Kraiburg Austria – a ‘colourful’ 50 years

It’s been half a century since the founding of leading retreading materials provider Kraiburg Austria. At a celebration marking 50 years in the business in early June, the Geretsberg, Austria-based company looked back upon a “colourful and varied history.” It’s a history that wouldn’t have been such a successful one had the company not enjoyed the continued and full support of founding and owner family Schmidt and the entire workforce at the Geretsberg site. Fifty years of Kraiburg Austria – it is a success story with a bright future, and at the company’s golden jubilee celebration this was shared with around 100 political, business, industry and media representatives.

The very fact that Kraiburg Austria was founded in Geretsberg, Upper Austria in the summer of 1964 can be traced back to the political upheavals that followed the Second World War. The Schmidt family had already established a business 60 kilometres away from Geretsberg in Waldkraiburg, Germany as early as 1947, however Austria wasn’t a member of EU predecessor the European Economic Community (EEC); it belonged to the European Free Trade Association (EFTA), an organisation set up as a political and economic counterbalance to the EEC. Fritz Schmidt Senior, Supervisory Board chairman and Kraiburg shareholder, recalls that a consequence of these two competing economic areas was high tariff barriers between the regions.

This situation made life complicated for those doing business in border areas. But duties were avoidable if production took place within the region where they’d be sold – Kraiburg Austria was thus established in Geretsberg; the German company went international and the business was able to continue growing and flourishing.

Rubber production in Geretsberg began on 3 August 1964 at a former sawmill, with a workforce of nine taking care of the operation. The initial target capacity was 60 tonnes of material per month; output half a century later is more than 2,000 tonnes each month. An important growth factor was a contract signed with retreader Bandag. Kraiburg Austria already had business relations with retreading company Schelkmann in the 1960s, however the company’s entry into pre-cure retreading first took place when Bandag entered the European market. It started producing treads for the US firm, which was then headed by Steve Keller, in 1970. The new pre-cure tread business rapidly developed, and in 1982 Kraiburg Austria decided to market its own products in Europe – the Bandag contract was terminated and “The Original” subsequently established.

But Kraiburg Austria’s success story almost came to an abrupt end in the mid 1970s. On 11 August 1976, a major fire broke out at the Geretsberg plant during the summer holiday shutdown period, knocking the facility out of action for many months. As Fritz Schmidt Senior recalled during the jubilee festivities, he and his brother Peter Schmidt needed to decide whether or not to re-establish production at the same site. But the owner family had a strong argument in favour of rebuilding after the fire: the workforce.

The company can still count on its workforce in Geretsberg, shared managing director Thorsten Schmidt during the jubilee event. This was underlined by the fact that the site’s first manager and a worker from the earliest days were amongst those taking part in a panel discussion about the company’s “colourful and varied history.” Speaking on the panel about Kraiburg Austria’s recent reorientation, Thorsten Schmidt said “we’re on the right path.” Following the industry-wide crisis that began in 2008 (and which the company describes as “the largest challenge in our history”), the company has strived to decrease its dependency on the tyre market, and the on retreading market in particular. Even today it must be conceded that retreading is and will remain “at best a stagnant market” in Europe.

Increasing globalisation within the tyre industry has left regionally-active companies particularly vulnerable. As a result, for the future Kraiburg Austria plans a greater focus on specialised products such as industrial rubber mats and compounds. Production in Geretsberg should be operated “more efficiently, with less expense and, if possible, on a smaller scale,” shared managing director Thorsten Schmidt with his guests.

Currently Kraiburg Austria employs 325 workers and around 25,000 tonnes of product leave the Geretsberg plant each year, including (according to 2013 figures) 10,000 tonnes of pre-cure treads. The facility uses a seven and an eight storey press to manufacture the 10.5 metre treads (each sufficient for three retreads). Kraiburg Austria’s total annual turnover is €83 million; in 2009, at the height of the crisis, turnover sank to €57 million, a sharp dive from the previous 2007 record of €84 million. By 2011, turnover had bounced back to more than €100 million, a variation that illustrates the market fluctuations the company has survived during its 50 year history.