ALEX BRUMMER: As UK firm Johnson Matthey’s plan to make EV batteries falls flat… Can Britain keep up in the race to build green tech?
Robert MacLeod, chief executive of Johnson Matthey (JM), has been striving for some time to convince shareholders that when its big earning catalytic converter tips over a precipice, investment in a key chemical for batteries would take up the slack.
As Cop 26 winds down in Glasgow, Johnson Matthey admits it is dumping its investment in complex compounds for EV fuel cells, as well as MacLeod.
The spin is that the two events are unconnected. But everyone who has been indoctrinated with JM’s greenwash will have a contrary view.
Out of juice: As Cop-26 winds down in Glasgow, Johnson Matthey admits it is dumping its investment in complex compounds for EV fuel cells as well as MacLeod
In an update just six months ago, MacLeod was telling the world that an agreement with Norwegian counterpart Nornickel was an ‘important milestone on our journey to developing a sustainable battery ecosystem’. More accurately, he might have described it as a journey to nowhere.
The broader significance of JM’s decision to pull the plug on Elno, created from nickel, cobalt and lithium to be deployed in the cathodes for advanced batteries, is that it is extraordinarily hard for even a market leader in current car technology to get traction in electric vehicles.
The Government can talk until it is green in the gills about the UK’s carbon-free future. But when it comes to turning great new technologies into global opportunities, the UK is not even at the races.
The science may be brilliant, but if you are competing with behemoths such as China’s £190billion Contemporary Amperex Technology, which is focusing on European markets, UK companies will struggle to compete.
The big question for Johnson Matthey is what comes next. MacLeod seems to think the fresh frontier is hydrogen.
One wonders if JM has noticed that a far larger British outfit Ineos has moved into this space, as have the UK oil majors.
Car maker Toyota has been running a fleet of experimental hydrogen cars in Tokyo for years. Why JM should think it has capacity to compete in this space defies analysis.
What JM does have is a reputation for remaking itself over a 204-year history in which it engaged in everything from banking (a disaster) to gold and other metal trading.
It still has core skills in nickel and other key rare metals. MacLeod’s replacement Liam Condon, transferred from rival Bayer, draws the short straw of weaning the group onto greener technologies.
It would be a tragedy if a valuable climate change experiment were to render one of Britain’s oldest industrial groups vulnerable to an overseas or private equity bid. But after a 19 per cent thumping for the share price anything goes.
Amanda Blanc moved with noteworthy speed to reshape Aviva after taking the helm at Britain’s largest insurer 15 months ago.
It has not been an easy ride, with Swedish hedge fund Cevian snapping at her heels demanding ever faster action on disposals and cost cutting. Proceeds from the latest piece of the sales programme, the £1.7billion Polish transfer, have still to arrive.
Once it has all happened, there should be between £4billion to £5billion of excess funds of which some £750m has already been committed in share buybacks.
So what to do with the cash? Big battalion investors prefer buybacks for tax reasons. It is easily forgotten that Aviva has an unusually large base of 500,000 private investors, remnants of the merger with demutualised Norwich Union in 2000. Buybacks are fine but can take years to accrue value.
Smaller investors generally prefer cash in hand through a special dividend, and Aviva is very conscious of that.
Followers of the LV saga ought to be more than aware that if the 1.2m policyholders vanish into the jaws of Bain Capital, it will be private equity barons and their investors who will pocket most of the uplift in value rather than a broader group of stakeholders.
The savings stampede during the pandemic saw net flows into Aviva’s investment products soar by 21 per cent.
Blanc is earmarking some of the overflowing resources to push deeper into financial advice. Transforming acquisitions is not on the cards. But never say never.
Aim-quoted newcomer Saietta is turning the tables on Beijing. The maker of electric engines for scooters and the like has snapped up China’s e-Traction from the fast-dismembering Evergrande empire for a modest £1.7million.
Nice to see two-way traffic speeding down the cycle lanes.