Germany's oldest family business is based in Kreuztal near Siegen. The metal refiner now called “The Coatinc Company” galvanizes and coats metal to protect it from rust - such as steel beams for guardrails on the highway or balcony railings. The company was founded in 1502 as a steel forging company and has been family-owned ever since, now in its 17th generation. Although galvanizing plays a large role in the industry, the company name is only known to a few end users because they do not come into direct contact with it.
This is the case with many hidden world market leaders in German industry. Your customers are often other companies. This is shown by a look at the new list from the Family Business Foundation, which compiles the names of the 50 oldest German companies that are consistently in family hands. Their common trait is their endurance, but their recipes for longevity are very different. Their business models are similarly varied.
The list includes big and well-known names but also many smaller ones that only mean something to those in the know. The big celebrities on the list include the Darmstadt chemical and pharmaceutical company Merck (founded in 1668), which is represented in the DAX, and the Duisburg family holding company Haniel. The Warsteiner brewery group is also widely known, founded in 1753 and named after its hometown of Warstein in North Rhine-Westphalia. In the beer market, which is prone to mergers, it is particularly difficult to maintain family entrepreneurial independence.
The porcelain manufacturer Villeroy & Boch stands for quality and hygiene. The brand is considered Made in Germany, but the roots of the company, based in Saarland, go back to the eventful German-French history.
Family businesses also score points with their attention to detail. The manufacturer Prym, founded in 1530, enabled the mass production of stainless snap fasteners at the beginning of the 20th century. The idea of the push button already existed, but it only became truly market-ready through technical perfection in the form of the suspension developed by Prym, which makes the button click so irresistibly. Everyday products like the push button seem obvious today, but are based on laborious innovations.
Writing instruments sell well abroad
With the traditional private bank Metzler from the banking metropolis of Frankfurt and the Fürstlich Castell’sche Bank from Würzburg, the long-standing family businesses are also represented in the financial sector. The stationery from the family business Faber-Castell with its 250-year history, which began with a pencil workshop in Stein near Nuremberg, is also well known among consumers. The company is still based there today. However, the fact that it has remained on the market for so long is less due to local ties and more to international expansion.
What is the secret behind entrepreneurial longevity? Perhaps the key lies in reconciling the opposites of tradition and change. “Over the centuries, these companies have continually reinvented themselves, with the family as an anchor of stability and a rock in the surf,” says Stefan Heidbreder, Managing Director of the Family Business Foundation. According to Heidbreder, such survivors give the German economy resilience in the current times of crisis.
The traditional companies are distributed unevenly regionally: most of the very old family businesses are located in North Rhine-Westphalia, Bavaria and Baden-Württemberg. In the East, on the other hand, there is not a single one of the 50 oldest family businesses that are entirely family-owned. In fact, the expropriations during the Soviet occupation and later in the GDR era broke the tradition of many family businesses there.
How family businesses fared in the East
After the war, thousands of family businesses in the GDR were dismantled or expropriated. Some well-known brands – such as Teekanne, Odol and Wella – also migrated to the West. The remaining companies were harassed and disadvantaged compared to state-owned companies. Initially, until the 1970s, there was still a small remnant of medium-sized family businesses with state participation in the GDR.
But then Erich Honecker, who had just come to power at the time, struck the final blow and in 1972 converted the last remaining medium-sized companies into “state-owned companies” or incorporated them into existing combines. After that, only small businesses in crafts and workshops were able to survive, but they were not allowed to have more than ten employees.
After the fall of the Berlin Wall in 1989, some expropriated businesses were transferred back to the heirs of the previous owners. But only a few reprivatizations went smoothly after decades of planned economy and decoupling from the world market. In some cases it was possible to build on previous successes. The Blüthner piano factory in Leipzig and the organ builder Hermann Eule in Bautzen achieved this. Some reprivatizations of East German companies were successful through management buyouts, i.e. sales to senior East German employees of state-owned companies. As a result, they often never came back into the hands of the founding families.
