Autocatalysts
The Autocatalyst business had an excellent year. The major vehicle markets of Europe and North America were buoyant with sales in Europe up around 5%, while in NAFTA vehicle sales were up 9% setting an all-time record of 19 million units. Sales in Japan were flat on the prior year and those of the developing economies of ASEAN, while recovering, were still below the pre-crisis levels of 1996. Car sales in South America were very poor. Overall, good growth in vehicle sales, combined with the impact of tighter legislation around the world, pushed global demand for autocatalysts up by 10%. Johnson Matthey’s unit sales increased by 11%.

Novel advanced polymer fibre catalyst supports developed by Oy Smoptech Ab

The continuing spread of emissions regulations worldwide and the tightening of standards in Europe and North America are the main drivers behind a substantial capital investment program.This includes a new, higher capacity plant in India and a new facility in China which is being established near Shanghai. While these countries currently represent only a small fraction of world vehicle demand, together India and China account for 40% of the world’s population and both are very serious about tackling environmental pollution. Continued strong growth in demand for increasingly sophisticated autocatalysts in the developed economies of Europe and North America will be met from a new factory currently under construction in Royston, UK and further expansion of our Devon facility in the USA. Both factories will use new, state of the art processing technology which will enable the production of catalysts to higher specifications.

Chemicals
The platinum group metal (pgm) chemicals and refining businesses in North America and Europe also had an excellent year with sales ahead of the good performance achieved in the prior year. There was continued strong demand for refining services driven by the increasing prices of the platinum group metals.

Manufacturing autocatalysts at Johnson Matthey’s production facility in Malaysia

The Chemicals business’ new manufacturing facilities for homogeneous catalysts and particulate, fixed bed catalysts in both the US and UK are exceeding expectations and are already approaching full capacity. The high throughput screening methods that Johnson Matthey has pioneered for catalysis over the last few years are providing a unique catalyst optimisation service for our customers. A plant to manufacture specialised heterogeneous catalysts for the bulk chemicals industry is close to completion and will provide additional sales, commencing next year. We have agreed a phased acquisition of Oy Smoptech Ab, a Finnish start-up company that has developed novel advanced polymer fibre catalyst supports.These will be combined with our pgm technology to launch a new generation of anchored homogeneous catalysts.

Demand for pgm chemicals as precursors for autocatalysts and petroleum refining catalysts is strong and other products are also contributing to growth in the chemicals business. Alfa Aesar, the research chemicals business continues to perform well in North America and is developing its Internet based sales activities.

Chemists at Johnson Matthey Pharmaceutical Materials develop innovative chemical processes for the manufacture of active pharmaceutical ingredients

Pharmaceutical Materials
Pharmaceutical Materials manufactures and markets a range of high value active pharmaceutical ingredients to both generic and research based pharmaceutical companies.The business has a significant niche presence in controlled drugs. 1999/2000 saw excellent growth in key established products, especially carboplatin, fentanyl and hydromorphone, while methylphenidate came under pressure due to increased competition for this generic product. Significant progress was made on several important new products as well as in two products in the later stages of clinical trials.

An important programme of investment in the growth of the business has continued during the year with the commencement of a major expansion of its facility in West Deptford, New Jersey. Construction of these expanded facilities, which will include both laboratories and state of the art manufacturing suites, is scheduled for completion in 2001.

Testing the latest generation of fuel processors for residential fuel cells at Johnson Matthey’s new fuel processor laboratory in Devon, USA

Fuel Cells
1999 was a year of exciting developments in fuel cells.While sales revenues are small, important collaborative relationships are being established with leading manufacturers and system developers in today’s fuel cell industry, which will be crucial to the success of the business in the future. Johnson Matthey is already well positioned to be a major supplier of fuel cell catalysts and catalysed components to amongst others Ballard, XCELLSIS, General Motors and Plug Power. The company’s fuel cell technology is well regarded throughout this rapidly growing industry. Over the next 12 months the business will focus on strengthening its ties with key suppliers and building robust manufacturing processes in preparation for expected major growth in demand for its products.A major expansion of Johnson Matthey’s fuel cell research and development facilities is underway at Sonning Common, UK and a new fuel processor laboratory and pilot production unit has been established in Devon, USA.