Founded in 1872, it was located in Potschappel, a suburb of the town of Freital in the Sächsische Schweiz-Osterzgebirge district about 8 km (5 mi) southwest of Dresden, the capital of Saxony.

The company has had a chequered history of ownership including its period as a nationalised VEB (People's Owned Enterprise) in former East Germany.

[1] In January 2020, Agababyan announced that  production would cease indefinitely, with two employees being retained to continue sales of stock from the showroom in the Carl-Thieme-Straße and the shop in Dresden until the end of 2020 when the company might be finally dissolved.

[2] Carl-Johann Gottlob Thieme (born 12 September 1823 in Niederjahna, died 18 March 1888 in Dresden) was a Hausmaler (a free-lance porcelain decorator).

He decided to manufacture his porcelain and found a suitable plot of land at the gates of the city of Dresden in the industrial village of Potschappel.

[citation needed] The flower modeller Carl August Kuntzsch (1855–1920), a son-in-law of Thieme, played a key role in the company's success.

After Thieme's death, he took over the company and the economic success in 1912 enabled extensions to the production buildings, which have remained unchanged.

Following the end of World War II when Dresden was in the territory administered and occupied by the Soviet Union, the former owners were forced out of the company in 1951.

From 1972 the company traded as “VEB Sächsische Porzellan-Manufaktur Dresden; Headquarters Freital " and nationalization was fully completed.

Aided by the pursuit in justice of imitators and forgers during the 1970s, the popularity of Dresden porcelain outside East Germany rose again into the 1980s.

After German reunification, the world market for decorative and luxury porcelain experienced a major upheaval in the 1990s,[6] and the owners also changed frequently.

Due to the wrong priorities being set by the company management for decades and lack of funds for maintenance, moisture had penetrated through the damaged roof, the outbuilding was in a ruinous state and the plastered models have decomposed.

Around 12,000 models are the original forms, from which working moulds for porcelain objects could and can be removed again and again, which wear out in the production process.

This is due not only to war losses, but also mainly to the great flood of the Wiederitz in 1957, when the entire company archives in the basement were destroyed, they are no longer fully documented.

The community brand of the Dresden porcelain paintings Klemm, Donath and Hamann, a stylized Kurhut, is occasionally stamped on crockery items from the first half of the 20th century.