Swiss Industrial Pioneer in the 19th Century
Georg Fischer's origins lay in the earliest years of the Industrial Revolution. In 1802, Johann Conrad Fischer, then 29 years old, bought a mill near Schaffhausen, in Switzerland on the German border. Fischer converted the water-driven mill into a copper melting plant and began researching new alloy types for steel production. By 1805, Fischer had successfully developed a process for producing cast steel, marking a first on the European continent, and breaking the monopoly on cast steel held until then by England's Huntsman.
Fischer's work put Switzerland on the industrial map, and established the Schaffhausen region as the heart of the country's industrial development. Over the next decades, Fischer continued to develop new alloys and production processes. Among Fischer's most significant patents was that for the production of malleable cast iron, developed in 1827. In 1845, Fischer successfully developed a new method for producing cast steel, although the industrial scale use of the process by the company did not begin until some 30 years later.
Joined by son Georg Fischer I, the elder Fischer began expanding the company, opening two new steelworks in Austria, in Hainfeld in 1827 and in Traisen in 1833. Another of Fischer's sons, Berthold, took over direction of the Traisen site. Yet it was under Fischer's grandson, Georg Fischer II, that the company turned to an area that was to become a company specialty for much of the next century.
The gathering momentum of the Industrial Revolution at the mid-19th century had brought about dramatic population increases in the world's cities. These in turn were faced with developing new public infrastructures to handle the growing population demand, installing sewer and water systems, and, later, gas transmission systems for lighting and heating utilities. Fischer turned its production of malleable cast iron to this sector in 1864, launching a range of pipe fittings. The company quickly became a prominent specialist in the area, which grew steadily through the end of the century.
Commercially Oriented Public Company in the 20th Century
Fischer launched industrial production of cast steel in 1877, becoming one of Switzerland's leading producers. Rising competition from Germany, as well as stiff import duties, in the later years of the century led Fischer to open a sister plant in Singen, over the border from Schaffhausen in 1895. The investment forced the company, by then headed by Georg Fischer III, to turn to the public market for backing, a move completed in 1896. At this time the company took on the name of Aktiengesellschaft der Eisen- und Stahlwerke von Georg Fischer.
Although initially the majority shares were acquired by Fischer's family, by the turn of the century a significant proportion had come under control of banks and other institutional investors. When Fischer ran into financial difficulties in 1902, its bank shareholders insisted that Georg Fischer step down from management control, marking the last time a member of the Fischer family was to exert operational control of the company. The company now transformed itself from a family-run organization to a professionally managed, commercially oriented corporation.
Georg Fischer III, in the meantime, founded a competing steelworks in Schaffhausen, remaining in business until near the end of World War I, when he sold that business to Georg Fischer. The company continued to look for new acquisitions in the interwar years, acquiring another Schaffhausen-based company, Maschinenfabrik Rauschenbach. That purchase introduced the company to the industrial engineering and gray cast iron markets. At the same time, the company had continued to expand its product lines, adding a variety of items, such as automated weaving loom machinery in 1926, mass lathe production in 1938, and others, including cast iron pots and other kitchenware and cookware. Another product, the Trilex truck wheel system launched in 1933, became an important source of company revenues, accounting at one point for more than 10 percent of its total sales.
The company's operations had remained focused on the Schaffhausen region into the 1930s. In 1933, however, the company made its first major international acquisition, buying up England's Britannia Iron and Steel Works Ltd. That purchase enabled the company to begin production of malleable cast iron products for the U.K. market as well. The company's holdings in both the United Kingdom and Germany during World War II, however, placed the group into an extremely difficult position--the company later commissioned a noted historian to produce a report on its conduct in Germany during World War II, including addressing allegations that the company had used slave labor in its facilities.
Following the war, Fischer simplified its name to Georg Fischer AG. In the 1950s, the company targeted new growth opportunities. In 1952, the company developed new fully automatic molding and casting systems as part of its Engineering Machinery component. Although that market remained close to the group's cast iron and steel core, Georg Fischer had by now started to look beyond that market. In 1952, the company began developing new pipe fittings and pipe systems production methods using a new material: plastic, in the form of PVC.
Expansion in the 1970s and 1980s
By 1957, the company had succeeded in rolling out full-scale industrial production of plastic pipe fittings. The company's early entrance into the category enabled it not only to capture a leading share of the plastic pipes market, but to bolster its status as a world-leading producer of pipe fittings in general. The company backed up its plastic fittings production with the development of a special PVC adhesive, called Tangit, launched in 1964. This new product, which solved a key problem in plastic fittings, brought about a surge in demand for plastic fittings in the 1960s. The company responded by expanding production, opening a new facility in England in 1966 and a second plant in Seewis, Switzerland, in 1971.
The move into plastics was also a key factor in the company's shifting geographic focus--by the mid-1960s, more than half of Georg Fischer's sales came from outside of Switzerland. By the beginning of the 1970s, those sales had topped SFr 1 billion for the first time. The company's research and development efforts, meanwhile, turned toward its cast iron production. In 1971, the company patented a new magnesium converter process that made possible the mass production of cast iron-based automotive components. This category became a key product group in the company's Automotive division.
The 1970s represented the start of an important period of expansion for the company, which developed from a limited manufacturing presence in Switzerland, Germany, and the United Kingdom, to a globally operating group with subsidiaries in some 30 countries. Acquisitions formed an important part of the group's growth, starting with the purchase of Waeschle, based in Ravensburg, Germany, in 1972. That purchase marked the start of the group's later Plant Engineering Group, solidified by the 1979 purchase of Swiss company Buss, based in Basel. That year, also, the company acquired a 50 percent stake in a foundry in Lincoln, England, later acquiring full control of the plant.
The company moved into the United States at mid-decade, set-ting up a sales subsidiary, Georg Fischer Inc., in California, which provided oversight for the company's expansion into the North, Central, and South American markets. In 1979, Fischer targeted expansion into the rapidly developing Middle East markets, forming a manufacturing operation in Riyadh, Saudi Arabia, that year.
Expansion continued through the 1980s. In 1983, the company purchased a 51 percent stake in Ateliers des Charmilles, based in Geneva, which became known as Charmilles Technologies after its full acquisition in 1988. That company had been a pioneer in electric discharge machining (EDM) manufacturing techniques, and formed the basis of the group's Manufacturing Technology business group.
Fischer began restructuring at the end of the decade, spending some SFr 250 million between 1987 and 1991 on a redevelopment of its Schaffhausen and Singen plants. At the same time, the company set up a new Piping Systems distribution center, plastics production plant, and testing laboratory in Schaffhausen. In 1990, the company restructured its corporate organization as well, setting up Georg Fischer AG as a holding company for its primary business groups. These were now reorganized as separate, autonomously operating businesses.
As part of its restructuring effort, the company shut down its steel foundry at its Schaffhausen site, converting the plant to automotive components production in 1991. Two years later, Georg Fischer shut down its Worms, Germany steel foundry as well. Then in 1994, the company began spinning off a number of noncore operations, such as a real estate business, and logistics and accounting businesses.
Four-Pronged Focus for the New Century
The company's restructuring led the way to a focus on four core business areas at the approach of the 21st century. The Automotive Products division was boosted in 1995 with the purchase of Schubert & Salzer Eisenguss, based in Leipzig, Germany, which produced components for trucks and other heavy industrial vehicles and construction equipment. The following year, the group boosted its EDM branch to world-leading status with the purchase of Switzerland's Agie SA. That company was merged into the group's existing Manufacturing Technology operation, which was renamed Agie Charmilles. Fischer next turned to its fittings business, buying up R&G Sloane Manufacturing Company in Little Rock, Arkansas, establishing the company as a plastic fittings and pipe manufacturing presence in North America.
The company's other core businesses grew as well into the next century. Agie Charmilles led the company into China, establishing two joint ventures to manufacture EDM machinery in 1998, and launching its first products on the Chinese market by 1999. The company also moved into the Latin American market that year, buying the manufacturing rights to EDM equipment developed by Brazil's Engemaq.
By the end of the decade, Fischer's Automotive Components segment had become its largest business group, a position solidified by the company's acquisition of mb-Guss and Mössner, both based in Germany. These purchases, made in 1999, raised the company's aluminum components casting capacity by more than four times.
Fischer's acquisition drive continued into the new century, as the company joined in the purchase of Krupp Wermer & Pfleiderer, in Stuttgart, part of the Thyssen Krupp group and a leader in the German plastics processing market. That company was then merged with Fischer's Buss and Waeschle, and the entire operation was renamed as Coperion Holding GmbH. Fischer's share of Coperion stood at 50.1 percent, against the 49.9 percent stake held by acquisition partners Westdeutsche Landsbank and West Private Equity of London. At the time of the establishment of Coperion, Fischer announced its intention to spin off the company early in the new century.
Even as it celebrated its 200th year anniversary, Georg Fischer was hit hard by a depressed industrial climate. By the end of 2002, the group's sales had shrunk by some 11 percent from the previous year, to slightly less than SFr 3.5 billion. In response, Georg Fischer announced a companywide restructuring effort at the end of 2003, cutting some 1,000 jobs in an effort to boost operating profits. Despite these difficulties, Georg Fischer remained a world-leading industrial engineering group.
Source: http://www.fundinguniverse.com
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