SIG moves with the times

SIG packaging for Corona beer. SIG

For almost all of its 150 years, the SIG company made its name by producing railway wagons and firearms for the Swiss Army.

Then a decade ago, the industrial concern based in Neuhausen am Rheinfall gave up those loss-making sectors to concentrate on packaging.

SIG was founded by three men – railway pioneer Friedrich Peyer im Hof, watchmaker Heinrich Moser and industrialist Conrad Neher – on January 17, 1853, as the “Swiss Wagon Works near Schaffhausen”.

The founding fathers, who each contributed SFr50,000 ($36,150) to the start-up capital, were quick to spot the potential for water power from the River Rhine.

“At the beginning there was a mechanical axle going directly from the Rhine Falls to the manufacturing unit and a few years later they built an electricity power station,” SIG chief executive Roman Boutellier told swissinfo. The company today still owns the hydraulic plant.

The company was never a cottage industry because from the beginning it had a staff of around 150 working in the fitting, forging, carpentry and assembly shops.

Faith and vision

With the Swiss Confederation about to create a federal army with standardised weaponry, SIG’s timing was perfect.

The Vetterli rifle, which appeared in 1868, was an immediate success. It was the first mass-production, field-grade, repeating rifle with high interchangeability of parts.

As a result, SIG became a supplier of small arms to the Swiss Army and, through numerous developments, maintained that status until the end of the 20th century.

“SIG is very well known for high precision and also very high reliability,” Boutellier told swissinfo.

Throughout its 150 years, SIG not only supplied firearms and railway wagons, it also diversified into other areas.

Perfect timing

Looking back, the choice of location showed vision and faith in the future because the factory was not at the outset connected to Switzerland’s railway network, which then consisted of just 23 kilometres of line.

In the early days the wagons therefore had to be hauled by horse-drawn cart to Schaffhausen railway station. It was only years later that the first siding track reached the plant and the old, arduous form of transport could be dispensed with.

The history of the company reveals that SIG had started manufacturing firearms by 1860, with an order that year for 1,600 hunting rifles.

Switzerland was then moving towards a more organised federal state and was seeking to strengthen its defence capabilities in the face of what it saw as “unstable” national states surrounding it.

Luxury harem on wheels

In 1919, it risked going into the automotive sector by building a luxurious mobile home for an Indian maharajah. It was used to transport four women from the maharaja’s harem, who were accompanying him on a tour of First World War battlefields in France.

It featured a drawing room, kitchen, shower, air conditioning, electric light, hot and cold water, as well as a toilet that doubled up as a photographic darkroom.

The company has also produced trucks, buses, trams, electric vehicles, gliders and power cranes over the years.

The strategic decision to leave the railway carriages and firearms businesses was taken about ten years ago to enable the company to concentrate on another of its core businesses – packaging.

“You can still travel in SIG railway carriages. There are hundreds of them still travelling throughout Switzerland. This was a national business until a few years ago,” explained Boutellier.

But the railway carriages fell victim to the concentration process of the 1990s. SIG incorporated its rolling stock division into a joint venture with FIAT before it sold all its shares in 2000 to the Alstom group.

Painful break-up

The sale of the firearms division was also a painful experience.

“This was very difficult because there was a lot of emotion involved in it. Every Swiss soldier has his SIG rifle at home, and here in Switzerland we are still known as the firearms company,” added Boutellier.

“It was very hard to convince the people that we had to go into a new direction. We did market research which told us there were better opportunities elsewhere.

“We also found out that the Swiss Army wasn’t going to order new weaponry, which meant we were heading for losses and that helped us to convince the people.”

The strategy of concentrating on packaging technology was defined in 2000, but SIG was no stranger to the sector: the company has been involved in packaging for almost a century.

From Toblerone to carton bricks

“Packaging started with Toblerone chocolate – the chocolate that looks like the Matterhorn, about 100 years ago… but 15 years ago we bought Combibloc, which is the number two behind Tetra Pak in making carton bricks,” Boutellier explained.

“This has changed the whole company because there’s very good business there.”

“Packaging is very close to basic human needs. You eat and drink whether it’s a recession or a boom phase, and therefore we think it’s a very stable business. It’s also a growing business because the population is growing,” he added.

The structure of the group now makes it one of the biggest providers of packaging solutions worldwide, offering solutions for solid and liquid food, and non-food products.

Boutellier admits that times have not always been easy for SIG over the past century and a half, with the last two and a half years being particularly challenging.

“But the values already represented by the founders, with their railway rolling stock business, remain the same: quality, ruggedness and reliability,” he said.

swissinfo, Robert Brookes

Key facts

SIG was founded on January 17, 1853.
The first SIG railway wagons received awards at the World Exhibition in Paris.
In 1863, SIG was awarded a major contract for infantry rifles to equip the Swiss Army.
The last large-scale military contract for SIG was the model 90 Swiss assault rifle.
The company says that worldwide, up to 50 per cent of all foods perish because of inadequate packaging.
In 2001, the SIG Group reported net sales of SFr2.4 billion, with about 9,200 staff. Net profit was SFr52 million.