Domino sweetens a sugar empire

Well-connected: A powerful, politically influential Cuban-American family is behind the pending purchase of the Domino Sugar company and its Baltimore refinery.

September 23, 2001|By Kristine Henry | By Kristine Henry,SUN STAFF

Alfonso Fanjul Jr. was barely out of college in the fall of 1959 when he and several attorneys sat nervously at a conference table in his company's headquarters waiting for Fidel Castro's men to arrive. The soldiers, who had overthrown dictator Fulgencio Batista, were coming to announce the fate of the sugar business that Fanjul's great-grandfather had started in Cuba more than a century earlier.

Even though private property was being confiscated all around him and his family had fled the country, Fanjul believed he could save the business.

Finally the militiamen entered, tossed their machine guns on the table and declared that all of the family's land belonged to the government. Fanjul can almost laugh today at the memory of himself as a 22-year-old trying to reason with them, pointing out that Castro's plan called for only nonproductive land to be taken over.

"One of the men picked up his machine gun and stood up and just looked at me," recalled Fanjul, 64. "There was a map [of Fanjul's property] on the wall, and he pointed on the map with the machine gun and made like a big circle over it. He said, `We're going to take it all away.'

"He was looking at me straight in the eye and said, `We will pass the laws to do it afterward.' I knew then it was time to shut up."

Castro's militia had been installed in the family mansion, so instead of returning home, Fanjul hid out in the sugar mills and at friends' homes for several nights. Later, while he was driving through a checkpoint, plainclothes officers fired at him.

He narrowly escaped, drove to the airport and, without a suitcase, boarded a commercial jet bound for the United States. A former schoolmate who had become a Castro supporter searched him before he was allowed to depart.

"The only consolation I had," Fanjul said, "was that there was a pin in my pocket that stuck him and he bled for a while."

Fanjul (pronounced fan-HOOL) joined his family in New York, and they immediately went to work rebuilding their sugar empire in the United States. Their West Palm Beach, Fla.-based company, Florida Crystals Corp., is now one of the country's dominant sugar-cane producers and, with 180,000 acres and 750,000 tons of raw sugar produced every year, has surpassed the business they were forced to abandon in Cuba.

The Fanjuls' pending acquisition of Domino Sugar company and its refinery in Baltimore will catapult Florida Crystals even higher, allowing it to vertically integrate its operations and control every aspect of the business of sugar, from its planting and harvesting to its refining, packaging and distribution.

Domino also gives them a well-known brand name that is sold coast to coast. "We view Domino as a permanent investment," Fanjul said, "that will be good for ourselves and good for the workers at Domino."

He said that no layoffs of the Baltimore refinery's 500 employees are planned and that the giant neon sign that has towered above the harbor for half a century will remain.

Florida Crystals is led by Alfonso Fanjul, the chairman and chief executive, and his brother, Jose "Pepe" Fanjul, who is vice chairman, president and chief operating officer. Their two younger brothers, Andres and Alexander, are division presidents.

Alfonso and Pepe Fanjul have become major players in local and national politics, giving generously to campaigns and pressing hard for their interests.

They have won praise from the Cuban-American community, their unionized employees and other growers, as well as criticism from environmentalists and some lawmakers who accuse them of polluting the Everglades and relying on government subsidies.

`Live and learn'

"Our family was not politically active in Cuba and that was one of the errors we made," said Pepe Fanjul, 57. "Live and learn."

Thanks in part to their political connections, the Fanjuls now account for about 40 percent of the cane grown in Florida and more than 9 percent of the nation's cane sugar.

Florida Crystals' headquarters occupies the entire second floor of a new corporate complex in West Palm Beach. The offices' employees enjoy a stunning view of the Atlantic Intercoastal Waterway that separates the more blue-collar West Palm Beach from the exclusive island of Palm Beach, where the family resides.

Palm Beach, which is three blocks wide, is home to Metromedia Co.'s Chairman John W. Kluge, financier Carl Icahn, and real estate magnate Donald Trump.

Though it is largely a bedroom and vacation community, investment firms and banks occupying pink and yellow buildings are everywhere. The retail district of Worth Avenue offers one- and two-story shops that include Cartier, Tiffany & Co., Escada and Hermes.

This street is also where Alfonso Fanjul, who goes by the name Alfy, likes to ride his bike and go on walks with his grandchildren. He calls home a 100-foot yacht, named the Crili after his daughters Crista and Lillian. (His other residence is on the ocean in Coral Gables.)

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