First Hungarian paper industry ltd

The First Hungarian Paper Mill Joint Stock Company was perhaps the most important paper mill of the dualist era, operating between 1881 and 1943/1944. Its development was uninterrupted from the 1890s until the end of the First World War, but it was significantly affected by the Treaty of Trianon, as the factories abroad were taken out of the company's control. In the 1920s, Vilmos Herz's son Henrik Herz, who had marked the previous era, restored the company to its former glory as CEO, and the company recovered from the economic crisis to expand again in the 1930s.

The First Hungarian Paper Industry Joint Stock Company was founded in 1881 with a share capital of 100 000 HUF. Already in the first years of its operation, it took over and modernised the mills in Nagyszabos and Horkai, which had previously been run by the company of Károly Dávid. Although the factory in Grossabos burnt down in 1891, this was an advantage rather than a disadvantage in the long run, as the factory, rebuilt in 1893-1894, was equipped with the most modern equipment, which enabled it to produce medium-fine and fine paper grades. In the first ten years, the company, which was mainly headed by Vilmos Herz, made further improvements: the use of the watermark, which was introduced at that time, was of great importance in competing with the Austrian paper industry.

Thanks to successful management, the company was able to further expand its interests at the turn of the century. In 1903, the company acquired a stake in the Smith & Meynier Rijeka Paper Mill, and in 1911, the first Hungarian rotary paper mill was built on the site of the burnt down Maszniko mill. To add to the uninterrupted pace of its development, it increased its influence by acquiring, among other things, the paper mill in Hermanec in 1916-1917, and in 1918 it bought shares in the Zagreb Paper Company and the paper mill of Márton Copony's company in Zernest. Thus, for the business year 1917-1918, the company had indeed consolidated almost all the paper factories in paper-producing Hungary after the Treaty of Trianon: the joint-stock company had paper factories in Nagyszabos, Özörény, Maszniko, a pulp mill in Özörény, a wood pulp mill in Hirsch and a wood pulp mill in Maszniko. It also had interests in Smith & Meynier Rijeka Papírgyár Részvénytársaság, Hermaneczi Papírgyár Részvénytársaság and Zagreb Papírgyár Részvénytársaság. The annual production of these mills was 120 000 m³ of paper, 80 000 m³ of pulp and 45 000 m³ of wood pulp. The clear success of the joint-stock company was that, despite the difficulties caused by the common customs area, it was able to compete successfully with the Austrian factories.

However, the First World War also had an impact on the company's paper production only in the sense that it had to face the increasing paper shortages in the last years of the war. The joint stock company was the only factory producing newsprint, and its capacity was around 50 wagons of newsprint per month. However, despite a ministerial decree stipulating a monthly production of 45 wagons of newsprint, it was able to deliver 9 wagons to the capital's newspapers in January 1917 and only 4.5 wagons in February. In addition, the price of paper had increased significantly: by 1916, it had risen by 300-350% compared with the price in May 1915. This was also linked to the critical shortage of coal, which forced the company to shut down its plants. The Hungarian paper industry was also at a disadvantage because the domestic mills could supply about 40% of total consumption, two thirds of which was tied up in state supplies. This meant that the Austrian paper industry was able to tap into the Hungarian "consumption" at high prices, as the state's demand was much lower than in Hungary. An example of this was the need for rotary newsprint, of which the Maszniko mill was able to produce 500 wagons out of a total of 1 700 to 1 800 wagons, the rest being supplied by the Austrian mills.

On the one hand, the war and the associated inflation and loss of territory following the First World War, and on the other, the death of Vilmos Herz in 1920, necessitated fundamental changes to meet the demands of modern times. The son of the former CEO, Henrik Herz, was forced to divest himself of a large part of the company's companies, which were located outside the country. In the 1920s, in the spirit of reorganization, the commercial management of the Diósgyőr Papírgyár Részvénytársaság, which had been completely rebuilt in 1926, was taken over, and it proved to be an excellent business. In parallel with paper production, the company expanded its sales programme to include writing and printing paper and packaging paper. It was to Henrik Herz's credit that by the end of the 1920s the company was able to become a national paper centre even without mills.

Company revenue in HUF and CZK

In the 1930s, despite the consequences of the Great Depression, the company was able to continue its success. On the other hand, with the reintegration of the Highlands, the company regained access to its pulp mill in Özörény, which had been sold in 1923 and whose annual pulp production (1500-1600 wagons) was considerable at the time. The importance of the mill is shown by the fact that the reacquisition of the mill enabled Hungary to produce 700-800 wagons of pulp again. In 1937, the Zernesti paper mill, which had been founded in 1853, was bought back and although it was acquired by the First Hungarian Paper Company in 1918, it lost its ownership after Trianon. One of the most modern paper mills in Romania, it had a capacity of about 8 000 tonnes of paper per year. In addition, apart from its interest in the Diósgyőr paper mill mentioned above, it also became the sales agent for several Hungarian paper mills (Hazai Papírgyár, Diósgyőr, Neményi, Pesterzsébet Papír- und Nyers Fedélplattengyár).

The company's share price in pence

Sources

BME Honi Ipar 1881-1944.

Compass 1921-1944.

Great Hungarian Compass 1881-1920.

Press material 1881-1944.

Founded on 20 March 1881.

Termination time not set

Founders: dr. Vilmos Herz

Securities issued:

Decisive leaders:

Principal activity: production of finished paper products: carbonless, office, draft, newsprint, printing, colour, packaging and greaseproof paper

Main products are not set

Seats:

Locations are not set

Main milestones are not set

Author: Róbert Szabó