Wednesday, April 27, 2016

Alabama company says Cuba needs its tractors, but approval process is slow

Alabama company says Cuba needs its tractors, but approval process is slow

Cleber hopes to get Cuban approval soon that would allow it to set up an
assembly plant on the island
Wants to assemble a simple tractor suitable for small-scale farming
Plans to set up operations in the Mariel Special Economic Development Zone

An Alabama tractor company angling to become the first American business
in more than a half century to set up manufacturing operations in Cuba
is about midway through the approval process.

Cleber, based in Paint Rock, Alabama, outside Huntsville, wants to
assemble small tractors in Cuba's Mariel Special Economic Development
Zone for use in Cuba and beyond. The simple tractor model that Cleber
wants to produce is called Oggún in homage to the Santeria god of iron,
tools and weapons, and it's designed for small-scale farming.

Cleber is the first U.S. company to receive permission from the U.S.
Office of Foreign Assets Control and the Commerce Department for a
manufacturing project on the island since the Dec. 17, 2014
rapprochement between the two countries.

When President Barack Obama visited Cuba in March, he said that Cleber
"will be the first U.S. company to build a factory here in more than 50

But Saul Berenthal, a Cuban-American who is a co-founder of the company
and its chief operating officer, said it's not a done deal yet. The
Cubans still haven't given final approval for the project. "I'd say
we're in the middle of the process," Berenthal said. "Nothing is done
until the fat lady sings."

As overtures to Cuba by American businesses have picked up since the
thaw, Berenthal said, "There are a lot of people in Cuba who are very
busy and that tends to slow things down." All documents and manuals also
must be translated into Spanish, he said, and there's plenty of other
red tape.

But Berenthal, who was in Cuba two weeks ago for more talks, said he's
hopeful Cuban approval could come within the next 90 days. Cleber has
been told it will take about six months to get a factory up and running.
Initially, Cleber plans to have 10 employees and expects to add two more
people annually as production ramps up.

From just serving the Cuban market, Cleber would like to eventually
expand and export to other Central American and South American markets
covered by Cuban trade agreements.

Berenthal and co-founder Horace Clemmons set up Cleber shortly after the
rapprochement was announced with the idea of producing small-scale
tractors particularly suited for the Cuban market.

Many Cuban campesinos still use livestock in the fields or aging
tractors, Berenthal said. There are about 60,000 tractors in use in Cuba
today, but many of them are from the 1980s, and 500 to 1,000 are lost
every year because they are cannibalized for parts or simply stop
working, he said.

The simple design of the Oggún, which uses parts that are widely
available, also is in keeping with more sustainable agriculture.

Cuba began a transition to more sustainable agricultural practices in
the 1990s because it didn't have much choice after the collapse of its
benefactor, the old Soviet Union. With supplies of pesticides,
fertilizers and oil scarce, Cuba began breaking up large state farms and
Cuban producers began turning to organic farming techniques. But
production has fallen.

Getting food production back on track is a Cuban priority. "Cuba's
mission is to be able to replace $2 billion in agricultural imports,"
Berenthal said. "There's also the pressure for more food from the
tourism industry, which is increasing tremendously."

"Not often in life do we get the opportunity, through simple efforts on
our part, to make a difference in the lives of many. This venture
represents that opportunity, to show the Cuban people the benefits of
expanded commerce opportunities with the United States," Clemmons said.

Even though new rules by the Obama administration make it easier to
trade with and do business with Cuba, the embargo is still in effect and
some U.S. projects require special approvals.

"There will be opportunities in Cuba. There are few places in the world
with a real white space," said Maguerite Fitzgerald, a partner at The
Boston Consulting Group. But doing business with Cuba, she added, "isn't
a fast game or one that's played with traditional rules."

Berenthal said Cleber is prepared to let the Cuban approval process run
its course. But if it drags on too long, Cleber plans to begin
assembling Oggún tractors in Alabama and taking orders.

"We're going to build tractors. We'd like to do it in Cuba," he said.
Cleber thinks Cuba's Special Economic Development Zone, a
180-square-mile complex under development 28 miles west of Havana, is
the place to do it. The Mariel zone wants to attract foreign investment
in clean, sustainable projects with export potential.

Source: Alabama company says Cuba needs its tractors, but approval
process is slow | Miami Herald -

No comments:

Post a Comment