Annual Report 2011 Holcim Ltd

24
A model Egyptian company
In 1929 “Holderbank”opened a cement
factory in Tourah in Egypt. Life in Egypt
would not be easy for the Swiss, and
not just because of the officials who
sat on the Board of Directors as local
representatives. Concerned about their
livelihoods – under Swiss leadership
bribes for the necessary approvals
weren’t flowing as generously as before
– lawyers in the area also sought
to delay the operations and block
further improvements to the cement
factory. Despite this resistance,
“Holderbank” was able to merge its
older factory in Maasara with the new
plant. The new operation struggled
during the world economic crisis,
mostly as a result of the depreciation
of both the Egyptian and British pound.
Nevertheless, Tourah would become a
model enterprise, garnering the attention
of King Fuad I. Four years after it
opened, the King visited the factory
with a large retinue. The Schmidheiny
biographer, Hans O. Staub, would later
describe this as one of the greatest
days in Ernst Schmidheiny’s life.
King Fuad I of Egypt visits the “Holderbank” plant in Tourah.
At the beginning of the Golden 20s Ernst Schmidheiny, along with “Holderbank”
founder Adolf Gygi, laid the foundation upon which Holcim would build for
decades to come. It’s possible to trace many of the company’s most important
characteristics back to this decade.
In 1922, “Holderbank” engineers began their first activities abroad, using their
technical know-how to support the construction of a cement plant in Beaumontsur-Oise,
south of Paris. The work was carried out on behalf of the Société Suisse
de Ciment Portland SA of Neuchâtel, in which “Holderbank” at the time had a
large stake.
Ernst Schmidheiny had hardly taken over as Chairman of the Board of “Holderbank”
when he began pushing to expand abroad. He embarked on a steady series of wellconsidered
transactions, and had no hesitation about taking on minority interests
as long as they made strategic and economic sense. During a trip through Cyprus
in the early 1920s, he made a detour to Egypt, having heard about an old cement
factory in Maasara that was for sale. Cement production in Egypt was not really
efficient at the time. The situation was so bad that most Egyptian cement had to
be imported. Schmidheiny jumped in. In 1926, he founded the Société Égyptienne
de Ciment Portland Tourah-le Caire with the goal
of building an ultramodern cement factory south
of Cairo. In 1927, the company was completely in
Swiss hands, and two years later the new plant in
Tourah was opened. Alongside his business interests,
Schmidheiny quickly developed a personal affinity to
Egypt, and considered emigrating. His wife Vera, who
for health reasons was very fond of the warm climate,
liked the idea as well.
It is a measure of their farsightedness that both Ernst
Schmidheiny and Adolf Gygi dealt early with the issue
of the company’s succession planning. Schmidheiny’s
sons Ernst Jr. and Max, as well as Gygi’s son Hans,
were all integrated in various functions at “Holderbank” and quickly learned to
take on business-related responsibilities. All three of them would play important
roles in the subsequent development and expansion of the Group. In 1923, Gygi
and Schmidheiny sent their sons to the Netherlands and Belgium to scout possible
cement work acquisitions. It would prove to be a fruitful trip. Just two years later,
“Holderbank” would take an equity position in Ciments d’Obourg in Belgium and
a year later, in 1926, in the Dutch cement plant ENCI. Unfortunately the elder Gygi,
who died in an automobile accident in 1924, would not be able to experience this
first phase of expansion abroad.
For the younger generation, Adolf Gygi’s death meant an unexpected and somewhat
premature assumption of leadership roles. In 1924, Ernst Schmidheiny Jr.,
the elder of Schmidheiny’s two sons, became the head of the cement factory in
Holderbank-Wildegg. His father still held the reins of the company firmly in his
hands, and continued pushing on with its rapid expansion both at home and abroad.
It would only be in the following decade that “Holderbank” would feel the effects