The first mining businesses were conducted by banker Frédéric Jacobs almost 100 years ago, but the expansion was carried out by his son-in-law, Antoine Velge, followed by his sons Marc and Frédéric, and his grandson Antoine. The great-grandson Federico is next in line. These are the names behind Sapec.
In 1923, Frédéric Jacobs, a banker from Antwerp – where he was born in 1866 – acquired a significant stake in the Société Anonyme Belge des Mines de Aljustrel. For the export of pyrite, he needed transportation, storage space, and a dock. In this search, he found Herdade das Praias. With about 400 hectares, seven kilometers from Setúbal, the land had good rail connections to raw material sources, easy access to the sea and northern European ports, and abundant industrial labor. The deal was made, and in 1925, a fragmentation workshop was set up on site to granulate the pyrite (which was then exported to northern Europe).
On January 21, 1926, the Société Anonyme de Produits et Engrais Chimiques du Portugal (Sapec) was established in Brussels, which began to exploit Herdade das Praias, having bought 60 hectares and, in 1933, the remaining 423 hectares from the Aljustrel Mines. At Sapec, Frédéric Jacobs was prominent, with Antoine Velge, born in 1901 (who married his daughter, Alice Jacobs), as his right-hand man.
Shortly after, a fertilizer factory was built. The growth of the business required a greater presence in Portugal, so the Velge family bought Quinta d’Ayres, a former convent house from the 18th century, for residence in Portugal and Quinta do Anjo in Palmela for the horses. In 1936, the family acquired a majority stake in the Société Mines et Industrie in Lousal and the British A. White Crookston’s stakes in the Caveira Mines.
MINAS DO LOUSAL
During World War II, Antoine Velge went to Belgium, but his wife and five children came to Portugal. With the death of Frédéric Jacobs in 1946, the inheritance was divided – with Sapec being bequeathed to his daughter, Anne Jacobs Velge, and the Pont Brulé group to his nephew, Paul Van den Bosch..
In 1954, Frédéric Velge completed his degree in Forestry Engineering and went to work in the coal mines of Liège. Shortly after, his father, Antoine Velge, challenged him to manage the Lousal Mines, which had good conditions for pyrite exploitation, and he moved there in 1958.
In a few years, Frédéric Velge transformed the Lousal Mines with the support of collaborators like the German geologist Günter Strauss, who said of Frédéric Velge: “He was always thinking about the profitability of the mine and how he could improve the exploitation processes.” He carried out technological conversion and reorganized the administrative, financial, and social areas, increasing productivity in the mine from 1.3 to 8.5 tons per miner and reducing accidents from 500 to 150 per year.
In 1960, it was Marc Velge’s turn to join Sapec in the industrial area, while his father, Antoine Velge, maintained the business in Brussels. In 1963, Antoine acquired a significant shareholding in the Tharsis Mines, a company listed on the London Stock Exchange but with mines in Spain, and once again challenged Frédéric to manage the mining company. In a few years, he made Tharsis the largest and most modern pyrite mine in Europe.
In 1968, his uncle, Van den Bosch, from Socfin (Société Financière des Caoutchoucs), who had no children, asked Antoine for Frédéric Velge to take over the leadership of the company – which was much larger than Sapec, with businesses in various parts of the globe – without losing connection to the family business.
In 1969, Frédéric Velge and his family moved to Brussels. During those ten years, he created a new company in Ivory Coast to produce palm oil. He developed many plantations in Malaysia and Indonesia. The plantations combined palm and rubber trees because the company did not want to depend on a single market, especially since the two products were traded in counter-cycles.
The Velge Family Heading Towards the Fifth Generation
The capital of Sapec Portugal SGPS is entirely owned by the Belgian Sapec, which is over 98% owned by the Velge family through family holdings in Belgium (Financière Frédéric Jacobs) and Luxembourg (Soclinpar), since Sapec was delisted from the Euronext Brussels stock exchange in 2018 – after buying the 15% stake of the second-largest shareholder, Coberpa, the previous year. The decision was made following the sale of the agribusiness for over 400 million euros. “Sapec no longer had the scale to remain on the stock exchange,” explains Antoine Velge. His son, Frederico Velge, born in 1986, worked for several years outside Portugal and joined Sapec in 2019. He conducts research and oversees new businesses, such as Algaia, as the operational management of the company is entrusted to non-family professionals.
Foundation Date
1926
Turnover
40 million euros (2019 in Portugal)
Main Businesses
Distribution of chemicals for industry (Sapec Química), Land logistics (SPC) and port logistics (Sapec Terminais Portuários and Navipor), Food ingredients from algae (Algaia).
HOSTAGE OF APRIL
Ten days before April 25, 1974, Antoine Velge passed away at Quinta d’Ayres in Azeitão. Frédéric was in Belgium, and it was Marc Velge who faced the “shock” of the revolutionary process of establishing democracy. As he recalled: “There were strikes almost every day. At one point, I was kidnapped, and there were even gunshots, but it was all just a joke. People seemed like children. I was in the office for almost three days. But people would come to see me and bring me cigars and food. Those times passed quickly.” In March 1975, a wave of nationalizations began, but Sapec, being a foreign company, escaped this process, unlike its rival, CUF.
In 1981, the company was on the brink of bankruptcy, with bank debt around 70% to 80% of sales, significant drops in factory productivity and its market share in fertilizers falling from about 25% to 10-15%. Fertilizers were subsidized by the Supply Fund, which was often delayed in payments, creating cash flow difficulties.
At that time, Eduardo Catroga was hired to share executive leadership with Marc Velge. The main strategic concern was the company’s survival in the face of significant economic and financial imbalances. At Sapec, three business units were created for fertilizers, agrochemicals, and feed. New management methodologies were incorporated, a new planning and control system, a different performance evaluation method, and investment analysis. From a centralized functional organization, the company moved to decentralized management by business units.
In 1986, there was a clash between the two executive presidents of Sapec. As Eduardo Catroga wrote, “while I was recovering the company, he was obsessed with his Sapec II project, with the mines and metallurgy in Palhal and agricultural activity at Quinta dos Anjos.” Faced with this dilemma, Frédéric chose the path of the manager, leading to a shareholder confrontation with his brother, Marc. In October 1988, the brothers reached an agreement, and Antoine became the majority shareholder in Sapec. That year, the Lousal Mines were closed.
SAPEC OPTION
The capital of Sapec Portugal SPGS is entirely owned by the Belgian Sapec, which is over 98% owned by the Velge family through family holdings in Belgium (Financière Frédéric Jacobs) and Luxembourg (Soclinpar), since Sapec was delisted from the Euronext Brussels stock exchange in 2018 – after buying the 15% stake of the second-largest shareholder, Cobepa, the previous year. The decision was made following the sale of the agribusiness for over 400 million euros. “Sapec no longer had the scale to remain on the stock exchange,” explains Antoine Velge. His son, Federico Velge, born in 1986, worked for several years outside Portugal and joined Sapec in 2019. He conducts research and oversees new businesses, such as Algaia, as the operational management of the company is entrusted to non-family professionals.
As Antoine J. Velge recalled, “my father was a minority shareholder in Socfin, having a management agreement with two other major shareholders. In Sapec, he was also a minority, needing my uncle’s votes to make decisions. I told my father: ‘It doesn’t make sense for you to continue living as a minority. You must make a choice.’ And at that time he asked me: ‘What would you do? You are going to be my successor.’ I replied: ‘I would prefer to focus on Sapec!”
In 1993, Eduardo Catroga assumed the position of Minister of Finance and was replaced by the fourth-generation member of the Velge family, Antoine J. – who graduated from the European Business School and had a career at Lazard Frères. He joined Sapec in 1987 and had Eduardo Catroga as a “coach.” He continued the same strategy: a dynamically managed business portfolio aimed at creating value.
In 1997, Sapec’s fertilizers merged with those of the José de Mello Group in Adubos de Portugal, but shortly after, Frédéric Velge and José Manuel de Mello clashed, and the Velge family exited the fertilizer business. With the proceeds from this sale and the animal nutrition company, Sapec heavily invested in the agrochemical and plant nutrition business, with acquisitions in Spain and significant investments in the Setúbal factory and R&D (research and development).
Frédéric Velge passed away on October 20, 2002, at his castle in Folembray, France, acquired in 1936. In the following years, portfolio management continued. In the energy sector, the group made a misstep when, after selling wind farms in Spain, it invested in the United States but failed to sell the investment in 2007 due to the financial crisis and had to undergo a gradual divestment process..
In November 2016, it sold the Agro-Business Pole – consisting of the Portuguese Sapec Agro and the Spanish Trade Corporation International – to the international private equity fund Bridgepoint for 456 million euros. In March 2019, it acquired 31% of Algaia, which, as Antoine Velge notes, “is still a ‘seed’ that has not yet matured. It is a bet on the sector of food ingredients from algae, where we believe there could be significant growth in the next decade and where we want to strengthen our position.”