Stinnes AG

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Stinnes AG

Humboldtring 15
45472 Muelheim an der Ruhr
Germany
0208/494-0
Fax: 0208/494-698

Wholly Owned Subsidiary of VEBA AG
Incorporated: 1902 as Hugo Stinnes GmbH
Employees: 34,697
Sales: DM 21 billion
SICs: 8999 Services, Nec; 5171 Petroleum Bulk Stations and Terminals; 4412 Deep Sea Foreign Transportation of Freight; 5169 Chemicals and Allied Products, Nec; 5211 Lumber and Other Building Materials; 5052 Coal and Other Minerals and Ores; 6120 Wholesale Distribution of Fuels, Ores, Metals and Industrial Materials; 6110 Wholesale Distribution of Agricultural Raw Materials, Live Animals, Textile; 7630 Supporting Services to Sea Transport; 6220 Dealing in Other Scrap Materials, or General Dealers; 8200 Institutions Specializing in Insurance Other Than Long-Term.

Stinnes AG, a group of independent divisions consisting of 119 major domestic and 85 foreign companies, is Germany’s and one of Europe’s largest transportation and distribution companies. As of 1965 Stinnes AG has been a wholly owned subsidiary of VEBA AG, Germany’s largest firm. The Stinnes group’s three principal activities are trading in raw materials, especially coal and oil; chemical distribution and steel processing; and air, sea, and land transportation. An increasingly important business segment of Stinnes is the service industry, from do-it-yourself building materials, to ownership of the prestigious Hotel Nassauer Hof in Wiesbaden, to providing data processing services.

Stinnes AG has deep roots in modern German history. The company’s founder, Mathias Stinnes, was born in Muelheim in the Ruhr valley during the time of the French Revolution, when the German states were heavily fragmented and decentralized. It is all the more amazing that entrepreneurship could succeed in an area of Europe where innumerable regional interests competed against one another. Added to this politically and economically unstable environment were the numerous invasions of the Napoleonic armies that devastated the very region in which Mathias Stinnes was born.

One of many children of a poor bargeman and his wife, Mathias was affected deeply by the winds of change buffeting him and his generation. The democratic ideas of the French Revolution and Napoleon’s forced and short-lived consolidation of the German states signaled change. The legacy of that brief union was not lost on the diplomats gathered at the 1815 Congress of Vienna, who issued a call for a voluntary lifting of trade restrictions on the Rhine, the longest river in western Europe, of which the Ruhr is a tributary.

With so much change in the air, Mathias Stinnes and his two brothers did not follow in their father’s footsteps, as generations before them had. Instead of remaining poor laborers, they opted to hire laborers and go into business for themselves. In 1808 Mathias Stinnes, with the help of his brothers, set up his own company, named after himself as elder brother, that hauled goods and raw materials on a boat via the Ruhr.

Stinnes’s business grew, despite the community’s deep-rooted distrust of someone who chose to strike out on a path different from his forefathers. When Mathias died in 1845, his steamboats plied the Ruhr, and he had become the largest private owner of inland shipping in the fragmented German states. Unusual for that day and age, he branched out into other businesses: the Ruhr area was rich in coal, and by the time he died, the Mathias Stinnes company owned shares in 36 mines, four of which his firm had built. Stinnes’s traditional lines of business—trading in raw materials and transportation on inland waterways—were well established by the 1840s.

Mathias’s sons took over the family enterprise in turn, each one dying at a young age. Despite the succession of political crises in Germany occasioned by wars of unification as well as the rise of an organized labor movement, the Stinnes firm continued to expand. In 1908, 100 years after the company was founded, it possessed 21 tugs and nine of its own ports along with their storage facilities, and owned and controlled five mines. By then, however, a new company had arisen that in time would engulf the old Mathias Stinnes firm.

Hugo Stinnes, grandson of Mathias Stinnes, was born in 1870. Dissatisfied with the traditional family business, the 21-year-old Hugo persuaded his mother to sell her ownership in the firm and to lend him 50,000 gold marks to start up his own business, which he incorporated in 1902 as Hugo Stinnes GmbH in Muelheim. He still retained technical management of the Mathias Stinnes mines, however, and gradually the two companies became indistinguishable.

Hugo Stinnes was a dynamic, forceful, and imaginative entrepreneur whose horizons stretched well beyond the traditional family enterprises and the customary way of doing things. His original business—coal mining and transportation—was what he knew best; from there, however, he went on to found the biggest business empire that Germany, unified into a centralized state in 1871, had ever seen.

Even the coal business would change under the farsighted entrepreneur: in the years before World War I, Hugo Stinnes entered into a partnership with the much older August Thyssen. Together, the two established the Muelheimer Bergwerk-sverein, which took over used mines and made a profit out of them. Soon Hugo Stinnes’s firm had branches of its coal business in Great Britain, Italy, and the Russian Empire. He entered the shipping business on his own, and his fleets competed with and would eventually absorb the family fleets. He experimented with recycling gas from coke furnaces and became the foremost promoter of electricity in Germany. Hugo Stinnes tirelessly expanded into new business arenas, not for the mere sake of expansion, but to integrate all of his businesses “vertically,” a feat that he would not fully accomplish until after World War I.

Despite the shortages of various raw materials because of the Allied blockade of Germany’s ports, Hugo Stinnes GmbH emerged unscathed from the war and with an even bigger portfolio. With the Kaiser in exile and a new democratic government in place, Hugo Stinnes became a member of the Reichstag and thus politically influential. The French occupation of the Ruhr valley, where many of Stinnes’s assets, especially mines, were located, convinced him that vertical integration of his business, from raw materials to the finished product—including transporting the finished product and controlling the sources of energy in Germany to complete this process—must be accelerated.

A veritable frenzy of expansion followed, in the course of which Stinnes established a partnership with Stahlwerk Breuningshaus steelworks and proceeded to purchase companies that would fully complement this line of business, such as rolling mills, rivet and wire works, a machine tool factory, and other related companies. In 1920 Hugo Stinnes acquired a mining and foundry business that employed 18,000 workers and joined with Germany’s largest manufacturer of electrical equipment and appliances, Siemens, to enter that line of business in a partnership. Interested in new energy sources, especially petroleum, Hugo Stinnes’s firm began acquiring oil wells abroad, along with refineries and the ocean vessels necessary for conveying the precious fuel. Shipping and transportation companies were purchased as a matter of course, and with Hugo Stinnes’s increasing involvement in politics, his business interests turned to newspaper presses, publishing houses and printing establishments, which his firm acquired in short order. Helping this process of acquisition was the cataclysmic German inflation of the early 1920s; property could be bought for almost nothing.

At the time of his premature death in 1924, not only was Hugo Stinnes Germany’s most influential and powerful industrialist, but he was also the owner of the largest firm (in terms of assets and revenues) in the country. Hugo Stinnes GmbH consisted of more than 4,500 businesses and employed tens of thousands of workers.

A year and a half after Hugo Stinnes’ death, the company was on the brink of ruin. Profligate sons succeeded him and competed against each other; banks recalled their loans, and finally, son Hugo, Jr., sold half of the company’s shares to two American banks in return for a huge loan. Much of the company’s assets and property were destroyed during the succeeding war years; immediately afterwards, the Stinnes firm reverted to the control of the Allied occupation authorities. Half of the firm was still owned by banks in the United States.

The Hugo Stinnes company probably would have gone under, its stock sold to the highest bidder—most likely to a foreign company—without the intervention of Heinz P. Kemper. Because he had no Nazi party affiliation during World War II and had for many years directed an American subsidiary in Germany, the American occupation authority selected him to head Stinnes. As its director, Kemper dismissed Hugo Stinnes, Jr., from the helm, thereby ending the Stinnes family’s connection to that firm.

Reviving the company and returning it to prosperity was nearly impossible, especially since its assets were spread throughout Germany and British and French authorities were far less friendly and compromising than the Americans. There was also the urgent matter of repurchasing the half of Stinnes still under American ownership, since the Americans were in a position to make a takeover bid for the other half. Unfortunately, Stinnes finances were in turmoil, and there was no money for repurchase.

The firm began to slowly recoup some of its losses and show a profit, thanks in part to the reform of German currency in 1948 and to the formation of the West German state, or Federal Republic of Germany, in 1949. The company was hardly out of deep water, however. The U.S. Government informed Kemper in the mid-1950s that Stinnes stock held by U.S. banks would be sold to the highest bidder, and Germans would be excluded from bidding. Desperate to save the company, Kemper turned to the German government in Bonn for help. Chancellor Konrad Adenauer gave Kemper a sympathetic hearing. Adenauer in turn had a friendly relationship with U.S. President Dwight D. Eisenhower, who was able to pull enough strings to allow the Germans to participate in bidding for their own stock. The Stinnes company, however, did not possess the required capital—DM 100 million—the likely price of repurchasing the stock. So, the German government intervened once more; Finance Minister Ludwig Erhard worked to set up a consortium of German banks that could provide the necessary loan, all of which would have to be repaid to the last pfennig. In the United States, Kemper successfully outbid his competitors, including some of the most powerful firms in the Common Market, and the Hugo Stinnes firm was once more a wholly German-owned company.

The Marshall Plan for the resurrection of the German economy as well as the economic benefits of West German unification laid the foundations of the German “economic miracle.” The Hugo Stinnes company once again became one of Germany’s largest transportation and raw material supply companies, with sales in the multi-billion dollar range by the early 1970s. In 1976 the company’s name was changed to Stinnes AG, in recognition of the fact that the firm was no longer in the hands of the Hugo Stinnes family, and as a reflection of the traditions of both Mathias Stinnes, the founder, and Hugo Stinnes, the daring entrepreneur. By then, Stinnes AG had joined the VEBA group of companies, Germany’s largest firm. In 1965 VEBA had bought 95 percent of Stinnes stock, thus turning the company into a subsidiary. By becoming part of this holding company, Stinnes turned into the biggest transportation company in West Germany, since VEBA sold one of its largest barge lines to Stinnes in return for the Stinnes glassworks and the chemical firm Chemiewerk Ruhroel.

By the early 1990s Stinnes AG had become a multibillion dollar company, operating the largest transportation industry in Europe, and also serving as the owner of Brenntag AG, the largest supplier of petrochemicals on the continent. Headquartered in Mathias Stinnes’s home town of Muelheim on the Ruhr, Stinnes has branched out into every continent on the globe, and into every country in Europe, including eastern Europe and Russia. On the eve of the twenty-first century, Stinnes consisted of a multitude of major companies, most of whom concentrate on the three business operations of Stinnes: trading in raw materials, distribution, and transportation. Two-thirds of Stinnes’ revenues were derived from foreign markets, and one-third of its over 35,000-member work force were employed by Stinnes businesses outside of Germany.

In the early 1990s Europe’s biggest transportation (in terms of land traffic) network was the Schenker Eurocargo group, which merged with Stinnes in 1991. A fleet of trucks and other conveyances—including railroads—transported merchandise throughout Europe, including Eastern Europe. Schenker-Rhenus AG, along with its subsidiaries, employed a total of 20,000 people and was without doubt Stinnes’s largest component. Stinnes’s Schenker International division was a major air and sea transporter of freight arid operated fourteen travel agencies as well. In the trading division, Stinnes Intercarbon was the top supplier and marketer in Europe of coal and its byproducts; also in the trading division, the Stinnes firm Frank & Schulte GmbH processed and supplied ores, minerals, and metals to anywhere in the world via its 20 subsidiaries; in the distribution segment, consisting of approximately six major companies, Brenntag AG was the number one supplier of industrial chemicals to chemical manufacturers and the cosmetics industry throughout Europe. An increasingly important segment of Stinnes business was the service sector, especially home-improvement chain stores. A small but important enterprise was the replacement tire market operated by Stinnes Reifendienst, which held the number one market position in Germany; this Stinnes division also owned more than 200 service stations throughout Germany, the Netherlands, Switzerland, Austria, and Alsace.

Since the unification of East and West Germany, Stinnes, unlike many former West German companies, has been in the forefront of investment and expansion into the former German Democratic Republic. Stinnes was also one of the first West German companies to establish corporate branch offices in the eastern German states and to establish major delivery routes into and out of those states. Brenntag AG opened a major distribution center in Magdeburg in former East Germany and quickly established branches of the firm throughout eastern Germany. Shortly after unification in the fall of 1991, Stinnes’s earnings from eastern Germany alone totalled DM 1.5 billion—over US$1 billion.

So hungry was the Eastern European population—which for decades lived under restrictive communist governments—for western goods in the early 1990s, that Stinnes was fortunate to have cultivated strong economic ties long before the fall of communism in eastern Europe and Russia. For one thing, the opening up of the east led to new raw material sources for Stinnes, the largest supplier of raw materials in Europe. Because of this, the Stinnes division Frank & Schulte had a year of record profits during the period of slow worldwide growth in 1991. Ores, minerals, and alloys were increasingly being obtained by Frank & Schulte from its Eastern European markets, which represent the best opportunity for growth for that company. Brenntag opened an important branch in Warsaw and offices in the Prague and Moscow, only the beginning of its full penetration of the Eastern European market. The majority of Stinnes’s divisions were racing to develop or extend their business in the east, including Russia, where the future of the vast Stinnes firm seems to lie.

According to a past chairman of Stinnes AG, Guenter Winkel-mann, the company could not exist without international markets. For this reason, Stinnes was particularly affected by the recession in North America, Australia, and Great Britain in the early 1990s. At the same time, however, Stinnes, which derived most of its revenues from overseas markets, was entrenched as the global leader in transportation and distribution. Stinnes’s transition from a German firm to a multinational company took place nearly 100 years ago. By comparison, many other large companies in Germany and elsewhere were just beginning to branch out overseas. Diverse businesses and international markets were the major strengths of Stinnes AG and crucial components of a global leader looking to maintain its position in the twenty-first century.

Principal Subsidiaries

Internationales Kohle-Trading; Stinnes Intercarbon AG; Stinnes Intercoal GmbH; Stinnes Hansen Coal GmbH; Stromeyer GmbH; Stinnes Kohle-Energie Handelsges. mbH; IKO Industriekohle GmbH & Co. KG; Fechner Gmbh & Co. KG; Stinnes Hansen Coal Company; Intercarbon Pty. Ltd; Agenzia Carboni, S.r.l.; Intercarbon do Brasil Ltd.; Store Norske-Stinnes Intercoal A.S.; Internationales Ö1-Trading; Stinnes Interoil AG; VTG Paktank Hamburb GmbH; Stinnes Interoil Inc.; Stinnes Interoil PTE LTD; Stinnes Interoil Italia SRL; Internationales Erze/Mineralien-Trading; Frank & Schulte GmbH; Ferrocarbon GmbH; Fergusson Wild & Company Ltd.; Microfine Minerals Ltd.; F + S Alloys and Minerals Corporation; Miller and Company; Brenntag AG; Brenntag Eurochem GmbH; Brenntag Interchem GmbH; Industick GmbH, Chemische Produkte; Chemische Fabrik Lehrte; Stinnes Mineralölhandel GmbH; Boucquillon N.V.; NBM Nederlandsche Benzol Maatschappij B.V.; B.V.V./H Firma L.J. Volkers; Brenntag France S.A.; Groupe Distribution Chimie, S.A.; Brenntag (U.K.) Ltd.; Brenntag Italia S.p.A.; Brenntag Portugal Produtos Quimicos Lda.; SOCO Chemical Inc.; Textile Chemical Company Inc.; SOCO-Lynch Chemical Corp.; Delta Distributors, Inc.; P.B. & S. Chemical Company, Inc.; Brenntag Interchem Inc.; Brenntag (Taiwan) Co. Ltd.; Southern Inc.; Walter Patz OHG; Stinnes Montanhandel GmbH & Co. KG; Stinnes Stahlhandel GmbH; Hollinde & Boudon GmbH; Bausthl Schöder GmbH; Josef Stangl EisengroBhandel u. Biegebetrieb GmbH; Michael Friess GmbH; Stinnes Rohrunion GmbH; Stinnes Steel AG; Stinnes BauMarkt AG; Baustoff-Union GmbH & Co. KG; SB-Baustoff-Vertrieb GmbH; Stinnes Reifendienst GmbH; Hofka Sampermans B.V.; Pneu Matti AG; Kautzmann S.A.; Reifen Reiner Ges. mbH; Inter-Union Technohandel GmH; Batavia M. Sawatzky GmbH & Co. KG; Mester Werkzeuge, Werkzeugfabrik GmbH; Interconti Industriekontor GmbH; Gelhard GmbH & Co. KG; Tegro AG; Batvia A/S.; Viktor E. Kern Ges. mbH; Schenker Eurocargo; Biermann-Schenker Portugal Lda.; Bischof Gesellschaft mbH; Exped Holland B.V.; Newexco B.V.; Schenker & Co. AG; Schenker & Co. A/S; Schenker Danmark A/S; Schenker S.A.; Schenkers Ltd.; Schenker Eurocargo B.V.; Schenker Eurocargo N.V.; Schenker Transport AB; Schenker-Berker A.S.; Schenker Interlogistik AG; Schenker Hellas AG; Schenker Hungaria Kft.; Schenker Italiana S.p.A.; Schenker Norge AS; Schenker Polska Sp.zo.o.; Schenker Witag; Schenker International AG; c & d Luftfracht-System GmbH; Rhenus Air Transport GmbH; Schenkers International Forwarders, Inc.; Schenker of Canada Ltd.; Schenker Panamericana (Mexico) S. De R.L.; Schenker Panamericana (Panama) S.A.; Schenker Panamericana (C.A.) Ltda.; Schenker do Brasil Transportes Internacionais Ltda.; Entra, Engelberg Transport Internacionales. C.A.; Schenker Argentina S.A.; Schenker Colombia S.A.; Schenker & Co. (East Africa) Ltd.; Schenker & Co. (Botsuana) (Pty) Ltd.; Schenker & Co. (S.A.) Pty. Ltd.; Japan Schenker Co. Ltd.; Rhenus Transport International Ltd.; Schenker (H.K.) Ltd.; Rhenus Transport (Singapore) Pte. Ltd.; Schenker Singapore (Pte.) Ltd.; P.T. Trans-Kontinent Utama; Schenker Malaysia Sdn. Bhd; Schenker (Thai) Ltd.; Schenker (H.K.) Ltd.; Denny & Roys Ltd.; Schenker & Co. (Aust.) Pty. Ltd.; Rhenus AG; “Nancyport” Société d’Exploitation du Port de Frouard S.A.; Luxport S.A.; Rhenus AG fur Schiffahrt und Spedition; Spoorhaven Stevedoring & Warehousing B.V.; Rhenus Nederland B.V.; Stinnes Reederei AG & Co.; RK Reederei + Spedition; Reederei Jaegers GmbH; Combined Container Service GmbH & Co. KG; Bayerischer Lloyd AG; Bulgar Lloyd GmbH; Deutsch-Ukrainische Verkehrs-GmbH; Rom Lloyd GmbH; DLM Donau-Lloyd-Mat GmbH; Stinnes Antverpia N.V.; Hungaro Lloyd KFT; Bayerischer Lloyd Ltd.; Midgard Deutsche Seeverkehrs AG; Poseidon Schiffahrt OHG; Frachtcontor Junge & Co.; Junge & Co.; Ahlers N.V.; De Baerdemaecker N.V.; Railship GmbH & Co. KG; Transwaggon GmbH; Stinnes-Immobiliendienst GmbH & Co. KG; Hotel “Nassauer Hof” GmbH; Hamburger Hof GmbH & Co.; Hamburger Hof Verischerungs-AG; Stinnes-data-Service GmbH; INAS GmbH; Stinnes-Organisationsberatung GmbH; Stinnes Corporation; Precision National Plating Services Inc.; Transwaggon AG; KKKK A/S.