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46 |
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44 |
CESSNA AIRCRAFT TO BE USED TO OPERATE AIR SHUTTLE SERVICE- Guatemala City, Guatemala-based Grupo TACA, a consortium, has agreed to establish an Inter-Republic of Cuba air shuttle operation, Iter-Cuba S.A., with Republic of Cuba government-operated AeroTaxi S.A., which is a subsidiary of Gaviota S.A., which is controlled by the Revolutionary Armed Forces of the Republic of Cuba. Inter-Cuba S.A., will use 14-passenger United States-built Cessna aircraft. The Cessna Aircraft Company, which is located is Wichita, Kansas, is a subsidiary of Rhode Island-based Textron, Inc. The flights will be piloted by Costa Rican nationals with the first officer being a Republic of Cuba national. Inter-Cuba S.A. will serve the cities of Havana and Trinidad, and resort areas of Varadero, Cayo Coco, Cayo Largo, and Nueva Gerona on the Isla de la Juventud. Ticket prices will range from US$30.00 to US$100.00. Grupo TACA includes TACA airlines of El Salvador, AVIATECA airlines of Guatemala, LACSA airlines of Costa Rica (which already operates San Jose-Havana-Toronto flights), and NICA airlines of Nicaragua. By establishing operational agreements with existing airlines, the Institute of Civil Aeronautics of the Republic of Cuba (IACC) will gain the use of non-U.S.S.R.-built aircraft to primarily transport tourists within the Republic of Cuba. This is significant due to one result of the 1997 crash of a Cubana Airlines U.S.S.R.-built turboprop aircraft in Santiago de Cuba, the island's second-largest city. After the crash, United Kingdom-based tour operators and travel agents were instructed by the government of the United Kingdom not to permit their clients to travel within the Republic of Cuba on Cubana Airlines aircraft. Cubana Airlines continues to replace its primarily U.S.S.R.-built aircraft fleet with aircraft manufactured by Fokker and Boeing. Cubana Airlines has also discussed the purchase of aircraft manufactured by Airbus and Canada-based manufacturers.
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HS Code
9802200000 |
Commodity Description
Medicinal & Pharmaceutical Products, Donated |
Value (US$)
45,300.00 |
CUBA DEBT GAINS IN VALUE ON INTERNATIONAL MARKETS- Analysts from London, United Kingdom-based BNP, BBV Latinvest, and ANZ Investment Bank, report that the recent initiatives by the Clinton Administration (resumption of direct flights, resumption of remittances, and health care product sales procedures simplification) along with the government of the Republic of Cuba's recent agreement for the repayment of approximately US$769 million in commercial debt to Japan-based companies, are building confidence amongst international creditors and, as a result, expectations for the increase in value of traded Republic of Cuba debt. In recent weeks, Republic of Cuba mark loans have risen by 3.0 points to 3.75 points, to 29.25 points offered.
ARGENTINA SEEKS DEBT RESOLUTION- The government of Argentina reported that it would send a delegation to the Republic of Cuba for the purpose of 1) exploring additional opportunities to increase bilateral trade and 2) discussing a resolution of the US$1.3 billion debt owed by the Republic of Cuba. According the government of Argentina, bilateral trade was US$200 million in 1988, decreased to US$70 million in 1993, increased to US$133 million in 1996, and was approximately US$150 million in 1997. More than 98% of the bilateral trade was in exports from Argentina to the Republic of Cuba, mostly animal feed and grains. Argentina imported vaccines, citrus fruit, cigars, and rum. The Ministry of Tourism of Argentina reported that approximately 34,000 Argentinean nationals visited the Republic of Cuba in 1997, spending approximately US$25 million. Argentina is the Republic of Cuba's second-largest creditor with 12.1%, of the Republic of Cuba's total foreign debt of approximately US$10.5 billion, while Japan has 12.8%. Most of the debt to Argentina was created in the 1970's when the Republic of Cuba purchased significant quantities of vehicles from Argentina-based companies. The debt was, over the years, consolidated, and is now debt to the government of Argentina. H.E. Jorge Tellerman, Ambassador of Argentina to the Republic of Cuba, said that "we have taken note of the advances in debt negotiations with Japan. It doesn't necessarily mean they will be repeated, but it's a signal that makes us think the terrain has improved. We've drawn no conclusions, but want to explore the possibilities."
ARGENTINA REPORTS 1996-1997 CORN AND WHEAT SALES TO CUBA- The Government of Argentina reported that it had sold 150,000 tons of corn to the Republic of Cuba in 1996-1997 and had sold 200,000 tons of wheat to the Republic of Cuba in 1996-1997. No quantities were reported for 1997-1998 sales of corn and wheat to the Republic of Cuba.
MALAYSIA OFFERS CREDIT FOR 50,800 TONS OF PALM OIL- H.E. Lim Keng Yaik, Primary Industries Minister of Malaysia, confirmed that his government, through the Palm Oil Credit and Payment Arrangement Program for Cuba, will provide a Japanese Yen-denominated credit, worth approximately US$10 million, to the Republic of Cuba for the purchase of 50,800 tons of palm oil.
JAPANESE BUSINESS DELEGATION TO VISIT- H.E. Saburo Tanaka, Ambassador of Japan to the Republic of Cuba, reported that a delegation of Japan-based business executives, particularly in the tourism sectors and agricultural sectors, would soon visit the Republic of Cuba to discuss bilateral trade opportunities and investment opportunities. Ambassador Tanaka said that the recent restructuring of US$750 million in commercial debt owed by the Republic of Cuba to Japan-based companies included a provision whereby the government of Japan would provide incentives for Japan-based companies to increase their trade with and investment within the Republic of Cuba.
CHINESE ECONOMIC DISCUSSIONS UPDATE- H.E. Ricardo Cabrisas, Minister of Foreign Trade of the Republic of Cuba, and H.E. Sun Zhenyo, Vice Minister of Foreign Trade and Economic Cooperation of the People's Republic of China, signed trade protocols and agreements during their annual meeting 25 March 1998 to 27 March 1998 in the city of Havana. China provided a US$12 million credit to a rice farming joint venture, US$6 million for educational purposes, and US$1 million to complete two small hydro-electric plants. The government of the Republic of Cuba reported that bilateral trade was US$300 million in 1997, compared with US$270 million in 1996. Investments by China within the Republic of Cuba include textiles, a restaurant, rice farm, fan factory, and small motor plant. There is also a joint venture medical equipment production facility operating in Beijing.
BRAZIL BUSINESS UPDATE- H.E. Ibrahim Ferradaz, Minister for Foreign Investment and Economic Cooperation of the Republic of Cuba, visited Rio de Janeiro, Brazil, on 27 March 1998 to speak at a conference on business opportunities within the Republic of Cuba. Minister Ferradaz reported that of the 340 joint ventures within the Republic of Cuba, only one was with a Brazil-based company. Republic of Cuba-Brazil bilateral trade was approximately US$60 million in 1997.
TROPIFLORA SEEKS INTERNATIONAL MARKETS- Ms. Nancy Perez, Director of Republic of Cuba government-operated Tropiflora S.A., said that the company is working to gain a US$100 million to US$200 million share of the global fresh-cut flower market. Tropiflora S.A. earned gross revenues of US$1 million in 1997. Ms. Perez said that poor growing techniques, poor storage, and poor transportation reduced export possibilities and domestic sales. Tropiflora is constructing 40 covered hectares for flower cultivation, with plans to have a total of 700 covered hectares. Tropiflora's export subsidiary, Flor Caribe, reported that it exported more than 1 million flowers of 30 varieties in 1997, with 70% of the exports to Holland and the remainder to other European countries and to Canada.
MINING UPDATE- H.E. Marcos Portal, Minister of Basic Industry of the Republic of Cuba, reported that there were fifty-two contracts with non-Republic of Cuba-based companies to prospect for nickel, gold, silver, copper, lead, zinc, and other minerals. Mr. Antonio de las Reyes, Mining Advisor to Minister Portal, reported that 40,000 square kilometers had been identified for exploration and that more than US$60 million had been spent thus far. He said that new companies had been established, often in association with non-Republic of Cuba-based companies. He said that two joint ventures had been created, both with Miramar Mining, a subsidiary of Canada-based Orion. Mr. de las Reyes said that gold mining had begun at the Mantua copper mine in Pinar del Rio, 100 kilometers west of the city of Havana, where plans are for mining a gold cap of 8,300 ounces, then an estimated 166,500 tons of copper. The total investment at the Mantua copper mine is expected to be US$158 million. On the Isla de la Juventud, 150 kilometers south of Havana, Delita S.A. will soon mine the Delita gold and silver deposit, which is estimated to contain 1.75 million ounces of gold and 14 million ounces of silver.
NICKEL PLUS COBALT UPDATE- H.E. Maros Portal, Minister of Basic Industry of the Republic of Cuba, reported that the country possessed the second-largest known cobalt reserves in the world and the third largest nickel reserves. Nickel plus cobalt are the Republic of Cuba's second-largest export, after sugar, and fourth-largest U.S. Dollar earner, after tourism, remittances from abroad, and sugar (although sugar has a high gross revenue, net profits are minimal). The Republic of Cuba expects to produce 68,000 tons of nickel plus cobalt in 1998, compared with 60,600 tons in 1997. Mr. Antonio de las Reyes, Mining Advisor to Minister Portal, said that nickel plus cobalt production had increased by more than 100% since 1994 because of foreign investment and foreign commercial bank credits of US$200 million. He said that the Ministry of Basic Industry had signed and was currently negotiating additional joint venture agreements that would, in the medium term, increase nickel plus cobalt production capacity by an additional 65,000 tons.
NICKEL PLUS COBALT BACKGROUND- The Republic of Cuba's nickel industry is concentrated in northern Holguin Province, 800 kilometers east of the city of Havana. There are three plants in operation, a fourth, known as Cupey, near completion, and a fifth being developed. Mr. Antonio de las Reyes, Mining Advisor to H.E. Marcos Portal, Minister of Basic Industry of the Republic of Cuba, reported that Moa Nickel S.A., a 50%-50% joint venture with Canada-based Sherritt International Corporation, produced 26,000 tons of nickel plus cobalt in 1997 and is expected to produce a similar quantity in 1998. The Che Guevara nickel works produced 25,000 tons of nickel plus cobalt in 1997 and is expected to produce 28,000 tons in 1998. The Nicaro nickel works produced 9,600 tons of nickel plus cobalt in 1997 and is expected to produce 14,500 tons in 1998. Mr. de las Reyes reported that US$100 million had been invested during the last three years in Moa Nickel S.A., and another US$100 million which had been obtained during the last three years from Europe-based banks was being invested in the Che Guevara nickel works and the Nicaro nickel works. Pinares S.A., a joint venture with Australia-based Great Western Mining, plans to construct a plant and refinery in Holguin Province that would have a 35,000-ton annual capacity. The total value of the Pinares S.A. joint venture is approximately US$400 million to US$600 million. Negotiations continue with various non-Republic of Cuba-based companies to complete Cupey, which has a 30,000-ton annual capacity. Construction at Cupey was 75% completed when financing was eliminated, in part as a result of the collapse of the U.S.S.R.. Australia-based QNI Limited recently announced that its 100%-owned subsidiary, San Felipe Mining Limited, has established a five-year economic association (75% controlled by San Felipe Mining Limited) with Republic of Cuba government-operated GeoMinera S.A., to explore and conduct test drilling for nickel plus cobalt deposits at San Felipe, in Camaguey Province, 550 kilometers east of Havana. QNI Limited has reported relationships with South Africa-based GenCorp, which had been discussing a possible venture in San Felipe, Camaguey, for several years.
OIL AND GAS UPDATE- H.E. Marco Portal, Minister of Basic Industry of the Republic of Cuba, reported that Republic of Cuba government-operated Cuba Petroleum (Cupet) had signed forty contracts with non-Republic of Cuba-based companies to explore for oil and to produce oil and natural gas. He said that there were twenty-two exploration agreements and eighteen production agreements. Sources within the government of the Republic of Cuba report that domestic oil production had increased during the last six months from an average of 31,000 barrels of oil per day to 32,000 to 33,000 barrels of oil per day, or 17% of 1997's total consumption of 8.23 million tons of oil, the remaining 83% being imported. 1996 domestic oil production was approximately 15% of less than 8 million tons of oil consumed. The sources reported that approximately US$185 million had been invested in oil exploration during the last five years, and that US$100 million has been invested in oil production during the last five years. Republic of Cuba-produced oil is mainly extremely heavy crude high in sulfur, used primarily to generate electricity. Production increased from 526,800 tons in 1991 to 1.45 million tons in 1997. Cupet began in 1997 to engage non-Republic of Cuba-based companies to develop plans to use an estimated 200 million cubic meters of natural gas burned off each year from existing oil wells. Currently, approximately 100,000 cubic meters of natural gas is being delivered by pipeline to the city of Havana for use by residential consumers. A joint venture was established in 1997 with Toronto, Canada-based Sherritt International Corporation to use natural gas in Matanzas Province, 140 kilometers east of Havana, to generate electricity. The project, with an eventual 200-megawatt capacity, would be completed in the year 2000 and would replace the need for approximately 350,000 tons of oil per year. A joint venture has been established with France-based Elf Acquataine to supply gas, in place of currently-used kerosene, in the island's second-largest city, Santiago de Cuba, located 800 kilometers east of Havana. 80% of the residents in Santiago de Cuba use kerosene to provide heat for cooking. An unnamed United Kingdom-based company is negotiating an agreement similar to that of Elf Acquataine to supply gas to residents in Havana.
MINISTER OF FOREIGN AFFAIRS MEETS WITH THE POPE- H.E. Roberto Robaina, Minister of Foreign Affairs of the Republic of Cuba, met with His Holiness John Paul II during the visit to Vatican City, Vatican. Minister Robaina had previously completed a four-day visit to the Russian Federation. Minister Robaina's meeting with the Pope came three days after the Pope met with The Honorable Madeleine Albright, Secretary of State of the United States.
USCTEC SPEAKING SCHEDULE- Mr. John S. Kavulich II, President of the U.S.-Cuba Trade and Economic Council, is to participate at the following events: (Under Discussion) 13 May 1998- "Trade with the Americas" conference sponsored by the World Trade Center Association Los Angeles-Long Beach. 29 May 1998- Luncheon co-sponsored by The Cuban Studies Institute at Tulane University in New Orleans, Louisiana, and the World Trade Center of New Orleans, Louisiana. For information telephone 504-862-8000 extension 2601.
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Due to a delay in the delivery of the monthly magazine Business TIPS on Cuba, the February 1998 and March 1998 issues are being included in the package containing this issue of the ECONOMIC EYE ON CUBA©. Our apologies.
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