The division has been renamed in order to more accurately reflect its product range. Colours & Coatings manufactures inorganic and organic colours and surface coatings for use in a wide range of industries including automotive, glass, tableware, tile, plastics and inks. Colours & Coatings Division is a global business and is organised around the four key markets it serves: Glass, Pigments and Dispersions, Structural Ceramics and Tableware. The division saw strong profit growth in all sectors except Tableware.

Glass
The Glass business, based in Maastricht in the Netherlands, manufactures black obscuration and silver conductive enamels for automotive glass. It also makes enamels and decorative precious metal products for other glass applications such as bottles and architectural glass. Glass had a very successful year achieving good growth in both sales and profits, building on the introduction of new products in the automotive and decorative precious metals markets. Its operations in the United States and in the Far East were reorganised during the year to focus on the major growth potential of these markets with immediate benefits being realised.

Pigments and Dispersions
The Pigments and Dispersions business produces a wide range of inorganic and organic pigments and pigment dispersions used in printing inks, paints, automotive finishes, woodstains and plastics. During the year the business achieved good profit growth benefiting from its strong market positions in pigments and dispersions for paints and in transparent iron oxide for the woodstain and automotive finishes markets. Despite the impact of the strong pound much of this growth came from outside the UK. Cost reduction initiatives undertaken during the year have placed the business in a good position to benefit from improvements in the economic climate.

Structural Ceramics
The Structural Ceramics business manufactures colours, glazes and frits for the tile and sanitaryware industries and includes Johnson Matthey's zircon business. The Tile business has operations in all the world's major markets including Italy, Spain, Brazil and the Far East. Products for the sanitaryware industry and for roof tiles are produced chiefly in the UK and the Netherlands. Zircon, a white pigment used principally in the tile and sanitaryware industries, is manufactured by the controlled grinding of zircon sand and additives at sites in Spain, Italy, the UK, Brazil, Malaysia and India. A facility is under construction in the United States.

The Structural Ceramics sector had a very good year with profits up in all three of its businesses. While the Tile business was hit by a fall in sales to Asia, it benefited from substantial improvements in Europe, particularly in the fast growing Spanish market. The Sanitaryware business faced difficult market conditions throughout the year but benefited from major reductions in its cost base. The Zircon business traded very strongly, despite falling prices, having established itself as the leading low cost producer.

Tableware
The Tableware business supplies colours, glazes, decals and decorative precious metals to the tableware industry. This was a difficult year for the business with many of its customers, particularly in North Staffordshire, severely affected by the strength of sterling and the continued downturn of Far Eastern markets for their products. Profits were down and major cost reductions were implemented during the year. The business is now well positioned to benefit from any upturn in the market.