History of Th. Goldschmidt AG

Modest beginnings in Berlin

When the chemist Theodor Goldschmidt founded Chemische Fabrik Th. Goldschmidt in Berlin on December 8, 1847, in Berlin, he could hardly have foreseen that his company would last into the 21st century and would indeed become one of the German industrial corporations looking back on a very rich tradition. The company quickly outgrew its site on Köpenicker Chaussee and was moved to the Landwehrkanal in 1849. The fledgling factory initially supplied precursor products for textile manufacturing, including preparing salt, dextrin, chlorinated lime, tin salt, and chlorinated tin. The main customer was the Kattun printing company R. Goldschmidt & Söhne that was owned by family members of Theodor Goldschmidt.

In the two decades, the company continued to operate on a very small scale, employing approximately 15 to 20 people while annual sales revenues in 1852 amounted to just 18,000 talers and rose very slowly in the years to follow. After the death of Theodor Goldschmidt in 1875, the stagnation continued under the management of his son-in-law, Otto Kersten.

Things began to turn around when Karl Goldschmidt, Theodor's eldest son, took over the management in 1882. Karl Goldschmidt immediately started to experiment with the development of a technically advanced and profitable process for tinplate detinning. This promised to be a lucrative business since tin was rare and precious in Europe and detinned steel scraps were in great demand in the iron and steel industry.

Goldschmidt

Headquarter of Chemische Fabrik Th. Goldschmidt, Essen 1898

When Karl Goldschmidt’s younger brother Hans became a managing partner in Chemische Fabrik Th. Goldschmidt in 1888, the company entered a new era that would see almost thirty years of ideal cooperation. Thanks to the advancements in the detinning business, the company had to move closer to its customer base in the Rhine-based silk industry and the steel factories of the Ruhr Valley. Once Essen was chosen as the new business site, the Goldschmidt brothers sold the property in Berlin and moved to the new premises in February 1890.

Success in Essen

The detinning business became a huge success, and the company’s payroll doubled from 60 in 1889 to 120 in 1892. By 1897, Goldschmidt employed as many as 217 people. The introduction of an improved electrolytic detinning process in 1895 and of chloride-based detinning in 1906, followed by the application of an alkaline detinning process in 1911 represented the state of the art and catapulted Goldschmidt to an uncontested top position in the global market in the time before World War I. The establishment of a global sales organization for tinplate and the founding of modern detinning operations in Great Britain and especially the USA (Goldschmidt Detinning 1908) after the turn of the century document the global aspirations of Chemische Fabrik Th. Goldschmidt, which had turned into a global company despite its small size. To further expand its market position for tin, Goldschmidt established its own tin refinery in Essen in 1899, which became the second-largest European tin refinery with highly advanced technology.

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Berlin plant, workers in the yard, 1886

While the tin smelter had to be closed down in 1929 because of the economic impact of World War I, this era saw the rise of another process for the precision welding of streetcar and railroad tracks, which Hans Goldschmidt had patented in 1895. The so-called Thermit process, which was based on aluminothermal reactions, brought world fame to its inventor.

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Thermit welding in Graz (Austria), before 1914

To this day, the constantly improved Thermit process continues to be the standard welding process for railroad installations all over the world. Taken together, tinplate detinning and the Thermit process formed the basis of Goldschmidt’s entrepreneurial success for decades. Based on the continuous growth of its payroll, Goldschmidt was compelled to introduce a comprehensive social benefits system for its employees. The company health insurance fund of 1896 was followed by a company-owned retirement fund in 1897, into which employees and employer made prorated payments. The fund was intended to provide support in case of permanent disability or death. Other remarkable introductions included a progressive vacation policy in 1906 and the construction of a recreation facility for employees in 1907.

Incorporation

Due to the significant expansion of business, especially abroad, and the resulting investments, Th. Goldschmidt AG was founded in 1911 with an initial capital of 10 million gold marks. Although Karl and Hans Goldschmidt initially owned most shares, share packages were sold consistently at the stock market over the course of the years. By the 1930s, the Goldschmidt family held about 33 percent of shares, a sufficient portion to exert their dominant influence over the fate of Th. Goldschmidt AG until 1997.

In 1912, Goldschmidt acquired a new source of raw materials by purchasing a chemical plant in Mannheim-Rheinau. The intent was to have a supply of inorganic base chemicals such as chloride and sulfuric acid in order to avoid dependence on large corporations. From 1916, the Mannheim facility also housed a pilot plant for liquefaction coal to manufacture gasoline, which Friedrich Bergius, who would later win the Nobel Prize in Chemistry, built on behalf of Karl Goldschmidt, but never completed. The involvement of Bergius also caused a disagreement between the Goldschmidt brothers, which ultimately prompted Hans Goldschmidt to leave the management board of the company in 1916. World War I had significant consequences for Goldschmidt. The company lost markets, its foreign subsidiaries and plants were seized or had to be sold below value, and patents and trademark rights were declared null and void. These events forced the company to completely refocus its activities in 1920.

Expansion to industrial group

Toward the end of the management era of Karl Goldschmidt, who transferred the management of the company to his son Theo in 1923, Th. Goldschmidt AG acquired two troubled companies in 1921 that were both larger than their buyer: the electro technical factory Neufeldt & Kuhnke in Kiel and the Buckau chemical plant with a large production facility in Ammendorf near Halle/Saale. Following extensive investments, Buckau became a major raw materials supplier for Goldschmidt and was completely absorbed into the company in 1937. The promising Ammendorf plant, which housed numerous operations from Essen during World War II, would eventually be seized in 1946 during the Soviet occupation. Neufeldt & Kuhnke—better known under the name of Hagenuk, used after 1936—was a manufacturer of marine technology, signal and communication devices, but also made radios, diving suits, and light bulbs. This company, which had little to do with Goldschmidt's core business and had been acquired for reasons of diversification, never became truly integrated and remained a source of consistent worry and frequent losses until it was divested in 1979.

New products

In the 1920s, Goldschmidt introduced numerous new products with great success. Innovative bearing materials containing tin and lead were at the core of the bearing technology unit (sold in 1996), while highly disperse red lead oxide—developed in 1926—earned a top position among anti-corrosive paint products (sold in 1981). After 1927, the ethylene research of Friedrich Bergius bore the successes and led to the production of emulsifiers, which to this day are manufactured under the names of Tegin or Protegin. This pioneering work laid the foundation for today’s Consumer Solutions Business Unit of Evonik Industries. In 1929, Goldschmidt produced the adhesive film on the basis of synthetic resin and soda pulp paper, which soon became a serious competitor for the wet adhesives predominantly used in plywood manufacturing (sold in 1984).

War and reconstruction

Just like the rest of the chemical industry, Goldschmidt benefited from the military buildup measures of the Nazis in the 1930s. This involved the expansion of numerous production facilities, which required the use of forced labor after 1942. The adhesive film production was considered particularly essential for the war effort as part of airplane manufacturing. At the end of the war, the company faced almost complete destruction, and 85 percent of the Essen plant laid in ruins. German industry made a rapid recovery after the currency reform in 1948, and this economic turnaround is now referred to as the “Economic Miracle.” Goldschmidt was no exception and boomed. The parent plant in Essen was completely rebuilt and was even able to grow significantly following the purchase of the surrounding wasteland property at favorable prices.

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Fire in Tegin plant, Essen site, September 05, 1942

Innovations were added to the product portfolio of the pre-war era. In 1947, Goldschmidt introduced the disinfectants on the basis of amphoteric surfactants, which would hold a top market position for a long time (sold in 1995), while rare-earth products, especially lighter flints, enjoyed global success (sold in 1978). The in-house development of silicones would turn out to be the most significant. The silicone research begun in 1947 in Essen forms an important basis of the activities at the present Evonik site Essen/Goldschmidtstrasse. The simple silicones of 1955 were followed by stabilizers for polyurethane foams in 1961, which form a core business at the site to this day. Numerous modified siloxanes continue to hold top positions in applied interface chemistry as foam inhibitors, crosslinkers, dispersion aids, and separating agents.

Modern times

In the 1960s, Goldschmidt’s character began to change. In a rapidly accelerating process, the company turned itself from a supplier of mixed chemicals with emphasis on inorganic and metallurgy products to an almost exclusive manufacturer of organic specialty chemicals. Its new, consistently growing and modernized facilities began to supply new products such as betaine in 1966 and Abile for the cosmetic industry in 1982, coatings and paint additives in 1978, radiation-curing silicones in 1981, and dispersion agents for color master batches in plastics in 1995. At the same time, production facilities that were no longer profitable or did not match the corporate philosophy were shut down or sold, including the tinplate detinning facility in 1990, and the subsidiary Elektro-Thermit GmbH in 1998. This development was associated with increasing internationalization. As an example, subsidiaries in Italy and England were established in 1966 and 1972, followed by the opening of the most important production site outside of Germany in Hopewell, Virginia, USA in 1980.

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Goldschmidt AG, Essen site, TEGO building, 2001

A new era complete with external changes began in 1997 when VIAG AG acquired the majority of shares, a step which would ultimately turn Goldschmidt AG into a subsidiary of the new Degussa after the merger of VEBA and VIAG in 2000. Within the Degussa Group, Goldschmidt’s activities were essentially bundled in the Consumer Specialties Business Unit. The highly successful additive business for coatings and paint became part of the Coatings & Additives Business Unit. The main previous Goldschmidt activities continue to be managed by Evonik Industries at the Essen/Goldschmidtstrasse site.