Haniel

They all sat at the same table

09/24/2018

100 years ago, the first Annual Shareholders' Meeting at Haniel took place – with three participants. The first annual report was also presented at the meeting. Discover the events that preceded these firsts.

For Franz Haniel & Cie. GmbH, which had been founded one year earlier, the first proper Annual Shareholders' Meeting took place in Duisburg-Ruhrort on 16 September 1918 at 6 p.m. All the invited guests could literally sit at the same table: After all, there was only three of them (for comparison: in 2017, around 200 shareholders were present at the meeting). Back then only “legal entities“ that represented the parent companies of the business convened. Paul Reusch and Arnold Woltmann represented Gutehoffnungshütte; Eduard Carp represented the family-owned mines Rheinpreußen, Zollverein and Neumühl. They agreed on the distribution of an annual dividend of 6% for the first financial year, which had only lasted nine months (July 1917 to March 1918). At this point, they presented the Franz Haniel & Cie. GmbH annual report and discussed it. With 26 pages and a cover sheet this was quite straightforward (the annual report 2017 comprises 156 pages). The thin paper was written on using a typewriter, the financial statement set nice and neatly in a table with pencil and ruler. Oblique strokes made it practically impossible to falsify the results.

Difficult times for Haniel

The First World War adversely affected OHG Franz Haniel & Co., as well as the transport of coal and the material quality, as can be read in the first annual report of 1918. At that time many workers were soldiers on the front and were therefore not available to the smelting works and coal mines. The annual report also lists frequent shipwrecks, which indicates an investment backlog. At the same time, uncertainty over new competitors spread in Haniel’s transport business. At that time the Rhine-Westphalian Coal Syndicate (RWKS) regulated the sale of coal. It had newly begun to favour contracts with transport companies, which in terms of organisation were attached to a mine because the mines belonged to the syndicate. However, Haniel’s coal transports were not processed by their mines, but rather by the OHG. This now placed the company in an unfavourable position.

Since 1870, Haniel has existed as a general partnership (OHG). The shareholders were five children and a grandchild of Franz Haniel. The grandson was Franz Haniel Junior. The three factors – staff shortages, investment backlog and competitive disadvantages – meant that restructuring of the general partnership was urgently necessary. Eduard Carp supported a solution in favour of a GmbH, in which the coal trade could be subordinate to the mine. They would thereby cease to be disadvantaged by the syndicate. Major shareholder Franz Haniel Junior held a different view on this point. Until 1917 Haniel therefore remained a general partnership.

The beginning of a new era
On 22 June 1917, Franz Haniel & Cie. GmbH was finally founded. This was controlled by the Haniel mines – Neumühl, Zollverein and Rheinpreußen, as well as the Gutenhoffnungshütte. The Haniel family entrusted the management of the company to Johann Wilhelm Welker. The first manager from outside the family was not only an expert in the coal and transport business on the Rhine and familiar with the processes at the coal syndicate, but he also brought the transport company Piepmeyer & Oppenhorst with him into the Haniel portfolio. With Welker Haniel began to diversify for the first time, so they no longer invested only in coal mining and transport as well as iron smelting.

Cautious optimism was allowed
In the first annual report there was little sign of the fledgling realignment. Due to the still unclear outcome of the war investment, particularly in western Germany due to its proximity to France, were perceived as uncertain. This is because in the case of a German defeat their ships could be seized by the Allies. Between July 1917 and March 1918, even so Haniel participated in the transport development on the Mittelland Canal, helped with the establishment of the German Schiffscreditbank AG and bought almost a 25% stake in Oldenburgisch-Portugiesische Dampfschiffsreederei (OPDR). It was very important to Haniel to reduce dependency on the Rhine as the main transportation route. The company therefore considered the rivers Ems, Weser and Elbe as alternative routes for coal shipping to the international ports in the North Sea. In this respect, canals and railway lines functioned as connecting links. At the same time as establishing the GmbH, Haniel gradually also began to tap into new markets in Germany, which offered greater growth potential. Thus, despite the chaos of war, in its first annual report Franz Haniel & Cie. GmbH looked to the future with cautious optimism.