At the end of the day on January 31, 1979, Henrik Thorning got into his car, an Alfa Romeo, and drove the short way home to his wife and two young sons. He had quit his position as a technical manager in the Danish division of Jotun, a large producer of plastic materials, and that day had been his last on the job. In October of the previous year, he and his wife Dorthe Thorning had made the decision: now was the time when they would start up their own company.1
He came home that Wednesday in January to a company that existed only in the form of a small office in the basement of his and Dorthe’s house in the city of Kolding, where a business and financing plan had been drawn up. But over the following months Fiberline began to take shape. Henrik Thorning’s idea was to start a production of profiles in reinforced plastic (See Appendix 2 for more details on reinforced plastic and profiles).
These materials are strong, flexible, and lightweight, and in the 1970s they had been known and used in a number of different industries for a period.2 But Henrik Thorning wanted to make profiles using a new method called pultrusion. This would ensure greater control of the process in which plastic material is mixed with reinforcement fibers.
Potentially this would give a more homogeneous product of greater strength which would make the possible use of the profiles much greater compared to the profiles already on the market.3 So far there had been only a little experimenting with pultrusion in Europe, and no one had much success with the method yet.4 Therefore, Henrik Thorning would have to build up a production without really knowing if it would be possible to refine the process of pultrusion to a level where it could be industrialized.
In this first chapter of the analysis, I will establish what I see as the basic narrative of Fiberline, in which the self-conception and image of context of the start-up is expressed.
Penrose, in a rare consideration of the start-up situation, notes that
The selection of the relevant product-markets is necessarily determined by the ‘inherited’ resources of the firm – the productive services it already has. This is true even in the extreme case of the prospective new firm with no resources at all other than the entrepreneur himself and what capital he can raise; the particular productive activities to be undertaken by such a firm must be chosen from among the alternatives suitable to the abilities, finances, and preferences of the entrepreneur.5
Fiberline and Henrik Thorning draw on the basic narrative when they make decisions and act; the preference of Henrik Thorning in focusing on particular productive activities and markets finds explanation in this narrative. The construction of the basic narrative is strongly influenced by the prior experience and knowledge of Henrik Thorning, which can be said to be the inherited resources of Fiberline or the productive services available to the company in the start-up situation. These inherited resources will be the focus of the chapter following this one. Before I turn to the basic narrative in this first chapter, I will begin by describing the circumstances of the start-up of the company in 1979 and the method of pultrusion.
The circumstances of the start-up
Henrik Thorning’s first few months working from the basement at Terresseparken in Kolding held many different challenges. Decisions had to be made concerning financing, equipment, machinery, personnel etc. Henrik Thorning agreed to buy a pultrusion machine from a Norwegian company called Plastkonstruktioner. The price was 740.000 Norwegian Kroner.6 After making this decision, he started to look for a suitable site for the production in the area around Kolding, where he had a strong network of family and
friends, some of which were to become an important part of the start-up. Also it was from this area he drew most of his professional experience, and he had good knowledge of the other companies in the composite industry, many of them clustering in the southeastern part of Jutland and particularly around Kolding. The existing composites companies were mostly using different methods of laying up fiber class to create for example boats. Since Henrik Thorning was planning to exploit the method of pultrusion to create a production of a different kind, these could not be perceived as immediate competitors. Instead, they presented a knowledge base from which experienced employees might later be drawn.
Part of this professional local network was also Henrik Thorning’s old employer Jotun.
They were to deliver the polyester for the production, and as Henrik Thorning already knew the market well, he felt sure to get a good price. Jotun’s sales manager Peder Irgens was (and is) a good personal friend of Henrik and Dorthe Thorning, and at Jotun, he dealt with the business of Fiberline.7
In a newly developed industrial area in Kolding, a local contractor was building a small production hall which suited the need of Fiberline. After the lease was signed, though, the contractor went bankrupt. The machine, however, was on its way from Norway, and Henrik Thorning was now in a hurry to find a new location. He found some empty buildings in the village of Nr. Bjert just outside Kolding. They were owned by a company called Peter Madsens Maskinfabrik and had been used for manufacturing equipment for the agricultural industry. The lease was only for part of the buildings, which also housed other small production companies, but included the right to use a parking lot in front of the buildings as well as some additional buildings for storage.8 Dorthe and Henrik Thorning decorated the small office in the corner of the production in orange and brown as the fashion of 1979 dictated. Here, Dorthe Thorning would set up her work place, which included an electric typewriter—very advanced technology at the time she thought and one of her most valued possession.9 Before Dorthe and Henrik Thorning had moved
in and started decorating office space, funds had been raised. Their strong family network played an important role in this effort.
Dorthe and Henrik Thorning had discussed their plans for starting up a company with Dorthe’s older brother Anders Hallen Pedersen many times. He was following their efforts and was interested in investing in the company.10 Anders Hallen Pedersen owned a company called Dukadan, one of Denmark’s largest distributors of plastic products and intermediates, and by the late 1970s Dukadan had invested in several different production companies in the plastic industry.11
Henrik Thorning and Anders Hallen Pedersen agreed they would both invest 200.000 DKK in the company. Anders Hallen Pedersen represented Dukadan in this venture, while Henrik Thorning invested as a private individual (He borrowed the money from his farther).12 Apart from the 400.000 DKK invested by the owners Fiberline started out with further capital of 800.000 DKK. These were provided as a loan from FIH and from Aktivbanken A/S, who also granted an overdraft to support the day to day running of the company.13 The bank had been created in 1970 after a merger of four local banks.14 W.O.
Christiansen had been manager of one of the four banks, Kolding Folkebank, and after the merger he was part of the management of Aktivbanken. He became Fiberline’s contact in the bank, where both Henrik Thorning’s father and grandfather were already customers after having used Kolding Folkebank before the merger.15
Today Henrik Thorning tells that he met with W.O. Christiansen already in 1978 to present him with the business plan for Fiberline. The plan was drawn up before Henrik Thorning quitted his job, because he wanted to be sure he could get the necessary capital before this. They met for coffee and what Henrik Thorning describes as a casual meeting at 11 am, one day in October. Henrik Thorning gave him the business plan and W.O.
Christiansen promised to look it through after lunch the same day. In the afternoon he
called Henrik Thorning and said that everything looked fine and that the bank would be happy to lend the requested sum to the new company. He stressed, Henrik Thorning explains, that the material seemed to be well prepared, and that as both Henrik and Dorthe Thorning were of respectable family he knew well it would be no problem.16
On January 27 1979 the founding was registered by the Danish authorities.17 Both the shares and the votes were divided equally between the two owners. Danish law stated that a joint-stock company with a share-capital of 400.000 DKK or less could chose to have a board of just two members, whereas companies with a larger share-capital were obligated to establish a board of at least three members.18 Still Fiberline chose to form a board with four members.
Henrik Thorning asked his friend Kai Busch to be part of the board of Fiberline. Kai Busch was managing director of Kolding Trikotagefabrik a local textile company.19 Dukadan were to be represented in the board by Anders Hallen Pedersen and his company’s lawyer, Jørn Hansen. The two of them were used to working with each other in Dukadan and with the many subsidiaries already owned by the company.20 Jørn Hansen could be very frank and sometimes appears to have taken it upon himself to communicate the attitude of Dukadan in situations where it would have been more difficult for Anders Hallen Pedersen (as a brother in law) to do so.21 This might also have been the point of forming a larger board, as a buffer for potential disagreements in the family, but nothing was stated directly about the matter.
Altogether Henrik Thorning appears to have been rather well prepared, not least for raising capital, before he quit his job in Jotun. Penrose notes that “the type of entrepreneurial service needed to raise capital may not be closely related to the type of services needed to run a firm efficiently, for successful raising of capital depends on an entrepreneur’s ability to create confidence.”22 Henrik Thorning certainly seems to have
inspired confidence, probably well aided by the relevance of his experience. But his network, both private and professional, was also important for his ability to raise capital and as such an important resource of the prospective firm which was put to service in the start-up situation.
In his article on the Lessons from Iago, Hjorth has discussed the persuasive abilities of the entrepreneur. He uses Shakespeare’s Othello and particularly the sly and cunning character of Iago as an allegory to discuss how the entrepreneur prior to the start-up uses narratives to make sense of his idea of the prospective company and just as importantly to convince others of the idea.23 Therefore, it may be assumed that the basic narrative of Fiberline to which I will soon turn (or at least a version of it set in future) expressing the core of the idea of the company was constructed well before the founding of the actual firm and instrumental in inspiring confidence in Henrik Thorning, making him persuasive.
Penrose also notes, however, the persuasive abilities of the entrepreneur are not the same services needed to run a firm efficiently. In the view of Henrik Thorning the efficient running of Fiberline rather demanded that resources in production and product development were put to service and as noted his intention was to build his company on producing profiles by pultrusion.
Pultrusion
At the middle of the 1970s, laying up and molding fibers soaked in plastic materials by hand was the most used method for making reinforced plastic. Apart from serious health issues, this was a problematic method because it was hard to control, which again made it difficult to ensure a homogeneous quality of the products. This meant that only quite simple constructions could be made in the material. Other different methods of molding then being used in the industry had the same problems of ensuring even quality. Thus,
many were experimenting with different forms of continuous processes because they would in principle be easier to control and optimize.24
The method of pultrusion is based on a continuous process. It was first developed in the 1960s by Brandt Goldsworthy, an American mechanical engineer working for many years in the aviation and automobile industry and the lead innovator in many different methods of producing reinforced plastic materials. By 1976 approximately 40 companies in the U.S.A. were producing profiles by pultrusion, by a number of different methods, in an industry with no overall standard and mostly producing simple profiles.25 The methods used had many limitations and the product was rather expensive compared with profiles in other materials, for example steel. The fibers were mostly pulled (hence the name of the method) through open polyester baths, making it difficult to control the placing of the fibers as well as problematic to ensure a healthily environment.26
In Europe the experiences with pultrusion of profiles was still limited; although there were attempts in both England and France, no one had yet been very successful in developing the method to a stage where it could be industrialized. The products manufactured were still very simple and often of poor quality. As in America, the fibers were pulled through systems of open baths.27
Jotun, where Henrik Thorning worked, was interested in developing new uses for the reinforced plastic materials and was also developing new methods of production. The company was focusing, however, on another method called filament winding, which is used to make pipes, poles etc.28 The company Plastkonstruktioner in Norway was working with pultrusion, and they had developed a way to inject the plastic material into a closed chamber through which the fibers were pulled. In October 1978 Henrik Thorning visited Plastkonstruktioner in Norway: he saw that what they were doing for developing the process of pultrusion had potential and could make it possible to produce the profiles with
greater accuracy. Also the profiles could be shaped in countless ways (at least in theory) and given numerous different properties so that they might be used in many industries.29 A production based on this form of pultrusion would then be different from that of most other composite companies in the region (and Europe in general). As mentioned these generally focused on a simpler process and a product with only one or very few uses.
In pultrusion as it is done in Fiberline today, reinforcement fibers are pulled through a guiding tool where they are placed very precisely. This is important for securing the desired properties of the finished profile. The fibers are then led through processing equipment where they are impregnated with plastic, called the matrix material. The combined mixture of fibers and matrix is pulled further through heating equipment where the profile is cured to its final form. The fully cured profile is then pulled forward to a saw that cuts the profiles into defined lengths.30 The process enables continuous production of composite profiles with a constant cross section and material properties tailored to specific purposes (see appendix 3 for a drawing of the process and further details).
This new form of pultrusion required less manual labor than the older methods which would potentially help close some of the price gap between profiles in reinforced plastic and other materials. Another advantage was the improvement of the working environment gained by injecting the plastic material into a closed chamber instead of using open baths.
At Jotun, Henrik Thorning had been tasked with evaluating the different existing methods for producing reinforced plastic as part of his job. This had drawn his interest to pultrusion, and he had found it to be the most efficient method compared to the six other methods he evaluated (see appendix 4 for the main points of the evaluation). Also, he knew that Jotun was working with the development of new types of polyester that were easier to control in the curing process and would be well suited for pultruison.31
As Henrik Thorning tells it today, pultrusion is a very difficult process to master because there are many variables to control: for example, the fit between the fibers and the geometry of the tool, the temperature and curing process as well as the reaction between the plastic material, the fibers and the different chemicals that are added to different purposes (to accelerate the curing of the profiles or to give them different colors for instance). The difficulties of pultrusion were also a general point raised when discussing new methods in the plastic industry in the early 1980s.32
Plastkonstruktioner never really mastered pultrusion. According to Henrik Thorning, the Nowegian company’s problem was a lack of focus on this single process—and eventually they gave up. This observation seems to be important for Henrik Thorning, who sees determined focus as a main explanation why Fiberline learned to master the process.33 This focus and the process of pultrusion in general is a key part of what I have chosen to call the basic narrative of Fiberline which I will first present then elaborate on in the following.
The basic narrative of Fiberline
The basic narrative is centered on three core ideas of Fiberline; the product, the process and the potential. It is continuously formulated and reformulated from the start-up and, though not unchallenged, it continues to give sense and purpose to Fiberline up to today.
It may be formulated along lines such as these:
Henrik Thorning founded Fiberline to produce profiles in reinforced plastic. It was simply too good an idea to pass over and he believed he could make pultrusion work. Profiles in reinforced plastic is an amazing product with many beneficial properties. If produced by pultrusion the profiles are usable for endless purposes and they have the potential to challenge profiles in steel and aluminum.
The main function of the basic narrative is to give purpose or meaning to Fiberline. It constructs the company’s conception of self which as noted by Penrose is the grounds for action. Also the basic narrative creates an image of the environment (or the market) in which elements are in clear opposition to Fiberline (the steel and aluminum profile industries). This contributes to strengthening the self-conception of Fiberline. To know who you are it is good to know what you are definitely not.
In the following sections I will unfold the basic narrative through a line of examples and also discuss how this “micro” narrative of Fiberline draws on larger narratives for example of entrepreneurship to strengthen the self-conception of the company. I will first discuss how the motivations of Henrik Thorning are narrated and how he is established as the founder of the company. I will then consider the understanding of the product and the perception of the market in the basic narrative. I will also discuss the role attributed to the method of pultrusion in the narrative and finally connect these points to the construction of the company’s birthday.
Establishing a proper motive and a founder
In November 1981, about three years after the founding of Fiberline, a local newspaper featured an article on the young company. It was mostly built on an interview with Henrik Thorning in which he discusses founding the company and his motivation for doing it. In the article it is noted that Henrik Thorning took the leap from a permanent position in Jotun. As he explains:
At that point I had worked in the Jotun Group for three and a half years. It was an excellent company and I was satisfied in working there. But at some point you get an idea that you would like to try out in practice… I think that for some people it is natural to be self-employed and start something up.34