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Wednesday, November 02, 2016

Cuba opens to world at Havana trade fair but few U.S. companies are present

Cuba opens to world at Havana trade fair but few U.S. companies are present
BY MIMI WHITEFIELD
mwhitefield@miamiherald.com

HAVANA
Despite the Obama administration's efforts to build a new business
relationship with Cuba, U.S. companies were far from center stage at the
34th Havana International Fair.

The fair, which began Monday and runs through Friday, is an
international extravaganza of buying and selling that has brought
together more than 3,500 exhibitors from 73 countries at the sprawling
ExpoCuba complex outside Havana.

Cuba with 125 exhibitors representing 325 enterprises was naturally the
largest participant and occupied the central pavilion trying to sell
everything from its biopharmaceutical products to Coppelia ice cream and
its famed cigars and rum.

The fair in one of the last Communist countries in the world comes at a
time when the Cuban economy is struggling. In the ceremony opening the
fair, Rodrigo Malmierca, Cuba's minister of foreign trade and
investment, said the country will probably finish the year with less
than 1 percent growth.

There were some two dozen exhibitors from the United States, including
JetBlue, California wine producers, Napa Auto Parts, Cummins engines and
the USA Poultry and Egg Council.

Their numbers were also bolstered by the arrival Tuesday of a business
delegation led by the U.S. Chamber of Commerce's U.S.-Cuba Business Council.

Former U.S. Secretary of Commerce Carlos Gutierrez led the delegation,
which also included executives from American Airlines, GE, and Fifth
Street Asset Management.

But the U.S. numbers paled in comparison with some of the European
countries. Spain had more than 100 exhibitors, Italy registered 93 and
Germany had 65.

They even eclipsed exhibitors from some of Cuba's closest trading
partners. China, which introduced a new Yutong electric bus at the fair,
had exhibitors signed up for 48 booths; there were 31 exhibitors from
Venezuela and just 15 from Russia.

Prominent banners marked the pavilions of these nations, but the United
States had to share space in a pavilon with the Caribbean countries,
Puerto Rico and Pakistan.

Despite wider latitude for U.S. business to now operate in Cuba -- even
with the embargo still in effect -- the Cuban government has been slow
to strike deals with many American companies.

"They've made it very clear the embargo needs to be lifted before there
is the unfettered participation other countries have," said Saul
Cimbler, president of Cuba Business Advisory, a Miami consulting firm on
the hunt for joint ventures in Cuba.

"Whether U.S. companies figure out how to participate with Cuba or not
[under new Obama administration rules], the Cubans are moving forward
with other countries," said Cimbler, who attended the fair.

In fact, the Cuban government has intensified its campaign for an end to
the embargo in recent months.

Malmierca not only complained that some of Cuba's current economic woes
were due to a "stiffening of the blockade" -- the Cuban term for the
embargo -- but also to its "extraterritoriality," which makes it more
difficult for Cuba to do business with third companies.

Still, the U.S. exhibitors at the fair were upbeat.

Cummins, which makes a variety of motors for trucks, boats and mining
equipment, was making its first appearance at the fair. To promote its
brands, it was doing a brisk business handing out pens, baseball caps
and straw hats emblazoned with its company name.

"I've been assigned to develop business here," said Jaime Teixeira de
Queiroz, the company's Miramar-based executive director for business in
the Caribbean and Cuba.

The company is exploring which of its products may be eligible for sales
to Cuba under exceptions to the embargo and thinks the telecom,
transportation and renewal energy sectors offer the best opportunities.

He said Cummins "wants to move quickly" and hopes to have a distributor
in Cuba within a year or year and a half.

Rust-Oleum can't currently sell its paint and maintenance products in
the Cuban market, but the company figured it was important to get
exposure at the fair, said Oscar Rubio, a Miami-based consultant for
Rust-Oleum Sales Co.

But he said the company is hopeful that could change soon. "We are
expecting some changes [in U.S. regulations] in the next 60 days -- at
least that is what our consultant on regulations tells us. He is very
positive and thinks we can be selling in Cuba by March 1. We certainly
want to be," Rubio said.

A recent U.S. rule change allows American companies to negotiate future
contracts or a memorandum of understanding with Cuban entities,
contingent on getting future approval from the U.S. Office of Foreign
Assets Control or when the embargo is lifted.

During the Havana fair, Cuba is looking to not only boost its trade but
also to increase foreign investment -- an area that is still largely off
limits to American companies.

On Tuesday, it hosted an investment forum in conjunction with the fair,
and Malmierca made it clear that Cuba is ready to open to the world.

"Foreign investment isn't a necessary evil. We want it for the
development of the country," he said. "It's sovereign decision of Cuba
that no one is imposing."

To meet its development goals, Cuba has said it needs to attract $2.5
billion in foreign investment annually.

Since it introduced a new foreign investment law in 2014, Malmierca said
Cuba has attracted 14 investments in existing businesses, 15 new
investments at the Mariel Special Economic Development Zone and 54
investments outside the zone. They add up to $1.3 billion, far from
Cuba's goal, conceded Malmierca.

At the forum, he unveiled Cuba's third investment portfolio -- projects
that have been studied in detail and are ready to receive capital from
foreign investors. The latest portfolio includes 395 projects -- 69 more
than in 2015.

They represent a potential investment of $9.5 billion.

Among the high priority areas for investment are tourism, renewable
energy, infrastructure improvement and projects related to agriculture
and food production. Investment can be direct or through an associate
company, said Malmierca.

"What struck me, generally speaking, is that the Cubans continue to
expand regulations regarding foreign investment," said Gutierrez. "I
know people think the process is moving slowly, but it is moving."

Each year there have been more indications that Cuba is becoming more
welcoming to foreign investment, he said.

Over the course of the two-day investment forum, he said more than 200
appointments had been scheduled with business executives.

U.S. Cava Exports, which represents several wineries in California's
Napa and Sonoma valleys, also hopes to see sales to Cuba develop in the
near future. It considers both state enterprises and private restaurants
as its potential customers.

"We're almost there. We hope to have our first container of California
wines in Cuba by January 2017," said Marisol Lopez, vice president of
U.S Cava Exports. "It's exciting times."

Wine is considered an agricultural export and is therefore eligible for
sales to Cuba, Lopez said.

It was U.S. Cava's second year at the fair and Lopez said that some
companies she saw last year had not returned.

"I think they thought they would be able to sign quick contracts," she
said. "You need to establish relationships. It takes a lot of patience."

Source: Cuba gets few U.S. companies at annual trade fair in Havana | In
Cuba Today - http://www.incubatoday.com/news/article111860677.html
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