In 2022, Lonza celebrates the 125th anniversary of its foundation. Like the River Lonza, after which the company is named, the business has flowed through changing times, always adapting its course to the needs of the day. Throughout its history, Lonza has captured the opportunity offered by innovation to serve the basic needs of successive generations with energy, light, food and now medical treatments and technologies. We have divided our story into different decades, so you can click to explore any time period. Take a glimpse into our past and find out how from small beginnings in the Swiss Alps, Lonza has grown into a dedicated strategic partner to the healthcare industry, pursuing its purpose of enabling a healthier world.
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The 1890s formed a prelude to the modern world we know today. Cars, wireless communications and even smoke detectors already existed in some form. However, the map of the world looked quite different. Europe was dominated by the German and the Austro-Hungarian Empires. Britain held the largest territory in the world and Russia was ruled by the Tsars.
In this twilight of the old empires, Switzerland had moved closer to modernity with an established stable and settled republican state, having adopted its federal constitution in 1848. In the mountainous Swiss valleys, life continued much as it had for centuries before, dominated by the seasons, agriculture and the great glaciers. However, in one valley, change was coming fast.
The latter Nineteenth Century was a time of enormous technological change, with the Second Industrial Revolution well under way. While the First Industrial Revolution had involved the mechanisation of processes such as weaving and smelting iron, the second was more about applied science and technologies such as electricity.
In the 1880s, early industrial plants were built, using electricity to break down saline solutions into chlorine and caustic soda. Around the same time, aluminium was first produced by electrolysis at 1000 ºC. At the Paris World Exhibition in 1889, “silver from alumina” was recorded as being a popular attraction. Industrial electricity quickly became big business, with equipment manufacturers promoting furnaces and associated technologies. All this forms the background to the foundation of Lonza.
In the mid-1890s, representatives of the Nuremburg-based company S. Schuckert & Co met with Swiss financiers. The S. Schuckert Company offered the electric furnace process for making calcium carbide, which was used for its clean, clear and bright light in gas lamps. In return the Swiss financiers agreed to invest in hydroelectricity generators to power the electric furnaces. It was agreed that the generators would be located on the River Lonza near Gampel. To support this agreement, contracts were signed with local municipalities for the use of the river, both to generate hydroelectricity and for industrial transport. While it may seem surprising that much early electric power came from a renewable source, hydropower has always been one of the simplest ways of producing electricity.
Within the Swiss financier community, the foundation of Lonza was initiated by Alfons Ehinger, a banker who was born and raised in Basel, and known locally for his efforts to support local charities and causes. He turned 48 in the year in which he founded Lonza. By this time, he had an established career and reputation, as well as five young children. Ehinger was present at the first meeting with S. Schuckert & Co, and soon after, he travelled to St. Maurice to register the new company. On 27th October 1897, Lonza was incorporated and Ehinger became its first president. He continued to lead the business until he passed away six years later. The Neue Zürcher Zeitung’s obituary in 1903 paid tribute to his “tireless diligence and unshakable calm”.
When Elektrizitätswerk Lonza was founded in 1897, it was a joint-stock company with a share capital of CHF 800,000 (around CHF 27 million today). The company was set up to establish and expand the hydroelectric power of the River Lonza for the manufacture of electrochemical and electrometallurgical products. The Gampel 1 power station was completed by 1898 and was the first large plant in the Valais canton; furnaces began producing carbide in August 1898. These early days were beset with problems including late deliveries, explosions, floods and low yields.
Nonetheless, Lonza persevered. The Gampel 2 power station was finished in 1900 (three of its original generators would produce electricity until 1975) and the market for carbide expanded quickly. However, the carbide market experienced a bubble and in 1902, just as Lonza’s future was looking promising, carbide prices collapsed. The industry suffered what a contemporary report described as “a serious and permanent reverse.”
The beginning of the Twentieth Century was a time of great optimism in Europe with advances in technology and science gathering momentum. Within the first four years, air conditioning and the world’s first fully synthetic plastic (Bakelite) had been invented, the first radio programme had been broadcast and the first Model T rolled off Henry Ford’s production line. As the old order began to shift, modern social issues were coming into focus with women gaining the vote in Finland and universal suffrage becoming an increasingly important topic in many other countries.
At this time in southern Switzerland, Lonza’s carbide facilities were beginning to face challenges. The carbide industry’s bubble of success began to burst in 1902, although the use of calcium carbide in acetylene gas lamps had helped to soften the blow. With acetylene’s high burning temperature, these lamps were a significant improvement over oil. They were brighter, less dangerous and burned more cleanly. However, this was by far carbide’s largest use and its days were numbered.
In the early years of the Twentieth Century, it became clear that the pendulum was swinging decisively in favour of electric lighting. Lonza had already started to receive requests to support the electrical lighting of local municipalities. This meant that the business needed to find new markets for carbide and acetylene. The company responded quickly and – as early as 1903 – Lonza started working with two other carbide plants, collectively forming the “Consortium for the Electrochemical Industry”.
The Consortium had some success in finding new uses for calcium carbide. One of these involved adding nitrogen to calcium carbide to produce the first synthetic nitrogen fertilizer (calcium cyanimide). A further use was found in the production of acetylene in metal cutting and welding. Both technologies are still in use today. However, none of these novel uses were sufficient to replace the lost market demand caused by the rise of electric lights.
The company also faced new competition in the energy market from Germany. Lonza built its hydroelectric plants in the Swiss valleys in the late 1800s. However, the growth of steam turbines meant that electricity could now be produced economically from coal and carbide furnaces and no longer needed to capture hydroelectric energy from rivers in inaccessible mountain valleys.
The challenges had a cumulative impact. The carbide market was shrinking and turbine electricity could produce cheaper carbide in Germany. Furthermore, the new German companies were likely to move into the Swiss market and undercut prices. Lonza recognized these challenges and responded dynamically by founding its own German subsidiary called LonzaWerke, Elektrochemische Fabriken GmbH. In the same decade, Lonza also began construction work on its Visp site, which is still in use today, and moved its headquarters to Basel.
The tensions between Serbia and the Austro-Hungarian Empire came to a head when Archduke Franz Ferdinand was assassinated. This resulted in the Austro-Hungarian Empire declaring war on Serbia. By the end of July 1914, the First World War was underway.
World War I was the first ever large scale industrialized conflict, driving increased demand for mechanical and technical products and services. At the same time, imports stagnated and supply chains were cut in many countries across Europe. Lonza’s production of ammonia from calcium cyanimide was used to support the War Technology Division of the Swiss military. The facilities built for this came online shortly before the end of the war and several major deliveries were made.
Throughout the war, Switzerland struggled with alcohol production due to wartime shortages of fermentable agricultural products, but Lonza’s carbide could be used to manufacture alcohol. In the spring of 1917, a contract was signed between Lonza and the Swiss Alcohol Board allowing the government to buy an annual alcohol volume equivalent to Switzerland’s pre-war requirements. However, there were challenges with obtaining the necessary equipment. This meant that Lonza found itself making alcohol at a loss and the company was forced to terminate the contract. More significantly for the business, demand for carbide shot up as an alternative fuel in countries that experienced a shortage of coal.
While demand for carbide soared during the war and caused a carbide shortage, it crashed when the war finally came to an end in 1918. This resulted in several plant closures for Lonza and caused a knock-on effect on the company’s power stations, which were now producing more electricity than the nearby factories could use. To manage these challenges, Lonza built a 100km long high-voltage line between the Upper Valais and the factories of the Gesellschaft für Chemische Industrie company (later Ciba) in the southern Swiss town of Monthey. This expansion also enabled Lonza to acquire several other local power plants as part of its ambitious plans to increase its network of hydroelectricity production.
Due to the volatile carbide market before the war began, Lonza was already looking for new ways to use acetylene and the company opened an acetylene plant in Visp in 1917. This would ensure Switzerland’s supply of acetaldehyde and acetic acid, both of which were crucial during the later years of the war effort. Acetic acid was also important for the production of indigo dye, for which Switzerland was then a global center.
The atrocities of the First World War placed an indelible blemish on the opening decades of the Twentieth Century. At the same time, it also formed a crucible of demand, innovation and industrialization that paved the way for the new world order in the 1920s.
For Lonza, the 1920s were a time of steady growth and expansion. The company had taken over the general supply of power for the lower Valais and providing electricity (both for industrial and domestic use) was an increasingly important part of its business. The Gampel I plant had been upgraded in 1924 and the Gampel 2 plant upgrade followed in 1928.
Lonza also redoubled efforts to broaden its sales base and develop new products based on its two mainstays – ammonia and acetylene. Even at this early stage in its history,the company already understood that diversification acted as a buffer to over-exposure in volatile markets such as carbide. It also became apparent that producing commodity products such as basic chemicals did not deliver high margins. It would be able to command higher margins from higher value products and more sophisticated offerings.
This diversification marked the beginning of Lonza’s transformation from an early Twentieth Century company into an industrial conglomerate. It moved into higher value chemicals by providing starter chemicals and intermediate products to the local paints, coatings and pharmaceuticals industries. By 1925, it had expanded into the emerging field of plastics. Lonza’s post-War strategy of broad-based growth, with a portfolio of offerings ranging from hydroelectricity to pharmaceutical chemicals, would remain in place until after World War II.
Switzerland was an early adopter of electricity and the country’s electrification in the early years of the Twentieth Century allowed it to become more productive than most other European nations. By 1936, some 70% of Swiss railways had already been electrified. Few other European countries had hit this proportion by the turn of the Millennium.
Lonza had other great plans. Records show that as early as the Eleventh Century, the inhabitants of the town of Ried had tried to divert the course of the Massa River (which is fed by the Aletsch Glacier) to their meadows and fields via long irrigation channels. In 1927, Lonza and its partners set out to drill a 3km tunnel under the 2230m Riederhorn Mountain. This tunnel was originally intended for a power line, but was repurposed for irrigation. In the 1920s, this was a hugely ambitious project and it was finally finished in 1946, when it began irrigating the fields of Ried-Mörel.
The chemicals business was also expanding in multiple directions. In the late 1920s, Lonza opened a large limestone quarry in the Valais near Leuk to supply the raw materials for carbide with the latest available technology. It included a conveyor track which took the stone from the quarry, across the Rhone River to waiting railroad cars at the Susten railway station.
As well as taking control of its supply chain, Lonza was also innovating in the field of nitrogen chemistry. It began making nitric acid for fertilizers in 1927 and was the first company in Germany to build a large-scale plant for its production. Lonza was already producing simple fertilizers but, from around 1930, it began developing more sophisticated products that were designed for specific crops. Like fertilizers today, they were tested in research institutes and field trials.
Lonza also began the manufacture of artificial fabrics, including acetate films. In modern times, these are most commonly associated with photography, but in the late 1920s, they were used as the raw material for manufactured silk. The company set up a spinning mill in Visp in 1928. Between 1934 and 1935, production was moved to Germany and the company began making acetate silk first in the town of Säckingen and then at Weil am Rhein.
All this progress was not without accompanying setbacks. The worst fire in Lonza’s history took place in October 1928, affecting three factories and a hydroelectric plant. The risk of an explosion in a neighboring chlorine storage facility forced the evacuation of the entire population of Visp. Just over 2,000 people were forced to take refuge in the Staldbach area, roughly a kilometer away. Similarly, the company had experienced the advantages of the roaring ‘20s, but it also experienced challenges with the downturn of the global economy, which followed the infamous Wall Street crash of 1929.
The 1930s were a tough decade for Lonza. Switzerland was hit hard by the Great Depression. Industrial production fell by 20% between 1929 and 1932 and it would not show strong signs of recovery until 1937. Demand for fertilizers in Switzerland fell and Lonza turned its attention to international markets. However, this did not make up the revenue shortfalls caused by low prices. Earnings declined and cost savings could not close the gap.
Some of Lonza’s challenges were offset by the German economy, which grew strongly from 1932 onwards. However, Germany’s expansionist ambitions were also driving the world towards war. In 1938, it annexed both Austria (in the Anschluss) and the German populated border areas of Czechoslovakia. The Allied Powers had been following a policy of appeasement, but it was becoming increasingly clear that this was untenable. On 1 September 1939, Germany invaded Poland and two days later, Great Britain declared war on Germany.
As with its predecessor, the Second World War placed a high demand on heavy industry. In order to ensure food security for its people, the Swiss government drew up a plan which involved expanding arable land into areas which had previously been used for pastures and grazing. As these were marginal areas for cultivation, Swiss demand for nitrogen fertilizers increased six-fold compared to pre-war levels. Lonza expanded its facilities to meet these increasing needs.
The company was also contracted by the Swiss government to produce synthetic fuel and in 1941 the first decorated tanker filled with Lonza fuel was ready. The company also began producing rubber substitutes (notably PVC), as imported supplies of rubber became scarce during the war. Lonza‘s hydroelectric growth also continued at pace. A new low-pressure power station allowed the Eglisau-Reckingen section of the Rhine (which has a shallow gradient) to be used to generate power. It was completed in 1942, with the power divided equally between Switzerland and Germany.
Because of Switzerland’s neutral status, many Swiss companies including Lonza continued to do business with Germany. However, subsidiary companies and sites located in Germany largely became independent of the main Swiss company during the Second Word War.
In Switzerland, throughout the war, Lonza continued to expand its power generation either by building new stations or by buying stakes in other hydroelectric companies. Half a billion Kwh of generating capacity was needed, reflecting both the wartime economy and widespread electrification. Power plants were built in record time and often in very difficult conditions. Switzerland, then as now, generated a high proportion of hydroelectricity. Today, it still has more than 600 hydroelectric plants and well over 50% of its power is generated this way.
The Second World War underscored Lonza‘s importance to the Swiss economy and its position in a number of strategic industries. Fertilizers were only one aspect of this. Doubling production of nitric acid supported the firearms and explosives industries, because even neutral countries like Switzerland needed to be armed and able to protect themselves. Lonza’s synthetic fuel substitutes kept national transport running. Even the Swiss watchmaking industry may have struggled without Lonza‘s production of organic glass.
In May 1945, Germany surrendered and in September Japan surrendered, thereby finally ending World War II. Post-war, Lonza maintained its position as a fertilizer and fuel manufacturer and Swiss industrial production recovered (with some of the government war contracts stretching into the 1950s). The period between World War II and the 1970s oil crisis is often referred to as the Post-War Economic Boom. It was characterized by sustained industrial and technological growth and for companies like Lonza, it was a time of growth. The Swiss economy grew fast, exports skyrocketed, incomes rose and the population grew. There was also a construction boom, particularly in the Mittelland between Geneva and Lausanne and between Zurich and St. Gallen.
Because Switzerland had remained neutral in the war, its industrial infrastructure was intact, unlike many of its neighbors. This provided the country with a head start, allowing industrialization to continue at pace. As a result, the electrical grid expanded and demand for power grew rapidly.
This growth was so fast that Lonza’s own power plants were no longer sufficient to meet the electricity requirements of Swiss industry and the general public. The biggest single problem was caused by the seasonal imbalance which can impact countries that are dependent on hydropower. In the summer when the snow melts and precipitation is highest, hydropower is abundant. However, in the winter precipitation is lowest and often falls as snow. This is the time when demand is higher but production is necessarily lower.
Storing power to match supply and demand has long been a commercial imperative for the energy industry. Then, as now, batteries cannot store energy efficiently over long periods, so pumped storage facilities were constructed. In such facilities, water is pumped into reservoirs high in the mountains when electricity is abundant. When extra power is needed, the water is released through turbines and used to generate electricity. Today this remains the most widespread way of storing hydroelectric energy.
Although Lonza had suitable concessions for both new power stations and pumped storage facilities, the cost of these large-scale facilities was prohibitive. The most pragmatic solution was to develop innovative business models, either forming partnerships with other companies or buying shares in them. Around 1948, Lonza acquired a 50% stake in Salanfe SA in the town of Vernayaz in the Valais. The partners built a dam to create the Salanfe reservoir which was finished around 1952 and sat at an altitude of 1,925m. There was a series of smaller acquisitions at around the same time.
Although power was increasingly important to Lonza in the early post-war years, the company also maintained its position in the fertilizer market. By rationalizing production facilities and expanding its range of fertilizers, Lonza was able to keep pace with the growing demands of agriculture.
However, the winds of change were again blowing around the world. The petrochemical industry started to grow fast in the 1940s. At the same time, Lonza found that high levels of carbide production were causing issues. These included the practical limits to what could be produced alongside early environmental concerns. The petrochemical industry was looking increasingly attractive, while carbide was beginning to look like yesterday‘s technology.
In the 1950s, a recognizable version of our modern world was taking shape. The decade saw the first credit cards, the foundation of McDonald‘s and the discovery of DNA. In the late 1950s, the foundations of the EU had been laid and the Soviet Union launched the world’s first satellite into space.
During this time, Lonza continued to innovate with its business model, forming both joint ventures and further subsidiaries. One such company was Aletsch AG, which had been formed in the late 1940s to expand and build new hydroelectric plants, with Lonza remaining responsible for all energy production. The Aletsch-Mörel power plant was built shortly after the JV’s inception and began operation in 1950, while the Ackersand II station was built between 1956 and 1958.
Industrial demand for power required more power stations supported by a stronger infrastructure. In the 1950s, Lonza found that some of its early major power lines lacked the capacity to cope with the growing needs of Swiss industry. They were upgraded to ensure that the new voltage transmission could meet these new levels of demand.
Change was afoot in the chemicals sector too. Lonza formed subsidiaries such as Airex AG. Founded in 1956 and initially producing PVC foams, the company was set up to meet growing demand for synthetic materials. In 1956, Lonza began the industrial production of synthetic niacin (Vitamin B3), which would become an important market in the following decades.
At this time, the chemical industry was facing great changes. There was a decisive shift away from coal to oil as primary material. New processes made it possible to produce ethylene, acetylene and hydrogen (used to make ammonia) from petroleum either simultaneously or separately. This was not a development that Lonza could ignore if it wanted to stay competitive and supply its customers both at home and abroad.
Faced with these challenges, Lonza made the switch from coal to the splitting of light petroleum. At the Annual General Meeting on 10 July 1959, the Board of Directors announced the decision to convert Lonza’s chemical base from coal to oil.
The carbide chemistry had been central to Lonza’s operations for more than half a century, so the change from coal to oil in the 1960s represented a dynamic shift in business focus. Despite the scale of this transformation, Lonza responded quickly, in line with the pace of change in the market.
1964 saw the discontinuation of the first carbide plant in Gampel and in 1965 an industrial cracker was approved in Visp. This would break down gas or petrol into petrochemical building block chemicals such as ethylene and hydrogen, greatly expanding Lonza’s product portfolio. These petrochemicals were widely in demand for many products, including clothing, housing, transport and personal care items.
At the same time, Lonza continued to expand its power generation capabilities, often using joint venture companies. This involved building both numerous new hydropower stations and adding capacity to existing ones. One of the more notable new power stations was the thermal power station at Vouvry. It was built to deal with winter demand which was a challenge for hydropower because mountain waters freeze in the colder months. Vouvry was finished in 1965 by a consortium including Lonza and five other companies. At the time, it was Switzerland’s first oil-fired power station and remained the only Swiss oil-fired power station until it finally closed in 2000.
At this time, Lonza was effectively acting as conglomerate of two businesses whose activities complemented each other. One was a business that supplied electricity and acted as a utility company, while the other business focused on chemicals.
For Lonza’s electricity business, the 1950s and 1960s were a period of constant hydropower expansion as energy consumption increased exponentially, doubling roughly every decade. Interestingly, the Visp petroleum splitting plant (the cracker) offered a brief respite from increased energy usage levels, as it was less energy intensive than the former production of carbide and hydrogen. This meant that the energy requirements of the Valais factories fell by a third.
For Lonza’s chemical business, the 1960s were a time of expansion and flux. Reflecting the rapid changes it had undergone in the past decade, it underwent a fundamental reorganization into four largely independent departments in 1966. These included inorganic chemicals, fertilizers and agrochemicals, chemicals and plastics.
By 1966, the future looked bright for Lonza. The post-war industrial boom had been running for nearly two decades and was the most sustained and intensive period of growth that western economies had ever known. Switzerland had enjoyed 5% average annual growth in the 1950s and 4% in the 60s. The late 1960s saw a peak in the post-war economic boom. In 1970, the Swiss economy grew by an all-time high of 6.5%, the type of increase that would now be associated with emerging markets.
Like many chemicals and energy companies, Lonza was riding this boom. In 1968, it opened a new fertilizer plant with automated lines and expanded storage facilities to help deal with seasonal demand fluctuations, which ranged from 100 tons a day in the summer to 1,200 tons a day in the winter. Both its nitric acid and ammonium nitrate plants were upgraded and expanded. Other chemicals plants were planned and built at the same time.
Geographic expansion continued alongside Lonza’s growth in capacity and capability. In 1969, Lonza established a presence in the US, in the very same year that the Americans landed on the moon.
The construction of power stations continued apace as demand for energy grew. In November 1971, the aluminium manufacturer Alusuisse and Lonza joined forces to create Kraftwerk Lötschen AG. Ground was broken in 1972 and the power plant was finished three years later.
The carbide industry was finally discontinued in the early 1970s. On 14 September 1972, carbide was manufactured for the last time in Visp (and in all of Switzerland) bringing nearly 75 years of industrial history to an end. Today, in the rocky soil of one of the quarries where quartz was once mined for its production, grape vines grow and a Lonza pinot noir is made.
Modern branding was also coming to the Swiss valleys. In 1970, Lonza retired its famous lynx symbol which had featured on its products for many decades. The lynx is native to the Lötschental region and the name of the River Lonza (from which the company takes its name) corresponds to this Celtic word for lynx. Despite this rich history, the world was changing and so the “Lonza lynx” was replaced by a word mark, which formed a precursor to the iconic word mark that is still used today.
A further development which seemed minor at the time would carry huge future impacts for Lonza. In the 1970s, the company Smith, Kline & French (now GlaxoSmithKline) developed a revolutionary drug that reduced stomach acid secretion. It helped peptic ulcers heal more easily, rendering the majority of stomach surgeries unnecessary. The drug was a huge global success, and the company could not keep up with demand in its own factories.
Fortunately, at this time, Lonza had spare manufacturing capacity and so could deliver the early stages of production. This relationship did not last long but the experience provided the necessary impetus for the development of Lonza’s fine chemicals business. It was also an early sign of the company’s future move towards the healthcare industry.
The post-war boom came to an abrupt end in October 1973, when the Organization of Arab Petroleum Exporting Countries (OAPEC) announced an oil embargo to target the nations that had supported Israel during the Yom Kippur War. Neutral Switzerland was not one of them but, like many developed markets in the decades since the war, the country had become dependent on oil.
By the time the oil embargo ended in March 1974, oil prices had risen from $3 a barrel to almost $12. This was a huge shock to western economies and Switzerland was no exception. It imported oil and along with many other countries, banned flying and driving on selected Sundays. Having grown for decades, energy consumption fell for five years from 1973 to 1978 and the economy shrank by 7.5% in 1975 and 1976.
In November 1974, Lonza merged with its business partner Alusuisse. This union was a sensible and pragmatic response to the energy supply concerns. The merger created an industrial conglomerate through vertical integration. The oil crisis forced Western countries to look at both its dependence on the Middle East for energy and how its economies were structured. In Switzerland and much of the developed world, this ignited the transition away from heavy industry to services and high-value manufacturing. One early sign of Lonza’s change of focus towards higher value production at the end of the decade was the opening of Lonza Bayport (Texas), which was the company’s first US fine chemicals plant.
For much of the world, the 1980s heralded the beginning of the age we live in now, in terms of technology, as well as geopolitics and economics. The Cold War finally ended in 1989 with the fall of the Berlin Wall, while capitalism flourished in many developed markets. Companies started to focus on high value offerings and outsourcing and offshoring took off like never before.
Technological change was accelerating too, with the first commercially available PC developed by IBM in 1981. At the same time, the protocols behind the World Wide Web were developed by Tim Berners Lee at CERN near Geneva in 1989, although most people would not hear about it until many years later. Transformation was not limited to the technology sector, the life sciences were changing too. Biotechnology was becoming a buzzword and pharmaceutical giants were delivering therapies and treatments at a new level of scale and complexity.
During the early years of the decade, Lonza created a research group to apply its existing expertise in fine chemistry and organic substances to the biotech field. The goal was both to look at customer needs and explore new areas. A focus was placed on interdisciplinary cooperation and innovation was driven in collaboration with academia. Over the course of the decade, Lonza became one of the world’s first custom manufacturers of biologically active pharmaceutical ingredients.
In 1984, Lonza opened a new fine chemicals complex in Visp, a significant event that was attended by the Bishop of Sion. The company also applied technological advances to its existing activities and in 1984 it developed the “LONZADATA analysis system”. This system made it possible to determine the nutrient requirements of soils to ensure the optimum use of fertilizer. It subsequently led to a new peak in Lonza fertilizer production in the 1980s.
Lonza continued to expand geographically with significant acquisitions in both Italy and the US. The US expansion involved the purchase of plants in Pennsylvania and Ohio for the production of fatty acids, esters, glycerine, hydantoins and special surfactants. As the biochemicals business began to grow and expand, Lonza began to rationalize its involvement in the electricity supply and distribution business.
Other changes were afoot in the 1980s. An increase in government regulation of heavy industries led to a greater awareness of environmental impacts. As concerns came to light, Lonza began to take action to address its environmental issues. It reduced the emissions of the exhaust gases in its Visp hydroelectricity plant and reduced local air pollution levels by recycling the exhaust gases as fuel for the furnace. This allowed the feed water of the steam plant to be preheated, which improved air quality while saving energy.
As Lonza evolved alongside changing environmental and economic agendas, the 1980s were very much a decade of transformation for the business. In 1980, Lonza would have been recognizable to those employees who had worked for it in the 1940s, but by the end of the decade the company would be more recognizable to its current employees.
In the 1990s, some of today’s global problems, such as climate change and cybercrime, were not yet widely apparent, but many of the comforts and benefits of the modern world were already well established. Modern historians have characterized the 1990s as the decade of “Peace, Prosperity and the Internet” and this was a fair assessment for the corporate world. Many businesses embraced the acceleration of technological change and globalization, which supported sustained levels of economic growth across developed markets.
Lonza began the decade with a name change, becoming Alusuisse-Lonza Holding AG in 1990. Alongside this new development, the company‘s brand identity also evolved. A few years later ‘Leave it to Lonza’, was adopted as a new slogan to promote the company as it continued to embrace new technologies and expanded its offerings. In 1992, it expanded into Central Europe by purchasing the Czechoslovakian State Research Institute for Biofactors and Veterinary Drugs. The institute was a target for Lonza at this time, as it specialized in the biotechnological production of fine chemicals.
The 1990s also saw reforms in China as the market began to open and lay the foundations to become an economic superpower. Lonza already had a presence in China at this early stage in the development of the national economy. In 1995, it signed a joint venture agreement for the construction of a plant producing niacinamide (a Vitamin B3 compound) in Guangzhou. Lonza still retains a presence in this important strategic location today.
Changes were also coming to Central and Western Europe, albeit more gradual. With an increase in environmental concerns and the early signs of the circular economy, older equipment was retired, more advanced facilities were built and uses for waste materials found. More widely, alterations in fertilizer production and the discontinuation of some chemicals reflected evolving market demand.
However, the biggest shift at this time was Lonza’s increasingly decisive expansion into biotechnology. In 1996, it acquired Celltech Biologics, a leading manufacturer of therapeutic proteins for pharmaceutical customers. This included two major facilities in Slough (UK) and Portsmouth (US), both of which remain important hubs for mammalian manufacturing in the Lonza Biologics Division today.
With a desire to focus on its new direction of biochemistry and fine chemicals, aluminium smelting and electricity production was not deemed a natural or obvious fit. Management believed that a tighter focus was a key to unlocking greater shareholder value and in the late 1990s Lonza demerged from the Alusuisse-Lonza Group and listed independently on the Swiss Stock Exchange.
Lonza celebrated its centenary in 1997, shortly before the demerger took place. The company had started the Twentieth Century harnessing the fast-flowing Swiss glacial rivers for hydropower and ended it as a specialist manufacturer of fine chemicals and biotech products. This journey, from heavy industry to the knowledge economy, is the same journey that many of the world’s most successful companies and economies made during the same period.
In the Western world, the single most notable event of the first years of the new Millennium was 9/11, which ignited a series of conflicts in the Middle East. At the same time, it became apparent that China was likely to be the next economic and political superpower. The Noughties also saw the growth of service outsourcing in developing economies, most notably in the BRICs.
Alongside these geopolitical and economic shifts, technological changes were also reshaping the world. The Internet was playing an increasingly important role in corporate and domestic life. In 2000, the dotcom bubble burst, but by the end of the decade smartphones were ubiquitous and Facebook had almost half a billion users. While the internet was the undoubted star of the decade, biotech was also making great strides and Lonza was part of this transformation.
In 2000, Lonza commenced a project to build three 20,000 liter mammalian cell culture fermentation reactors in Portsmouth (US). These were completed in 2004 at a cost of more than $200 million, which represented the single largest investment in the company’s history at that time. Just one year later, in 2001, Lonza undertook the divestment of its power generation business. The energy facilities were sold to EnBW Energie Baden-Württemberg AG, and Lonza Energie AG became EnAlpin Wallis AG, headquartered in Visp. This was a decisive moment of transformation as Lonza finally stepped away from its roots in power generation and marked its commitment to a future in pharma and biotech.
By the middle of the decade, Lonza’s transformation was gathering pace. There was clear momentum behind its move to be a leading strategic partner to the pharma and biotech markets. It acquired several more bioproduct businesses making it a global player in biopharmaceutical provision. Moreover, a fourth bioreactor came online in Portsmouth (US), underlining the company’s commitment to the US. It also bought a biopharmaceutical manufacturing operation in Spain from Genentech and broke ground for a new biopharmaceutical manufacturing facility in Singapore.
The second half of the decade saw more of the same. Lonza continued to make acquisitions in areas such as biotech and biopharmaceuticals while selling selected chemical assets. It expanded its life-science platform via acquisitions and grew its cell biology platform. It also improved its offerings for the growing viral vaccine, gene therapy and biotherapy markets as well as contract research and custom biologics. Reflecting a globalized economy and Lonza’s increasingly strong multinational presence, this growth was driven across countries ranging from Canada to China and the UK to Israel.
One notable acquisition was that of MODA Technology Partners, a software company providing paperless quality control and assurance solutions. This was perhaps an early indication of the increasingly prominent role of IT in life sciences, which has expanded exponentially since that time.
Lonza began the decade as a knowledge economy company, and ended it as a global biotech leader. The continued push into biotech (while divesting extraneous businesses) made good sense strategically. Biotechnology gained commercial momentum slowly in the 1990s, but really began to deliver in the 2000s. As the decade closed, it was widely viewed as a key future industry.
One of the best illustrations of the advances in biotech is the cost of sequencing a single human genome (one person’s DNA). In 2001, the total expense was more than $100 million, but by the end of 2011, it was below $10,000. This set a precedent for the commercialization of medical technology, which would continue to grow at pace in the years that followed.
In the early 2010s, the world was still feeling the impact of the 2008 financial crisis. The populist politics in democratic countries were increasingly influenced by the rise of mass social media. This decade also saw an increasingly wealthy and influential China and the widespread realization that global warming must be addressed by both business and governments alike. Finally, biotechnology was really starting to hit its stride, which was perfect timing, as it would play a critical global role in managing the challenges of the early 2020s.
Lonza started this period on a positive note when it won the 2010 Swiss Chemical Society’s Sandmeyer Prize for microreactor technology. It continued to drive expansion in the US, China and Switzerland to service the growing viral vaccine, gene therapy and oncology therapy markets. The company also made its largest acquisition at that time. The Connecticut-based Arch Chemicals was a global company that made biocides to fight the growth of harmful microorganisms. This allowed Lonza to create a leading microbial control business.
There were less obvious milestones too. In 2011, Lonza celebrated 40 years as one of the world’s leading producers of vitamin B3. Since 1971, the company had supplied more than half the world’s demand for vitamin B3 for the human and animal health nutrition industries. In the same year Lonza also became the first company to dual list on the Swiss Stock Exchange (SIX) and Singapore. This reflected the company’s global nature and the growing importance of Asia as a customer and financial market.
Acquisitions were made in New Zealand and Canada, new laboratories were built in Switzerland and the world’s largest dedicated cell and gene therapy manufacturing facility opened in Houston, Texas. These growth investments delivered a broad portfolio to support the healthcare industry, which was growing at speed and scale. This decade saw the beginning of the fragmentation of some large pharma companies and the rise of the small biotech, driven by ambitious levels of VC funding. Combined, these shifting tectonics established and embedded outsourced manufacture and commercialization as a strategic imperative for the healthcare industry.
As the decade closed, Lonza’s future looked bright because there was every chance the 2020s would be the decade of biotech. Then, late in 2019, the first tentative reports of a new respiratory virus started to circulate in the global media. There had been similar concerns with SARS before, but this time it was very different. The decade ahead turned from one of hope and ambition to one of caution and concern.
The gathering storm of the pandemic at the end of 2019 became an urgent reality in early 2020, when many national governments closed their borders and instigated national lockdowns. Immediately, teams of infectious disease specialists and epidemiologists raced to sequence the genome of the virus (known as 2019-nCoV). This was completed and released at unprecedented speed, allowing researchers to develop therapeutic candidates that could help to control the pandemic.
In May 2020, Lonza entered into an agreement with Moderna to manufacture the drug substance for its vaccine against Covid-19, later named Spikevax. In just eight short months, Lonza managed to build manufacturing facilities for the new mRNA technology and commence production of the vaccine drug substance. Based on the initial success in meeting unprecedented delivery timelines, Lonza and Moderna expanded the collaboration in 2021, with three additional mRNA drug substance manufacturing lines in Visp and a further line in Geleen (NL).
While making an active and decisive contribution to controlling the pandemic, Lonza also showed strong levels of resilience in navigating the challenges of the global lockdown. As an essential supplier of goods and services, Lonza’s office-based employees commenced remote working routines, while manufacturing facilities and labs maintained operations with close attention to employee safety. The business navigated supply disruptions and continued to deliver treatments to its customers at a time when global needs had never been greater.
At the same time, Lonza was doing what it had always done – adapting to the changing world. On 1 July 2021, the business completed the divestment of its former Specialty Ingredients business for an enterprise value of CHF 4.2 billion. The part of the business which had dominated so much of the Lonza’s history was charting a new course as an independent company with new owners. For the first time in forty years, Lonza was no longer operating across both the chemical and healthcare industries. The business was now focused solely on healthcare, and its operations were organized into four distinct divisions: Biologics, Small Molecules, Cell & Gene, and Capsules & Health Ingredients.
Today, Lonza is already using its free cash flow to drive an ambitious level of growth. In 2021, the business invested 24% of its sales revenues in new growth projects (CHF 1.3 billion). This level of internal investment will ensure that the company can maintain and consolidate its position as a leading partner to the pharma, biotech and nutrition markets.
In 2022, Lonza celebrates its 125th anniversary. It is also the first full year in which the business operates as a dedicated strategic partner to the healthcare industry. Across a global network of more than 30 sites, its 17,000 employees are now united by common purpose to enable a healthier world and a vision to bring any therapy to life.
As we close our company history, the Lonza business today may seem a long distance away from its beginnings in hydroelectricity. However, there are many constants that have permeated the company for more than twelve decades.
Our capacity to adapt and our desire to serve have combined to define our DNA for the last 125 years and these same characteristics will continue to drive our business forward in the decades to come.