Livent Corp (LTHM)

[TradingCharts]

Another Look at Livent
Published on August 10, 2019

By Joe Lowry

If you are a regular reader of this space you know I have been quite negative on my former employer over the past few years, calling their hydroxide focused strategy “the House of Cards”; saying things like “it is better to be lucky than good” and even referring to Livent’s CEO, Paul Graves as the “chief reader” of the Livent “story”. Sorry Paul.

First, before I continue with my “partial House of Cards mea culpa”, let me clarify some key points in how I think about the former world lithium #2. For most of the years I worked for FMC Lithium, they were committed to being an industry leader. Unfortunately, with the arrival of new CEO in 2010, FMC Corporation focused on becoming a boutique Ag-Chem company and many suboptimal decisions related to the lithium business ensued. You can trace the beginning of FMC Lithium’s slide to #5 to the arrival of CEO Pierre Brondeau and his decidedly “non lithium” agenda. Not making a value judgement just stating the obvious.

While FMC failed to make resource investments in this decade, their western world competitors, SQM and Albemarle, added capacity; as did China powers Ganfeng and Tianqi. The “Big 3” morphed into the “Big 4” with FMC as the “odd one out” dropping to #5 and rapidly losing relevance.

By Q4 2012, I was out of FMC and by early 2013 I was working with a number of companies: Ganfeng, FMC Lithium’s Japanese JV partner, a large Japanese trading company and several juniors. My long tenure in the industry also led to many short term engagements providing my perspective on FMC Lithium – past, present and future. My comments were generally along the lines of: FMC makes great products but the new management doesn’t understand the franchise or the future. The best example of this was when the CEO had the “revelation” to rebrand FMC Lithium as a “minerals” business and lump it in with soda ash. For someone like me who had spent the better part of a career trying to convince the market that FMC Lithium was THE “specialty chemical” lithium producer seeing a clueless CEO confuse the lithium market with the “minerals” re-branding strategy was hard to take despite the fact I was no longer an employee. Loyalties die hard.

The day after I left FMC in 2012, Paul Graves joined the company as Chief Financial Officer. Last year when FMC spun off the Lithium Division, Paul was named the CEO of the new company that took the name Livent. Long before Paul was directly involved in the lithium business, the hydroxide strategy that I christened the “House of Cards” was announced by the now departed lithium leadership team.

Why did I call FMC’s hydroxide strategy the “House of Cards” back in 2016?

Read the rest here.

https://www.linkedin.com/pulse/another-look-livent-joe-lowry/