Courtaulds

Courtaulds was an English based manufacturer of fabric, clothing, artificial fibres, and chemicals.

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Foundation

George Courtauld returned to England in 1794, and founded a silk, crepe and textile business in north Essex at Pebmarsh – George Courtauld & Co – with his cousin Peter Taylor (1790-1850). In 1810, his American-born son Samuel Courtauld was managing his own silk mill in Braintree, Essex.

In 1818, George Courtauld returned to America, leaving Samuel Courtauld and Taylor to expand the business – now known as Courtauld & Taylor – by building further mills in Halstead and Bocking. In 1825 Courtauld installed a steam engine at the Bocking mill, and then installed power looms at Halstead. His mills, however, remained heavily dependent on young female workers – in 1838, over 92% of his workforce was female.

By 1850, Courtauld employed over 2,000 people in his three silk mills, and he had recruited partners including (in 1828) his brother, George Courtauld II (1802-1861) and – in 1849 - fellow Unitarian social reformer Peter Alfred Taylor (1819-1891 – son of Peter Taylor who died the following year). By this time, Courtauld was a very wealthy man but was also suffering from deafness. He planned to spend more time on his country estate Gosfield Hall near Halstead, but could not convince himself to retire, and continued to play an active role in the company until just before he died in March 1881.

His great nephew Samuel Courtauld (1876-1947) became chairman of the Courtauld company in 1921 but is chiefly remembered today as the founder of the Courtauld Institute of Art in London. William Julien Courtauld was also a benefactor of the arts: he gave artworks to the Essex County Council chamber at Chelmsford and the town hall at Braintree in the 1930s.

Leadership

Courtaulds Plc: Sir Christopher Hogg - Chief Executive 1979-1991 and Chairman 1980-1996 Sipko Huismans - Chief Executive 1991-1996 Gordon Campbell - Chief Exectuive 1996-?

Courtaulds Textiles:

Expansion

Courtaulds had entered the market of cellulosics (viscose and acetate) in North America with the setting up of the American Viscose Corporation (AVC) in 1909. The investment in the USA was highly successful, but its sale was enforced in 1941 as part of the negotiations which preceded Lend-Lease.

Meanwhile in Europe Courtaulds expanded its cellulosics business both directly and in joint ventures, including British Cellophane.

In 1945 Courtaulds remained one of the four groups which dominated the man-made fibre industry in Europe (counting the German VGF and the Dutch AKU as one group, and including also the CTA--later merged into Rhone-Poulenc~-in France, and Snia Viscose in Italy). Courtaulds activities in continental Europe consisted in a wholly owned, one-factory viscose fibre business employing some 3,000 people in France, a 50% share in a similar business in Germany (of which the other 50% was owned by VGF, the major competitor), and a minority shareholding which controlled 20% of the voting capital in the Italian firm Snia Viscosa, also primarily a viscose fibre producer. This activity expanded until the 1960s, when these products were replaced by newer developments

Post World War II

Courtaulds was one of the earliest companies in the UK to establish an economics department. In the three decades following World War II that department made notable contributions to the understanding of investment appraisal and the formulation of British - and later European - trade policy. The function also played a significant role in the development of Courtaulds from a rather sedate, man-made fibers producer to the world's largest textile manufacturer, a position the company attained in the mid-1970s. The economics department then influenced the early stages of the subsequent extensive restructuring of the company, a process that culminated in the demerging of its textile activities as a separately quoted company in March 1990 ^[1]

Break-Up

By the late 1980s, the manufacture of clothing was quickly moving to South East Asia, and China. Courtaulds had shut many of its UK based factories and moved production to new Asian based sites ^[2] but its main customer Marks and Spencer wanted better prices. Secondly, its main profit was coming from its chemicals business, which was being held back by the textiles business.

In 1990, Courtaulds plc split itself in to two parts:

• Courtaulds textiles - the fibre manufacture and clothing business
• Courtaulds plc - the chemicals business

Courtaulds plc

The global chemicals industry was in a distinct recession, and the company faced difficult times. The company employed 23,000 and had £2 billion ($4 billion) in annual revenue, with 30% from the United States, 40% from Europe and 15% from Asia-Pacific. CEO Sipko Huismans had focused the company on rationalisation and cost cutting: We have to cut costs. We can't count on sales growth to pay us more or to allow us to buy more of our favorite things. In 1991, the company closed its French viscose plant, allowing its other plants to boost output to 93% capacity, compared with an industry average of 75%. This enabled the share price to double in the first three years following the demerger. ^[3]

Although prices were stable, the company had a potential revenue generator in Tencel, a man-made fibre Courtaulds had spent £100 million and 10 years bringing to market. Like viscose, Tencel is made from cellulose derived from dissolved wood pulp. While rayon production generates large amounts of sulfurous waste, Tencel is made with a "closed loop" chemical process in which the solvent can be filtered and reused. The final product is far stronger than rayon or cotton, which allows a huge variety of different forms and feels - from ultrasoft yet strong denim jeans, to shirts that feel like silk, to scarves that ape the texture of cashmere. ^[4]

To aid its goal of expanding its business, specifically in Asia-Pacific, Courtaulds plc delivered part of its development in joint ventures, particularly with Akzo Nobel. In 2000, Akzo-Nobel proposed a merger, which the EU approved subject to the sale of Coutauld's aerospace business.^[5]

In October 2000, PPG Industries announced it had agreed to buy Courtaulds Aerospace for $512.5 million. Based in Glendale, CA, the aerospace business has annual sales of approximately $240 million (U.S.), employs 1,200 people. It manufactures sealants in Glendale, CA, and Shildon, England; coatings and sealants in Mojave, CA; glazing sealants at Gloucester City, NJ; and coatings at Gonfreville, France. The business also operates 14 application-support centres in North America, Europe, Africa, Asia and Australia.^[6]

Courtaulds Textiles

Courtaulds Textiles is Britain's largest producer of lingerie and underwear. The organization employs around 20,000 people across 16 countries in Europe, North America and Asia, and has annual turnover exceeding £1billion, 40% of which is earned by sales to Marks & Spencer. It markets its products under leading retailer labels across the world as well as its own reputed brands which include Aristoc, Berlei and Gossard and Well. Additionally, Courtaulds Textiles had an international network of lace and stretch fabric businesses.

The business has moved most of its manufacturing jobs offshore, most of which is now divested in joint ventures for flexibility. Investments in Sri Lanka include joint venture partnership with MAS Holdings (Pvt) Ltd, a £2million investment which employs 2,000 people and manufacturers lingerie and leisurewear for retailers including Victoria's Secret, Marks & Spencer, BHS and Hanro. A second joint venture of £3.1million employs 1,100 and exclusively manufactures men's underwear and baby wear for Marks & Spencer. A £3million expansion phase is underway which will increase the 700 strong workforce to 1,100 ^[7]

In 2000, Sara Lee attempted to acquire Courtaulds Textiles. A bitter battle ensued and Courtaulds issued various counter measures to survive as an independent company. However, Sara Lee's chairman announced that the the acquisition will strengthen our European presence and give us access to a range of exciting market opportunities - so they increased their offer to £150million, and won. ^{[8] [9]}

While the name Courtaulds disappeared in the chemical merger with Akzo Nobel, the Courtaulds textile name remains as a division in Sara Lee. However, to survive it again had to slash jobs and axed many of its factories as it grappled with the high costs of manufacturing in the UK and M&S, under Stuart Rose, continuing to squeeze its suppliers. In February 2005, Brenda C. Barnes became the chairman and CEO of Sara Lee - and had a far more focussed strategy. Courtaulds was seen as basically a British-based brand and company, and did not fit with a global business. Barnes agreed sale of the business was right, and for some time tried to sell the Coutaulds business, which had a turnover in 2005 of $560m (£302m), but was hampered by Courtaulds' pension deficit. It was eventually agreed with the UK pension regulator to increase payments into the deficit from £20m to £32m a year until 2015. ^[10] In May 2006, Sara Lee announced the sale of Courtaulds Textiles to PD Enterprise Ltd, a major supplier of clothing to Courtaulds Textiles. No sale price was announced, but it was announced that Sara Lee would continue to hold the $483 million (£260 million) pension deficit, and Brenda Barnes commented that Sara Lee had effectively "given away" the unit. ^[11]

PD Enterprise, a privately held company based in Hong Kong, operates nine facilities that produce more than 120 million garments annually. Its products include bras, underwear, nightwear, swim and beachwear, formalwear and casualwear, jackets and coats, babywear and socks.

Brands

• Berlei - ladies' underwear
• Gossard - ladies' underwear
• Aristoc - ladies' Hosiery
• Pretty Polly - ladies' Hosiery
• Elbeo- ladies' Hosiery

Production sites

• Flintshire - German Glanzstoff Manufacturing Company started an artificial silk factory in Flint in 1907. During World War I the factory was taken over by Courtaulds in 1917, who in 1920 built Castle Works followed the Deeside Mill in 1922. At its height Courtaulds employed over 10,000 people at four sites. Textile production declined from 1950, and Aber works shut initially in 1957, opened for rayon in 1966, and pulled down in 1984. Castle works closed in 1977 and Deeside Mill in 1989. ^[12]

• Northern Ireland - many of the latterly held British-based jobs were based in the grant-aided infrastructure of Northern Ireland. Limavady employed 185 jobs, which were lost in May 2004.

• Wolverhampton - Dunstall Hall Works

• Coventry - Foleshill Road Works
  • Courtaulds Grafil - Production of Carbon Fibre for use in sports, aerospace and automotive industries
  • National Plastics - Production of specialised plastic products including British military bullet proof helmets

• Derby - Spondon Works

References

1. ^ http://www.allbusiness.com/periodicals/article/119291-1.html
2. ^ http://www.ukbusinesspark.co.uk/cos99406.htm
3. ^ http://europa.eu/bulletin/en/9806/p103050.htm
4. ^ http://www.iht.com/bin/print_ipub.php?file=/articles/1993/02/25/chem_0.php
5. ^ http://europa.eu/bulletin/en/9806/p103050.htm
6. ^ http://www.pcimag.com/CDA/Archives/5ccca34a916a7010VgnVCM100000f932a8c0____
7. ^ http://www.boi.lk/popcontent/courtaulds.htm
8. ^ http://www.brandfinance.com/docs/clients/client_details.asp?id=5
9. ^ http://www.saralee.com/newsroom/news_release_popup.aspx?id=134
10. ^ http://www.bharattextile.com/newsitems/1999693
11. ^ Sara Lee offloads Courtaulds division (The Times)
12. ^ http://www.bbc.co.uk/wales/northeast/sites/flintshire/pages/courtaulds2.shtml