Caribbean Export OUTLOOK 2016 - 2017

TRADE & EXPORT HOT SPOTS

of business in practically all sectors.

generally no quantitative restrictions. These items include but are not limited to agricultural products including fish, meat, dairy products, vegetables, spices, grains, fruits, nuts, plants and seeds, oils and margarines, juice beverages, extracts, non-metallic mineral products such as stone, chemicals including insecticides, paints, varnishes; beauty products, wood, furniture, paper products, items of clothing and footwear, scrapmetals, and buildingmaterials. All regional exporters producing within any of these product categories can view Cuba as a target market. Furthermore,accordingtotheEuromonitorReport onkeyindustriesinCuba,beverageswillexperience the largest volume of growth in consumer demand between2013 -2018, followedbyhomecare, tissue and hygiene, packaged foods, beauty and personal care, consumer appliances and electronics and apparel. Themajority of officials and distributors inCuba, including CIMEX and TRD Caribe, two of the largest distributors in the island with over 15,000 and 2056 stores throughout Cuba respectively, have confirmed a great need for specific items such as glass bottles for beverages in Cuba. Again, the growing tourism sector is creating a high demand for beverages like rum and beer. Cuba’s Ministry of Trade has also cited the need for fresh fruits and vegetables, especially during the heavy summer tourist season. TRD indicated high demand for items such as shoes and clothing, pharmaceuticals, condoms, household cleaning items, and even luxury items such as cosmetics. A demand for paper napkins, plastic kitchen items and foods such as jams, jellies and sauces has also been articulated. Given the market structure of the country, and that government procurement via invitation to tender can be considered the route to market for any products to be exported into Cuba, one important step to penetrating the Cubanmarket is the registration of a potential supplier with the relevant Cuban government-owned distributing entity. The registration process entails the translation into Spanish of a company’s legal registration documents and constitution by an officially recognised translator of the national government ministry responsible for trade or diplomatic relations with Cuba. For example, in Barbados this would be the Ministry of Foreign Affairs and Foreign Trade. The translation must be notarised

and lodged with the exporter’s local Cuban Embassy office, after which the originals will be lodged with the exporter’s national Embassy located inCuba for reference in themarket. Copies will be issued to potential Cuban importers i.e. the relevant government enterprise/distributor armed with government import licenses, for inclusion in their list of potential suppliers of a particular product(s). TheCubanChamber of Commerce is invariably involved as a pivotal contact point in the process of business-to-business matching. Once this procedure is complete, the registered exporter can be included in any future bids by the Cuban Government as a potential supplier of that particular good. The registration process can take between four months to over a year. The advantage again for the regional exporter is their access vis-à-vis the CARICOM-Cuba FTA.

The Mariel Special Development Zone (MSDZ), located 45 kmwest ofHavana city, and occupying 465.4km 2 of space, is a highly touteddevelopment project of Cuba that was set up in 2013 to attract foreign investment – an industrialisation by invitation of sorts – to encourage technological innovation, increased exports, import substitution, and to generate newsources of employment for the Cuban economy (www.zedmariel.com). While the zone appears to still be in a building mode, the areas for investment are specifically planned by type and size of investment, and the relevant government institution assigned responsibility for its governance. Foreign investment may take three forms: joint ventures, international economic association contracts, and 100% foreign owned investments.

With regard to services, opportunities for regional service providerswho canprovide capacity training

Greatest emphasis in theMSDZwill be placed on biotechnology and medicines (13 opportunities);

general industry (6); agro-food industries (5); and renewable energy (1). However, based on total investment opportunities throughout the whole country and not just limited to the MSDZ,

So how can CARICOM governments assist their businesses to penetrate the Cuban market?

in hospitality and customer service are high. LABIOFAM, a major pharmaceutical company, predicts a newfocus on the development of the ICT industry in Cuba, no doubt based on the growth trajectory of the Cuban economy which must be supported by ICT. Energy services is another avenue for export and investment as signaled by the growing oil and alternative energy production focus of the Cuban Government. As it relates to foreign investment, in accordance with Cuba’s move to stimulate its economy, business opportunities are to be promoted through a diverse portfolio of opportunities prepared by MINCEX, the Ministry of Foreign Trade and Investments. These are to be published annually and are aimed at providing general information on every sector or activity and keeping investors abreast with key elements of priority projects for the Cuban government. The first such list was published in 2014 in the Portfolio of Opportunities for Foreign Investment and made available online at www.cepec.cu. Generally all sectors except health care services for the Cuban population, educational services for the Cuban population and the armed forces, are of interest to the Cuban Government. The internal local business administration/systems of these services can only be provided by Cubans. This seems to open the door for almost all forms

the Cuban government’s priorities will be on oil investments by far (86); followed by investments in tourism (56), agro-foods (32), industry (16), renewable energy (14) and biotechnology and medicines (13). Important Business Nuggets Internet access for private users has only recently become available at a cost, by a state-run telecommunications company, ETECSA. Internet outlets and surf rooms are now available with WIFI hotspots available intermittently throughout the island, as well as at most hotels. While this is still somewhat of a limited access, it has had a significantimpactoncommunicationsinCubaand telecommunications may well be a growth area for investment. Advertisingisprohibitedbylaw. Consequently,the traditional capitalistic approaches to marketing by meansofadvertisementsinthenewspaper,radioor TV; billboard signs; etc. are not permissible. This posesaninterestingchallengeandforcesinnovation and creativity – a very relational and hands-on approach is required. Word-of-mouth, product launches around important events, and strategic alliances can be useful in this regard. For example, the face of Sacha Cosmetics in Cuba was endorsed by Cuba’s most popular female salsa singer.

40

www.carib-export.com