From Commodity to Specialty Chemicals: Cellulose Products and Naval Stores at the Hercules Powder Company, 1919-1939

Consider the following "snapshots" in the life of the Hercules Powder Co. of Wilmington, Delaware: In 1919 Hercules' total sales were $20.5 million. More than 99 percent of these revenues came from a single line of business: commercial explosives, including gunpowder, smokeless powder, blasting powder, and, especially, dynamite. These products were sold to mine and quarry operators, construction firms, and the general hardware trade, and were, for the most part, indistinguishable from products offered by leading competitors. Hercules managed its assets through a single operating department. The company maintained a small "Experimental Station" on the grounds of one of its dynamite plants to serve the research and testing needs of the entire company. This station operated on an annual budget of about $180,000, a total of less than one percent of sales. The company held four patents and had ten patent applications pending. Two decades later Hercules' sales exceeded $41 million. The company now produced more than two hundred products ranging from explosives to a variety of cellulosic and rosin-based compounds, paper chemicals, insecticides, and synthetic resins. Most of these products were highly specialized; indeed, most were developed with particular market niches in mind and usually in close cooperation with key customers. In 1939 Hercules conducted its business through six operating units. To support hese activities the company relied on a central research laboratory near the corporate headquarters in Wilmington, Delaware, with an annual research budget of nearly $1 million (or about 2.5 percent of sales). Hercules held more than 600 patents and had more than a hundred applications pending. As these snapshots suggest, Hercules changed ramatically during the interwar years. This transformation, ofcourse, occurred against the backdrop of fundamental changes in the worldwide chemical industry and similar (even more dramatic) changes at other chemical companies. In the two decades after 1910 the modern U.S. chemical industry was born: process technology