Bunge y Born
Encyclopedia
Bunge y Born was a multinational corporation
based in Buenos Aires
, Argentina
, whose diverse interests included food processing
and international trade in grain
s and oilseeds. It is now known as Bunge Limited
.
and Prussia
, and his brother-in-law, Jorge Born, who was recently arrived from Antwerp. The company superseded the Bunge Company founded in Amsterdam
by Johann Bunge, in 1818. Following the purchase of 60,000 hectares (150,000 acres) of prime pampas wheat fields, Bunge & Born established Centenera, their first food processing plant, in 1899. They had one of the largest wheat mills in the country built on a Puerto Madero
lot in 1902, and with it, established Molinos Río de la Plata
(later a leader in the local retail foods market).
The company started Argentina's first burlap
bag manufacturer, following which they successfully lobbied government policy makers for protective tariffs
on the then-critical commercial staple. They established a mortgage bank, the Banco Hipotecario Franco Argentino, and a subsidiary in Brazil
in 1905, and by 1910, they reportedly controlled 80% of Argentine cereal exports (Argentina was, by then, the world's third-largest grain exporter). They later established paint manufacturer Alba (1925), chemical and fertilizer maker Compañía Química, and textile maker Grafa (1932), among others; by the late 1920s, the company's annual export receipts alone reached US$300 million. The company inaugurated its neo-gothic Buenos Aires headquarters on Leandro Alem Avenue
, designed by local architect Pablo Naeff, in 1926.
Bunge & Born's near-monopoly on cereal and flour exports ended with populist President Juan Perón
's 1946 establishment of the IAPI, a state agricultural purchasing and export agent. The company responded by extending its reach into the country fast-growing retail processed foods market, and though its prominence as the nation's chief exporter was partly restored by Perón's 1955 ouster and the IAPI's liquidation, its focus remained domestic over the next three decades. A privately-held company, Bunge & Born did not release periodical financial statements, though it reported US$2 billion in gross receipts in 1962; by then, it had become a leader in commodity futures trading, operating 110 offices worldwide.
The Bunge, Born, Hirsch, Engels and De La Tour families remained the company's chief stock-holders, and by extension, leaders in the domestic textile, paint, chemical, fertilizer, and food processing industries. On September 19, 1974, however, the consortium was shaken by the kidnapping of siblings Jorge and Juan Born by the far-left terrorist group, Montoneros
. The Born brothers were kept in a known Argentine State Intelligence
safehouse for nine months until their June 1975 release, something made possible without public suspicion of outside involvement by the agency's numerous contacts inside the Montoneros (including the leader, Mario Firmenich). Freed for a US$60 million ransom (the largest on record at that time), the ordeal triggered the company headquarters' relocation to São Paolo, Brazil, and contributed to the March 1976 coup.
Retaining their Argentine interests (44 companies, by the 1980s), the families continued to suffer from ongoing disputes, and in 1987, CEO Mario Hirsch died suddenly. The election of Carlos Menem
to the Argentine Presidency in May 1989, however, resulted in an agreement between the President-elect and Jorge Born that gave the company partial control over national economic policy. Bunge & Born provided the Menem government with its first two economy ministers, and the combination of large rate increases on public services (around 500%), a simplified exchange rate and a massive, mandatory wage hike led to a sharp economic turnaround between July and November 1989. This foray into government policy making, however, ended in a new currency crisis that December and the failure (compounded by the company's lackluster business performance) resulted in Born's 1991 ouster from the board; he was replaced by Chief Operations Officer Octavio Caraballo.
Beset by the rift between Jorge Born and his brother, Juan, the prior unity between the shareholders disintegrated as Caraballo struggled to modernize the company. Family frictions intensified when Jorge Born formed a business partnership with one of his former kidnappers, erstwhile Montonero strategist Rodolfo Galimberti.
-registered Bunge International in 1994, retaining the Bunge y Born name only in Argentina. Bunge remained a privately-held company of 180 shareholders (including the longtime controlling family interests) and divested itself in 1998 of almost all its retail foods interests in favor of a greater role in international agribusiness
and commodity markets; by then the company's gross annual turnover had reached US$13 billion. Bunge ultimately went public
on the NYSE in 2001, becoming Bunge Limited.
Multinational corporation
A multi national corporation or enterprise , is a corporation or an enterprise that manages production or delivers services in more than one country. It can also be referred to as an international corporation...
based in Buenos Aires
Buenos Aires
Buenos Aires is the capital and largest city of Argentina, and the second-largest metropolitan area in South America, after São Paulo. It is located on the western shore of the estuary of the Río de la Plata, on the southeastern coast of the South American continent...
, Argentina
Argentina
Argentina , officially the Argentine Republic , is the second largest country in South America by land area, after Brazil. It is constituted as a federation of 23 provinces and an autonomous city, Buenos Aires...
, whose diverse interests included food processing
Food processing
Food processing is the set of methods and techniques used to transform raw ingredients into food or to transform food into other forms for consumption by humans or animals either in the home or by the food processing industry...
and international trade in grain
Cereal
Cereals are grasses cultivated for the edible components of their grain , composed of the endosperm, germ, and bran...
s and oilseeds. It is now known as Bunge Limited
Bunge Limited
Bunge Limited is a Bermudan food conglomerate with its headquarters in White Plains, New York. As well as being a leading global soybean exporter it is also involved in food processing, grain trading, and fertilizer...
.
History
Bunge & Born was founded in 1884 by Ernesto Bunge, a German Argentine whose uncle, Carl Bunge, had been Consul General in Argentina for both the NetherlandsNetherlands
The Netherlands is a constituent country of the Kingdom of the Netherlands, located mainly in North-West Europe and with several islands in the Caribbean. Mainland Netherlands borders the North Sea to the north and west, Belgium to the south, and Germany to the east, and shares maritime borders...
and Prussia
Prussia
Prussia was a German kingdom and historic state originating out of the Duchy of Prussia and the Margraviate of Brandenburg. For centuries, the House of Hohenzollern ruled Prussia, successfully expanding its size by way of an unusually well-organized and effective army. Prussia shaped the history...
, and his brother-in-law, Jorge Born, who was recently arrived from Antwerp. The company superseded the Bunge Company founded in Amsterdam
Amsterdam
Amsterdam is the largest city and the capital of the Netherlands. The current position of Amsterdam as capital city of the Kingdom of the Netherlands is governed by the constitution of August 24, 1815 and its successors. Amsterdam has a population of 783,364 within city limits, an urban population...
by Johann Bunge, in 1818. Following the purchase of 60,000 hectares (150,000 acres) of prime pampas wheat fields, Bunge & Born established Centenera, their first food processing plant, in 1899. They had one of the largest wheat mills in the country built on a Puerto Madero
Puerto Madero
Puerto Madero, also known within the urban planning community as the Puerto Madero Waterfront, is a barrio of the Argentine capital at Buenos Aires CBD, occupying a significant portion of the Río de la Plata riverbank and representing the latest architectural trends in the city of Buenos...
lot in 1902, and with it, established Molinos Río de la Plata
Molinos Río de la Plata
Molinos Río de la Plata is Argentina's largest branded food products company. The company is a large exporter of sunflower processed oil and is one of Argentina's main exporters of bottled oil...
(later a leader in the local retail foods market).
The company started Argentina's first burlap
Burlap
Hessian , or burlap in the US, is a woven fabric usually made from skin of the jute plant or sisal fibres, or may be combined with other vegetable fibres to make rope, nets, and similar products...
bag manufacturer, following which they successfully lobbied government policy makers for protective tariffs
Protectionism
Protectionism is the economic policy of restraining trade between states through methods such as tariffs on imported goods, restrictive quotas, and a variety of other government regulations designed to allow "fair competition" between imports and goods and services produced domestically.This...
on the then-critical commercial staple. They established a mortgage bank, the Banco Hipotecario Franco Argentino, and a subsidiary in Brazil
Brazil
Brazil , officially the Federative Republic of Brazil , is the largest country in South America. It is the world's fifth largest country, both by geographical area and by population with over 192 million people...
in 1905, and by 1910, they reportedly controlled 80% of Argentine cereal exports (Argentina was, by then, the world's third-largest grain exporter). They later established paint manufacturer Alba (1925), chemical and fertilizer maker Compañía Química, and textile maker Grafa (1932), among others; by the late 1920s, the company's annual export receipts alone reached US$300 million. The company inaugurated its neo-gothic Buenos Aires headquarters on Leandro Alem Avenue
Leandro Alem Avenue
Avenida Leandro N. Alem is one of the principal thoroughfares in Buenos Aires, Argentina, and a commercial nerve center of the city's San Nicolás and Retiro districs.-Overview:...
, designed by local architect Pablo Naeff, in 1926.
Bunge & Born's near-monopoly on cereal and flour exports ended with populist President Juan Perón
Juan Perón
Juan Domingo Perón was an Argentine military officer, and politician. Perón was three times elected as President of Argentina though he only managed to serve one full term, after serving in several government positions, including the Secretary of Labor and the Vice Presidency...
's 1946 establishment of the IAPI, a state agricultural purchasing and export agent. The company responded by extending its reach into the country fast-growing retail processed foods market, and though its prominence as the nation's chief exporter was partly restored by Perón's 1955 ouster and the IAPI's liquidation, its focus remained domestic over the next three decades. A privately-held company, Bunge & Born did not release periodical financial statements, though it reported US$2 billion in gross receipts in 1962; by then, it had become a leader in commodity futures trading, operating 110 offices worldwide.
The Bunge, Born, Hirsch, Engels and De La Tour families remained the company's chief stock-holders, and by extension, leaders in the domestic textile, paint, chemical, fertilizer, and food processing industries. On September 19, 1974, however, the consortium was shaken by the kidnapping of siblings Jorge and Juan Born by the far-left terrorist group, Montoneros
Montoneros
Montoneros was an Argentine Peronist urban guerrilla group, active during the 1960s and 1970s. The name is an allusion to 19th century Argentinian history. After Juan Perón's return from 18 years of exile and the 1973 Ezeiza massacre, which marked the definitive split between left and right-wing...
. The Born brothers were kept in a known Argentine State Intelligence
Side
Side was an ancient Greek city in Anatolia, in the region of Pamphylia, in what is now Antalya province, on the southern Mediterranean coast of Turkey...
safehouse for nine months until their June 1975 release, something made possible without public suspicion of outside involvement by the agency's numerous contacts inside the Montoneros (including the leader, Mario Firmenich). Freed for a US$60 million ransom (the largest on record at that time), the ordeal triggered the company headquarters' relocation to São Paolo, Brazil, and contributed to the March 1976 coup.
Retaining their Argentine interests (44 companies, by the 1980s), the families continued to suffer from ongoing disputes, and in 1987, CEO Mario Hirsch died suddenly. The election of Carlos Menem
Carlos Menem
Carlos Saúl Menem is an Argentine politician who was President of Argentina from 1989 to 1999. He is currently an Argentine National Senator for La Rioja Province.-Early life:...
to the Argentine Presidency in May 1989, however, resulted in an agreement between the President-elect and Jorge Born that gave the company partial control over national economic policy. Bunge & Born provided the Menem government with its first two economy ministers, and the combination of large rate increases on public services (around 500%), a simplified exchange rate and a massive, mandatory wage hike led to a sharp economic turnaround between July and November 1989. This foray into government policy making, however, ended in a new currency crisis that December and the failure (compounded by the company's lackluster business performance) resulted in Born's 1991 ouster from the board; he was replaced by Chief Operations Officer Octavio Caraballo.
Beset by the rift between Jorge Born and his brother, Juan, the prior unity between the shareholders disintegrated as Caraballo struggled to modernize the company. Family frictions intensified when Jorge Born formed a business partnership with one of his former kidnappers, erstwhile Montonero strategist Rodolfo Galimberti.
Bunge International
The company was converted into the BermudaBermuda
Bermuda is a British overseas territory in the North Atlantic Ocean. Located off the east coast of the United States, its nearest landmass is Cape Hatteras, North Carolina, about to the west-northwest. It is about south of Halifax, Nova Scotia, Canada, and northeast of Miami, Florida...
-registered Bunge International in 1994, retaining the Bunge y Born name only in Argentina. Bunge remained a privately-held company of 180 shareholders (including the longtime controlling family interests) and divested itself in 1998 of almost all its retail foods interests in favor of a greater role in international agribusiness
Agribusiness
In agriculture, agribusiness is a generic term for the various businesses involved in food production, including farming and contract farming, seed supply, agrichemicals, farm machinery, wholesale and distribution, processing, marketing, and retail sales....
and commodity markets; by then the company's gross annual turnover had reached US$13 billion. Bunge ultimately went public
Public company
This is not the same as a Government-owned corporation.A public company or publicly traded company is a limited liability company that offers its securities for sale to the general public, typically through a stock exchange, or through market makers operating in over the counter markets...
on the NYSE in 2001, becoming Bunge Limited.