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Keramik Holding AG Laufen is one of the world's leading producers of sanitary ware--toilets, bathtubs, sinks, and other bathroom fixtures for private, semi-public, and public markets. Since the late 1990s, Laufen has streamlined its products to focus exclusively on bathroom fixtures. (Previously the company had been a major manufacturer of such diversified ceramics products as roofing tiles and porcelain table service.) The company's products are marketed under a variety of brand names, including Laufen, Jika, Duravit, Inda, MyLife, Swing, Profil, and Moderna, and feature designs by such names as Alessi, frog, Helemont Telefunt, and Phoenix Design. Laufen has been controlled by private Spanish company Roca Radiadores since 1999; the companies' combined operations have given the group the second place position in the world market, after American Standard, and the first place spot in the European market. Despite Roca's controlling share of more than 92 percent, Laufen continues to be operated as an autonomous group. Based in Switzerland, Laufen has long operated internationally, with six production facilities in Switzerland, Austria, Portugal, and the Czech Republic, and sales branches in 28 countries throughout the world. Laufen is also active in South America, in particular through its Brazilian subsidiaries Incepa and Celite, and in Thailand through its stake in partnership UMI-Laufen. In 2000, Laufen's sales were estimated at $640 million.
Turn of the 20th Century Brick Foundations
Laufen began operating at the turn of the century with the founding of the Tonwarenfabrik Laufen AG, in the town of Laufen, near Bern, Switzerland, in 1892. Using the region's clay deposits for raw materials, the company originally concentrated on manufacturing bricks, then added roofing tiles. In 1925, the company expanded its business into the fast-growing market for sanitary ceramics products, forming a new company, AG für Keramische Industrie Laufen. By 1926, the company had a full line of bathroom ceramics products, including sinks, bathtubs, and toilets. Laufen was the first in Switzerland to enter the market and quickly imposed itself as the country's market leader before spreading out across Europe.
Laufen added a new product group in 1932, that of the manufacturing of ceramic tiles for bathrooms, kitchens, and other applications. Part of the company's growth came about when "sanitary" bathrooms--long the privilege of Europe's upper classes--became the norm in new and renovated housing on the continent. Attitudes towards bathrooms in Europe had also evolved: once perceived as a strictly utilitarian facility, they were now viewed as serving an important role in home life.
Beginning of International Expansion: 1950s
Laufen's production remained focused on its domestic market through the end of World War II. By the beginning of the 1950s, however, the company began preparing its international growth. In 1952, Laufen turned to Brazil for its first foreign expansion effort by acquiring Incepa SA, a ceramic tile producer based in Campo Larga. Laufen brought over its technology, and Incepa quickly became a leading producer of both ceramic tiles and sanitary products for the Brazilian market.
Much of Laufen's international growth came through cooperation agreements with local partners. Such was the case with the country's entry into Austria, where by the 1960s the company had been working together with Osterreichische Sanitär-,. Keramik-, und Porzellan-Industria (OSPAG), based in Wilhelmsburg. In 1967, Laufen acquired OSPAG outright, adding ceramics operations stretching back to the late 1800s, when a workshop was set up in Wilhelmsburg in order to produce stoneware based on technologies being developed by England's Wedgewood.
After being controlled by a series of owners during the nineteenth century, OSPAG came under the proprietorship of the Lichenstern family when brothers Heinrich and Leopold Lichtenstern acquired the factory in 1883. By the turn of the century, however, the Wilhelmsburg works was struggling, as production slowed and debts mounted. When Heinrich Lichtenstern died in 1895, the next generation of Lichtensterns, in the form of Heinrich's son Richard, took over the business. Just 16 years old at the time he inherited the family's ceramics works, Richard Lichtenstern was able to restore the company's business and quickly succeeded in paying off the company's debts.
By the 1930s, a new generation of Lichtensterns prepared to take over the family business. Yet the Austrian Anschluss during World War II forced the Lichtensterns to flee the country, and the Wilhemsburg works were taken over by the Austrian government. It was not until 1947 that Kurt Lichtenstern, Richard's son, returned to Austria to reclaim the family business. During the family's stay in the United States, Lichtenstern had become an American citizen and adopted the name Conrad H. Lester.
Lester restructured the ceramics operation and reoriented it toward the production of sanitary ware. In 1955, the company changed its name, to Osterreichische Sanitär-,. Keramik-, und Porzellan-Industria (OSPAG), and introduced a new brand name for its products, Austrovit. By then, the transformation of bathroom fixtures from utilitarian form to more luxurious design was well under way, and in 1959 OSPAG brought bathroom design to the Austrian market with the release of its Ultra series. The company was also credited with being among the first to attach a toilet's bowl to its cistern, creating the semi-WC in 1960.
The merger between Laufen and OSPAG enabled both operations to extend onto a European wide scale. OSPAG was to remain an integral part of Laufen's growing business and was particularly active in launching the company into a new trend in the 1980s, that of hiring external designers to create new and complete bathroom fashions. In 1985, the company turned to designer Helmut Telefunt and debuted the first of Laufen's successful and long-lasting Vienna line. Also in that year, Laufen introduced new manufacturing technology for its sanitary products, using a high-pressure casting production process.
Laufen's operations extended into Germany during the 1980s with the addition of a share in that country's Duravit, which had long been noted for its design-focused bathroom fixtures. That company had originated in 1817 when Georg Freidrich Horn built an earthenware crockery factory in Hornberg, in the Black Forest region. By 1842, Horn's factory had begun producing sanitary fixtures as well. Throughout the remaining half of the century, the Hornberg plant continued to produce both product lines, ending crockery production only in 1912. In the 1950s, the company, which had remained an earthenware specialist, switched its production to porcelain, which it began marketing under the Duraba and Hornbeg brand names beginning in 1956. By 1960, the company had taken on a new name, Duravit GmbH, which later became a brand name as well, especially with the launch of a line of bathroom fixtures and furniture in 1977.
Duravit expanded beyond Germany in the 1980s with the purchase of a stake in France's Ceramique de Bischwiller in 1984. Then, in 1988, Duravit joined up with Laufen, changing its name to Duravit AG. With Laufen as a major shareholder, Duravit continued to grow, taking full control of Ceramique de Bischwiller in 1991 and adding Sanitarporzeltan Dresden GmbH in 1992. A strong success for Duravit came in 1994 with the launch of a new series of bathrooms and fixtures designed by Philippe Starck. Laufen and Duravit also began cooperating together on an international scale, as Laufen took over much of Duravit's international marketing and distribution needs.
International Leader in the 21st Century
The opening of the eastern European markets at the beginning of the 1990s gave Laufen a new opportunity for expansion. In 1991, the company acquired noted Czech ceramics producer Jika. That company's history traced back to 1878, with the construction of a factory in Znojmo, where decorative ceramic objects and utensils were manufactured. In 1920, Jika became the first in the region to launch the production of sanitary ceramics and bathroom fittings with a line of wash basins, tubs, and sinks. By the 1990s, Jika had become the leader in the Czech market.
A public company by the 1990s, with a listing on the Swiss stock exchange, Laufen went on a drive to internationalize its operations, adding subsidiaries in Portugal, the United Kingdom, Germany, and elsewhere. The company also built up a strong presence in Spain through a 35 percent stake acquired in Portuguese company Sanitaria, which brought it in direct competition with another European ceramics heavyweight, Roca Radiadores. The company continued to manufacture a broad line of ceramics-related products, ranging from construction materials to home furnishings, and by the mid-1990s ranked as the world's third-largest producer of ceramics, with more than 14 million pieces per year.
The mid-1990s, however, witnessed the rapid consolidation of the European ceramics sector as companies raced to gain scale for the upcoming single monetary union slated for the end of the decade. Laufen itself joined in the drive for size, turning to Dutch-Swedish counterpart Sphinx Gustavsberg. The two sides agreed to a merger in 1996 but were then forced to call off the agreement as both companies found themselves struggling in the face of an industry-wide slump.
Laufen itself was hard hit into the late 1990s. On the one hand, the ceramics industry's growth was hampered by overproduction; on the other, Laufen found itself too exposed in many of the world's emerging markets, which, after a long period of economic growth, had begun to show signs of collapse. Laufen was particularly hurt by its efforts to expand in the Asian markets. Starting in the early 1990s, the company had rapidly built up a presence in Taiwan, Hong Kong, China, Singapore, South Korea, and Indonesia, particularly through the marketing and sales of the Duravit brand. In 1996, the company reinforced its presence in these markets, joining Thailand's United Mosaic Industry Co. to form UMI-Laufen. Yet the cost of setting up operations there, as well as difficulties elsewhere in its network, quickly dragged on the company's profits.
Laufen was also attempting to expand in South America, where its position in Brazil had grown to include Cidamar, a sanitary ware manufacturer acquired in 1976. In 1997, Laufen acquired control of public company Celite S.A. Industria e Comercio, a leading specialist in bathroom fixtures in Brazil. If that purchase made Laufen the clear market leader in Brazil, with a strong position elsewhere in Latin America--the company had gained more than 25 percent of the South American market--it also heightened Laufen's exposure to the troubled economic climate in that region.
By 1998, Laufen had dipped into losses and was forced to undergo a thorough restructuring that included a cut of some 15 percent of its international work force. Laufen also repositioned itself, regrouping its core activity around its profitable bathroom and sanitary ware and selling off its non-core operations, including its crockery and construction materials businesses. By the end of 1998, the company had largely completed its restructuring, enabling it to return to profitability by the beginning of the next year.
In 1999, Laufen announced that it was interested in pursuing strategic partnerships with other major European ceramics producers. The company was reportedly eyeing a merger with rapidly growing Sanitec, of Finland, which went on to buy Sphinx Gustavsberg that year. Instead, in August 1999, Laufen announced that control of the company had been acquired by privately owned Spanish conglomerate Roca Radiadores. Combining Roca's sanitary ware operations with those of Laufen created an internationally operating sanitary ware heavyweight with sales of more than $1.4 billion, placing it as number two in the world, behind the United State's American Standard, and number one in Europe.
Despite becoming a member of the larger Roca group, Laufen retained its autonomous operations. The company continued to expand, especially in eastern Europe. With operations in the Czech Republic, Slovakia, Poland, Russia, and other countries of the former Soviet Union, Laufen had built up a solid position in the rapidly growing eastern European market. In 2002, Laufen increased its position in the region with the takeover, through its Czech subsidiary Laufen CZ, of two additional Czech companies, Jihoceska Keramika and Keramicke Zavody.
Principal Subsidiaries: AZA Immobilien AG; Bath Plus Inc.; Celite Mineracao do Nordeste Ltda; Celite S.A. Industria e Comercio; Celite do Nordeste Industria e Comercio de Ceramica S.A.; Celite do Parana Industria e Comercio de Ceramica Ltda; Ceramconsult AG; Duravit AG; Fayans Kaspichan AD; Incepa Loucas Sanitarias S.A.; Incepa Metals; Int. American Ceramics Inc.; Jihoceska Keramika a.s.; KWA Immboilien AG; Kera-Immobilien AG; Keramicke Zavody a.s.; Keramik Laufen AG; Laufen Asia Ltd; Laufen Ceramics Inc.; Laufen International Inc.; Laufen Canada Ltd.; Laufen-Duravit Italia S.r.l.; Logasa Industria e Comercio S.A.; Oespag; Reflorestadora Ceramica Parana Ltda; Sanitana S.A.; Sociedade de Mneracao Ceramite Ltda; UMI-Laufen Sanitaryware Ltd.; United States Ceramic Tile Company.
Principal Competitors: American Standard Corp.; Sanitec Corporation; Tostem Inax Holding Corp; TOTO Ltd.; Kohler Co.; Air Water Inc; Takara Standard Co Ltd.; Uralita SA; Villeroy und Boch AG; USI Plumbing Products; Cleanup Corp.; Geberit International AG; Elkay Manufacturing Co.; Coop Costruttori Scarl; Ideal Standard SpA; Homeform Group.