Degussa Group

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Degussa Group

Postfach Box 11 05 33
Weissfrauenstrasse 9
D-6000 Frankfurt am Main 11
Federal Republic of Germany
(069) 218-01
Fax: (069) 218-3218

Public Company
Incorporated: 1873 as Deutsche Gold-und Silber-Scheideanstalt vormals Roessler
Employees: 35,000
Sales: DM14.40 billion (US$9.64 billion)
Stock Exchanges: Frankfurt Dusseldorf Hamburg Munich Zurich Basel Geneva

Degussa is the only company in the world operating simultaneously in the three fields of metals, chemicals, and pharmaceuticals. It has production sites in more than 25 countries and has expert representatives of its own throughout the world.

Degussa’s story begins in Frankfurt am Main in the first half of the 19th century. The Free City of Frankfurt, as it was known in those days, built its new mint in 1840 in the immediate vicinity of Degussa’s present head office, following a commitment it had accepted in 1837 at the Mint Conference in Munich. Here, the South German states and the Free City of Frankfurt, which together made up the states forming the German Customs Union of the day, had agreed for the first time on a common monetary unit, the florin, and had undertaken to coin certain amounts of the new currency. The director of the mint, Friedrich Ernst Roessler, son of the mint counsellor of the grand duchy of Hesse and living in the neighboring town of Darmstadt, at the same time established a precious-metals refinery within the mint at the behest of the city. He took a lease on the refinery and in January 1843 started operations at his own expense. Roessler thus laid the foundation for what was to become Degussa AG.

In addition, Friedrich Ernst Roessler established a chemical engineering laboratory not far from the Frankfurt Mint on the site now occupied by Degussa’s head office. By-products of the sulfluric acid refinement process, in those days the standard method, were processed there and silver nitrate for photography and cyanide compounds were produced.

As a consequence of the Austro-Prussian War of 1866, in which Frankfurt lost its political independence, Friedrich Ernst Roessler became a Prussian civil servant and had to discontinue his private refinery business. He was nevertheless able to acquire the now private refinery for his two eldest sons Hector and Heinrich, both of whom had studied chemistry. They transferred refinery operations to the chemical engineering laboratory, located in a new factory built for the purpose, and continued to run both lines of business under the name Friedrich Roessler Sohne (Friedrich Roessler Sons) as a private company.

By developing an economical form of sulfuric acid refinement, a process which was still common—the electrolytic process was introduced in 1892 and 1895—Friedrich Roessler Sohne was technically well-equipped to take advantage of the creation of the new German Empire in 1871, when the coins of the former independent German states were replaced by the newly introduced mark currency, thus providing a favorable opportunity for extensive minting and refining activities. However, since the securities required by the empire on refinement orders could not be met, the precious-metals refinery Fried-rich Roessler Sohne was converted into a joint-stock company, or Aktiengesellschaft, in January 1873 in order to enlarge its capital resources. Several banking institutions were behind the founding of the present Degussa, which from then on operated under the name of Deutsche Gold-und Silber-Scheideanstalt vormals Roessler (German Gold and Silver Refinery, formally Roessler) for more than a century. Only in 1980 was the acronym and telegram address Degussa, in common use since the 1930s, entered into the trade register with the addition of the term Aktiengesellschaft identifying it as a share-issuing company.

Its initial capital amounted to 1.2 million gold marks. Of the 2,000 shares issued, 525 were held by the Roessler family, representing 26% of the stock capital. The company’s identity as a family business was preserved nevertheless, owing to the appointment of the brothers Hector and Heinrich Roessler to Degussa’s first board of directors.

Degussa’s first great commercial success came about as a result of its newly developed method of producing bright gold for the fire-resistant embellishment of china ware and glass, following the completion in 1879 of the large-scale minting contracts for the German Empire. Other ceramic colors were later added to the list of products.

Shortly afterward in 1882, Degussa began to produce bright gold in the United States. This led to the foundation of the Roessler & Hasslacher Chemical Company of New York in 1889, with affiliated companies and a plant in Niagara Falls, New York, which gradually took on the entire Degussa production program. As a consequence of World War I, these companies were lost to Degussa after their confiscation as German property. They were acquired in 1930 by E.I. du Pont de Nemours & Company, with which they merged two years later.

After the end of the 19th century Degussa’s trade business expanded particularly rapidly. The company acted as sales agent for individual products and product groups manufactured by other chemicals companies, and conventions regulating production and sales were set up in both Germany and Europe. In order to obtain access to new products, the company often participated, even in a minor role, in their production. This business policy enabled Degussa to make considerable profits, with a relatively restricted capital participation, over a considerable number of years.

In 1898, together with the Aluminium Company of London, Degussa founded the Electro-Chemische Fabrik Natrium GmbH in Frankfurt. At Rheinfelden, on the Upper Rhine not far from the Swiss border, the company established a plant to produce sodium using the Castner process. This substance was needed by Degussa for manufacturing cyanide salts. Over the years the Rheinfelden plant, owned exclusively by Degussa from 1918, has been the site of many production developments, in particular of active oxygen compounds—peroxo-compounds—and the fumed silica Aerosil. At present, catalytic converters for the purification of automobile exhaust emissions are also made in Rheinfelden.

In 1905 the Degussa chemist, Otto Liebknecht, developed a process for the production of sodium perborate from a sodium peroxide base. Sodium perborate had already become a highly successful product in a matter of months, with the introduction onto the market of the Henkel company product Persil, the first active detergent, in 1907. Persil at that time consisted of 15% sodium perborate produced by Degussa and 85% bleaching soda manufactured by Henkel. Degussa’s participation in the world’s first electrolytic hydrogen peroxide factory at Weissenstein, Carinthia, in Austria, also dates back to this time.

As early as 1905 Degussa had already been involved in the establishment of the Chemische Fabrik Wesseling AG in Wes-seling, near Cologne. It thus consolidated its position in cyanide chemistry, now one of its longest-established fields of activity.

Expansion continued in the metals division as well. By taking a holding in the G. Siebert platinum smelting works in Hanau, today a Degussa subsidiary, Degussa became active in the production of semi-finished precious metal goods.

Because a policy of international expansion was no longer possible during and immediately after World War I, Degussa strove to acquire domestic production sites. As early as 1919, it accepted an offer from the precious metal refinery, Dr. Richter & Co., in Pforzheim, southwest Germany, to take over this company. Today, Pforzheim is the main production plant for Degussa’s dental products, which form part of the pharmaceu-ticals division. Gold alloys for jewelry and dentistry, solders, silver amalgams, and dental equipment are produced here.

An important new field of activity, organic chemistry, was entered into by Degussa in 1930-1931 following many years of negotiations concerning the acquisition of the two large German charcoal production companies, the Holzverkohlungs-Industrie AG in the town of Constance and the Verein fur Chemische Industrie in Frankfurt, with its numerous plants. Degussa now had access to a wide variety of organic chemical products. The Holzverkohlungs-Industrie AG had already succeeded in modernizing its processes and changing over to new products such as adhesives—Atlas Ago—during the merger negotiations. The company expanded its product range on an even more intensive scale after the merger, moving from meth-anol to formaldehyde, and from formaldehyde to pentaery-thritol and acrolein—which gained great significance in methionine synthesis after World War II, when the amino acid acid methionine was used to treat widespread malnutrition—and ultimately to the plastic polyoxymethylene, developed jointly with BASF AG.

The company also began acetone production, based on the low-cost raw material alcohol. British Industrial Solvents Ltd. was founded as a joint venture with a partner company, Distillers Co. Ltd., of Edinburgh, in 1928. Based on methods of developed by the Holzverkohlungs-Industrie AG, a large-scale plant in Hull was built for the production of acetone, acetalde-hyde, acetic acid, and butanol. A process for the manufacture of water-free alcohol, which met with considerable demand as an admixture for fuel, proved a commercial success. Soon many domestic and foreign licenses were using the method at a total of 68 plants, together producing over 5 million hectoliters of absolute alcohol per year. Acetone paved the way for the production of acetone cyanohydrin, and acetone cyanohydrin led to methylmethacrylate (MMA) and polymeric methylme-thacrylate (PMMA).

In 1932, Degussa acquired a small flame soot factory in Kalscheuren, near Cologne, which had run into financial difficulties. Degussa’s involvement with carbon black can be traced to this date. By 1934 it had already succeeded in producing active gas black CK3 at Kalscheuren. Gas black produced in America had been for many years an indispensable product in the tire industry, which uses carbon black as a strengthening filler. In the late summer of 1933, the German Ministry for the Economy had approached Degussa with the demand that Degussa produce active gas black, based on domestic raw materials, at Kalscheuren. In 1935, Degussa researchers succeeded in developing the so-called gas black production process. This breakthrough yielded a product which could finally compete in the market against so-called channel blacks, which had been dominated by U.S. manufacturers until then. Together with the German tire manufacturers, Degussa founded the Russwerke Dortmund GmbH in 1936 for the production of carbon black using the Degussa CK3 process. Furnace black is used nowadays as a strengthening agent by the tire manufacturing industry.

In addition to metals and chemicals, Degussa has a pharmaceuticals division. This division’s beginnings date back to 1933 when Degussa purchased the Chemisch-Pharmazeutische AG Bad Homburg in Frankfurt am Main from its Jewish owners. It was difficult for Jewish-owned companies to operate under Nazi economic restrictions, so the owners offered to sell to Degussa. Shortly before the outbreak of World War II Degussa had developed into a significant group of companies. During World War II, all of Degussa’s links with Allied countries were severed. However, Degussa continued its traditional activities within the framework imposed on the German economy by the government’s war policies. Its broad production base provided Degussa with a large number of starting points in the initial period of reconstruction after World War II, during which destruction was considerable. In addition to war damage, the dismantling of the hydrogen peroxide plant-virtually the only production site left intact—in Rheinfelden on the Swiss border, the loss of all foreign assets, and of all plants and holdings located in the Soviet-occupied sector of Germany, Degussa also lost a large part of its precious metal stocks. The progress of reconstruction before the 1948 German currency reform was further hindered by forced decartelization measures introduced against Degussa, the investigation of its technical and trade secrets by the Special Services of the occupying powers, and the forced sequestration of Degussa plants located in the French Zone of occupation, including the factories in Constance and Rheinfelden.

The June 1948 German currency reform created the foundation for a new economic beginning. In the same year, Degussa began to rebuild its head office on the original site in Frankfurt. An additional administrative building was erected in Frankfurt in 1953.

A new hydrogen peroxide plant in Rheinfelden, a replacement for the one dismantled, was one of the first construction projects realized in Germany in the early 1950s. Plants for production based on the anthraquinone method were built in the 1960s and 1980s. Production of the fumed silica Aerosil also commenced in Rheinfelden. It had first been produced successfully in 1942 in the course of efforts to manufacture a cheap substitute for carbon black from readily available raw materials such as sand or silicates.

In 1952, Degussa began to build its own hydrogen cyanide factory in the newly established plant at Wesseling, near Cologne, very close to the Chemische Fabrik Wesseling branch; both are referred to jointly as the Wesseling plant. Production was later switched to Degussa’s own process based on methane and ammonia. New markets for hydrogen cyanide, produced in Wesseling, emerged along with the discovery of the amino acid methionine and cyanuric chloride. Methionine met with considerable demand as an animal feed additive, improving the quality of protein. Cyanuric chloride is a primary product for herbicides, optical brighteners in textiles and paper, and reactive dyes.

The first plans for an overseas production site after World War II dated back to the early 1950s. Degussa founded the company Bragussa in Brazil and built a plant for production of ceramic colors on a site not far from Sao Paulo. Production began in 1955. The company was later merged with other Brazilian subsidiaries to constitute Degussa s.a., operating in all three Degussa sectors: metals, chemicals, and pharmaceuticals.

As well as building up a worldwide sales network, Degussa focused its attention on research activities that had to be postponed immediately after the war in favor of reconstruction of production facilities. Prior to World War II, Degussa’s research center was housed at the head office in Frankfurt, but had to be evacuated to various sites during the war years and could not be reestablished on its former site owing to insufficient space. Consequently, at the start of the 1960s, a chemicals research center with laboratories and workshops was built on the site of Degussa’s subsidiary at Wolfgang, near Hanau. The chemicals research and applications technology facilities, which were also moved to Wolfgang, are constantly being expanded.

Metals research operations were also grouped together directly next to the chemicals research center, and the precious metals refining and metallurgy operations were moved away from the center of Frankfurt in 1972 to take up residence in a new metals plant in Wolfgang.

As Degussa’s production capacities in the Federal Republic of Germany were no longer sufficient, a large-scale chemical plant was built in Antwerp, Belgium, around 1970. The first production plants for sodium perborate, Aerosil, hydrogen cyanide acid, and cyanuric chloride started operations in 1970. A few years later, in 1974, the company took the first steps towards the construction of another large-scale chemical plant, this time in the United States, more than 90 years after the establishment of Degussa’s first U.S. production plant. The Degussa Corporation U.S. produces silicon tetrachloride, Aerosil, methionine, cyanuric chloride, the herbicide Bladex, hydrogen peroxide, formaldehyde, and hydrogen cyanide at its plant in Mobile, Alabama. Polyoxymethylene is produced jointly with the BASF Corporation.

The United States contains the largest proportion of Degussa’s foreign investments. These belong to the chemical division, which includes such products as catalytic converters for automobile exhaust emissions and chemicals, precipitated silicas, the vitamin B nicotinamide and, since 1988, three large-scale carbon black plants. Degussa’s activities in the United States also include metals.

Carbon black activities in the 1980s were not only restricted to the United States, where Degussa acquired the carbon black plants of Ashland Oil in Ashland, Kentucky, and grouped them together into a separate company, the Degussa Carbon Black Corporation, a fully owned subsidiary of the Degussa Corporation. Degussa also purchased the European carbon black plants of the Phillips Petroleum Company of Bartlesville, Oklahoma. The carbon black plants in Ambes, France; Botlek in the Netherlands; and Malmo in Sweden became Degussa’s property entirely, while Degussa also acquired a 50% holding in a carbon black plant in Ravenna, Italy. The company also acquired a 50% stake in a carbon black plant in South Africa.

Degussa’s pharmaceuticals division, which dates back to the 1930s, also underwent a major expansion. A majority holding in the Bielefeld-based Asta Werke AG, which produces anti-cancer drugs, had been acquired by the end of the 1970s. In 1983, the company became a fully owned Degussa subsidiary. A few years later, in 1987, the entire domestic and foreign pharmaceuticals activities—the Chemiewerk Homburg Branch, Asta Werke AG, and various holdings in Brazil, Italy, Austria, Switzerland, and India—were amalgamated to form Asta Pharma AG, whose headquarters are in Frankfurt. A further important acquisition by the pharmaceuticals division in the same year was the French pharmaceuticals group Sarget S.A. in Merignac, near Bordeaux, together with several European subsidiaries. The Sarget group’s principal products are analgesics, cardio-circulatory compounds, antiseptics, vitamins, and amino acid preparations.

The increasing influence of Japan and the steadily growing economic impact of Southeast Asia prompted Degussa to establish, in addition to its organizational network, its own production sites, and technical application centers in the Pacific Basin region.

In the course of the company’s worldwide expansion, Degussa’s organization has been streamlined. In addition to disincorporating the pharmaceuticals division and converting it to the Asta Pharma AG, Degussa’s oldest area of activities, the metals division, has been the target of extensive restructuring measures, including the complete takeover of the high-tech company Leybold AG and the resumption of primary recovery activities after an interlude of almost 100 years.

Principal Subsidiaries

Asta Pharma AG; Degussa Bank GmbH; Degussa Elektronik GmbH; Leybold AG; Degussa Antwerpen N.V. (Belgium); Degussa Corporation (U.S.A.); Degussa s.a. (Brazil); Leukon AG (Switzerland); Nippon Aerosil Co., Ltd. (Japan, 50%).