In 1874, he purchased the Valdemarshaab paper factory, located just north of Køge, for 60,000 kroner after it had gone bankrupt following a flood in 1872.
By 1875, Melchior had fully renovated the factory and constructed Søvang, a large Italian-style director's residence adjacent to the site.
Known for their hospitality, the couple frequently hosted social gatherings, sometimes organizing soirées and short plays in their home.
When constructing Søvang, he specifically designed the upper floor to include a large photographic studio with an overhead window and an east-facing glass wall to optimize natural light.
These gatherings often included artists and writers, most notably Hans Christian Andersen, who became acquainted with the family in 1862 and visited frequently until his death in 1875.