Quiet catalyst for change
By Peter Marsh
Published: August 2 2009 22:12 | Last updated: August 2 2009 22:12
Soon after joining his current employer as a fresh-faced engineer in his 20s, Neil Carson deliberated about where he might like to end up. “Being the chief executive seemed to me then both a good job to have and one that I’d be capable of doing,” says Mr Carson matter-of-factly about his thought processes a quarter of a century ago.
The remark points both to an inner confidence and also a sense that he had joined a company that seemed finely tuned to his own interests and attributes.
Five years ago, Mr Carson achieved his ambition. He took over the top job at Johnson Matthey, one of the oldest of the UK’s top 100 companies by market capitalisation, and also one of the least known.
The relative anonymity of Johnson Matthey – which dates from 1817 – is partly because of the company’s main product field. It is one of a handful of businesses in the world that manufactures catalysts. These are a class of substances used to speed up or enhance chemical processes in sectors from food production to energy, but about which most people are almost completely ignorant.
Manufactured in thousands of different types, catalysts add up to a global industry with sales of about $10bn (€7bn, £6bn) a year.
The most important ingredients of catalysts, produced often in tiny quantities, can sell for up to $100,000 a kilogramme, making them 200,000 times more expensive than steel.
The bold future for chemical environmental solutions
Chemical catalysts, says Neil Carson, are often at the heart of efforts to “use resources more efficiently and cut out waste”.
The chief executive of Johnson Matthey – one of the biggest makers in the world of these specialist chemical materials – says that efforts by companies to use new technologies to make both their own operations and those of other businesses less environmentally obtrusive is “bound to become a more central area for discussion over the next few years”.
Looking beyond his own company to the wider points about the uses of technology to reduce pressure on the environment, he says he is sometimes irritated at what he says is an over-simplistic way of encouraging societies to use less energy, burn less carbon and so combat global warming.
“I often have the impression the debate is almost exclusively about switching into alternative forms of energy production such as wind power or nuclear power stations,” says Mr Carson. “In reality, the discussion should go a lot wider.
“There are a million things that companies can do to move in this direction. Some might involve a greater use of catalysts but others can involve a range of other activities such as using smart electricity meters to cut energy consumption or the use of new materials in the building industry to insulate them better.”
The company’s biggest single division is making automotive catalysts – a field in which it is the world leader – fitted to vehicle exhausts to clean up emissions.
Johnson Matthey does little promotion and is disdainful of advertising or publicity campaigns. In spite of the company’s reputation for keeping out of the limelight Mr Carson is an engaging talker when he agrees to meet for an interview at the company’s unobtrusive London office in the Hatton Garden jewellery district.
What led him to join the company in the first place was, he says, Johnson Matthey’s focus on “turning the results of research and development into something useful”.
The company has about 450 research and development staff out of a total workforce of just over 8,000. It spends approximately 4 per cent of its turnover on this activity, a fairly high proportion for most manufacturers.
Growing up in south London, Mr Carson went to a private secondary school.
“I always enjoyed technical subjects and had an interest in how things were made. But I’m afraid I failed to devote enough time to studying,” he says. “My A-levels were a bit of a disaster.”
The teenage Mr Carson’s two lowly grades in physics and chemistry just about qualified him for enrolment on an engineering course at what was then Lanchester Polytechnic. What is now Coventry University was – and still is – considered a long way from the top rung of UK academic establishments.
But in spite of the polytechnic’s less than stellar reputation, what convinced Mr Carson it would be a good place for him to study was “the large amount of engineering kit” it had in its workshops.
From this base, moving to such a technologically rich company as Johnson Matthey – which Mr Carson joined in 1980 soon after completing his degree course – seemed an obvious step.
Mr Carson did 12 jobs at Johnson Matthey, many of them involving sales and marketing and including a three-year spell in the US in a senior job in catalyst products, before becoming chief executive.
The company had begun life in London as an assayer (testing house) for gold and other precious metals. In 1851, it was appointed the official refiner to the Bank of England, responsible for validating gold bars.
Johnson Matthey moved into platinum in a big way in the 1920s. Today, the company is the world’s biggest distributor and recycler of the metal.
Platinum and similar metals such as palladium and rhodium happen to be a key ingredient in many types of catalyst.
A few years ago, fittingly for such an understated business, Johnson Matthey shifted its headquarters from London to Royston, a quiet country town 80km north of the capital. This is a short drive from Mr Carson’s home in Cambridge, and where he spends most of his time when in the UK.
By comparison with most European businesses, the company is highly global. Of its total sales last year of £1.8bn, about 30 per cent came from Asia and South America, and a quarter from the US and Canada.
Only about 10 per cent of last year’s sales came from the UK, which is home to about 40 per cent of its workforce, most of them in manufacturing.
Of total revenues, about two-thirds come from catalysts. The rest is linked to sales and refining of platinum and other metals, plus other more specialist divisions such as production of elements for fuel cells (novel kinds of energy systems) and platinum-based drugs.
The company has been less hard hit by the global recession than many other industrial businesses. Profits for 2008-09 were down just 5 per cent compared with the previous year.
Mr Johnson is at pains to point out that Johnson Matthey is far from immune from lower demand from many of its customers, especially in automotive.
But he thinks there are enough strong new ideas coming through the company’s R&D pipeline, to improve technical processes in many sectors and have an impact in making many industries more environmentally benign, that prospects for the next few years are “encouraging” .
Mr Carson is keen to play down the idea that the complexity of Johnson Matthey’s product field makes the company hard to run. “To me, it [the company] does not seem complicated at all,” he says. “There’s a strong thread of chemistry running through what we do. It’s our job to link up our knowledge with the requirements of our customers in whatever industry they happen to be.”
He says that over the past 20 years it has had a “strongly consensual” management approach.
“I’ve tried to follow this way of doing things. Outside formal meetings, I regularly have informal discussions with groups of managers [out of the top 15 or so people running the company]. We go around the table discussing problems or challenges that seem likely to be important. We try to sort most of them out before anything becomes too much of an issue.”
Copyright The Financial Times Limited 2009
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