RHI AG History
Telephone: (43) 1-50213-6124
Fax: (43) 1-50213-6130
Sales: EUR 1.87 billion ($1.5 billion)(2001)
Stock Exchanges: Vienna
Ticker Symbol: RHI
NAIC: 327124 Clay Refractory Manufacturing; 325998 All Other Miscellaneous Chemical Product Manufacturing; 327125 Nonclay Refractory Manufacturing; 541330 Engineering Services; 551112 Offices of Other Holding Companies
All RHI Refractories employees act in accordance with a globally uniform and binding corporate philosophy. This constitutes the basis of RHI's corporate culture and involves binding targets and values.
- Didier-Werke, one of the first company's in Europe to produce fireclay brick, is founded.
- Veitscher Magnesitwerke becomes the world's first magnesite processing company.
- Austro-American Magnesite Company, later known as Radex-Heraklith, begins magnesite mining and processing along with the production of Heraklith wood wool insulation and fireproofing boards.
- The company is acquired by National Refractories Co., and Radex-Heraklith is separated into its building products and insulation divisions.
- Radex-Heraklith is spun off from National Refractories in a management buyout, then goes public on the Vienna Stock Exchange.
- Radex-Heraklith acquires Veitscher Magnesitwerke.
- Fifty-one percent of Didier-Werke, which includes NARCO North American subsidiary, is acquired.
- Radex-Heraklith acquires 89 percent of Didier Werke, later boosting its share to more than 96 percent.
- Radex-Heraklith changes its name to RHI AG.
- Global Industrial Technologies, which includes subsidiary Harbison-Walker, is acquired.
- Facing massive asbestos liability claims, RHI's North American subsidiaries file for bankruptcy and are put up for sale.
RHI AG is the world's top manufacturer of heat-resistant refractory products, with a global market share of some 15 percent and as much as 30 percent of the European and NAFTA markets. The steel industry accounts for the largest share of the company's sales of its ceramics-based refractory products, contributing more than 59 percent of RHI's revenues of EUR 1.87 billion in 2001. The company also sells to the non-ferrous metals, glass, and cement and lime industries, among others, through brand names and products including Radex, Andkerharth, and Grasanit. RHI's refractories materials, grouped under main subsidiary RHI Refractories, are used for controlling the high temperatures involved in such production processes as steel making, copper and aluminum smelting, and the production of cement, lime, and glass. While refractories remains RHI's core product, contributing more than 80 percent of the company's sales, RHI has long manufactured fire-resistant and noise and thermal insulation building materials for the construction industry, especially through its brand name Heraklith, which has long been one of the major insulation brands in Europe. Until 2002, RHI also maintained an engineering division that was chiefly involved with the construction of lime kilns and smelting furnaces for the non-ferrous metals market and air heater systems for the steel industry. This division was sold off as part of the company's restructuring around its core refractories line. RHI, based in Austria and quoted on the Vienna Stock Exchange, faced a difficult year in 2001, as its debt topped EUR 800 million--largely due to the mountain of asbestos liability claims inherited by the company through its U.S. operations, but also because of a slump in the worldwide steel industry. In early 2002 RHI de-consolidated its U.S. businesses, which then filed for bankruptcy. The restructuring of the company was expected to restore its profits and revenue growth by the end of that year.
European Refractories Pioneers
While the origins of RHI can be traced back to the early nineteenth century, the modern group was forged through the merger of a number of important European refractory products manufacturers in the 1990s. The oldest member of the later RHI originated with the establishment of Chamottefabrik F. Didier, in the town of Podejuch, near Stettin, in what was then known as Prussia, in 1834. Founded by Friedrich F. Didier, that company became one of the first in Europe to begin production of refractory bricks.
The development of fire-resistant materials represented an important step in the development of the Industrial Revolution in general and the steel industry in particular, enabling kilns and furnaces to achieve higher heat levels. At the same time, new refractory products became necessary in order to protect smelters, blast furnaces, kilns and the like, making them safer and longer-lasting. By 1888, the Didier-Werke, as it became known, had begun its own research and development program in order to extend its production into a wider range of industrial fireproofing products. By 1932, when the company officially adopted the name Didier-Werke AG, it had become a leading German refractory products producer and one of the leaders in Europe.
The discovery of the fire-resistant properties of magnesite, the carbonate of magnesium, gave a new boost to the refractory products industry in Europe, and especially in Austria. Thanks to its large magnesite deposits, Austria became a leading player in the European refractory products industry and one of the region's primary sources for the mineral. The country's involvement in the refractories trade received its first boost in 1881, when Carl Spaeter discovered an important magnesite deposit near the town of Veitsch, in the Styria region of Austria. Spaeter began mining operations that same year, and by 1886 the mine was sufficiently established to begin production of magnesite for the refractory products industry.
Spaeter's business, designated as Veitscher Magnesitwerke Actien-Gesellschaft in 1899, became the world's first producer of processed magnesite for refractory products. The company itself developed into a major manufacturer of refractory and fireproof products in addition to its mining operation. Veitscher also played a leading role in the development of new magnesite-based refractory products, particularly after the establishment of a dedicated research and development facility in 1935. By the early 1990s, when Veitscher merged with rival Radex-Heraklith Industriebeteiligungs AG (RHI), it had become Austria's second-largest fireproof products maker.
RHI by then formed the heart of what was to become the world's leading refractory products conglomerate. That company had its start at the turn of the century with the discovery of a magnesite deposit at Millstätter Alpe, in Austria's Carinthia region, in 1907. A year later, Emil Winter, an Austrian-American, bought the mining rights to the Millstätter site and founded the Austro-American Magnesite Company. The new company quickly took over the rights to manufacture a new insulation product patented by Robert Scherer in Vienna in 1907. By 1908, Austro-American had begun production of the new material, the so-called wood wool, which combined wood and magnesite to create a lightweight building material that provided insulation and fire-resistant qualities. Previously, buildings required thick walls in order to provide insulation from the cold; the new product, dubbed Heraklith, was to help transform much of Europe's construction industry by enabling the construction of buildings with thinner walls.
Austro-American, which later became known as Österreichisch-Amerikanische Magnesit AG, became a strategic producer of magnesite, while also developing into an important manufacturer of refractory products. The company's insulation division, which remained focused around the Heraklith brand, later diversified into other insulation products, such as the introduction of multi-layer insulation boards featuring polystyrene and Heraklith materials in 1967 and the introduction of expanded polystyrene boards the following year.
Global Market Leader in the New Century
By 1974, Österreichisch-Amerikanische Magnesit had come under the control of the United States' General Refractories Co., which folded the company into its organization as its European Division. At that time, the company's business was separated into two divisions, building materials and insulating materials. The latter division was reformed under the name Austrian Heraklith AG. In 1981, that company began production of rock wool insulation products.
General Refractories' struggles through the 1980s led to its divestment of its European Division in 1987. General Refractories itself was acquired by Belmont Industries in 1988, then taken over by AP Green in 1994. The spin off, in what at the time was Austria's largest-ever management buyout, created the newly independent Radex-Heraklith Industriebeteiligungs AG, or RHI. At the same time, Radex-Heraklith went public, listing on the Vienna Stock Exchange. The company's building and insulation materials operations were then brought under subsidiary Heraklith AG.
RHI began a long expansion drive in the 1990s that rapidly expanded its worldwide presence. Among the companies purchases was that of a 50 percent stake in National Refractories of Oakland, California, giving RHI an important foothold in the U.S. market. The company also launched an engineering division, which specialized in the design and construction of kilns and smelting furnaces. Then, in 1991, RHI announced that it had acquired majority control of domestic competitor Veitscher Magnesitwerke AG. By then, RHI had built up sales of more than $400 million. With the addition of Veitsch, RHI's revenues topped $700 million.
Initially, RHI and Veitsch maintained their separate operations and brand names. However, in 1993, the two businesses were merged together to form a new subsidiary of RHI, Veitsch-Radex Aktiengesellschaft für feuerfeste Erzeugnisse. In that same year, RHI added a new fireproofing and insulation subsidiary, Dolomite Franchi. Based in Italy, Dolomite Franchi had been set up in 1919 in response to the embargo placed on Austrian magnesite imports to Italy. Dolomite Franchi replaced magnesite with dolomite and went on to become a leading Italian producer of insulating materials.
In 1994, RHI acquired Germany's Vedag Dachsysteme GmbH, which produced roofing materials, and then led that company on an expansion drive into Eastern Europe, with marketing and sales facilities in Slovakia, the Czech Republic, and Poland. Vedag was later brought under RHI's Insulation division before being spun off in a management buyout in 2001.
RHI turned to Germany again for expansion in 1995, this time acquiring a 57 percent share in Didier-Werke. RHI quickly added Didier to its core refractories subsidiary, creating the new Veitsch-Radex-Didier, or VRD. By 1997, RHI had increased its control of Didier to nearly 90 percent, and to 96 percent in 2002. The addition of Didier transformed RHI into a truly international company, with sales topping EUR 1.5 billion ($1.2 billion) and a global market share of more than nine percent. Didier also extended RHI's U.S. presence with subsidiary NARCO. That company had been founded in 1929 as North American Refractories Co., a manufacturer of fireclay bricks, and had been acquired by Allied Corp. in 1979 before joining Didier in 1989. The addition of NARCO, which was placed under VRD America, enabled RHI to reduce its reliance on the European market. After the Didier acquisition, the NAFTA market reached 23 percent of RHI's sales, compared with 70 percent of sales from Europe.
In the late 1990s, RHI began restructuring its operations, which included the phase-out of its engineering division. The company also formally changed its name in 1998, to RHI AG, recreating itself as a holding company for VRD, Radex-Heraklith, and other subsidiaries. Then, in mid-1999, RHI seized an opportunity to extend its presence in the North American market. In that year, Global Industrial Technologies Inc., based in Dallas and parent of Harbison-Walker Refractories Co., one of the United States' leading refractory products companies, faced a hostile takeover from WHX Corp. RHI stepped in as a white knight in a deal worth some $500 million. The acquisition was completed in 2000.
The addition of Harbison-Walker, originally founded in Pittsburgh as Star Fire Brick Co. in 1865, boosted RHI's share of the global refractories market past 15 percent, with a market share in the NAFTA region of more than 30 percent. The acquisition also loaded the company down with debt. Nonetheless, the purchase appeared promising, and Harbison-Walker and NARCO were combined into a new company, RHI Refractories America.
By 2001, however, the company's rapid expansion into the North American market left it highly exposed to the sudden economic downturn, and particularly the slump in the steel industry. The company's debt level soared to nearly EUR 900 million; worse yet, RHI suddenly found itself confronted with a mountain of lawsuits stemming from its newly acquired subsidiaries' use of asbestos in the past. The protective clauses that had been put into place in order to limit RHI's exposure to damage claims had become challenged, and the company's U.S. operations were now under direct threat.
RHI attempted to prop up its North American holdings, but by the beginning of 2002 the company's prospects in the region appeared bleak. At the beginning of 2002, the company de-consolidated its U.S. operations. At the same time, NARCO filed for bankruptcy protection and was soon after joined by Harbison-Walker and Global Industrial Technologies as well. By mid-2002, RHI, which had been forced to restructure its financing in order to confront its heavy debt burden, announced its intention to sell off its U.S. operations and to retrench around its core European operations.
RHI reorganized its structure again, shedding its holding company status to take direct control of RHI Refractories. That division now became the company's core business, although RHI maintained its Radex-Heraklith insulation operations as well. The company finally sold off its engineering division as well. By late 2002, RHI's restructuring efforts appeared to have restored the company's stability, as it once again began showing profits. Although RHI's expansion hopes had stumbled in the United States, the company was comforted by its continued status as the world's leading refractory products group.
Principal Subsidiaries: Betriebs- und Baugesellschaft GmbH (Germany); Corrosion Technologies de México SA de C V (Mexico); Corrosion Technology (Peru) SA (Peru); Didier-Werke AG (Germany); Dolomite Franchi SpA (Italy); Dutch MAS BV (Netherlands); Dutch SAPREF BV (Netherlands); Full Line Supply Africa (PTY) Limited (South Africa); GEFRO GmbH (Germany); Gen-X Technologies Inc (Canada); GIX International GmbH (Germany); GIX International Limited (United Kingdom); INDRESCO de México SA de CV (Mexico); INDRESCO UK Ltd (United Kingdom); INTOOL de México SA de CV (Mexico); Latino America Refractories ApS (Denmark); Magnesit Anonim Sirketi Turkey TRL; Oy Tulenkestävät Tiilet AB Finland; Radex West GmbH (Germany); REFEL SpA (Italy); Refmex S de RL de CV (Mexico); Refractarios Green S de RL de CV (Mexico); Refrattari Italiana SpA (Italy); RHI Africa Investment Holdings (Pty) Ltd (South Africa); RHI (Canada) Inc (Canada); RHI Dinaris GmbH (Germany); RHI Finance ApS (Denmark); RHI Refractories Africa (Pty) Ltd (South Africa); RHI Refractories Andino CA (Venezuela); RHI Refractories Asia Ltd (China); RHI Refractories Asia Pacific Pte Ltd (Singapore); RHI Refractories España SA (Spain); RHI Refractories (France) SA (France); RHI Refractories Ibérica SL (Spain); RHI Refractories Italiana srl (Italy); RHI Refractories Liaoning CoLtd (China); RHI Refractories Mercosul Ltda (Brazil); RHI Refractories México SA CV (Mexico); RHI Refractories Nord AB (Sweden); RHI Refractories Spaeter (Site Services) Ltd (United Kingdom); RHI Refractories Spaeter Ltd (United Kingdom); RHI Refractories Spaeter GmbH (Germany); RHI Refractories UK Limited (United Kingdom); SAPREF AG für feuerfestes Material (Switzerland); Veitsch-Radex GmbH; Didier Ltd (Zambia); Dolomite Franchi GmbH (Germany); Dr-Ing-Petri & Co Unterstützungs-Gesellschaft mbH (Germany); Magnesitwerk Aken Vertriebsgesellschaft mbH (Germany) N; Marion South America SA (Chile); Radex Latinoamérica CA (Venezuela); Refractories Consulting & Engineering Gesellschaft mbH; Rheinischer Vulkan Chamotte- und Dinaswerke mbH (Germany); RHI Argentina SRL (Argentina); RHI Réfractaires Algérie EURL (Algeria); Thor Ceramics Limited (United Kingdom) N-; Dolomite di Montignoso SpA (Italy) E; Lokalbahn Mixnitz-StErhard AG; Società Dolomite Italiana SDI SpA; Stopinc AG (Switzerland); Treuhandgesellschaft Feuerfest mbH (Germany).
Principal Competitors: Cookson Group plc; Mitsui Mining and Smelting Company Ltd.; Wacker-Chemie GmbH; Morgan Crucible Company plc; Lafarge Refractories; Toshiba Ceramics Company Ltd.; Hepworth Ltd.; Plansee Holding AG; Shinagawa Refractories Company Ltd.
- Alm, Richard, "Austrian Company to Buy Global Industrial," The Dallas Morning News, July 14, 1999, p. 2D.
- "Bullig bis barig," Die Presse, September 11, 2001.
- "Feuerfestkonzern RHI mit Riesenverlust," Der Standard, January 15, 2002.
- "The Making of a Refractories Giant," Ceramic Industry, October 2000, p. 2.
- "RHI Faces Massive 2001 U.S. Asbestos-related Loss," Reuters, January 14, 2002.
- "RHI sieht sich wieder feuerfester," Der Standard, May 29, 2002.
- "RHI's US Assets for Sale," Chemical Business Newsbase, February 4, 2002.
Source: International Directory of Company Histories, Vol. 53. St. James Press, 2003.comments powered by Disqus