Alfa Laval AB - ABS Is Formed in 1883

ABS Is Formed in 1883

The work that Oscar Lamm put in during his travels produced positive results, and overseas sales increased during 1880. The growth of the business demanded another form of collaboration between the two partners, and a limited company was the natural solution. On April 5, 1883, the company's statutory meeting was held, with de Laval and Lamm as the major shareholders. Oscar Lamm controlled 48 percent of the company shares and Gustaf de Laval 47 percent. The remaining 5 percent of the company was controlled by four individual members of the new board. Lamm was chairman of the board and managing director. In the same year, the company, named AB Separator (ABS), established a subsidiary in the United States. The managing director for this new company, the De Laval Cream Separator Company, was J.H. Reall of New York. He was not an engineer, nor did he own a workshop, but edited and published the Agriculture Review and the Journal of the American Agricultural Association. The Swedish separators were manufactured by P. Sharples of Westchester, New York. In 1886, Oscar Lamm left the corporation as managing director and was replaced by John Bernström in 1887. Gustaf de Laval was elected to the Royal Swedish Academy of Science and to the Royal Swedish Academy of Agriculture and Forestry. In the United Kingdom, the Dairy Supply Company, ABS's main customer, became sole agent.

At the same time, Gustaf de Laval constructed a turbine engine that could be used as a power source for the separator. A very important acquisition was the Alfa patent, bought in 1889 from a German, Clemens von Bechtolsheim.

In the years prior to 1890, the Danish company Burmeister & Wain won an ever-increasing share of the market. Burmeister & Wain was a major competitor both in Denmark, where it almost ousted ABS, and after 1883 in the international market. ABS marketed a product inferior to that of Burmeister & Wain, since its cream separator had a lower skimming capability. In the short term, however, ABS managed to increase its sales because of the high demand from small dairies overseas, which Burmeister & Wain could not yet cater to effectively. Burmeister & Wain's dominant market position in Denmark, ABS's decline in that market, and Lefeldt's inferior position in relation to foreign competitors in its home market, Germany, can be taken as evidence of the key importance of product quality to company growth.

When ABS began to find it hard to sell power-driven separators, it fitted them out with a new energy source—the turbine. At the same time, ABS launched its manual cream separators in the hope of reaching new groups of customers. Fourteen years were to pass before another Swedish company established itself in the Swedish and overseas markets. Before this competition had begun to seriously threaten ABS's future, the market was broadened to include more countries.