| The History of Verona Dyestuffs By: Fred E. Hilger, 1976 Note from ColorantsHistory.Org: Fred E. Hilger (1910-2006) was Vice President of Sales for the Verona Dyestuffs Division of Mobay Chemical Corporation when he retired on November 1, 1975. Hilger was one of the founders of Verona Dyestuffs in 1953. He wrote a personal history of the company which is reproduced below without editing: "Since we may be in a transition period from an economic era of abundance and expansion to one of depletion and conservation, it might be worthwhile to re-live some of the early experiences in the history of Verona, which started operations 25 years ago. The year 1953 had just begun. Business had gotten over its first post-war excitement and was just coasting along at this point. Some of us who had spent four years in the war and were still laboring under the after- effects, were looking for something more exciting like a secure job in a large, established corporation. We were ready to take chances and start something new and different, something to which we could commit ourselves and be part of creating an organization with new products, new ideas, and a new and fresh corporate climate. There were thirteen of us; a few were older, out for a last fling in the final years of their careers. They brought financial resources, experience, and contracts. The rest of us were younger, with knowledge of our trade and friends in the industry with whom we were going to do business. All of us had worked for General Dyestuff Corporation, which had held a commanding position in the U.S. dyestuff industry before World War II. At the beginning of the war, the government took this company over because of its past German affiliation, and after the war its management and board of directors were filled in many cases with political appointees, some of whom came from entirely unrelated areas, such as the Army, airlines, entertainment world and others. The resulting conditions within the company were prime reasons for our decision to take the plunge into something new and cut the ties which had been formed over many years. The head of our group was Ernest K. Halbach, former president of General Dyestuff Corporation. He was unquestionably the acknowledged dean of the dyestuff industry at that time, and a commanding figure exuding solidity, stability, and integrity. Heaven knows we were to need a leading figure of this caliber in order to attract respect and confidence in something that was slow to develop, and for quite a while was nothing but an idea in our collective heads. Mr. Halbach - only presidents and board chairmen would call him Ernest - was well along in years and most people his age would think of a serious dedication to golf or fishing instead of the responsibility and pressure connected with starting a new commercial enterprise. Little did we know then how much stress and strain would be generated by our creation. Prior to these events, Mr. Halbach had acquired control of Verona Chemical Company, Newark, New Jersey in 1951, and was its president. Verona Chemical manufactured and sold aromatics, dyestuffs, dry color intermediates and assorted chemicals. Our plan was to establish Verona Dyestuffs as a division of Verona Chemical Company, and to sell a range of dyestuffs composed of domestic and imported products. We hoped to introduce to the United States’ market new products from abroad and to purchase the more mundane products we believed we would be able to sell - either domestically or abroad. On a long range basis, we expected to attract support from one of the large German dyestuff manufacturers and possibly become their representatives in this country. Well, it pretty well worked out this way! During the late summer of 1952, Mr. Halbach rented a building in Union, New Jersey, which was to be built to suit our intended purpose of using it as our headquarters; containing offices, central laboratory, and warehouse. At the same time, contacts were established with various potential staff members experienced in the dyestuff field. In February 1953 we held a christening party in the Union lab, and by March 1953 sixteen women and men had joined Verona Dyestuffs and started what was later called - by a rather poetic and prophetic customer (aided by some martinis) - “the rising star on the dyestuff firmament”. The truth of the matter was, however, that at the beginning the Verona star was rather sluggish in its ascendancy, and the reasons for this were manifold. Perhaps a better view of this period can be held from the perspective of one of the earliest sales branch operations. At that time, i.e. early 1953, we had our headquarters in Union, New Jersey (where they are still today) although the building was considerably smaller then, and two branch offices; one in Providence, Rhode Island, covering New England and one in Ardmore, Pennsylvania, near Philadelphia, which took care of Pennsylvania, Southern New Jersey, Delaware, Maryland, West Virginia and Virginia. In 1953, a much larger percentage of the U.S. textile industry was located in the territories of these two branches than there is today. In Ardmore we rented a room on the second floor of a small building owned and used by a local suburban newspaper. Our staff consisted of two salesmen and our capital assets were made up of one shiny new manual typewriter; the furniture was borrowed from the landlord. Our first task was to compose, type and mail a letter to our potential customers, telling them that we had arrived. Our main sales arguments were that we would supply them with new and interesting products from abroad, and give them personalized service as only our knowledgeable and experience staff could. Well, our first visits were not exactly anticipated with bated breath, and we soon found out that personal connections and friendships were fine, but by no means an assurance that a company would change suppliers form well-known established concerns to a rather nebulous new venture with a Shakespearean name. Moreover, our technical information and illustrative material were rather makeshift and crude, to say the least. Foreign pattern cards and circulars could rarely be used because of trademark restrictions, which meant that this material had to be translated and typed with different product names. Needless to say, even our best home-made efforts made us appear like poor country cousins compared to the sleek avalanche of colorful publications provided by such competitors as du Pont, Calco, National Aniline and the Swiss companies. In fact, during those early days, a top technician from Burlington Industries told us at one time that he enjoyed listening to our presentations, but that we were too exotic for serious business relations. But then, soon after we had launched Verona, something happened that helped us considerably. On April 1, 1953, the General Dyestuff Corporation filed a suit against Verona for $6.2 million plus costs. The defendants were Verona Chemical Company and several of its employees, namely Halbach, Swenson, Celentano, Channon, Debes, Donnelly, Fullerton, Hilger, Hill, Luqueer, Meady, Taylerson and Westbury. The accusations were basically the use of confidential information and trade secrets acquired by these employees in their previous jobs and pirating employees away from the plaintiff. Needless to say, no confidential information or trade secrets were misused and one could hardly talk of pirating if employees wanted to leave a company which was being mismanaged. This suit was widely publicized and discussed in the industry and simultaneously brought much publicity to Verona. The reaction in the trade was one of sympathy for Verona as the underdog who was bullied by a large, wealthy and powerful corporation. The feeling was for those fellows who had enough gumption to start from nothing and believed they could make it on their own steam. Previously closed doors were opened by customers who wanted to meet those people who were worth more than $6 million. Even the plaintiff eventually saw the handwriting on the wall and the suit was discontinued in April of 1954. The whole episode meant a shot in the arm for Verona even if it did not exactly cause a stampede of customers to swamp us with orders. And so we struggled through that first year of our existence. We bought our supplies from quite a number of domestic manufacturers, and our imports came from Bayer, Hoechst and Cassella. Yorkshire Dyeware tried to do business with us, but it never came to very much. We set-up stocks of products we thought we could sell and picked up orders wherever we could find them. Unfortunately, the products in stock and those being ordered were by no means always the same. We found that it was much harder than we had expected to get a share of the volume garden-variety products. In many cases, the reason for this was that we did not have sufficient control over the exact standardization of our products which was required especially by the continuous dye-house. The result was that we were confined to quite some extent to selling new and specialty dyes which unfortunately were mostly used in smaller volumes. The two dominant dyestuff ranges in those days were Vats and Naphthols, and it was Hoechst especially who had the most interesting products in these lines. They had chlorine-fast vat blues, a bright, fast vat orange, a fast economic vat rubine, as well as some outstanding vat dyes for printing. We tried to promote Fast Navy Blue Salt RA for the continuous production of the Indigo shade with very little success, and Hoechst had the Fast Direct Blue F3GL which was much in demand for automotive upholstery fabrics. We sold some Cassella specialties on a small scale and good sized amounts of DINA Acid to Harmon Colors for their pigment manufacture. Bayer was strongest in the direct, acid, chrome and vat lines with products which were not easy to sell. But, here again, there were never products which became hits, e.g. Diamond Black PLC, certain Isolan dyes and auxiliaries such as Bleaching Salt Bayer, Avolan IS and IW. We managed to get some of Bayer’s vats (Vat Brown G) started in the South. But above all, we made a hit with the Phthalogen dyes with which we competed successfully against du Pont’s and ICI’s counter products. But the Phthalogens were not easy to apply and during the winter of 1954 we sent a technician to Leverkusen to study all aspects of the application of these products. Phthalogens were much in demand for certain fashion shades because of their brightness and extreme fastness and by 1957 we sold enough Blue IF3G in a little over a year to dye 25 million yards of 4-yard goods at a 10 g/1 depth. But the main effect of these sales and technical efforts were to get the Verona name established and to make ourselves known as a company with new and interesting products with which it pays to do business. Moreover, these were years of building and organization, of becoming knowledgeable in a wide range of products and reaching for customer’s acceptance and confidence as a newcomer on the scene. Our sales crept up slowly during the fifties, but neither our sales volume nor the returns were sufficient to keep us in the black. This meant that we were barely able to sustain our growth, to say nothing about accelerating it. We had one salesman in the Carolinas in 1953 who, with the help of technicians from Union, covered these important textile states alone until 1957 when a second salesman was added. At one time during those years we had the opportunity to engage a very successful and well-established salesman in the South, which would have helped us greatly. But, when this came before the Board of Directors the representative of a well-known industrialist who was a stockholder in our company turned thumbs down and insisted that we could not afford this comparatively high-priced man. The stockholder then proceeded to hire this man himself for his own company. We consoled ourselves at times that it took Du Pont seven years until their dyestuff division became profitable and considering the comparative resources - especially during the first part of Verona’s history - we did not do so badly even if it took us ten years to turn the tide. The obvious aim of Verona was more than ever to seek the backing of a large and financial strong company for a foundation on which we could build for the future. Of the three main German companies, we felt closest to Bayer because of personal connections and fortunately for us it was Bayer which showed more interest in us than the other companies. Many efforts on various levels went on behind the scenes form 1953 to 1957 to bring about a closer alliance between our two companies. This, we felt, would be to the advantage of both parties. Through hard work and knowledge of the U.S. market, we had created for ourselves opportunities which we were not able to exploit without the financial, technical and commercial backing of a company like Bayer. On the other hand, Bayer could hardly afford to ignore the U.S. Market and could use our organization as a nucleus for their own representation in this country. From our relations with the larger and more important customers, we had learned that we needed a closer technical contact with the manufacturers of our products, a more elaborate technical and sales organization, a sounder financial base and domestic manufacture of the products which we were selling or would be selling in larger volume. The latter was considered essential for a better control of standardization as well as availability of these products. This was recognized not only by us at Verona but also through frequent contacts by various gentlemen at Bayer. Upon re-reading our correspondence during those years with gentlemen from Bayer, especially with Mr. R. Lienau, it comes back to mind what a stressful and often frustrating period it was for all of us. While some of us knew that Bayer was interested in a marriage with Verona, most of our staff was not aware of this. On the other hand, everyone at Verona could not help but know of the rather serious financial situation of the company. Our business activity had grown but the size of our staff and their paychecks had remained stagnant. The result was that there were too few people who were expected to do too much work for too little money with nothing but uncertainty ahead of them. No wonder that the morale within our company began to suffer. Mr. Lienau visited us frequently and was kept informed of the situation through intensive correspondence between us. It was he, more than anyone, who was instrumental in bringing the two companies together. But there were also other Bayer visitors in those years. Dr. F. Gund came and went to customers with us where he was very highly regarded. Mr. H. Koehler and Dr. O. Loehr came several times and seemed most anxious to have Bayer re-enter the U.S. market in the dyestuff field. Dr. Knauf came in 1955 and took a very close look at us and seemed to approve of what he saw. Early in 1956, Prof. Haberland himself came to meet us and to take a look at the Pharma plants and the Verona plant in Newark. During his whirlwind inspection of the various buildings, he talked much and fluently about what should be done to make these factories more modern and more efficient. The dollar amounts needed to finance these plans were thrown about with an almost casual abandon, at least so it seemed to us after years of a rather parsimonious existence. After Prof. Haberland and Mr. Pflueger, who accompanied him, had departed, the three or four of us who had attended this meeting gathered in Mr. Halbach’s office to digest what we had heard. At that time our finances were in almost desperate straits, since the major stockholder - mentioned before - had withdrawn his money. As we sat there, still somewhat stunned by our exposure to the potential affluence of multi- national business connections, our treasurer came into the room to tell us that he did not have enough money to meet the payroll. The contrast was reminiscent of the affairs of Amos and Andy, of pre-television radio fame. However, by now the end of our ordeal was in sight. Both sides had decided they wanted and intended to get together and both sides recognized the need of a U.S. manufacturing plant. Mr. Pflueger himself worked on the most important matter of making the necessary financial arrangements. Bill Ostern had arrived at Metachem in March 1956 and proved a mighty ally in keeping things moving in the right direction. Needless to say, there were differences of opinion as to how this alliance should be managed in the future but by the time the snow began to fall in 1956 Bayer and Verona had formed a combined dyestuff selling organization in the United States. Negotiations with Pharma had been conducted simultaneously and on January 8, 1957 the Verona Chemical Company purchased all outstanding capital stock of Pharma Chemical Corporation. Effective December 2, 1957 Pharma Chemical Corporation was merged into Verona Chemical Company and the corporate name was subsequently changed to Verona-Pharma Chemical Corporation. Pharma Chemical Company was founded by Dr. Eugene A. Markush in 1917, and manufactured drugs which were new to the American market. When these drugs - after World War I - became available from abroad, Pharma turned to the manufacture of synthetic dyes. It only manufactured one drug again, namely Halocrene, an intermediate for Atabrine which was needed in large amounts as a quinine substitute in the Pacific campaign during World War II. At the time of Bayer’s acquisition, Pharma made acid, direct, pre-metalized and vat dyestuffs as well as printing azoics and intermediates. Its sales ran about $4 million per year. The acquisition of Pharma proved more complicated than anticipated, partly because of existing sales agreements with other companies and partly because of the sometimes conflicting ideas and desires of four parties, namely, Bayer, Pharma, Verona as the future selling organization, and the financial people were not always easy to reconcile. Probably the most serious difference of opinion existed between Bayer and Mr. Halbach regarding the future management of Verona. Bayer wanted - quite understandably - a Bayer man in the number one slot of Verona’s management, whereas Mr. Halbach - having gone through World War II as President of a German affiliate - felt that Verona should be headed by an American. This bone of concentration was actually not entirely resolved until Mr. H. Urban had been eased into the president’s job of Verona-Pharma at the end of 1957. Trying to be most tactful and understanding about this whole matter - the blessings of personal confrontations had not yet been discovered - Bayer told Verona at first that a gentleman by the name of Urban would come from South America to work in our laboratories because of his knowledge of Bayer products. He came on May 1, 1957 and he did work in the lab, if only very briefly. He then was given a desk in Vice-President W. L. Swenson’s office since he had also experience in administration and marketing. Before the year was out, Mr. Urban was president of our company and thus made a career which in rapidity has never been equaled at Verona. By this time, Mr. Halbach began to show the severe strain of the past years. His health began to deteriorate early in 1958 and he died shortly thereafter. His death marked the end of an era, since with Mr. Halbach went the last outstanding leader of the U.S. dyestuff industry as it existed between the two world wars. After Mr. Urban had taken over, efforts were being made by all concerned to consolidate the new corporate entity and to establish communications and relationships between the three components - Bayer, Pharma and Verona. Mr. Pflueger set up social gatherings in New York and many pleasant evenings were spent in Mr. Urban’s home which went a long way for all of us to get to know each other in a relaxed and pleasant atmosphere. Actually, it was quite remarkable how quickly Verona-Pharma did become integrated and how quickly practically all staff members, regardless of their previous affiliations, transferred their loyalty to the new corporation. For those of us who had gone with Verona through the previous years of uncertainty and frustration, it was truly a relief to see our company finally in a position where we could plan for the future rather than having to meet constant emergencies. Most important, new and very competent staff members came to Verona at this time. Gunter Thiel and Helmuth Prochaska came in October 1958 shortly after Dr. Kass had taken over management of the Technical Department. Both gentlemen worked with us at first for a trial period of six months, during which they shared one room as their living quarters, in true frugality “a la Verona”. They then went back to Leverkusen and we kept our fingers crossed that they would come back. Well, in June 1959 they did come back with their families and started their outstanding careers with Verona. Dr. Schran came in November 1958 and brought with him his exceptional knowledge of manufacturing vat dyes which we urgently needed. Bill Buffum came in January 1959 and proceeded to put his pragmatic stamp on our accounting operations. Our sales staff in the South was enlarged when Ted Howe and John Schwager and his co-workers moved over to Union from the Flat Iron Building in New York and John provided an invaluable sales link to the production staff in Bayonne. All these moves strengthened our organization immeasurably and created a new spirit plus raising the morale of the older members of Verona. But our financial performance was still anything but satisfactory and would remain so for a few more years. It is hard to describe the depressing effect of working in a continuously money losing operation as some of us had done since the inception of Verona. Moreover, it soon became apparent that Bayer had not expected that it would take as long as it did before we were finally in the black. This happened in 1963 with the kingly sum of $5,839.00. In order to understand our situation in the late fifties and early sixties, it must be remembered that prior to Pharma’s acquisition, it had no selling organization of its own and sold almost entirely through dealers and jobbers and, to a lesser extent, through other dyestuff manufacturers. In those years dealers and jobbers played a much more important role in the market than in later years and today. Dyeing was still an art rather than a science, and rayon, acetate and nylon were the only volume synthetics. Since the efficiency of the dyehouse was more dependent on the dyer’s personal ability and experience rather than on scientific systems and sophisticated equipment, the dyer reigned supreme in his baliwick. As a result, a salesman depended - to a much greater extent - on his personal relationship with the dyer and with all such a dependency can entail. Needless to say, dealers and jobbers thrived in this atmosphere and were, in some cases, indispensable outlets for dyestuff manufacturers. It is questionable whether this was clearly understood by all at the beginning of Verona-Pharma. There had been some belief that once the new company was established we could take over the dealer business by selling direct and absorbing the dealer’ s discount. It did not quite work out this way, which brought disappointment and upset financial expectations. Another problem descended upon us at the beginning which we had not expected. One of the most important dyestuff groups of Pharma was the printing azoics - Pharmols and Pharmasols. These were used in very sizable amounts by the large printers in the South before pigment systems became more perfected. Pharma had some patents in the printing azoic field and held a rather basic position. These products were sold exclusively by Carbic Color & Chemical Company and - to complicate matters - Hoechst was in the process of acquiring Carbic when Bayer was courting Pharma! After many protracted meetings during which Mr. Lienau was our standard bearer, it was agreed that Carbic would turn over the azoic business to Verona within a 6-month period. As could be expected, some of the azoic patents began to run out and companies such as Sun Chemical and Hilton Davis started to offer diazamino compounds to the larger textile printers, which they could easily couple with Naphthols themselves. Apart from this further loss of business, Pharmasol prices dropped in some cases by as much as 75% and eventually most volume Azoics were replaced by diazamino compounds and Naphthols and - in some cases - even Naphthols were finished by textile printers from available intermediates. All of this, of course, further aggravated our financial situation. As far as Pharma was concerned, Bayer saw themselves straddled with a company largely dependent on printing Azoics which were going up the chimney and on garden variety acid and direct dyes which - to quite some extent - were sold by jobbers and dealers. Bayer was not happy at all and soon a sign appeared on the wall of the U.S. Sales Department in Leverkusen: “Verona-Pharma Chemical Corporation, a non-profit organization. It was not planned that way”. Obviously, something had to be done. Dr. Schmitz came and stayed for several months to work on our product line and product names. Dr. Kramer came twice and tried to prod us toward greater efforts and greater profitability. The first time he used the carrot by playing golf with us, giving us good dinners and being very jovial and understanding. The second time he used the stick by more or less telling us we did not know how to sell. At one meeting he told us we should replace competitor’s sulphur dyes with vats. This, of course, would have been no mean feat if it could have been accomplished. But our remonstrations about comparative pricing on the U.S. market fell on deaf ears and Verona’s reputation took another nose-dive. Dr. Berliner came and tried to convince us that our customers should use vat powders rather than pastes, like all sensible people did in the rest of the world. But, surely our visitors did get a fair impression of the complexities, as well as the uniqueness of the U.S. market. It was quite true that vat dyes made up one of the most important dye groups in the U.S., partly because of du Pont’s excellent promotion of continuous dyeing methods and partly because of the promotional efforts of the Vat Dye Institute. Thanks to Dr. Schran, we did perfect our vat dye production and enlarged our product line. The result was that our vat dye sales went from $1 million in 1958 to $ million in 1968. Another most important avenue open to us was to start the domestic manufacture of Bayer’s excellent line of dyes for acrylic and polyester fibers which slowly began to grow in importance, as well as certain selected acid dyes for the considerable wool/nylon blend market which existed in this country. While the desirability of this plan seemed apparent, the actual implementation came slowly. There was a natural reluctance to invest further amounts into a money losing operation and, in many cases, we were not yet selling certain dyes in sufficient quantities to make domestic manufacture worthwhile. Then there were those who believed that it was most important to keep the Leverkusen chimneys smoking. However, thanks to the persistent efforts of Mr. Urban and others, e.g. Dr. Gassmann, our domestic manufacture grew, as can be seen from the attached sales figures of the more important dyestuff groups. The low point in our financial performance was reached in 1960, with a loss of almost $1 million for the year; but the turning point came the following year. Our sales went up from $8 million in 1960 to $10 million in 1961, mostly because of higher dyestuff sales. Besides, the larger volume of our own manufacture meant a better utilization of the existing capacity and - consequently - a smaller loss at the end of the year. It became more apparent than ever - at this time - that our production facilities had to be consolidated, and toward the end of 1961 Dr. Gassmann put together a very lengthy and detailed report pertaining to the recommended closing and disposition of our Plant Number 3 in Newark and the transfer of certain production programs to Bayonne. At that time, the following were produced at Newark: Aromatics, Phthalogen Brilliant Blue IF3G, Roskydale, Acramin Binder SLN, Fast Color Bases, Organic Intermediates and Fur Dyes, a special developer for Polaroid and certain textile auxiliaries. The Newark plant was finally sold in 1963, at a loss of $230,000 plus $13,000 in closing expenses. Up to this year, Dr. E. Bruening had been Vice-President of Production. He returned to Germany on September 21, 1963. Subsequently, Mr. D. Del Guidice became Plant Manager of Plant No. 1 and Dr. E. Schran Plant Manager of Plant No. 2 in Bayonne, with the latter being “Primus-Interpares” in matters pertaining to both plants. In the Technical Application Department during this period, i.e. the late 50’s and early 60’s, Helmuth Prochaska started his pioneer work with the giant printers in the south and laid the foundation for the development of many new printing systems which were to develop into such important successes in later years. In the north, Mark Frankfurt put Verona on the map with the printers in that area. Gunter Thiel - who like Helmuth Prochaska had the title Executive Technical Engineer, while Dr. Kass was in charge of the laboratory, concentrated on the technical promotion of Astrazons for acrylic and acid dyes for wool/nylon blends. The famous combination of Levalan Yellow 2G, Pharmalan Blue 2G and Azo Phloxine GA sold for this new blend in very sizable amounts. The testing of pre-shipment samples for the examination of close adherence to standard, was started by Deering Milliken with this combination which - later on - spread to most volume products. Deering Miliken demanded the components of the above- mentioned acid color mix in 10,000-lb. Batches and Pharma gave them to us. Levalan Violet 4BF developed into a good sized specialty. Chrome Black T was still big and Mr. Urban considered himself an expert on this color, since he had manufactured it in China. During one week-end he went to the lab to make his own dyeing in order to check the lab’s results. He found no discrepancy but he discovered some bottles that had been left open. The culprits were admonished. The Resolins began to move slowly, although the future potential of this range was clear from the start. Resolin Blue FBL, which later became the most important single dyestuff in our range, was first manufactured in 1961. During these early years of Verona-Pharma, the move of the textile industry to the south kept on gaining momentum at the expense of the New England and Philadelphia areas, where textiles once had been dominant. In addition, all the expansion of existing companies took place in the South. Thus, our southern branch began to deserve more attention. We had moved out of our original small office in a shopping center to York Avenue in Rock Hill, where we rented a building of our own with warehouse, laboratory and office facilities. While at the time this seemed quite an improvement, such was the case by comparison with our previous office only. To pick up dyestuff drums, customer’s trucks had to snake their way along a narrow dirt road behind our building which - when it rained - turned into a fathomless quagmire where trucks got stuck and irate customers wondered what happened to their vehicles. The lab was something to behold! It was infinitesimal by our present standards and jammed to the gills with equipment and three or four people. One of them - by the name of Butch - weighed around 300 lbs., which compounded the space problem. Every work area in the lab was either exposed to the sonorous sounds of the men’s room or the more subdued going-ons in the ladies room. No place was out of earshot of both, and some jockeying for position went on in the lab, depending upon which sounds were found less distracting. Customer’s visits were not exactly encouraged, since our modest abode made a rather poor showing compared to the palatial establishments of our larger competitors in Charlotte. In those days, the larger textile companies would send their trucks once or twice a week to Charlotte and have them pick up supplies from all the branch offices there, thus earning refunds for freight charges. Not being in Charlotte was therefore a certain disadvantage. On the other hand, our location in Rock Hill was certainly more economic to operate, which was important, and the kindest thing that could be said about it. But in spite of all the frugality much hard work was done in those years and many valuable contacts were established which were to be of great help to us in later years. Early in 1961, Bayer felt that our overall sales effort could be strengthened by the addition of Dr. W. O. Goulden, who joined Verona on February 1, 1961. He concentrated his sales activities on the northern territory and our so-called “twilight zone”, the TAG area consisting of Tennessee, Alabama and Georgia. Dr. Goulden, after making his contribution, left on October 22, 1965. After a 1-year quarantine, he joined Farbwerke Hoechst in the United States. In the South we had to part with our branch manager in Rock Hill and eventually Helmuth Prochaska took over as our southern manager, which included the Carolinas and the TAG area. You will notice that the enclosed sales figures show a slight dip in 1963. This was caused by the fact that our organic intermediate sales department, under Mr. O. Winkler, was transferred to Naftone, New York on September 1, 1962. Although some U.S. dyestuff companies ran their intermediate and dyestuff business under the same management, it was felt by Bayer that the intermediates should stand on their own legs and find their own unencumbered place in the market. All of this brings us to another important milestone in the history of Verona, when the second chapter comes to an end: On December 31, 1965 Mr. H. L. Urban went into retirement after many years of service to Bayer all over the world, and returned to Germany. The only disappointment about Mr. Urban was that he remained a “Mr. Urban” and that, among those of us who worked closely with him, we never achieved a “Hans” relationship. Yet, we very much like his warm relaxed and outgoing personality. There is, of course, no question that he accomplished a great deal for Verona and that he had a very tough road to hoe during his tenure. He helped to make Verona develop from its rough beginnings to a recognized member of the trade; he helped to introduce Bayer to the realities and peculiarities of the even more funds to convert our company after years of red figures into a viable organization which could stand on its own feet. Happily, the year 1963 showed the first profitable result and during his last two years with us the company stayed solidly in the black. On January 1, 1966 Jim Alexander took over as president of Verona-Pharma Chemical Corporation and a new chapter in the history of our company started, which in scope was to greatly surpass the two previous chapters. Jim came from Canada, where he had held managerial positions with Shawinigan Chemicals Ltd and McArthur Chemical Company. Before joining us he spent more than a year in Leverkusen in order to acquaint himself with the intricacies of the dyestuff business. On November 1, 1972, Jim Alexander said the following of his first impression and experiences with Verona in a speech which he delivered in Bushy Park: Let me first give you my impression of the status of the company at the time when I took it over from Mr. Urban. The greatest strength of the company was probably in the Sales Department. A small nucleus of experienced salesmen existed in the company. These men had very good contacts with the dyers and the management of the textile industry - particularly in the area of North and South Carolina. The Application Department at this time was competent in some fields but the number of trained people was too few to cover a market of the size of the United States. By January 1, 1966 the manufacturing plants had completed the transition from the Pharma management. The Uptown Plant had been modernized to a certain extent, the production had been converted from Azoics, which business was lost to Blackman-Uhler and other, to more sophisticated products such as the Astrazons. In fact, the first appropriation request that I worked on was an expansion of the Astrazon unit. The manufacturing was being built up at the same time by Dr. Schran at the Downtown Plant in the field of anthraquinone dyes -mainly vat and disperse types. I was fortunate while in Leverkusen in 1964 and 1965 to be able to recruit about half a dozen young textile engineers who came to join me in Verona. I judged those people to be technically competent and to have a personality that was flexible enough to allow them to adapt to the “American way of strife”, as it was termed by Dr. Goulden. It took some time for these textile engineers to adapt themselves to the United States. However, it is evident - in retrospect - that this strengthening of our sales effort with first class technical support was the real key to our success. Our competent technicians and salesmen were able to help the dyers solve their problems. This resulted in the larger sales and market share. A similar effort was not made by our competition. In fact, many of our major competitors such as Cyanamid and GAF reduced their technical efforts in an attempt to improve their profitability. Allied Chemical is treating dye sales in the same manner as chemical commodities. Since their research efforts had not produced the newer dyestuffs such as the fiber reactive with the higher profit margin, they found they were in a profit squeeze. Their economics are proving to be self-defeating. We attained about a 20% per year growth rate between 1965 and 1970. This growth started in 1965 - mainly with the basics and fiber reactive from the Uptown Plant and with the vats and disperse dyes from Downtown. It is of interest to note that the ratio of domestic production to products imported from Leverkusen has remained essentially constant between 66% and 72% over the entire period from 1965 to 1972. This means that as products grow in volume and manufacture is taken up here, they have been replaced by newer products from Leverkusen which have been imported. But let us get back to 1965 and try to recapture the atmosphere as it existed then. Since Jim Alexander had spent most of his time in Leverkusen in the ATEA, he came to us with a great deal of enthusiasm for the products, the technical talents and technologies available from Bayer. He was determined to combine that fund of know-how with the talents and assets he found in Verona and thus push Bayer into the front rank of the U.S. dyestuff companies. One could sense his impatience to get on with the job, and having been exposed to Verona’s reputation in Leverkusen, it is doubtful that he had too much faith in us at the beginning. A typical scene comes to mind when we were the only two passengers in the cavernous lobby of the old Newark airport on a peaceful Sunday evening. We were waiting impatiently for a delayed flight to the South which finally took off at 2 o’clock in the morning. But that, to Jim’s eagerness, still seemed much better than waiting until Monday morning. Once Jim found out that we were only too happy to work with him on our mutual goal, things began to happen. In fact, so many events took place in the ensuing years that it is difficult to put them all into chronological order. To those of us who had experienced the early years, this period was particularly exciting - the entrepreneur spirit, the largest in the means which became available, the breadth of imagination and thinking and last - but not least - the collaboration throughout the company. A restructuring of the organization took place which converted it from a shape of a pyramid more to one of an obelisk. Despite Jim’s authorization approach, management was not dictatorial and most decisions were arrived at by consensus rather than by dicturm and committees met regularly to hammer out plans and ideas. Responsibility was delegated and yet steps were taken that no one would operate in a vacuum or on a tangent. There were no neat little organizational cubicles and everybody knew pretty well what each one of us was doing. Most felt that this was a most satisfactory way of making a living and they gave their best. It was apparent that the two Bayonne plants would be unable to cope with the developing and anticipated sales volume and yet no expansion to speak of was possible in either plant. The stage, therefore, had to be set for new plant and a sufficient sales volume had to be built up to justify such a plant. We increased the number of salesmen commensurate with the task before us. We concentrated on those customer accounts where we could sell in volume those products which fitted into our production program, which meant directing our efforts mainly toward such companies as Burlington Industries, Deering Milliken, J. P. Stevens, Cone Mills, Dan River, Lowenstein and others of similar caliber. This was done in close collaboration with the Technical Department. Product managers were appointed as well as managers of specific application fields such as carpets. Technical symposiums were set up for small groups of customers. This was done mainly in the South but also in the North and it contributed greatly to our reputation in the trade and created closer contacts with the customer’s personnel. Technical papers were given at national conferences and new technologies and processes were promoted and discussed in meetings and plant visits. It was truly a period of flourishing technical activity which was carried out in close harmony and collaboration with the gentlemen of the ATEA in Leverkusen. The result was that our sales climbed in spite of the fact that after five years of boom, a severe slump developed in 1966 in the textile industry, caused partly by fewer military orders and partly by sliding demand. The industry showed very poor earnings, a condition which was aggravated by severe over-production. It was at this time that an intensive house cleaning started in textile manufacturing and processing with many companies, especially in the North, going out of existence. This process of elimination extended over several years and finally resulted in a healthier and more stable industry. A similar condition prevailed in the dyestuff industry where, starting in 1964, price deteriorations had started which by 1966 assumed major proportions, especially in volume items of the direct, vat, and modified basic groups. Discounts of as much as 25% were given and the era of “meet competition” pricing had begun. The Astrazons were particularly affected, since some of the smaller dyestuff companies began importing these types from Japan and tried to get into the market by slashing prices. Nevertheless, we almost doubled our own Astrazon production capacity in 1966 and stayed very much in the race. We started to manufacture other major products domestically in 1967 such as Levafix dyes, the famous Isolan Yellow NW, Alizarine Blues and Greens and Vats such as Yellow PG, Brown FFR, and Golden Orange 4G plus Phorwite BBH and others. Alex Frirdich came in 1965 and in the following year he was appointed manager of the new Sales Development Department which, in the beginning, concerned itself mainly with polyurethane products, optical brighteners and the paper industry. Later the leather industry and textile chemicals were added. Dr. W. Kass left on March 31, 1966 and went back to Leverkusen. Gunter Thiel took over as Manager of the Technical Applications Department. A branch operation with lab and office facilities was set up in Atlanta in 1966 to cover the increasingly important market which was rapidly developing in the TAG area. The main impetus came, of course, from the blossoming carpet industry which had sprung up predominantly in northern Georgia. The processing of tufted carpets moved relatively rapidly from rather simple beginnings, in any available garage or barn building, to highly sophisticated factories with new technologies, new processes and an infinite array of new styles, constructions and designs. We were very much involved right from the start in these new developments which included printing, continuous dyeing and different kinds of space dyeing. Needless to say, we benefited greatly from our close association with this practically new industry. A rather pleasant interlude occurred when it was decided that some members of our staff should attend the International Textile Machinery Show in Basle in the fall of 1967. A precedent had been set when Verona was represented at the previous show in Hanover in 1963. The idea was to be helpful to our American customers, to make them aware of our European connections and to do some institutional advertising for Verona and Bayer. Mr. Leymann was particularly helpful at these gatherings and arranged a most successful reception in one of the better restaurants in Basle. Numerous trips were made with U.S. customers to various textile and machinery companies in Europe and many valuable contacts were established which helped in later years. This brings to mind that no history of Verona would be complete without mentioning the contributions made by Fred Leymann in taking care of, and befriending, our customers during their European visits. An avalanche of American textile men descended upon Europe in the 60’s, mainly because of new textile machinery developments, and we encouraged them - whenever possible - to visit Leverkusen. These visits organized and supervised by Fred Leymann invariably made a lasting impression upon our customers and did much to cement our relations with them. The next important year in our history was 1968. Our sales had reached $26 million and we certainly were now in the front ranks of U.S. dyestuff manufacturers. We had grown faster than the annual 5% of the dyestuff industry and our market share was about 6%. Equally important, our ROI was 18%. The product groups in which we were particularly successful were the Vats, Basics and Blue Disperse dyes. As mentioned before, Pharma’s production output at the two plants in Bayonne of $18 million was close to capacity limits and no expansion was possible for lack of space. Therefore, a plan was hatched in 1967 to establish new manufacturing facilities at Bushy Park, South Carolina. The reasons were that this plant site: 1) was close to our main market in the south 2) provided sufficient land for future expansion and growth 3) enabled the establishment of facilities for waste water treatment and the meeting of the new ecological requirements In 1968, 1,300 acres were purchased in Bushy Park and the estimated investment of $17.2 million was approved at the end of that year. Early in the year, John Schwager chose to go into retirement for personal reasons, although he was still to perform valuable services for Verona later on, on a part-time basis. One of our oldest branch operations in Haverford, Pennsylvania was closed during this year and Bob Hill came to Union to sell to our co-manufacturers and dealers. Dr. Machatzke came to us from Bayer on April 1, 1968 and started working in Plant #1 in Bayonne. Al Lubin joined us as Assistant Sales Manager and concentrated on the re-sale business, our sales to the paper trade, and later became the Sales Manager of the Northern sales region. Hans Teich became an important pillar in our Technical Department in 1968 after working for almost 2 years for Burlington Industries trying to organize a new wool yarn dyeing operation in North Carolina. The year 1968 was also the year when textured polyester knit goods began to assume major importance, as indicated by the jump in Resolin sales from $2,373,000 in 1967 to $3,642,000 in 1968. A rather important visitor must be mentioned her - Dr. Dittmer - who came to us in 1968. He stayed with us for about 6 months in order to observe our marketing activities. This was in line with a study program he carried out in various parts of the world in order to prepare himself for his elevation to a wider field of responsibility in the Bayer hierarchy. He adjusted very readily to his new surroundings and formed many close ties which were to last for years to come. But let us get back to the final years of the 1960’s. Rock Hill finally vacated its tight quarters on York Avenue and moved into a brand new building in 1969 which was constructed according to our specifications and which made us the first occupant in the Rock Hill Industrial Park. This building contained offices, laboratory and warehouse for a staff which had grown to 100 people to cover the most important textile states of the Carolinas and Virginia. Our annual sales to Deering Milliken alone had grown to $1 million and to Burlington Industries to $3 million. Not long after we moved in (in 1970) pigment compounding units were set up for the printing industry which - in later years - were to contribute handsomely to our overall profits. By 1972, this compounding plant generated sales of $4.5 million with an ROI of 50%. However, the biggest event occurred when the first stage of the Bushy Park plant was finished in the fall of 1970. Apart from the important long range implications of this happening, we anxiously hoped that these new facilities would have the short term effect of relieving severe shortages of disperse dyes which had developed because of the capacity limits of our Bayonne plants. An elaborate opening ceremony was organized to which we had invited many of our customers and dignitaries of the chemical industry and the political world. The festivities took place in the finished goods warehouse before a sizable audience and Jim Alexander, Prof. Hansen and Governor West were the principal speakers. This was followed by an inspection of our new plant and there was no doubt that our guests were impressed. Even the elements could not contain their exuberance after the successful ceremonies were over, and burst forth into a magnificent thunderstorm which plunged most of the city of Charleston into a blackout. Consequently, the evening of festivities took place at candlelight which underscored the historic traditions and the charm of this attractive town. During the following days we visited the presidents of our two largest customers with Prof. Hansen and discussed Bayer’s considerable technical and economic resources. We emphasized our customer’s access to this important chemical giant through Verona. Early in 1971 we held a Sales and Technical Conference in Charleston at which we dealt particularly with the problem of declining profits. Stagnant selling prices and unexpectedly high start-up expenses at the new plant had a rather negative effect on our financial results. The emphasis in our deliberations was on plans to bring about greatly increased sales with volume preferably in the most profitable products. The jump in sales from $30 million in 1969 to $67 million in 1972, with an equally dramatic increase in income, showed that we took this concern seriously. In line with our above-mentioned financial problems, the abortive 10% price increase was launched during the first quarter of 1971 which - in later years - was to lead to such expensive litigation. Moreover, with most products, this price increase could not be maintained. In the same year we opened up our first West Coast branch office in Los Angeles under Al Meilink. We had observed and visited this market from Union for a good many years. When some important carpet manufacturers started operations in California, the time seemed ripe for a branch operation which proved to be the right decision. Dyestuff manufacturing was discontinued at our downtown plant in Bayonne on July 1, 1971 because of pollution problems. Besides, the products made here could be produced more economically in Bushy Park. On October 1, 1971 all Bayer’s U.S. subsidiaries were merged into Baychem Corporation with total sales of about $200 million. This step, however, did not affect the independent management of the individual divisions. A big jump in sales was accomplished in 1972. The increase was 35% for the company as a whole, but 42% for the Mills Department. Our re-sale sales went down slightly because we were already selling three times as much to our co-manufacturers as they were selling to us. We had an R.O.I. Of 12.2% which was considerably better than in the two previous years. Our position in the U.S. dyestuff industry improved further from a market share of 10% in 1971 to 11.8% in 1972. Our sales of Resolin dyestuff went up considerably and the work done by Leverkusen on the mechanism of dyeing these products certainly helped. Levafix and acid dyes sales increased and new types of the latter range were being produced domestically which the market demanded and which were not in Bayer’s line. Our sales in the printing field developed most successfully and climbed to $13.8 million in 1972. Meanwhile, Alex Frirdich, who had been in charge of our Sales Development Department left Verona on March 31, 1072 and took over the management of Bayer’s dyestuff and organic chemical sales operations in Canada. On July 1, 1972 Helmuth Prochaska came to Union from Rock Hill and took over Alex’s job in addition to his management of the Printing Department. A decided change in the fortunes of the company occurred in 1973. The first half of the year was still relatively good with sales 17.5% ahead of the previous year. But at mid-year a decided turn for the worse set in with the result that by year’s end our sales were about 10% below budget, accompanied by a decided nose-dive in profits. In fact, the company operated essentially on a break-even basis during the second half of 1973. The main reasons for the abrupt change in the situation were: 1. The changes in the value of the U.S. dollar vs. the Deutsche mark and the resulting increase in the cost of intermediates and finished dyestuffs. 2. A sudden drop in the demand for dyestuffs. This sudden change in the sales level at mid-year took us completely by surprise. It brought a change from shortages to the accumulation of excessive inventories. As business slowed, competition became fiercer than ever and some prices dropped by as much as 20%, e.g. Astrazons. Everybody tried to keep as much of the shrinking market as possible and we found ourselves hard pressed to meet some of the price reductions in view of our greatly increased costs. The range that affected us to the greatest extent was the Resolins. Our sales had mushroomed to the point where in late 1972 and early 1973 we outran production capacity in spite of our new facilities in Bushy Park. It had become necessary to put six of our main Resolins on allocation which resulted in loss of business to the competition who had ample supplies and in certain cases offered lower prices than we had done. All of this meant that our sales attitude which had been conditioned by continued growth and allocation of dyes supplies, had to be changed back to our old traditional aggressive sales approach. Meanwhile, Dr. H. Machatzke had been made Vice-President in charge of manufacturing on July 1, 1972 after having managed the two Bayonne plants, succeeding Mr. D. Del Guidice who passed away on May 13, 1972. Mr. Henning Richter-Oldekop joined us on January 1, 1973 and was most helpful in our efforts to get the best possible prices for our products in spite of competitive pressures and an unfavorable cost situation. In August of 1972 we opened up a new and sizable office in Providence, Rhode Island which had been intended to a large extent to aid the sales efforts and requirements of our Sales Development Department in the non-textile field. Bert Celetano was in charge of our New England operations and had made a major contribution in building up this territory for us. He died quite unexpectedly not long after the new branch building had been put into operation. In Bushy Park, Bldg. C9-2 was authorized in 1972 when the plant was producing close to capacity. This building was finished in 1973. An official opening ceremony was arranged once again, but this time the invited guests were member of our staff who had joined Verona in 1960 or prior, Mr. Urban and Dr. Delfs came from Germany and many of our employees saw Bushy Park for the first time. The occasion was a great success and did much to maintain the high morale in our company. On July 15, 1974 we opened up a most attractive building of our own in Dalton, Georgia which became our headquarters for the TAG area. John Sutton our branch manger had built up our reputation and our sales in this territory over many years until we outgrew our Atlanta facilities and moved to Dalton, the center of the carpet industry. This was the last expansion move made by our company and the history of Verona as an independent corporate entity came to an end in August 1974 when it became the Verona Dyestuff Division, Mobay Chemical Corporation and started a new career as a member of a most promising and expanding organization comprising most of Bayer’s subsidiaries in this country. From this point on, history turns into current events. Adverse business conditions continued to the end of 1975 but in 1976 Verona recovered both in sales and profits. Several competing companies fell by the wayside during these last competitive years and Verona climbed form its number 3 position in 1973 to the number 1 position at least as far as textile dyestuffs are concerned. When Mobay Chemical Corporation was created in its present form, Jim Alexander moved to Pittsburgh, Pennsylvania as Senior Executive Vice-President. Fortunately for Verona, Dr. H. Machatzke was chosen to succeed him and became Vice-President and General Manager of Verona. This was far from being an ideal period in which to take over an assignment of such importance since sales declined because of unfavorable business conditions. At the same time, there was a transition period when Verona as well as Mobay had to adjust to the new organization framework of being much more integrated into Mobay Chemical Corporation than it had been previously. This involved new lines of authority and required flexibility and tact, qualities with which Dr. Machatzke was well endowed. Mr. Richter-Oldekop became Director of Sales in November of 1975; Mr. Prochaska took over as Manager of the newly acquired Harmon Pigments operation and Mr. Karl Lange became Marketing Manager of the Non- Textile Department. It should also be said that the history of Verona would not be complete without the close contact with Rolf Lienau from its very beginning to his final retirement. Rolf was as much responsible as anyone for the acquisition of Verona and it would seem likely that during our struggling years this decision was not always hailed in Leverkusen as one of the wisest moves. We certainly must have been a cross to bear at times but it must give him satisfaction as it does to all of us that the final outcome of Verona’s history proved him right. It is worthwhile to remember that when Verona started those who believed in our chances for success were very much in the minority. And if we did wind up number 1 in our specific field of endeavor it is because of the spirit and commitment of Verona’s staff and because of our great and good fortune of getting the support of Bayer’s vast human as well as technological resources." Click on photos to enlarge: |
| Verona Headquarters |
Gunter Thiel ca. 1989
Dr. Hans Schran-1967
James H. Alexander-1967
| Verona Resiren Dyes Mobay Chemical Corporation Annual Report 1975 Click to Enlarge |
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Helmuth Prochaska-1972
Dyestuffs
| Fred E. Hilger Photo: American Dyestuff Reporter 1953 |
Verona Dyestuffs Plant 1-Bayonne ca. 1970
Verona Dyestuffs Plant 2-Bayonne ca. 1970
Verona Dyestuffs Bushy Park, SC Plant ca. early 1970's
| ColorantsHistory.Org |
| Original Management of Verona Dyestuffs Division of Mobay Chemical Corporation Reunite at Bayer Corporation Bushy Park, SC Plant in Spring 1997. Left to right: Alex Frirdich, President Bayer Inc., Canada; Mrs. Frirdich; George Struzyna, VP Engineering; James H. Alexander, Executive VP Mobay Chemical Corporation; Mrs. Alexander; Mrs. Machatzke; Dr. Heinz Machatzke, President; Mrs. Prochaska; Helmuth Prochaska, General Manager of Harmon Colors. Click to Enlarge. |