SINGAPORE (Sept 24): While watching the markets react to the escalation of the US-China trade war this past week, I stumbled over a small news story that I doubt many people noticed. A unit of Compagnie de Saint-Gobain, a French MNC, which is part of the Euro Stoxx 50 index, is spending US$26 million ($35.5 million) to build an 88,000 sq ft facility in a little town called Beaverton, in the US state of Michigan, to produce components and assemblies for its customers in the pharmaceuticals industry.
This is not a big move by the standards of an MNC with a market value topping €20 billion ($32 billion), but the story caught my eye because it stood in sharp contrast to all the negative news in the market. Also, Saint-Gobain has an interesting history that stretches back to 1665. That was the year Jean-Baptiste Colbert, who was the Comptroller-General of Finances, under the rule of the famously profligate French king Louis XIV, established a company called Manufacture Royale de Glaces de Miroirs. As its name suggests, the company produced glass and mirrors, which were all the rage among the wealthy elite of France.
The company was partly financed by the state, though its beneficiary was an individual named Nicolas Dunoyer, who also happened to be a son of one of the king’s butlers and a tax collector for Orleans. Colbert backed the venture because he wanted France to produce the glass and mirrors it was importing from the Republic of Venice, which was the global leader in this arguably high-value field. It was a struggle to match Venice at its own game, but France eventually became good enough to supply its home market. In 1672, subjects of Louis XIV were banned from importing glass. By 1678, the company was producing glass for the Hall of Mirrors at the Palace of Versailles.