700-Year-Old Swedish Timber Company Is Still Going Strong by Branching Out

The discovery of the Great Copper Mountain in Sweden’s Dalarna lake and forest region seven centuries ago gave rise to a company that this year was still capable of launching a successful $1-billion takeover deal.

The company is Stora Kopparbergs Bergslags AB, Swedish for “The Great Copper Mountain Mining Works.” Claiming to be the world’s oldest operating company, it celebrates its 700th anniversary in mid-June.

“We have been a fairly quiet, silent company over the years, but in the past 3 1/2 years, we have embarked on an aggressive expansion,” said Stora managing director Bo Berggren.

In April, 1984, the company employed just 9,000 workers. This year, with the $1-billion uncontested acquisition of Swedish Match AB, the total will reach around 34,000.

Turnover last year was 25.6 billion crowns--$4.26 billion--making Stora Europe’s second biggest forestry group.

Sheepskin Document

The anniversary marks the issue of the company’s earliest surviving share certificate. Dated June 16, 1288, it records on a sheepskin document bearing a royal seal the purchase by Bishop Peter of Vasteras of an eighth share in the Great Copper Mountain.

While small amounts of copper and gold are still recovered from the mine in Falun, central Sweden, Stora now is best known for its timber.

With the March acquisition of Swedish Match, it is now branching into new areas--household goods, kitchen flooring, cigarette lighters and matches.

“We were searching for something new to develop, and Swedish Match, with its international organization, was an obvious partner. For example, Swedish Match is a large consumer of sawn timber, which we produce,” Berggren said.

Berggren can boast a mere 26 years with the company, which he joined as a metallurgist in Stora’s now relinquished steel division.

New European Acquisitions

Having guided Stora to the top flight of European forestry companies, Berggren is now setting his sights on new European acquisitions.

“The scope for expansion in forestry is limited to around 3% a year. We have resources and ambitions above that and want business areas with a different capital structure and which are more international,” he said.

Over the centuries, Stora was controlled by the Swedish monarchy and aristocracy. While Sweden no longer has a powerful nobility, it has some extremely rich business empires, and Stora’s wealth is carefully guarded by one of them--the Wallenberg family. The copper financed the military adventures of Swedish kings for centuries. Criminals were offered amnesty if they accepted work in the depths of the Copper Mountain, where cave-ins were an inevitable hazard.

By the mid-17th Century, the mountain had been reduced to a large hole in the ground, peppered with numerous underground passages, chambers and tunnels.

Even then, it drew curious visitors--forerunners of the thousands of tourists who visit now every year. “The Falun Mine is assuredly worthy of being called the eighth wonder of the world, although in terms of the difficulty of the work as well as the drudgery and cost it entails. It is not merely comparable with all the others, but surpasses them,” a scholar called Olof Naucler wrote in 1702.

Stora’s five-day Jubilee celebrations beginning June 15 will be attended by the King and Queen of Sweden. Events include a stockholders meeting to be held in the mine, an economic debate with former U.S. Secretary of State Henry Kissinger and an international athletics meet.