Return to Refractories Page
Throughout most of its history, the refractory industry has lived in the shadow of its better known and more appreciated consumer, the iron and steel industry. In Australia, in the twentieth century, the relationship between Newbold General Refractories Ltd1and the Broken Hill Proprietary Co Ltd2 has conformed exactly to this pattern. Life in the shadow of a major consumer has had a marked if predictable impact on the respective historiographies of the industries. On the one hand, a wide range of literary works, by academics, popular writers on industry and authors commissioned by the B.H.P., have appeared on the steel industry (although no definitive academic history has appeared in recent years)3. On the other, there has been nothing, of any type, published on the history of the Australian refractory industry (and little enough on overseas history)4. Even the histories of the iron and steel industry give, at most, no more than a paragraph to refractory bricks.
While this relative lack of attention might seem warranted in terms of relative size it is not in terms of the strategic importance of refractories as an input in the process of steel production. To put it simply, without refractories there can be no steel industry. Two other points can also be emphasised. First, the manufacture of refractories is, and always has been, a sophisticated industrial process requiring substantial capital inputs and specialised technical skills in the workforce. Second, refractories have also long been a crucial input in other (and more complex) industries, including gas processing, glass manufacture, the production of metals generally and, most recently, aerospace technology. A history of a refractory producer is long overdue for all of those reasons and this thesis is intended as an initial contribution to the field.
Throughout its history, Newbolds has continued to construct plants in close proximity to its major customers. This geographical closeness is characteristic of the symbiotic relationship between the two industries. Internationally, the iron and steel industries accounted for approximately 70% of refractory consumption in the 1960's5. This figure shows the importance of iron and steel producers to refractory manufacturers. Neither the steel or refractory industry could survive without the other. Both industries rely on each other for their very existence.
Large scale refractory production is an indicator of a relatively advanced level of economic development. Small-scale refractory production has historically followed the development of a coal industry6. This occurs for two reasons. The first is that fireclay, the most common raw material used in elementary refractory production, is usually found in conjunction with coal seams. The second reason is that the firing of refractory bricks and the industries in which they were used required large amounts of fuel and, for hundreds of years, the most commonly used fuel was coal.
Australia adhered to this overseas model of refractory industry development. Early fireclay brick production was associated with coal mining. Industrial pottery and brick production were industries associated with coal mining and sustained by the resultant industries such as smelting. They also reflected the onset of urban development which followed the development of these industries7.
Historically too, the development of an iron and steel industry required a new scale and sophistication of production that led to changes and expansion within existing refractory production. Elementary refractory production, based on fireclay, was often undertaken as a supplementary exercise by the producers of ordinary building brick manufacturers or the makers of other forms of industrial pottery. However, iron and steel production required silica brick refractories, a different type of material involving an different level of technical expertise to produce. As such, this type of refractory production does not usually evolve until the development of an iron and steel industry is in progress.
Thus the evolution of an independent refractory industry came historically as part of the evolution of a complex industrial base, of which the iron and steel industry was a vital part. The continuing technical improvement of a refractory industry has also been linked to changes in the iron and steel industry.
The advent of the Australian iron and steel industry, utilising what was then the new open hearth steelmaking process with large coke ovens, required the development of local silica refractories. This remained the backbone of refractory production for over a hundred years. The next major change in refractories came in the 1950's, when the development of the Basic Oxygen Process of steelmaking brought about a completely new direction in refractory manufacture. A completely new form of refractory, tar-bonded dolomite refractories, led to the virtual extinction of traditional silica bricks.
Otherwise, within the refractory industry, technological change has been limited. Thus, hand moulding has always been an important technical skill from the ancient beginnings of the industry until the last ten years. Although mechanical moulding became widespread in the 1930's, hand moulding was still required for decades because of the specialised nature of consumer requirements. There was and still is the necessity to produce limited numbers of refractory products with very individual specifications. Mechanical production would be uneconomic in the circumstances.
This specialisation of production has also affected the structure of the industry. The specialised nature of the demand has meant that one company or plant has tended to produce a limited range of products. The capital costs associated with attempting to produce a comprehensive range makes this uneconomic. Newbold's, however, has been something of an exception to this rule. The company has, from its very beginnings, produced refractories from across the spectrum of products. This has resulted in Newbold's being the most significant refractories producer in Australia. Its closure would affect all aspects of national industry rather than a small section as would happen in overseas markets.
The reasons for Newbold's market domination of the refractory industry reflect such factors as the size of the Australian market and its role in relation to the dominant Australian steel producer. In fact its business strategies, and certainly the results over time, have run parallel to those of its giant customer, the B.H.P.
Thus Newbold's began as a successful exercise in import replacement as the Australian industrial sector grew to the point where it could support such an enterprise. As such it reflected an important characteristic of Australian industrial development: the ability to combine imported capital and technical knowledge with local labour skills, in what were quite complex production processes, to meet local requirements very effectively.
Thereafter, Newbold's grew with its main customer. And, just as the B.H.P's essential business strategy was to completely dominate the domestic market, through both horizontal and vertical integration, Newbold's pursued much the same policy. Over a period of forty years, it came to hold a virtual monopoly of refractory production through a series of takeovers of companies in the same industry.
This correspondence in business strategies also reflects such common influences as the relatively small size of Australian industrial markets, tariff protection and a search for economies of scale. It also underlines the essential theme of this thesis - the critical importance of the interdependence of refractory and steel producers. The steel industry was and remains the predominant customer for refractories. Mutual interdependence makes the relationship between refractory and steel producer critical for the former, providing a theme which pervades the history of Newbold's.
Other aspects are explored, include the complementary question as to why did the B.H.P Co Ltd wait so long before taking direct control of its source of refractories? Why did a company, known for seeking to maximise the vertical integration of production, (a policy of controlling the production process from the raw materials to finished product), allow such a strategically important element of that process to remain outside its direct control for such a long period of time?
Two major problems have been encountered in attempting to tell the story of Newbold's. In the first place, the primary documentary evidence is scanty and fragmentary. There are some very brief accounts of the firm, especially in its later years, and these have been supplemented where possible by letters and invoices where available. Contemporary newspaper and other journal articles have also proved valuable, as have the oral accounts of ex-employees.
Second, despite the range of secondary material on the B.H.P and the steel industry generally, which has been invaluable as background material, none of this touches on the relationship between steel and refractory producer. This relationship is unique and consequently, there has been no previous historically analytical study to provide a model. The attempt to explore the relationship in this thesis therefore has had to break new ground.
1 The company referred to as Newbold General Refractories had three major name changes: between 1908 to 1912 the company was known as Newbold Brothers. From 1912 to 1940 the company was called the Newbold Silica Firebrick Co Ltd and finally after 1940 the company was known as Newbold General Refractories Ltd. Throughout this paper all of these various companies will be referred to as Newbold's.
2 Hereafter known as the B.H.P Co Ltd.
3 see Helen Hughes, The Australian Iron and Steel Industry 1848-1962 (Darville: Melbourne UP, 1964); Alan Trengove, What's Good for Australia...?, (Stanmore: Cassell Australia, 1975)
4 see Kenneth W. Sanderson, The Scottish Refractory Industry 1830-1980 (Edinburgh: The Author, 1990)
5 Kenneth Shaw, Refractories and Their Uses (London: Applied Sciences Publishers Ltd, 1972) p. 179
6 Sanderson, p.23
7 Scott Carlin, Terracotta Australis: Potter & Brickmakers 1833-1981 (Newcastle: Newcastle Regional Museum, 1992)
© Copyright - Michelle Watson, 1996
Go to Chapter One - Origins to Post World War One