Cuba's Battle to Replace Imports

Cuba's Battle to Replace Imports
September 11, 2009

HAVANA TIMES, Sept. 10 (IPS) - Cuban authorities have been working for
some time now to reduce imports of all products that can be produced
domestically at a lower cost. However, this effort has had a hard time
making headway.

The government has made it obligatory for all companies to focus on
reducing imports in their production plans and as such gradually
increase domestic production in all areas possible, whether in industry
or agriculture.

Insufficient production on farms and at food industries forces the
country to import more than US$ 2 billion in food per year, some of
which can be produced in Cuba.

Efforts to replace some imports, such as milk and pork have shown
encouraging results, nevertheless, Cuban agriculture is far from meeting
the demand with its own efforts.

Adding to the rising costs of food imports are high transportation costs
due to increased oil prices.

In the industrial sector there has also been problems leading to
instability of products, which in turn causes a lack of confidence and a
downward spiral.

Cuban Spark Plugs and Tires

The steel and mechanics industry, which has real possibilities to
increase its production, has a considerable way to go to help reduce the
country's imports. Among the obstacles faced over the last few years is
a failure to return to production levels existing before the economic
crisis, limited development of new products, prolonged procedures to
obtain raw materials, and technological backlog.

NGK, Peugeot and Taino are among the sparkplugs marketed on the island,
but only Tainos are made in Cuba. Nowadays, the only factory of this
type in the island produces 70 percent of the 1 million spark plugs used
in Cuba, as a response to the governmental call to replace imports.

According to Hugo Vidal, head of the Neftalí Martínez Company, located
in the city of Sagua la Grande, Santa Clara, the factory's installed
capacity could meet the remaining 30 percent of demand, although
production levels depend greatly on the raw material received.

In statements to the local press, Vidal said that production costs are
lower cost than the import price.

The Taino Especial and Prisma spark plugs were certified by the ISO 9001
System of Quality Management in 2008 and are also backed up by
international security and health regulations. These products have added
nickel and copper electrodes, which greatly increase conductivity and
efficiency, making them more competitive on the market, Vidal said. The
Neftalí Martínez Company was founded in 1964 by Argentine-Cuban Ernesto
'Che' Guevara.

One of the most outstanding features of the Cuban sparkplugs is that
they are good for some 15,000 kilometers. "The country only imports
sparkplugs that have different igniters which the company still cannot
produce," Vidal explained.

Even in the middle of serious economic difficulties, worsened by the
global crisis, the Cuban authorities have their eyes set on the recovery
of the island's economy.

Recently, the country has increased the purchase of public
transportation vehicles and those in the construction, hydraulic
resources and agriculture sectors.

There is also a process aimed at increasing the number of trucks and
tractors. All of this also leads to the need of more tires.

Although a considerable amount of tires are still being imported, the
production of several types of tires for agricultural equipment,
trailers, freight cars and public transportation vehicles is increasing
at the Nelson Fernández Tire Company, located in the municipality of San
José de las Lajas, as a way to contribute to the replacement of imports
and advance in several economic programs of the country.

The Nelson Fernández Tire Company currently produces 240 tires daily,
with a forecasted 4,000 per month, and 14,000 in 10 months, which would
save more than US$ 1 million on imports.

Company director Eduardo Remis says that the majority of tires are
distributed to the agriculture sector, sugar industry, and internal trade.

"Although the technology we use is more than 60 years old, the products
are of high quality and efficient," said Remis.

Healthcare

The replacement of imports has more than one benefit. It not only allows
the country to save money, but also generates work for hundreds of workers.

The domestic production of medicines can generate significant savings.
For example, from 2008 to date, the Quimefa Pharmaceutical Corporation
has saved the country more than US $2.5 million in their production of
16 medicines that were imported before.

According to local reports, 96 percent of the basic medicines needed by
the population and sold at subsidized costs were provided in the form of
562 domestically produced products and 307 imported.

The Director for Quality Control and Development at Quimefa, Ramón
Arango, said that the replacement of imports in the sector is mainly
aimed at increasing the availability of medicines in the market and
reducing costs.

Cuba began the process of replacing imports in this area in 1991 and
from that time on has developed some 400 products.

Arango said that the five-year plan for 2007 to 2012 includes
incorporating 73 new products, 31 of which replace imports and 42 new
products.

These medicines include antibiotics; treatments for the eyes, heart and
blood system, and the skin; and anti-inflammatory, anti-asthmatic and
anti-parasitic medicines.

"The raw materials and resources are not always available. And this is
exacerbated by the [US] blockade and the effects of the global crisis,
in addition to copyright restrictions. These factors and others of a
productive nature lead to occasional shortages," said Arango.

Hygiene

One of the most notable advances in the replacement of imports is the
national production of cleaning and personal hygiene products. For more
than a decade Cuban factories have been producing soaps, colognes,
perfumes, shampoos, and other items.

The Suchel Union, belonging to the Ministry of the Light Industry,
produces toiletries, and cleaning and cosmetic products. Suchel
produces competitive products both in quality and price, although there
have been some complaints from retail buyers.

According to the director of production and development at the Ministry
of Light Industry, Juana Iris Herrera, last year the country imported
26,000 tons of the raw material used to make soap and can produce 16,000
tons a year domestically.

New investments are aimed at producing all the raw material used to make
soap by 2010. According to Herrera, "so far this year more than 1.5
million CUC has been saved in import costs of this raw material."

The Suchel Union also produces plastic bottles for creams, shampoo, and
toothpaste.

One of the achievements that have had the greatest impact within the
organization is the production of disposable glasses used by Cubana de
Aviación airlines. The Institute of Civil Aeronautic of Cuba (IACC) uses
some 6 million units a year, 5 million of which have been produced locally.

It has been foreseen that in 2010, the industry will produce 8 million
high quality disposable glasses.

Suchel also produces plastic baskets, vinyl rope, laundry detergent,
toilet and household soap, toothbrushes, deodorant, brooms, buckets,
dustpans and several other articles.

Although there are several other good examples of successes, Cuba is
still far below the objectives set out by the government to replace
imports in times of reduced available financial resources.

Cuba's Battle to Replace Imports - Havana Times.org (11 September 2009)
http://www.havanatimes.org/?p=13665