In the colonial era, only a few companies managed to achieve phenomenal business success in the Dutch East Indies. Among these, Gebroeders Veth stands out as a prominent example. This colossal enterprise, by the standards of its time, exhibited diverse operations and managed assets worth billions. Through the enduring business journey of Gebroeders Veth, which spanned nearly 70 years, we gain insight into how a colonial company was born, thrived, declined, and eventually met its end.
According to records preserved in the Economisch Archief van Nederland en Koloniën (Economic Archive of the Netherlands and Colonies), Gebroeders Veth was initially established in the form of a commanditaire vennootschap (CV) in 1886. It later transformed into a firm and eventually evolved into a naamlooze vennootschap (NV), a limited liability company, with its founding charter dated 1920 and the Royal Approval of the Kingdom of the Netherlands (Koninklijke Bewilliging) on February 4, 1921.
The roots of Gebroeders Veth can be traced back to the Veth brothers, Bastiaan “Bas” Veth (1860–1922) and Franz Herman Veth (1863–1938), as detailed in information from the Stadtarchief Amsterdam. They were the first and second sons of Jan Veth (1833–1899), a sailmaker and ship owner from Delft, Netherlands. Besides Bas and Franz, Jan Veth had three more sons: Jan Cornelis Veth (1864–1923), Cornelis Gerard Veth (1868–1948), and the youngest, Arie Adriaan Ferdinand Veth (1876–1956).
In 1886, Bas Veth and Franz Veth founded CV Gebroeders Veth, with Jan Veth as their silent partner. Initially, Gebroeders Veth engaged in trading activities in the Dutch East Indies, also serving as agents for sailboat owners, including Jan Veth himself and his wife’s family. The main office of CV Gebroeders Veth was located in Amsterdam. As the business expanded, it established its first branch in Padang, followed by several other branches in Makassar, Sibolga, and Medan. The other Veth siblings gradually joined the business after completing their education. With these new branches, the company began building a strong business presence from the western to the eastern parts of the Dutch East Indies.
Gebroeders Veth capitalized on the diverse skills within the Veth family to venture into various new fields of business. At the outset, the company used sailboats to export Arabica coffee from the Dutch East Indies. Most of this coffee was sourced from West Sumatra and stored in depots in Padang before being transported to the United States. The US Consulate in Padang listed Gebroeders Veth as one of the routine commercial firms in its directory since at least 1889. The Hong Kong-based publication “The Chronicle and Directory,” which featured annual trade directories for the Asian region, also recognized Gebroeders Veth as a firm engaged in export and import activities in Makassar.
Gebroeders Veth later acted as an agent for the steamship companies Oceaan (Holt Lijn) and Nanyo Yusen Kaisha. It also served as a correspondent for the Nederlandsch Indische Handelsbank and represented insurance companies. At this time, Gebroeders Veth had become financially strong enough to invest in other trading firms.
In 1900, Bas Veth’s memoir was published. The book, titled “Het Leven in Nederlandsch-Indië” (Life in the Dutch East Indies), revealed his 12-year (1879–1891) journey across the Dutch East Indies as a trader and entrepreneur. Interestingly, the memoir was full of sarcasm and expressions of disgust. Bas Veth portrayed Nusantara’s nature as less beautiful than described by travelers. He criticized the character of the indigenous people and found their food unappealing, and he remarked on the hot climate. He even referred to the colony as the “incarnation of misery.” However, he also despised the greed-driven nature of European colonizers, whom he labeled as “barbarians.” These expressions seemed to be an outlet for Bas Veth’s frustrations during his business endeavors. Running a business in colonial land was undoubtedly challenging, involving compromises with both native communities and colonial powers as well as competing with fellow traders.
Despite the challenges, Gebroeders Veth managed to thrive in its early years. It became a prominent player in the West Sumatra region, where it co-founded the first cement company in Southeast Asia, NV Nederlandsch Indisch Cement Portland Maatshappij (NIPCM), in 1910. The cement factory was established in Indarung. This initiative was the result of collaboration between Gebroeders Veth and Carl Christophus Lau, who discovered the remarkable limestone potential of the area. The Veth family saw the opportunity in the natural resources of Padang and invited others to join in sharing the potential. In the joint venture, the Veth brothers initially invested around 235,000 guilders in shares.
The NIPCM cement factory utilized energy from Indonesia’s oldest hydroelectric power plant, PLTA Rasak Bungo, established in 1908. Additionally, the factory used pulverized coal from the Ombilin coal mines, the oldest in Southeast Asia. Gebroeders Veth placed its personnel in leadership positions within NIPCM from its inception. These leaders guided the company to success, generating profits of hundreds of thousands of guilders annually and amassing assets worth millions of guilders.
To put things in perspective, during that era, the value of 1 guilder was equivalent to 6 euros, or around 100,000 Indonesian rupiahs today. NIPCM’s success wasn’t just due to its status as the sole cement producer in the Dutch East Indies; it also excelled in terms of product quality, with its cement quality being on par with European products.
Buoyed by success in cement production, Gebroeders Veth expanded into the mining sector. The company became directors of Kinandam-Sumatra Mijnbouw (established in 1911), which reopened and operated the Salido gold mine, which had been exploited by the Dutch East India Company (VOC) more than a century earlier before closing in 1737. Furthermore, Gebroeders Veth, now an NV, also managed other gold mining companies, including Barisan Mijnbouw (1929), which held the Goenoeng Aroem concession, and Kinandam-Trust.
Gebroeders Veth diversified into other sectors as well, such as managing palm oil plantations in Deli. Additionally, the Veth family established several subsidiary companies, including Priaman Coprabereiding (1917), Pantei Kiarah Cultuur (1935), and Veth’s Papierenzakken Fabriek, a paper bag manufacturing plant (1936). Many of these ventures were pioneering, which led to an exponential increase in profits.
However, despite reaching its zenith, the business history of Gebroeders Veth eventually reached an anticlimax in the mid-1920s. This was due to increasing business competition. For instance, in the cement sector, the company faced challenges from Japanese cement products. The Great Depression (1929–1939) also dealt a blow to Gebroeders Veth, causing further setbacks. Additionally, during the Japanese occupation of the Dutch East Indies in 1942, the company was compelled to surrender its assets.
After World War II, Gebroeders Veth faced an increasingly challenging business landscape. The tumultuous wartime conditions led to the gradual demise of one business after another within the company. The final blow that brought the history of Gebroeders Veth to an end was the Indonesian government’s nationalization policy in 1958.
The legacy of Gebroeders Veth is a complex narrative of entrepreneurship, adaptation, and eventual decline. As we reflect on its rise and fall, we gain insights into the economic, social, and political dynamics that shaped colonial businesses and their destinies. While the company may no longer exist, its history serves as a reminder of the intricate interactions between colonial powers, local communities, and the ever-changing landscape of business and industry.