Rohm & Haas Legacy

It began a century ago with two German men named Otto.

Otto Rohm, scientist, had invented a product for tanning hides into leather.

Otto Haas, businessman, was determined to market his friend's product in Haas' adopted home of America.

Within a decade, their company's revenue had hit $1 million. Philadelphia-based Rohm & Haas was on its way to becoming the international chemical giant and regional business icon of today.

"The beauty of Rohm & Haas is that the scientific genius of Dr. Rohm combined so well with the business acumen of Mr. Haas," said Christine Miller, a company spokeswoman.

Theirs was a partnership that gave rise to specialty chemicals, to Plexiglas for a burgeoning aircraft industry, and to other pioneering work in plastics, cosmetics, dyes, and varnishes.

And also to the hazards of chemical work - including dozens of job-related cancer deaths at its Bridesburg plant and persistent claims of other cancer clusters.

By 1999, Rohm & Haas was the world's largest specialty-chemical company - now employing 3,100 in this area - with headquarters in Center City and facilities in Philadelphia, Bucks and Montgomery Counties and in Delaware. The company has 15,700 workers in all.

Yesterday's announcement - a $15 billion deal for Dow Chemical Co. to acquire Rohm & Haas - puts an exclamation point, if not a period, behind a century of corporate evolution.

"The passage of time and the process of growth have made it a very different creature from what it was in the beginning," wrote author Sheldon Hochheiser in a 1986 history of Rohm & Haas.

Otto Haas first came to America in 1901 from Stuttgart, Germany. His father's early death had impoverished his family and ended Haas' education at age 12, according to Hochheiser's book.

Haas immersed himself in the German dyestuffs industry, honing his sales chops.

Rohm held a doctorate and was working as a municipal chemist when he invented Oropon, his leather-tanning product.

Rohm first teamed with Haas in Germany in 1907. Two years later, Haas returned to America and opened the Philadelphia office that would become the firm's headquarters.

As a salesman, Haas "made his mark by helping to solve problems in the tanneries," Hochheiser wrote. "In the following decades, he sought to sell other products the same way. Time and again, he succeeded. . . ."

His success began in an era when Philadelphia was the nation's foremost manufacturing center, well ahead of second-place New York City.

World War I had forced Rohm & Haas to sever its German ties, and Haas became sole owner as the company emerged in 1920s America as a specialty-chemicals firm.

Old-timers and retirees described Haas as stern, paternalistic and benevolent. His stewardship led the company through the Great Depression and into an era of discovery and innovation.

In the 1930s, it developed its trademark Plexiglas for the aircraft industry and continued finding new uses for it. Company prosperity was further boosted by government contracts and innovations in plastics, cosmetics, dyes and varnishes.

The flip side was the risk of working there - for which Rohm & Haas was said to have paid people well.

Long-term exposure to carcinogens at its Bridesburg plant in Northeast Philadelphia led to dozens of cancer deaths among workers there. For years, employees tried to avoid "Building 6," where the exposures had occurred, even as the company instituted stronger safety measures.

The deaths, along with later claims of cancer clusters around its facilities in Bridesburg and Spring House, Montgomery County, soured relationships between the company and employees, neighbors and environmental groups.

Otto Haas, who died in 1960, was succeeded by his son, Fritz Otto Haas. He led a company expansion into latex paint and agricultural chemicals such as Dithane M45 fungicide, its best-seller.

The younger Haas' 1970 retirement ended direct family management of the company. By then, its headquarters at Sixth and Market Streets oversaw 51 plants, with 20,000 employees, in nearly two dozen countries.

A 1999 merger with Morton International Inc., the salt-maker, made Rohm & Haas the world's largest specialty-chemicals company.

But recent years have mostly been marked by shrinkage - layoffs and divestitures paralleling the mounting consolidation of the global chemical industry.

In 2001, it sold its agricultural-chemicals business for $1 billion to Dow Chemical Co. Yesterday, Dow agreed to acquire the rest.

Dow has said it would preserve the Philadelphia headquarters, along with the Rohm & Haas name.

That pledge was hailed by John Haas, 90, son of Otto Haas. The benefits of the deal, he said, "are a tribute to a great company with dedicated employees and sound leadership over many years."

Chemist Otto Rohm and businessman Otto Haas establish a partnership in Esslingen, Germany, to produce and sell Oropon. The synthetic material was used in leather-tanning as a replacement for fermented dog feces.

Haas sets up a branch office in Philadelphia.

Sales rise to $1 milllion, in part due to cutting off exports from Germany during World War I. In 1917, the U.S. government enters the war and attempts to seize the company as an enemy-alien property. Haas saves the American arm of the company, but Rohm loses his 50 percent stake. It is auctioned off for $300,000. Despite this, the two men remain close friends.

The wholly American company grows its specialty-chemical business with products for leather-tanning and textiles. The products are mostly licensed from German companies. In 1924, Haas, along with the Karl Albert Co., founds the Resin Products Co. They market synthetic resins for fast-drying varnishes. The company introduces Lethane, an insecticide used in household fly sprays, which it develops in its own labs.

Otto Rohm dies in 1937. In 1931, the company had introduced Plexigum, which was used as a middle layer in safety glass. In 1932, Rohm and Walter Bauer develop a clear, rigid, polymer sheet. Rohm gave it the name Plexiglas. The new product was shatterproof and easy to shape when heated. With the approach of World War II, it became the ideal material for cockpit canopies on military aircraft.

The war years saw the company expand to nine times its pre-war size, due to the huge demand for Plexiglas.

Many other products begin to roll off the line, including oil additives, solvent-borne resins, plasticizers, the fungicide Dithane, and Amberlite for water purification.

Industrial collapse in Europe opens further opportunities and growth for the company.

Plexiglas finds new peacetime uses in signage, car tail lights, skylights and safety glazing. The first acrylic paint binders are introduced, which allow for soap-and-water cleanup, and fast drying. Acrylics also find their way into inks, finishes, polishes and adhesives.

Otto Haas dies in 1960. His son Fritz becomes CEO. The company grows with its established acrylic products and others. The agricultural chemicals division markets Dithane M-45 fungicide overseas.

Fritz Haas retires. Vincent Gregory becomes CEO. In a major restructuring, the company brings focus back to its core strengths and abandons new fibers and health products lines that it had pursued in the 1960s.

Rohm & Haas buys 30 percent of the Shipley Co. in a bid to enter the electronic-chemicals business.

The company eliminates its polymethyl methacrylate chemistry business, which includes Plexiglas. It expands into electronic chemicals by buying the rest of Shipley. Other purchases in the field include Rodel Inc. and LeaRonal Inc. It makes a major move in 1999 by merging with Morton International, maker of Morton Salt, creating a global chemical company with revenue of $6.5 billion.

Today, Rohm & Haas generates $9.24 billion in annual revenue. Paint additives remain its major business.

The company agreed to be sold to Dow Chemical Co. for about $15 billion.

SOURCE: Rohm & Haas Co.