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Compagnie Financière Sucres et Denrées S.A. (Sucden), is one of the world's leading sugar trading houses, controlling some 15 percent of the world sugar market. Each year, the company is responsible for the trade of over five million tons of both raw and white refined sugar. Yet Sucden, a privately held company based in Paris, France, remains more or less unknown. The company acts as a go-between among sugar-producing countries, often at a government level, and sugar refining markets, again at a government level, but also directly to major sugar-based industrial companies. Sucden supports its operations through an internationally operating subsidiary network, with its primary sugar trading offices in the United States, Russia, Switzerland, and Brazil. The company's Miami, Florida-based Amerop is one of Sucden's largest subsidiaries, handling 1.5 million tons of sugar per year, chiefly for the North and South American markets. Amerop is also present in Chile, Mexico, and the Philippines, and handles trading among the Central and South American market countries as well. The company also operates a dedicated Brazilian subsidiary, which handles some 25 percent of that country's total sugar output. Sucden's early entry into the liberalized Russian market has given the company a leading industry position in that country, one of the world's largest sugar processing and consumer markets. Sucden has also long operated a trading subsidiary in the United Kingdom, Sucden UK, which is one of that country's leading commodity and futures brokerage houses. Sucden's UK operations also include Comfin--which targets the sugar markets in the African, Caribbean, and Pacific regions--and Genoc Chartering, which acts as a chartered shipbroker for the international trade in sugar and other dry commodities. The private company's annual revenues are estimated at more than EUR 2 billion ($2 billion) per year. Sucden is led by chairman Serge Varsano, son of the company's founder.

Cuban Connection in the 1950s

Maurice Varsano founded a small sugar-trading business in the 1952 at a time when the international sugar trading market was undergoing profound changes. Sugar, which had long been an important commodity, became even more integral for the developing food processing industry, which relied on sugar for both for its flavoring and food preservation properties.

The end of World War II had also brought about the end of the colonial era, as former colonies claimed or gained their independence. At the same time, the new countries regained control over their natural resources, which had formerly been exploited for the benefit of the colonial occupiers. This situation opened the opportunity for a new generation of trading houses to establish itself on the world sugar scene.

Sugar quickly became an important economic and political liaison, linking both sugar producing countries--predominantly in the developing world--and sugar processing and consumer markets, especially in the West. Varsano recognized that the new governments would seek the help of traders to market their countries' sugar production on the world markets and positioned his company as a middle man, buying up contracts for a specified amount of sugar, which he then resold to sugar refiners and processors.

By the beginning of the 1960s, Varsano had already positioned his company, Compagnie Financière de Sucres et Denrées, or Sucden, as a major player on the worldwide sugar market. Varsano's moment had come with the Cuban revolution and the rise to power of Fidel Castro at the end of the 1950s. In 1959, Varsano correctly recognized that Castro required a new trading partner in order to sell the country's important sugarcane crop--a primary source of Cuban income. Yet Castro was unable to find buyers for the country's sugar crop, which until the revolution had been controlled by U.S. interests. Varsano stepped in, offering to sell Cuban sugar to Japan and North Africa. The move not only helped preserve Castro's regime but also established Sucden as a force in the sugar industry. In 1961, Sucden established a subsidiary, Amerop Sugar Corporation, bringing it closer to the Latin and North American market.

Sucden's success with Cuban sugar led the company to adopt a policy of political neutrality, a position that was to encourage Forbes magazine later to describe the company as the "despots' best friend." Indeed, into the 1970s, the company continued to play the role of lifeline for a number of politically unstable--and unpopular--countries. Yet Sucden's strategy differed markedly from that of its English and American rivals, which typically sought quick profits, since the company developed long-term relationships with its government customers. At the same time, Sucden often received backing from the French government, as Sucden's commercial operations often coincided with the country's political ambitions. Nonetheless, as Le Monde reported, when asked by Fidel Castro which side he was on, Maurice Versano was quoted as saying: "I am on the side of sugar."

Maurice Varsano had become an important figure on the international commodities scene by the early 1970s, leading the company to expand beyond its focus on sugar to trade in a variety of other commodities. The creation of the European Common Market led to new opportunities, and in 1973 Sucden opened a subsidiary in the United Kingdom after that country joined the European Community. Sucden UK developed into a diversified commodities and futures brokers which, through subsidiary Comfin, also established in 1973, spearheaded Sucden's sugar brokerage interests in the Africa, Caribbean, and Pacific regions that remained under British influence.

Sucden's success as a trader encouraged its industrial ambitions as well. The company's investments led it into the growing agro-industrial market, and by the mid-1980s Sucden had emerged as one of France's leading food producers, particularly through its holding of Sogelait, a dairy products broker and distributor, and Sogeviandes, which, through its Charal brand, became the number one French beef products producer.

Sucden's transformation into an agro-industrial group took on steam after Maurice Varsano's death in 1980. The company's leadership was then transferred to a "trustee" management team under Max Benhamou, Benjamin Coriat, and Jacques Bachelier, who had been instrumental in helping Varsano build up the business. Yet majority control of the company rested with the Varsano family, in particular with Serge Varsano, who was just 24 at the time of his father's death.

Sucden's acquisition of chocolate maker Cacao Barry in 1982 thrust it to the forefront of the French agro-indusrial sector. Barry had originally been founded in England in 1842 and launched a cacao processing arm in Meulan, France, in 1920. By the 1960s, Barry had ceased production of processed chocolates and instead focused on operating as a cocoa processor, becoming the wold's largest by the 1980s.

Focused Sugar Trader in the 21st Century

Sucden's rising food processing operations came to represent the majority of the group's sales, which reached the equivalent of $7.5 billion by the end of the 1980s. Nonetheless, the company still remained a key player in the international trading market. Once again, Sucden displayed a willingness to take political risks, acting as a broker in Nicaragua in 1984 and slightly later adding contracts in El Salvador. The company's brokerage activities took it beyond sugar as well, and in the 1980s the company became a major rice broker operating in such markets as Laos and Vietnam. The company also entered the market for fertilizer, coffee, and other commodities during this time.

The arrival of Serge Varsano as head of the company took Sucden into a new era. By 1988, the younger Varsano had succeeded in gaining control of 85 percent of the group. He quickly imposed his own management team on the company and now sought to replicate his father's talent for large-scale contracts. Cuba once again became a primary market for Sucden, which acted as a middle man between that country and the Soviet Union in a transaction involving some 1.8 million tons of sugar in 1988.

Varsano decided to take on the cocoa market as well. In 1988, the Ivory Coast, the world's largest cocoa producer, was under pressure to repay its foreign debt. Varsano offered to purchase some 400,000 tons of cocoa, representing some 20 percent of the country's crop, which was then placed it in storage. The deal brought Sucden into the headlines and also into a head-to-head confrontation with the cocoa market's longtime leader Phillip Bros., based in the United States.

Varsano next turned to the petrol market, buying up 17 percent of Germany's Marimpex, which enjoyed contacts in the Iranian and Libyan oil markets. By 1990, Sucden had gained majority control of Marimpex and had begun negotiating its first Iranian oil contracts in a bid to become a major player in that market as well. Yet a slump in worldwide cocoa prices, which forced the company to sell short on its cocoa holdings, led to a quick unraveling of its empire.

• Fottorino, Eric, "Serge Varsano, PDG de Sucres et Denrées: Un négociant monté en graine," Le Monde, July 1, 1989.


• ------, "Sucres et denrées, de la régence à la gestion," Le Monde, October 25, 1991.


• Fuhrman, Peter, "Despots' Best Friend (Serge Varsano)," Forbes, February 5, 1990, p. 178.


• "Sucden Eyes Bigger Sugar Market Share in Asia," Reuters, November 26, 2003
  
• "Sucden Reappointed on Cocoa and Sugar Futures," Trade Finance, February 2003, p. 8.


• "Sucden Sweetens Russian Business," Trade Finance, March 2002, p. 3.

Source: International Directory of Company Histories, Vol.60. St. James Press, 2004.