More than one hundred and twenty years ago, on April 6, 1895, Siemens founded its first company in South Africa. The first major order is the expansion of Johannesburg's power supply and the neighboring goldmines – the beginning of a prosperous development.
Siemens’ first business activities in South Africa date back to 1860, when the company’s English affiliate – Siemens, Halske & Co (from 1865: Siemens Brothers) – received an order to supply equipment for the continent’s first electrical communications link, a telegraph line connecting Cape Town with the British naval base at Simon’s Town. In the decades to follow, Siemens also equipped several telegraph offices and supplied telecommunications cables and telephones as well as equipment for the generation of electric lighting. Local operations were conducted via independent agencies. In 1880, G. A. Boettger in Cape Town became Siemens Brothers’ sole representative in South Africa.
Gold rush in the farm country – first major orders
In 1886, the world’s largest known gold deposits were discovered in the Witwatersrand district of Transvaal. News of the discovery triggered a huge gold rush that accelerated industrial development in what was still a largely agricultural country. Foreign companies like Siemens & Halske also profited from this development. For example, the Siemens parent company in Berlin was awarded a major contract to build Cape Town’s first electric power plant.
Siemens signed a second lucrative contract at about the same time. Starting in 1895, the company played a key role in expanding power supplies for Johannesburg and the neighboring goldmines. Rand Central Electric Works Ltd., which had been established in London to manage this expansion, commissioned Siemens to build an alternating-current power plant near the coal mines at Brakpan. Electricity was transmitted from the plant to the growing gold mining town and to the mines’ various consumers via high-voltage power lines. The first public power plant in South Africa took two years to build and went into operation at the end of 1897.
The energy business flourishes – The Siemens & Halske South African Agency, 1895
These entrepreneurial successes strengthened Siemens’ resolve to organize its businesses activities in South Africa more systematically. On April 6, 1895, the Siemens & Halske South African Agency was founded in cooperation with R. Günzburg & Co. The purpose of the joint venture, which was headquartered in Johannesburg, was the “sale of S&H products and the construction for third parties of individual or centralized electric lighting, power transmission, telegraph and telephone systems.”
Due to the expansion of the goldmines and the development of the cities and communities in Witwatersrand, power consumption in the region rapidly increased, enabling the S&H Agency to land a large number of orders to supply more lighting systems for goldmines and the Johannesburg suburbs as well as for military installations and forts in Pretoria.
A foothold also with the British – Siemens Limited Johannesburg, 1898
Siemens’ further development in South Africa was hampered by political difficulties arising from tensions between the local English population and the Boers, who were primarily of Dutch origin. Both national groups laid claim to political leadership. In these disputes, the Germans in South Africa repeatedly sided with the Boers, creating problems for German businesses since many mining companies were in British hands or under British influence.
To offset this competitive disadvantage and gain a stronger foothold in the British-dominated areas of South Africa, the S&H Agency was reorganized at the beginning of August 1898 as a limited company, Siemens Limited Johannesburg. As expected, the new company was more successful than its predecessor. Siemens Limited soon landed orders to supply and install lighting systems and power plants in cities and goldmines and to equip waterworks and train stations with dynamo machines, motors, water meters and arch and incandescent lamps. The company had every reason to view the future with optimism. But the political situation worsened dramatically.
The tensions between the British and the Boers in South Africa finally erupted in a bloody war that lasted from October 1899 to May 1902 and ended with a British victory and Britain’s annexation of all Boer-controlled territories. The Boer War threw all of Siemens’ business activities and expansion plans in South Africa into disarray. Anti-German feeling now ran high in nearly all regions of the country since not a few Germans had fought in the Boer armies.The time ahead was a challenging one for Siemens Limited. Economic development in the country was slow even after peace returned.
The already difficult situation was further complicated by structural problems and an unclear assignment of responsibilities within Siemens as a whole. Siemens & Halske in Berlin and Siemens Brothers in London had long competed in international markets and had no clear distribution agreements for the South African market. In addition, both sister companies were active in communications as well as energy. During and after the Boer War, Siemens & Halske allowed Siemens Brothers to take the lead in South Africa, and business operations in the country were coordinated from London starting in 1903. However, this arrangement had a detrimental effect on Siemens’ energy business, which was actually the company’s more lucrative arm.
No progress without cooperation – clear responsibilities for the future
A central organization to manage the international business of Siemens & Halske, Siemens-Schuckertwerke and their two English subsidiaries was set up, at the urging of the company’s German and British representatives, only in 1908. As part of the new organization, the Siemens companies agreed to maintain joint representative offices abroad. Their individual sales offices and local branches were directly assigned to the newly established Centralverwaltung Übersee (central overseas administration), which was headed by Carl Friedrich von Siemens. Responsibility for Siemens’ future business in South Africa’s electrical market was assigned to the export departments in London. This reorganization brought stability to Siemens Limited as well.
Starting in July 1910, all the company’s activities were coordinated from the Johannesburg office. The order situation had also stabilized in the meantime. In 1909, for example, Siemens landed orders to expand the Cape Town power plant and to supply transformers for the power plant in Rosherville. The company also participated in the expansion of local mines by supplying switchgear and turbo motors for a compressed air system. After several eventful years, Siemens’ activities in South Africa were now on a solid footing, and the company could look forward to a prosperous future.
Dr. Ewald Blocher