Master of ceramics (potter) Franz Nagy had owned the land since 1925 that the Munich-Allach facility was built on. With his business partner, the porcelain artist Prof. Karl Diebitsch, he began the production of porcelain art. The porcelain factory Porzellan Manufaktur Allach was established as a private concern in 1935 in the small town of Allach, near Munich, Germany. In 1936 the factory was acquired by the SS. Heinrich Himmler, the leader of the SS who was known for his obsession with Aryan mysticism, saw the acquisition of a fine porcelain factory as a way to establish an industrial base for the production of works of art that would be representative, in Himmler's eyes, of truly Germanic culture. Allach porcelain was one of Himmler’s favorite projects and produced various figurines and tableware to compete in the small but profitable German porcelain market.

Hitler unlike Himmler did not seem to care as much for Allach Porcelain. He is quoted as saying, “It’s like looking for ghosts in your attic. What culture can be found in a clay pot?”about Himmler’s efforts at finding evidence about the ancient origins of the Germanic people. What he said could also show his true feelings about Allach Porcelain.

The fall of the Third Reich brought an end to the Allach concern. The Allach factories were shut down in 1945 and are widely believed to have never been reopened.