Gradually, a complex of steelworks was formed in the vicinity, producing initially mainly for Prussian arms industry. Since the foundry was established in extensive forests, where there was lack of labour, already in 1754 it was decided to set up a colony called Freidrichstal. Locals also began to use the name of the Budkowiczanka River to refer to this place, which is listed in sources as early as in 1309 as Zegwizd. In 1830, apart from the official name Friedrichstal, also Polish name of Szegwisz is mentioned, in 1845 Segwiźdź, and it was only a step to the present Zagwiźdź. Some of the buildings of the former Kluczbork Foundry were occupied until recently by an iron foundry. The so-called hammer forge (formerly Charles foundry - Karlshutte) currently includes a historic complex of industrial buildings from the 19th century, with a museum hall with exhibits related to local history and memorabilia of the former foundry.