Founded in 1816, Courtaulds became one of the country’s leading silk weavers, but by the end of the century its main product – mourning crepe – was in decline and new sources of growth were needed. In 1904 it acquired the patents for the viscose process. A factory was built in Coventry, and over the next few years Courtaulds established itself as the world’s leading rayon producer. It was the first European company to start rayon production in the US; its American subsidiary accounted for a large share of its profits in the inter-war years.
Following the invention of nylon, Courtaulds was eager to get into synthetics, and in 1940 it formed a joint nylon venture with ICI. (ICI had a patent-sharing agreement with DuPont and thus had access to the American company’s nylon technology.) However, it was kept out of polyester by ICI, which was the principal patent holder, and although Courtaulds launched its own acrylic fibre, Courtelle, in 1959, it was still heavily dependent on slow-growing cellulosic fibres. Partly for that reason, it diversified into other industries, principally paints and packaging. It also had a small textile business, derived from its earlier vocation as a silk weaver.
The diversification drive was stepped up in the mid-1960s, following an abortive attempt by ICI to take over Courtaulds. The new management which took control of the company after the bid adopted a policy of forward integration, investing on a large scale in textiles and clothing in order to secure captive outlets for its fibres. The company also made further acquisitions outside fibres, principally in paints. A new business that was started in the 1960s, based on licensed technology, was carbon fibre, which is described more fully in the next section; carbon fibre later formed part of a new division, Courtaulds Advanced Materials.
The investment in textiles and clothing proved to be a serious mistake and in the mid-1970s Courtaulds was in financial trouble. Many of its textile mills and clothing factories could not compete with imports from low-wage countries; cutbacks in capacity were unavoidable. In fibres Courtaulds had been successful with Courtelle but still had a big commitment to cellulosics, the outlook for which looked unpromising. Of its various diversifications only paints had done well.
What followed in the 1980s was an attempt to reposition the company, aimed at businesses in which Courtaulds had, or could reasonably hope to create, a competitive advantage. Textiles and clothing were demerged into a separate company, Courtaulds Textiles; several downstream chemical businesses, principally in coatings and advanced materials, were acquired; and a
woodpulp mill in South Africa which had been the principal supplier to Courtaulds’ rayon factories, was sold. Fibres might have been divested during this period, but Courtelle was profitable, and the company had developed a new cellulosic fibre, based on the solvent spinning process (see below),
which appeared to have excellent prospects. In 1990 the company decided to manufacture the new fibre, branded as Tencel, in the US; the factory came on stream in 1992.
woodpulp mill in South Africa which had been the principal supplier to Courtaulds’ rayon factories, was sold. Fibres might have been divested during this period, but Courtelle was profitable, and the company had developed a new cellulosic fibre, based on the solvent spinning process (see below),
which appeared to have excellent prospects. In 1990 the company decided to manufacture the new fibre, branded as Tencel, in the US; the factory came on stream in 1992.
By the mid-1990s Courtaulds had two main businesses, paints and fibres, of roughly equal size and at this point the company’s financial position began to deteriorate. Profits from the older fibres had collapsed, while sales of Tencel, after a promising start, were slowing down. Several of the acquired businesses were performing poorly. The best part of the company was the paints division, and it attracted the attention of international paints companies which were seeking to enlarge their stake in this industry. In 1998 Akzo Nobel, the Dutch company, launched a successful takeover bid for Courtaulds. Its only interest was in paints; the fibres business, including Tencel, was later sold to CVC, a private equity firm.
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