By Shrikesh Laxmidas

FAJOZES, Portugal (Reuters Life!) - When Ferdinand Claus and Georges Schweder opened a soap factory in Portugal in 1887, they couldn't have dreamed their products would today be used by stars like Oprah Winfrey, Nicolas Cage and Kate Moss.

The German duo left Portugal due to the First World War, but when Achilles de Brito bought the company in 1918 and renamed it Ach Brito, he kept the Claus Porto label for the luxury soaps that have been a calling card throughout the company's history.

The role of history is visible at the factory in northern Portugal. Workers wrap soaps in colourful Art Deco packaging designed decades ago at the company, after each bar has been made through traditional, manual milling and drying processes.

The results are rich, fragrant and creamy soaps that fetch up to 15 euros ($18.86) a bar at luxury retail outfits such as Harrods, SAKS Fifth Avenue and Galeries Lafayette in Paris.

From the very start, the soaps became popular among European elites, with fashion houses like Chanel requesting custom-crested versions, a private label tradition that continues today with clients including Spain's Paradores historic hotels.

Oprah Winfrey called the soaps "a labor of love" which appeal to the senses and make great gifts.

"From our production methods to our graphics portfolio, we take inspiration from everything that has been done here, so that there is continuity," said Ach Brito's CEO Jose Fernandes.

Last month, the Ach Brito story took another turn when the company acquired Confianca, its main Iberian rival which, at the respectable age of 115, is a contemporary of its new owner.

Fernandes said the move makes sense as the two companies share many characteristics like an attention to detail and quality, a long list of prestigious clients and a common ride through the ups and downs of their sector's history.

He recalled that, in 1887, soaps as we know them today were new, and so Ach Brito and Confianca had space to grow, selling daily-use soaps to a new mass market. At their peak, Ach Brito had 400 employees and Confianca had almost 1,000.

But in the 1980s multinational corporations introduced shower gels and with their powerful marketing operations, forced the traditional soap companies to downsize.

"About six years ago we decided to start looking for new markets for our value-added products, which we already exported to the U.S. and which we knew could succeed in competitive markets," Fernandes said.

This included selecting prestigious stores to provide visibility, and the company had a stroke of luck in attracting New York cosmetic firm Lafco as its U.S. distribution partner.

The company now exports to around 40 countries, with the premium, more profitable, products now making up half of the sales, up from 16 percent a few years ago.

Fernandes said that the success is also due to the Claus soaps being natural and eco-friendly, a claim many soap companies cannot make, and which helps attract younger clients."

He added that the current economic crisis has had an effect on the company's cashflow, but the recent success will allow it to ride out the storm.

The Confianca acquisition, which leaves the group in the hands of Achilles de Brito's descendants, "makes particular sense in the context of the crisis, and allows the merged company to target revenues of around 8 million euros in four years time, up from 4 million in 2008," he said.

(Reporting by Shrikesh Laxmidas, editing by Paul Casciato)