products in 2009/10 and we expect the group’s sales will be down in our first half in comparison to a very strong performance in the same period last year.” But he said: “Looking beyond 2009/10, prospects for Johnson Matthey remain encouraging, with concerns about the environment and new emissions legislation underpinning growth in both automotive and process catalyst sales.”

New regulations to cut emissions come into force in the US next year and in China in 2011, and are expected to benefit the group in coming years.

Tracerco has recently taken over Process Vision Services, giving it bases in Belgium and France, and is investing £1m in research centres in Asia and Australia.