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Velux A/S

Velux A/S

Tobaksvejen 10
Soborg, DK-2860
Denmark
Telephone: (45 39) 69 11 44
Fax: (45 39) 56 26 69
Web site: http://www.vkr-holding.com

Wholly Owned Subsidiary of VKR Holding A/S
Incorporated:
1941 as V. Kann Rasmussen & Company
Employees: 9,000
Sales: DKK 11.5 billion ($1.95 billion) (2005 est.)
NAIC: 337920 Blind and Shade Manufacturing

Velux A/S is one of the worlds leading producers of roof windows and other rooftop fittings. Indeed, the Denmark-based companys prominence is such that Velux has become more or less a generic term for this type of window, that is, a skylight that can be opened to allow ventilation. In addition to roof windows, the company also produces skylights, sunscreens and awnings, roller shutters, thermal solar panels, and related fittings and equipment. The Velux Group of companies operates on a global level, with sales in more than 90 countries, and a worldwide network of manufacturing and sales and distribution subsidiaries.

While Europe remains a major market for the company, Velux has established a strong presence in the North American market; the company has also extended its reach into much of Asia, with an emphasis on the Japanese, South Korean, and, at the start of the 21st century, Chinese markets. The company has also been extending its reach into the Eastern European markets. In 2007, for example, the company, which entered Russia during the 1990s, expected to open a new plant in the city of Rostov Veliky. In all, Velux operates ten manufacturing facilities and 40 sales subsidiaries.

Velux A/S itself is the centerpiece of VKR Holding, formed as a holding company for the groups diversified operations. These include production of vertical windows and external doors, also for the third-party and private label channel, as well as door panels, awnings, blinds, and the like. VKR also owns SolarCap, which oversees a group of companies developing and marketing thermal solar energy systems for the European market. Velux, which employs 9,000 of VKRs total 13,000 employees, is estimated to generate approximately 80 percent of VKR Holdings revenues. VKR posted total revenues of more than DK 14 billion ($2.4 billion) in 2005. The company remains privately held and controlled by the founding family, through the Villum Kann Rasmussen Foundation and the Velux Foundation. Jørgen Tang-Jensen is CEO of Velux A/S.

VENTILATION AND LIGHT IN 1942

Velux was the brainchild of Villum Kann Rasmussen, born on the Danish island of Mando in 1909. After completing an engineering degree at the Technical University in Denmark, from which he graduated in 1932, Rasmussen went to work for a company producing glass roofs. An avid inventor, Rasmussen founded his own company, V. Kann Rasmussen & Co. in 1941, based in Copenhagen, and worked on developing his own glass roof, skylight, and window designs. Just one year after founding the company, Rasmussen received a contract to supply skylights for a school in South Zealand.

This contract provided Rasmussen with the inspiration that transformed the company into a major international manufacturing group. The skylights for the school were part of the schools plan to rebuild its attic space into classrooms. Rasmussen understood that the major drawback of skylights, compared with typical vertical windows, was that the skylight was unable to open. Thus it might bring light into the attic space but was unable to provide fresh air. Rasmussen set to work solving the technical difficulties of enabling the skylight to open, notably, ensuring the window remain watertight as well as providing insulation against heat loss.

By the end of that year, Rasmussen had succeeded in developing the first roof window, as he called it. The design, which featured a metal frame on the exterior surface, providing a durable structure, was fitted with a wooden frame on the interior. This frame was not only aesthetically pleasing, capable of matching existing vertical window frames, but also provided the insulation properties of wood. The frame also featured a gutter, to drain rainwater away from the structure. Rasmussen named his invention Velux, combining the Ve from ventilation with lux, the Latin word for light.

Rasmussen continued to develop the Velux, which not only became his companys core product, but also gave the company a new name. In 1945, Rasmussen invented a new pivotable hinge, allowing the entire window to be spun 180 degrees. This enabled both surfaces of the window to be cleaned and represented a major step forward in the products acceptance in the market. The company launched its new window, the FV, in 1946. At the same time, the company became one of the first to use double glass, providing additional insulation.

Rasmussens invention represented a major coup during the challenging postwar years in Europe when there was little financing available for new construction. The Velux window allowed for the conversion of unused attic space into well-lighted and well-ventilated living and work spaces. The window design also provided solutions for other issues in building design. In 1948, for example, Veluxs N series gained approval by the Danish government for use as emergency exit windows.

The innovative roof window design quickly captured attention outside of the Danish market. The companys first steps into the international market came from neighboring Sweden, when the company awarded a license to produce its window designs to a local manufacturer in 1944. By the end of the decade, the company had begun exports to Norway and the United Kingdom, and then to Ireland and Germany. This last market rapidly became one of Veluxs most important, as the massive reconstruction effort needed there following World War II offered an enormous opportunity for the young Danish company. In 1952, Velux teamed up with a local partner, E. G. Albers, forming a production plant and launching sales of the Velux models for the German market.

If Rasmussens company had struggled during its early years, by the late 1950s the company had hit its stride. The United Kingdom, which had also suffered a great deal of damage from bombing raids during the war, provided another strong market for the company, leading Velux to extend its sales and distribution operations there in 1954.

GLOBAL GOAL IN 1965

In addition to extending its manufacturing and sales networks, Velux, led by Rasmussens continued design and development work, added to its line of products as well. In 1956, for example, the company introduced its Velux awning blind, for which Rasmussen received an international patent. By then, too, the company had entered the vertical windows market as well, introducing the first of this line in 1952. The companys vertical windows operations were regrouped under the Velfac brand in 1961, and Velfac later became a separate subsidiary under VKR Holding.

COMPANY PERSPECTIVES

Velux is a global company founded on a vision of daylight, fresh air and quality of lifeand these benefits are enjoyed in millions of homes around the world.

Today, more than sixty years after the first Velux roof window was installed in a Danish school, our vision and values have evolvedbut fundamentally remain as first expressed by our founder, Villum Kann Rasmussen.

Velux also began integrating its manufacturing during the 1950s. The company created the BBI Metal and Plastic Factory in 1954 in order to supply these materials for its window production. In 1956, the company launched production of glass panels, which were also marketed under the Vitral brand. The company also developed its own flashings, which became standard features of its windows in 1962.

Velux kept its focus on extending its international reach through the end of the 1950s and into the 1960s. The company added operations in Holland and Belgium in 1957. The following year, the company launched sales offices in Austria and Switzerland. The companys entry into France came only later, in 1962, but quickly became a major market for the Velux brand as well. By 1965, the companys international ambitions were summarized by Rasmussen, who announced a new company vision that year: It is our goal worldwide to extend the use of utilized attics and to ensure and further develop the leading position which the Velux roof window has today as the window for the sloping roof.

The companys efforts to establish its greater international reach were backed by continued product development. This resulted in the launch of a new generation of Velux roof window systems, the GGL. The new series featured a redesigned pivot hinge that made the window even easier to open than previous models, while also featuring a new insulating glass unit. The GGL was also able to remain open without the need of a supporting bar.

Backed by the GGL model, Velux continued to build its international presence, adding Italy in 1968 and Spain in 1973. The company also made its first move outside of Europe, launching sales in the United States in 1975. The extension of its operations also required the company to expand its production capacity. To this end, Velux added several new production sites outside of Denmark. In 1973, the company opened its first production facility in the United Kingdom, followed by a factory in France. The fast-rising sales in the United States, as well as in Canada, also led to the construction of a plant dedicated to the North American market in 1978.

Veluxs international penetration was all the more successful due to the companys ability to adapt its product line to the needs of foreign markets. Building traditions varied widely from country to country and even from region to region, so the company adapted its products accordingly. Accompanying these adaptations was the development of electric mechanisms to operate the companys windows, introduced in 1973. The company also developed a new model, the VTL, launched in 1977, which was specifically designed for rooftops with a less dramatic pitch than that found in the snowier Nordic markets.

REORGANIZATION UNDER THE VKR UMBRELLA

By then, Veluxs ownership structure had undergone the first of its reorganizations. With founder Rasmussen approaching his seventies, the company created a new shareholder foundation, the Villum Kann Rasmussen Foundation, in 1971. A decade later, the company added a second organization, Velux Foundation, specifically created to provide cultural and research funding. Nonetheless, Villum Kann Rasmussen himself remained as the head of the company until his death in 1993. Following his death, the companys operations, which had expanded into several areas beyond its core windows business, were restructured under a new holding company, VKR Holding A/S. The Velux Group remained the largest operation within the new company, which included such subsidiaries as Rationael Vinduer in Denmark, Svenksa Fönster and Mockfjärds Fönster in Sweden, and West Port, in England, all of which manufactured doors and vertical windows.

By then, Velux had successfully expanded its list of products. The company launched a new series of sunscreens and decorative products in 1979. These were expanded in 1983 with the addition of window linings and electrically operated venetian blinds. Toward the end of that decade, the company added roller shutters to its range of primarily rooftop-based products. In 1990, this lineup was expanded again when the company introduced the Cabrio rooftop balcony.

KEY DATES

1942:
Villum Kann Rasmussen founds V. Kann Rasmussen & Company in Copenhagen and invents the Velux roof window.
1952:
Company launches sales and production in Germany through a joint venture.
1965:
Goal of developing worldwide operations is announced.
1975:
Company first enters North American market through a sales subsidiary.
1978:
Company builds a factory in the United States.
1981:
Company enters Japan, which becomes one of its largest markets.
1993:
Founder Villum Kann Rasmussen dies.
2006:
Velux announces plans to enter new construction sector.

Velux also expanded its international network during the 1980s and 1990s. The company took advantage of the thaw in the Cold War to make its first entry into the Central and Eastern European market, setting up a joint venture in Hungary at the end of the 1980s. From there, the company was able to expand further into the region, adding its first sales operations in Russia in the 1990s as well.

At the same time, Veluxs interests increasingly turned to the rapidly developing markets in other parts of the world. During the 1980s, the company launched sales operations in Australia, which followed an entry into the Japanese market. Growth in that market was relatively slow at the beginning and came largely from the northern Hokkaido region. However, by the end of the decade, the company had successfully adapted its designs to meet the specific needs of that market, including the production of a typhoon-proof design that took into account the intense rains and high winds during the rainy season.

The mainland Chinese market also held vast potential for the company, at first as a low-wage manufacturing base for its Japanese sales. However, as Chinas purchasing potential skyrocketed at the dawn of the 21st century, that country itself became an important growth market for Velux. The Russian market also held promise for the company, and at the end of 2006 Velux announced its intention to build a new factory there, in the town of Rostov, with construction expected to be completed in 2007.

Into the middle of the decade, Velux continued to lead the roof window market with its commitment to innovation. The company introduced a new generation of roller shutters, as well as the Integra electric window, launched in 2002. The following year, the company introduced a new solar-powered roller shutter, which took advantage of the companys entry into the production of solar panels, first launched in 1999. By the end of 2006, the company had also introduced a new range of roof windows designed for flat roofs as well as a sun tunnel design.

Both products were developed in part to support the companys new goal of expanding its core business beyond furnishing existing homes and buildings. Rather, for the new century Velux sought to establish a second base of operations in the market for new building construction. As part of that effort, the company launched a new program of marketing to, and working directly with, architects.

By the middle of the first decade of the 2000s, Velux had become the worlds leading manufacturer of roof windows. With 9,000 employees and sales estimated to top DK 11.5 billion ($1.9 billion), Velux remained the focus of the larger VKR Holding, said to account for 80 percent of the total groups sales. Building on more than 60 years of success, Velux looked forward to a bright and airy future.

M. L. Cohen

PRINCIPAL OPERATING UNITS

Velux France; Velux (China) Company Ltd.; Velux America Inc.; Velux Solutions Inc. (United States); Velux Greenwood Inc. (United States).

PRINCIPAL COMPETITORS

Lacy Diversified Industries; Lowes Companies Inc.; Georgia-Pacific Corporation; Stora Enso AB; Blue Circle Industries plc; Truth Hardware Corporation; Pentair Inc; Grupo Tafisa; Nobia AB; Pfleiderer AG.

FURTHER READING

Maxwell, Steve, Sunlight, Fresh Air and Good Feelings, Toronto Star, October 5, 2006.

Velux Expands Design Service, TTJ-The Timber Industry Magazine, April 29, 2006, p. 4.

Velux (Focus on Skylights), Roofing Contractor, July 2006, p. 56.

Velux Japan Ltd.: Bringing Light to Life, Investing in Japan, February 26, 2004.

Velux Raises Roof, TTJ-The Timber Industry Magazine, May 13, 2006, p. 31.

Veluxs Parent Company Reports Lower Profit, Boersen, April 23, 2002.

Velux to Invest $10$50 Mln in Window Plant in Rostov-Veliky, Russia & CIS Business and Financial Newswire, November 10, 2006.

Velux to Mail Building Trade in Intrigue Blitz, Precision Marketing, June 17, 2005, p. 5.

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