"Visions set unexpected energy free." Würth Trading Group wants to massively extend its share in the world market of assembly technology.
Adolf Würth GmbH & Co. KG is the world's leading distribution group specialized in the fasteners market--that is, screws, nuts, and bolts, and other accessories--which is also the company's original product line. Yet Würth offers a far-ranging, diversified line of more than 50,000 products, many of which are marketed under the company's and its subsidiaries' brand names. These products include hand tools and power tools and machines; automotive products, including aftermarket parts and fittings; paints and related products; fittings for the furniture and construction industries; as well as water and heating pipes and systems and heating and air conditioning systems. The company also owns a publishing house and distributes work clothing. Würth typically targets the professional crafts market, but also supplies to mid- and large-scale businesses. Since the late 1990s the company has been branching out to supply the OEM and DIY markets. The Würth Group is composed of more than 265 companies--about half of which operate under their own names as part of the company's Allied Companies division. Würth is present on five continents and 80 countries, with more than 37,000 employees and sales of EUR 5.28 billion. After nearly 60 years in business, Würth remains a privately held company owned by the founding Würth family, represented by Reinhold Würth, son of the company founder and the chief architect of its growth into one of the largest distribution companies in Germany. While Würth remains active in the company, it is now run by Chairman Dr. Walter Jaeger and CEO Harald Unkelbach.
Fastening Success in the 1950s
In the aftermath of World War II, Adolf Würth, who had spent some 20 years as a screws and fasteners salesman, set up his own wholesale business, in the town of Künzelsau. Würth's business remained a small one, although he was joined by son Reinhold, who, at the age of 14 became the company's first apprentice. At the age of 17, Reinhold Würth received his wholesale and retail trade license. By then, however, the younger Würth was already somewhat of a veteran traveling salesman for the company.
The early 1950s was a time of vast reconstruction in Germany and the Würth business was one of many similar businesses. Adolf Würth's management of the business was described as "conservative." Indeed, by the early 1950s, the business was posting annual sales of just DM 170,000, the equivalent of approximately $80,000.
Adolf Würth died in 1954, leaving Reinhold Würth, then 19 years old, to take over the family business. The younger Würth proved a more dynamic businessman and quickly expanded the business's operations beyond the Künzelsau region. By 1955, the company had boosted its sales to DM 176,000, a rise of more than 20 percent in just one year. From then on, Würth set a goal for his business of achieving double-digit sales growth each year--a record the company was to maintain, for the most part, throughout its history.
The extraordinary growth of the German economy and the success of its industry in the postwar decades created a booming demand for Würth's core fasteners--the screws, nuts, and bolts that were literally required to rebuild the country. Würth quickly spread throughout Western Germany, eventually opening more than 80 branch offices.
The economic boom, meanwhile, had spread throughout Western Europe, and by the early 1960s, Würth determined to expand the company internationally. The company made its first foreign expansion move in 1962, when it launched a subsidiary in The Netherlands. That first operation was quickly followed in other countries throughout Europe, including Italy, Switzerland, Austria, and Belgium. In 1965, Würth restructured the company into a limited partnership, wholly owned by the Würth family.
Having expanded throughout Europe in the 1960s, the company next began preparing to enter farther-flung markets. In 1969, the company entered the United States--the world's single largest fasteners market--with the launch of The Würth Screw and Fastener Corporation. Based in Monsey, New York, the subsidiary initially limited its sales area to New York, Connecticut, New Jersey, and Massachusetts, but quickly grew to cover much of the northeastern region. One year later, Würth opened a subsidiary in South Africa as well. By then the company had grown beyond its original headquarters, and in 1969 Würth moved into a new facility in the Gaisbach area of Künzelsau.
Würth entered the 1970s with sales of DM 53 million. Despite a setback in 1975--the only year the company saw negative sales growth--by the end of the decade, Würth's revenues had leapt to DM 330 million. Reinhold Würth continued to set ambitious goals for the company, announcing his determination to raise revenues to more than DM 1 billion by the middle of the 1980s. Aiding the company's growth was its steady international expansion, including the establishment of its first subsidiary operation in Australia in 1981. Acquisitions of existing businesses played a key role in Würth's development, such as the purchase of Winzer Industrial in 1986 and Monks and Crane, a leading engineering distributor, in 1990, both in the United Kingdom. By 1985, Würth had reached its DM 1 billion goal. Two years later, after the company's sales had climbed to DM 1.3 billion, Würth announced a new company goal--that of reaching the DM 10 billion mark by the year 2000.
To fulfill that goal, Würth completed its first bond issue, raising a loan of CHF 75 million. The company continued its international expansion, notably in Asia, where it acquired a Japanese company to establish itself in that market in 1987, and in Malaysia, where the company launched a new subsidiary the same year. Closer to home, the company expanded into the former Eastern Germany only months after the country's reunification in 1990.
Global Leader for the 21st Century
The 1990s were to be an era of strong growth for Würth as it worked toward Reinhold Würth's "Vision 2000." In 1992, the company moved to a new, DM 60 million headquarters in Gaisbach-Künzelsau. That building also featured an art museum, the Museum of Modern Art of the 20th Century, open to the public and featuring Reinhold Würth's extensive art collection--numbering more than 5,500 works, including the works of Picasso, Christo, Hrdlicka, and others.
Reinhold Würth retired from active management in 1994, saying: "I didn't want to destroy through a possible obstinacy of old age what I had been building up by then." Nonetheless, Würth remained an active advisor to and ambassador for the company as it continued its worldwide expansion. Beginning the decade with the equivalent of EUR 1.5 billion (about DM 3 billion) in sales, Würth's sales had jumped to EUR 2.2 billion by 1995.
Much of the company's growth during the period came through an aggressive acquisition campaign, helping the company build up its market position in the highly fragmented market. Many of the company's acquisitions enabled it to enter and reinforce its position in new markets, beyond its traditional fasteners business, such as the 1989 purchase of Sartorius, a tools manufacturer originally founded in Dusseldorf in 1879. Würth added production capacity to its distribution business with the purchase of L & C Arnold, based in Ernsbach, in 1994.
A feature of many of Würth's acquisitions was the company's willingness to keep existing management in place, often allowing the new subsidiary to continue to trade under its own name. In this way, Würth encouraged its subsidiaries, most of which had been founded and remained managed by entrepreneurs like Reinhold Würth, to maintain their entrepreneurial culture. This feature helped attract a number of the company's acquisitions, particularly at the turn of the century as the beginnings of a consolidation phase began to take hold in the fasteners industry. Because Würth remained a steadfastly private company, acquisitions were always paid for in cash--another attractive feature for many of the company's acquisition targets. The company's cash-purchase policy led Würth to complete several more bond offerings through the decade. Yet the company's private status meant that it was able to plow profits back into the business.
Würth opened an enlarged distribution facility in 1996, with 52,000 meters of floor space, at a cost of DM 60 million. That facility helped to support the company's strong growth over the following year, in which the company added more than DM 1 billion in sales. By then, the United States represented a rapidly growing share of the company's business, as Würth adopted a new strategy of focusing growth on that market. In 1996, the company acquired Revcar Fasteners, based in Roanoke, Virginia, signaling the start of Würth's intention to take part in the consolidation of the U.S. fastener market.
The Revcar acquisition was to be the first of a flurry of U.S. purchases extending through the end of the decade. In 1997, Würth's acquisitions included Eastern Fastener Corporation, founded in 1962, as a distributor of marine hardware, and the Baer Supply Company, founded in Chicago in 1950, as a distributor of cabinet and furniture fasteners and fittings. Adams Nut & Bolt and Snider Bolt & Screw also were added that year. Other notable U.S. acquisitions included the purchases of Service Supply Co., based in Indiana, and Action Bolt & Tool, based in Florida, in 1999.
A number of acquisitions had not only enabled Würth to consolidate its position in its domestic market, but also helped it grow into one of that country's largest distribution firms. Among the company's acquisitions of the period were the addi- tion of L & C Arnold in 1994, a manufacturer of furniture-grade and other fasteners, founded in 1898. In 1995, Würth acquired Hahn + Kolb GMBH, which also was preparing to celebrate its 100th anniversary. In 1996, Würth added Fega, or Fränkische Elektrogrosshandlung Ansbach, founded in 1978; the following year, the company acquired Mepla-Werka, a specialist in furniture fittings and inventor of the concealed hinge, and Conmetall, based in Celle, founded in 1976.
Helping to finance these acquisitions was the completion of the company's largest ever bond issue, worth EUR 150 million. The influx of capital enabled the company to continue its acquisition drive in 2000, buying up Schossmetall Gruppe, founded in 1953 in Salzburg, and Uni Elektro, founded in 1970 through the merger of three existing businesses. These purchases, along with others--the company had acquired nearly 100 companies worldwide since 1998--helped the company match its Vision 2000 goal, as it topped the EUR 5 billion mark that year.
Würth was not prepared to rest on its laurels, however. Already the world's leading distributor of fasteners and related products, with a 4 percent share of the global market, Reinhold Würth announced his latest "Vision 2001," calling for the company to increase its market share by as much as 16 percent and its sales to as high as EUR 15 billion by the year 2010.
Principal Subsidiaries: Wuerth Israel Ltd; Würth á Islandi ehf (Iceland); Würth Albania Ltd. (Albania); Würth Argentina S.A.; Würth Armenia; Würth Australia Pty. Ltd.; Würth Aztur Ltd.Sti. (Azerbaijan); Würth Belarus Ltd.; Würth Belux N.V. (Belgium); Würth Bulgaria Ltd.; Würth Canada Ltd.; Würth Chile Ltda.; Würth Danmark Montageteknik A/S; Würth do Brasil Peças de Fixaçao Ltda; Würth Estonia A.S.; Würth France S.A.; Würth Guangzhou (China); Würth International Trading Co. Ltd. (Shanghai); Würth Oy, Riihimäki (Finland); Würth Tehran Ldt. (Iran); Würth-Hrvatska d.o.o. (Croatia).
Principal Competitors: Daniel Measurement and Control Inc.; Textron Inc. (TXT); Illinois Tool Works Inc.; Nucor Corporation; Kanthal AB; Textron Fastening Systems; Metaldyne Corp.; Hilti AG; Textron Fastening Systems Inc.; TT Electronics plc; ACCO Brands Inc.; SPS Technologies Inc.; Fastenal Company; Premier Farnell plc; Harbour Group Ltd.; McKechnie Group; Fairchild Corp.; Gunnebo AB; Stanley-Bostitch Inc.