Connecting businesses in Cuba

Posted on Monday, 09.14.09
Connecting businesses in Cuba
Cuba's business institutions could play a key role, as trade between the
U.S. and the island accelerates in spite of the half-century embargo.
BY MIAMI HERALD STAFF

HAVANA -- Across the street from the massive Karl Marx theater sits a
beige-colored building that has become a critical stop for businesses
preparing for the economic future of the Caribbean's largest nation.

The law office of Lex S.A. -- a spinoff from the Chamber of Commerce of
Cuba -- helps about 100 companies a month register their trademarks and
brands in Cuba. Some are already doing business on the island under
exclusions to the U.S. embargo, others await the day when the sanctions
end and the two nations resume normal trade.

On the wall is a picture frame crowded with the logos of some of the
firm's recent clients: Sprite, Cafe Pilon and Kmart.

As the pace of legal U.S.-Cuban trade continues to speed up -- despite
the nearly 50-year-old embargo -- institutions such as Lex will likely
play a critical role in the emerging partnership.

LOOPHOLES EXIST

Most U.S. companies and their subsidiaries have been banned from
conducting business on the island since the embargo was solidified in
1962 under the Kennedy administration. But the sanctions contain
exemptions and loopholes that do allow some transactions.

About 158 U.S. firms currently do business with the island, mainly under
food and agriculture exclusions carved out in 2000, and more than 5,000
U.S. companies have registered their brands on the island, said Kirby
Jones, the founder of Alamar Associates, which has been helping U.S.
companies make Cuban contacts since 1974.

The Coca-Cola Co., which owns Sprite, said their trademark registration
was simply in the interest of protecting their brand.

``These registrations should not be interpreted as a precursor to a
launch in Cuba but part of a normal and legal course of business,'' the
company said in an e-mail.

Kmart and Cafe Pilon did not respond to interview requests.

NEBULOUS NETWORKS

While dealing with Cuba has gotten easier in the past decade, the lack
of traditional business institutions can sometimes be baffling for
newcomers, Jones said.

``Say you are in the business of manufacturing tractors and say, `I want
to get ready for business in Cuba' and reach for the phone. Who do you
call?'' he said. ``It's not a system set up as in other countries. You
can't say `I am going to call the ministry of X and scout around and
find out who might purchase my widgets.' ''

Another key business institution in Cuba is Alimport, the government-run
importer of food and agricultural products that supplies national
distributors, such as Cubalse, Cimex and Palmares.

Richard Waltzer has been dealing with Alimport since 2002 when his Fort
Lauderdale company, Splash Tropical Drinks, began sending juice and
daiquiri mixes to the island. Splash also exports third-party grocery
products such as peanut butter, crackers and coffee creamer.

Waltzer said Cuban officials have always been ``very accommodating'' and
have helped turn the nation into one of his most important export
markets. Splash does not disclose revenue, but sales to the island now
represent about 10 percent of business, he said.

Hoping to capitalize on his experience, Waltzer recently launched the
Havana Group to help other businesses develop Cuba strategies.

``I look at this as an opportunity to build American brands there,'' he
said. ``At some point in the future when the embargo is lifted -- and I
feel that is going to happen -- we will have established the business
relationships and business model to help other companies to do what we
have been doing successfully for the last seven years.''

Relationships are key to business, and that holds true in Cuba, too.

But because the U.S. bars most business travel to the island, those
contacts can be hard to make from abroad. (For example, Miami Herald
requests for basic business information made via phone calls and e-mail
to Alimport, Cimex, the organizers of the annual Havana International
Fair and the Cuban Interests Section in Washington, D.C., were not
returned.)

EXPOS ARE KEY

Marvin Lehrer, senior advisor for the USA Rice Federation, has been
attending trade fairs in Cuba since 2001.

He said the expos were key to brokering some early deals for U.S. rice
growers, but since then -- as more business is done via e-mail and phone
-- the event's importance has faded.

Still, he said, it is a key venue to make initial contacts and get a
feel for the Cuban market.

``If an American wants to sell to Cuba and thinks he has the right
product, then go to the trade show,'' he said. ``You might say `I will
never do this again,' but you might also make a sale.''

One organization that will likely see its fortunes turn if the embargo
is ever lifted is the Chamber of Commerce of Cuba.

Located on the corner of a leafy green street in Havana -- with its
windows and doors flung open to mitigate the effects of a
power-rationing program that prohibits air conditioning in many
government offices -- the chamber has not had a U.S. member since it was
relaunched in 1963 under the Fidel Castro regime.

Still, it is a place where international entrepreneurs gather
information or meet others in the business community.

The arrival of U.S. representatives ebbs and flows with the changing
political winds, said Ibrahim Rodríguez Cuevas, an expert in
international law at the chamber.

During the initial days of the Obama administration, there were hopes
that the U.S. might make a dramatic move to dismantle the embargo, he
said. Since then, it has become clear that any changes that come will be
gradual and tenuous.

``Things looked like they were going to improve,'' Cuevas said. ``But
politics seems to have everything on hold again.''

A Miami Herald staff writer reported from Havana. The name of the
reporter was withheld because the journalist lacked the visa required by
the Cuban government to report from the island. Past requests by The
Miami Herald for such a visa went unanswered.

Connecting businesses in Cuba - Economy - MiamiHerald.com (14 September
2009)
http://www.miamiherald.com/business/economy/v-fullstory/story/1231315.html