André & Cie SA’ sudden demise

Traders are condemned to constantly adapt to the harsh conditions of their profession, without right to error in the complex stages of trading, which combine reactivity and understanding of the workings of finance and logistics.

Based in the lakeside city of Lausanne, Switzerland, a 45 minutes train ride outside of Genève, and in the absolute discretion, André SA (Suisse) accounts 1/3 of international grains traded in Switzerland.

Banks had placed in the trader commercial skills and capacity to honour its contractual obligations an absolute confidence.

During decades, André & Cie SA, the Switzerland-based global grain business has rivaled Cargill ( and Continental Grain, Louis Dreyfus, Bunge and Born).

André the Giant

André & Cie SA has umbrellas in 70 countries and is unquestionably one of the world’s five biggest grain traders.

It owns Suisse-Atlantique S.A., a 700,000 dwt fleet specialized in global freight chartering and multiple stakes into traders, (Garnac and Adnac with ADM) in the United States, South America Africa and the Eastern-bloc.

The firm is also active in the soft trades.

The Head Office of André SA, Chemin messidor 5-7, Lausanne

andre & cie headoffice lausanne 1 Immeuble administratif André & Cie S.A. chemin messidor 5-7 3 of 4.png

The rear windows offer a panoramic view of Lake Geneva and the French Alps in the distance.

andre & cie headoffice lausanne 1 Immeuble administratif André & Cie S.A. chemin messidor 5-7 1 of 4.png

The HQ is now the home of Debiopharm International, a biopharma. Not far from there, a few streets away, you can find Ameropa, another Swiss, privately owned international agri-business founded in the 40’s with offices in Lausanne.

andre & cie headoffice lausanne 1 Immeuble administratif André & Cie S.A. chemin messidor 5-7 2 of 4.png


In 2000, the private company turnover, from 10 billion CHF during its heydays*, seems to have been downsized to the 4 billion CHF mark (CHF/USD 0.64).

*If by revenue, it appears rather small, remember that’s what a ABCDs looked like before China’s WTO accession and the biofuel mandates.

Soybean and Soymeal was a 59 Million metric tons and Wheat and Coarse Grain was a 200 MMT trade flows-They are now respectively a  market of 258 million metric tons (MMT)  and 381 MMT annually.

Any estimate would put today Andre & Cie SA at a more than 25 billion CHF which would be in the top of the Swiss corporate world by revenues.

André & Cie SA as profiled in Sosland’s World Grain Magazine in 1997 [1]:

“André Dedication to Trading stands out in commodity world”

“André divides its business into four major parts, of which trade in agricultural commodities is the largest. It has a financial services division that seeks to work primarily with customers and countries that need its expertise in financing, both of commodity transactions and even capital investments. [ André & Cie Finco Division / Structured Commodity Finance ] The group said it stands ready to supply all types of industrial equipment, complete agricultural food processing factories and installations for packaging agricultural and food products.

In transport, which does not include the “paper freight” market noted earlier that falls under commodity trading, the company operates a fleet of 12 ocean-going vessels as Suisse-Atlantique S.A., totaling about 700,000 tonnes deadweight. It also operates a fleet of special aircraft, which are designed to carry freight primarily in short take-off and landing (STOL) situations and which are used frequently in international relief activities.

Its fourth major area of activity is described as “agricultural industry.” While André says it does not have an “industrial leg,” like many of its competitors, the group has two soybean crushing plants in South America, one in Argentina at Puerto de San Martin, where daily processing capacity is currently being doubled from 2,500 to 5,000 tonnes; and at Araucaria, in the interior of Brazil, with 3,000 tonnes of capacity.

These plants, along with small oilseed processing plants in several other countries, are viewed not as diversification but as an essential backstop to the group’s participation in global soybean meal markets. This capacity is considered especially important in the development of protein markets in the Mediterranean countries where quality has become an increasing issue.

Once a separate department, but now under the broad commodity umbrella, is the important role André & Cie plays in maintaining Switzerland’s strategic food stocks. As a neutral nation surrounded by other nations and with no access of its own to the sea, Switzerland has a policy of maintaining food reserves, of which grain is an important component. André operates elevators and silos located at points around the nation that maintain these strategic stockpiles.

      Traders and Managers

In developing its staff, André historically has differentiated between people with trading skills and those who are destined to be managers. As reflected in the career of the newly-retired Mr. Corke, who spent the past 25 years primarily in international wheat trading in Lausanne, André prefers to allow its traders to gain expertise in a specific commodity area and to allow these traders to build relationships with customers around the globe, while remaining in a specific commodity area.

A separate development track is in place for business managers. When a young person is hired as a management trainee at Lausanne headquarters, he frequently is assigned to other locations, often to Argentina, where the company has a diversity of interests, or to an agent or representative office in a smaller country. Describing working for a group like André as a “demanding profession,” the company acknowledged that it has become more and more difficult to attract young Swiss to work in the business. Thus, about half of the 350 people working at the headquarters are not Swiss.

André does not require a university education to join the company in either management or trading. A key to the group’s philosophy emerged in a discussion of the skills that are looked for in hiring young people. “Commodities are not the only focus,” it was stated. “More important to us is a capacity to grasp the needs of customers, to have a youngster who is able to relate to our customers and to understand how best to serve them.”

Also important to recruiting is to look for young people with the capacity to comprehend any given situation, as well as the ability to come up with a program for structuring and restructuring in order to add value. These young people have to be able to deal with financing issues and complexities, with transportation and any number of different matters. “We mix it all up to find a good mix,” came the answer. “We seek fluency in trading, financing and transport among others.”

Asked how André views itself in comparison to the other leading multinational companies that also had a beginning in grain, the response was to the effect that “we see ourselves as kind of the leader in our emphasis on pure global trading and probably as number five in the volume we do.” The observation was further made, “We don’t want to be number one in market share. That measure, for which real benchmarks are lacking, has little to do with profitability, and we believe there is no possibility of growth without profits. But most important of all, there is no lasting profitability without adding value for our customers.”

Excerpt from a heavyweight by the shores of Lake Geneva by the STSA, the Swiss Lobby for the Commodity Trading Industry [2]:

The world of grain trading is a closed world, with a handful of families at its heart. For decades, 4 companies dominated the world stage, collectively known as the ABCDs. A for André, B for Bunge, C for Cargill and D for Dreyfus.

From family store to global grain trader

The story of trading house André & Cie is one of true entrepreneurial spirit, one of successes and failures.

The story starts in 1877. Aged 21, Georges R. André set up a wholesale store in Nyon from which he would sell flours, dried vegetables and pasta under the name of his father, H. André & Fils. He also imported dried pasta from Italy, first for the local market and then for the whole of Switzerland. In 1905 his son Henri joined him, after gaining some initial experience in banking in Italy and in England. By the time the First World War broke out the business was already well established.

Henri transferred the business from Nyon to Lausanne and convinced his brother-in-law Alfred Demaurex to leave behind his profession as a notary to join him, while developing activities in Genoa and risking himself in Argentina, at the time a very important grain exporter. Success was forthcoming and André & Cie contributed to supplying Switzerland with foodstuffs during the Second World War.

The family, very discreet, benefited from Swiss neutrality. In the 1970s, 300 staff members worked from the corporate office, chemin Messidor in Lausanne. The company was then spread all over the world and distinguished itself by its flexibility, as grain exporting countries can very rapidly turn into grain importers as was the case with Russia and Argentina once markets were opened.

In 1978, André & Cie entered a grain supply agreement with Saudi Arabia and during this period negotiated with a number of fragile states such as Iran, Yemen or North Korea.

Georges André

georges andre.png

in front of his store in Nyon (Photo courtesy of the city of Lausanne)

André & Cie’ sudden demise

The trading house’s success was largely built on its Argentinian operations, but a wave of defaults in Argentina at the end of the 1990s indirectly weakened the company, as did failed investments in two Russian companies.

In 2000, the company shed 225 staff from its workforce, of which 60 in Switzerland, but this proved insufficient, despite financial support from the Swiss Federal authorities. On 20 January 2001, André & Cie announced a major restructuring of the group, the beginning of the end for the company which was then liquidated.

All that is left of André & Cie are some shipping activities, under different business names.

As for the A for André, it has now been replaced by traders with the A of ADM, or Archer Daniel Midlands. Just as discreet as André, the American trading firm based in Rolle now employs over 180 staff.


In the world of traders and merchants rarely someone break the law of silence.

In the folklore, it is repeatedly mentioned that André & Cie demise has been caused by “rogue trading” in soybeans.” 3

 The first-order problem is Macro. By the late 90s, the world is confronted with a fragile global trade & macro economies. Commodities prices, in real terms, are lower than in the 80’s. André is the 2nd most export-oriented grain company after Conti.

Continued recessions and defaults in Argentina, Russia, the Brazil devaluation reflected the tough environment for grain and oilseed companies.

André & Cie SA’s financial position was negatively impacted by credit and crippled by default losses. The performance of South-America and Russia/CIS was critical to André & Cie SA’s overall company demise (representing two-third of its capital and half of its sales).

It highlights well the concentration and country risks faced by the houses and the boutiques in commodity trading. 




As mentioned previously, “Andre & Cie Finco division”, “the Swiss commodity trading company’s  financial services division was working with “customers and countries that need its expertise in financing, both of commodity transactions and even capital investments”.

It should have no place, at least not in a trading company and looking at the divulged results, it appears that André & Cie doesn’t have an adequate financial surface.

  • In 2000, André SA (Suisse) had benefited from loan-aids from the Swiss Federal Authorities which, I reckon, is quite unusual for a non-bank.
  • In 2001, the $340M net equity company, had cumulated a -173M deficit blamed as the result of “the rogue actions of one soybean trader in derivatives…”
  • Negative pre-tax cash flow of more than -300M had required the owners to supplement the business with money from other sources…
  • In effect, this meant that the real financial leverage of the André & Cie SA would have been unacceptable amidst its non-performance.
  • In the absence of support from its Bank creditors or more government loan guarantees, André & Cie SA would not be able to support its net equity.

Banks may only had better known the loan-guarantees and the end-game that André & Cie SA had in foreign countries:

After a syndicate of 43 banks refused to extend credit lines on $540 million debt, the 124-years company with 1200 employees was forced to liquidate, selling its assets to repay the bank loans.

In the process, the André group ended its commercial activities and ceded its Argentinian platform (elevators, transformation and export-elevator) to New-York based Bunge Ltd. for $70M. 

The U.S grain company, analogously  under stress at the end of the 90s,  ipo-ed on the NYSE via lead underwriter Morgan Stanley and Credit Suisse First Boston two-month earlier raising $281.6 million.

What was André & Cie SA Finco Division’s contractual obligations with customers, countries and their substance ?

For example, Standby letter of credit (SBLC) are quite popular in the 90s as credit enhancements in “structured finance”, bringing sub-investment grade borrowers in Russia/CIS and Latin America to the international debt market.

With a Standby letter of credit (SBLC), the institution is paid a fee to provide a specified cash amount to reimburse the ABS-issuing trust for any negative performance (cash shortfalls from the collateral, up to the required credit support amount).

Today, Standby-Letters of credit are becoming less common forms of credit enhancement, since securities enhanced with SBLCS correlates with the issuers downgrades as well (the “wrong-way risk“). The SBLC of a bank defaulting is simply worthless.

The Finco Division of André & Cie SA could have had quite a ride collecting high interests in the mid 90s…

The model was really very strong because enables to produce risk-free money month in month out.

It may be what could have enticed André & Cie SA Management (who was dealing in L/Cs anyway because of its trade financing activity) to lend more of its creditworthiness to Russia/CIS, Latin America counterparties in what they perceived as a long carry-trade arbitrage in the rates.

Carry trade is a strategy in which an investor borrows money at a low-interest rate in order to invest in an asset that is likely to provide a higher return.

In the period up to 1998, Structured finance managers have commonly borrowed in Swiss francs or U.S Dollars, taking advantage of very low-interest rates using the money to take long positions in assets backed by high interest rate.

However, towards the end of the decade the “structured finance” department would have had trouble sleeping at night- the classic predicament of “book now, think later”.

This strategy relies on stability in asset prices, as an adverse exchange rate movement or credit alone can easily wipe out the returns from the interest rate differential.

There seems to be a belief that trade-to-cash has sunk André but in fact the reverse is true4 .

Eventually, André may have failed in understanding its own cyclicality, country and the liquidity risk of their business as well as taking on too much leveraged risk on carry strategies with strong tail correlation in high volatility regime (even though these strategies appeared to be uncorrelated in a low volatility regime).

So do Structured notes have a lot to answer for the sudden demise of a commodity-firm that had existed for 125 years ?

No question.

We all know what happened to André & Cie in the end.

Only months after the bankruptcy of Houston-based Enron (world’s largest commodity trader) that had rocked the trading and financial world, André the Giant announced it was formally closing the operations demanding protection from its creditors in the Swiss courts.


One question remains: Was André & Cie trading or banking ?



Simon Jacques,

Commodity trading and finance

Manager of commercial relationships and mastering the art of commodity merchandising, Simon Jacques is advisor to leading energy marketers and producers on defining and imparting the knowledge and skill sets necessary for their professional staff to function effectively.






[1]”André Dedication to Trading stands out in commodity world“, André & CIE. S.A, World Grain, May 1997

[2] André & Cie, “a heavyweight by the shores of Lake Geneva”, Swiss Trading & Shipping Association (STSA)

[3] Some have a posteriori categorized André & Cie demise as “rogue trading”. “Not Too Big Too Fail Systemic Risk, Regulation,and the Economics of Commodity Trading Firms“, Trafigura, Pirrong March 2015

[4] André & Cie SA had built a pronounced taste for secrecy but I have a source at André who remains close to Raymond Cretegny. “I have known the people of Finco and you are very close to the truth” he said when I have outlayed my theory the Finco had ended up engulfing André & Cie.


Navigating the commodities markets with Freight and Spreads © 2017


7 thoughts on “André & Cie SA’ sudden demise

  1. Back in the day, Garnac Grain (part of Andre’, based in New York and then later Overland Park, Kansas) was a client. Good people, got company, but times change. Sic transit gloria.

    Liked by 1 person

  2. I must disagree with much of it. Not to make it nicer but to come closer to deeper causes and less known dilemmas. There has never been a formal bankruptcy. Quite a difference.


  3. Nice and complete article. congrats. Chapter 11 was invoked despite that the company at that time did not qualify and therefore the liquidation never ended in bankruptcy. Few know the real story. Guess the biggest lesson we learned was that Family companies stay within the past and proven strategies. Sudden changes (like the rapid advance of internet and tighter banking rules) disrupt the known and overwhelm the family’s knowledge base. In absence of a consensus between family members to entrust the company to a professional manager with an ample decision powers, the easiest way is to sell or liquidate and for the latter a “chapter 11” is very convenient.


  4. by the way there was a article in swiss magazine “le bilan” from September 2001 (!!!) where the “chapter 11” was questioned together with the way communications were manipulated etc. Obviously the then management vehemently denied.
    Case interested can send u a scan.


  5. Pingback: Traders or Commodity Finance Banks ? Part XII- TRAFIGURA OFFSET ARRANGEMENT | Navigating the Commodity Markets with Freight and Spreads

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