US Companies Head For Cuba -- Slowly

US Companies Head For Cuba -- Slowly
Jim Randle
Last updated on: March 20, 2016 5:36 PM

TAMPA, FLORIDA—
Two small U.S. companies are working to set up businesses in Cuba, as
relations between Washington and Havana thaw. But after months of
effort, the firms that want to build tractors and distribute food must
still jump bureaucratic hurdles to set up the first new U.S. business
operations Cuba in decades.

Horace Clemmons and Saul Berenthal hope to assemble a small, inexpensive
tractor in a factory in Cuba.

The veteran U.S. software engineers designed the vehicle to be cheap,
simple, and just right for 40-hectare farms in Cuba.

They hope to have their Cleber Tractor plant running early next year,
turning out 1,000 tractors annually.

Cuban-born Berenthal traveled with a group of business owners to Havana
to take part in an entrepreneurship event with U.S. President Barack
Obama. Before leaving, he told VOA commerce that benefits people in both
nations will be a "healing mechanism" that improves relations.

Have 'the green light'

"We are ready to go, and we have gotten the green light, but the devil
is in the details. We still have to go through a lot of paperwork and a
lot of bureaucracy and a lot of agreement from multiple sources as to
the details," he said.

While the partners have approval from Washington and Havana to proceed,
they still have to cope with sometimes frustrating bureaucracies in both
nations.

Clemmons, who grew up around farming and loves machines, said the
tractor they've developed can get spare parts from many sources.

He also said the arrangement keeps costs down for farmers, boosting the
chance the company will succeed and eventually export tractors from Cuba.

"It's inevitable we'll make a profit, and I believe it's inevitable that
we'll be mass producing tractors in Cuba in the near future," Clemmons said.

He said the plan is for the factory to assemble kits that are made in
the United States, along with some "off the shelf" parts from various
sources.

Not yet conducive to business

Two other U.S. entrepreneurs are headed for Cuba seeking permission to
set up a wholesale distribution market similar to a wholesale produce
distribution market they ran, and then sold, in Tampa, Florida.

Manuel Fernandez and Michael Mauricio already have Washington's
permission to open a business in Cuba and are seeking approval from
Havana. They hope to eventually expand their Cuban operation to include
other products besides food.

Many U.S. companies are considering investing, as some restrictions of
the decades-long U.S. economic embargo against the communist nation are
eased, professor Jose Azel said.

Lacking infrastructure

Azel, a University of Miami researcher, said many become discouraged
when they learn that electricity, roads and other infrastructure can be
unreliable in Cuba, and low salaries mean consumers can't buy much.

In a Skype interview, Azel said Cuban law does not allow foreigners to
own a majority of a business, and it can be hard to enforce contracts.

"You are looking to invest in a country where the government can act
capriciously and arbitrarily at any time it wishes, so it is not
conductive to foreign direct investment, to putting money on the
ground," he said.

Azel said Cuba needs nearly everything, but beyond tourism, cigars and
rum, the island nation has little to sell to raise money for development.

In an effort to boost growth and trade, Cuba has started a Special
Economic Development Zone in Mariel, a port city on the Island's
northern coast, about 50 kilometers from Havana.

An official website shows pictures of a modern container terminal, wide
roads, and construction projects for warehouses and other facilities.

Source: US Companies Head For Cuba -- Slowly -
http://www.voanews.com/content/us-companies-cuba-business/3242078.html