Two politically connected brothers who fled the Castro regime and later built a sugar empire in Florida agreed yesterday to purchase the Domino Sugar company for $180 million.
Alfonso and J. Pepe Fanjul visited with workers at the Baltimore plant on Key Highway yesterday and said they plan no layoffs or management changes.
They intend to keep both the Domino brand name and, to the relief of local preservationists, the 120-foot red neon sign that has illuminated Baltimore's harbor from atop the plant for five decades.
"We view Domino as synonymous with sugar in America, and we are very excited because it fits very well in our plan," Alfonso Fanjul (pronounced fan-HOOL) said in an interview at the plant. "We could not conceive of a better brand."
The Fanjuls have been trying since the 1980s to acquire Domino, including an unsuccessful bid in 1988 when it was sold to current owner Tate & Lyle PLC of London for $305 million.
Officials at Tate & Lyle said they are selling the company because U.S. price supports are keeping the cost of raw sugar high and erasing the Domino refinery's margins. Domino, they said, is losing money on every pound of sugar it sells.
But those price supports are a boon to the Fanjuls, who have one of the largest sugar-producing companies in Florida, farming about 180,000 acres of sugar cane fields in Palm Beach County. They are fifth-generation sugar growers who moved to the United States from Cuba in 1960.
The Domino acquisition will add to their vertically integrated company, which is involved in every aspect of sugar producing, from farming to refining to distribution of the finished product.
The Fanjuls give hundreds of thousands of dollars to political candidates and parties each year, according to filings with the Federal Election Commission and a company spokesman. Recipients include the campaigns of George W. Bush, New York Mayor Rudolph W. Giuliani, Sens. Hillary Rodham Clinton of New York, John Kerry of Massachusetts and Spencer Abraham of Michigan, now U.S. energy secretary.
Pepe Fanjul, 57, is a Republican and served as Bob Dole's finance chairman in Florida during his 1996 bid for the White House. Alfonso Fanjul, 64, is a Democrat and served as Bill Clinton's finance chairman in the same election.
The Fanjuls will fold their sugar refinery in Yonkers, N.Y., into the Domino operations, giving Domino four refineries - two in New York, one in Louisiana and the Baltimore plant. Combined, the four facilities will produce 2 million tons of sugar a year and have revenue of about $1 billion.
The brothers, through their company Florida Crystals, will own 61 percent of Domino; the remaining 39 percent will be owned by the Sugar Cane Growers Cooperative, a co-op of 56 growers in Palm Beach County.
Together, Florida Crystals and the co-op account for about 60 percent of the 2 million tons of sugar that Florida produces annually, said Jack Roney, director of economic and policy analysis at the Sugar Alliance, a trade group that represents growers, refiners and processors.
The Baltimore plant opened in 1922, and was owned at the time by the American Sugar Refining Co., or Amstar. In 1984, Amstar Corp. was sold for $428 million to investment banking firm Kohlberg, Kravis, Roberts and Co., which sold it two years later to Merrill Lynch Capital Partners Inc. Tate & Lyle bought the company in 1988.
Florida Crystals and the co-op will pay $180 million for Domino and up to another $25 million over four years, depending on the performance of the business.
"Sugar is what we do; it's our business, it's our commitment, it's our life," said Alfonso Fanjul. "We view Domino as a permanent investment that will be good for ourselves and good for the workers at Domino."
He said the contract with the United Food and Commercial Workers union would be honored under the new ownership.
"We look at [the Fanjul acquisition] as a positive, it doesn't seem like anything that's going to be confrontational," said Alex Hamilton, president of the union that represents about 400 workers at the Domino plant in Baltimore. "The workers feel pretty good about it."
Elise Butler, programs director for the Baltimore-based Preservation Maryland, said she was "thrilled" to hear that the landmark sign would remain.
"The Domino Sugars sign is a historical and cultural icon in Baltimore. It's the first thing that greets you on the harbor and we're excited that it's going to stay," she said. "It may spell 'Domino,' but it sure says 'Baltimore.'"