Four fundamental global drivers provide opportunities for growth in many of our businesses
1. Environmental factors, climate change and regulation
One example of a major driver of growth in our Emission Control Technologies Division is the spread of heavy duty diesel (HDD) emissions regulations around the world.
The HDD market was worth ~US$800 million in sales excluding the value of precious metals at the end of 2012. It is expected to grow strongly by the end of 2015 as legislation tightens and covers more types of equipment in developed markets and as legislation spreads to the developing markets of China, India and Brazil.
Heavy Duty Diesel Vehicle Sales Outlook (Regulated Engines) – 2012-2020 (calendar years)
Source: JD Power and Johnson Matthey estimates.
2. Natural resource constraints
There is increasing demand for alternatives to oil and natural gas for making transportation fuel, key petrochemical intermediates and even pipeline gas using coal and biomass derived from waste materials. These all use catalysts and technologies supplied by the Process Technologies Division.
In China energy security is a priority for the government. China has large coal reserves making coal an appealing and available feedstock. Through its Process Technologies Division Johnson Matthey is well positioned to benefit from the growth of coal to chemicals processes in China.
Expected growth in coal to chemicals
Source: China Petroleum and Chemical Association and Johnson Matthey estimates. SNG = synthetic natural gas. E = estimated. CAGR = compound annual growth rate.
3. Population growth, urbanisation, increasing wealth
Population growth and increasing urbanisation and wealth, particularly in emerging markets, will drive an increase in the number of cars on our roads. This links to growth in Johnson Matthey's Emission Control Technologies Division.
Johnson Matthey is a leader in emission control catalysts and other high technology components for cars, producing about 30% of the light duty catalysts made each year.
Light vehicle growth
Source: LMC Automotive (September 2013). CAGR = compound annual growth rate.
4. Health and nutrition, ageing population
An ageing population with increasing health needs is driving growth in the use of generic pharmaceuticals and pain management drugs.
Johnson Matthey is a world leading supplier of controlled substance active pharmaceutical ingredients (APIs), mainly to generic pharmaceutical companies.