Johnson Matthey neutralized from Russia
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The world’s largest manufacturer of automotive catalysts, Johnson Matthey, has exited its business in Russia. The company’s plant in Krasnoyarsk, which is now idle, became the property of Russian top managers in June. Analysts point out that in Russia there is a base of raw materials for production, but there are questions about intellectual property rights for technologies. In addition, the production of cars in the country has been greatly reduced.
Since the end of June, the Russian plant Johnson Matthey “Johnson Matti Krasnoyarsk” has been owned by Catalysts and Technologies LLC, follows from the data of the Unified State Register of Legal Entities. Since July, the company has been renamed to Ecotechsis LLC. The Catalysts and Technologies company was established at the end of November 2022, with 33.3% each from the CEO of Johnson Matthey Krasnoyarsk Leonid Rakitin, the commercial director of Johnson Matthey in the Russian Federation Andrey Kossov and the financial controller Vadim Nevenchenko, follows from SPARK data. Thus, the asset passed to Russian top managers, which has become a common practice for Western companies when they leave the Russian Federation.
According to Kommersant, production at the plant is planned to be resumed. In addition to production, the company also provided consulting services, as well as conducts research and testing. Kommersant sent questions to one of the founders of Catalysts and Technologies.
Johnson Matthey is the world leader in the automotive catalyst market. The automobile catalysts plant in Krasnoyarsk was opened in 2008. Catalytic converters are designed to clean exhaust gases by oxidizing harmful compounds. At that time, Johnson Matthey stated that “according to forecasts, 4 million cars a year will be sold in Russia by 2010 (this has not happened so far.— “b”), and consequently even more stringent emissions control requirements will be introduced.” Although the requirements for the environmental class of engines and fuels in Russia were indeed tightened, in 2022 the requirements were greatly weakened amid difficulties, including with electronic engine blocks. Now, instead of the Euro-5 class and above, it is possible to produce cars of the Euro-2 class and above in the Russian Federation at least until February 1, 2024.
Johnson Matthey’s latest up-to-date report for the fiscal year ended March 31 states that the company closed its Moscow office, ceased all new commercial activity in the Russian Federation, and suspended production at its Krasnoyarsk plant. The report also states that £15m as at 31 March relates to restricted cash held in Russia. The company did not write off Russian assets.
According to the reports of Johnson Matthey Krasnoyarsk, in 2022 the plant reduced its revenue by 82.9%, to 1.4 billion rubles, and also showed 374.2 million rubles. net loss against profit of 926.6 million rubles. a year earlier. At the same time, it was pointed out that consumer demand has significantly decreased in the Russian Federation.
Dmitry Babansky from SBS Consulting calls the plant in Krasnoyarsk an interesting asset: he points out that the plant’s capacity is designed for 1 million units of catalytic converters per year, raw material suppliers (Krastsvetmet) are located near the plant. Krastsvetmet’s website reported in 2021 that Johnson Matthey was purchasing precious metal compounds from Krastsvetmet’s refining division. At the same time, the issue of intellectual property remains, as well as a problem with demand against the backdrop of a fall in output in the auto industry, the analyst adds. Before the crisis, the local production of Johnson Matthey accounted for about 20% of the catalytic converter market in the Russian Federation. Another third of the market was occupied by Ecoalliance (part of the Rosatom group), imports accounted for 40-45%, he concludes.
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