LEADERSHIP ANDINNOVATION

SINCE 1878

SGS IS THE WORLD’S LEADING INSPECTION, VERIFICATION,TESTING AND CERTIFICATION COMPANY.

EARLY BEGINNINGS

A young Latvian immigrant sits on the docks of Rouen as ships come and go – the arteriesof an industrialised Europe pulsating rapidly before his eyes in one of the continent’s largestports. Opportunities abound. It is 1878 and he seizes an opportunity that one day will becomethe global benchmark in quality and integrity. From its early beginnings inspecting grainshipments, SGS now leads the industry that it helped pioneer on the docks of Rouen thatday in 1878.

What this young man realised was that grain exporters were losing money because they werenot being represented at the port of destination. Importers would only pay for the amount ofgrain received, not what was shipped. During transit, and especially in loading and unloading,there were losses in the volume of grain due to shrinkage and theft. His idea was to defendthe rights of the exporter by inspecting and verifying the quantity and quality of the grain onarrival with the importer. In return for this service, he would receive a commission from theexporter based on the value of the shipment.

1878

THE FIRST INSPECTION

He borrowed money from an Austrian friend andbegan inspecting grain shipments on arrival inRouen. The service reduced exporters’ lossesand increased their profits.Word spread aboutthe value of the service and business grewrapidly. These two young entrepreneurswent into business together and formeda company on 12 December 1878. Withina year, the company had opened officesin France’s three largest ports: Le Havre,Dunkirk and Marseilles.

One early innovation that helped the companybuild on its reputation was the Full OutturnGuarantee (FOG). Still provided by SGS today,this service reimburses the exporter for theloss of grain during shipping, as long as SGSis allowed to inspect the cargo at both loadingand unloading. First established for the NorthAmerican grain trade with Europe, the service

expanded around the world and broughtin considerable revenue for the company.

By 1913, the company that began with theinspection of a single grain shipment fromRussia to France had seen incredible growth.

The company was inspecting 21 milliontonnes of grain per year across a network of45 offices throughout Europe and had becomethe leader in the grain inspection business.

It is 1878 and this young man seizesan opportunity that one day willbecome the global benchmark inquality and integrity.

1913

TURBULENT TIMES

The FirstWorldWar was a bleak time for thecompany, with both its customers and its ownoffices divided by the trenches. In 1915, thecompany moved its headquarters from Paristo Geneva, Switzerland, to continue operationsfrom a neutral country. On 19 July 1919, thecompany took a further step in rebuilding andadopted the name it carries today, SociétéGénérale de Surveillance.

By 1928, the company had growninternationally, with offices and affiliatesin 21 countries around the world. In 1939the company expanded into the inspectionand analysis of raw materials, minerals andmetals through the acquisition of laboratoriesin Europe. In addition, the company startedoperating in South America, with offices inArgentina and Brazil, delivering agriculturalinspection services.

The SecondWorldWar brought severe disruptionto global trade and as a result impacted thecompany’s core grain inspection business.The company was able to make a rapid returnto profitability by 1946 through contracts withthe Allied powers inspecting consumer goodsdestined for soldiers. SGS also played a keyrole in inspecting imports entering Europeunder the Marshall Plan.

POST-WAR EXPANSIONAND DIVERSIFICATION

In 1950, 80% of the company’s revenuestill came from its core Agricultural Servicesbusiness, however a steady change wasunderway. Company management realisedthat to survive over the long-term, SGSneeded to diversify its business. Over thefollowing years, SGS would continue toexpand and diversify.

1919 1950

The company’s Industrial Services businessbegan in 1955 with the inspection of industrialmachines and goods and grew further in1965 with the acquisition of a companythat specialised in non-destructive testing.The Oil, Gas & Chemical Services businessalso began in this same period. In 1962,SGS acquired several companies that wereleaders in oil and petrochemical productstesting. Also during this time, the MineralsServices business grew by providing FullOutturn Guarantee (FOG) services to customers.

Decolonisation in Africa and Asia, as well asdevelopment in Latin America, provided SGSwith new markets to explore. It was in thisperiod that the Governments & InstitutionsServices business began by providingpre-shipment inspection services to customsauthorities. SGS assessed the value of goodsin the country of supply, allowing the collectionof appropriate taxes and duties from importersand exporters. In 1965, the company won its

first contract for this service in the Congo.Business in South America also expandedto include consumer testing, industrial andcertification services.

The 1970s saw more awareness of theenvironmental impact of industry.With theinstitution of laws to clean up and protectthe North Sea, the company began providingenvironmental consultancy and remediationservices to customers in the oil and gassector. Demand for environmental servicessoon spread to other business sectors.

1965 1970s

In 1950, 80% of the company’s revenuestill came from its core AgriculturalServices business, however a steadychange was underway.

MOVING TOWARDA SUSTAINABLE FUTURE

By 1980, half of the company’s revenue wasgenerated from services that had not evenexisted in 1970. The company now had 113offices, 57 laboratories and 9,500 employeesworking in over 140 countries around theworld. In 1981, the company went publicand less than four years later, sales hadreached an impressive CHF 1.5 billion.

The late 1980s saw the creation of the LifeScience Services and Systems & ServicesCertification business lines through acquisition.In this same period, Automotive Services grewout of the company’s loss adjusting servicesprimarily for the automotive industry.

The dawn of the 1990s saw great opportunitiesfor a company whose success was, andcontinues to be, based on global trade.Withthe fall of the Soviet Union, previously closed

economies were now open for business andby the end of the decade, SGS had opened28 offices in the region.

Booming economies in Asia and Latin Americaalso added to the company’s growth. In 1991,SGS expanded into China through the startof a joint venture. Today, SGS China hasexpanded to a network of over 40 offices andlaboratories serving the inspection and testingneeds of the company’s entire customer base,especially those in its Consumer TestingServices business.

POSITIONED FOR GROWTH

Industry changes in the pre-shipmentinspections sector in the late 1990s ledthe company to focus its Governments &Institutions Services segment on more stablesources of business. By the start of thenew millennium, wide-ranging corporate

1980 1991

restructuring led to the formation of the tenbusiness segments that are currently foundat SGS.

Today, SGS operates across a wide variety ofindustry sectors, employs more than 50,000people across 1,000 offices and laboratoriesand is active in nearly every country in theworld. The company has steadily grown tobecome the industry leader it is today. It hasdone this through continual improvement andinnovation and by reducing risk and improvingthe productivity and efficiency of its customers’operations. Moving forward, SGS is wellpositioned for growth and will continue to lookbeyond customers’ and society’s expectationsin order to deliver market leading serviceswherever they are needed.

SGS is well positioned for growth andwill continue to look beyond customers’and society’s expectations in order todeliver market leading services whereverthey are needed.

TODAY

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