Curtain falls on Schmidheiny era

The production of cement - here a Holcim factory in Siggenthal, northern Switzerland - was one of two pillars for the Schmidheiny business empire Reuters

The decision of Thomas Schmidheiny to stand down this week from the board of Lafarge-Holcim marks the end of an era for the most important Swiss industrial dynasty of the 20th century. The 72-year-old billionaire is one of the principal shareholders of the world’s largest cement company. 

This content was published on May 11, 2018 minutes

It was great-grandfather Jacob Schmidheiny who got the ball rolling in 1867, when he took charge of a small brickyard in eastern Switzerland and successfully expanded it. 

His sons, Ernst and Jacob II, continued the business. Ernst invested in cement manufacturing, which would later develop into Holcim. The third generation, Ernst’s sons Max and Ernst II, focused on the production of cement and passed on the business to Max’s sons Thomas and Stephan in the 1970s. 

Stephan Schmidheiny (left) in 1988; his brother Thomas in 1991 Keystone

These two would attract much admiration during their business careers but also a lot of criticism. 

Thomas, a qualified machine engineer, worked his way to the top of the company. His brother, two years younger, qualified as a lawyer and took over the asbestos side of the business, which would later trigger a scandal that no one could have foreseen. 

Prison sentence 

Years before the carcinogenic effects of asbestos were proved, Stephan Schmidheiny was promoting the development of asbestos-free panels. 

In 1988, he began separating himself from all shareholdings of the asbestos group, creating foundations for victims of asbestos and getting involved in sustainable economies. As the main business consultant at the United Nations conference for the environment and development, he worked closely on issues of ecological and social sustainability. Since then, the multibillionaire has been considered a philanthropist. 

Nevertheless, he was sentenced in Italy to 18 years in prison in connection with the deaths of factory workers who had been exposed to asbestos at Eternit Genova, a firm that owned four asbestos factories in Italy in which Schmidheiny was a majority shareholder. In 2014, the Italian Supreme Court overturned the ruling, saying the statute of limitations had passed. 

Anti-corruption investigation 

Somewhat less of a moral burden was the Holcim cement company of which his brother, Thomas, was CEO from 1978 to 2001 and chairman of the board of directors from 1989 to 2003. 

But Thomas was also the target of criticism on several occasions, for example for the company’s wage policy in South Africa. Revelations in an insider report damaged the industrialist’s reputation. 

He also attracted the interest of Spanish anti-corruption authorities, getting off with a fine of “only” €1.5 million (CHF1.78 million) thanks to his willingness to cooperate. 

He also made headlines for his co-responsibility as a board member in the collapse of the Swiss national airline Swissair. 

Diverse portfolio 

Under Thomas Schmidheiny, Holcim expanded in promising growth markets in Eastern Europe, China, India and Southeast Asia. Along with another Swiss industrialist he also controlled Lonrho, active in Africa. 

In addition, he owns the Grand Hotel Bad Ragaz in eastern Switzerland, various wine estates and an art collection comprising above all works by the Swiss painter Ferdinand Hodler. 

In 2015, Thomas Schmidheiny orchestrated a merger with French company Lafarge.

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