The return of the family: Stefan Messer

Its name has long been associated with expertise in industrial gases. For more than 115 years, Messer Group has been manufacturing and supplying the likes of oxygen, nitrogen, argon, carbon dioxide, specialty, and medical gases to customers in a variety of sectors, from food services to industrial manufacturing. While the original Messer family wholly owns the company today, it hasn’t always been that way.

Expertise in industrial gases

Founded in Germany in 1898 by Adolf Messer at age 20, in 1965 — under the leadership of Hans Messer — a merger between Messer Group and Knapsack-Griesheim, then a subsidiary of the chemical group Hoechst, took place. This enabled the new business, Messer Griesheim, to grow significantly and evolve into a global enterprise.

Since 1979, Adolf Messer’s grandson Stefan Messer has worked in the family business. His view was that he and his siblings should retain their long-term influence over the company and in 1999 he purchased Messer Griesheim’s cutting and welding division on their behalf. With the support of the financial investment company Carlyle, this later merged with Castolin Eutectic to form the Messer Eutectic Castolin Group — a new company of which the family held 36% of shares. After restructuring, the family purchased the shares off Carlyle, which has meant that, since 2005, they’ve held 100% of the shares.

In 2001, the Hoechst percentage of shares in the remaining gas business were transferred to financial investment companies Goldman Sachs Funds and Allianz Capital Partners. As the new majority shareholders, they had a tricky job ahead of them; the company had been struggling for years and by spring had hit a net deficit of about €1.6 billion. Over the next few years, the investment companies focused their attention on restructuring the business and relieving it of debts. Consequently, Messer Griesheim divested a number of its holdings and ‘slimmed down’ its operations.

Reclaiming full ownership

"After a few more years we had the option to take back all of the shares — held by Goldman Sachs Funds and Allianz Capital Partners — to regain full ownership of the Messer Griesheim company," Stefan says. "However, in order to do this, we had to shrink its operations. We withdrew from some of our activities, and we focused on what we were doing in Western and Eastern Europe and in China."

Between 2004 and last year we invested more than €2 billion, generated from our cash flow, into new plants and our growth.

Stefan says that the biggest opportunity was to restructure the European business and to create a strong strategy that would take Messer Group to new heights. "We started a program called ‘Independence’ and we invested a lot of money to rebuild a series of air separation and CO2 plants in lots of countries in Europe," Stefan says. "This was in order to manufacture all of the types of gases we sell; we wanted to produce them all ourselves.

"The other opportunity was our growth strategy, particularly in China and Vietnam. We started a lot of new plants, took over the gas supply for some of the big steel companies, and this was all predominantly happening in Asia."

Back in the black

Today, Messer Group is an extremely robust player in its sectors, back in the black with annual revenues of €1.7 billion. Stefan credits its success to having a long-term view on doing business, as opposed to looking only for short-term gains.

"Our focus is now on strengthening our existing markets," he shares. "Between 2004 and last year we invested more than €2 billion, generated from our cash flow, into new plants and our growth. We are consolidating and strengthening our existing markets and are looking for expansion in South East Asia. In Vietnam we already have a very good position; we are the biggest gas company there. We are looking for new projects in the other ASEAN countries like Malaysia, the Philippines and Indonesia. We have opened an office in Singapore to analyse the market and to find potential projects there. It’s all going well, we already have a couple of things in the pipeline."

Stefan notes that Messer Group is a family-oriented organisation that looks after its customers as well as its employees. "These are important values for us," he says. "We encourage responsible behaviour, operating responsibility, excellence, mutual trust and respect. We work in a variety of different countries so we have to respect all of the cultures out there. We have a culture of trust, and we are very open; it’s as if we are one big family."