Four months following the Havana International Trade Fair (FIHAV), some projects are in the process of being implemented. This also includes areas that have long been taboo for investors. Like the state news portal Cubadebate reported, the first ones are supposed to start in April wholesale and retail centers open with foreign partners. New projects have also come regarding in other areas.
The first joint ventures in retail
The Spanish-Cuban joint venture Gran Ferretero SA will open a hardware store next month. The company was set up last April and will, among other things, sell building materials and hardware wholesale. This should primarily supply the approximately 7,000 small and medium-sized enterprises (SMEs) with input goods, but state-owned companies should also benefit.
The wholesaler Emi Foods LLC and the Argentinian Grupo Sur want to set up shops for groceries, textiles, household goods and hygiene articles in Cuba in the coming weeks. For September, the Italian company Italsav plans to open a shopping center in Havana on the basis of a joint venture, “whereby we leave the sale and the staff to the Cuban state, while we take care of the management and the selection of the products,” explained Italsav owner Berto Savina. The company has been a supplier for the state drugstore chain “Agua y Jábon” (English: water and soap) for many years. During the peak of the pandemic, the company proved to be a reliable supplier of food and hygiene products, and Italsav also supported the country’s vaccination campaign by donating disposable syringes. Behind the company is Italian businessman Mauro Fusano, whose Maury’s stores have been established in Italian retail for 40 years.
Russia plans to open a “special department store” for chemical products and household items. These are to be sold as part of a joint venture with the state trading giant Cimex. Pricing “for both wholesale and retail will be determined independently by the company,” the announcement reads. In addition, a new hotel is to be built, which is aimed specifically at Russian guests.
All sales take place in foreign currencies, the offer should include many products that are in high demand. At the presentation of the reform last autumn, Deputy Foreign Trade Minister Ana Teresita González explained that “long-term partners and companies from friendly countries” would be given preference when it came to foreign investments in trade.
As Economics Minister Alejandro Gil emphasized, further trading and import companies are to be added in the second half of the year. They will initially settle in the properties of state supermarkets and rent their warehouses. With the opening of domestic trade to foreign investors in 2022, Cuba wants to fight inflation by expanding supply. “Actions like these can help reactivate our industry,” said Gil, who urged authorities to speed up the issuance of new permits.
Other projects in the transport & logistics sector
Beside the trade were last also in the ranges biotechnology and Transport new cooperations with foreign partners announced. One of the projects currently under negotiation is a joint venture for the management and expansion of the international airports Juan Gualberto Gómez in Varadero, Abel Santamaría in Santa Clara and Cayo Las Brujas. Agreements have been made in the areas of catering and gastronomy for Havana’s José Martí Airport. In addition, unspecified leases for aircraft operated by foreign airlines for domestic operations and contracts for cargo, baggage and aviation fuel insurance services have been signed.
The state-owned Gemar group of companies, which maritime logistics dedimnet, has projects for parcel and postal services, the construction and operation of a multipurpose maritime terminal in the area of La Bajada (Pinar del Río) and a third joint venture for the management of the Cabañas shipyard in the Mariel Special Economic Zone ( ZEDM) signed.
Cuba railroad, the Unión de Ferrocarriles de Cuba (UFC), has signed a Memorandum of Understanding with China’s Beijing Fanglian Tech Co., Ltd. on the purchase of spare parts for Chinese locomotives. Another contract with an unknown foreign company concerns the installation of solar panels in Mariel’s railway workshops.
The State automobile group For its part, GEA wants to build up new maintenance and service capacities with the South Korean Hyundai group, which has been represented in Cuba for many years. A separate factory is to take care of the production of spare parts and equipment for the automotive industry.
There was a setback for the joint venture of the Mexican meat manufacturer Richmeat in the special economic zone of Mariel: Apparently, the production of the popular minced pork (“picadillo”) had to be temporarily stopped due to a lack of financing. The Cuban news agency ACN spoke of a planned maintenance campaign, and production has now started once more. Since opening in November 2019, the company has been able to expand its production from 30 to 160 tons per month, compared to a target of 300 tons.
Cuba plans to attract between 2.5 and 3 billion in foreign investment inflows annually, but so far has fallen short of the targets it has set itself. In addition to problems such as the lack of foreign currency and bureaucratic obstacles, the main reasons are not least the applicable US sanctions, to which new ones have been added in recent years, which primarily affect the financial sector and foreign investments.
