Caribbean Export OUTLOOK 2016

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.

With regard to services, opportunities for regional

service providerswho canprovide capacity training

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

of business in practically all sectors.

The Mariel Special Development Zone (MSDZ),

located 45 kmwest ofHavana city, and occupying

465.4km

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.

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,

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.

So how can CARICOM governments assist their

businesses to penetrate the Cuban market?

TRADE & EXPORT HOT SPOTS