The Egyptian Sugar Company

The Suarèses, Spanish Jews with Italian citizenship who arrived in Egypt via Italy in the early nineteenth century, were among the wealthiest Egyptian Jewish families in the late nineteenth and early twentieth centuries.^[40] Building on the ruins of the state-owned sugar company established by Khedive Isma‘il to diversify Egypt's agroindustrial sector, Raphael Suarès (1846–1902) and two other resident foreigners built a new sugar refinery in 1881 at Hawamdiyya, about twenty-five kilometers south of Cairo.^[41] In 1893, the Suarès family bank contributed two-thirds of the capital to a new sugar partnership with the French Raffinerie C. Say to form the Sucrerie Raffinerie d'Egypte. In 1897, this enterprise merged with La Société Générale des Sucreries de la Haute Egypte to form La Société Générale des Sucreries et de la Raffinerie d'Egypte. In 1902, the Egyptian Sugar Company bought nine cane crushing mills in upper Egypt from the firm originally established by Khedive Isma‘il, now the Daira Saniyeh Sugar Company owned by an Anglo-Egyptian group led by the German-English investor Sir Ernest Cassel. Consequently, the Egyptian Sugar Company became heavily indebted to Cassel, and he secured a role in its management. This enterprise soon established a near monopoly over Egyptian sugar production.

Rapid expansion and the heavy debt to the Cassel group led to the firm's bankruptcy in 1905. The company was reorganized, and a new management team was installed, led by a Belgian, Henri Naus, and Sir Victor Harari Pasha, a Jew born in Lebanon, a British citizen, and a former high official in the Egyptian Ministry of Finance. Harari served as Ernest Cassel's local agent. Naus managed the Egyptian Sugar Company until his death in 1938.

In addition to their major investment in the Egyptian Sugar Company, the Suarès-Qattawi-Rolo-Menasce business group, in collaboration with French interests and Ernest Cassel, held an extensive complex of interests in agricultural land, irrigation, financing, and sugar production in upper Egypt centered on the sugar producing region of Kom Ombo. Thus, at the beginning of the twentieth century, the sugar industry was a colonial economic enterprise with origins connected to lands acquired by foreigners as a result of Egypt's foreign debt and bankruptcy in 1876. The Suarès family was the link between European capital and Egypt's agricultural resources. Even in this period it would be incorrect to see the Suarèses as blind tools of European interests. Though they were certainly local allies of European capital, the Suarèses operated only in Egypt, unlike Ernest Cassel or the French Say interests, who had worldwide ambitions. By World War I, the Qattawis eclipsed the Suarèses in economic and political influence, becoming the most prominent Jewish family in Egypt and the major local investors in the Egyptian Sugar Company. After several decades, the character of the ownership and management of the company changed significantly. The new relations among foreign capital, resident Jewish capital, and Egyptian Muslim capital in the Egyptian Sugar Company from the late 1930s to the mid-1950s are comparable to developments in other firms during this period.

In the late 1930s, the French shareholders, who had always exercised loose control over the firm, became even less significant in its management.^[42] When Henri Naus died, the French Embassy in Egypt tried to encourage the French shareholders, who then held 30 percent of the Egyptian Sugar Company's stock, to exert their power in determining the direction of the firm. But they could not do so. Effective control had shifted into the hands of Belgians (Henri Naus), Egyptian Jews (Qattawi and Harari), and Egyptian Greeks (a group led by the Cozzika family). In 1942, after a brief period of Cozzika preeminence, Ahmad ‘Abbud Pasha was elected to the board of directors and became managing director of the Egyptian Sugar Company. In 1948, his takeover of the firm was completed by his election as chairman of the board. During the 1940s, two Jews—René Qattawi Bey and Col. Ralph A. Harari, the son of Victor Harari,—sat on the board with ‘Abbud Pasha and several other prominent Muslim Egyptians—Sharif Sabri Pasha, Husayn Sirri Pasha, Muhammad Mahmud Khalil Bey, ‘Abd al-Hamid Badawi Pasha, Hasan Mazlum Pasha, and Sir Mahmud Shakir Muhammad Pasha. The only representative of the French interests that began the firm with the Suarès family was Baron Louis de Benoist, who was also the agent-supérieur of the Suez Canal Company resident in Egypt. Thus, in 1948, the board was composed of eight Egyptian citizens, of whom one was Jewish (Qattawi), and two foreign nationals, of whom one was Jewish (Harari).

‘Abbud Pasha began Egyptianizing the staff when he took over the management of the sugar company. By 1947, the firm had 954 administrative and technical employees, of whom 725 (76 percent) were Egyptian and 38 were mutamassirun. Another 34 claimed to be Egyptian but had no documentary proof.^[43] Less than 30 (0.^[3] percent) of the 9,000 laborers were foreigners in 1947, but they were more skilled (or at least management considered them to be so), better paid, and received better benefits than the Egyptians. These figures exceeded the minimum quotas for employment of Egyptians established by the 1947 Company Law, and no changes were required to comply with this legislation. At the top echelon of the firm, ten of thirteen members of the Managerial Committee were still foreigners in 1947. But by 1952, ten of fourteen members were Egyptians. This change probably resulted as much from ‘Abbud's desire to assert control through his own appointees as from pressure to Egyptianize. After 1947, the number of Egyptian employees and laborers in all capacities rose gradually.

The composition of the firm's capital also changed in the 1940s and 1950s. By 1955, only 26 percent of the shares of the Egyptian Sugar Company were held in France.^[44] The Qattawi family continued to maintain a substantial interest in the firm. The remnants of the Jewish Suarès-Qattawi-Rolo-Menasce interests, who had originally served as intermediaries for colonial-style direct foreign investment by Sir Ernest Cassel and the French Say firm, had become willing collaborators with Ahmad ‘Abbud, Egypt's most dynamic and successful Muslim entrepreneur.

Despite what appeared to be the successful Egyptianization of the firm, on August 24, 1955, the Egyptian Sugar Company was placed in the custody of the Ministry of Finance because of a dispute between ‘Abbud and the new regime over taxes and prices (a protective tariff had guaranteed the company's profits and market share since 1931). The government sequestered the firm and in 1956 liquidated it. After the Suez/Sinai War, it became a state-owned enterprise. The Egyptian Sugar Company was nationalized not because the government was concerned about foreign economic domination, but because ‘Abbud, an autocratic and imperious personality, would not bow to the government's economic policy demands. The Qattawis were forced to abandon their interest in the Egyptian Sugar Company when they left Egypt after the 1956 war, but their role in the firm had little to do with why it became one of the first firms of Egypt's public sector.

None of these shifts in the ethnic composition of the shareholders, management, and work force is noted by Anis Mustafa Kamil, Nabil ‘Abd al-Hamid Sayyid Ahmad, or ‘Arfa ‘Abduh ‘Ali in their discussions of the Egyptian Sugar Company.^[45] All of them regard the firm simply as a foreign/Jewish colonial enterprise. Their accounts suggest that the firm's character was forever determined by its beginnings, resulting in ahistorical accounts of the sugar company (and many other firms they discuss as well) in which the normal activity of capitalist competition and the rise and fall of rival groups of investors are absent from the analysis. This permits them to represent “Jewish capitalism” or the “Jewish bourgeoisie” as a monolithic bloc. All of them, in various ways, accuse the Jewish business elite of Zionist sympathies.

In the case of the sugar company, Kamil notes that the firm “continued until 1948 to be the basic source of sugar for the Zionists of Tel Aviv.” ^[46] This sounds very incriminating for an audience that may not know that there were many commercial ties between Egypt and Palestine until 1948 and that exporting sugar to Palestine (some of which was undoubtedly consumed by the Arab majority of the population) was both legal and beneficial for Egypt's balance of foreign trade. Moreover, the Qattawis, the leading Jewish family in the firm, were the most outspoken anti-Zionists in the Jewish community (except perhaps the communists). Their motive for exporting sugar to Palestine—most likely, simply the opportunity for profit—was certainly not sympathy with Zionism.