Incorporated: 1905 as Trelleborgs Gummifabriks Aktiebolag
NAIC: 326211 Tire Manufacturing (Except Retreading); 326220 Rubber and Plastics Hoses and Belting Manufacturing; 326299 All Other Rubber Product Manufacturing; 336399 All Other Motor Vehicle Parts Manufacturing; 336413 Other Aircraft Parts and Auxiliary Equipment Manufacturing; 339991 Gasket, Packing, and Sealing Device Manufacturing
SIC: 3011 Tires & Inner Tubes; 3052 Rubber & Plastics Hose & Belting; 3069 Fabricated Rubber Products Nec; 3714 Motor Vehicle Parts & Accessories; 3728 Aircraft Parts & Equipment Nec; 3053 Gaskets, Packing & Sealing Devices
With more than 100 years behind it, Trelleborg AB ranks as one of the world's top players in the so-called industrial rubber sector--that is, the non-tire portion of the rubber industry. Trelleborg, which takes its name from the town in Sweden where it was founded in 1905 and is still headquartered, specializes particularly in sealing, protecting, and damping products and engineered solutions based on advanced polymer technology and plastics for a variety of industrial environments. The Trelleborg Engineered Systems unit serves the process, infrastructure, construction, oil and gas, and other industries, offering such products as industrial hoses, rubber sheetings, tunnel seals, chemical protection suits, industrial vibration damping solutions, and rubber sealing membranes. Trelleborg Automotive is the world leader in antivibration products for light vehicles and also produces brake shims, vehicle boots, and engine cooling hoses. Trelleborg Sealing Solutions is among the global leaders in precision seals for the aerospace, automotive, and industrial sectors. Trelleborg Wheel Systems produces solid industrial tires for forklift trucks and other material-handling equipment as well as tires for agricultural and forestry machinery. About 70 percent of Trelleborg's sales are generated in Europe, around 22 percent in North and South America, and approximately 8 percent in the Asia-Pacific region and other markets.
Dunker-Led Beginnings
Henry Dunker, the founder of Trelleborg, was born in 1870 in Esbjerg, Denmark. His mother, Henriette, was Danish, while his father, Johan, was of German origin. The family moved to Helsingborg, Sweden, in 1872 when Johan Dunker took on the job of expanding that town's harbor. The elder Dunker eventually pursued his long-simmering idea of setting up a Swedish rubber production plant to produce rubber galoshes, a potentially lucrative venture given the nation's preponderance of rain and slush. In partnership with some wealthy Helsingborg businessmen, Johan Dunker formed Helsingborgs Gummifabriks Aktiebolag in 1890. Before too long, production of rubber galoshes began, and Henry Dunker, then in his early 20s, was installed as president of the company. The death of his father in 1898 left Henry firmly in control.
In the meantime, Johan Kock, another young entrepreneur, had been one of the founders of AB Velox. Formed in Malmö, Sweden, in 1896, Velox moved a year later to Trelleborg, located on the Baltic Sea, where it stood as the southernmost Swedish town. With cycling growing rapidly in popularity at this time in Sweden, Velox was formed primarily to manufacture bicycle tires, although it also produced technical rubber products, such as industrial hoses, belts, gaskets, molded components, and roll coverings.
Poorly managed, the debt-ridden Velox faced liquidation by 1905. Henry Dunker, with ambitions of becoming the undisputed leader of the Swedish rubber industry, seized this opportunity. On October 30 of that year, he engineered the formation of a new company, Trelleborgs Gummifabriks Aktiebolag, which took over the assets of Velox. Dunker, who was named president, controlled 51.1 percent of the new firm's shares, with the other 48.9 percent held by Kock. Gustaf Lagergren, an associate of Dunker, was the first chairman, but Kock took over this position in 1909.
Dunker divided production between his two rubber enterprises: the Helsingborg business focusing on consumer products such as rubber galoshes and balls, and the Trelleborg company concentrating on tires and industrial rubber products. These firms remained separate, and Dunker was eventually dubbed "Galosh King" as he grew Helsingborgs Gummifabriks into Europe's leading producer of galoshes and rubber shoes.
Under Dunker's leadership, Trelleborgs Gummifabriks meanwhile quickly expanded and by 1911 was able to tout itself as the largest rubber producer in Scandinavia. In addition to continuing to produce bicycle tires and a wide variety of technical rubber products, the company established itself within two areas that remained central to the firm for decades to come: automobile tires, first produced in 1907, and rubber coats, which debuted in 1910. The first Trelleborg car tires were of the pneumatic rubber variety, a breakthrough product that helped spur the exploding growth of motoring. By the beginning of World War I, Trelleborgs Gummifabriks was generating more than half of its sales from tire production, although bicycle tires still accounted for the majority of tire revenues. The sales of rubber coats grew large enough by 1915 to justify the establishment of a separate unit, the coat department. Among the other new products introduced during this period were rubber heels and soles for shoes, mattresses and air cushions, football bladders, rubber gloves, and items made from hard rubber, often called ebonite, such as handles for pots and pans and handrails for trains and trams. In the meantime, the company in 1908 first used its logo consisting of the letter "T" inside a triangle standing on one of its points.
Navigating Through World Wars and the Great Depression
A vital supplier of government orders during World War I, Trelleborgs Gummifabriks saw its sales double during the war years while profits hit record levels. Total sales during the four war years totaled SEK 18.6 million. Among the items produced by the company for the Swedish defense forces were gas protection suits, rubber raincoats, and tires. As the war dragged on, the company contended with the shortage of raw rubber by increasingly turning to the recycling of scrap rubber.
After an initial upswing immediately after the war, the Swedish economy fell into a deep and lengthy recession lasting from 1920 to 1922. Sales at Trelleborgs Gummifabriks fell by two-thirds, layoffs resulted in a workforce reduction of one-third, and wages were cut by 30 percent. In 1921 the company recorded the first full-year loss in its history. Despite the hard times, the firm's first subsidiary, a Stockholm-based sales company, was established. During the succeeding recovery, sales of hard-rubber products, pneumatic tires, and coats were particularly strong, and revenues reached SEK 5 million by 1925. Foreign sales doubled during this period, and products were being exported to ten countries, including Australia and the United States. In 1926 the firm established its first foreign subsidiary, the London-based Trelleborg Ebonite Works Ltd., a move designed to circumvent the high tax on direct imports from Sweden.
Although sales fell for three straight years during the Great Depression of the early 1930s, Trelleborgs Gummifabriks fared surprisingly well given the depths of the economic crisis mainly because of the rapidly increasing demand for automobiles and hence for automobile tires as well. Between 1931 and 1935 sales of automobile tires produced at the Trelleborg plant doubled, and by the late 1930s car tires were Trelleborgs Gummifabriks' largest product line. At mid-decade, overall sales were nearing SEK 8 million, while the workforce, numbering more than 1,000, was producing four categories of rubber products: bicycle tires, car tires, industrial products, and clothing. The rapidly growing coat department had expanded into the production of protective clothing and diving suits while continuing to make its core rainwear. Two highly popular ebonite products of the mid-1930s were the yo-yo and the bowling ball.
On September 1, 1939, the same day that World War II broke out, Dunker loosened his reins on the company by appointing Hilding Ståhlbrandt president. Ståhlbrandt had been the sales manager at the sugar company Svenska Sockerfabriks AB and before that had served for a number of years as the plant manager at the Mazetti AB chocolate company. Also in 1939 Trelleborgs Gummifabriks aimed to push past its limitations as a small company on a global scale by entering into a long-term technical and commercial cooperation agreement with B. F. Goodrich Company, at the time the world's fourth largest producer of automobile tires. The outbreak of World War II, however, forced this agreement to be mothballed, and Trelleborgs Gummifabriks also had to postpone plans to build a new and larger tire plant in Trelleborg.
During the war, although the country remained neutral, Sweden launched a major rearmament program, and Trelleborgs Gummifabriks once again served as a major supplier to the nation's armed forces. Sales surged as the company produced tires for all of the army's vehicles and bicycles, huge numbers of raincoats, tent components, and gas protection gear, including overalls, gloves, and rubber boots. Other war-related production included bulletproof fuel tanks, aircraft engine components, and various rubber components for submarines. Civilian production continued on a much more limited scale, including raingear sold under the Akvarex brand name and bicycle tires, the latter remaining the firm's best-known consumer item. In keeping with the self-sufficiency required during a period of widespread rationing, demand for the company's rubber preserving-jar rings skyrocketed. On the raw material front, reclaimed scrap rubber once again came to the fore, while Trelleborgs Gummifabriks also gained access to supplies of synthetic rubber from Germany through a controversial agreement engineered by the Swedish government.
Postwar Prosperity
Kock died in 1945, at which point Dunker succeeded him as chairman. A widower without any children, Kock left his estate to three foundations. His 48.9 percent interest in the company he helped found remained in the possession of these foundations until late in the 20th century, when they gradually sold off most of their Trelleborg shares. In the meantime, the first few years following World War II were difficult ones for Trelleborgs Gummifabriks because of shortages of capital, raw materials, and labor. Business began to take off in 1948 when sales rose to SEK 49.6 million, the company generated gross profits of SEK 13.8 million, and the workforce increased to more than 2,200. Also in 1948, construction was completed on the war-delayed car tire plant in Trelleborg, an expansion that tripled capacity from 200 to 600 tires per day. Among other capital investments, a new warehouse and distribution building opened in Trelleborg, and part of the clothing production operation was shifted to a new plant in Skurup, Sweden. Also in the immediate postwar years, Trelleborgs Gummifabriks and B. F. Goodrich resumed their alliance. Among the alliance activities was a contract by which B. F. Goodrich started supplying vinyl resins to its Swedish partner as Trelleborgs Gummifabriks began producing products made from plastics for the first time. In July 1949 Ståhlbrandt died suddenly of a heart attack. At the urging of Dunker, Ståhlbrandt's son, Åke, succeeded his father as company president at age 35.
One of the major developments of the 1950s was a concerted internationalization drive. The company over the course of the decade established a network of agents and dealers in 65 countries, starting first with the Nordic countries, then moving on to the major industrialized nations of Europe, and finally to Turkey, Czechoslovakia, Poland, Israel, Egypt, India, the United States, South America, Africa, and the Far East. The major lines of products exported by Trelleborgs Gummifabriks during this period included bicycle tires, car tires, wheelbarrow tires, rubber flooring, rubber belts and tubes, and bowling balls. The company next took its global ambitions to the next level by establishing overseas sales companies, first in Denmark (1959) and then in Norway, Finland, the United States, and Germany. The first foreign production plant was established in the Netherlands in 1962 for the manufacture of battery cases. Eventually, these and other moves helped push the portion of sales generated outside of Sweden from just 4 percent in 1950 to nearly 40 percent in 1970.
The 1950s also saw a number of changes in the firm's array of products. The company introduced the world's first winter tire, the Wittmer, in 1953, the same year that the firm's partnership with B. F. Goodrich led to the introduction of Europe's first tubeless car tire, the Safe-T-Tire. In 1958 Trelleborgs Gummifabriks introduced a low-profile tire called the T Farmer, which was designed mainly for transport equipment for forestry and agricultural applications as well as for large farming machinery, such as harvesters. The rise of plastics as an alternative base material to rubber led to the establishment of a subsidiary called AB Trelleborgplast. Starting in 1957, this subsidiary, based in Ljungby, Sweden, began manufacturing plastic sheeting, coated fabric, and refrigerator moldings made from polyvinyl chloride (PVC). Vinyl floor tiles produced by this unit used asbestos as a filler material. In the meantime, fierce competition, primarily from Japanese manufacturers, forced the company to discontinue production of a number of product lines, including air mattresses, inflatable rubber boats, and bowling balls. By 1960 sales exceeded SEK 200 million, while the number of employees neared 5,000.
Over the course of a number of months in late 1959 and much of 1960, Trelleborgs Gummifabriks and B. F. Goodrich were involved in negotiations concerning the U.S. firm's desire to gain a minority or even a majority interest in the Swedish concern. A deal appeared likely until the autumn of 1960 when the health of the 90-year-old Dunker deteriorated, and the company's board decided not to go forward with the founder's health in such a fragile state. Dunker died in May 1962, at age 92 and as the wealthiest person in Sweden. Like Kock, Dunker died a childless widower, and he left his fortune of around SEK 60 million (some SEK 35 million after imposition of Sweden's inheritance tax) to a number of funds and foundations, generally called the Dunker interests. The will of Sweden's "Rubber King" stipulated that these entities retain their majority control of the voting rights in Trelleborgs Gummifabriks. Part of the income from the Dunker interests pays for the operation of the Dunker Hospital in Helsingborg, while another portion goes to the City of Helsingborg to be used, in the words of the will, "for an independent purpose of benefit to the citizens of Helsingborg." The city has used money from the Dunker interests to fully or partially fund Helsingborg City Theater, Helsingborg Concert Hall, the Museum of Culture in Fredriksdal, a new stand at the Olympia football stadium, and the Dunker Cultural Center.
In 1963, following Dunker's death, a new share issue provided Trelleborgs Gummifabriks with about 500,000 new shareholders. The following year, the company's shares began trading on the Stockholm Stock Exchange. In the meantime, the company was also active on the acquisitions front, purchasing Stensholms Fabriks AB, a maker of specialized sealing rings (later renamed Stefa Industri AB), and AB Ekparkett, producer of parquet floors, both in 1962. Among new product areas pursued in the mid-1960s were wear-resistant rubber products for the mining industry and heat-resistant textile conveyor belts. On the tire front, Trelleborgs Gummifabriks produced its first radial tire, the T-Belt, in 1964.
In 1965 Trelleborgs Gummifabriks and the other company that Dunker had been instrumental in developing, by this time known as Helsingborgs Gummifabriks AB Tretorn, entered into a loose cooperative grouping. The two firms remained independent legal entities with different owners but had a common majority owner, the Dunker interests, and a common board, group management, and president (Åke Ståhlbrandt). This arrangement was intended to help the two companies compete in the rapidly changing European business landscape, which had seen the establishment of the European Economic Community and the European Free Trade Association. Among the cooperative activities were the combining of certain purchasing and sales operations. By 1969 what was known internally and externally as the Trelleborg-Tretorn Group ranked as the seventh largest rubber company in Europe, with combined sales of SEK 651 million. Trelleborgs Gummifabriks, with about 6,500 employees, generated SEK 501 million of these revenues, while Tretorn, a 2,800-employee concern concentrating on rubber and canvas shoes, boots, and balls, posted sales of roughly SEK 150 million. One development of particular note during the late 1960s was the discontinuation of Akvarex raincoats and trench coats because of brutal competition from textile imports from low-wage countries. The plant in Skurup shifted its focus to protective suits, including certified fire and chemical protection suits, bulletproof vests, and storm hats. Competition in the tire sector was fierce as well and prompted Trelleborgs Gummifabriks to limit its ambitions in this area to producing tires for the Scandinavian market.
1970-83: Prolonged Period of Decline
By 1970, industrial rubber products accounted for 62 percent of Trelleborgs Gummifabriks' total sales, while the portion generated by tires had declined to 29 percent. A sharp economic downturn that began in 1971 and featured skyrocketing wage inflation further undermined the company's auto tire operations, which had been suffering from the expensive transition to radial tires, major worldwide overproduction, and abnormally low prices. Tire inventories mounted, the tire operations eventually began operating in the red, and finally the difficult decision was made to exit from one of the firm's historically most important businesses. The phasing out of passenger car and truck tires began in 1975 and was completed the following year. The company, however, retained its position in specialty tires, such as low-profile tires for agricultural and forestry equipment.
Also in 1975, the bicycle tire business recorded a loss for the first time in the company's history mainly because fierce competition had entirely undercut the United States as a viable market. Most bicycle tire production was therefore phased out, although limited production continued under a contract with the Swedish government for civil emergency planning purposes. This arrangement ended in 1996, at which point Trelleborg and its predecessor, AB Velox, had produced more than 100 million bicycle tires and tubes over a nearly 100-year period.
These historic closures precipitated a one-quarter reduction in the company workforce in Trelleborg, while the resulting financial hit contributed to three straight loss-making years, the first since the early 1920s, with the red ink for 1976 to 1978 adding up to about SEK 100 million. The downturn prompted Ståhlbrandt to resign from his position as president in 1976, although he remained chairman of the board. Brought onboard as the new president was Arne Lundqvist, who had previously been president of Svenska IBM AB.
Cost-cutting came to the fore under the new leader, who also launched a major restructuring that radically decentralized what had been a strictly hierarchical organization with the establishment of around 40 independent profit centers. Trelleborgs Gummifabriks also shortened its name to Trelleborg AB in 1977, and the following year the alliance arrangement with Helsingborgs Gummifabriks AB Tretorn was ended and along with it the shared presidency. Helsingborgs Gummifabriks later became known as simply Tretorn AB, and this firm by the end of the 20th century had positioned itself as a producer of outdoor lifestyle footwear and tennis balls. PUMA AG Rudolf Dassler Sport acquired Tretorn in 2001. Under Lundqvist, meanwhile, Trelleborg attempted to create a third leg to stand on in addition to the rubber and plastics operations, but the president's diversification attempts, most notably into the manufacture of precision mechanical parts, were neither successful nor lasting. Although Trelleborg returned to modest profitability in 1979, the decade had proven exceedingly difficult: whereas total sales more than doubled between 1970 and 1980, from SEK 517 million to SEK 1.34 billion, profits grew only from SEK 24 million to SEK 35 million. In the early 1980s the board of directors grew increasingly dissatisfied with the company's inability to produce more robust profits, and the search for a new leader was launched early in 1983.
1983-89: Astounding Growth As an Industrial Conglomerate
With a background that included management positions at appliance giant AB Electrolux, Rune Andersson became the fifth president of Trelleborg in May 1983. Andersson immediately made his mark by replacing the highly decentralized structure implemented by his predecessor with the creation of six independently operating business areas. In addition, unprofitable units were shut down, and noncore subsidiaries were sold. Profit growth was quickly reestablished (notably, a 130 percent increase in 1984), the Trelleborg share price began ascending, and capital was freed up for a huge expansion.
The initial acquisitions of the Andersson era served to bolster Trelleborg's international position in the industrial rubber sector. In 1984 the company acquired Atlas A/S Den Norske Remfabrik, the largest industrial rubber company in Norway, with annual sales of more than SEK 100 million. The following year, Trelleborg purchased Bakker Rubberfabriek B.V., one of the oldest and most respected rubber companies in the Netherlands, and Spondon Plastics, a U.K. manufacturer of battery cases. Also added in 1985 was Goodall Rubber Company, which generated revenues of SEK 550 million as a distributor of industrial rubber products throughout the United States and Canada. That year, Trelleborg's newfound health was clear from the profits of SEK 167.2 million that were generated from the total sales of SEK 2.13 billion. Also, Åke Ståhlbrandt stepped down from the board of directors after 42 years of company service. Ernst Herslow was named the new chairman.
Trelleborg's shift from rubber company to industrial conglomerate became clear in 1986 via the SEK 700 million ($107 million) purchase of a 40 percent stake in the much larger Boliden AB, a Swedish mining, chemicals, and trading company. At the time, Boliden itself was in the midst of taking over Swedish contracting and building materials company Ahlsell AB. By 1988 Trelleborg had acquired full control of Boliden, and with the 1987 purchase of a number of operations of the U.S. firm Allis-Chalmers Corporation that produced crushing and screening equipment for the mining and processing industries, mining and metals had become Trelleborg's largest business area, surpassing rubber and plastics.
Among numerous other deals completed in this period, in 1986 Trelleborg merged its specialty tire operations with Viskafors AB to form Swedish Tyre AB, which was 48 percent owned by Trelleborg. Also in 1986, the company acquired the Mataki Group, a producer of roofing materials and specialty chemicals, from the Danish firm Superfos A/S. In 1988 Trelleborg acquired Malmö-based Bröderna Edstrand AB, the largest independent steel wholesaler in Sweden with annual sales of SEK 2.2 billion, and Saab-Scania Enertech AB, a producer of heating systems with annual sales of SEK 1.3 billion. Andersson also made an aborted run at taking over Aktiebolaget SKF, the world's leading producer of roller bearings, in 1988; after being rebuffed by that company's major shareholders, he sold the 10 percent stake he had built in SKF at a tidy profit.
The deal making continued in 1989, highlighted by the purchase of a 50 percent stake in Canadian mining company Falconbridge Limited, with the Canadian firm Noranda Inc. taking the other 50 percent. Toronto-based Falconbridge, a concern with annual revenues of SEK 13.3 billion, was the world's second largest producer of nickel and had copper and zinc operations as well. Trelleborg also sold its chemicals unit, Boliden Kemi, to the Finnish firm Oy Kemira Ab in 1989. Fueled by the acquisitions spree and skyrocketing metal prices that bolstered the position of Boliden, revenues at Trelleborg reached a record SEK 26.49 billion ($4.25 billion) in 1989, nearly ten times the 1986 level of SEK 2.8 billion, while profits soared correspondingly from SEK 315 million to SEK 2.74 billion ($440 million) over the same period. Rubber and plastic products generated less than 13 percent of overall revenues by the end of the 1980s. The company's share price reached an all-time high of SEK 235 in October 1989, having increased an astounding 7,604 percent over the previous ten years.
1990-98: A Narrowed Focus
In May 1990 Kjell Nilsson succeeded Andersson as Trelleborg president and CEO. Nilsson, a close associate of Andersson whom the latter brought with him from Electrolux, had previously led a turnaround at Boliden. Andersson, meantime, replaced Herslow as company chairman. By the end of 1990 Trelleborg was organized into nine business areas: Boliden Mineral, Boliden International, Boliden Metal, Ahlsell (HVAC distribution), Bröderna Edstrand (steel distribution), Enertech (heating systems), Ventilation, Swegon (a publicly listed industrial group with operations in construction, climate control, and distribution acquired in 1990), and Trelleborg Industri (rubber and plastics). The company also continued to own a 50 percent stake in Falconbridge, while in July 1990 the mineral processing systems subsidiary Svedala Industri AB was taken public and became an associated company 49.5 percent owned by Trelleborg. In 1991 another business area was added via the takeover of the forest products group Munksjö AB, producer of corrugated-board packaging, specialty paper, tissue and household paper, and pulp. Not neglecting its rubber area, Trelleborg in 1991 also acquired the tire division of the U.S.-based Monarch Rubber Company to become the world's largest manufacturer of solid industrial tires. The following year the company purchased Rubore Materials Sweden AB, a manufacturer of brake shims featuring a thin rubber sheeting to prevent screeching in car brakes.
These acquisitions were a mere sideshow, however, to Trelleborg's dramatic fall from its late 1980s pinnacle. A host of negative economic developments pushed the company into a tailspin in the early 1990s. In addition to the general worldwide economic downturn that followed in the wake of the Persian Gulf War, Trelleborg was also forced to contend with plummeting metal prices, a collapse of the Swedish construction market, a decline in the dollar exchange rate, and sharp wage increases in Sweden. As a result, pretax profits for 1991 plunged 78 percent, and then the company suffered substantial pretax losses in 1992 and 1993: SEK 1.56 billion ($205 million) and SEK 1.52 billion ($190 million), respectively. Trelleborg embarked on an extensive streamlining program while also divesting large portions of its sprawling operations to reduce a heavy debt burden. Enertech was sold in the spring of 1993 to Wolseley plc for SEK 650 million. Late in the year Trelleborg sold its remaining shares in Svedala Industri and also sold 75 percent of the shares in Munksjö through a public offering. The company in 1994 sold its remaining shares in Swegon and reduced its stake in Falconbridge. The remaining shares in the latter were jettisoned the following year, with the Falconbridge divestments alone generating proceeds of more than SEK 7 billion and a capital gain of SEK 3 billion. Also in 1995, Trelleborg sold its remaining shares in Munksjö to Jefferson Smurfit PLC for SEK 805 million. This retrenchment enabled Trelleborg to become virtually debt-free, return to strong profitability, and concentrate on three core areas: mines and metals, rubber products, and distribution. The company posted pretax profits of SEK 3.51 billion ($493 million) in 1995 on revenues of SEK 21.3 billion ($ 2.99 billion).
Its financial position turned entirely around, Trelleborg returned to growth mode but this time the focus was squarely on the core founding business, rubber products. A new wave of internationalization was launched that concentrated in particular on emerging markets, including China, Singapore, Malaysia, the Philippines, Brazil, Poland, and the Czech Republic. In 1996 a number of rubber companies both inside and outside of Sweden were acquired, with the annual sales of the acquired operations totaling approximately SEK 1.6 billion. The most important of these were: CMPP, a France-based producer of industrial hose and rubber sheeting with sales of SEK 600 million, purchased from the Michelin Group; Horda AB, a Swedish rubber company with sales of SEK 360 million that produced such items as automotive components, building profiles and other extruded profiles, composites and granulate for the cable industry, and retreading materials; and the Spanish firm Ibercaucho, a SEK 300 million concern specializing in rubber sheeting, fenders, and expansion joints.
Another watershed event occurred in June 1997 when Trelleborg began its exit from mines and metals by selling about 55 percent of the common shares of Boliden on the Toronto Stock Exchange. Proceeds from this sale totaled SEK 4.4 billion, and Trelleborg recorded a capital gain of SEK 1.5 billion. The proceeds enabled Trelleborg to make further acquisitions, including the 1997 purchase of Yale-South Haven Inc., a firm based in South Haven, Michigan, that generated annual sales of SEK 1 billion ($130 million) from the production of antivibration components for the automobile industry. That year Trelleborg also expanded its distribution side by the acquisition of Skoogs AB, one of Sweden's leading electrical appliance wholesalers, and the purchase of a majority stake in Starckjohann Oyj, a Finnish wholesaler specializing in the heating, water, and sanitation sectors.
1999 Forward: Becoming One of the Top Non-Tire Rubber Companies in the World
By early 1999 Nilsson had become a figure of controversy, in part because of reports of irregularities in the sale of Boliden shares. The board of directors elected to replace Nilsson as president and CEO with Fredrik Arp in February of that year. Arp was a former top executive of Trelleborg, including a stint as head of the tire division; he had left the firm in 1995 to become president and CEO of the Swedish packaging company PLM AB. The new leader moved swiftly to erase the final vestiges of Trelleborg's forays as a conglomerate. Later in 1999 the remaining shares of Boliden common stock were spun off to Trelleborg shareholders. Trelleborg continued to own Boliden preference shares, but these were eventually converted to common stock and were completely divested by 2003. A number of other businesses, including Skoogs, were either divested or liquidated in 1999. Then late in 1999 Trelleborg sold a 51 percent stake in its remaining distribution operations to the venture capital company Nordic Capital, and reorganized as Trenor Holding AB. Included within Trenor were Ahlsell, Bröderna Edstrand, and Starckjohann. Trelleborg completed its exit from the distribution sector in 2004 by selling its 49 percent stake in Trenor to Nordic Capital.
The proceeds from this dramatic series of divestments were used to build up Trelleborg's core industrial rubber and polymer operations--in particular through three major acquisitions of U.K.-based companies, two of which occurred in 2000. In March of that year the company acquired the BTR antivibration systems (AVS) business of Invensys plc for SEK 2.1 billion ($250 million) to become the world's leading producer of antivibration devices for the automotive industry and the number two AVS supplier to the nonautomotive industrial sector. In the automotive sector, the addition of the BTR unit, which specialized in the engine and suspension mount business, complemented Trelleborg's existing strength in the body mount area. BTR operated 17 factories in seven countries and generated annual revenues of nearly SEK 4.2 billion ($500 million). In late December 2000 Trelleborg purchased the automotive components operations of the Laird Group PLC for SEK 1.5 billion ($156 million). The Laird operations had annual sales of SEK 2.8 billion ($270 million) with a manufacturing base of 16 plants in six countries, mainly in Europe. The deal strengthened Trelleborg's position in the AVS sector while also moving the company into the noise-reduction and fluid systems businesses.
In April 2002 Rune Andersson resigned after 19 years at the company, 11 as chairman. Taking over as chairman was Anders Narvinger, the president of the Association of Swedish Engineering Industries and Trelleborg board member since 1999. Pretax profits for 2002 totaled SEK 902 million ($93 million) on net sales of SEK 17.63 billion ($1.81 billion). More than half of the firm's sales were generated by the Trelleborg Automotive unit, which focused on automotive and industrial AVS, brake shims, thermoplastic boots, and gas springs. The company's three other units were Trelleborg Wheel Systems, specializing in agricultural tires and solid industrial tires; Trelleborg Engineered Systems, producer of industrial hoses, fender systems, rubber sheeting, dredging hose systems, tunnel seals, and chemical-resistant suits; and Trelleborg Building Systems, supplier of waterproofing and sealing products, primarily for the European construction sector.
In 2003 a new unit, Trelleborg Sealing Solutions, was created following the acquisition of the precision seals business of Smiths Group plc for SEK 6.28 billion ($810 million), the third of Trelleborg's transformational acquisitions and the largest in its history. The acquired business, which mainly operated under the name Busak+Shamban, specialized in polymer-based precision seals for the industrial, automotive, and aerospace markets. It had annual sales of SEK 5.5 billion ($710 million). Its operations were located mainly in Europe and North America, but the business maintained production facilities in Brazil, Canada, Denmark, France, India, Italy, Japan, Malta, Mexico, Poland, Sweden, the United Kingdom, and the United States. By 2004 this acquisition, coupled with the two major deals completed in 2000 as well as a number of smaller fill-in-type purchases completed during this period, pushed Trelleborg's revenues back up to SEK 22.91 billion ($3.12 billion), nearing the level of conglomerate-era Trelleborg.
The sale of its 49 percent stake in Trenor Holding in 2004 enabled Trelleborg to circle back to a firm focus on industrial rubber and polymer products, a return to the roots that Henry Dunker had established a century earlier. In the wake of the acquisition of the Smiths unit, Trelleborg concentrated on improving its existing business units through efficiency efforts, smaller acquisitions, expansion into new markets, and new product development. In January 2004 the company bolstered its automotive hose business by the purchase of Metzeler Automotive Hose Systems from Metzeler Automotive Profile Systems S.A. for SEK 275 million ($37 million). In October 2005, the year of Trelleborg's centenary, Peter Nilsson was named president and CEO following Arp's departure to become president of Volvo Car Corporation. Nilsson had previously led Trelleborg Engineered Systems.
In January 2006 the company acquired the U.K.-based CRP Group for SEK 956 million ($123 million). CRP specialized in underwater polymer systems and solutions for offshore oil- and gas-extraction projects. In October of that same year, the Trelleborg Engineered Systems unit was further bolstered with the purchase of Spartanburg, South Carolina-based Reeves Brothers, Inc., for SEK 1.33 billion ($180 million). By acquiring Reeves, Trelleborg became the world leader in polymer-coated fabrics used in such areas as the graphics, personal protection equipment, aerospace, defense, and fluid solutions industries. At the end of 2006, the Trelleborg Building Systems unit was integrated into Trelleborg Engineered Systems. Also during the year, the Goodall Rubber hose distribution business was divested.
By this time, Trelleborg AB ranked as the world's third largest industrial (i.e., non-tire) rubber company, trailing only Continental AB and Hutchinson S.A. Revenues for 2006 reached a record SEK 27.04 billion ($3.67 billion), but pretax profits fell 24 percent to SEK 1.19 billion ($162 million). Rising prices for raw materials pushed profits down, while the Trelleborg Automotive unit was further hurt by production cuts by the U.S. Detroit-based automakers. Later in 2006 the company launched a restructuring of this unit that involved the closure of two plants in England, and in early 2007 Trelleborg was considering whether to jettison certain parts of its automotive business. Also in 2007, Trelleborg continued to pursue smaller acquisitions, while the Trelleborg Sealing Solutions unit began replacing the Busak+Shamban brand name with the Trelleborg moniker.
Principal Subsidiaries
AVS Brasil Getoflex Ltda (Brazil); Busak and Shamban Belgium SA; Trelleborg do Brasil Solucões em Vedacão Ltda (Brazil); Busak and Shamban Bulgaria EOOD; Busak and Shamban CZ spol s r.o. (Czech Republic); Busak and Shamban Hankuk Ltd. (South Korea; 75%); Busak and Shamban Japan KK; Trelleborg Sealing Solutions Polska Sp.zo.o (Poland); Busak and Shamban Suomi Oy (Finland); Busak and Shamban Suisse SA (Switzerland); Busak and Shamban Sverige AB; Trebolit AB; Busak and Shamban Österreich GmbH (Austria); Chemtrading Alpha Holding AG (Switzerland); Gromedi Oy (Finland); Mar-Con Polymers Ltd. Oy (Finland); Trelleborg Automotive Czech Republic S.r.o.; Trelleborg Automotive China Holding AB; Trelleborg Automotive Poland Sp.zo.o; Trelleborg Automotive S.R.L. (Romania); Trelleborg Automotive Slovakia s.r.o.; Trelleborg Engineered Systems Lithuania UAB; Trelleborg Corporation (U.S.A.); Trelleborg Sealing Solutions US, Inc.; Trelleborg CRP Inc. (U.S.A.); Trelleborg Wheel Systems Americas Inc. (U.S.A.); Trelleborg YSH Inc. (U.S.A.); Trelleborg YSH SA de CV (Mexico); Trelleborg Engineered Systems China Holding AB; Trelleborg Engineered Systems Group AB; Trelleborg Fluid Solutions Czech Republic s.r.o.; Trelleborg Gummi AG (Czech Republic); Trelleborg Holding AB; Trelleborg Building Systems AB; Trelleborg Industrial AVS AB; Trelleborg Holding Danmark A/S (Denmark); Trelleborg Phoenix A/S (Denmark); Trelleborg Sealing Solutions Denmark A/S; Trelleborg Holding France SA; Trelleborg Industrie SA (France); Trelleborg Holdings Italia S.r.l. (Italy); Trelleborg Holding Norge AS (Norway); Trelleborg Viking AS (Norway); Trelleborg Holdings (UK) Ltd.; Trelleborg Sealing Solutions UK Ltd.; Trelleborg Automotive (UK) Ltd.; Trelleborg Hong Kong Holdings Ltd. (China); Trelleborg Industri AB; Trelleborg Industrie S.p.A. (Italy); Trelleborg Insurance Ltd. (Bermuda); Trelleborg International BV (Netherlands); Trelleborg Automotive Germany GmbH; Trelleborg Fluid Solutions Germany GmbH; Trelleborg Wheel Systems GmbH (Germany); Trelleborg Lesina s.r.o. (Czech Republic); Trelleborg Protective Products AB; Trelleborg Treasury AB; Trelleborg Wheels AB; Trelleborg Wuxi Holding AB; Trelleborg Rubore AB; MHT Takentreprenören I Malmö AB; TSS China Holding AB; TSS Holdings Sweden AB; Trelleborg Forsheda Sweden AB; Velox AB.
Principal Divisions
Trelleborg Engineered Systems; Trelleborg Automotive; Trelleborg Sealing Solutions; Trelleborg Wheel Systems.
Principal Competitors
Continental AG; Hutchinson S.A.; Bridgestone Corporation; Freudenberg & Co. Kommanditgesellschaft; Tokai Rubber Industries, Ltd.; Tomkins plc; Cooper-Standard Automotive Inc.
Further Reading
Aspegren, Carl, and Agneta Ulfsäter-Troell, The First 100 Years, Trelleborg, Sweden: Trelleborg AB, 2005, 295 p.
Begin, Sherri, "Trelleborg to Buy Laird Auto Businesses," Rubber and Plastics News, November 20, 2000, p. 1.
Brown-Humes, Christopher, "Trelleborg to Buy PSS for SEK 6.5bn," Financial Times, July 22, 2003, p. 24.
Carnegy, Hugh, "Trelleborg Divestment Was 'Reluctant' Decision," Financial Times, July 28, 1995, p. 23.
Davis, Bruce, "Precision Deal: Trelleborg Acquires Smiths' Seals Unit," Rubber and Plastics News, July 28, 2003, p. 1.
------, "Trelleborg Buys Ibercaucho," European Rubber Journal, December 1996, p. 8.
------, "Trelleborg Names Arp, Caplea to Top Posts," Rubber and Plastics News, March 8, 1999, p. 28.
------, "Trelleborg Signals Acquisitions," European Rubber Journal, July/August 1997, pp. 10-11.
------, "Trelleborg to Acquire BTR AVS Unit for $250m," European Rubber Journal, February 2000, p. 2.
Davis, Bruce, and Marty Whitford, "Buy American: Trelleborg Industri to Purchase Auto Parts Firm Yale-South Haven," Rubber and Plastics News, March 3, 1997, p. 1.
Johansson, Carolina, "Trelleborg's Efforts to Cut Debt Are Starting to Pay Off," Wall Street Journal Europe, November 8, 1993, p. 12.
McIvor, Greg, "Trelleborg Mining Arm to List in Toronto," Financial Times, February 13, 1997, p. 29.
McNulty, Mike, "Trelleborg Plans $178 Million Purchase: Reeves Brothers Deal Will Expand Company's Manufacturing Base in U.S., China," Rubber and Plastics News, October 2, 2006, p. 1.
Meyer, Bruce, "Hungry for More: Trelleborg Plans to Edge Out Top Dogs in Sealing," Rubber and Plastics News, October 29, 2007, p. 1.
Moore, Miles, "Trelleborg Cooperating in Justice Probe," Rubber and Plastics News, July 23, 2007, p. 7.
Moore, Stephen D., "Trelleborg Thrives As Andersson Directs Swedish Firm Toward Basic Industries," Wall Street Journal, Western ed., October 23, 1989, p. B9D.
Shaw, David, "Trelleborg Enters Third Phase," European Rubber Journal, January 2004, p. 16.
------, "Trelleborg Set to Expand by Acquisitions," European Rubber Journal, January 2000, p. 14.
Taylor, Robert, and Kenneth Gooding, "Starring Role Born of Sense of Timing: The Rise of Sweden's Trelleborg," Financial Times, August 18, 1989, p. 17.
Ulfsäter-Troell, Agneta, and Carl Aspegren, Despot och charmör: Henry Dunker--millenniets helsingsborgare, Helsingborg, Sweden: Helsingborgs museer, 2002.
Webb, Sara, "Rubber King Looks to Expand Empire," Financial Times, July 13, 1988, p. 29.
White, Liz, "Trelleborg Aims to Be the Best in AVS," European Rubber Journal, June 2000, p. 41.
------, "Trelleborg Buys Smiths' Polymer Seals Operation," European Rubber Journal, September 2003, p. 6.
------, "Trelleborg Expands in South Korea, China," European Rubber Journal, June 2003, p. 4.
------, "Trelleborg to Acquire Metzeler Auto Hose Unit," European Rubber Journal, January 2004, p. 2.
White, Liz, and Bruce Davis, "Trelleborg to Focus on Rubber Operations," Rubber and Plastics News, May 31, 1999, p. 12.
— David E. Salamie
