90 years of BayWa: A history. B avarian roots. Glob al business. Foreword Wilhelm Haas was one of the founding fathers of the coopera- tive movement. He said the following about the charac- ter of his “project” in 1905: “The idea of the cooperative is an eminently ethical and noble one …, but the day-to-day work that is involved has a thoroughly material character, and ignoring this will lead one astray.” Just under 20 years later, in 1923, the Bayerische Warenvermittlung landwirtschaft- licher Genossenschaften AG was founded in Munich, in- spired by the hyperinflation of the era. The company, found- ed as an Aktiengesellschaft (or listed company), quickly 3 became known simply as BayWa. To this day, BayWa is still shaped by cooperative values. Keeping the needs of the cus- tomer in mind and acting in a financially responsible man- ner have always run through BayWa’s strategy like a “green thread” – even though the “green square” did not become the company’s logo until 1972. Today, the cooperative movement is in the middle of a renaissance. All over the world, people are facing up to the challenges of the future by applying the principles of self- government, self-help and self-organisation. Agriculture is also experiencing a renaissance of its own. Ensuring that the growing global population’s demand for food and energy is met is one of the foremost challenges of the 21st century. The basic needs associated with these challenges form the focus of BayWa’s activities: food, shelter, warmth and mobil- ity. BayWa concentrates on the fields of Agriculture, Energy and Building Materials, which it continues to develop inno- vatively and on an international scale. The founding fathers of the cooperative movement knew that working together was the only way to solve many problems. And today we see that markets and the challenges of the future know no na- tional boundaries. BayWa’s roots are Bavarian. The future is international. Klaus Josef Lutz Chief Executive Officer of BayWa AG The government printed money faster and faster. And that money was worth less with each passing day. Hyperinflation. Bavaria’s cooperatives were forced to look for a way to reduce their risks, so they separated their banking business from their trading business. January 1923 marked the “birth” of BayWa, the Bayerische Warenvermittlung landwirt- schaftlicher Genossenschaften. The company grew quickly, despite the economic crisis crippling the Weimar Republic. Later, the Nazi dictatorship and WWII would shape its devel- opment. After the war, BayWa managed to rise again quickly, with the company tapping into new fields of business and target groups. 1923 –1972 Foundation, war, rise From its founding until the end of the war: The milestones of 1925 Slowed down by the crisis BayWa’s early years Workers and clerks at the company’s warehouses – seen here in front of a typical operation with rail connection – had to overcome tough times. 1923 Founded as a listed company The company, influenced strongly by the cooperative movement, commenced operations with 400 warehouses and a logo resembling a sheaf of grain, which it would continue to use until 1972. 1945 Rebuilding begins Many of BayWa’s buildings had been destroyed or damaged by the end of the war. 6 7 1934 Active throughout Bavaria Gleichschaltung led to the creation of a central cooperative organisation. The picture here shows a typical ware- house of the era. 1929 onward Drumming up business BayWa’s drummer mascot was known and loved by all. 1927 The roots of mechanisation The use of machinery started increasing harvest yields in the 1920s. 1935 onward More production 1939 – 1945 Participation in the war economy The Reichsnährstand demanded in- BayWa was forced to contribute to securing the food creases in output. supply during WWII. 1923 –1972 Foundation, war, rise Hyperinflation inspires change In the 1920s, the Bayerische Zentral-Darlehenskasse (BZDK), one of the most influential cooperatives in Bavaria, began to see its business model – which combined the purchase and sale of agricultural produce, trading in agricultural resources, and finance – as too risky. At an extraordinary general meeting in January 1923, the BZDK formed a new cooperative orga- nisation for goods and commodities: BayWa. The company was – and still is today – a listed company with a strong cooperative influence. 1 2 8 The BDZK, which had been founded in the late 19th cen- 9 A listed company with a pronounced 1 Shaped by principles tury, already had a few hundred warehouses to its name by Friedrich Wilhelm Raiffeisen Cooperatives: an overview cooperative influence the early 1920s. Departments for grain, chemical fertilisers, (1818–1888) was the father of the cooperative movement in feedstuff and machinery conducted the day-to-day business Today, cooperatives are in the middle of a renaissance. The company took advantage of the benefits of being a list- rural areas. Their members – who are also their customers – are operations and were each headed by a director who was an ed company, such as the broader capital base and greater able to directly influence business policies. The roots of 2 Good neighbours expert in his field. The BDZK’s management board was re- the German cooperative movement can be traced back management flexibility. At the same time, BayWa was shaped From the moment of its foun- to the mid-19th century, when farmers started pro- sponsible for the goods-trading and financial businesses. by a profound cooperative influence in the form of its owner- dation, BayWa’s headquarters ducing more for the market, forcing them to increase were located in the Raiffeisen Conditions were deteriorating with each passing day. Repa- yields and employ more capital. Many farmers ended up ship structure and the members of its Supervisory Board. building at Türkenstrasse 16 in a dire situation that threatened their very existence, ration payments anchored in the Treaty of Versailles in 1919 The company had a share capital of 500 million marks, which in Munich. were a heavy burden on the economy and the government. leading to the creation of the first relief funds on a local was soon raised to 1 billion marks. After the currency col- and regional level. The public sector’s creditworthiness suffered particularly as lapsed, the first balance sheet in goldmarks showed a share a result of the war’s financing, which had come from the issue Real improvement came with the establishment of capital of 4 million goldmarks divided into 100,000 regis- of bonds.The government kept printing money faster and fas- rural credit associations. Friedrich Wilhelm Raiffeisen, tered shares and 100,000 bearer shares of 20 goldmarks mayor of the town of Weyerbusch in Germany’s Wester- ter, causing the devaluation of cash and bank assets. wald region, founded the first savings and cooperative each. Only cooperative circles were allowed to purchase association in 1846/47. Raiffeisen was responsible for shares. Legal transfers of registered shares required the setting out the characteristics that would go on to The situation worsened in 1923, culminating in hyperin- define cooperatives: mutual liability among members, approval of the Supervisory Board, which was strongly influ- flation. Those in charge at the BZDK were forced to act. So self-reliance and self-government. Hermann Schulze- enced by cooperatives. they separated their banking business from their trading Delitzsch, who initiated the establishment of trades- men’s unions in the mid-19th century, is another figure business. The business of finance had become dangerous, whose name is indelibly linked to the history of coopera- Goods and money: BayWa and the BZDK tives in Germany. and the move was intended to make sure the trading busi- share a CEO until 1972 ness was no longer subject to such an incalculable risk. The “one for all and all for one” concept grew to become a powerful force in Bavaria. The Bayerischer Clemens Löweneck, Chief Executive Officer of the newly Founded on 17 January 1923 at an Landesverband landwirtschaftlicher Darlehenskassen- founded company, headed both BayWa’s trading business vereine and the Bayerische Zentral-Darlehenskasse and the BZDK’s financial business, which were operated extraordinary general meeting (BZDK) were founded in Munich in 1893/94 as listed cooperatives with limited liability in order to make the as separate units. BayWa and the BZDK would continue to The trading organisation was separated from the business of cooperative structure of rural trading more efficient. share a CEO until 1972. BayWa commenced operations with finance at an extraordinary general meeting on 17 January more than 400 warehouses and took over as a wholesaler 1923. The company was recorded in the commercial register for the cooperative trading business. While the headquarters on 16 February 1923. Based at Türkenstrasse 16 in Munich, in Munich determined business policies, the branch offices the new company’s full name was Bayerische Warenvermitt- signed contracts with mills and breweries. They also man- lung landwirtschaftlicher Genossenschaften AG. But soon aged and advised the individual warehouses, which had it became known simply as BayWa. formed the basis of the cooperative trading business since the 19th century. 1923 –1972 Foundation, war, rise of small secondary warehouses. Warehouse structure would remain a hot topic for cooperatives and BayWa for the nine decades to come. The competition was stiff, even back in 1923. Other coopera- tive trading organisations were operating in Bavaria at the time. In the city of Regensburg, this competition took the form of the Genossenschaftliche Warenzentrale des Bayerischen Bauernvereins eGmbH, or “Gewa” for short. Nuremberg was home to the Raiffeisen-Waren-Hauptgenossenschaft. The 10 Kreis-Darlehenskasse (district credit association) operated 11 1 its own goods trading business in Ansbach. And although the 2 BayWa branch office in Augsburg managed the cooperative’s warehouses in Swabia, the local cooperative association still 1 The age of ox-drawn carts maintained a share of profits and losses until 1930.