Groz-Beckert Group

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Groz-Beckert Group

Parkweg 2
D-72458 Albstadt
Germany Telephone: (49) (7431) 10-0
Fax: (49) (7431) 10-2777
Web site: http://www.groz-beckert.com

Private Company
Incorporated: 1937 as Theodor Groz & Soehne
Employees: 7,500
Sales: EUR 452.4 million ($561.2 million) (2003)
NAIC: 339993 Fastener, Button, Needle, and Pin Manufacturing; 333512 Machine Tool (Metal Cutting Types) Manufacturing; 333513 Machine Tool (Metal Forming Types) Manufacturing; 332618 Other Fabricated Wire Product Manufacturing

Groz-Beckert Group is among the world's leading manufacturers of high-precision industrial needles used in the cloth making, textile, and shoe manufacturing industries. The company's product range includes about 60,000 different needles and related accessories, including knitting and hosiery machine needles and parts, sewing and shoe machine needles, felting and structuring needles for the production of non-woven materials and tufting needles and modules for carpet manufacturers. In addition to developing and manufacturing this broad range of industrial needles, Groz-Beckert builds the machines to produce the needles in-house. The company's Swiss subsidiary Grob Horgen AG is the world's leading supplier of weaving machine accessories. Groz-Beckert also makes high-precision ceramic punching components which are used to manufacture multilayer microchips used in computers, mobile phones and other high-tech products. Groz-Beckert products are manufactured in Germany, Switzerland, the Czech Republic, Portugal, Canada, India and China. Headquartered in Albstadt, southwestern Germany, the family-owned company exports more than 80 percent of its output to over 150 countries.

Early Roots Go Back to 1850s

The history of the Groz-Beckert Group began in the middle of the 19th century in Ebingen, a small town in Swabia, Germany. In a region where hosiery knitting was the dominant way to make a living, Theodor Groz, the son of a pharmacist who died prematurely, decided to leave his home town to learn the craft of needle making. After apprenticeships in Germany and Austria he returned to Ebingen in 1852, got married and opened a store for fashion accessories and toys. At the same time he began to make warp-knitting needles on the side, which were used in stockings manufacturing. Groz took this "side business" very seriously. Driven by the idea to make better needles than anyone else, he invested most of his financial resources into refining the needle making process. Needle-making was time consuming and complicated. Each needle was made from iron wire, which had to be bent, stretched, drilled, pressed, cut, filed, hardened, polished and finally straightened out. Although needles constituted only a fraction of a knitting factory's cost, they played a decisive role in the end product. Poorly made needles could break after being used only for a short time or—even worse—stain or cut the thread, and thereby ruin the product. Therefore, high-quality needles were a concern of foremost importance for every knitting factory owner.

In 1864 the warp loom needle output of the better part of a year turned out to be of such a low quality that they could not be used, due to the low-quality of the wire used to make them. This serious threat to the existence of his enterprise encouraged the company founder even more to invest his time in quality improvement. By 1867 Groz had created detailed "How-To" manuals for the production of steel needles, hosiery frame needles and latch needles that exceeded the quality standards of the time. One of the main factors that determined the quality of the needles was the hardening of the iron, and later steel wire, to make the material as durable as possible. For ten years Groz experimented with different technologies, using high-quality piano wire imported from England, and finally succeeded in developing a process that yielded outstanding results.

With the onset of the industrial revolution in the late 19th century more and more steps of the manufacturing process were mechanized. Groz realized that—to keep ahead of the competition—he had to develop his own needle-making machines that were not available on the market. The company's engineers pioneered the field with a number of innovations, including the so-called bearded forming machine in 1883 and the Shanking machine in 1890.

Soon Groz's needles gained a reputation for outstanding quality. By 1861 Groz's needle-making workshop employed 25 workers, putting out some 10,000 bearded needles a week. After a few years Groz decided to add latch needles to his product range, a new type of needle which gained a growing market share at the time, and the workshop produced between 1,000 and 2,000 latch needles weekly. In 1874 his son Daniel together with a friend made a significant improvement in the design of the latch needle, mechanizing the latch fastening process.

The arrival of the steam engine in the 1870s boosted productivity to new heights. At the same time, mechanization of the knitting industry resulted in a higher demand for knitting machine needles. The growing number of incoming orders stretched the workshop's capacity to its limits. In 1884 production was moved to a factory building near Ebingen's train station. By 1892 the factory's work force reached 400. At the turn of the century the 550 workers at Theodor Groz produced 40 million bearded needles and 15 million latch needles a year in one of the industry's most modern production facilities.

Merger Creates World Market Leader in 1937

The late 19th century was a period of change in leadership at the Theodor Groz company. In 1879 Theodor Groz's oldest sons Theodor and Daniel became partners in their father's business, which was renamed Theodor Groz & Sons. Thirteen years later the company founder as well as his son Theodor died. In 1897 Daniel Groz passed the management reins on to his younger brother Oskar and brother-in-law Heinrich Cless. However, only four years later they left, and Adolf Groz, the company founder's youngest son, took over the family firm.

In the early years of the 20th century Theodor Groz & Soehne enjoyed a period of continued growth. Adolf Groz continued his predecessors' efforts to expand into new markets outside of Germany. At the time, France, Great Britain and the United States were the major markets for industrial knitting needles. As early as 1884 Theodor Groz had started to export the company's new latch needles to the United States. When World War I erupted in 1914 it interrupted the company's further growth. Exports came to a sudden halt. However, right after the war the company established a joint sales office in New York City with another leading German knitting needle manufacturer—Ernst Beckert, Nadelfabriken Commandit-Gesellschaft, based in Chemnitz, Saxony.

Similarly to Theodor Groz, company founder Ernst Beckert grew up in an area where hosiery knitting was the usual way of making a living. Growing up in Eibenberg in Saxony, he was used to helping his family turn the hand wheel of the knitting loom. However, Beckert was more interested in machines rather than textiles. He became a mechanic and worked in one of the region's numerous mines until he broke both his legs in an accident at work. During the several months he was unable to work and had to lay in bed, Beckert became interested in the needles his father used for hosiery knitting. He spent not only hours and hours, but also all his money, experimenting with different ways to manufacture knitting needles. After studying the needle-making craft for over a decade, Ernst Beckert began to manufacture needles in his hometown in 1871, the year when a new German Empire was proclaimed. At first, Beckert made his needles under the most primitive conditions. However, with industrialization picking up speed in a thriving economy, Beckert realized that his needles would be needed in large numbers and consequently focused on industrial mass production. Beckert's enterprise took off immediately and soon grew into Saxony's biggest knitting needle factory. A second production site was established in nearby Stollberg in 1885. At the turn of the century Beckert's enterprise employed more than 200 workers. In the following decades the company kept growing. Before World War I, Ernst Beckert Nadelfabriken exported up to half of their total output to the United States. In addition, Beckert's knitting needles were shipped as far as Central and South America, the Far East, Japan, India and even Australia.

The establishment of a joint sales office in 1918 in the United States marked the beginning of a cooperation between the Groz and Beckert companies. While the isolation from the world markets during World War I caused a temporary setback, the two German needle makers soon caught up again with their competitors from France, England and the United States after the war. Due to a number of technological innovations, such as the first automatic rotary table latching machine, productivity reached new heights at the Ebingen and Chemnitz plants. However, in the aftermath of the lost war, the German currency collapsed in 1923. After the new Reichsmark was introduced, nine leading needle manufacturers from Saxony, including Ernst Beckert Nadelfabriken, and Theodor Groz & Sons, entered merger negotiations. However, when the German economy went back into growth gear, the merger plans were abandoned. Nevertheless, in 1928 Ernst Beckert's grandson Fritz Seelmann-Eggebert bought a minority stake in Theodor Groz & Sons. Nine years later the leading knitting needle manufacturer in Swabia finally merged with the largest knitting needle producer in Saxony. In 1937 the Theodor Groz & Sons and Ernst Beckert companies became Theodor Groz & Soehne & Ernst Beckert, Nadelfabriken Commandit-Gesellschaft, Ebingen und Chemnitz—in short Groz-Beckert.

Company Perspectives:

Ready to meet any challenge related to tools for the textile industry—that's Groz-Beckert. Today, tomorrow, and in the future.

The merger created Germany's largest manufacturer of knitting needles with a large market share. The new firm remained in the hands of the two founding families. From the Groz family, the sons of Alfred Groz, Hans and Walther, joined the Groz-Beckert company. The Beckert family was represented by Fritz Seelmann-Eggebert. Meanwhile, Adolf Hitler and his National Socialist Party seized political power in Germany. Two years after the merger, Germany went to war again. The result was disastrous for Groz-Beckert. In the last months of the war the company's factory in Chemnitz was destroyed, while a burning ammunition train exploded near the Ebingen factory, shattering roofs, doors and windows.

New Geographical and Product Markets

After the end of the war the old Beckert factory in Chemnitz fell under the rule of the Russian occupation forces. While the finished goods warehouse was completely destroyed, most of the machines were usable again after minor repairs. However, the Russian Aliied Forces dismantled anything that was left in the factory and shipped it to Russia. Fritz Seelmann-Eggebert, one of the company's directors, was arrested and held in custody for four years. While the Chemnitz plant was lost for the company, the former Groz-factory in Ebingen, which was governed by the French occupation authorities, was rebuilt and resumed production after lobbying efforts by the French knitwear industry had successfully prevented its dismantling. In the beginning, the needle output of the factory was traded for food, which was in short supply right after the war. The company not only helped feed its remaining and newly hired workers, but also helped them find a new home by building several hundred apartments. By the late 1940s the reconstruction of the buildings was completed and state-of-the art equipment had been developed and installed. In 1950 the company's output in Swabia alone reached prewar production levels for both Ebingen and Chemnitz. Within only two more years that output doubled again. As the German economy entered the postwar economic boom, Groz-Beckert enjoyed a long period of sustained growth.

Right after the company was up and running again, Groz-Beckert revived its prewar contacts with customers in other countries. By 1948, almost two thirds of the company's output was shipped to 39 foreign countries again. However, the international expansion did not stop there. As early as in the 1950s Groz-Beckert began to move parts of its production abroad. In 1957 the company established its first production facility in the United States. Three years later a production subsidiary was set up in India. In 1969 a Groz-Beckert production plant went on stream in Portugal, which was followed up by the acquisition of the Portuguese needle manufacturer Euronadel in 1980. In the 1990s the company added production subsidiaries in the Czech Republic and China.

In the 1980s Groz-Beckert began to venture into new product markets. For almost 130 years the company had successfully occupied the niche market for knitting machine needles. However, in the long run that market was too small to sustain further growth. Beginning in 1980, Groz-Beckert added sewing, felting, structuring and shoe machine needles into its product range. A further expansion into new product markets was established by acquisitions. In 1998 Groz-Beckert acquired the tufting needle manufacturing unit from Aachen-based Josef Zimmermann GmbH & Co. KG, including the rights to the "Eisbär" brand name. Two years later the company took over Swiss tufting and weaving accessory maker Grob Horgen AG. In addition to these new markets within the textile industry, Groz-Beckert ventured into an unrelated product market which, however, allowed the company to utilize its know-how in making high-precision parts from hardened metal. In 1997 the company began to manufacture ceramic punching components that were used to make multi-layered microchips used in computers, mobile phones and other electronic devices. In 2003 the company was still managed by descendants of the founders: Dr. Thomas Lindner, a member of the Beckert family and Florian Groz from the Groz family's side.

Principal Subsidiaries

Groz-Beckert KG; YANTEX (Yantai) Precision Textile Accessories Co. Ltd. (China); Groz-Beckert Asia Private Ltd. (India); EURONADEL-Indústrias de Agulhas Lda. (Portugal); Groz-Beckert Portuguesa, Lda. (Portugal); Groz-Beckert Czech s.r.o. (Czech Republic); Sinotech Asia Ltd. (Hong Kong); Groz-Beckert Singapore Pte. Ltd. Groz-Beckert Korea Co. Ltd.; Groz-Beckert Japan K.K.; PT Groz-Beckert Indonesien (Indonesia); Groz-Beckert USA, Inc.; Groz-Beckert Canada; Groz-Beckert de México, S.A. de C.V.; Groz-Beckert U.K. Ltd.; Groz-Beckert Verkaufsstelle (Switzerland); Groz-Beckert Española, S.A. (Spain); Groz-Beckert Italia S.r.L. (Italy).

Principal Competitors

Ferd. Schmetz GmbH; Haase + Kühn Group; Fukuhara Needle Company, Ldt.

Key Dates:

1852:: Theodor Groz opens a needle-making workshop in Ebingen, Swabia.
1871:: Ernst Beckert founds a needle factory in Eibenberg near Chemnitz, Saxony.
1918:: The two companies establish a joint sales office in the United States.
1937:: The Theodor Groz & Sons and Ernst Beckert companies merge to become Groz-Beckert.
1945:: The company's factory in Chemnitz is destroyed and machines are dismantled by Russian Allied Forces.
1960:: A production subsidiary is established in India.
1980:: Groz-Beckert brings sewing, felting, structuring and shoe machine needles into its product range.
1996:: The company is renamed Groz-Beckert Komman-ditgesellschaft.
1997:: The company enters the market for ceramic punching components.
1998:: Groz-Beckert acquires tufting needle manufacturer Josef Zimmermann.
2000:: The company takes over Swiss weaving accessory maker Grob Horgen AG.