Eyeing Cuba

With Cuba now just two hours away, TT manufacturers are bent on finding the right formula to get their goods into the communist island. Cuba is being seen not only as a possible trading partner because of the availability of highly skilled labour but the country is a springboard into the Spanish-speaking Caribbean. There is also the close trading ties with countries like China and Canada.

Companies operating out of Cuba from these countries can offer our manufacturers the benefit of their licences and distribution expertise to set up operations within Cuba, a big plus for local manufacturers. It will also increase the current value of trade between the two countries. Last week, Trinidad and Tobago manufacturers spent a long week scoping out the Cuban market, courtesy the TTMA, TIDCO and Republic Bank. This trip was also a landmark for BWIA, as it marked the airline’s inaugural flight to the island. At the start of the mission many were skeptical about entering the market. Some companies felt they would have to compete directly with China and Canada on the Cuban market.

Cuba currently exports toilet and facial tissue, cigars and corrugated paper, while importing ammonia, bars and rods along with petroleum. It is currently looking to increase its foreign direct investment in the energy sector which is one of the benefits it hopes to derive from Trinidad as part of the CARICOM bi-lateral agreement. While China is a big investor in the nickel and oil industries, it is also the source of most of Cuba’s durable imports. At the end of the trade mission, TT manufacturers came away with invitations for trade, stronger business ties and gathered invaluable information on doing business in Cuba. It will not be easy. Trinidad Brushware Ltd, is offering some of the products Cuba imports from China, it would mean competing against China.

The company’s managing director, Paul Tiah, said he felt comfortable in getting a foothold on the market. Manufacturers were also discouraged by the lengthy registration process which called for at least five years of operations and three years of trade with Cuba. However, as the mission progressed, manufacturers found ways to get around these. Henry Tang Lee, managing director of Global Marketing enterprises, one of the manufacturers present for the TTMA Trade Mission, said he found getting into Cuba was not as difficult as he thought.
Lee, a manufacturer of clear, coloured and printed plastic bags will be able to set up business in Cuba, but indirectly. By forging ties with a Canadian distributor operating within Cuba, he will be able to export his products through them. The Canadian company already had a licence to operate in Cuba, a system local businessmen soon realised they could capitalise on.

The Cuban government has already indicated its interest in gaining support and input from TT’s energy sector. Sirelda Gonzalez, an executive of Commercial Politics for the Government of Cuba, said they were very interested in strengthening ties with TT, especially in the areas of drilling and refining. Currently, Cuba imports 30 per cent of its oil from Venezuela. Enrst and Young has indicated that there may be reserves of oil and gas available to Cuba in the Gulf of Mexico, but this is yet to be confirmed. The manufacturers’ major concern was getting their goods into Cuba and finding the right distribution outlets, without the heavy registration process.

To help facilitate the distribution of TT goods in Cuba, the TTMA, along with the Cuban Chamber of Commerce, plan to set up a distribution company in Cuba. Anthony Hosang, TTMA president, felt this was a crucial move in assisting local manufacturers and for ensuring success on the Cuban market. Hosang said since Cuba signed the agreement with CARICOM, TTMA has done a lot of work to familiarise companies on what is required. “We realised that to allow us to trade freely, as freely as the Cuban will be able to trade in Trinidad, we needed to have a Trinidad and Tobago Trading company that would have full licensing and distribution authority,” said Hosang.

He said Ambassador Narace and Minister of Trade and Industry, Ken Valley, have been in discussions concerning the trading company. He also said the next step is to put together the terms and conditions the manufacturers would like to operate under. Once this company is set up properly, it will allow our manufacturers to export directly to Cuba and have their products distributed through the Trading Company.

While the trading company will help most of the companies, there is also the question of credit. One concern is that local manufacturers will need to offer their goods on credit terms to Cuban companies. This condition is listed as a specific requirement for doing business with Cuba, according to Cuban officials. While bigger companies might be able to handle this, smaller companies aren’t so sure. “Gaining financial aid is important for Cuban businessmen,” said Cuban officials. It was made clear to manufacturers by consultants from Ernst & Young, Cuba, that while Cuban distributors are eager for foreign goods, the limited availability of hard currency makes it hard for them to do business.

While Cuba looks to Trinidad for investment and expertise to help boost its energy sector, TIDCO wants Cuba’s expertise and direct investment in the Wallerfielf Business Park, specifically in the area of medical devices and software. “We realize that we are reaching out to them because we recognise there strength in medicine and pharmaceuticals and invited them to be part of the new Wallerfield project. We want to piggy back on their strengths in terms of what they can offer and invest in Trinidad, specifically their know how and expertise,” said Brian Charles, Vice President of marketing at TIDCO. By and large, TIDCO, he said, will facilitate investment and help manufacturers with their exports.

COMPANIES that took PART IN
THE MISSION TO CUBA:
CARIB GLASSWORKS LIMITED
CARIBBEAN PACKAGING INDUSTRIES LTD
ERIN MEAT PACKERS LTD
HAKIM JUMAN AND SONS LTD
HILTON TRINIDAD AND CONFERENCE CENTRE
RADICA TRADING COMPANY LTD
REPUBLIC BANK LTD
SACHA COSMETICS LTD
SISSONS PAINTS LTD
S.M. JALEEL COMPANY LTD