In the 1920 and early 1930s, the German semi-synthetic fibre industry was dominated by a duopoly of two big players. The incumbent firms were not willing to expand their staple fibre capacities to the extent demanded by the new Nazi government, which prepared for autarky and war. Hence the government encouraged other private companies, especially spinning mills, to found eight regional staple fibre plants and protected them against the incumbents who were technologically superior. The Nazis’ infant company protection enabled the newcomers to become competitive within a few years. After the war and without any protection, these firms flourished on the world market. While the big players left the market, two of the newcomers founded in the second half of the 1930s are today the last European producers of staple fibre. Hence companies founded for protectionist reasons by a non-benign government became successful firms competing on the world market.