Mariel speeds up business with foreign capital

Companies from 36 countries are seeking a space in the Special Development Zone created in Cuba to lead the new stage of foreign investments.

Renewable energy, the production of radial tires and of glass containers appear among the most developed investment projects.

With the confirmation of a gradual increase of foreign investors interested in placing their capital in the Mariel Special Development Zone (ZDM), executives from that enclave returned to the recent edition of the 32nd Havana International Trade Fair (FIHAV 2014), a year after its first presentation to the world’s businesspeople.

At a forum with national and foreign participants during Cuba’s major trade event, the director of the ZEDM’s Regulatory Office, María Teresa Igarza, this time announced that companies from 36 countries had brought proposals for investments in that place. Spain, Cuba, Italy, Vietnam, China, France, Brazil, Mexico, Holland and Canada are among the most represented nations, reported the executive, who is confident that the first projects would be approved early next year.

Only a bit over two months after its official inauguration last January 27, 15 projects were in the process of negotiation. According to statements by Igarza published at the time by the newspaper Trabajadores, the Office expected that several of those investments would start operating before the close of the current year.

At the Havana International Construction Fair, held in April, the director of the Office explained that the “intentions” of investing in Mariel “continue and have been growing,” and she said that the projection is that “no later than” the end of the first semester a group of files would be ready for their processing.

Judging by the most recent information, all the requirements demanded for the full “development” of the negotiations had still not concluded. But other reports indicate important advances for investments in several of the prioritised sectors in the Zone, among them renewable energy, the iron, steel and machine, light and chemical industries (glass containers, personal hygiene products and textiles), logistics, electronic, food and agriculture production projects and the biotechnology and pharmaceutical industry.

During the forum, Igarza reiterated the special advantage that the ZEDM offers to investment companies. In addition to the total renovation of its port, equipped with a modern container terminal, and its proximity to the capital – 45 kilometres to the west of Havana -, the Zone has an attractive regulatory framework – a mild tax regimen and effective labour and wage regulations – and has adopted a system that aims to shorten the traditional slowness to give the green light in Cuba to a foreign investment.

“The Zone already has the basic infrastructure for the establishment of the first investors, that is, electricity, water, communications, the only thing missing is the levelling of the plots and the possibility of taking these services toward the interior of the installations,” the director of the office explained a few days ago.

The National Information Agency (AIN) cited the case of a radial tire factory, negotiated by the Cuban Rubber Enterprise with Russian and Chinese firms.

The assistant director of the Cuban entity, José  Lázaro Llorens Peña, said that the project, with participation by the Russian Tatneft Company, seeks to have access to new technology, equipment and know-how to build in Mariel a plant with capacity to produce a minimum of 1.2 million tires a year. With this amount of production, Cuba would replace in a short time the imports in that sector.

The national demand for this type of light and transport tires stands at around 800,000 units, the executive of that firm of the Chemical Industry Business Group reported. If the estimated production were to be achieved, some 400,000 tires would be left over for export.

This venture would thus comply with several of the objectives specified in the new policy of opening up to foreign investments: access to capital and technology, substitution of expensive imports, diversification of exports, expansion of Cuba’s incomes in hard currency, and boosting economic growth.

Out of the 246 potential projects offered by the Opportunities Portfolio presented by Cuba at FIHAV, the Mariel Special Development Zone is responsible for 25 of them, a sort of prow in the current Cuban reopening to foreign investments. (2014)

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