Dyckerhoff AG

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Dyckerhoff AG

Biebricher Strasse 69
D-65203 Wiesbaden
Germany
Telephone: (49)(611) 676-0
Fax: (49)(611) 676-1040
Web site: http://www.dyckerhoff.com

Public Company
Incorporated: 1864 as Portland-Cementfabrik Dyckerhoff & Söhne
Employees: 11,232
Sales: DM 4.3 billion ($2.19 billion) (1999)
Stock Exchanges: Frankfurt/Main Dusseldorf Berlin Hamburg
Ticker Symbol: DYK
NAIC: 32731 Cement Manufacturing; 32732 Ready-Mix Concrete Manufacturing; 42132 Brick; 327331 Concrete Block and Brick Manufacturing; 327332 Concrete Pipe Manufacturing; 32739 Other Concrete Product Manufacturing; 32741 Lime Manufacturing; 32742 Gypsum Product Manufacturing; 44419 Other Building Material Dealers

German-based Dyckerhoff AG is the management holding company for one of the world’s largest groups of companies engaged in producing construction materials. Cement and con-crete make up about 60 percent of its total sales, however the Dyckerhoff product range also includes limestone and mortar products, plastering systems, filler materials, binding agents, facade insulation products, and do-it-yourself hardware. With almost 80 subsidiaries, the Dyckerhoff group’s presence extends throughout the world. More than one-third of Dyckerhoff’s revenues are generated outside of Germany. The company consists of four independent business divisions: Dyckerhoff Cement, Dyckerhoff Cement International, Dyckerhoff Concrete, and Dyckerhoff finishing products. Dyckerhoff Cement has a 20 percent market share in Germany and cement production plants in Spain, Luxembourg, the Czech Republic, Russia, Poland, and the United States. The family of the company’s founders own about 40 percent of Dyckerhoff.

Origins in the 1800s

Wilhelm Gustav Dyckerhoff, the founder of the Dyckerhoff company, was born on October 16, 1805, in Elberfeld, Germany. Following in his father’s footsteps he became a businessman, and from 1835 until 1860 he worked as an independent wholesaler for ceramics products of the German firm Villeroy & Boch. In 1861 he began a new enterprise to manufacture and sell cement together with Carl Brentano, a German engineer.

On June 4 1864, the 59-year-old Dyckerhoff founded his own cement company, together with his two sons Gustav and Rudolf. Twenty six-year-old Gustav Dyckerhoff, who had gained experience in the import/export business in Germany, England, and France, took over responsibility for administrative and financial aspects of the business. His younger brother, Rudolf Dyckerhoff, was 22 years old and had studied machine building and chemistry in Karlsruhe and Heidelberg. Naturally, he took over responsibility for the production plant. The new company took the name Portland-Cementfabrik Dyckerhoff & Sohne (Portland Cement Factory Dyckerhoff & Sons) and was based in Amöneburg, on the right bank of the river Rhine between Wiesbaden and Mainz.

In 1866 the company was incorporated as an Offene Handelsgesellschaft, a private trading company, and the rights and responsibilities of the three founders were put down in writing. Wilhelm Gustav Dyckerhoff’s experience as a businessman together with his son’s enthusiasm contributed to the company’s rapid success. The factory first employed 14 workers. Its main production facility was a huge round oven with 12 compartments in which the ingredients for the cement were heated. The factory was located directly off the shore of the Rhine river; 2,228 tons of cement were shipped to Dyckerhoff’s customers from the factory during the company’s first year of existence. In 1882 an 18-meter high water tower was erected to generate power for the plant.

The unprecedented wave of political and entrepreneurial optimism that followed the founding of the German Empire in 1871 set off an extensive construction boom. Nevertheless, right from the beginning, the Dyckerhoffs looked for business opportunities outside Germany. In 1867 the first Dyckerhoff exports arrived in the Netherlands. A year later they reached the United States for the first time. As early as 1886 Dyckerhoff products were being exported to over 100 countries. The Metropolitan Opera and the Waldorf-Astoria hotel in New York City were among the most prestigious construction projects to use Dyckerhoff cement. In 1886, 8,000 wooden bins of Dyckerhoff cement were ordered for the foundation of the Statue of Liberty.

In addition to his responsibilities as chief production officer, Rudolf Dyckerhoff became involved in setting up new organizations for the growing German cement industry. In 1864 he was a founding member and was later elected vice-president of the German national trade organization for the manufacture of bricks, clay, and lime products and cement. Twelve years later he co-founded a trade organization for Portland cement manufacturers, where, again, he was elected vice-president and became scientific advisor, especially in the area of standardization. He developed technologies that made it possible to balance out the fluctuation in the ratio of raw materials to ensure a high quality end product. In 1907 Rudolf Dyckerhoff was awarded a professorship. Founder Wilhelm Gustav Dyckerhoff remained involved in the management of the family business until a ripe old age, dying in 1894.

Dyckerhoff Thrives Until World War II

The Dyckerhoff production plant was expanded significantly around the turn of the century and new technologies replaced old ones. Electric power replaced huge steam engines. Steel ball mills were introduced that reduced the percentage of water in the raw cement mixture by one-third. Rotating ovens replaced ring ovens and eliminated the hard work of pulling huge chunks of concrete out of the ovens by hand. Finally, machines were introduced that replaced wooden frames for brick stone production. During this time, Rudolf Dyckerhoff spent many hours in his research laboratory, experimenting with different ratios of clay and lime stone until he found the right mixture to produce a Portland cement with excellent characteristics.

In 1911, before brothers Gustav and Rudolf Dyckerhoff retired, they transformed their business into a limited liability corporation, Dyckerhoff & Söhne GmbH. The new legal format enabled them to limit the risk connected with dynamic expansion and ensured continuation as a family business. Rudolf Dyckerhoff died at age 75 in 1917; Gustav Dyckerhoff died at age 85 in 1923.

The company survived the hard times of World War I, German hyperinflation, and the worldwide economic depression of the 1920s. In 1931 the company merged with Westphalian cement maker Wicking AG to form the new Dyckerhoff Wicking AG. Five years later the company was again renamed, Dyckerhoff Portland-Zementwerke AG. In 1939 Tubag, a company that manufactured cement and bricks joined the Dyckerhoff group. Tubag’s speciality was Trass, a volcanic rock that had been used by the Romans, mixed as an additive into mortars and plasters. Two of the most prestigious construction projects of the time, in which Dyckerhoff cement was used, were a stadium for 100,000 built in 1928 in Montevideo, Uruguay, and the restoration of the fundament of the dome in Mainz between 1925 and 1928.

In the early 1930s, Dyckerhoff developed a new technology that allowed for its introduction of the first white Portland cement, which had always before been gray. Called Dyckerhoff Weiss, the product could also be mixed with color pigments to make colored concrete. Another innovation of the 1930s was reinforced thin-shell concrete segments, slender curved slabs used in construction projects such as ice arenas and airplane hangars. These were invented by Dyckerhoff & Widmann, another firm founded by Wilhelm Gustav Dyckerhoff.

Expansion and Diversification: 1956-89

During the post-World War II reconstruction years, Dyckerhoff pioneered another new technology. In 1949 the company introduced a new cement: Dyckerhoff Dreifach. It was especially hard and strong and was used for pre-stressed con-crete, such as that used in bridge elements. Another innovation debuted in 1949, when Dyckerhoff cement was shipped in bulk silo containers or special trucks rather than sacks. Three years later Dyckerhoff introduced well cements for oil and gas explorations. Able to hold its shape precisely, this product was critical for such well drilling, which could reach 8,000 meters or more into the earth.

Company Perspectives:

Claim: We want to be technically innovative and leaders in our field through intelligent and original solutions to problems concerning all aspects of the building industry. Staff: We believe that the basis for success rests in the qualification, commitment, and performance of our staff and their identification with the corporate goals and tasks. Customers: We treat our customers fairly and correctly and prefer long-term benefits to short-term gains. Environment: We express our responsibility to the environment through an economic use of raw materials and energy, recultivation in accordance with the requirements of modern landscape conservation, and a reduction of environmental impacts through the use of the latest technologies.

In 1953 the Amöneburg plant’s output exceeded one million tons of cement. In 1956 the company name was changed to Dyckerhoff Zementwerke AG to reflect the broader variety of cements being made. The year 1959 marked a new technological era for Dyckerhoff. From that year on, ready-mixed concrete was transported in mixer trucks with rotating containers directly to the construction site. The same year, the first dry ovens were introduced which used less energy and were more environmentally friendly. In 1978, for the first time, cement was packed into paper sacks through a fully automated facility. During the 1960s and 1970s, a boom time for the German economy, Dyckerhoff more or less continuously expanded its capacity, range of products, and sales. In 1973, a peak year for cement production, the annual cement output was more than eight times the figure of 1953, or over eight million tons.

Between 1974 and 1985 the demand for cement dropped, forcing Dyckerhoff to explore other markets. One important field of diversification was the development of products for the reconstruction, remodeling, or renovation of buildings. The year 1985 was marked by three important events for Dyckerhoff. First, the company was renamed Dyckerhoff AG because its activities had long outgrown the production of cement. With the new name came a new corporate identity concept, including a new, modern logo that has been in use ever since. Second, a new business division for finishing products— Dytec—was founded. Dytec was the new umbrella group for all Dyckerhoff’s activities in do-it-yourself products, including plaster, paint and varnishes, insulation materials, glue and other chemicals used in construction, and hardware tools. Finally, Dyckerhoff MIKRODUR, a mineral-based binding material, was introduced to fill and strengthen very small cavities. By the end of the 1980s Dyckerhoff had three strong business divisions: cement, ready-mixed concrete, and Dytec, and seven production plants in Germany, one in Spain, and one in Glens Falls, New York. Dyckerhoff’s subsidiaries and shareholdings expanded into Austria, Spain, Luxembourg, the Netherlands, Belgium, Turkey, France, Great Britain, and the United States.

Early 1990s: German Reunification and Modernization

The reunification of Germany in 1990 opened new opportunities for Dyckerhoff. In 1991 the company acquired the Deuna Zement GmbH, founded in 1975 and located in the East German state of Thuringia. Deuna Zement had access to extraordinarily homogenous raw materials which made possible the production of many different cement types, including specialty cements of very high quality. However, the production plant was technologically outdated by western standards, and the high number of employees—1,700—significantly lowered profitability. After reconstruction in the early 1990s, Deuna Zement would become one of the most modern plants of its kind.

However, another effect of the fall of the iron curtain was less favorable for Dyckerhoff. Shortly after the East European markets opened, cement from plants in former Czechoslovakia and in Poland, subsidized in part by their national governments, flooded the new German states of Bavaria, Saxony, Berlin, Brandenburg, and Thuringia. The price for this cement was approximately 20 percent below the market price in Germany. In addition to being able to offer government-subsidized low prices for energy and transportation, these competitors were able to take advantage of significantly lower wages.

Because of the tough competition in the cement market, Dyckerhoff was involved in other activities fueled by the construction boom in East Germany. Old production facilities were modernized throughout the country, as old buildings that had suffered from insufficient maintenance during the previous four decades had to be rebuilt or renovated. Numerous graying and damaged facades in East German cities and towns got a new face. There was enough demand for Dyckerhoff’s finishing products division to thrive. Another market opened up when sewage systems were modernized all over eastern Germany, and the construction of new single family houses started booming. To address this market Dyckerhoff started producing finished concrete products in 1990. The new product range included decorative concrete stones, slabs, and edging for paving; garden and landscape furnishings; concrete pipes and sewage treatment technology; and pre-fabricated building parts for floors, walls, stairs, balconies, and garages.

At the same time Dyckerhoff established its ready-mixed concrete division and other production facilities in the new German states. An East German Dyckerhoff subsidiary, the Tricosal GmbH, established a new production for grouting tape in Deuna. The ready-mixed concrete division had established a distribution network with ten subsidiaries and 26 plants in the new German states by 1993. Dyckerhoff’s finishing products division also expanded its distribution network and opened service centers in bigger East German cities to advise craftsmen and do-it-yourselfers about products. By 1993 there were about 1,000 employees from the new German states on Dyckerhoff’s payroll, and the company had invested approximately DM500 million in its new sites in East Germany.

Key Dates:

1864:: Portland-Cement-Fabrik Dyckerhoff & Söhne founded.
1886:: Dyckerhoff cement is exported to over 100 countries.
1911:: Dyckerhoff & Sohne GmbH established.
1931:: Merger with Wicking AG to form Dyckerhoff Wicking AG, and Dyckerhoff Weiss, the first white Portland cement in Germany, is introduced.
1936:: The company is renamed to Dyckerhoff Portland Zementwerke AG.
1949:: Dyckerhoff Dreifach revolutionizes pre-stressed concrete technology.
1952:: Dyckerhoff Well Cements for oil and gas explorations are introduced.
1956:: Company is renamed to Dyckerhoff Zementwerke AG.
1985:: The new name Dyckerhoff AG and a new Logo are introduced.
1991:: Dyckerhoff acquires Deuna Zement GmbH.
1994:: Dyckerhoff takes over Ciments Luxembourgeois.
1999:: Lone Star Industries acquired.

The Late 1990s: Reorganization and International Growth

By 1994 Dyckerhoff was Germany’s second largest producer of construction materials with a 20 percent market share in cement and 18 percent in ready-mixed concrete, as well as an annual production capacity of nine million tons per year world-wide. However, after 1994 the construction boom in eastern Germany began to die out. At the same time the German economy slowed, and prospects for the cement industry were uncertain. Therefore, Dyckerhoff’s main capital investments during the 1990s focused on modernization of cement kilns, grinding plants, and logistics infrastructure; broadening the product range; reducing energy costs; and the implementation of environmentally-friendly technologies. For example, about 120 filter systems were installed in all Dyckerhoff cement plants, removing the dust from air and gas emissions. The dust from exhaust gases emitted from rotary kilns where the raw material was dried and ground at 1,400 degrees Celsius was removed by large electrostatic precipitators. The buildings with steel ball mills where the cement klinker was ground to a fine powder were sound-proofed and equipped with sound absorbers to cut noise pollution. The dust content of gas emitted into the environment was monitored continually. All together, between 1988 and 1998, Dyckerhoff invested about DM 1.5 billion in its plants.

While it lowered production costs, Dyckerhoff aggressively expanded into new markets abroad. This was reflected in the number of Dyckerhoff employees working outside Germany; by 1995 28 percent of all employees worked abroad, while only one year earlier that figure stood at 20 percent. At the same time, in 1995, the total number of Dyckerhoff employees rose by one-fifth, caused primarily by the expansion of activities in the ready-mixed concrete and finishing products markets. Another factor that contributed to this workforce growth was the acquisition of a majority share in Luxembourg-based Ciments Luxem-bourgeois, a group of companies active in the cement, concrete, natural stone, and plasters markets with DM 200 million in annual sales.

In 1994 and again in 1997 Dyckerhoff changed its organizational structure. Until then, Dyckerhoff AG oversaw the operative cement business and also functioned as the parent company for its independent subsidiaries. In 1995 Dyckerhoff AG was transformed into a management holding company, while the cement activities were transferred to a new company, Dyckerhoff Zement GmbH. All cement-shareholdings abroad were organized under the newly founded Dyckerhoff Zement International GmbH. In 1996 the Dyckerhoff Baustoffsysteme GmbH was founded to include all activities in the field of construction materials for building contractors, including such products as binding agents, filling compounds, grouting, immobilizing, and injection materials. Dyckerhoff Beton GmbH was founded in 1997 and managed the ready-mixed concrete division, Transportbeton GmbH, as well as all subsidiaries manufacturing and marketing concrete products. Finally, Dyckerhoff Ausbauprodukte GmbH organized all companies of the finishing products and do-it-yourself business division. The reorganization included a change in Dyckerhoff’s top management. Industry outsider Peter Rohde, who had extensive experience in the coal mining industry, succeeded Alexander von Engelhardt, who had guided Dyckerhoff through a decade of significant change.

Because of the stagnating markets in Germany and Western Europe Dyckerhoff saw its main growth potential in Eastern Europe, the United States, and even West-Siberia. Consequently, the reorganization was followed by a series of acquisitions that included cement production plants in Nowiny, Poland; in Hranice and Ostrava, Czech Republic; and Sverdlovsk, Russia. In 1999 Dyckerhoff bought Lone Star Industries Inc., an American producer of cement and ready-mixed concrete, for $1.2 billion. In early 2000 the company announced that it was planning for further global expansion.

Principal Subsidiaries

Dyckerhoff Zement GmbH; Dyckerhoff Zement International GmbH; Dyckerhoff Beton GmbH; Dyckerhoff Ausbauprodukte GmbH; Dyckerhoff Luxembourg S.A. (Luxemburg); Anneliese Zementwerke AG (48.8%); NCD Nederlande Cement Deelnemingsmaatschappij B.V. (Netherlands; 45.6%); Deuna Zement GmbH; Intermoselle S.à.r.l. (Luxemburg; 50%); Ciments Luxembourgeois S.A. (Luxemburg; 68.4%); Cementos Hispana S.A. (Spain; 61.6%); Cementownia “Nowiny” S.A. (Poland; 87.1%); Cement Hranice a.s. (Czech Republic; 97.5%); Glenns Falls Cement Company Inc. (United States); Lone Star Industries, Inc. (United States; Beton Union GmbH & Co. KG (Germany; 96.2%); Ispo GmbH; Dyckerhoff Ausbauprodukte AG (Switzerland); Isoned B.V. (Netherlands); Dyckerhoff Matériaux S.A. (France).