Entrepreneurship - Stephan Schmidheiny

Entrepreneurship

Industrial Heritage

With the establishment of a brickyard in Heerbrugg in Eastern Switzerland in 1867, Jacob Schmidheiny, Stephan Schmidheiny’s great-grandfather, laid the foundation for a family business that later would become global.

At the beginning of the 20th century, Stephan Schmidheiny’s grandfather, Ernst Schmidheiny I, invested in the fledgling cement industry and later in the production of asbestos cement. The next generation, Stephan Schmidheiny’s father Max and his uncle Ernst II, expanded these companies – Holderbank and Swiss Eternit – and additionally invested in companies such as Wild-Leitz and BBC Brown Boveri.

Stephan Schmidheiny – Entrepreneur and Pioneer

After studying law at the University of Zurich, Stephan Schmidheiny joined Eternit AG in Niederurnen in 1974 as sales manager. As early as 1976, his father handed the overall management of the Swiss Eternit Group, SEG, over to him. Thus, at the age of 28, Stephan Schmidheiny headed a decentrally managed conglomerate with shareholdings in over 20 countries. In 1984, his father Max divided up his estate, with Stephan Schmidheiny receiving the Swiss Eternit Group, while his brother Thomas Schmidheiny took over the company Holderbank (now LafargeHolcim), which operates in the cement business.

Ending Asbestos Processing

In the mid-1970s, a debate on the possible dangers of asbestos processing to human health started among scientists. At that time, however, a technical and scientific consensus was still far off. Nevertheless, shortly after taking office in 1976, Stephan Schmidheiny decided on an innovation program, “New Technology”, to develop asbestos-free products. Additionally, under his leadership, in order to protect the employees’ health and safety, considerable investments were made in the Swiss Eternit Group for workplace safety and improved production equipment. The Swiss Eternit Group thus took on a pioneering role in the industry.

In 1981, Stephan Schmidheiny publicly announced his exit from asbestos processing and as early as 1984, a majority of Eternit products were manufactured asbestos-free. Stephan Schmidheiny was thus far ahead of the competition and of most government regulations. Only in 1990 was asbestos processing banned in Switzerland. In many EU countries, such as Italy for example, a ban was only implemented years later. And almost two-thirds of all countries worldwide still allow asbestos processing.

At the end of the 1980s, Stephan Schmidheiny sold all his holdings in the Swiss Eternit Group and and embarked on a new entrepreneurial course.

The Industrial Architect

Stephan Schmidheiny began at a very early stage to expand his entrepreneurial activities beyond the construction industry and the national borders of Switzerland. He often invested in companies that were in financial difficulties and needed to be restructured. In addition to Switzerland, over the years he increasingly turned his focus to Latin America. He diversified across a range of industries, holding investments in companies operating in areas such as

  • the production of gypsum, packaging and water pipes
  • finance and real estate
  • forestry
  • steel
  • and manufacturing electronic devices, watches, cameras and microscopes.

Saving the Swiss Watch Industry

In Switzerland, the investment in SMH / ASUAG, today’s Swatch Group, was one of the most successful. At the beginning of the 1980s, the Swiss watch industry had hit rock bottom because of competition from Japan; SMH was handed over to its creditor banks. Together with Nicolas Hayek, Stephan Schmidheiny acquired a majority shareholding in SMH in 1985, and went on to lay the groundwork for an unprecedented success story in Swiss business history: the launch of the Swatch watch.

Once a strategic realignment and profound restructuring had returned the watch company to profitability, Stephan Schmidheiny, who had been a director and investor from the outset, gradually withdrew from this commitment. The foundation for his present wealth had been laid.

 

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Pioneering Work in Latin America

In 1998, Stephan Schmidheiny created a groundbreaking group of companies in Latin America – GrupoNueva. GrupoNueva and its companies have adhered to the ‘triple bottom line’ philosophy from the outset, simultaneously pursuing social, ecological and economic objectives. GrupoNueva initially included Amanco und Plycem, leading companies in the building materials industry, as well as investments in the forestry sector.

As early as 1982, Stephan Schmidheiny had invested in Terranova, a forestry company in Chile, which he developed into a leading provider of sustainable wood products. In 2005, Terranova and Masisa merged to become one of the largest publicly traded companies in the Latin American forestry sector.

In 2001, Stephan Schmidheiny decided to withdraw gradually from all his business functions and from public life. From then on, he turned his attention to his legacy.

In 2003, Stephan Schmidheiny gifted the shares of GrupoNueva to the non-profit Viva Trust he had founded. The generated dividends provide the funding for the non-profit Fundación Avina, which he also established in Latin America in the 1990s.

Acting as a Catalyst

In addition to his entrepreneurial activities, Stephan Schmidheiny also took on responsibility as a board member of renowned Swiss companies. For example, he was a member of the Board of Directors of what is now UBS for 18 years, and sat on Nestlé’s Board of Directors for 15 years. He spent 16 years on the board of BBC Brown Boveri, where he also played an active role in shaping the merger with Asea that resulted in today’s ABB.

Stephan Schmidheiny established the foundations Fundes and Avina in the 1980s. This set the basis for his entrepreneurial philanthropy, a concept centred on the belief that the great challenges facing humanity cannot be overcome with financial donations alone, but only with entrepreneurial solutions. Stephan Schmidheiny remains committed to philanthropic endeavours to this day.

Committed to Sustainability

At the beginning of the 1990s, Stephan Schmidheiny increasingly turned to societal discourse and philanthropy. After being appointed Chief Advisor for Business and Industry in the preparations for the UN Conference on Environment and Development, he focused in more detail on questions relating to ecological and social sustainability. He published several international bestsellers on the topic, and acted as a catalyst for politics and business through the World Business Council for Sustainable Development WBCSD that he founded.

His pioneering work in the field of eco-efficiency has been recognised by various universities, and he has received honorary doctorates from the INCAE Business School in Costa Rica, Yale University in the US, Rollins College in the US and Universidad Católica Andrés Bello in Venezuela.

Shaping the Daros Collection

After his brother Alexander’s early death, Stephan Schmidheiny began from 1995 onwards to take an active role in shaping the former’s art collection. He took the conscious decision to have the collection run in an entrepreneurial manner, ensuring that it would be managed in future within a professional structure, namely Daros. The Daros Collection is thus an evolutionary project to some degree: the goal is for it to develop in line with the Zeitgeist and the works of art it brings together, rather than merely standing still.

It currently comprises some 250 pieces, including outstanding works by Andy Warhol, Gerhard Richter, Brice Marden, Willem de Kooning and Cy Twombly. There are also impressive groups of works by Mark Rothko, Robert Ryman, Barnett Newman, Sigmar Polke, Bruce Nauman, Robert Gober, Christopher Wool and Thomas Schütte.

From the end of the 1990s, Daros also focused its activities on contemporary Latin American art, reflecting Stephan Schmidheiny’s commitment to the region. However, it soon became apparent that the Latin American collection would be able to develop better in its own dedicated structure, and the Daros Latinamerica Collection was therefore set up in 2000 independently of the Daros Collection. Today it is one of the most comprehensive private collections of contemporary Latin American art, and is owned by Ruth Schmidheiny, Stephan Schmidheiny’s first wife.

In addition to ensuring that the management of the foundation remains keenly focused, Daros has for many years placed great emphasis on making the works accessible to the general public. Initially it used its own premises in Zurich for this purpose, and between 2001 and 2008 Daros displayed selected works from the collection in various temporary exhibitions. Regular loans to renowned museums such as the Museum of Modern Art in New York and the Tate Modern in London are testament to the outstanding quality of the collection.

Since 2010, the Daros Collection has been working together closely with the Fondation Beyeler in Riehen, with individual groups of works from the collection being put on display at the Fondation Beyeler.

 

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Stephan and Viktoria Schmidheiny

The Gift of Life

With his entrepreneurial success and his commitment to sustainable development, Stephan Schmidheiny played a prominent role on the world stage for many years. Following his father’s example, he was keen to ensure at an early stage that the responsibility for his businesses and initiatives could be handed over to the next generation. He therefore stepped down completely from all executive functions and formal positions in 2003. After years of working for the common good, he sought a different quality of life and devoted his efforts to his own personal interests. Stephan Schmidheiny still serves as Chairman of the charitable institution Avina Stiftung.

Shortly before his 60th birthday – in October 2007 – Stephan Schmidheiny suffered an aortic rupture and life-threatening internal bleeding. As if by a miracle, he survived. Grateful to have received this precious gift, he is enjoying his new chance at life with his second wife, Viktoria. A Vienna-born doctor, Viktoria Schmidheiny shares her husband’s passion for music, art and culture.