SWEDEN: Other Business - Business Legends - Production without rest or rust.

SWEDEN: Other Business - Business Legends - Production without rest or rust. - While most companies don't live long enough to enjoy centenary celebrations, Sweden's Stora Kopparberg could live long enough to celebrate its millennium.

by Rhymer Rigby.
Last Updated: 31 Aug 2010

While most companies don't live long enough to enjoy centenary celebrations, Sweden's Stora Kopparberg could live long enough to celebrate its millennium.

Although there is no real reason why they shouldn't be, companies are not immortal: the average lifespan is around 50 years. And, after their allotted two score and ten, most simply take one of the well-trodden paths to the corporate hereafter. But not all; there are a few that pre-date Queen Victoria; a couple which pre-date the Renaissance and one, Sweden's 709-year-old Stora Kopparberg, that pre-dates most of western history.

Actually, like the very old everywhere, Stora isn't really sure of its age. So, although it dates its foundation from a document signed in 1288, there is evidence of economic activity at the company's Falun copper mine as far back as 850. Regardless, recorded history begins at Falun (Stora Kopparberg means Great Copper Mountain) in the late 13th century. A number of Swedish nobles - known as master miners - controlled the mine, the rights to which were divvied up into sections known as fourths, which were, somewhat confusingly, actually sixteenths of the whole thing. As Sweden's only real source of tradable wealth, Falun prospered until the mid-14th century when the previously laissez-faire government took an interest, hiking copper taxes and, to redress staff shortages, granting criminals asylum if they worked the mine.

Government intervention was only a minor hiccup, however, and, by the 15th century, the Copper Mountain had its own guild. Members' obligations included helping their fellows to escape justice should they murder an outsider; privileges included a manly eight pints of beer a day. Alongside heavy drinking and concealing killers, the guild was politically active and often abused the king's envoys. But it didn't know its limits and after one such incident, an enraged monarch showed up, yelled at the miners for 12 hours and underscored his point by beheading five master miners.

Understandably political activism ceased thereafter and, by the end of the 16th century, Falun was at its zenith. New pumping technology allowed previously flooded areas to be exploited; this coincided with a sharp rise in prices. Now producing 3,000 tons per year, Falun was the biggest wealth generator in Sweden. Copper taxes financed a bellicose foreign policy and it was even decided to recast the currency in copper. In retrospect, this was a questionable decision as a 10 daler piece tipped the scales at 20 kilos.

The 18th century was one of decline for both the mine and parent country.

Copper yields were falling and diversification began: other metals were smelted, precious metals mined and forestry interests developed. By the 19th century, Stora had ended its dependence on copper but other problems were increasingly evident. The company was a Byzantine collection of often conflicting interests overseen by both a government-appointed board and a separate private board. The Swedish government partially redressed this by merging these in 1862, making Stora a private company, albeit one with a variety of power bases and an archaic ownership structure. And, although profitable growth in new areas continued, the company had to wrestle with a managerial triumvirate comprising a mine director, private director and an overall manager - none of whom had a clear mandate to lead.

What Stora needed was a troubleshooter. This it found in Erik Ljungberg, a 32-year-old industrialist, who assumed the general managership in the 1870s and made it the seat of power. Ljungberg modernised the company and, perhaps most importantly, scrapped the 600-year-old system of ownership by 'fourths', making Stora a joint stock company. Despite a rather naive outlook and a penchant for trite maxims ('He who rests, rusts,' etc.) Ljungberg remained at the helm until his death in 1915, leaving behind him a dynamic, modern company.

After the painful depression, Stora bounced back in the 1930s and thrived in the post-war boom as demand for its products grew. Towards the end of the 1960s, growth stagnated as international competition hit the company's markets. To counter this, it made a number of overseas acquisitions, invested in new technology, and began to climb up the value chain, a process that accelerated in the 1970s and '80s.

In 1988 the company's shareholders celebrated its 700th birthday at the Falun mine, now largely a museum. With a little luck, there is no reason why their successors should not celebrate its millennium in 2288. That really would give currency to the prospect of corporate immortality.

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