Delayed From 2017 To 2018, Unilever Begins Construction Of US$35 Million Facility In ZEDM

Although production will be delayed by one year, from 2017 to 2018, Unilever's US$35 million majority-owned joint venture has commenced construction within the Mariel Special Development Zone (ZEDM) near the city of Havana, Republic of Cuba.  See 5 November 2016 article and 22 January 2016 media release:

Havana, Republic of Cuba
5 November 2016

By Sarah Marsh | HAVANA

Communist-ruled Cuba and global consumer products company Unilever Plc (ULVR.L) on Friday started work on their new $35 million soap and toothpaste factory, a joint venture in the Mariel special development zone west of Havana.

The factory, due to begin production in 2018, reflects a surge of investor interest in Cuba since President Raul Castro took over from his brother Fidel in 2008 and started on a path of structural reform to update the centrally-planned economy.

Among the reforms were a new foreign investment law and creation of the Mariel zone, which offers companies significant tax and customs breaks and is centered around a giant container terminal.

"Our (planned) new and sustainable installations demonstrate our commitment to invest in the long-term growth of the Cuban economy," Unilever Chief Executive Officer Paul Polman said at a ceremony in Mariel, where he and Cuban Industry Minister Salvador Pardo laid the first slab for the factory's foundation.

Unilever (UNc.AS) (ULVR.L) had announced its joint venture with Cuban state company Intersuchel S.A, which will be called Unilever-Suchel SA, last January.

The factory, which will make products such as Sedal shampoo, Rexona deodorant, Omo detergent, Lux soap and Close-Up toothpaste, marks a symbolic return of the Dutch-British company to the island.

Unilever was one of the first companies to establish a venture in Cuba once it allowed some Western investment in the 1990s after the fall of former benefactor the Soviet Union.

It left in 2012 over a dispute over who would have the controlling interest in a joint venture. Now it will have a 60 percent stake, with Intersuchel SA holding 40 percent.

At the time of the dispute, Cuba had preferred that the state hold a majority stake in joint ventures with foreign companies, but Cuba has since become more flexible and investor-friendly.

"We are witnesses to the start of a new phase," Polman said.

Unilever is the best known company to have so far received approval to operate at Mariel. Cuba has given the green light to 19 business proposals in total, some joint ventures, other Cuban or 100 percent foreign-owned.

Many are still in the early stages of planning or construction and the zone, which covers the 180 square miles (466 square km), looked deserted on Friday, a largely empty, wind-swept, sandy area by Mariel Bay.

Unilever plc
London, United Kingdom
22 January 2016

Unilever and Intersuchel agree $35 million Cuban joint venture

Unilever is to invest in Mariel, Cuba’s Special Development Zone. Partnering with state-owned company Intersuchel, we will build a $35 million homecare factory to open in 2017.

Cuba has a new overseas investor in its Mariel Special Development Zone and a new joint venture to celebrate.

Unilever and state-owned firm Intersuchel have signed a deal which will see the formation of a new company, Unilever-Suchel S.A. and a $35 million investment (equivalent to €32.3 million) in a personal and homecare factory which is set to open in 2017.

The factory will manufacture some of our top-selling personal and homecare international brands, including Sedal shampoo, Rexona deodorant, Omo detergent, Lux soap and Close-Up toothpaste. Unilever will take a 60% stake in the venture, and Intersuchel will hold 40%. The factory is expected to generate 300 direct jobs.

Unilever will invest in Mariel’s Special Development Zone, which allows foreign and domestic companies to trade and invest with fewer regulations and is designed to encourage overseas investment.

The signing ceremony for the joint venture was attended by Dutch Foreign Trade Minister Lilianne Ploumen, Ana Teresa Igarza, General Director of the Mariel Special Development Zone, Fabio Prado, President of Unilever Mexico & Greater Caribbean and Pedro Fraga, President of Intersuchel S.A.

Since 2011 Cuba has been gradually opening up its economy to outside investment to attract foreign capital and generate new jobs. Ploumen told reporters attending the event that she hoped Unilever would be the first of many Dutch companies to come and invest in Cuba.

Unilever’s Fabio Prado added: “We’re very enthusiastic about this approval, which will allow us to strengthen our leadership position in strategic regions, in order to develop home and personal care products that are always aligned with Unilever's Sustainable Living Plan."