Julio Lobo

Julio Lobo Olavarría (1898-1983) was a Venezuelan born, US educated sugar tycoon often called “The King of Sugar”.  His father Heriberto Lobo, a self-made banker born in Venezuela of Sephardic Jewish descent, came to Cuba from Venezuela in 1900 as deputy manager of the North American Trust Co. after being expelled by Venezuelan president Cipriano Castro for his refusal to open Banco de Venezuela’s vaults to finance his insurgent government. 

In 1904, taking advantage of business opportunities in post war Cuba, Heriberto left his banking career and joined Spaniard from the Canary Islands Luis Suarez Galbán in the trading firm Galbán-Lobo.  Julio joined the firm in 1919 shortly after arriving from the US with a college degree from LSU.

Galbán-Lobo escaped the worst of the sugar price crisis having sold most of its sugar before the dramatic price drop from 20.5¢ per pound in May 1920 to 3.75¢ in December of that same year.  On October 1921, Julio brokered the largest sugar deal to that date valued at $6 million putting Galbán-Lobo on the same level with its main competitor Czarnikow-Rionda Co.

On Wall Street in New York, with his cousing Gustavo Lobo as manager, Julio Lobo established Olavarría & Co. to serve as his agent in the sugar trading business.  Olavarría & Co., together with offices of Galbán Lobo around the world, both worth on paper some $4 million, were the main assets Julio Lobo had outside of Cuba when forced to exile in 1960.  A small amount compared to his net worth in Cuba which was estimated at $200 million prior to the 1959 Revolution.

Julio Lobo’s strategy changed in the early 1940s from being a sugar trader to being a sugar mill owner despite a not so favorable experience with his first mill in 1926.  In 1946 he purchased his largest sugar mill First National Bank of Boston for $1.6 million, the Caracas sugar mill.  In all, Lobo came to own 15 sugar mills although not all of them at the same time, Tinguaro being his favorite.  He did not own all his mills outright, he often had partners but always had controlling interest.

On December 9, 1952 Lobo ventured out of the sugar business and organized Banco Financiero, a commercial bank of which he had 53% ownership.  Initially, loans in the sugar industry amounted to 77% of its total portfolio, however this later diminished to 45%.  Some of the other shareholders of Banco Financiero included Amadeo Barletta, majority owner of El Mundo newspaper and of the General Motors and Cadillac dealerships in Havana.  Barletta had moved to Cuba from the Dominican Republic after being accused of involvement in an attempt to kill dictator Rafael Leonidas Trujillo in 1935. 

In the 1950s tourism was one of Cuba’s fastest growing industry and Lobo could not but get involved.  Banco Financiero financed the Riviera and the Capri hotels, both owned by Meyer Lansky and the Mob.  The bank was never associated as a front for mafia money although Barletta was suspected but never proven to have mafia links.

In February 1956 Lobo attempted an unsuccessful hostile takeover of Cuban Atlantic Sugar Co. who in 1946 had acquired the assets of the Hershey Corporation including its 3 sugar mills and about 45,000 acres of land.  Almost two years later, on December 31, 1957, Lobo successfully closed on the deal to acquire the 3 Hershey mills from Cuban Atlantic Sugar Co. under a Panamanian company named Chiriqui Sugar Mills Corp. 

Funds for the  $24.5 million Hershey purchase were $15 million cash and $9.5 million in a loan from City Bank he personally guaranteed.  This acquisition as stated in his own words, proved to be Lobo’s Waterloo.  In exile in New York and unable to pay the Citi Bank loan remaining balance of $6.75 million, he filed for Bankruptcy on July 23, 1964 and in 1965 had to leave for Spain to avoid creditors. 

Some of his assets in the US including his seat in the New York Sugar Exchange were ironically enough acquired by Czarnikow-Rionda Co.

Pictured below is the facade of the Galban-Lobo office building in Old Havana and a plaque next to the front door with a short biography of Lobo and states that at the time of the Rovolution, Lobo was owner of the principal and greatest capital in Cuba.