Johnson Matthey: APIs down but Sigma-Aldrich acq could bring opportunities
Across its fine chemicals division, Johnson Matthey reported total sales of £155m ($243m) for the first half of the 2014/5 financial year. This was down 4% on the same period last year, affected by a 5% drop in API sales to £100m, and an 8% drop in its research chemicals business, although operating profit for the half grew 3% to £42m.
“We had demand for bulk opiates and ADHD APIs,” Chief Executive Robert MacLeod said in a conference call, but there was reduction on the specialty opiates side. “This was partly due to phasing of orders and also a little bit of increased competition in the generic space for a pain relief API.”
However, “the outlook remains good and we expect the second half to be better than the first half,” he assured shareholders.
During the call, the Division Director for the Fine Chemicals business, John Fowler, was asked whether the announcement made during the past quarter that Germany’s Merck KGaA is set to buy chemicals and services firm Sigma-Aldrich for $17bn would have an impact on Johnson Matthey.
“The short answer is no, that deal was probably more to do with biological research chemicals,” he said, “but I'm quietly optimistic that there will be some opportunities from it because I see Merck is kind of distracting Sigma with vertical integration.”
He added the deal could see Johnson Matthey “taking some of the business on the chemical side,” bolstered by the opening of several new warehouses to support future growth in Asia and the US for this business,