From Potash company to mayor player of the war economy

With August Rosterg at the helm, Kali-Industrie AG (renamed Wintershall AG in 1929) succeeded in improving its position in the domestic market by signing a contract with the State of Thuringia and in 1926 also exerting decisive influence on the creation of a Franco-German potash treaty.

Kali-Industrie AG prioritized streamlining production to a far greater extent than did its competitors and in 1925 this was demonstrated when it commissioned what at the time was the world’s most modern potash plant in Merkers. The manufacture of mixed fertilizers was becoming increasingly important as was the marketing of the by-products of potash extraction, such as bromide, kieserite, Glauber salt, and magnesium chloride.

During the Great Depression (1929-33), thanks to its strong position in the potash syndicate (42-percent share) and price agreements with the French manufacturers, Wintershall AG was better able to survive than most of the other companies. Rosterg felt it was less the potash industry and its cartel and more the entire German economy, if not society as a whole, that was under existential threat. He called on the one hand for a return to the liberal economic  system as had existed prior to the First World War and, on the other, wanted to abolish some of the most important achievements of the inter-war years and have the trade unions disbanded. He believed the republican parliamentary system of the inter-war years was an utter failure and advocated a dictatorship. With their ideas on economic policy, Rosterg and August Diehn, General Director of the potash syndicate, were in the early 1930s dangerously close to the proposals being pushed by the Nazi Party, whose foggy economic policy program theysought to influence.

Venture into the oil business

From 1931 onwards Wintershall started efforts to establish oil extraction and processing operations, and thus a new business. The move was prompted by production facilities being put in place at the Volkenroda field. Hopes of additional major oil discoveries in Thuringia were subsequently dashed. What proved more permanently and economically important was the 1931 takeover of Gewerkschaft Nienhagen founded by deep drilling pioneer Anton Raky, the stake acquired in Gewerkschaft Elwerath, and the buy-out of the Salzbergen refinery. In this way, Wintershall managed to emerge as the new crude oil player alongside DEA, Preussag, and Elwerath.

To expand its position in the crude oil business and shore it up against competing interests, directly after Hitler came to power, Wintershall made full use of the personal contacts it had already established with some of the key leaders in the new regime. As early as 1933-4 and in violation of the Treaty of Versailles the corporation started cooperating with military agencies. The company made available abandoned potassium mining shafts as the basis for army munition dumps and later also provided production plants important for armaments manufacture.

Support of the war economy

Economic policy during the Third Reich was geared toward achieving independence from the outside world and pushing rearmament, a policy thrust that favoured the expansion of activities in the crude oil business. Through its stake in Elwerath, Wintershall took part in the erection and expansion of the two refineries in Misburg that were critical to the armaments industry, and in 1935 acquired NITAG’s filling-station network.

Moreover, the company invested in producing petrol from coal, first of all using the Fischer-Tropsch method of synthesis in Castrop-Rauxel and from 1936 on in the newly constructed plant in Lützkendorf, which was to rely on various different processes to make both petroleum and lubricants. Other investments in the war economy included starting light metals production and the manufacture of highly concentrated nitric acid. However, Rosterg’s hopes that an “economy would evolve free of all compulsions” came to nothing. 

On the contrary. The Nazis subjected the potash business to ever stricter regulations and, with regards to the production of mineral oils and light metals, insisted on greater investments, even though these were not justified in business terms.

The Economics of Destruction

Wintershall therefore became part of the “Economics of Destruction” in a twofold sense. Firstly, its own resources were increasingly put in the service of the war economy, thus contributing to the Nazis’ war of annihilation and rule by occupation of large parts of Europe. Secondly, Wintershall risked the very foundations of its own existence. This was shown especially drastically in the case of the Lützkendorf plant. Wintershall was completely out of its depth when it came to the technological and organizational side to setting up the factory. 

Together with and in consultation with the other German oil companies, Wintershall participated in the exploitation of oil deposits in Hungary, Poland, and Ukraine by obtaining a stake in several of the mineral oil companies active there. Previously, the company had acquired crude oil concessions in Austria and, in the course of the war, also took part in the ever more important crude oil extraction in the “Ostmark”.

After the end of the war, Wintershall had to forfeit about 90 percent of the output as well as all its foreign shareholdings. Wintershall’s production facilities in the Soviet Occupation Zone were seized and expropriated.