25 Years Kraeber & Co GmbH
A Retrospect - A Prospect
On this anniversary the most significant question I ask myself is:Would I establish my own company once again?
This question I shall answer at the end of my reflections. Beforehand, however, I shall make a few personal remarks.
On the 27th November 1979 I visited a notary public with my wife (at that time two share holders were required to set up a GmbH) and asked him to register the company Kraeber & Co GmbH to begin business on the 1st January 1980. The business began with a capital of DM 100.000, of which DM 27.000 was invested in the office equipment.
At the beginning of December 1979 I received a demand from the tax office to pay DM 76.000. For this reason we effectively started the company without any working capital. The tax back payment was based on an audit of the companies Holtraco and Alfred Nupnau, their activities having been sold to the Intsel Corporation, New York, in 1977.
My "Capital" was that I was well known in the German pharmaceutical industry and viewed as trustworthy.
To assist in gaining a better understanding a short summary of my curriculum vitae:
- Gymnasium (High School, uncompleted), 2 years 'Handelsschule' (college - commercial education)
- Not one hour of training in Chemistry
- Apprenticeship in the Export of "Sundries" at the Hamburg Export company Heinrich Umbach, starting 1953
- 10 years at Karl O. Helm (now Helm AG), Hamburg, building up the Pharma-Import Department
- 10 years as share holder in the firms, Holtraco and Alfred Nupnau with partners Peter Claus Ahrens and Hans-Jürgen Ahrens, building up again a department dealing in pharmaceutical raw materials
- 2 years as Managing Director of the Hamburg establishment of the Intsel Corporation, New York to whom the activities of Holtraco and Alfred Nupnau were sold in 1977
Independence and self-determination are very important prerequisites for me. It was difficult to accept the situation during the time as Managing Director of Intsel, because often changing instructions coming from the central office in New York had to be followed. For the same reason I did not accept taking the management of Marsing & Co, Copenhagen. In 1978, I had assisted John Marsing in the sale of his firm, Marsing & Co, to Intsel.
We booked the first order on the 2nd January 1980, arranged through my friend Jürgen Utermark of the Hamburg broker C. Reifkogel for the company EP Feinchemikalien Handel GmbH, Hamburg, for 1000Kg pharmaceutical grade Resorcinol and 1000Kg technical grade, which I obtained from my friend Horst Dieter Katthage from Dr Bohne & Co, Schwelm. I initiated the refining of the highly purified material from the technical grade by Dr Bohne in 1964. Today we are leaders in quality in the worldwide market. This is to demonstrate the continuity of our business.
We founded the 'Kommanditgesellschaft' (limited partnership) Kraeber GmbH & Co in 1986, in which my wife and both my children, Anja and Jan were incorporated. Besides tax reasons it was our idea to bring the children into the firm as partners at an early stage. Kraeber & Co GmbH became the complementary partner of the KG and undertook the management. The routine business was from this point the responsibility of the KG.
From the beginning of my activities in the area of pharmaceutical raw materials during the sixties I recognise the following requirements as essential. They are still now the basis for our activities:Reliability - Continuity- Quality- Price
When we are taking new products into our sales portfolio, we base on these principles. We must be able to guarantee long-term supplies and reliable qualities. Business is based on exclusivity agreements with conventional and / or contract manufactures. In 1982 we began our own production. Sheep plasma for heparin analysis was our first product. In the meantime we have become the main producer of animal blood fractions in Europe.
We restrain from doing 'spot business', to make a 'fast buck'. Continuity is most important for us, as this is the basis of reliability. My principle was always "I must not become rich this year".
The lack of finances meant that there were 12 years total dependencies on the banks. We paid temporarely up to 16 % interest. That made it difficult, to increase the necessary company capital to finance investments and the continuously growing turnover.
Help was at hand by chance. We received the request to develop a special product, which we could supply during several years generating substantial turnover with very interesting profit margin.
Problems were on the horizon in the form of new regulations and directives. In 1998 we purchased a commercial site and space in Ellerbek, in which we built our 'state of the art' production facilities for blood fractionation. Precisely at the time when we submitted our application to obtain our production licence, without preliminary warning, a new alteration was included into the German laws that active pharmaceutical ingredients of human, animal and biotechnology origin have to be produced and documentated in accordance with the GMP regulations. Our authority in Kiel informed us simultaneously that animal blood fractions used for the manufacture of vaccines or diagnostics are treated as active substances. Our submission was only accepted after two years.
In the meantime we had invested € 300.000 in our change of EDV hardware, we installed the 'Charisma' software from GUS AG, Cologne, and introduced GMP documentation. Today we are overall pleased, that we went ahead with this programme. Today all medicinal manufacturers worldwide require GMP production and documentation of all active materials.
Difficult for us was the fact that many users stopped including animal origin materials, particularly, in the manufacture of vaccines, in the cosmetic industry and in the biotechnology industry due to BSE, swine fever and chicken pest. The result was a temporary decline in turnover in the animal blood fraction division up to 70%. Meanwhile we could compensate this decline.
During 2002 Jan Michael Kraeber became an equal partner and managing director. The handing over of responsibility goes speedily on. I have reduced my working hours from 60 to 40 hours per week and can pull myself back from problems. The company is on a good financial footing and well organised, the niche products are available long term, the quality of our products correspond to or surpass the newest requirements and we have not to be anxious about our competition. The personnel is well trained, trustworthy and work independently and with self responsibility, Jan (my son) has the necessary training and knowledge and will have support from Franziska Faber (my niece), who is limited partner and authorised representative. The book keeping and accounts are handled by Anja Kuhnert (my daughter).
Thanks must not only go to my employees but also to our suppliers and contract manufacturers. Especially also, to our customers who have facilitated by continued purchases thereby helping the building and continued growth of our business. Many of my business partners, with whom I communicated through the last few decades, are in the meantime retired. It is time to hand over the responsibilities to the next generation after more than 50 years in business.
Now as a pensioner I have time to work!
Only without the responsibilities of the daily business, am I able to deal with new opportunities. I can seek new partners as distributors, find new products, which we can manufacture or have manufactured for us. Manufacturing procedures to find or to acquire is an interesting job.
We have a good basis for this development work. We have an extensive library, experience and knowledge to build 'clusters', i.e. cooperation between specialists, along with the access to several international databases, the access to the worldwide market and reliable partners for development work and production.
The outcome of these activities is the production of Erythrulose, a substance that acts as self-tanning agent.
Finish working? No, why should I. I have made myself self reliant, independent and self determined in my time and can choose my activities. Why should I give this up? So to answer the question that was asked at the beginning:
I would establish an own company again, but certainly not under the same circumstances.
Today one must be aware of the fact one must be able to fulfil large amounts of additional legislation. Estimated approximately 300.000 laws and directives have to be followed. A company requires at least a general manager, a production manager, a quality controller, a first aid person, a risk assessment, a safety officer, fire officer, a bookkeeper, a computer expert, a tax adviser and especially a lawyer in order to ensure that none of these laws and directives is contravened! Ah, yes, one also requires employees to do the work and to earn money.
Starting today without ones own working capital together with just two assistants, as I managed to do, is no longer possible.
I request our partners to join together with us to continue another 25 years building up new business to our mutual benefit. There are never ending opportunities that we can make every effort to make a good living. It is only necessary to bring together the special knowledge and ideas of individual experts in order to generate new business. Our part is principally the organisation of the co-operation between the specialists and the putting together information.
I have a vision: The future will bring many new and very interesting developments. We shall find our share. We are moving forward with confidence. It can only keep improving.
Jens- Uwe Kraeber
in December 2004