Few industries are more important to modern life than the chemical industry. Almost everything we touch, the clothes we wear, and much of what we eat contains chemicals or was processed by chemicals. Yet the companies are usually out of sight of consumers. This extremely complex industry has long been led by giant companies like the American firms DuPont, Union Carbide, and Dow, and the big German companies BASF, Bayer (pronounced “Buy-er” in German), and Hoechst (“Herkst”).
Yet many of the most important breakthroughs have come from smaller “specialty chemical companies.” Here is the story of perhaps the greatest and most successful of those specialists, Rohm and Haas of Philadelphia, today part of Dow. We see and touch the company’s innovations throughout our lives. The story of Rohm and Haas is one of a lifelong transatlantic friendship and partnership and one man’s even-longer dedication to building a great company, despite a multitude of obstacles.
In the late nineteenth and early twentieth centuries, the top university chemistry departments, chemists, and chemical companies were German. Throughout that era, the chemical industry was one of the fastest growing industries in the world, the “high tech” of its day, as the chemists developed new dyes for fabrics, new medicines, new paints, and many other products, often derived from coal or petroleum.
After working for the German Merck company, bright young German Ph.D. chemist Otto Rohm (pronounced with a long OH as in “Kohl’s”) had taken a job in 1904 as an analytical chemist with the Municipal Gas Works in Gaisburg, Germany. On his daily way to work, Rohm walked past the smelly works of a local tannery. On both sides of the Atlantic, the tanning of hides and skins to turn them into shoe leather and other uses was a major industry. A key step in tanning was soaking the hides in “bate” to soften them and open their pores to later accept the dyes that colored the leather. For centuries, tanners used dog dung and hen feces, often imported from Turkey, for their bate. This bating process was the source of the obnoxious odor Rohm sensed.
What caught the nose of the inquisitive chemist was that same odor coming from the waste products of the gas works where he worked. Outside of work hours, Otto Rohm began to experiment with these waste chemicals to see if he could create a man-made bate to replace the noxious animal excrement. Over time he developed a synthetic product which seemed to do as good or better a job of bating. Rohm left his job to work for a large tannery, which licensed his product for sale to other tanneries in Germany.
Otto Rohm is only half of our story. The other man in the picture was his longtime friend, Otto Haas. Otto Rohm was a great chemist, but Otto Haas turned out be to an even better businessman. After working on English language accounts at a German bank, Haas emigrated to the United States in 1901 at the age of twenty-nine, seeking greater opportunities. In New York City, Haas worked for a chemical company and a meatpacker, learning American business practices and improving his English, though he never lost his thick German accent.
Back in Germany, Otto Rohm continued to improve his synthetic bate. In 1907 he wrote Otto Haas that Haas should come back to Germany so that the two friends could form a business partnership to further profit from Rohm’s inventions. Haas crossed the ocean and the two men formed the first Rohm and Haas partnership. Rohm worked in the lab; Haas helped him but also traveled the country meeting with tanners to understand their problems and opportunities.
Oroh, the synthetic bate named after the partners’ initials, worked at first but then the leathers made with it faded over time. The colorful dyes applied to the leathers would not hold as well as those bated with dung. Otto Rohm went to work, studying the enzymes in animal feces, ultimately extracting the missing ingredient from cattle pancreases. Working day and night (“like Americans do,” said Haas), the two men created a more successful new synthetic bate, Oropon, by the end of 1907.
Haas started selling Oropon in England. Working closely with each customer, he learned that every type of hide or skin required a slightly different formula, which Rohm created. A full product line evolved and the partners opened a factory in Darmstadt, Germany. It came time for Otto Haas to return to the America he loved and start selling Oropon there.
The big American tanning industry was divided into segments. Heavy cowhides were turned into the soles of shoes and other uses by Chicago’s giant meatpackers. Patent leathers came from Newark, New Jersey. But the softest and most exclusive leathers, which came from goats, sheep, calves, and ostriches, imported from around the world, were tanned in Philadelphia. Purses, billfolds, gloves, and the upper parts of women’s shoes were made from these high-end leathers. Among the softest of all was kid leather, made from goatskins. Each year, Philadelphia’s tanneries turned sixty million goatskins into fine kid leather. All put up with the stench of animal droppings as their bate.
In September 1909, Otto Haas opened a Rohm and Haas office in Philadelphia to serve this market, where the very effective but more expensive Oropon could meet the specialized needs of the fine leather tanners. Haas had little luck convincing the hidebound (pardon the pun) tanning industry to try something new, when the old ways had worked fine for centuries. He put special effort into selling the Foerderer tannery, largest in the city, which tanned three hundred thousand skins a week. Months turned into years as Haas continued selling, learning the needs of every tannery and of every skin, and always in touch with Otto Rohm and his laboratory in Germany.
Success and Expansion
Gradually achieving success in the tanneries of Philadelphia, then in other cities, the American branch of Rohm and Haas grew under the intense, focused leadership of Otto Haas. Few chemical companies put as much emphasis on customers and customer service as Haas and his company. He and Rohm shared their discoveries and ideas with customers, tested each new innovation in real world tanneries, and kept developing new solutions to customer problems. By 1913, 120 American tanneries were using Oropon in its various formulations. Rohm and Haas also developed the reputation of being a good place to work, with Otto Haas treating his employees like family.
World War I changed everything for any German company doing business in the United States. The American government seized “alien property” in times of war. Foreseeing this, in April 1917 Otto Haas created a separate, American Rohm and Haas company (though part owned by Rohm and his family). At first only importing and packaging Oropon made in Germany, the American company in the same year built its own factory at Bristol, Pennsylvania.
Haas and Rohm continued to share their knowledge, and after war’s end, could more comfortably communicate with each other. In 1920 the American Rohm and Haas purchased the general chemical business of Philadelphia’s Charles Lennig company. Lennig’s big dockside factory at Bridesburg, Pennsylvania, gave Otto Haas more factory capacity.
The men continued to develop new tanning bates, including ones for the heavier hides made by the Chicago meatpackers, which ended up becoming shoe soles, combat boots, and luggage.
In 1927, Haas moved the company’s headquarters to a fine building on Philadelphia’s Washington Square.
In Germany, the ever-inquisitive Otto Rohm continued exploring other aspects of chemistry beyond tanning bates. Otto Haas knew that the companies had to expand beyond the leather industry in order to grow. He supported Rohm’s laboratory work, often putting up the money as the German firm struggled financially while the American arm became profitable. Haas also began to sell the company’s products internationally, at first focusing on Latin America. In 1927 Haas created a separate company, under his control, to do research in the United States, in conjunction with Rohm’s work in Germany.
Many new products came from the partners’ work. Haas also developed relationships with the other German chemical companies, often licensing the American rights to new chemicals from them. A Rohm and Haas engine oil additive allowed the oil to flow better at extremely cold temperatures. In World War I the Russian army used the additive to allow their tanks to work better than even the Germans’ tanks during the freezing Battle of Stalingrad.
In 1901, Rohm had written a paper on acrylic chemistry, and his curiosity led him back to that field in the 1920s. Among his first inventions was an acrylic based Gluefilm. When placed between two sheets of glass, the Gluefilm made the glass shatterproof.
The two Ottos saw great promise in this product. The burgeoning auto industry was changing from selling open cars like the Model T to the closed-body car, which required windows. The shattering of glass in auto accidents was a major hazard to any automobilist, as they were called in the day. Henry Ford was the first major automaker to offer shatterproof glass, but the windows soon turned yellow from continued exposure to the sun. Despite setback after setback, through multiple experiments and failures, the Rohm and Haas companies continued working on new formulations and uses for acrylics.
The big breakthrough came from Rohm’s work on Poly(methyl methacrylate), as the chemists call it. Crystal clear, easily formed into any shape imaginable (even curved storefronts) and shatterproof, this plastic was the first successful “synthetic glass.” Plexiglas could be lit from the side and carry the light around corners. Attuned to branding from their experience with Oropon, Rohm and Haas called their version “Plexiglas.” At the same time, the giant British chemical firm Imperial Chemical Industries developed their version, “Perspex,” and DuPont created their own “Lucite.” Neither of those giant companies understood the power of branding, marketing, and advertising any better than did Otto Haas. He began to study and pursue every application to which Plexiglas might be put.
At the New York World’s Fair (“World of Tomorrow”) of 1939-40, Plexiglas was everywhere. The biggest and most-attended exhibit, Futurama by General Motors, used Plexiglas throughout. GM even proudly paraded a see-through Pontiac with a body made of Plexiglas. Automobile taillights, radios, small appliances, jewelry, signs, and many other uses of Plexiglas were demonstrated across the fairgrounds, even in a plastic house. The public saw it as a “wonder material.”
While Otto Rohm died in 1939, the close relationships of the two families and their companies continued. World War II brought more challenges to German-American trade as the American chemical industry rose to the challenge of losing access to Germany’s often-superior chemical research. Otto Haas, a confirmed American and now a patriot, insured that his Philadelphia company was independent and could stand on its own. Like the rest of American industry, he pledged his full support, first to the Allies and then to America when it entered the war.
The war brought Otto Haas unprecedented business when the military discovered Plexiglas to be the ideal material for aircraft windows. Bulbous “bubbles” of Plexiglas, which could withstand the temperatures and pressures of flight, were perfect for aerial photography, gunners, and the men who aimed bombs. As always, Otto Haas and his colleagues worked around the clock to adapt their products to the needs of customers. Some plastic fabricators had trouble bending the Plexiglas sheets into the required bubbles, so the company helped them and made the bubbles for the military.
In 1941, America produced over 18,000 military aircraft, with 85% of the required plastics purchased from Rohm and Haas. Between 1937 and 1942, Haas’s production of Plexiglas increased one hundred times over. In the same time frame, the price per square foot of Plexiglas sheeting dropped from $2.86 to $1.02 as production efficiencies were achieved. In 1936, the American company had sold $13,000 worth of plastics. In 1941, the figure was $8.9 million.
While Rohm and Haas became known as the Plexiglas company, Haas’s labs and his desire to broaden the company’s product lines led to insecticides, some of which were especially important to the vineyards of France and Italy. Agricultural and other chemicals, each meeting a specialized industry need, were developed. Haas avoided the big commodity chemicals like sulfuric acid where the industry giants dominated.
The War also again raised issues of “alien property.” The United States government had seized the shares of the American company owned by Germany’s Rohm family. The government sold those shares, about 25% of the American company, to the public in a 1949 stock offering. The government collected $9 million, money which eventually went to the original owners, Otto Rohm’s children. Rohm and Haas stock thus became listed on the New York Stock Exchange. At the time, the company generated $5.1 million in annual profits on revenues of $62 million. Rohm and Haas was still tiny compared to competitor DuPont, which in the same year registered profits of $214 million while revenues exceeded a billion dollars for the first time in that company’s long history.
The postwar economic boom brought more prosperity to Otto Haas and his company. Virtually every major retailer, auto dealership, and gas station soon used internally lit Plexiglas signs to promote their locations alongside the nation’s streets and highways. General Motors’ Guide Lamp division in Anderson, Indiana, became one of the largest buyers of Plexiglas, now available in powder form and many colors, for taillights, knobs, and dashboard parts. Haas continued to lead the company into new categories of specialty chemicals and to expand internationally. New factories were built in Knoxville, Houston (Deer Park), and elsewhere.
On New Year’s Eve, December 31, 1959, the eighty-seven-year-old Otto Haas announced his intention to finally retire from active management, turning the company over to his son after fifty-two years of leadership. Few entrepreneurs have ever served so long and so well. The company’s stock, 35% owned by the Haas family, had risen to about thirty times the valuation of 1949. Two days later Otto Haas died, his life’s work completed.
Rohm and Haas after Otto Haas and to Today
While Rohm and Haas continued its focus on customer service and specialized chemicals, the chemical industry witnessed dramatic changes in the last half of the twentieth century. As formerly patented chemicals and chemical processes became generic commodities, leading companies sold off many operations while buying others with more attractive “upsides.”
In the 1960s, Rohm and Haas management partially caught the “diversification bug” so rampant in American industry, venturing into pharmaceuticals and synthetic fibers. These efforts failed as the smaller company could not compete with industry giants. But the core businesses, the longtime specialties of Rohm and Haas, continued to profit the firm, with factories and branches around the globe. By the 1980s, the failed ventures had been sold and the company returned to strength.
The changes in the industry, including the rise of Asian chemical companies, eventually led Rohm and Haas to even sell off Plexiglas, no longer covered by patents. Yet the company remained strong, true to the marketing and customer service standards of Otto Haas.
In 2009, industry giant Dow Chemical bought Rohm and Haas for $15.4 billion, including $3 billion in financing from Warren Buffett’s Berkshire Hathaway company. The price was 75% above the stock’s prior stock price, required in order to fend off a competing bid from Germany’s BASF, today the biggest chemical company in the world. In the prior year, Rohm and Haas’s 17,000 employees in 27 countries had generated revenues of $8.9 billion. Dow followed this big move by merging with DuPont in 2015, creating America’s largest chemical firm. Subsequently, in 2019, this giant split into three companies: Dow, DuPont, and Corteva (agricultural chemicals and seeds).
Rohm and Haas remains a key global component and brand for the new Dow, Inc. Plexiglass (the generic term for the trademarked Plexiglas with one “s”) is now primarily produced in China and other Asian nations and is sold by various companies worldwide under many trade names. Japan’s Mitsubishi Chemical company aggressively markets the Lucite brand, formerly owned by DuPont. In Germany, the Rohm company of Darmstadt, having changed hands multiple times, continues to make and sell Plexiglas. Demand for acrylic plastics boomed during Covid, whether for face shields or for barriers between store cashiers and their customers.
While Otto Rohm and Otto Haas likely never dreamed their company would someday be worth billions, it was through their lifelong dedication to high standards and to each other that created the foundation for this great company. And it all started with dog poop and bird droppings.
American Business History Center