100 YEARS OF PASSION FOR WOOD
1908–2008
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Dalhoff Larsen & Horneman A/S
Tlf. 43 50 01 00
Skagensgade 66
Fax 43 50 01 99
2630 Taastrup
www.dlh-group.dk
[email protected]
CVR nr. 34 41 19 13
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Foreword
Jørgen Møller-Rasmussen, 2008 © Kevin Broadbery
Dear Reader,
Welcome to a brief, yet exciting account of the first one hundred years of DLH.
Naturally, it is a story about wood, but more importantly it is
a story of the people who created the business and expanded
it. It is about vision, innovation and skill in good times as well
as in bad times. Strategic thinking is evident throughout as is
the courage to strike out world-wide; the Vikings of our day.
And demonstrating the very qualities stated in DLH’s
future-oriented shared values: Professionalism,
entrepreneurialship and openness – practised responsibly
in a global and multicultural world.
We now stand on the threshold of the second century in
the company’s history. Our joint passion for wood will be our
prime driving force.
Enjoy your reading!
Jørgen Møller-Rasmussen
President & CEO
A special thanks goes to author Peter Tygesen, MA and
director of Photo Center, Copenhagen, Lars Schwander,
former Senior Vice President Jørgen Aarestrup and
consultant Lennart von Haffner for the creation of the
DLH centenary tribute.
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DLH 1908 – 2008
Peter Tygesen
“Come on little brother, let’s start our own business!”
Harald Kjær was a man of action, and when presented
with the opportunity to make a good deal which would enable
him to set up shop on his own in the winter of 1908, he did
not hesitate. His younger brother, Frederik, was keen on the
idea too, and shortly after they started out on their own.
Twelve years later the company was the largest timber
wholesaler in Denmark. In the course of the last century the
company grew through wars and fluctuating market conditions to become one of the largest in the industry worldwide.
Initiative, courage and a gut feeling for the trade characterised the management of the company from day one. Kjær
had not yet reached the age of legal adulthood, but he was
already an experienced man when it came to recognising
personal strengths and insisted on making the best of what
he had got. He had done well at junior school, was extremely
gifted and would have liked to continue on in school, but his
family did not have the money to let him stay on. However,
this was not something which the boy was willing to accept,
so at the age of thirteen he defied his family and marched
back to school after the summer holiday to continue his education. He was angry and disappointed when the headmaster had to send him back home.
His father had arranged for him to start as an apprentice
in the timber trade, and this was where he settled in to make
a life and career for himself and where he stayed for the remainder of his days. Having completed his apprenticeship
and military service he found employment on the Danish island of Funen with a timber merchant company travelling
both as a sales representative and as a buyer, among other
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things, to procure timber from southern Sweden. Once when
returning from such a trip with a contract for 100,000 cubic
feet of timber he was greeted by a sullen owner who felt
that they had paid five Danish ‘øre’ too much per cubic foot.
However, Kjær would not take the criticism; he was convinced that he had made a good deal so he stood up for
himself, and the argument came dangerously close to turning into an actual fight between the young man and his boss.
Finally, Kjær challenged the timber merchant, “If you give me
the five øre per cubic foot I will be happy to take over the
contract.”
No sooner said than done, and with an initial capital of
DKK 5,000, 100,000 cubic feet of timber and the obligation to
pay back the Swedes, they got started. Harald Kjær was
twenty-two years of age; his younger brother was a mere
twenty-one, but with his office training as a managing clerk,
he was the ideal partner. Unfortunately, at that time the age
of majority was twenty-five, and neither of them was able to
register their company with the authorities. Harald Kjær
convinced their father Valdemar to become his official partner, and on 25 March 1908 the two eager brothers founded
the company, Harald Kjær & Co. A couple of years later, when
Harald reached the age of majority, his father withdrew from
the company and Frederik joined the business as partner.
Unfortunately, he died in 1923 and Harald Kjær continued on
alone for a couple of years. Even though timber was always
in demand, Harald Kjær had embarked upon his career as a
wholesaler in a difficult trade which was extremely sensitive
to fluctuations in the market, and back then they were both
more drastic and frequent than they are today. Denmark
Harald Kjær / File photo © DLH
only produced insignificant quantities of softwood, which
was the most important timber product for construction purposes, and the timber merchant companies’ most important
commodity therefore had to be imported; primarily from
Sweden. For this reason, timber wholesalers were also
strongly affected by exchange rate fluctuations and by the
country’s monetary policy as well as its policies on foreign
affairs and trade.
In addition, 1908 was a particularly turbulent year. The
country was undergoing rapid change; industrialisation
started late in Denmark, but around the turn of the century
new factories sprung up alongside power plants, harbours
and large housing estates for the many workers who migrated from the rural areas to the cities. The year before
Kjær founded the company the market overheated; construction was brought to a halt and many carpenters and
timber businesses had to close down. In 1908 the final blow
came when a banking crisis severely hampered credit facilities, and this made life in the construction industry even
more difficult. DKK 5,000 in initial capital did not go far for
the fledgling wholesaler. The first line of business was to finance sales to the hard-pressed customers; he had to take
out a loan. So one day he walked straight into the Danish
central bank and asked to see the governor. Here, he was
not only well received, but he was also promised the desired
line of credit on the one condition that the bank received
a balance sheet for the company. Harald Kjær thanked him
most humbly, but on his way home grew concerned as he did
not yet have any financial statements to present. He went
back to the governor of the central bank, Marcus Rubin, and
confessed that he would not be able to meet the condition.
The governor must have taken a liking to the dynamic young
man because he ended up getting the necessary line of
credit anyway.
He never missed a payment, and soon the company grew.
When World War I broke out only six years later, Harald Kjær
& Co. was a well-consolidated business. The Danish government managed to retain its neutral position during the war,
and this meant that even though it became difficult to import
goods, it was still possible, and both residential and industrial development continued in the big cities, albeit at a
slower pace. One of the conditions for the super powers
allowing Denmark to uphold its neutrality was that both
England and Germany were able to import Danish products
which sustained the agricultural and industrial sectors and
enabled them to continue to supply goods. Price increases
on their products enabled them to buy large quantities of
building materials.
Most of the Swedish timber was shipped in via the Baltic
Sea. However, there was a considerable risk of mines, and
this contributed to freight rates rising tenfold during the
war years. As the war approached its conclusion, the industry was also faced with highly inconvenient fluctuations in
the Swedish currency, and, due to the fact that all trade with
Sweden and related freight rates were calculated in the
Swedish currency, many importers experienced grave
shocks. However, the crisis also offered opportunities.
Timber wholesalers had eyed the possibility of importing
softwood from Finland, and even though the war put an end
to the shipments (due to its status as a Russian principality
Finland was an official enemy of Germany), Finnish timber
became extremely attractive when the country declared its
independence in 1917, especially in the face of the Swedish
foreign exchange crisis. The timber was cheap and the
exchange rate was favourable. The problem was getting
the goods to Denmark.
File photo © DLH
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Finnish expansion
Harald Kjær & Co. had made it through the war in one piece
and now started a large-scale expansion process through
a number of innovative measures. The company was quick
to realise the advantage of large-scale operation and synergies achieved by expanding the value chain from sawmill
to buyer through acquisitions and investments, and they
became involved in both shipping and retail. Finland played
a key role in this development.
Already, before the war, the company had invested in
Swedish companies and owned, among other enterprises,
J. Höök, which in the winter purchased logged timber from
the local foresters in Halmstad on the Swedish coast
slightly north of Denmark. Halmstad timber was in high demand in Denmark with significant sales to even the smallest
Danish harbours. At the end of the war, Harald Kjær joined
a group of local investors in Sweden’s capital, Stockholm, in
the establishment of a large trading company with the primary objective of arranging sales from Finland. Following
the war, the Finnish sawmills were bursting with cut timber;
there was a shortage of building materials all over Europe,
and the wholesalers’ order books were full of orders placed
by agents in the UK and on the continent. Many ships were
lost during the war and the shortage of ships had only
grown more acute with the renewed economic activity that
followed in the wake of the war. How should one go about
getting the huge quantities desired onto the market? The
answer was an extraordinary building project with a name
taken from a Swedish fairytale about the enormous magic
ship Refanut, which, according to the tale, sailed from
northern Sweden to the South Seas.
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In the course of June 1918, when the ice had cleared from
the Gulf of Bothnia, eighty men spent eight weeks fetching
planks from the filled warehouse in Tornio placing them
lengthwise and crosswise along the quayside to produce a
one hundred metres long floating monster of nearly 10,000
m3 of timber. The ‘vessel’ could carry more timber than fifteen to thirty of the contemporary carriers could typically
hold, and when everything was in place, two steam-run tug
boats set out to tow the enormous load southwards. A cabin
had been placed on top of the deck; complete with galley for
the three-man crew, and at the rear the Finnish colours
were flying.
Harald Kjær & Co. owned the Refanut, which was destined
for England, but when it entered Danish waters the then
strict customs regulations prohibited Kjær from re-exporting it, and as a result it was sold to one of the captain’s of
the building industry, Harald Simonsen. He needed the materials and also spotted the publicity potential of the amazing
fleet. It was such a spectacular and unusual sight that, when
it moored in the Port of Copenhagen, it was swamped by
curious Danes who were willing to pay an admission fee to
stroll upon the enormous deck, the like of which the Port
had never seen before. At this point in time Refanut II was
already on the drawing board. However, when the timber
was unloaded it turned out to be more damaged by the salt
water than anticipated, and the operation was never
repeated.
Refanut / File photo © DLH
Jann / File photo © DLH
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Taking the lead in Denmark
As the solution with the fairytale ships had to be abandoned,
freight was still a problem which had to be solved. Even
though steam navigation had become increasingly popular
since the turn of the century, timber was still transported by
sailing ships, which could hold between 350-600 m3, and as
the company thought big and bought in bulk, these were
simply too small.
This led to yet another daring logistics innovation: When
the Gulf of Bothnia began to freeze over for the winter, 2,350
m3 of timber still remained to be picked up from the principal
supplier in Finland. Kjær responded by contracting a fourmasted schooner to fetch the entire consignment in one trip.
His colleagues were flabbergasted at his audacity; never
before had such an enormous load been shipped to
Denmark in one haul; it was an accident waiting to happen.
However, it turned out to be a success and the whole lot
was sold.
First and foremost, the initiative proved that freight costs
could be reduced significantly by using a ship of that size,
and the following year the company chartered the fourmasted schooner Martha for another two or three trips,
from the ship owner Captain K. Jurnas in Pärnu in Estonia.
This business relationship would benefit Harald Kjær & Co.
for many years to come.
During a visit to Copenhagen Jurnas later presented
Kjær with a business proposal. Jurnas had been offered the
purchase of an additional vessel, similar to Martha, but did
not have sufficient funds to do so. He suggested that the
timber wholesaler buy a twenty-five per cent share in
Martha and invest an equivalent share in a new ship, Atlas.
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Jurnas had spotted a good deal; he was a skilful ship owner
and a good partner who understood the value of looking
after his partner’s cargo. For instance, he made sure that
huge tarpaulins were sewn out of canvas to ensure that the
timber would be dry upon arrival. This also meant that he
could load an additional 90 m3 on the deck without risking
that wet and heavy cargo would affect the stability of the
ships. The investments in the ships paid off: within the first
year Harald Kjær & Co. received a 100% return. The schooners were built in the USA from pitch pine and were used to
carry goods across the Atlantic Ocean in much the same
way as the Liberty ships during World War I, and following
the war there was a surplus of these ships in the USA.
Jurnas purchased a number of these four-masted schooners and ended up owning five. Harald Kjær was still his partner, and every year he received the same solid return on his
investment. The ships were able to complete approximately
four trips a year before the waters froze, and gigantic
amounts of timber were thus hauled home in this way.
At the other end of the value chain the company established a close co-operation with a number of hand-picked
timber merchant companies, especially in the most western
region of Denmark, Jutland, through the so-called 3%
scheme: By committing themselves to purchasing agreed
quantities in advance, they were offered consignments at
Harald Kjær & Co’s cost price +3%. This scheme was not at
all popular with their competitors. At that time, timber merchants operated in an industry where prices and market
agreements were settled over a brandy at their annual dinners, a procedure which would never be tolerated by today’s
competition authorities. They certainly did not feel that the
wholesalers should be allowed to compete with them head
on. Kjær broke with the rigid traditions and at several meetings in 1922 of the Danish trade association of timber merchants, its secretary recorded that “members from Jutland
complain about the competition from wholesaler Harald Kjær,
who will soon have a branch in every Juttish market town.
His competition makes itself felt in other parts of the country as well …”
The company’s initiatives established Harald Kjær & Co.
as the largest timber wholesaler in Denmark in 1920, a mere
twelve years after it was founded. Even though the timber
merchants in Denmark disliked his competition, they still
bought his goods as his company typically offered more
favourable trading terms than many of his competitors; and,
as his company was well-consolidated, Kjær could grant
extensive credit. This would turn out to be an additional
strength in the economic crisis that followed as boom and
bust are never far apart in the building and the timber industries. In 1921 the bubble burst and timber prices dropped
to a third of their previous level. Harald Kjær offered to take
over a number of timber merchant companies when they
were faced with insolvent liquidation, and soon the company
was directly involved in the retail business as the owner of
five timber merchant companies and as a close partner in
an additional six.
Inroads into Finland made by Harald Kjær & Co. under the
impact of the 1921 crisis, bear witness to the fact that this
company was both well consolidated and well run. Whereas
others buckled under, he hit back with what were at that
Andreas Kurt & Co., Finland / File photo © DLH
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time unprecedented acquisitions of great magnitude
amounting to more than 280,000 m3 in total from two large
Finnish sawmills, W. Rosenlew & Co. in Pori in the southern
part of the Finnish West Coast and Andreas Kurt & Co. near
Tornio at the tip of the Gulf of Bothnia. Great courage was
shown: in 1922 he offered to purchase from them their whole
year’s production for delivery the following year as well as
cash payments of respectively 180,000 and 500,000 pounds
sterling in advance when entering into the contract.
The greater part of the timber was supplied in Great
Britain and on the continent via the company’s agents while
the part suited to the Danish market was sailed there. This
was the beginning of a long-standing collaboration with the
two sawmills.
Andreas Kurt & Co., Finland / File photo © DLH
Andreas Kurt & Co,. Finland / File photo © DLH
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Andreas Kurt & Co., Finland / File photo © DLH
A turn for the worse
One of Harald Kjær’s strengths was to find talented employees and business partners. Yet another initiative from ship
owner Jurnas bears witness to this. As the season came to
an end each autumn, Jurnas returned to Estonia with his
fleet to stay for the winter. However, he felt that this was
an unnecessary idle period and suggested to Kjær that, instead of returning the ships to Estonia, he would undertake
one more trip to Finland, load the ships with timber once
again, and then moor the ships for the winter in various
Danish harbours. In this way the ships would function as
‘floating warehouses’ until the timber merchant companies
had emptied out their stocks in the spring. At this time of the
year none of the other wholesalers would have received
their goods from their frozen-in Swedish and Finnish suppliers, and timber prices were at their peak. The floating warehouse cargos were a success and greatly impacted on the
company’s continued consolidation.
During this time the company further explored the markets outside Denmark through its own agents in both
England and Germany.
However, dark clouds were gathering over the economy
of the industry, the company, the whole country; in fact, over
the economy of the entire world. Exchange rates were yet
again unstable, and with the economic and political collapse
of Germany, things took a turn for the worse. In 1926 the rate
of the Danish kroner increased by 50%. It was a hard blow
to the company and its customers. The following year the
company had to be restructured following liquidation; the
principal bank had shut off its credit and demanded the immediate repayment of all debts. All outstanding accounts
were settled with creditors, but Harald Kjær had to start
from scratch, this time with the limited company Harald
Kjærs Trælastimport A/S.
On the one hand, times were certainly not favourable for
a company which had to work its way up from the bottom,
and quite a few timber merchant companies resented the
wholesaler since his former ‘business branches’ had meant
fierce competition; something which they were only too
happy to be rid of. On the other hand, however, Kjær had
managed to keep five of his key employees and, along with a
number of good contacts among suppliers and loyal former
customers, they brought the company back to its feet. The
financial partners from Stockholm played a vital role, not
least by obtaining credit for Kjær from a local bank. Help
also presented itself from an unexpected corner: the company’s principal bookkeeper for many years, Miss Dagmar
Madsen, placed her whole life’s savings on her boss’s table
for his and the company’s disposal; the money amounted to
a fifth of the new company’s share capital.
“Anyone who has attempted to push a loaded railway cart
knows that you have to give it your all to get it started, but
once you get it going, it will more or less maintain speed on
its own,” one of the employees who helped launch the new
company recounts. In 1929 the company succeeded in
repurchasing J. Höök in Halmstad, and in the years to come
a new chief executive paved the way for significant exports
to the rest of Scandinavia, England and the European continent. A considerable amount of planks, timber and crate
wood was sold in the Netherlands. Previously, the Dutch
importers had not thought very highly of Swedish timber,
but the goods from Höök slowly drove out the traditional
imports from Canada.
The main market was still in Denmark, and times were
tough here in the years that followed. Even though quite a
few houses were built at the end of the 1920s, developers
often failed to live up to their commitments, and on more
than one occasion the company had to take over newly built
properties in the hope of being able to sell them since the
contractors were unable to pay their bills. The crisis was
further aggravated in the wake of the Black Tuesday at the
New York Stock Exchange in 1929 when the bottom fell out of
the market, causing the entire international trade to shrin
The building industry was so hard hit that half of the
carpenters and brick layers in Denmark were unemployed
in 1932. A subsequent severe lack of demand in agriculture
brought construction in that sector to a complete halt and
also contributed to the already poor rate of exchange of
the Danish currency. In 1932, the hitherto unlimited freedom
to import goods was abandoned; all foreign trade was to
be controlled by the central bank’s exchange office, where
importers had to apply for foreign currency for their
transactions.
Interference by the government in the timber trade also
affected the import company, if only for a short period and
with limited consequences. Since the end of the Middle Ages
Denmark had been a timber importing country. However, in
the 1870s and 1880s massive investments were made in
planting coniferous trees in the sandy soil in Jutland, and
at the beginning of the 1920s most of these plantations were
ready for logging. The Danish forest owners lobbied
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intensely; initially to increase trade and later to regulate
imports. This led to a heated debate on the quality of Danish
timber as opposed to Swedish, but the forest owners
teamed up with the architects who had the final say in the
product requirements for construction. A number of tests
were conducted which determined that the timber was as
strong as the timber from Sweden, provided that it had been
stored properly and cut at the appropriate time.
Armed with these findings, the forest owners obtained
governmental support, which meant a ban on all non-Danish
timber in government financed building projects. However,
the pressure from the forest owners did not cease, and after a violent storm had destroyed a large part of the Danish
spruce forests in 1934, the measure was expanded to a
complete ban on the importation of foreign timber in 1935
after having convinced the exchange office that the Danish
sawmills were able to meet the demand for beams, rafters
etc with Danish spruce logs. They had probably somewhat
oversold their abilities; the Danish Timber and Building
Merchants’ Trade Association’s centenary tribute states
that in the following year Danish timber merchants were
buried in legal actions as the demand for Danish timber
led to trees being forested year-round and sold without
allowing the timber to dry properly.
As a result a substantial number of buildings suffered
from fungal attack and dry rot was found in the fresh timber
which was so newly cut that “birds were still chirping in it”.
File photo © DLH
10
The port of Copenhagen / File photo © DLH
Finland / File photo © DLH
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Farsighted ownership transfer
1935 was a year of celebration for the company: The windingup of the company had been concluded, and Harald Kjær
could resume his old company name. At the same time, he
promoted his two closest employees: Knud Dalhoff Larsen
and Frees Horneman became co-owners of Harald Kjær &
Co. Always the visionary, he was already busy planning the
ownership transfer of his company at the age of 49 in an industry characterized by patriarchs where the survival of a
business was often threatened by the retirement of its
owner.
The two young partners were both given a fifth of the
company without having to invest a penny; Kjær merely
wanted them to commit themselves to work for the common
good of the company. Both of the new partners had formal
commercial training combined with traineeships at the
Finnish sawmills.
Dalhoff Larsen had joined the company in 1922. He had
been trained at a local grocers in the countryside and
moved on to a timber merchant company. From there, he applied for – unpaid – supplementary training as a trainee at
the big south Finnish sawmill, W. Gutzeit & Co. in Kotka. When
the head of shipping was taken ill, the young Dane took over
the job and learned all there was to know about sawmill operation and softwood shipping; a deciding factor in his subsequent success as a wholesaler.
Frees Horneman was trained in the timber trade and had
supplemented his training with a stay in Finland and a couple of years in England. He approached Harald Kjær & Co. in
1929 when the reconstructed company was struggling to
gain a foothold on the market and it simply could not afford
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to hire yet another hand, irrespective of his excellent qualifications. Horneman then offered to work without pay for a
trial period of three months. Kjær agreed, and the young
man embarked upon the difficult task of calling on the country’s more or less disgruntled timber merchants. Kjær’s generous offer of co-ownership only six years later testifies to
Horneman’s effectiveness, and it is telling of the time and
the climate that he did not land a single contract before the
expiry of the trial period.
Kjær had noticed two things about his prospective partners. For a start the two men complemented each other; one
was an extrovert and resourceful, the other one was organised and had a sense of perspective. The other thing was
that they got on well together, they liked each other – and
he had got it right: For the rest of their lives, they did not
merely remain partners, but close friends.
Due to the combined energy and talent of the three owners the new company grew rapidly. It managed to regain its
position as Denmark’s biggest timber wholesaler even before the end of the decade and now supplied close to a fifth
of the total timber imports into the country. However, the international dimension of the past had almost disappeared;
Harald Kjær & Co. sales were now concentrated in Denmark.
The company once again introduced innovative thinking
into the industry. One such initiative was an improvement of
the sales material. Competition was fierce, and following a
few years with Finnish imported goods of varying quality,
Danish timber merchants had grown wary of the Finnish
goods on offer. That winter Dalhoff Larsen therefore called
on A/B Kurt in Tornio and spent a whole week with the fore-
man and his staff, meticulously going through the process of
sawing and sorting the timber for exportation into Denmark.
He had taken a camera along and when everything was the
way he wanted it, he took a collection of photos of the stable goods and the location. Back in Copenhagen the pictures
were enlarged and arranged in an album for the company’s
distributors to present to sceptical timber merchants all
over the country. This was a completely novel way in which
to sell timber goods. It became an instant success and made
Kurt a sought-after brand with one stroke.
A second initiative created great loyalty towards the
company among the many new members of the industry.
Many timber merchant companies closed down during those
years, and people who were new in the business or who had
been laid off had difficulty finding new jobs. Harald Kjær &
Co., therefore, offered to forward a kind of advertisement
for them headed “Position wanted” to the country’s timber
merchant companies along with their regular sales material.
In that way the applications reached the relevant people
whilst at the same time saving the applicants the expense of
placing advertisements in all the regional papers. Dozens of
young people owed their careers to this service, and it also
gave the company the opportunity to handpick some of the
best people when needed.
The exchange control regulations remained in force until
1938, resulting in costly red tape and trade restrictions
affecting the activities of Harald Kjær & Co. One of the side
effects of the restrictions was that an increasing share of
the foreign trade was based on bilateral trade agreements
between Denmark and other countries, such as Poland. The
company therefore started importing through the Polish
ministry of agriculture, Paged. The supplies originated from
old, mature forests with bigger trees than the ones the
Danes had seen so far from Scandinavia. This turned out to
be a wise decision since the wood was of very high quality,
hard and resinous and largely knotless, and the country
thereby turned to a new, exciting source of imports. The
trade with Poland ended abruptly. On 31 August 1939 a
steamer departed from Gdynia carrying goods destined for
Copenhagen. It reached port the following day, 1 September,
and the same day Harald Kjær & Co. received a telegram
signed ‘Getreuhänder Paged’ with a request to pay the
invoice amount into a German account with the Danish
central bank.
Apparently a fifth German column had been waiting in the
wings of the Polish ministry of agriculture and sprang into
action when the Nazis attacked Poland that night while the
steamer was on its way to Copenhagen. The company did not
obey the order, but deposited the amount in an escrow account, which the Nazis seized when Denmark was invaded by
German forces the following year.
World War II had started.
Knud Dalhoff Larsen / File photo © DLH
Frees Horneman / File photo © DLH
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War again
Compared to most other European countries Denmark got
off relatively lightly during the war. Backed by a weak army
and facing the German war machine, the Danish government
capitulated on the morning of the invasion, 9 April 1940. In
fact, Denmark was of no great interest to the German Nazi
leader, Adolf Hitler; it was primarily needed as a springboard
to secure Norway and, in particular, Swedish iron ore exports from Norwegian ports, which had in the past been exported to steelworks in England. In addition to this he
needed Danish agricultural production and so in no way
should it be interfered with or disrupted.
The Danish government was allowed to continue to govern the country, albeit under the auspices of the German
authorities, and in many ways life went on as before. Sweden
was neutral and parts of Finland were under Soviet control
and, by means of the pact between Hitler and Josef Stalin,
also connected to Germany. In a tragic turn of events, the
Finns allied themselves with Germany in 1941, when they saw
the break-up of this pact as an opportunity to free them
from Soviet control. The importation of timber from the two
principal supply countries could therefore continue, and
Harald Kjær was one of the first Danes to be granted a visa
to Sweden with a view to securing the continued importation
of timber.
During the occupation demand for timber had grown dramatically since the German army had launched many building
projects on their arrival to Denmark, and the government imposed a supply duty on the Danish building trade.
For a company which was completely dependent upon importation the war imposed a serious obstacle, and to top it
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all from 1943 its principal was a refugee. The Danish army
had been retained during the first years of the war, but
several officers soon joined the growing Danish resistance
movement. Harald Kjær was well connected to several of
these officers and hid weapons for the resistance movement at his country residence near Roskilde. In the summer
of 1943 a number of Danish uprisings against German supremacy led the occupying powers to assume complete control and Germany started arresting members of the Danish
police and army. During the subsequent interrogations one
of the arrested officers disclosed Kjær’s weapons cache.
Fortunately, both Kjær himself and his family were in Sweden
at the time and stayed there until the end of the war. Back in
Denmark Dalhoff Larsen and Horneman continued to manage
the business, albeit under increasingly arduous conditions
as the war intensified. In 1942 Kjær’s son, Henning KabelKjær, joined the company as a partner and stayed in this position until 1958. He, too, had to flee to Sweden with his family
after the weapons store had been disclosed. In August 1944
the Danish ambassador contacted Kjær with a proposal to
assist in preparing the country for life after the German
occupation. Kjær was assigned the task of setting up an
emergency timber store to be delivered once the war was
over. As the amount was big, purchase was spread all over
Sweden amongst many suppliers, and it was, therefore, a
good deal for Denmark since prices were obtained that were
much lower than they became after the capitulation a year
later. The total purchase of almost 470,000 m3 was distributed in Denmark through representatives of the Swedish
sawmills according to pro rata sales figures from before the
The port of Copenhagen / File photo © DLH
occupation. Due to the large size of the consignment, the
Danish building industry had a relatively good start when
the damage caused by the war had to be remedied and the
backlog in residential development had to be dealt with. It
also ensured that contact with the Swedish and Finnish
sawmills was very quickly re-established, even though all
imports were considerably hampered due to a shortage of
foreign currency in the ensuing years.
During the war the authorities introduced import restrictions together with rationing, and both these measures were
upheld in the financially strained time after the war. In order
to arrive at a fair distribution of the short supply of foreign
currency for importation the central bank’s commodities
agency allocated quotas to the importers according to the
size of their pre-war imports. On the one hand, the scheme
meant that Harald Kjær & Co. as market leaders in the late
1930s could resume its trading business, but it also meant
great inflexibility because no importers could be allocated
currency for any types of goods which they had not previously imported. In an additional measure introduced to curb
inflation during the great shortage of goods the state also
fixed the distributors’ profit margin. All these post-war
regulations produced a huge, unwieldy and ever more
restrictive bureaucracy.
15
Frees Horneman /File photo © DLH
New times – new possibilities
Bringing the company and the country to its feet in the new
world order after the war was a humongous task. As was
the case after World War I there was a pronounced shortage of goods for the restoration of Europe. Great quantities
of timber were required, and two new supply countries were
added in the wake of the signing of the peace, viz. the Soviet
Union and what came to be referred to as East Germany. The
latter had to pay war damages to the Soviet Union, and one
way to pay such damages was for the Soviet Union to sell
the timber, which was then delivered to the Danish wholesalers by the Germans. Large quantities of timber, for instance
pinewood, arrived in Denmark on the Gedser ferryboat which
had a railway deck, often loaded to capacity with softwood.
This trade only went on for a couple of years after which
time the Soviet purchases were supplied from Russian forests and shipped from St. Petersburg, then Leningrad or
Archangelsk.
The negotiations in Moscow were extremely tough at
times. Frees Horneman was in charge of the international
negotiations and each time he travelled to a meeting with
the Soviet export company, Exportles, he had to hand in his
passport at his entry into the Soviet Union. The procedure
was then that he would have to apply for permission to
leave the country, and only when this was granted, was his
passport returned to him. Soviet commissioners shamelessly exploited this situation during their negotiations, and
on several occasions Horneman remained in his Moscow
hotel for weeks wondering whether his best bet was to stick
to his quotation or give in so that he could get back to work
in Copenhagen.
16
Harald Kjær & Co. had already sprouted two new subsidiaries. A/B Svea Timber was founded in 1938 for the
purpose of purchasing timber from the mid-Swedish forest
districts. In 1946 it was joined by Nordisk Trælastagentur,
which was used as a channel for the Russian supplies in
particular. Under the management of Harald Kjær’s son,
Henning Kabel-Kjær, the latter company became the first
intra-group company that led the old wholesale business
back to true international trading where the goods
purchased continued abroad, bypassing Denmark. After the
war and the ensuing civil unrest, Greece was in great need
of restoration. Nordisk Trælastagentur supplied the local
building industry with materials to such an extent that
Kabel-Kjær was made Greek consul to Denmark in the
process.
The housing shortage in Denmark went from bad to
worse from before the war and through the 1940s, and when
peace was restored, the Danish government went to great
lengths to alleviate the backlog. Inexpensive government
loans for residential development launched a boom that
continued into the 1970s, and the demand for building materials continued to grow.
At the same time, industry and export began to flourish
once more, and there was a corresponding rise in the demand for packaging. In those days everything was wrapped
in wood, in crates or barrels, and the company imported a
wide range of crates for the exportation of fish, milk powder,
eggs, cheeses, beer, mineral water etc. During the next few
years other packaging materials replaced wood, and sometimes the shift could take place uncomfortably fast. At one
time Horneman had purchased a large quantity of barrel
staves with a view to exporting them to Iceland’s herring
industry, among other things. However, the fishing industry
is volatile, and when there was a scarcity of herring, the
company was stuck with the staves. Horneman had a barrel
assembled and placed it in his office and he swore that it
would only be removed when all the staves had been sold.
It took several years before the barrel disappeared from his
office …
The government ban on timber product imports was
slowly lifted, and finally removed completely in 1950. The joy
was short-lived because the break-out of the Korean War
that year led to a great international shortage of timber and
the government re-imposed import restrictions which were
not lifted until May 1952.
To Africa
When the years immediately following the war nevertheless
saw the greatest expansion so far in the company, this was
principally due to a giant leap into the big wide world. These
were the years when the foundation was laid for the internationalisation which later positioned DLH at the cutting
edge of timber distribution. The company dramatically expanded its product range, first with exotic tropical species
and later with industrially manufactured timber products,
such as plywood and hardboards.
When the bilateral import agreements led to purchases
in Russia (and some in Austria and the former
Czechoslovakia) Frees Horneman started to look further
afield for timber products. The company had good liquidity,
was cushioned by a sound domestic market, and in the late
summer of 1946 it started trading in logs from West Africa, a
step which would prove decisive for the company’s future.
Timber from Scandinavia was used for building purposes
only whereas Africa held rich opportunities to explore new
avenues and create new sales markets. As early as the
1930s this great expansion had resulted in a strong consolidation of the company; however, the World War ‘locked’ the
capital. The company’s financial standing became apparent
in a letter from the bank warning the company that “contributions over one million kroner would not be interest-bearing”. After the war, the company therefore had capital that
could not really earn interest in the timber trade around
Denmark, and so it became necessary to invest in new
products and new markets.
Throughout colonial times the African continent had been
monopolised by the old colonial powers that were reluctant
to permit outsiders to trade. Naturally, the USA was one
such outsider, and as the country proved to be the uncontested leader of the western world following World War II,
there was an urgent need for bringing conditions on the
continent up to date, and this would later lead to the severance of the colonies. The old European colonial powers were
badly weakened by the war, and the American pressure
forced them to open up their colonies for buyers from other
countries. Consequently, Harald Kjær & Co. was able to
purchase 25,000 tonnes of logs from the Ivory Coast and
Cameroon in the summer of 1946. This became the start of
many years trading in timber from overseas, not only from
West Africa, but eventually from all over the world.
As was the case after World War I, the time after the
Second World War was also characterised by the difficulty
of procuring ships. Everywhere in Europe the war had
caused a severe loss of ships, and in all countries the merchant fleets were subject to restrictions with the state determining the purpose of the ships. In Denmark a government freight board had been granted absolute powers to
deal with all Danish tonnage.
In addition, ships loading logs from West Africa had to
have special characteristics. The coast only had a few natural harbours so the large, heavy logs were pulled out to sea
where the ocean going freight carriers would lift them onboard. This required ships with powerful cranes; also they
had to be spacious and with great deadweight because the
logs created ‘air’ in the holds.
The company therefore started to hire ships under time
charter, i.e. for a fixed price for a specified period of time.
The first ship, which was from the island of Bornholm, returned to Copenhagen in late October 1946, carrying 4,000
tonnes. More logs had to be fetched, and new ships, for instance the slightly larger Finnish ship ‘Alden’, were chartered.
However, time charter hire meant that a ship sailing
empty was costly, and the timber merchants suddenly found
themselves engaged in a completely new field: ‘Alden’ departed from the Swedish town of Luleå with a cargo of iron
ore for Barry in Scotland, sailed empty to Guinea-Bissau and
the Ivory Coast for logs, returned to Denmark, then carried
grain from three Danish ports to Genoa and finally ended up
in Finland with fertilizer from Tunis.
While shipping activities thus steered the timber merchants off their commercial course, such detours could
accidentally strengthen the timber trade by paving the way
for trade in new products: plywood. Like everything else, this
commodity was subject to strict import regulations, and as
the company had not been trading in plywood before the
war, it was not given an import licence after the war.
However, when the ‘Alden’ returned with its first cargo
of West African logs from the Ivory Coast in 1947, the Danish
waters were blocked by ice, and the ship had to wait for
some weeks in the South Norwegian port of Kristianssand.
It was a nuisance to have the ship moored there. Horneman
went off to take a look at the exotic cargo he had purchased and used the opportunity to sell some of the logs
to the local timber factory Lumberco while at the same time
arranging to buy the plywood that the Norwegian factory
produced from the 200 tonnes of bisselou timber he had
17
supplied. By means of this arrangement the company
obtained a licence to import the processed timber into
Denmark and in this way the company became a trader in
boards for the first time. While these shipping activities
steered the timber merchants off their commercial course,
such detours could accidentally strengthen the timber trade
by paving the way for trade in new products: plywood. Like
all other goods, this product was subject to strict import
regulations, and as the company had not traded in plywood
before the war, it was not given an import licence after the
war either.
At the same time he arranged to buy the plywood that the
Norwegian factory produced from the 200 tonnes of bisselou timber he had sold them. By means of this arrangement
the company obtained a licence to import the processed
timber into Denmark and in this way the company became
a trader in boards for the first time.
18
File photo © DLH
File photo © DLH
Lots of timber, no telephone
A temporary decline in the Danish trade in overseas timber
in 1948 gave rise to the idea of utilising the exotic logs as a
means of breaking back into the German market, which the
company had not cultivated since its reconstruction in 1927.
In a fifteen-year long partnership with a capable wholesaler
in the north German city of Hamburg, Harald Kjær & Co. and
its successor gained a strong foothold in a market that was
constantly and rapidly growing over the next decades.
Buying timber in Africa broke new ground, but it wasn’t
easy to guard against inferior supplies. Soon after the first
consignments had reached Europe the company realised
that profitability would very much depend on having local
representatives, and in the summer of 1949 the young Dane
Bjørn Jensen, who was training in the tropical timber trade
in Brazil, was hired to spearhead the company’s establishment on the black continent.
Bjørn Jensen was posted to the then Portuguese colony
of Cabinda at the mouth of the Congo River. His task was to
arrange shipments of the timber species limba for the growing production of plywood, and the first consignments were
shipped in 1950. However, before leaving South America he
had secured a consignment of paraná pine for the Danish
market, and in this way Harald Kjær & Co. closed its first
deal in Brazil, a country which was later to have great importance for the company. In Germany the African log trade
was doing well; the market was practically insatiable, and
soon the agent in Hamburg was joined by an additional
agent in Bremen. Limba was the principal species, but a lot
of red timber was also sold as well as wawa from Ghana,
samba from the Ivory Coast and abachi from Nigeria.
Bjørn Jensen, Cabinda 1940s / File photo / © DLH
19
Very soon the Korean War pushed up prices and thereby
also shipments. However, freight rates rose dramatically as
well and, as a consequence, the company set up two new
subsidiaries in 1951. The first subsidiary was called the
Northern Soft & Hardwood Co. Ltd. A/S. The word ‘soft’ was
added, firstly, because the company also handled the sale of
softwood from Sweden and Finland to the Greek market and,
secondly, because it hoped to sell softwood in South Africa
as well. The terms ‘soft’ and ‘hard’ are confusing to everybody except trained timber people, and, generally, all coniferous wood is characterised as ‘soft’ whilst all deciduous
wood is characterised as ‘hard’ no matter how soft the latter may be. This means that the softest wood in the world,
balsa, is characterised as hard even though it is softer than
the softest of ‘softwoods’.
The second subsidiary was the shipping company Nordisk
Rederiaktieselskab, which was to head the anticipated rapidly rising chartering business. It was hoped that, firstly, due
to growing demand for tonnage, the company would be able
to secure its own chartering and, secondly, that it would be
able to make a profit on chartering out the ships when they
were not carrying cargos for the timber trade.
While the timber cargos from Sweden increasingly
reached Denmark by rail, the Finnish consignments continued to be delivered by sailing vessels that were not replaced by motor vessels until way into the 1950s. Sailing
vessels were inexpensive and could prove an advantage
because they move with the waves to a greater extent than
a motor vessel, which ploughs the waves more violently.
Consequently, sailing ships avoid getting the deck cargos
20
wet, which would upset the stability of the ship. As shipbuilding grew in the post-war era, the price of the big motor vessels declined so much so that the sails were finally history.
It was in fact the modern steamers and later the diesel motor ships that the ship owners intended to base their business on.
However, Harald Kjær, the founder of the parent company,
had passed away before the documents for the establishment of the two companies had been signed. He had been
frail during the past few years, but was still a valued source
of advice at the office, which he visited daily. It was there, in
the middle of a meeting, that he suffered the heart attack
that ended his life.
Sad days followed. All the male staff members helped
carry the coffin at his funeral from Gentofte Church; Kjær
had succeeded in uniting many interests in the company and
creating a powerful spirit of co-operation, and it naturally
shook the company that its strong, charismatic leader was
now gone. However, the transfer of ownership which had
been initiated sixteen years earlier had equipped it for
survival.
Expansion into Africa
Later that same year Frees Horneman embarked upon an
epoch-making journey which lasted for months and took him
to most corners of the earth, but, more importantly, taught
him valuable lessons about the trade in West Africa which
was to be so decisive for the company’s future.
The company recognised the value of the new supply
countries straddling the equator, but had neither the knowhow nor the broader perspective needed to handle the new
sourcing markets. Having held meetings with agents in
London and Paris, he travelled to Cabinda, a wooded part of
Portuguese West Africa (Angola) the size of Zealand and located at the mouth of the Congo River, via Senegal, GuineaBissau, Ghana, Nigeria, and the former Belgian Congo (today
the Democratic Republic of the Congo).
His thorough account of this epoch-making journey has
been preserved, and from Cabinda he reported that there
was lots of good timber, but difficult conditions: the
Portuguese are arrogant towards foreigners, he says, “...
even bulk buyers like us are considered and treated as unwelcome intruders by authorities, organisations and the ordinary Portuguese population. Like in all other totalitarian
states, there is lots of admin..... the red tape is endless.”
Even though Horneman had seen appalling living conditions in poverty-stricken northern Finland in his youth, this
new timber world had even worse conditions: there was no
telephone, telegrams to Europe were expensive, board and
lodging unsatisfactory, the water undrinkable, the food
bland and the only hotel, which bore the name of Grande
Hotel, was shabby. However, Bjørn Jensen had to lodge at
the hotel because conditions in the colony were so unstable
that Horneman warned against the company putting down
roots in the form of buying or renting accommodation or
other measures that would tie down capital, ”Considering
the ill will shown to foreigners everywhere I recommend that
our organisation should always be mobile, in other words, be
able to leave Cabinda, either by road or by sea, at short
notice carrying the few belongings we have.”
But the timber! ”The forests are vast.... the majority of the
timber that is exported is limba, the finest species in West
Africa.” And there was plenty of it, more than the company
could sell at that time and at lower prices than any other
place in West Africa.
The Cabinda Enclave shipped logs from four places, but
three of them were so difficult due to the heavy Atlantic surf
that Horneman dismissed them as impractical. It was true
that Cabinda city was a small ‘town’, but its location in a
small bay provided protection against the rough seas.
However, even here loading ocean-going freight carriers
for Europe was no easy matter.
Horneman delivers an animated account of the working
process: ”Before a boat arrives, the goods are received, log
by log for grading and measuring on the beach, and shipping
consists of rolling 20 to 30 logs into the sea and gathering
them with iron wire which is run through a hook, fastened to
each log, to a fleet which together is moored to a buoy approximately 50 metres from the shore. From here they are
tugged to the side of the ship by our motor boat, and the
ship’s own crane lifts them onboard, log by log, as the shipper delivers the so-called water or canoe boys with the
fleet. One or two Africans, who stay along the side of the
File photo © DLH
21
ship on the logs, mostly in the water, unhook each log after
the wire strap of the ship has been fastened to the log.”
These are the conditions that the men of the timber trade
had to contend with during the following years as they contributed to the expansion of the group from those warm but
far-flung shores according to the motto that Horneman had by
then already formulated: that shipping must be undertaken by
locally based representatives. Why? Because, ”through local
control we will always be able to count on stable earnings as
opposed to importers who receive uncontrolled shipments,” he
wrote.
However, it did not prove an easy matter to undertake such
‘control’. All 15 or 20 suppliers, ”have one thing in common;
their chronic lack of money,” he stated “and they cheat.
Payments are to go through the local bank whose governor
is very aptly termed ’The King of Cabinda‘. He is broad-shouldered and brutal, and for a good reason. I get the impression
that all is fair if they succeed.“
‘Nordisk’ traded with all suppliers and worked in a systematic fashion. They kept files on all suppliers, and each individual shipper’s financial affairs, capacity etc. was noted in the
file. Another file was kept on every single timber species, recording new growing conditions, logging areas, supplier quality and customers.
The profitability of the overseas post was to be achieved
firstly by a stable supply to the treeless growth market at the
foot of the continent, South Africa. If this could be achieved,
”the branch can make a living of this and continue independent trade if the connection to Denmark should be broken off
due to war or similar disturbances,” Horneman wrote.
22
Pointe Noire, Congo /File photo © DLH
Errors and progress
The first years in the tropics were true pioneer years with
the errors that this entails, also as regards the purchase of
timber species. From Cabinda the company imported a consignment of kali timber. Due to a communication error they
received 2,000 m3 as opposed to the 200 m3 actually ordered. The kali was hard as rock. It was completely unsuitable for veneer and very difficult to saw, but somebody in the
company got the bright idea to try to sell the kali to the
Danish State Railways, DSB, as sleepers. One brave carpenter attempted to hammer a long nail into the wood, but it was
absolutely impossible since all nails bent; so no deal was
struck with the DSB on that occasion. However, the company
later sold the kali timber to the German State Railways
where they used the hard, yet strong timber species for
the floors of the carriages. Mind you, no new orders were
received for kali …
The shipping business also turned out to be unsuccessful even though Horneman came to the conclusion during his
trip that the organisation of purchases in West Africa could
only be a real success if Nordisk Rederiaktieselskab were
to own a couple of steamers that could specialise in the
carriage of logs, possibly sailing coal from South Africa
when there were no logs to carry. The activity was far removed from the company’s core business, and instead it
succeeded in obtaining favourable fixed rates at some of
the shipping companies that operated a regular service to
West Africa, for instance, the shipping company DanskFransk Dampskibsselskab.
On his travels Horneman had visited the city of Point Noire
in former French Congo (today the Republic of the Congo)
only a few hundred kilometres north of Cabinda and predicted
a prosperous future for the location once a bridge had been
built across the adjacent river. By 1953 the bridge had been
constructed and the forest authorities in French Congo were
ready to sell limba. In addition, the port in Pointe Noire had a
great advantage in that the delicate limba timber was loaded in
the harbour, thereby avoiding the risk inherent in taking it out
to sea. Limba is a relatively soft timber species which is susceptible to worm infestation and diseases. Getting the logs on
their way as soon as possible after logging was therefore vital
in order to ensure that they did not get wet during long voyages down rivers and prolonged immersion in water.
Only two other foreign companies had established themselves in the location, one Dutch and one French. ‘Nordisk’ now
used its good position in the German market, combined with
knowledge of local conditions and its presence in nearby
Cabinda, to quickly set up its second African office in Point
Noire.
The new African opening created great potential. Plywood
had become ever more popular as a building material in
Europe, and limba was a sought-after species for the production process. With the good contacts already established in
Germany the company obtained what was close to a monopoly
after a few years as a supplier to West Germany and
Lumberco in Kristianssand, Norway.
The large quantities had the added advantage of securing
freight discounts. Pointe Noire was navigated by liners from a
vast number of European countries, and when the tonnage
had eventually been built up following World War II, competition
increased among the principal charterers.
Cabinda, 1956 © Andreas Sørensen, File photo DLH
23
’Gorgeous things’
While the company was trying hard to obtain more and more
limba from Central Africa, new locations for setting up business were sought elsewhere in Africa. The location was to
be chosen on the basis of the presence of the timber species okoumé, which, like limba, is used for plywood production and for doors, yes, which was possibly even more suitable because the big logs were more homogenous.
At the same time okoumé is beautiful, very similar to mahogany, and is therefore very well suited as a finishing veneer: an okoumé door is thus a finished door needing no
further finishing with nobler species of wood. These properties made okoumé the most sought after timber species at
that time, and Germany imported two or three times more
okoumé than limba. If ‘Nordisk’ was to fight its way into the
market for tropical wood, the company would have to take
on the okoumé trade. There was one problem, however:
okoumé only grows in Gabon, and a state-owned French
enterprise had the monopoly there.
Nevertheless, the company found a loophole. On the
Gabon coastline north of the equator Spain had a small colony (now referred to as Equatorial Guinea), which boasted
just as much okoumé as Gabon relative to its size. That was
where the company decided to establish itself. To top it all
the country also grew limba; the first representatives of the
company visiting the country inspected the trees in the forest themselves and reported enthusiastically, ”what we saw
was certainly gorgeous”. Following difficult negotiations in
the colony and the Spanish homeland which were made even
more difficult by the awkward foreign exchange regulations,
Nordisk opened its third African branch based in the small
24
capital town of Bata in 1954. It turned out that the limba
could be shipped in large quantities in what was, apparently,
fine quality. ‘Apparently’ because when the logs were peeled
at the big German veneer mills, ugly black stains would
appear deep within the logs; this put an end to this export
venture and the company had no option other than concentrate on okoumé timber.
During the following years the company expanded into
other West African countries, with the only limitation being
how fast one could get qualified staff. In 1953 the company
started purchasing logs in Ghana through trusted associates, and three years later Nordisk set up its own branch
there. Four years later the company started out in Nigeria,
but soon left again. As described above, conditions in Africa
were difficult, and during the next few years they were confronted by new problems of two different types. Firstly, in
some countries valuable trees became scarce, at least at a
profitable travelling distance from the coast; and, secondly,
political problems arose with the fledgling autonomous
African governments. In Ghana timber exports were nationalised, then partly privatised again, followed by a period of
changing policies as regards what enterprises were allowed
to act as national agents. In 1961 Nordisk pulled out following
five years with no profit; the losses had eaten all earnings.
Instead the three remaining lorries were taken to the neighbouring Ivory Coast where the company is still operating as
it is in Ghana.
The company tried its luck in Liberia, but soon realised
that the country was more unpleasant to work in than was
desirable. It was intensely corrupt, and after a rival suc-
ceeded in having one of Nordisk’s employees thrown into
prison, the company soon pulled out again – presumably exactly what the rival wanted to achieve. Conditions later improved after which time the company returned, doing good
business for many years until the civil war ended operations
in 2003.
After Gabon had achieved autonomy, the country welcomed other entrepreneurs than the former French mono–
polist in the desirable okoumé market, but as little as two
years later conditions again became too problematic.
Despite this the company stuck it out on the continent, and
over the next decade it set up an ever increasing volume of
exports from various locations. Despite the nationalisation
of timber exports in the former French Congo the company
succeeded in retaining a presence as well as stable exports up to the mid 1990s. Then, due to civil war, timber supplies dried up. The office was closed in 2002, but DLH still
acts as a middleman in the country’s exportation of timber.
With the acquisition of the tt Timber Group in 2006, DLH returned to the Republic of the Congo, as it is now called, on
a large scale, this time as the owner of large forest concessions and production plants.
The same applied to Gabon, albeit on a smaller scale.
Cameroon and Ghana again became important suppliers
for DLH, and DLH was able to resume its export business,
either through its own representation or through
exclusive agents.
Modern times
Concurrently with the big African expansion from the mid
1940s the Danish headquarters was experiencing rapid
growth. While it is true that the wholesale trade is always
open to new ideas, it is characterised by more than a touch
of traditionalism. With the company’s representatives fighting their way through African rain forests and bureaucracy,
employees back at the company’s headquarters were at
loggerheads over the size of the company’s stationery. The
aggressor was the invoicing department which in 1949 attempted to update to the paper format A4 which was gaining
ground in Denmark that year due to the ever more popular
DIN standard.
Dalhoff Larsen, the chief executive, was concerned. Since
the company’s foundation forty years earlier two different
paper formats had served the company admirably: one which
was slightly shorter than an A4 sheet, but slightly wider, and
a second of the same width, but slightly longer. Was it really
necessary to change this? Another rather hot-tempered individual interfered. He was still annoyed at the spelling reform introduced the year before, according to which nouns
no longer began with a capital letter. That dispute he had
lost and he now threw all his pent-up anger into defending
the status quo. The dispute lasted for months – right until
the time when the young man who was in charge of the company’s stationery informed the boss that printers demanded
a surcharge for special formats, in other words, anything
other than the DIN-format. That put an end to the dispute in
the old trading company.
In the typing pool the secretaries, who were all women,
were banging on their typewriters with carbon copies, but in
Landgreven, Copenhagen / File photo © DLH
25
time modernisation also caught up with that department.
A photocopier was purchased, and in those days the word
‘photo copy’ meant just that: on the large monstrosity of a
copier the specially trained operator took a ‘photograph’.
The negative, which was white characters on a black background, was then transferred to a sheet of light-sensitive
paper – the copy – which was to be placed in a fixing bath –
and then the negative was hung up to dry. The whole pro–
cess required a dark room with a red light, and the company
had to rent a loft in the adjacent building for the operation.
The launch into Africa added yet another machine to the
office. When telephones finally arrived in Cabinda, it was often extremely difficult to make out what the expatriate had
to report, no matter how loudly he shouted into the receiver
7,000 kilometres away. The solution was to use a newly developed machine which the Danish company Bang & Olufsen
had begun to market. ‘Beocord U84’ was a so-called wire recorder which could record sound on a thin steel wire extended between two spools. When the operator shouted,
“Call from Africa!” the gentleman – as it was naturally a man
who was entrusted with the task of connecting the recorder
to the telephone – rushed over to the machine, gave the
signal when the person on the other end would shout his
“hello?”
Invoicing was still done manually, but here, too, modern
times had arrived. During the late 1950s the company succeeded in obtaining a machine via a distributor in Sweden
that could multiply, divide, add and subtract – and provide
legible copies. Following thorough testing and lengthy considerations this ‘invoicing machine’ was finally purchased.
26
The very same process gradually repeated itself ten years
later when at the end of the 1960s they invested in a machine
which could carry out electronic data processing, EDP.
The following decade saw far more dramatic changes, especially in social relations. As the standard of living improved,
the American ideal of more informal social conventions
spread, which according to some of the older generation was
considered completely ‘wild and unrestrained behaviour’. They
were accustomed to female staff wearing frocks of a decent
length and only discreet make up. The gentlemen, irrespective
of the temperature, were always impeccably dressed in suit
and tie, and bearded men had no chance of employment.
The 1960s did away with all that. One day two young women
turned up at the office dressed in hot pants. Everybody held
their breath, not least the two daring protagonists. However,
nothing happened, presumably because everybody realised
that the old ways were on their way out, and nobody wanted
to be perceived as a person who was holding back progress.
However, there was one interesting occurrence: one of the
company heads had three executives visiting, all men, and
one of the young ladies came in to serve the coffee, dressed
in the infamous tight and skimpy shorts. Nobody seemed to
take much notice, but all the men’s eyes were popping out.
When she had left, the boss cleared his throat, looked at his
guests and said, ”Do any of you gentlemen wish to see her
again?“ to which all nodded. He pressed the button on the
intercom and said, ”Say, Miss Frederiksen, would you kindly
bring us the latest sales circulars.“
Entering new markets
Outside the company walls a European building boom of an
unprecedented magnitude was well under way. Entire cities
had to be rebuilt. In 1946, the Danish government had passed a
veritable eight-year-plan which was to end the housing shortage. The Korean War had dampened ambitions slightly due to
price increases from 1950-53, but cheap government loans resulted in a period characterised by the development of large,
complete city areas. Timber was in high demand everywhere.
All over Europe the tremendous building activity surged
forward fuelled by the increasing industrialisation; not only
due to more rational production processes, but also due to
new materials, primarily concrete. Endless new products,
which were increasingly produced from artificial materials,
flooded the market.
Yet another radical change, which came in the wake of
World War II was the enormous information boom; never before had ordinary citizens and business people been subjected to such an incredible surge of information. Dalhoff
Larsen realised early on that timber had to be promoted,
because even though the wholesale business was rightfully
excited about the high demand, he predicted that timber
products could be threatened by the frenzy caused by the
new materials at the time. In 1956 he therefore initiated the
Danish Timber Council’s Information Office (TOP).
Since that time TOP has disseminated information about
timber and timber products and published a number of information leaflets with technical details. For twelve years
Dalhoff Larsen sat on the management board of the organisation which is still receiving financial backing from the
timber industry.
Horneman was good at casting the cannon balls, but Dalhoff
Larsen sorted them and together they let them off.
Horneman was the anchorman behind the strengthening
and expansion of the company’s sales network which went
hand in hand with the large purchases in Africa. After having
pioneered in Africa, Bjørn Jensen opened up new markets
behind the iron curtain, in Poland, former East Germany and
Czechoslovakia for the tropical hardwood that he knew so
well. From here he went on to Israel while other representatives had a go at markets which had never been entered
before, such as Italy, Spain, France, the USA and Australia, as
well as old markets, but now with new products, viz. the UK
and the Netherlands. From the well-established platform in
Germany sales drives were also attempted in Austria. Slowly
but surely the contours of a modern, international business began to take shape under the name with which the
group has finally established its position at the cutting
edge of the market: DLH. The change in company name was
the result of increasing disagreements among the three
remaining owners concerning the direction of the company
in the years after Harald Kjær’s passing in 1951. In 1958,
when Henning Kabel-Kjær decided to go his own ways, he
took over some of the Swedish assets and claimed his
right as heir to the name Harald Kjær & Co.
However, the company was carried on under the name
Dalhoff Larsen & Horneman, Nordisk Træimport, soon
known as DLH.
The port of Copenhagen / File photo © DLH
27
Retail trade – again
Despite the exciting new tropical activities the company’s
main business remained in Denmark and was still concentrated around the importation of softwood.
In the wake of the ongoing building boom in Denmark and
efforts to rationalise the industry, a consolidation of both
the wholesale and retail sectors was taking place. This
happened simultaneously with a rapid growth in the furniture industry and other timber industries, and DLH decided
to strengthen its sales in Denmark by purchasing a number
of timber merchant companies.
The first significant purchase was acquisition of the timber merchant company Christiansen & Nielsen in Aalborg in
1965. The town had a prime location from which to serve a
large catchment area, and it also had a long-standing history as an industrial centre. DLH already owned a fourth of
the shares in C&N, just as the company had already bought
up half of the shares in Sorø Trælasthandel near
Copenhagen.
DLH now expanded the business by buying up timber
merchant companies in Denmark; in the following five years
alone companies in Tune, Bredebro, Als and Holbæk were
either bought up completely or large share interests were
acquired. The investments were purchased due to their
favourable geographical location or due to the industrial
specialisation some of the timber merchants had achieved.
The timber merchant company in Bredebro was engaged
in the industrial development of glulam products which were
to have a vital impact on the choice of building materials in
the years that followed. The expansion in timber merchant
companies drew to a close in the 1970s, but it served as a
28
foundation for a new surge of acquisitions which was initiated in the 1990s.
Expanding the business to include timber merchant companies underlined the need to also strengthen storage capacity. Up to that point, DLH had served the Danish timber
market from warehouses and quays in the ports of the capital, Copenhagen, and Århus, Denmark’s second most important city. However, the old quays were no longer big enough,
and the group plunged headlong into two major building
projects of which one was also closely linked to the commencement of veneer production while both projects were
good examples of the badly needed rationalisation within
timber distribution. This also seemed like the perfect opportunity to move away from the tight quarters at the quays in
Copenhagen and Aarhus.
At a central location in Jutland along the north/south
bound motorway and railway the company purchased a plot
of land in a place called Hedensted and built a new 11,000 m2
central warehouse, which was inaugurated in 1965. The new
facility gave DLH an opportunity to radically change their
warehousing operation and make it more efficient.
Formerly the goods had been shipped in bulk, and it was
a tedious process to unload consignments of up to 75,000
pieces of timber, and it was far too time-consuming to send
them off again in that way. For this reason the decision was
made to completely modernise the work routines in the new
facility in Hedensted. In addition, the location on the harbour
had meant depending on that exact port for shipments and
that was a costly aspect.
In Hedensted the timber arrived from different harbours
and was transported directly to dumping grounds by the
warehouse by railway carts. In effect, the warehouse came
to function as a ‘domestic harbour’, fork lifts could move 60
rail wagon loads into the warehouse in a single day; the
company was now free of the constraints of the wet Danish
climate. At the hub of the warehouse was a new and revolutionary packing machine, a paternoster. In one tenth of the
time it took previously, the ’paternoster’ could automatically
pack and measure the length of the packages. The paternoster in Hedensted was Denmark’s first and its packaging
became an all-round success lasting several years until the
Finnish sawmills started to export packaged timber. The new
facility meant a significant revenue increase; the quantity of
timber imported by DLH in the first six weeks equalled the
quantity imported during the past nine years.
At the same time, Hedensted became the centre for the
introduction of a new type of ‘production’ in the wholesale
sector. The large indoor warehouse facility combined with
the sorting machine meant that customers could now be
served with day-to-day deliveries by lorry. In this way DLH
offered the timber merchants a way to minimise the capital
which was tied up in stored goods.
File photo © DLH
29
The rise of veneer production …
Running a large business often entails having to decide on
investments which reach far into the future and which are
thus subject to a number of unknowns. Some factors may be
predicted and assessed beforehand, and if you are skilled –
and lucky – the assessment will not be far off from reality.
Others still are simply beyond our reasoning and control;
the collapse of the Berlin wall, the tsunami disaster in Asia
and the terrorist attack in New York are examples of such
factors. The art of running a successful business is often
reflected in the ability to turn investments where the unknown factors are not favourable for the company into
something positive.
DLH’s disengagement from its attempt to produce veneer
at a profit is a good example of this. The reason was obvious: the majority of the company’s exports from Africa were
delivered to a number of foreign veneer and plywood mills,
and the company therefore considered taking part in that
process as well. The preliminary assessments showed that
the actual sheet production was better left with the existing
factories. However, the notion of cutting their own logs into
veneer so that company activities would be able to accommodate this lucrative area became increasingly more attractive, along with the upsurge in the export of African logs and
the rapidly growing export of Danish furniture. Notably, the
sale of Danish furniture to the United States had resulted in
a huge demand for the very best timber at home - especially
teak, since Denmark was the world leader in the manufacture of teak furniture. It was due to this that the customer
base in Denmark had remained stable, and, given that DLH
had a good working relationship with several of the best
30
known furniture designers of that time, it went without saying that they and their manufacturers should be supplied
with the desired veneer.
When a rival importer in Denmark built a veneer mill at
a later date and refused to cut veneer with logs purchased
by DLH, it was necessary to tackle it head on. There was a
great risk that DLH would lose the market for teak to the
Danish manufacturers. The investment in veneer production
was a giant leap. In the past fifty years the company had
specialised in trade, first as a wholesaler, later also as
retailers, but now the company was to become a manufacturing business for the very first time.
For that purpose DLH purchased a holding on Zealand in
1961 which had an ideal location by the railway near the town
Gadstrup, and built the region’s largest industrial plant,
Northern Sawmill & Veneerworks Ltd.
Beneath the giant laminated wood beams which held up
the plant’s roof five large veneer cutters and a peeling machine were installed along with drying kilns and big basins
of hot water where the logs were to be heated before they
were cut into veneer.
The plant included two types of veneer mills. When the
log is peeled it is placed on a spit which allows it to be
turned and led into a fixed cutter which peels the wood off
in thin strips in much the same way as a pencil sharpener
sharpens a pencil. During peeling the cut off strip is rolled
up like a carpet, dried and used in the production of plywood. Limba and okoumé logs are ideal for this purpose,
partly since they are relatively light with a homogenous
appearance and partly since the logs are fairly straight.
However, the majority of the production in Gadstrup was based
on the ‘veneer slicing process’. Here the log is first cut into
blocks and then a blade slices off fine layers of wood like a
giant cheese cutter. This veneer is used in the production of
furniture and equipment ranging from doors to more luxurious
goods such as tables, chairs and closets. The peels of five to
forty cm are joined lengthwise, either by a connecting wire on
the reverse side or by applying a more recent technique
where the edges are glued, i.e. edge banding.
The logs are hot when they reach the blade. They come
directly out of a basin where they have been submerged in
water for three days heated to a temperature of 80 degrees
centigrade. This makes the wood flexible.
In 1962, the first mahogany logs met the veneer blades in
Gadstrup, and in the following years the production increased
steadily. In 1973, when the plant was as busy as it would ever
be it produced 14 million m2 of veneer; a substantial part was
made from ’redwood’, ‘African mahogany’, particularly sapelli,
sipo and tiama. To this day you will still find doors all over
Denmark made from the reddish brown veneer from these
trees. Gadstrup also became a central warehouse for timber
goods, both softwood and hardwood, for deliveries in eastern
Denmark, and it was expanded on more than one occasion.
Gadstrup, Denmark / File photo © DLH
31
… and its decline
The veneer plant continued for more than 25 years, and although technical skills showed signs of increasing expertise
as time went by, the production never turned out to be the
financial ‘golden egg’ that people had hoped.
The peeling system had a hard time keeping up with the
competition from the large German plants which were able
to more than meet the market demands on their own.
Furthermore, the demand for teak veneer began to decline
which meant having to use less profitable wood species on
more and more of the five blades thereby making the production less profitable. To top things off, an increasing
number of African countries demanded that they be granted
exclusive rights to process their country’s timber before it
was exported, and starting in Ghana and the Ivory Coast
the exportation of logs was phased out. In response to this
development many of the European veneer plants moved
their blades and peeling machines to Africa where the cheap
labour led to the European veneer plants becoming even
less cost-effective.
Competition from Asian veneer plants exacerbated this
trend, and DLH decided to move two of the blades to the
Ivory Coast in 1978. In co-operation with other investors,
including the Danish Industrialisation Fund for Developing
Countries, IFU, a local saw and veneer mill, Sitransbois, was
established. However, the co-operation ended a couple of
years later.
A different course of events was taking place in Point
Noire. Here, DLH purchased okoumé veneer from a local
peeling plant for a number of years, which was targeted
at the Scandinavian market for fitting out ships. For many
32
Gadstrup, Denmark / File photo © DLH
years, the Scandinavian countries had been market leaders
in the production of sailing ships, particularly at the most
luxurious end of the market, and, since the light and beautiful okoumé wood was the ideal material for fitting out ships,
DLH was an obvious supplier to the home market. From mid1980s DLH became co-owners of the plant which had to end
production ten years later due to the civil war in the
Republic of Congo.
At this point fresh attempts were being made to revive
the veneer production in Denmark, including the purchase of
several competitors. The idea was to create a Scandinavian
centre in Engesvang backed by DLH’s extensive customer
network, but the project was abandoned in 1999 due to the
customers’ continued reflagging from Scandinavia.
However, along the way other specialised productions
had proved to be of interest for longer periods of time, not
the least following the purchase of Dansk Finer Center, DFC,
in Silkeborg. Their biggest customer was IKEA, which was a
major consumer of veneer. DFC also had a specialised production plant which made veneer flooring components. In
1995, this production plant was moved to Karlino in Poland in
order to utilise the cheaper labour available there. In
Poland, twenty-five former seamstresses were employed to
assemble the relatively complicated jigsaw puzzle by joining
and gluing the many pieces of veneer. This production plant
was also sold in 1999.
This put an end to DLH’s veneer venture as the company
had arrived at the conclusion that small specialised activities in diminishing niche markets were not to be prospective
cornerstones in the group. Then, on acquisition of the
Swedish group Bohmans, not much more than six years after that, DLH was once more involved in the production and
trade of veneer, though with some considerably more interesting markets in Russia and the Baltic States where veneer production was making headway.
However, the facilities in Gadstrup never lay idle through
those years when veneer production was starting to fall
and finally closed down completely. The kiln areas were used
for drying products from the sawmill which processed
Danish beech and various types of African timber. The plant
was later modernised and used for drying European hardwood, such as beech and oak from Poland. A large planing
production was also set up and this was an immediate success. Unfortunately, the plane burned down after only a few
months of constant use, but the Swedish supplier sent down
a new one, and after the original plane had been renovated
they both ran for many years, particularly producing cheap
but sturdy wall cladding out of Finnish shuttering boards
and later profiles of Russian larch.
The various companies which had been involved were
sold along the way, and since DLH built the plant in Gadstrup
the surrounding plots were developed into an attractive industrial area. In 2006, the plant was sold to a Danish business which had been on the lookout for exactly that kind of
facility: Gadstrup is particularly attractive as it is one of the
few areas on Zealand that the authorities have approved
for minor-scale polluting industries. DLH still owns vacant
plots adjacent to the industrial area. Activities in Hedensted
and Gadstrup were moved to the ports in Kolding and Køge
in 2004 and 2006.
However, through it all DLH continued the veneer sales and
even expanded through purchases of new businesses in
Norway and Sweden with well-established veneer sales in
2006 and 2007.
33
Gadstrup, Denmark / File photo © DLH
34
The port of Kolding / Denmark / File photo / © DLH
Hedensted, Denmark / File photo © DLH
35
A new generation and modernisation
Harald Kjær had shown the way: talented owners secure the
future of their business. In 1971, DLH was turned into a limited
company which cleared the way for a stock market listing in
the future along with modernisation. Knud Dalhoff Larsen
had resigned from his management position in 1968 when
he turned 70, and he died shortly after the business was
converted into a limited company. Frees Horneman was only
65 when he died in 1971. His son, John Horneman, carried on
his legacy as a member of the company’s executive board
and later as the chief executive officer until 1993.
In connection with the share issue the two founders each
invested a third of their shares in the newly established
DLH-Fonden [the DLH Foundation] which later came to be the
majority shareholder in the company. The aim of the foundation is to strengthen the company, to financially secure the
families and employees and to support charitable causes.
The 1970s and 1980s were characterised by dramatic market
fluctuations. Business had never been as good as in 1973,
but then came the oil crisis and “bang!”, a former employee
recounts, “the following year we didn’t sell a thing”. However,
sales picked up again and increased tremendously towards
the end of the decade, only to be followed by an annus horribilis in 1981 when even reputable Danish timber merchant
companies of long standing had to suspend payments. In the
course of the decade, DLH quadrupled both its equity and
revenue, bringing the company beyond the magical first billion Danish Kroner mark.
In 1986 the company took the crucial step of getting listed
on the stock exchange. A business is subject to radical
change when it becomes publicly owned in this way: the fo-
36
cus shifts to profit and return on investments, and the company gains access to additional capital. In connection with
the listing the two families decided to replace their more
influential Class A shares with Class B shares. The Class A
shares were then placed in DLH-Fonden. Many Danish companies use this allocation of shares to protect the company
from hostile takeovers. It is commonly agreed in the company that this move did in fact help preserve DLH’s independence when the economy went into decline and heavy
interest rates almost forced the company to its knees in the
early 1990s. More than forty years of success was replaced
by severe losses.
Markets worldwide were in a state of recession at this
point. The players on the hardwood market had observed for
some time that the market tended to move in five-year-cycles which usually ended with a sudden decline, and it was
such a decline that occurred in 1989. In Denmark circumstances further deteriorated in the wake of an unusually
severe slowdown of the economy in 1987, often referred to
as the ‘kartoffelkur’ [’potato diet’], with critics claiming that
Danes would only be able to afford potatoes for food in the
years ahead. These measures led to one of the most
marked economic changes of modern times, i.e. the debt-ridden Denmark turned into a thrifty Denmark. In the first instance, these measures were limited to private borrowing,
and included housing. For DLH, the potato diet resulted in a
further revenue decline and expensive foreign loans, both
factors which strained the already weakened business. It
was ironic that the very same minister of finance who had
initiated the potato diet was employed as the chief executive
officer of the company in 1993, and brought the company out
of crisis. Henning Dyremose had just left the world of politics and on his accession he declared that it was his aim
that the company in the coming years should obviate the
worst risks of those eternal and dangerous market
fluctuations.
John Horneman / File photo © DLH
A brave new world
On the eve of 9 November 1989, people from East Berlin
freely crossed over to West Berlin and started a chain reaction that caused the beginning of a dramatic decade for
the entire world. Within a few years, the global workforce
had been increased by a third in the wake of the fall of the
old Communist regimes and due to China and India opening
up to international trade. This brought about completely new
conditions for production and profitability as new markets
opened up and took shape. These major events went hand in
hand with information technology’s dramatic surge forward;
the EU issued a common currency and globalisation opened
up new capital and trade flows.
For an internationally orientated company the 1990s offered brand new possibilities, steep descents, but first and
foremost completely new conditions for doing business. A
few hundred kilometres south and east of Denmark a long
line of former Communist countries were now open for business. Since the 1970s DLH had, after a gap of a few years,
again actively purchased goods in Russia, always under the
heavy-handed control of the dictatorship, and now the company representatives ploughed their way through a nation
whose inhabitants and new company leaders struggled to
save the country from complete collapse. They found local
sawmills and companies eager to market products from
their vast forests.
Already in 1989, DLH had established its own branch in
Poland; a few years later branches were also established in
Russia, Belarus, Lithuania, the Czech Republic and Slovakia.
The veneer production was moved to Poland; the Canali
band saw from Gadstrup was put to work in the Carpates,
and by the end of 1997 Russia had become the company’s
second largest supply country, only surpassed by Brazil.
These branches primarily handled the purchasing side; on
the sales side DLH opened branches in Hong Kong, the USA
and South Africa just to mention a few.
Concurrently, in Denmark DLH underwent a dramatic expansion in the DIY sector in which they had already established themselves during the mid sixties. This came about
partly through acquisitions and mergers and partly through
setting up new DIY shops in Vejle and Odense. The retail division eventually ran 25 Danish timber merchants that supplied the local building trade.
The principal philosophy behind expansion was to utilise
various economic cycles on the international market for
hardwood in Denmark, in other parts of Scandinavia and on
the new Eastern European markets, etc. As part of this DLH
also pushed ahead by launching a completely new retail
chain, Woody, which they also thought could reverse trade
flows in the new countries in Eastern Europe so they would
no longer be mere distributors, but also purchasers. This
strategy was later changed; independence would be created
through globalisation. The Danish Woody shops were sold to
the Jem & Fix chain which later on became a major purchaser of timber and other building products, and the Polish
outlets were changed to sales premises for hardwood products.
Expansion in the DIY market and the retail market required capital and for the first time DLH used the opportunity to obtain it from the stock exchange with an issue in
1994 in connection with the take-over of the large Danish
timber company, Walter Jessen & Co., the limited company, of
which DLH already owned 25%. Inevitably, the economic recovery resulted in an international correction, and when it
came in 1997 it was a shock to the whole world. Following
Thailand’s decision to depeg its currency from the US dollar
in July of that year, it suffered a dramatic decline and in a
snowballing effect the currencies of a number of adjacent
countries were devalued, followed by Russia. This completely changed the premise for DLH’s international trade.
Henning Dyremose / File photo © DLH
37
The company had had operations in Brazil since 1983 and had
soon become the major exporter of mahogany to North
America and Europe of products from local Brazilian sawmills.
Across the globe, a Philippine board manufacturer whose
products DLH had distributed came to realise in the early
1990s that the business was no longer able to purchase its
raw materials locally since the country’s forests were practically drained of timber. However, through his contact with DLH
he was able to establish an import operation from Brazil.
In the course of a few years, a new trading chain had been
set up: in Brazil the sawmills were now used for more timber
species than mahogany, and DLH became a bulk exporter of
many different timber species. The trade flow was specifically
directed at a number of sheet material manufacturers in Asia
whose products DLH then distributed quite extensively.
In the summer of 1997 a ship was ploughing its way through
the waters from Brazil to Asia with yet another shipment at
a total worth of DKK 25 million when a crisis on the foreign
exchange markets loomed up like a bolt of lightening; resulting in a rapid fall in prices. Before the ship reached South
East Asia, another one was on its way, but suddenly the
channels of distribution were practically gone.
Foreign exchange rates in Asia continued to drop in the
next six months, DLH put the incident behind it, found new
sales opportunities, such as South Africa, rationalised its
Brazilian operations, came out of the crisis stronger than
ever and eventually carried on as a globally oriented group.
Brazil / File photo © DLH
38
The pebble in the shoe
Since its listing in 1986, DLH had become more visible in the
public eye. As this had been one of the objectives of going
public, it was a welcome change, but it also meant that growing criticism by environmentalists and other special interest
groups was levelled at DLH.
They were primarily concerned about the ongoing deforestation of the tropical rainforest and blamed all tropical
timber traders; regardless of the fact that most of the logging was carried out by the rapidly growing agricultural population in the poorest countries.
The criticism presented DLH with an increasingly pressing dilemma: on the one hand, the group was just as interested as the activists in preserving the rain forests; on the
other hand, traders had less control over the conditions
than the environmental groups would have you believe. As a
buyer you were situated in a part of the production chain
which was too far removed from the individual trees and
from the forests to have any real influence on how these
were managed. John Horneman, the chief executive, was familiar with the rain forest regions from his many years in
Africa, and he implemented a cataloguing of the environmental viewpoints which had been held by the company for a
long time. The first formulated environmental policy was then
publicised in 1992. DLH’s response was that the problem with
deforestation would not be solved by the company ceasing
to purchase tropical timber. It was further argued that this
might have the opposite effect: if the forests did not have a
commercial value, then the last bulwark against its clearing
would disappear.
Coincidentally, this is also the underlying ideology of mod-
ern management of the wildlife and nature parks in Africa
and the adjacent hunting grounds. By including the local
people and by ensuring that part of the earnings from the
natural resources, which are given a set value in this way,
are distributed to them, their interest in the preservation of
the area’s natural resources will also increase. The local
people in and around the forest will often prove to be its
best guardians or its greatest enemy.
It soon became apparent to DLH that an active policy of
promoting responsible forestry was the only way forward. It
was not enough to simply refer to the development work
which DLH had initiated in co-operation with voluntary aid
organisations such as Care Denmark or Danida; work which
supported local African communities by supplying new
means of production or trees for planting or by encouraging
suppliers to respect the laws and environmental considerations of the area. The company had to do more, much more,
because irrespective of what had been done previously, the
question kept gnawing away like a pebble in a shoe.
In 2002 the company launched a thorough assessment of
suppliers across the globe in countries that were known to
have problems with illegal logging. The objective of the Good
Supplier Program was to achieve complete transparency as
regards the origin of all timber purchased by the company.
From this point on, the company’s environmental policy focused on communicating with each individual supplier to
make sure that they complied with company standards (this
also includes respecting human rights and the living conditions of woodlanders); the goal is to know the origin of all
timber which the company uses in its supply chain. In actual
DLH, Høje Taastrup, Denmark / File photo © DLH
fact, this means that DLH has made its primary objective to
be able to account for each individual tree which is cut and
used in the production or distribution of the company’s timber. If a supplier is unable to comply with this standard, the
supplier will be phased out.
In 2006 DLH cemented its leading position in the tropical
hardwood market once and for all, and in addition took a
giant leap forward in its efforts to improve environmental
conditions when it purchased the large Swiss group, the tt
Timber Group. This company had many years of experience
of managing forests in the Republic of the Congo where its
subsidiary, CIB, owned concessions for the logging of timber
as well as sawmills for processing the timber. The group had
been working on bringing its large concessions in the coun-
39
try up to the high standard required to qualify them to be certified
by the FSC.
The Forest Stewardship Council was originally formed by environmental interest groups to reassure consumers that certified
timber was produced under the best possible conditions for the
forest and its population alike. The purchase of tt Timber finally
gave DLH the opportunity to personally manage its products from
forest to dealer. A few months after the purchase, DLH secured
FSC certification for 300,000 ha of forest in the Republic of the
Congo, making DLH the largest forest manager of FSC-certified
rain forest in Africa at that time. CIB continues to work towards
the certification of an additional one million ha of forest; these
areas have already achieved the much coveted TLTV standard,
which provides evidence that all relevant legislation has been
adhered to and that all timber has been felled legally.
Its position as the leading distributor of timber from certified
African rain forests presented DLH with the opportunity to fortify
its position as a distributor of timber produced under sustainable
conditions in general. As early as 2003, prior to its engagement in
the Republic of the Congo, the group had been marketing FSCcertified tropical timber from the Brazilian rain forest.
Congo © Lars Bo Kirk
40
A giant leap forward
Since the 1950s a curious situation developed on the international market for tropical hardwood: the largest retailer
on the world market was Danish and two of its closest
competitors were also Danish.
Due to the difficult economic climate at the beginning of
the 1990s the owner of the smallest of the three competitors, Carl Rønnow, decided to close his business and sell
parts of the company, and in the course of the next few
years DLH came to own one of the most interesting parts
of the company.
The two remaining companies were EAC Timber and DLH
which were of a similar size as regards hardwood and the
companies had been neck and neck in their endeavours to
take over each other for the previous twenty-five years.
However, towards the end of the 1990s EAC’s parent company was struggling financially, and in 2000 DLH acquired
EAC Timber; the acquisition was partly financed by increasing the share capital under DLH’s management.
It was a marriage of the kind which sells romance novels:
The dream of the one and only – they were meant for each
other. DLH was strong on the purchase side in Africa and
South America, EAC Timber was strong in South East Asia,
DLH’s strength lay in its trading skills, EAC Timber focused
on distribution from its own stock. In the few areas where
the two companies had parallel activities, the merger and
the efficiency enhancements were pain-free, especially due
to the fact that the “corporate culture was the same in both
companies; it was like a family reunion, it paid off from day
one”, a leading member of staff explains.
The merger of the hardwood activities was overseen by
President & Chief Executive Officer Jørgen MøllerRasmussen, who had righted the company’s course so that
it concentrated on the market segments in which it held a
leading position and changed its focus from growth with
company acquisitions solely in Denmark within the timber
trade to growth with international acquisitions of other activities. Out of the total revenue, the Danish contingent was
reduced to 40% after the merger with EAC Timber and the
merger was a vital step towards becoming a globalised
group since it meant that the company now managed a much
greater part of the value chain from supply to sales. At the
same time additional impetus was gained by the fact that
sales could be made directly from the company’s own warehouses rather than purely through trading – trading was
quite clearly less demanding on capital, but it was far more
volatile. Holding a global position also meant that the company was better equipped to face the dangers of market
fluctuations in the Danish market or other Scandinavian
markets since markets scattered around the globe are
rarely subject to economic decline simultaneously.
With the acquisition in 2002 of the American PW
Hardwood, in addition to the local American sales, DLH
obtained a stronger bridgehead for supplying the European
and Chinese sales offices with products of non-tropical
hardwood of which the vast majority were from the USA.
These developments strengthened the company’s distribution activities from its own warehouses but at the same time
retained the company’s trading department where the ‘backto-back deals’ could remain a large part of the revenue of
the company: The term originated from the fact that the
trader literally had a buyer on one line and a sales representative on the other. At the top of a strong trade organisation, trading has the great advantage that capital is only
tied up for a very short period of time in contrast to the
group’s other activities. Purchases from relatively small
suppliers in the forests call for payment on delivery, perhaps even in advance, as well as financing of transportation,
drying etc, distribution warehouses in the sales countries
and finally credit granted to distributors.
The acquisition of EAC Timber, tt Timber and Carl Rønnow
in Malaysia together led to DLH being able to initiate preparations for the closure of the Danish retail business. The
company had never succeeded in becoming market leaders
there, and it did not look as if it was going to happen in the
future either. In an effort to improve sales the timber merchant companies were made more efficient and streamlined
from 2002, and with a joint brand, Horneman, from 2007 the
division was ready for the sale that had been agreed with
the French Company Saint-Gobain in December that year.
Following the sale, Danish revenue in what was left of the
group had been reduced to a mere 17%. The dependency
on a small local market had been overcome.
DLH had let go of its Danish anchor.
41
From cottage industry and on into the future
Even though the company started importing plywood back
in 1946, ’sheet material sales’ remained a small cog in a big
wheel. In 1960 when raw materials for German sheet material
manufacturers had been exported for years, DLH staff still
referred to their own sheet material department as a
‘cottage industry’.
However, the building industry soon realised the potential
of sheet materials. The first boards were soft fibre boards
which were originally used for insulation purposes (today
they are mainly used for notice boards). Then followed the
hard fibre boards which are still used in industries
connected with furniture and fittings, for example as
back panels.
In the 1960s in particular American and Canadian plywood
for construction purposes started flooding the European
markets; at that time the company began trading in particle
boards which quickly came to replace planks in the furniture
and equipment industry. In the interim years a broad range
of new products have been introduced, especially the OSB
board, Oriented Strand Board, where oblong pieces of scrap
wood are glued together in three layers; since the 1980s
these slabs have been a colossal success in the building
trade.
The MDF board, or Medium Density Fibreboard, produced
by pressing together timber powder with wax and resin
additives, provided furniture manufacturers with a product
which was far more suitable for milling out profiles than
natural timber.
Many sheet material products have been influenced by
fashion; in the 1970s cheap boards from Asia, popularly
42
Køge / Denmark © Niels Torben Larsen, Denmark
known as ‘decorative panels’ with rhythmic, inhomogeneous,
longitudinal profiling were in high demand. The panels were
often used for wall cladding as well as back panels for cabinets, kitchen units etc. and had a thin photo veneer creating
the perfect illusion of any wood species the customer requested – from cherry through mahogany to oak. Fashions
come and go, and perhaps it is a sign of consumers becoming more quality conscious that there is hardly any demand
for such boards anywhere in the world today.
The development of new shipping routes and port facilities paradoxically led to efficiency enhancements: It was a
giant leap forward when DLH moved their main warehousing
and distribution facilities from cramped locations in the
Copenhagen and Århus ports to the newly constructed
harbour facilities in Hedensted and Gadstrup in the 1960s.
However, at the turn of the century modern port operations
meant that these facilities were already outdated, and in
2004 the warehouse in Hedensted was moved to the port of
Kolding – into rented facilities using leased equipment. In
this way the costs of loading, unloading and transportation
were reduced, and capital was released which would get a
higher return if applied for ongoing expenses. In this way
the Gadstrup operation was also moved to the port of Køge
in 2006. So from port to land to port again, but now on a
completely different basis.
In the years immediately following the establishment of
the facilities in Kolding four to six ships called at the port
with timber, plywood and other sheet materials from Russia,
Scandinavia, other parts of Europe, South America and the
Far East, and every day twenty-five lorries carried goods
from the facilities to customers in Scandinavia and northern
Europe. In one of the warehouses a computerised machine
cut sheet materials in accordance with specific measurements from the customers’ production orders. The boards
are packed by a robot system, and the executed orders
were delivered to furniture or kitchen unit manufacturers as
they were needed in their production process.
The Timber & Board Division is a perfect example of the
advantage of being a world-wide group with independent organisations located all over the world. Following the millennium Russian manufacturers developed a plywood board
made of birch with a plastic coating for concreting. Unlike
other plywood boards the lamination enables the board to
be recycled up to twenty-five times. In 2002, DLH USA
launched the board called Xact2form at a fair in Las Vegas,
and before the conclusion of the sales tour the product had
been sold out and was a definite success on the American
market. However, only a few years later things changed
dramatically; the US dollar dropped which meant that the
boards were no longer able to compete on price while at
the same time there was a frantic level of building activity
in Russia so that it was difficult to obtain boards even for
exportation. Over the next six months the Timber & Board
Division reversed the trade flow so that DLH USA now
exported boards to Russia.
In more recent years the demand for sheet materials has
been steadily increasing, and the robust international timber
market taught the players in this sector in 2006 that secure
supplies are the key to the future of the sector and so many
local distributors began to see DLH as the ideal partner with
future generational changes. This was one of the reasons for
a number of acquisitions that DLH carried out at the time
leading up to the 100-year jubilee in order to support the
supply and sales primarily in Scandinavia, the Baltic States
and Russia. The group grew with the purchase of the Swedish
Karl Ljungberg AB with its subsidiary in Norway, Palma
Byggrossisten AB, Olle Zettergren AB and the Danish sheet
materials retailer OK Træ ApS as well as the Norwegian Erling
Hustvedt group, which sells both sheets and hardwood products. In this way, DLH had strengthened its Baltic anchor; the
Baltic Sea countries are a growth area producing 30 per cent
of DLH’s revenue, excluding Denmark.
File photo © DLH
43
International shares and a green future
When Jørgen Møller-Rasmussen joined the company as
chief executive in 1998 one of his declared goals was to increase the price of the DLH share. Previously, the cyclical
nature of the shares had caused the company’s profit to
fluctuate between DKK 50 million and zero or less. The increased earnings contributed to the realisation of this goal;
since the turn of the millennium profits have increased from
DKK 41 million to more than DKK 200 million and this was noticeable to the shareholders; if you bought a share at the
end of 1998, it would bear interest at the rate of 25% p.a.
up until the end of 2007.
The introduction of a dividend policy with a dividend distribution of approximately 25% of the profits and a number
of other initiatives have contributed to increase the price,
thereby making the share even more attractive to investors.
Share issues in 2000 and 2006 increased the liquidity in the
market and made the share more appealing to private investors which increased the number of shareholders from 700
to 3,000.
Naturally, the higher share price has meant that many
shareholders are satisfied with their investments, but a high
share price is also important when a company increases its
share capital by means of new issues; a strategy DLH used
in the merger with EAC Timber in 2000 and in connection with
the acquisition of the tt Timber Group in 2006, the same year,
when shares were also issued to employees. The group’s
main shareholder, DLH-Fonden, still has the controlling interest (at the time of the centenary approximately 26% of the
capital and about 62% of the votes) due to its ownership of
all Class A shares, and the foundation wishes to maintain
44
this position. However; it is not opposed to share issues as
long as it does not lose its controlling interest in the company. The higher the share price, the more capital will be
available for expanding the business without diluting the
foundation’s share more than is acceptable. At the end of
2007 the DLH’s Deputy Chairman Arne Vierø, who is also a
long-standing member of the board of DLH-Fonden, felt that
they still had “one or two shots left in the gun” for more
emissions based on the issue of shares – until the foundation, via dividends from the company over a period, would
again “reload the gun” by regenerating its ownership share.
With a cash profit of DKK 600 million from the sale of the
Building Materials Division, DLH enters its second century,
well-equipped for expansion through strategic acquisitions.
By pulling out of the Danish market the DLH share has
become more international, and in future it will be promoted
to investors in Scandinavia, the UK and other parts of
Europe.
Timber is fast becoming a scarce commodity; countries
with large forest areas will increasingly limit the supply
while the demand will increase as the world’s population and
prosperity increases. An increased awareness of the role of
forests in the battle against CO2 emissions and the demand
for farmland and timber products for the production of bio
energy will only contribute to making forests and timber
products scarce resources.
At the same time informed consumers demand that timber
products not only be environmentally friendly, but also be
produced with respect for the people involved in the process. Through the development of a socially responsible pol-
File photo © DLH
icy and DLH’s strategic acquisition of concessions for the
utilization and protection of forest resources the company
is well-equipped to face these new circumstances, and this
will enable it to continue to offer responsibly produced timber products globally. Wood is a marvellous material which
will always be sought after because of its beauty and because of the ease with which it can be shaped and processed. In addition, if it is used in the correct way, it is the
most environmentally friendly material that we have. The
future is green for DLH.
Design Boje & Mobeck as
100 YEARS OF PASSION FOR WOOD
1908–2008
Design Boje & Mobeck as. Printed on FSC certified paper
Dalhoff Larsen & Horneman A/S
Tlf. 43 50 01 00
Skagensgade 66
Fax 43 50 01 99
2630 Taastrup
www.dlh-group.dk
[email protected]
CVR nr. 34 41 19 13
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