Mustad

History

Mustad is a group of companies created in 1843 by Ole Mustad, taking over the Brusveen Nail and Wire Factory after the death of the founder Hans Skikkelstad, Mustad's father-in-law.^[1] The company was headquertered in the small village of Gjövik (Norway), an area with poor infrastructures where transportation was an obstacle to most type of supplies: this favoured the development of many local businesses fulfilling the local communities' needs of everything from food and clothing to tools, schooling and even health services. In spite of the negative conditions and the pessimistic visions of the norwegian Department of Interior ("The difficulty in competing with foreign factories means that industry will never succeed in this country"^[2]), by 1860 Ole Mustad led his company to a primary position in the production of small metal products like fencing wire, nails, pins, fish hooks, horseshoe nails, shipbuilding nails, paper clips, thumb tacks and an almost endless series of other metallic wire-based products.

Crisis

The growth and successes of the 1870’s were followed by recession, mirroring the overall European crisis. The stagnation of the building activities resulted in a decreasing demand for nails. Hans Mustad, who in the meantime had taken the management over, experienced a very critical time which brought him to the suspension of all payments in 1879. Fear took hold of creditors and employees, as so many other companies had gone bankrupt in the same period, but something extraordinary happened: the workers continued working indefatigably, without payment for 2 years. They received “Mustad banknotes” instead: the notes acted as written acknowledgments from Mustad and were accepted by shops in Gjovik. The whole debt including interests was paid back by July 1882 and all creditors got their check during a memorable dinner at Hans Mustad’s home^[3]. Since then, Mustad’s entrepreneurial philosophy took the company to assume wide responsibilities over employees and their families: children were provided schools and several recreational and welfare activities were offered. Hans Mustad’s social disposition attracted attention of the press that started visiting the factory premises and its schools, band, choir, library and shop.

International development

These years were also crucial for the international development of the company. The obstacles at the time were mainly protectionism and tariff walls ^[4]: the decision was taken to start production within the international markets with the biggest potential. A nail factory was established in Finland in 1886, shortly followed by horseshoe nail factories in France (Duclair, 1891) and Sweden (Dalsland, 1898). Just before World War I, Europe consisted of five great powers (the United Kingdom, France, Germany, Austria-Hungary and Russia), plus another two nations were large consumers of horseshoe nails (Italy and Spain): in 1913 Mustad was established in all of them with the exception of Russia. Localisation criteria for the plants were mainly the access to energy, raw materials and transportation: a major example of longevity, the Swedish facility is still active and nowadays it is the major horseshoe nails supplier within the Mustad Hoofcare division.

War and diversification

The de-centralized strategic approach proved very effective for Mustad when - after World War II - the company lost all its factories behind the iron curtain, including about 8000 employees. The independent structures survived the war and grew rapidly to new successes. In the second half of the XXth century Mustad has increasinlgy diversified its interests into many different businesses, mostly based upon metallic wire, but also expanding into food and machinery: paper clips (of which Mustad turned out 70 million pieces a year), mattress springs, zippers, screws, margarine (which was produced for over 100 years and discontinued only in 1996), machines for the paper industry and for the manufacturing of boxes.

1. ^ Terje Paulsberg, "Mustad - Fish Hooks for the World"; Alfa Forlag AS, 2007
2. ^ Terje Paulsberg, "Mustad - Fish Hooks for the World"; Alfa Forlag AS, 2007
3. ^ Terje Paulsberg, "Mustad - Fish Hooks for the World"; Alfa Forlag AS, 2007
4. ^ A. Tena, Tariff Structure and Institutions in the Late 19th Century. New Perspectives on the Tariff Growth Paradox, 2007; http://www.ekh.lu.se/ehes/paper/Antonio%20Tena%202%202%20%28EHS%20Lund%29%20%282%29.pdf

1. REDIRECT O. Mustad & Son