The conglomerate was founded in 1892 by German industrialist Otto von Steinbeis in the Bosnian town of Drvar.

[1] After the First World War, with the formation of the Kingdom of Yugoslavia, it grew into one of the largest Bosnian industrial organizations.

[1] After the Second World War, with the formation of socialist Yugoslavia, the local Bosnian authorities once again reformed Šipad into a publicly owned conglomerate in 1948.

By the mid-1980s Šipad owned over 195 manufacturing and sales companies, 11 research institutions, with over 35 representative offices across Europe and the Middle East.

During this period it owned 30% of all Yugoslav forests and had a 30% share of all wood and lumber exports from the country, with over 84,000 employees.