Global trader cements Swiss roots with listing

Western brands are queueing up to break into Asia DKSH

Multinational trade firm DKSH that bills itself as the largest privately held company in Switzerland has announced plans to list on the Swiss stock exchange.

This content was published on February 19, 2012

The company has grown to a significant size in recent years by helping other firms trade in foreign markets. Yet DKSH has a low profile in Switzerland where it has been dubbed the “silent giant” by the media.

Parent company Diethelm Keller Holding, headquartered in Zurich, announced this week that it intends to publicly list shares in Switzerland by July.

The initial public offering will allow the fourth generation of the founding families, personified most notably by group chairman Adrian Keller, to cash in a portion of its stake before handing over the remainder to the fifth generation.

The company has been gradually building up to the IPO since the 2002 merger of Diethelm Keller Services Asia and SiberHegner Holding, which were both set up in Asia nearly 150 years ago.

“We see this move as an opportunity to sustainably enhance DKSH’s brand recognition among existing and potential new clients and customers, as well as favouring us in the labour market when recruiting top talent,” DKSH chief executive and president Jörg Wolle said in a statement.

Asian roots

The much anticipated listing is the second large IPO in Switzerland in successive years following the entrance of commodities giant Glencore on the Swiss stock exchange in 2011.

DKSH has a long history of trading in Asia and can trace its roots back to three Swiss entrepreneurs who set up separate companies in Japan, Singapore and the Philippines to take advantage of newly opened markets in the late 1800s.

The earliest of the founding firms, Siber & Brennwald – the precursor to the SiberHegner group, was established in Yokohama in 1865 to facilitate the trade of Swiss cloth and watches to Japan and Japanese silk in the opposite direction.

At the turn of the millennium, the other two founding companies – Diethelm Holding and Edward Keller Holding – joined forces. Two years later this group merged with SiberHegner to form DKSH.

The newly enlarged enterprise specialises in the so-called “market expansion services” (MES), helping other companies break into the fast growing Asian markets, set up supply chains and logistics infrastructure, market and sell their goods.

Expanding expansion market

Consultancy firm Roland Berger estimates that the MES business in the region will grow in value from $433 billion (SFr398 billion) in 2010 to $637 billion (SFr585 billion) by 2015.

A study by the consultancy group believes this will be fuelled by a six-fold growth in middle class consumers in the region by 2020, increasing Asia’s share of global consumption from 23 per cent in 2010 to 42 per cent in the next eight years.

The Swiss watch industry has been particularly successful in Asia, with a 49 per cent increase in exports to China boosting worldwide figures by 19 per cent last year. Roland Berger estimates that MES specialists picked up around $1.3 billion in business on the back of this success.

DKSH reported revenues of SFr7.3 billion ($8 billion) last year with a 22 per cent rise in operating income to SFr238 million. All but 4.2 per cent of total revenues were made in the Asia-Pacific region.

While observers view the listing as a logical step for the expanding multinational, Switzerland will lose a major player from its broad ranks of family run enterprises.

Family planning

Some 88 per cent of the 310,000 companies in Switzerland are controlled by family interests, a number that is expected to remain stable, according to Phillip Sieger from St Gallen University Centre for Family Business.

“There is no critical size beyond which a company can no longer operate as a family run enterprise,” Sieger told “We see many examples of very large companies under family ownership across the world.”

Of the family firms in Switzerland, more than 77,000 are facing succession issues within the next five years, according to a study published by the university last year.

Only one per cent will solve the issue with an IPO, the survey states, while more than half of the firms that carry on will be sold to staff. The remainder will be sold to another firm, to friends of the owners or to external buyers.

DKSH CEO Jörg Wolle is aware of the risks that a public listing presents. “We are conscious of the fact that an IPO will expose DKSH to public scrutiny to a far greater degree than in the past,” he stated earlier this week.

However, observers believe that DKSH has potentially less to lose from opening its books than Glencore, a company that moves in the secretive world of commodities trading often in turbulent countries.

Having raised fresh capital with the sale of shares to private investors in 2008, Wolle also sees the potential gains to be made from the planned IPO.

“It will help us to sharply raise the profile of our company among our existing and potential shareholders,” he said.

The DKSH story

The roots of DKSH can be traced back to an 1863 Swiss trade mission that included 24-year-old merchant Caspar Brennwald in its ranks.

After playing a part in the Swiss-Japanese Treaty of Friendship and Trade, Brennwald – together with partner Hermann Siber – founded a company called Siber & Brennwald in Yokohama.

The company, trading in Swiss watches and cloth in exchange for Japanese silk, was the forerunner of SiberHegner.

In 1868, another Swiss entrepreneur, Eduard Keller, started work in the Philippines and set up his own firm – Ed. A. Keller & Co – in 1887.

The same year (1887) Wilhelm Heinrich Diethelm set up Diethelm & Co in Singapore, trading primarily in kerosene and rubber.

In 2000, Diethelm Holding and Edward Keller Holding merged to form Diethelm Keller Holding.

Two years later, the group merged with SiberHegner to form DKSH.

DKSH reported revenues of SFr7.3 billion in 2011, an operating profit of SFr238 million and net profits of SFr152 million.

The company employs 24,000 staff in 650 locations in 35 different countries.

DKSH Japan now helps companies around the world – in such diverse fields as pharmaceuticals, chemicals, machinery, consumer goods, food products, performance materials and technology - to establish themselves and to trade in Asia.

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