Havana Cuba Business Travel Culture and Politics

Havana Cuba News

Cuba Business News

Posted August 23, 2004 by publisher in Cuba-US Trade

Email this article | Print this article | Search Havana Journal        

BY LARRY LUXNER | Special to the Miami Herald

Despite its relative proximity to Cuba and a common language and culture, Puerto Rico is landing only a tiny fraction of the contracts that the Castro government is awarding to U.S. food companies.

Some Puerto Rican exporters would like to change that.

Salvador Vassallo, president of the Puerto Rico Export Council, which represents about 50 local companies, says his group is trying to arrange a trade mission to visit Havana in October—though that might prove difficult given tough new U.S. regulations on visits to Cuba enacted June 30 by the Bush administration.

‘‘A lot of people are interested in exporting to Cuba,’’ said Vassallo, who is also president of Vassallo Industries, which manufactures PVC products at a factory in Ponce.

CHANGE IN 2003

Puerto Rico, a U.S. territory, exported a mere $54,000 worth of farm products to Cuba in 2003, down from $448,000 the year before, but those numbers may be deceiving.

‘‘There was a change in 2003, because shipments started going from San Juan to Havana via Jacksonville, so those were not counted as coming from Puerto Rico,’’ said Antonio Sosa Pascual, executive director of Compaa de Comercio y Exportaciones de Puerto Rico, a government agency. “We believe the real figure is between $500,000 and $1 million a year.’‘

Even if that’s the case, the Puerto Rican exports pale when compared to those from the United States.

Although most trade between the United States and Cuba is prohibited under U.S. sanctions in place for more than four decades, a 2000 American law created an exception to the embargo, allowing for the direct sale of American farm goods to Cuba on a cash basis. Since Cuba began purchasing U.S. food under the law in late 2001, Alimport, the Cuban government food purchasing agency, has imported around $600 million worth of U.S. farm commodities.

Sosa said vegetables and root crops such as yucca constituted more than 36 percent of all Puerto Rican exports to Cuba by value, cereals accounted for 16 percent of exports and sugar and candies 7.7 percent.

So far, the Puerto Rican company that has profited the most from exporting to Cuba is Pan American Grain in Bayamon.

LARGE RICE SHIPMENTS

Eduardo Fernndez, the conglomerate’s Caribbean export manager, said Pan American has shipped more than $500,000 worth of rice to Cuba for both institutional use and for sale in dollar stores.

‘‘We’ve also successfully exported our line of beans and lentils. In some months, we’ve shipped six or seven containers to Cuba,’’ he said.

Pan American, which has plants in Bayamon, Catao and Vega Alta, is the island’s largest agroindustrial company and its largest processor and distributor of rice and animal feed. The company, which is also in the beverage business, was the first Puerto Rican company to sign a contract with Alimport.

Not all food companies with Puerto Rican roots, however, are enthusiastic about trading with Cuba. Their reasons range from personal convictions against doing business with the Castro regime to business considerations, such as the threat of boycotts from irate Cuban-American consumers in South Florida.

Speaking at a CCE conference on Cuba this summer, Sosa said the two islands have certain affinities that should help promote trade: “Despite the large differences in economic development, Puerto Rico and Cuba are very similar in terms of culture and history. Cubans feel comfortable with Puerto Ricans and vice-versa. There’s a lot of trust.’‘

In fact, Puerto Rico and Cuba are often referred to as ‘‘dos alas del mismo pjaro’’—two wings of the same bird—because of their shared history under Spanish colonial rule.

Following the 1959 Cuban Revolution, Puerto Rico’s relative prosperity and Spanish-speaking culture attracted many Cuban exiles. At least 20,000 of them now live in Puerto Rico, where they have dominated certain sectors of the local economy, most notably advertising and the media.

With Cuba off-limits to U.S. tourists, Puerto Rico’s tourism industry took off after the revolution, and it could be the first to suffer if a U.S. travel ban against Cuba is lifted some day.

DELICATE ISSUE

Marta Acevedo, an executive at PricewaterhouseCoopers in San Juan, says ‘‘it’s only to the advantage of Puerto Rico’’ to trade with Cuba. But she said ‘‘it can be a very delicate issue for some people’’ who may not want to see the embargo lifted.

‘‘Puerto Rico had lucrative tax incentives [under Section 936 of the U.S. Internal Revenue Code], but now we don’t,’’ Acevedo said. “It’s dwindling away, so Puerto Rico is looking at new options within its territorial constraints. I think there are definite opportunities to utilize the companies that are already set up in Puerto Rico to also have branches in Cuba.

‘‘I see a distinct possibility of doing some sort of joint venturing. It’s either that, or one day we’ll be competing with a market that’s 10 times as large as ours,’’ Acevedo said.

Not all Puerto Rican companies are finding it easy to sell to Cuba, however.

Ricardo Pastrana Amaro, an official at Distribuidora Vzquez in Caguas, said his company has shipped just one 20-foot container of evaporated milk, worth $21,000, to Cuba.

‘‘We shipped it, but I haven’t been able to get down there,’’ he said. “I tried to get the license [from the U.S. Treasury Department], and I was denied. They didn’t give me any reason. But I’m planning to apply again, to see if we can ship some more. We would like to export some of our juices to Cuba.’‘

NO CONTRACT

Bayamon-based Master Foods Interamerica, a division of Mars, sent its regional business development manager, Miguel Alvarado, to the 2002 food show in Havana. Alvarado returned to Puerto Rico with commitments from Alimport to buy Snickers, Milky Way, M&M, Skittles and Twix candy products for Cuba’s dollar stores.

In April, Alvarado met again with Alimport officials at a second conference in Havana. But no contracts were ever signed.

‘‘Alimport confirmed interest in purchasing our confectionary brands,’’ said Felipe Bellande, the company’s regional marketing manager. “But that doesn’t mean anything until they effect payment in compliance with U.S. Treasury Department regulations. Until that happens, it’s just mere speculation.’‘

  1. Follow up post #1 added on August 24, 2004 by purchase real estate with 2 total posts

    Can anyone tell me house to purchase real estate in Cuba..?

    Please contact Matthew Joscelyne on email: .(JavaScript must be enabled to view this email address)


  2. Follow up post #2 added on November 04, 2004 by Sava Michaelides

    We would like to investigate the PVC (plastic) industry in Cuba with the purpose of doing business in that regard. Can you help?


Would you like to add more information?


Only members can add more information. Please register or log in

  • Advertise at Havana Journal Inc
Images of Cuba
Train terminal in Cuba
Follow Havana Journal
SUBSCRIBE to our Cuba Watch newsletter
LIKE us on Facebook

FOLLOW us on Twitter

CONNECT with us on Linked In

Section Archive
Havana Journal, Inc. BBB Business Review



Member of the Association for the Study of the Cuban Economy