Cuba Purchasing Agricultural Equipment; GulfWise LLC Receives 1st BIS License
Alabama Setting US Pace For Commercial Export/Assembly Activities In Cuba
1st & 2nd Agricultural Parts/Equipment Export Licenses
1st Agricultural Equipment Sale
Foley, Alabama-based GulfWise Commerce LLC (www.gulfwisecommerce.com), affiliated with 100-year-old Foley, Alabama-based The Woerner Companies (2015 revenues exceeded US$40 million; www.woerner.com), received a license from the Bureau of Industry and Security (BIS) of the United States Department of Commerce on 31 March 2016 to export advanced planting and harvesting equipment valued at US$108,184.00. The BIS application was submitted at the end of January 2016.
The purchaser is Republic of Cuba government-operated Tecnotex SA for use by the Republic of Cuba government-operated Indio Hatuey Research Station, a Matanzas, Republic of Cuba-based agricultural research institution. Tecnotex SA (affiliated with the Revolutionary Armed Forces of the Republic of Cuba) imports equipment, technology, and construction materials.
The agreement was negotiated in late 2015 and agreement-in-principle was concluded in January 2016, pending BIS approval. Formal purchase contract in process of completion.
There are two principal pieces of equipment: (a) Rear load Sprig Harvester, 42 in. with hook chain with box carrier attachment valued at US$49,962.00 and (b) Sprigmaster Broadcast with 12 sides, spring loaders and swivel coulters valued at US$51,944.00. Supporting parts and equipment include: (a) Gear boxes and Ogura clutch (for the Sprigger); (b) Multiple power belts; (c) Hydraulic motors; (d) Multiple Harvester teeth; and (e) Assorted miscellaneous parts are valued at US$6,278.00. The estimated weight of the shipment will be approximately 18,000 pounds.
The equipment, which is being manufactured in Alabama and expected to be delivered soon through the Port of Mobile, Alabama, will assist in establishing grass-covered areas for purposes ranging from erosion control to the creation of pasturage and the establishment or improvement of parks and recreational areas, such as playgrounds and sport facilities.
The discussions commenced in 2014 when GulfWise Commerce LLC initiated a dialogue with researchers at the University of Matanzas regarding multiple agriculture production issues in the Republic of Cuba. That dialogue led to an assessment of specialized equipment needed and to subsequent negotiations for a possible sale, which led to an application to the BIS.
Representatives of GulfWise LLC and The Woerner Companies have made five (5) visits to the Republic of Cuba; the first in 2012. Two representatives of the Indio Hatuey Research Station visited Alabama in 2015.
Significant about the transaction is the decision by the government of the Republic of Cuba to not focus upon a United States-based multinational (for example, Illinois-based Caterpillar or Illinois-based John Deere), but rather have the first export to the Republic of Cuba of durable (non-healthcare-related) commercial equipment be from a private company.
Mr. Robert L. Muse (www.robertmuse.com; 202-887-4990), the Washington, DC-based attorney who represented GulfWise Commerce LLC in the BIS licensing process, said the significance of the transaction is “… the government of Cuba clearly rewarded the patient efforts of a privately-owned company willing to invest the time to identify and fill the needs of Cuba’s rapidly changing rural economic landscape.”
Paint Rock, Alabama-based Cleber LLC has received authorization from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury and the BIS to create a tractor warehouse/assembly facility in Mariel Special Development Zone located near the city of Havana, Republic of Cuba. The government of the Republic of Cuba has authorized the assembly facility. The first year investment is US$1.4 million (which has been obtained according to the company); total long term investment US$5 million.
The city of Mobile, Alabama, has been a part of the Sister Cities International program (Society Mobile-La Habana) with the city of Havana, Republic of Cuba.
Since 2001, Alabama-based companies have been exporters of food products and agricultural commodities (poultry) from the United States to the Republic of Cuba under provisions of the Trade Sanctions Reform and Export Enhancement Act (TSREEA) of 2000.
During the last six years, the Port of Mobile, Alabama, has ranked 8th of 34 United States ports that have processed exports from the United States to the Republic of Cuba.