Caribbean Export OUTLOOK 2016

Doing Business

in Cuba

By Dawne Parris

A market of over 12 million people is nothing for

Caribbeanexporterstothumbtheirnosesat.That’s

the kind of market from which any company in

CARICOM would benefit. So when CARICOM

andCuba signed a reciprocal Trade andEconomic

Cooperation Agreement 15 years ago, it provided

exporters in the region with access to millions of

potential customers. The reciprocal agreement,

whichfocusedmainlyontradeingoods,gaveduty-

freeordutyreducedentrytoCubaofspecificgoods

suchasfruitjuices,sauces,condiments,seasonings,

and clothing from the CARICOM region. While

theagreementisnow,moreorless,inactive,several

establishedcompanieshavetakenadvantageofthe

opportunityofaccesstotheCubanmarket,though

not without having to overcome several hurdles.

BaronFoodsLimited,a SaintLucianmanufacturing

company with a Food Safety SystemCertification

(FSSC) 22000 V3 certified product range of 165

condiments and beverages is one such company.

Five of its condiments and sauces have been

approved and accepted for sale in the Cuban

market and the company is awaiting a confirmed

order from TRD Caribe, one of the largest food

and beverage distributors inCuba. It’s also eyeing

the hotel and tourism sector and retail stores.

Chief Executive Officer Ronald Ramjattan says

it would have been remiss of his 24-year-old

company, which is already in several othermarkets

in the region, not to have looked at Cuba. “Cuba is

a new and emerging market with over 12million

inhabitants sharing a similar culture and food

preference with the rest of the Caribbean people,”

he says. “The Cuban market is similar in many

aspects to the rest of the Caribbean, even though

the Spanish influence does have its fair share of

difference from us.”

As Ramjattan acknowledged, the benefits are

significant for any CARICOM exporter. They

include having access to a large, regional market

that American competitors can’t take advantage

of, due to the longstanding US embargo against

tradewithCuba. Even though fromJanuary 2015,

it became possible for Americans to visit Cuba

without a specific licence if the visit falls under any

of 12 categories, there are still limits to the amount

of goods that can be brought into the country in

luggage, and shipped by boat from abroad. The

challenges of breaking into and competing in the

Cuban market, however, are numerous.

Cuba has one of the world’s few remaining

centrally planned economies, with the

government controlling 90% of the economy.

All trade with that country must be conducted

through the state. Goods can therefore only be

imported into Cuba by government entities and

joint ventures holding permits for the goods in

question.

The high cost of transportation (both sea and

air); legal and institutional differences; and

insufficient finance and credit mechanisms are

some of the other major obstacles. Added to the

strict rules which guide the country’s import

policy, language was a hurdle for Baron Foods.

“Spanish being the spoken language is one of the

main barriers we had to face. The selling terms are

completely different too as they are looking for

three to six-month credit facilities,” says Ramjattan.

Kapril Industries, however, did not have the

language barrier problem.

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