“Holderbank” Financiers Glaris Ltd.

CH-8750 Glaris
Switzerland
(058) 61 34 94
Fax: (055) 27 83 19

Public Company
Incorporated: 1912 as Aargauische Portlandcement-Fabrik Holderbank-Wildegg
Employees: 25,000
Sales: SFr4.97 billion (US$3.22 billion)
Stock Exchanges: Zürich Basel Geneva

Switzerland’s “Holderbank” Financière Glaris (Holderbank), with its motto “cement, and all that goes with it,” is the world’s largest producer of cement products and services. Based in Claris, near Zürich, Holderbank remains firmly in the hands of Thomas Schmidheiny, although it is a public company.

Since 1912, when the elder Ernst Schmidheiny founded the Aargauische Portlandcement-Fabrik Holderbank-Wildegg, his family has controlled the diversified Holderbank empire, with a presence on five continents. The business was originally named after the town in the Swiss canton of Aargau where the first cement plant was founded.

Gradually taking up the work his father began, the younger Ernst Schmidheiny made sufficient profits early on from the cement products business to stabilize and then expand the group beyond Swiss borders, beginning in the 1920s. In 1923, Holderbank made its first overseas acquisition, the Dutch cement company Nederlandse Cement Industrie, based in Maastricht, near Belgium. In 1926 the Swiss group acquired the Ciments d’Obourg in Belgium.

In 1927 the elder Ernst Schmidheiny oversaw the construction of his 50%-owned cement factory near Cairo, Egypt, completed under the watchful eye of King Fouad I. Expansion abroad in that year also included the building of the Ciments de Chalkis Portland Artificiels plant in Greece. This recognition by Holderbank of the need to find international markets in the interwar years came decades ahead of most other European cement producers, who did not expand overseas to any great degree until after 1945. To control its growing international empire, Holderbank regrouped its interests in 1930 under an umbrella company, “Holderbank” Financière Claris Ltd.

The founder, the elder Ernst Schmidheiny, did not neglect Holderbank’s development at home in Switzerland. In 1914, increased production capacity and earnings enabled his group to acquire rival cement maker Rheintalische Zementfabrik of Ruthi.

Taking over from his father, the younger Ernst was accompanied at the Holderbank helm by his younger brother Max. In 1987, aged 81, Max Schmidheiny led the 75th-anniversary celebrations of his family’s industrial empire. Thomas, of the third generation of the Schmidheiny family, has controlled the Holderbank empire since Max Schmidheiny began handing over the businesses in piecemeal fashion toward the end of the 1970s.

Holderbank had been keen during the 1960s to take advantage of a consistently rising curve in world cement production. The first oil shocks in 1973 and 1979, each followed by an economic slowdown, slightly dented production levels. However, worldwide cement production doubled between 1967 and 1986, a period of rapid global expansion for Holderbank.

Growth for the Swiss group was particularly strong after the acquisition in 1970 of specific properties from a rival contractor, the Swiss Cement-Industrie-Gesellschaft (SCI). The deal struck by the two Swiss concerns enabled Holder-bank to acquire SCI interests in Mexico, Costa Rica, Lebanon, South Africa, and West Germany—Breitenburger Cementfabrik—in exchange for its own interests, among others, in the asbestos cement sector.

This transaction greatly tightened the Schmidheiny family’s hold on Holderbank. To strengthen the decentralized management structure which controls the worldwide Holder-bank group, Holderbank in 1991 employed more than 200 specialists in Switzerland, with another 200 on assignment throughout the world. The duties of the specialists range from consultancy work to constructing complex technical and financial projects. Holderbank received its Zürich stock exchange listing in 1958, but to this day remains protected against takeover bids due to the control of the majority of voting shares by the Schmidheiny empire.

Much of the success that Holderbank has known in its 78-year history can be attributed to its search for the best production technology and the lowest production costs. As Thomas Schmidheiny told International Management in September 1987: “The grey powder from my friends at Heidelberg [a major German competitor] is the same grey powder that we produce. So we compete essentially on price, and to do that we recognized long ago that we had to have the best production technology and be a low-cost producer.”

In 1986 Holderbank made a final break with SCI, with whom it had earlier swapped properties to increase its presence in South America, among other world markets. This deal gave Holderbank control of the Ostschweizer Zement-werke in Unterterzen, Switzerland, in exchange for giving SCI a number of interests in the United States, Belgium, Chile, and Ecuador.

At the same time Holderbank became the leading cement producer in the all-important U.S. market after acquiring in late 1986 the Denver, Colorado-based Ideal Basic Industries for around US$110 million. The acquisition gave Holderbank a commanding 14% market share in the United States, ahead of rival cement concerns Blue Circle Industries of the United Kingdom and Lafarge Coppée of France.

European cement makers, led by Holderbank, employed superior, highly cost-efficient production techniques to gain an advantage in the U.S. market over rival U.S. cement makers. For example, the Swiss group’s takeover of Ideal Basic Industries was followed by a vast expenditure to renovate the U.S. group’s obsolete production facilities. Holderbank absorbed an extra US$5.7 million increase in interest charges in 1989 to renovate Ideal’s Fort Collins plant in Colorado, when the Ideal group as a whole continued its poor record of results by posting a US$24.1 million loss on sales of US$245 million in the same year. Holderbank’s other major North American interests include Canada’s St. Lawrence Cement, acquired in 1953, and the Dundee Cement Company of Michigan, obtained in 1955.

Recognizing the dependence of the world cement industry on both business cycles and interest rate-sensitive construction industries, Holderbank became aware of the threat of a worldwide economic downturn at the end of the 1980s and began consolidating its global activities in that year.

Starting with its European interests, in 1989 Holderbank sold its small Ciments de 1’Adour plant in France and exchanged its interests in the Spanish Rezola plant for an added 8% stake in Ciments de Champagnole, raising its holding in this French operation to 50%. Because of this strengthened French presence, in direct competition with Paris-based Lafarge Coppée, Holderbank gained key contracts such as supplying cement products to the Channel Tunnel project, the extension of France’s TGV speed-rail system, and the Euro-Disneyland theme park development near Paris.

In 1990 Holderbank restructured its North American interests ahead of the downturn in construction business on that continent. In March of that year, the Dundee Cement Company, Ideal Basic Industries, and Northwestern States Portland Cement Company, acquired in 1988, were merged with Holnam Inc., Holderbank’s U.S. holding company.

This regrouping of U.S. interests, soon after Holderbank’s 75th anniversary in 1987, enabled the Swiss group to become the world’s leading producer of cement products with a market share of almost 3.5%. Either through direct ownership or a series of minority or majority holdings, Holderbank operates over 30 cement companies in 22 countries worldwide, which together produce well over 43 million tons of cement products annually.

The stakes acquired by Holderbank in early 1990 in three Hungarian cement companies—a 50% stake in the Labatlan cement works and a 33% stake in the twin Jejoscaba works— point to the group’s pursuit of opportunities in new Central European markets. Taken together, the three Hungarian cement plants produce about 1.6 million tons of cement products annually.

Besides recruiting its German interests in its push into Eastern Europe, Holderbank has also employed the expertise of its German business, Alsen-Breitenbury, to expand in the European environmental-protection and waste-management business. The particular services offered by Holderbank in these areas include treatment of polluted soil on industrial sites, developing chalk powder for use in flue gas desulfurization plants, and sewage and sludge treatment.

With an expanding foothold in East Europe, and having regrouped its North American interests amid an economic slowdown on that continent, Holderbank looks well placed to consolidate its strength in the 1990s as the world’s largest cement products producer.

Principal Subsidiaries

“Holderbank” Management and Consulting Ltd.; Cementfabrik “Holderbank”; Portlandcement-werk AG Olten; SCB Société des Ciments et Bétons; “Holderbank” Concreta AG; Stamm Holding AG; “Holder-bank” Chemicals Ltd.; Alsen-Breitenburg Zement- und Kalk-werke GmbH (Germany); Nordcement AG (Germany); Breisgauer Portland-Cementfabrik Kleinkems GmbH (Germany); ENCI-N.V., Eerste Nederlandse Cement Industrie (Netherlands); S.A. Ciments d’Obourg (Belgium); Ciments d’Origny S.A. (France); Hornos Ibéricos Alba S.A. (Spain); Unión Marítima Internacional S.A. (Spain); St. Lawrence Cement Inc. (Canada); Dundee Cement Company (U.S.A.); Ideal Basic Industries, Inc. (U.S.A.); Apasco S.A. de C.V. (Mexico); Industria Nacional de Cemento S.A. (Costa Rica); Productos de Concreto S.A. (Costa Rica); Cementos Boyacá S.A. (Colombia); La Cemento Nacional C.A. (Ecuador); Cementos Caribe C.A. (Venezuela); CIMINAS—Cimento Nacional de Minas S.A. (Brazil); Cia. de Cimento Ipanema (Brazil); Cemento Polpaico S.A. (Chile); The Cyprus Cement Company Ltd.; Société des Ciments Libanais (Lebanon); Anglo-Alpha Ltd. (South Africa); Iligan Cement Corporation (Philippines); Queensland Cement Ltd. (Australia); Milburn New Zealand Ltd.

Further Reading

Boesch, J., Dr. Hans Rudolf Schmid, and Dr. Benedikt Fehr, Schweizer Pioniere der Wirtschaft und Technik — Drei Schmidheiny, Zürich, Verein für wirtschafts-historische Studien, 1979; Arbose, Jules, “The Mysterious Schmidheiny Brothers Flex Their Financial Muscle,” International Management, September 1987; Bamberger, H.G., “Holderbank—Ein Weltreich aus Zement,” Budget, September 1988.

—Etan Vlessing