The Arabia factory was set up near Helsinki, Finland, in 1873 by the Swedish company Rörstrand. They chose Finland for its close proximity to Russia, where they wanted to expand their market. Within a few years the Arabia factory was producing half of Finland's total ceramics output. The Arabia factory was managed by Gustav Herlitz who had previously worked for Rörstrand in Sweden. The range of wares was expanded to include art pottery, domestic and utility wares, sanitary wares, tiles and even bricks.

During the first World War Arabia passed into Finnish ownership and by the outbreak of the second World War was larger than any producer of porcelain in Europe in terms of output.

Expansion continued during the war and into the second half of the twentieth century. Affiliations were forged with other companies and by the end of the century Arabia and Rörstrand were again part of the same group.