Brazilian retailer takes first steps into Cuba

Brazilian retailer takes first steps into Cuba
Wed Nov 23, 2011 7:10pm EST
* Company will export building materials to Cuba
* Reforms expected to increase Cuban demand
By Esteban Israel

SAO PAULO, Nov 23 (Reuters) - Brazilian retail chain TendTudo, which
sells home improvement products and construction materials, has taken
the first steps into what it believes could be a $400 million a year
market in communist Cuba.

The company recently signed a contract to start supplying in the first
half of 2012 a Havana store for Cuban state company Palco, modeled on
TendTudo's "home center" stores in Brazil though much smaller.

TendTudo's interest in part lies in the prospect of a strengthening
market for its products after a recent reform by the Cuban government to
allow the buying and selling of homes for the first time in decades,
said Carlos Christensen, president of TendTudo's international unit.

"Cuba has an important demand for tools, construction materials and
articles for the home," he told Reuters in a telephone interview.

"There are important challenges but for us it's a long-term objective.
The idea is to start small and go accompanying the changes in the Cuban
market," he said.

Cuba, a country of 11 million people, is in the midst of reforms
liberalizing its troubled Soviet-style economy with the goal of assuring
the survival of the communist system put in place after the 1959 Cuban
revolution.

The housing reform is expected to increase demand for building
materials, not only because the country has a housing shortage of more
than 600,000 units but because so many of the existing homes are in bad
shape after years of economic crisis and neglect.

Christensen believes that purchases just by the Cuban state, which
controls 90 percent of the island's economy, would exceed $400 million
annually for the electrical supplies, tools, paint, bathroom fixtures,
tiles and myriad other products TendTudo sells.

Cuba's retail sector is still off-limits to private companies, but its
opening would add to the island's potential, he said.

"But what happens if we establish ourselves there with a long-term
vision, first looking at the corporate sector and then eventually the
retail sector?" Christensen said. "The challenges are important but we
are patient." (Reporting by Esteban Israel; Editing by Jeff Franks and
Christopher Wilson)

http://www.reuters.com/article/2011/11/24/brazil-cuba-store-idUSN1E7AM1VP20111124