Vol. XII, No. 2 www.cubatradenews.com February 2010 sends ‘No. 3’ to run billion-dollar energy project oining a couple hundred electrical arrived Feb. 12 in Caracas to head a technical Jengineers and technicians, Cuba sent Also read: commission that is tackling Venezuela’s a high-profile veteran of the revolution Why Ramiro electricity shortage. to Venezuela to help the South American is in Caracas Valdés and the commission are working partner fix an energy crisis that has caused closely with Venezuelan Energy Minister Alí rolling blackouts and a popularity drop Page 3 Rodríguez Araque. It wasn’t clear how long for President Hugo the assignment of the Cuban vice president and Chávez. technology minister will last. The move put the hardline Since 2008, Cuba has been implementing a 1,000-mw past of Ramiro Valdés distributed-energy program in Venezuela, as part of a 10-year in the spotlight, triggered a old bilateral energy cooperation agreement. Cuba has supplied controversy in the opposition Continued on next page media, and ruffled feathers among electric company management and unions in Venezuela. But the electric aid also helps stabilize a government that INSIDE is crucial for Cuba’s economic well-being, puts the island in Opinion: Why is Ramiro in Caracas?...... page 3 a position where it makes purchase decisions for hundreds of QCI finishes Vietnam bridge project...... page 5 millions of dollars worth of equipment, helps the country’s Diaz-Balart announces exit...... page 7 engineers gain international expertise, and — in case of Brazil ties $1 billion package...... page 8 success — could turn the Cuban “energy revolution” an export $500m ferronickel plant on track...... page 11 product to other countries. Valdés, the No. 3 in Cuba’s hierarchy and a key player q&a: Arturo Valenzuela — Deadlocked...... page 3 in Cuba’s successful remake of a failing energy system,

Shanghai opening

a Cuban affair

See page 5

Photo: Courtesy Sol Meliá ‘Cuba sends No. 3,’ from previous page Venezuela with at least 43 diesel and fuel-oil generator clusters, a major energy crisis. for a capacity of 636 mw, and is in the process of bringing in Since 2006, in an at least 30 more. Some 200 Cuban electrical engineers and effort to remodel the technicians have been working in the country. entire power concept The power deficit is caused by low water levels in on the island, Cuba Venezuela’s largest reservoir and the lack of backup. Water h a s b o u g h t a n d power covers 70 percent of the country’s electricity. installed hundreds Venezuela, reports El Nacional, is paying Cuba $2.4 billion of generators from for the program. The daily attributed the figure to a former manufacturers such Generator cluster courtesy Guascor official of the Venezuelan energy ministry. According to as Guascor, Hyundai, that source, under a 10-year old agreement Venezuela pays MAN B&W, and MTU. Cuba $1,000 per installed kilowatt, plus $1,200 per kw for The country is now propagating its distributed power associated infrastructure and $200 per kw generated. generation concept as a model for fellow ALBA member Venezuela is planning to invest more than $13 billion in countries and other developing nations. According to official its electric sector through 2014. On Feb. 22, the government news agency AIN, Cuba provided seven mini power plants to announced it created an “Electric National Fund” (FEN), and Nicaragua, and one 60-mw power plant to Haiti. Likewise, that it was funded with $1 billion. Cuban electric engineering teams are working in Ecuador and Brazilian and Argentinean teams are also included in Equatorial Guinea in Africa. the effort, contributing know-how on hydroelectric and Official sources didn’t say where the generators for Venezuela thermoelectric plants. were bought, and who paid for them. Some 300 BR4000 Venezuelan experts quoted by opposition newspaper container generators made by MTU — a type Cuba has bought El Universal complained the equipment used by Cuba is for use on the island — have been installed in Venezuela. One “expensive, old-fashioned and short-lived.” However, in Cuba, industry observer speculated that Cuba simply resold some of the new distributed system has helped the country overcome the hundreds of generators it has bought since 2006.

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Will it be Clinton II all over again, or is Obama a man with his own ideas? The tragic death of a political prisoner on Cuba Trade & Investment News is a monthly publica- hunger strike in Cuba is putting the Administration’s timid tion of Trade & Investment Publications LLC (TIPs), Tampa, FL, USA. CTIN is distributed to subscribers via advances towards normalization to the test. Kneejerk rhetoric mail or e-mail. and dissident-only vs. evil-empire coverage will dominate the airwaves for the next days. Publisher Andrew Goddard These are the times when an independent-minded, alternative P.O. Box 13752 information source such as Cuba Trade & Investment News Tampa, FL 33681-3752 USA displays its biggest value. More embargo will get the United Tel: 813 839 6988 States nowhere, particularly while Cuba embraces the Fax: 813 831 3811 remainder of the world. At the summit in Cancún last week, [email protected] Cuba was not only a spectator but a driving force in the www.cubatradenews.com Editor Johannes Werner creation of a new hemispheric bloc. Transfer payments (see Tel: 941 330 0303 title story) and big investments (page 10) from Venezuela, [email protected] big-time loans from Brazil (page 8), and increasingly bold Cuban investments abroad (page 5) are the order of the day. Editorial Advisors This is the reality that will hopefully determine Washington’s Chris Aberle, FCStone, Des Moines next steps. Kirby Jones, US-Cuba Trade Assn., Wash. DC Talking about next steps: We have launched a new Cuba David Lyons, Daily Bus. Review, Miami venture with new partners. You’ll be excited to see that you can John McAuliff, FFRD, New York now get your Cuba business news online, real-time. Check out Phil Peters, Lexington Institute, Washington www.cubastandard.com, and tell me what you think. SUBSCRIPTIONS Call 813 839 6988. One year $375. In Canada and Mexico, add $15 postage.

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2 Florida Strait q&a: U.S.-Cuba policy Deadlocked he death of a political prisoner in Cuba on hunger strike Feb. 23 prompted a series of strong-worded statements by U.S. officials, followed by Cuban recriminations.T But even before the latest clash, the hope for change coming from the Obama Administration regarding Cuba had faded. Below we reprint excerpts about Cuba and its allies in Latin America from an interview by Spanish daily El País with Arturo Valenzuela, State Department assistant secretary for Latin America, published Feb. 7. Venezuela with answers, By Johannes Werner q. Are there reasons to be worried and this hasn’t about what’s happening in Venezuela been seen until Why is Ramiro in Caracas? with institutions, the judiciary, the now. Probably, media? this has to do with hat’s the question Venezuelan a. Yes, I believe so. This last incident some internal private media and Chávez of the prescription of a TV channel to changes in opponentsT have been asking since cable and other channels tends to be C u b a , i n Ramiro Valdés Menéndez, the two- an outrage against freedom of press. w h i c h i t time interior minister and father of These are important elements for all our isn’t clear Cuba’s intelligence services, landed countries, both as far as consolidation where the Arturo Valenzuela: No in their country early this month, of institutions and respect to basic situation is “dialogue with answers,” apparently to spend considerable rights such as freedom of expression going. as of yet. time in Venezuela in the coming is concerned. q. Do months. q. The United States maintains you believe the European Union should Interesting question. I would a policy of restraint with President change its Common Position on Cuba, argue that, more than anything, the Hugo Chávez. in force since 1996, that requires the answer has to do with economics a. The policy of President Obama government of the island to advance in and business. I’ll explain that in a is to continue with cooperation with democracy and human rights? moment. all countries. We are by no means a. This is a topic that appertains to the Ramiro arrived amid rolling in a project to lecture anyone, we’re EU, not the United States. That said, it blackouts, triggered by dramatically looking at how we can collaborate not clear to is how the intent to change shrinking water levels in the country’s with valid participants in the solution the Common Position would lead to biggest reservoirs (Seventy percent of of shared problems. Many problems a significant change in the situation Venezuela’s electricity is generated have to do with social conflicts, for the respect of human rights of the with hydropower). Valdés came with backwardness, with economic Cuban people. On our part, as we want on the heels of some 200 Cuban difficulties. If others have different to deepen a dialogue with Cuba, we do electrical technicians and engineers, visions, that’s also acceptable; we’re it conscious that this should be done and he is officially there to coordinate willing to discuss with everyone. considering our fervent commitment to a task force to solve Venezuela’s these rights and for the liberalization of power troubles (pun intended). the Cuban regime. The top-of-the-lung rhetoric in Cuba q. So, with Cuba, dialogue in Venezuela has it that bigger political q. There’s no disappointment in exchange for freedom? And change issues are at play. Washington with the lack of response of position only for weighty reasons? The opposition’s explanation as from the government of Cuba to a. That’s it. to why Ramiro really is in Caracas: Obama’s openings? To repress dissent and thus solidify a. We have reversed the previous VeneCuba, a Communist Frankenstein policy of freezing many people-to-people Honduras created by the evil Fidel who is now exchanges, to allow more connections. q. You’ve just been to Honduras, at running two countries from his secret And we are willing to recover, or even the inauguration of a new president. lair. As a sideline of this main job have more, of a direct dialogue with a. The election, in general terms, was of repression, Chávez opponents the government of Cuba on shared relatively good. Turnout was similar to add, Valdés is pushing obsolete issues. We have had conversations that of previous elections. The opposition technology on a much more advanced about migration topics, and there candidate won, big time; the same who will be others on the agenda. But it’s had lost to [Mel] Zelaya the previous Continued on next page true that what’s needed is a dialogue time, by three points. The Honduran Continued on next page

3 q&a: U.S.-Cuba policy ‘Deadlocked,’ from previous page a. Yes, I think these are the steps to seek how to normalize people gave two very clear signals: That it want a change, and the situation. We have worked with consultations, in America, that it was expressing, and this is very important, it sovereign in Spain, with the Central Americans, basing ourselves on will to seek a way out of the situtation brought about by the fundamental principles, and with the realistic idea of seeking coup d’etat. This electoral process was pre-existing, it wasn’t a way out. created to whitewash the coup, and it was part of the solution q. And the one we’ve had, what does it look to you? of the crisis. But not all: For Honduras to normalize, more a. I’d say it’s not bad. To a great degree due to what I noted, steps must be taken, which are in the agreement [Zelaya and because it’s based on the sovereign verdict of the Honduran the coup supporters signed in November]. President Lobo has people in an election that came from way before. Now, the said that he wants to seek reconciliation, recover democracy lesson is also that in Latin America at this point a military and return to the OAS. coup can’t be tolerated, and that we must look for mechanisms q. That’s what’s necessary for the United States to to work with the countries and that this won’t happen in the normalize its relation with Honduras? future. • O p i n i o n

‘Ramiro,’ from previous page “off” switch more often than they would like. Also, the long- run cost for maintenance and replacement of the still-new country, at an outrageous price. generators remains to be seen. And finally, whether the Cuban Hugo Chávez’ answer: To show unselfish Socialist solidarity distributed-energy model works in a larger, continental and provide Venezuela with cutting-edge technology, after a country is still open for judgment. natural disaster has befallen the Southern brethren. Even so, if you live in a blackout-prone country such as I admit, this is a caricature of the arguments fielded. But Venezuela, the Dominican Republic, Nicaragua, Panama, or the truth, as always, lies somewhere between the extremes. even Mexico and Brazil, Cuba’s “Energy Revolution” is at Yes, the main reason the Cuban government sent its No. 3 to the least worth serious consideration. Venezuela is political. After all, Venezuela is the island’s main And that’s where business opportunities come in. economic partner and benefactor; without it, tough times Not surprisingly, the Cubans have been mute about the would be even tougher. The drought is shining a painfully dollars and cents involved in their energy know-how exports. bright light on economic bungling and weak state institutions Like Chávez, the Cuban government paints its energy know- in the oil-rich country. As a result, approval for the political how exports not as an economic but as a solidarity issue. one-man show in Venezuela has dropped considerably, and In matters of aid, revenues are not supposed to matter, and that is of concern to Cuba. profits are a no-no. But particularly in these But the Cubans didn’t come to repress ‘According to a times of crisis, the hard-currency cash flow dissent in Caracas. They are there — as from the program has become a significant are the Brazilian, Argentine, Chinese and former energy ministry economic factor for Cuba. Russian teams Chávez has asked for help — official, Venezuela owes If you believe the former energy ministry to provide hands-on technical support. Cuba $2.4 billion.’ official cited by opposition newspaper El Two facts about Ramiro and Cuba have Nacional, Venezuela owes Cuba $2.4 billion been conveniently blacked out by the Chávez just for the additional capacity it recently critics: One — as vice president and minister of technology agreed to be deployed. Given the characteristics of the since 2004, Valdés has been one of the key players in a recent anonymous source, take this number with a grain of salt. But radical makeover of Cuba’s energy system. Two — that it’s fairly safe to talk about hundreds of millions of dollars. makeover in 2006/07, dubbed “Energy Revolution” by the And they are going to Cuban entities, but they pass on much Cubans, has been a success. of it to their foreign suppliers. The biggest quiet beneficiary In a matter of 48 months, and with relatively modest of the Cuban-Venezuelan program has — so far — been investment, Cuba was able to end the rolling blackouts MTU Onsite Energy, a division of Germany’s Tognum AG. that had Cubans sweating and precious food rotting during Cuban engineers have deployed hundreds of the company’s hot Caribbean summers. Combining a new system of generators in Venezuela. distributed power generation by thousands of diesel and In a nutshell: Ramiro’s presence in Venezuela has a lot to do fuel-oil generators with an intense energy savings campaign with economic and business reasons. Red Terror? My guess and a focus on renewable energy did the trick. It’s not is, Ramirito is way too busy managing technicians, suppliers, an unqualified success yet. For one, the new generators finances, shipments and construction crews to have time to increased Cuba’s dependency on expensive fuel imports, reign in Venezuelan Chávez critics. and that harsh reality has come haunting Cubans, as their Johannes Werner is editor of Cuba Trade & Investment cash-strapped government keeps urging them to use the News and Cuba Standard (www.cubastandard.com).

4 E c o n o m y Cuba gives high profile to Shanghai hotel opening dding an exclamation mark to the recent expansion next project will be construction of Cuban economic activity abroad, tourism Minister of a “similar” hotel in , the ManuelA Marrero traveled to China for the opening ceremony minister said. The partners reportedly of a Chinese-Cuban five-star hotel towering over Shanghai’s are planning construction at Marina financial district. Hemingway, in a western suburb of The 30-floor hotel, the highest in the Shanghai skyline, was the capital. designed with Feng Shui principles. It includes a Cuban bar Marrero said the partners had to Owned by Chinese state company Suntime International overcome “great obstacles” to get the Techno-Economic Cooperation Group and Grupo Cubanacan, project in Shanghai off the ground. He photo: Sol Meliá the 686-room Gran Meliá Shanghai is operated by Spain’s didn’t specify. Grupo Sol Meliá. Making the ceremony a sort of No details about the ownership arrangement have been Cuban-Spanish-Chinese summit, the opening was also released. Chinese state company CITIC Group, Shanghai attended by Sol Meliá President Gabriel Escarret, Suntime Bank, and Eximbank provided and guaranteed the funding. Chairman Yue Shiron, Cubanacan Director Luis Miguel Díaz, Cuba’s apparently largest hotel investment abroad is as well as Spain’s ambassador in China, the designated Chinese the first of more joint projects to come between Suntime ambassador to Cuba, and the mayor of Pudong, Shanghai’s and Cubanacan, Marrero said during the ceremony. The financial district.

Cuban flair photo: Sol Meliá While in China, Tourism Minister More than 3,500 sculptures, Manuel Marrero met in Beijing with paintings, and decorative objects by 60 tourism officials to boost marketing of Cuban artists are splashed over nine Cuba as a destination in the fast-growing floors in the Gran Meliá Shanghai. Asian source market. He also talked about The presidential suite on the 27th floor additional investment projects, including features four paintings by Roberto preparations for the construction of the Fabelo; a mural by Rigoberto Mena Suntime-Cubanacan hotel in Havana. decorates the lobby. In addition, Marrero met with potential Havana-based gallery La Acacia investors, as well as with Chinese travel held an exhibition opening parallel to agency and tour operator executives, and the hotel opening ceremony. tourism media representatives.

Cuban engineering firm completes bridge project in Vietnam uban state company Quality Couriers International In February, the company became the Cuban partner in a S.E.A. completed construction of a $78.5 million road Cuban-Brazilian joint venture to build a container terminal bridgeC spanning the Saigon River in the commercial capital at the Port of Mariel in Cuba. of Vietnam, Ho Chi Minh City. The Thu Thiem On behalf of the Vietnamese construction ministry, the bridge links a company provided supervision and technical assistance to new district of the Thu Thiem bridge project, which began in 2005. Ho Chi Minh City QCI’s part in the 1.25-kilometer, six-lane bridge, didn’t with the old center. begin until 2006. The project had been 10 months behind at photos: QCI, Construction that point of time, due to land compensation problems. QCI’s Ministry Vietnam, Google original two-year fee had been upwards of $650,000. maps The bridge, combined with a road tunnel, is a crucial part of the Thu Thiem trade and financial district mega-project and the city’s new traffic infrastructure. The Thu Thiem project, which is funded by Japanese development institution ODA and four Japanese contractors, includes construction of 10 bridges over the Saigon River. The Cuban company, which has an office in Hanoi, also supervised construction of segments of the Ho Chi Minh Highway in northern Vietnam.

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Photos: Juvenal Balán, Granma Em b a r g o Key pro-embargo player won’t return to Congress “Another chapter of service” for Cuba: Retiring, on the other side: Diaz-Balart Dorgan, Dodd press conference in Miami.

Bush years, the Diaz-Balart-led embargo caucus in Congress became the stronghold of anti-Castro activism in the United States and the main impediment to improvements in U.S.- Cuba relations. he central figure of hardline anti-Castro activism in “One of the achievements of which I am most proud was Washington announced he will retire when his term the codification, the writing into U.S. law, of the U.S. embargo expiresT in January, ending an 18-year run in the U.S. House on the Castro dictatorship,” he said. of Representatives. However, the political tide in Washington has reversed, “I will start another chapter of service, but not in public putting embargo advocates into the defensive. In a piecemeal office,” Rep. Lincoln Diaz-Balart, 55, said during a press strategy, Midwest farmers, liberal activists, tourism trade conference at Florida International University in Miami Feb. groups and oil corporations are currently targeting the travel 11. ban, a core part of the codified embargo. The announcement came after two Democratic senators, Byron Dorgan and Christopher Dodd, both key players in A different Castro embargo-easing efforts, said they will be stepping down. Lincoln Diaz-Balart’s name has been “It is important to recognize that the bipartisan team working dropped by Jorge de Castro Font, who for Cuba’s freedom from within the U.S. Congress is fully in is talking with federal investigators place and functioning more effectively than ever,” Diaz-Balart probing the Puerto Rico senator’s said. The group is led by Rep. Ileana Ros-Lehtinen (R-Miami), involvement in bribery, fraud and Lincoln’s younger brother, Rep. Mario Diaz-Balart (R-Miami), money laundering. De Castro Rep. Albio Sires (D-N.J.) and Sen. Bob Menendez (D-N.J.). In 2008, de Castro said publicly The Congressman left observers puzzled about his motive, he had traveled to Miami in 2005 with speculation ranging from a sacrifice that will allow to deliver $50,000 in illicit cash for the Diaz-Balart Mario to safeguard his House seat (see sidebar), to a run campaign. for president of Cuba, to his name appearing in a federal Diaz-Balart denies having received the money. corruption investigation (see sidebar). He made clear his involvement with Cuba will continue, but he was sketchy with details. Mario ‘inherits’ Diaz-Balart district “I am convinced that in the upcoming chapter of the struggle Triggering a political game of musical chairs, Lincoln I can be more useful to the inevitable change that will soon Diaz-Balart announced that his brother Mario will run in come to Cuba — to Cuba’s freedom — as a private citizen his district this fall. dedicated to helping the heroes within Cuba and to the study Congressional district 21 is considered safer for a and propagation of the ideas and ideals of `The White Rose,’ Republican candidate than Mario Diaz-Balart’s current which was founded by my father, Rafael Diaz-Balart, in district. The younger Diaz-Balart reportedly has been January 1959.” struggling with laggard fundraising. Says Ann Louise Bardach, author of “Without Fidel” and a According to politico.com, the leading contender for the chronicler of Cuban exile politics: “I’m sure that Lincoln will open seat in Mario’s 25th Congressional district is State remain in the family business, which is Cuban politics. He’s Rep. David Rivera, a close friend of the Diaz-Balart family certainly making life easier for his brother Mario, who was and author of several anti-Cuba measures by the Florida facing tough sledding in the next election. I predict both will legislature. State Senate Majority Leader Alex Diaz de remain thorns in the side of their former uncle, Fidel Castro, la Portilla, another Miami Republican, also expressed his for as long as he survives.” interest. Diaz-Balart, nephew of a woman once married to Fidel Democrats are trying to convince former Miami-Dade Castro, and son of a high-ranking official during the Batista Democratic Party Chairman Joe Garcia to run for the seat, dictatorship, was a driving force behind the tightening of U.S. according to politico. Garcia, a former executive director embargo policy in the 1990s. With the demise of the once- of the Cuban American National Foundation, last year lost powerful Cuban American National Foundation during the to Mario Diaz-Balart in a tight race, 47-53 percent.

7 E c o n o m y Brazil ties $1 billion loan package ringing a package of nearly $1 billion in loans on his fourth and probably last visitB as president to Cuba, Brazilian President Luiz Inácio Lula da Silva sent a message to his Lula’s legacy: successor: Cuba is a strategic part of Brazilian Cuba has become a interests. strategic corenerstone During his 48-hour visit, Lula toured the Port for Brazil. of Mariel, where Brazilian-led construction of a $300 million container terminal is underway. “We work with the perspective that the blockade against Cuba makes no more sense, Photo: Presidencia/Ricardo Stuckert and that it can fall at any moment,” Lula told reporters in Havana. “Therefore, Cuba will Cuba, among others “to contribute to the recovery of hotels have an extraordinary potential to enter international trade, and roads.” and most of all containers.” In the wake of the visit, the spokesman of the presidency Lula and Raúl Castro on Feb. 24 in Havana headed the signing announced Brazil was tying a loan package for the cash- of several economic agreements, ranging from cooperation strapped island, valued at nearly $1 billion. on informatics and Brazil will grant Cuba $600 million for investment projects telecommunications, in rice and sugar, and for road and port construction, as well as to joint research a $350 million loan for food purchases, spokesman Marcelo and development Baumbach told reporters during a press briefing in Brasilia of pesticides (see Friday. Some $150 million of the loan package have already sidebar). been disbursed for the container terminal at Mariel, and the Lula also said payment of another $300 million is “under negotiation,”

Lula paid a brief visit to Fidel photo: Presidencia/Ricardo Stuckert on his weekly radio according to Baumbach. Cuba requested an additional $230 Castro, accompanied by Raúl. show before the million; the additional loan amount “depends on administrative Venezuelan President Hugo Chávez visit that “we have issues,” the spokesman said. landed shortly before Lula in interest in making Lula arrived from the Rio Group summit in Cancún. After Havana, to meet with Fidel Castro. new investments” in Cuba, he visited Haiti and El Salvador.

The beef The port The port of Mariel, just west of Havana, will be able to Documents signed during the visit include a memorandum handle 1 million containers a year; the terminal will be of understanding about cooperation on informatics and operated by Dubai Ports. Construction, led by Construtora communications; the protocol of the second meeting of Norberto Odebrecht and financed by Banco Nacional the Cuba-Brazil Economic and Trade Working Group; de Desenvolvimento Econômico e Social (BNDES), is a complementation agreement on health; six technical underway. The Brazilian company has begun dredging and scientific cooperation agreements ranging from soy to accommodate vessels requiring 17-meter depth, and cultivation in Cuba, to mutual support in implementing building and rehabbing roadways and sanitary controls, to technology transfer on genetic railroads, according to official daily methods to battle tomato and pepper diseases, and Mariel Granma. During his visit, Lula witnessed development of biological crop plague agents. the formal creation of a joint venture with Brazilian state oil company Petrobras also signed an Cuban engineering firm Quality Couriers agreement, but no information was immediately available International S.A. that about its content. Lula said on his weekly radio program will be in charge of HAVANA before the visit that a three-year old Petrobras plan to build the Mariel project. a lubricants plant in Havana was still on. Brazilian Foreign Trade Minister Miguel Jorge Filho arrived in Cuba before Lula to begin talks about investments. Lula’s delegation also included Agriculture Minister Guilherme Cassel and Defense Minister Nelson Jobim. Mariel

8 E c o n o m y Brazil talking about triangulation with Cuba in Haiti countries find that supporting Cuban expertise and activities in poor areas Lula touring a is more cost-effective than building Brazilian field hospital their own aid programs. In the two in Port-au-Prince, the most recent cases, South Africa day after his visit to contributed $1 million to Cuban Cuba. healthcare programs in Tanzania, and Norway donated $800,000 to Cuban relief efforts in Haiti. “We know that the Cubans, among all people in the world, possibly Photo: Presidencia/Ricardo Stuckert are the best prepared in matters of solidarity,”Lula said. “They’re the best prepared, and that’s why we razilian President Luiz Inácio Lula da Silva said that want to build together all that’s possible to return hope to the Cuba proposed to cooperate with Brazil on healthcare Haitian people.” in Bearthquake-stricken Haiti. Lula, who made the statement before boarding his Cuba exporting PV systems presidential plane Feb. 25 in Havana en route to Haiti, said Venezuela’s Fundelec that Cuba proposes to work together on rebuilding Haiti’s announced it will healthcare system. The president didn’t specify. buy $6.2 million “Shortly, my health minister will be talking with the Cubans worth of Cuban-made to jointly build an action program to help the Haitians to rebuild photovoltaic solar their health policy structure,” Lula said. energy arrays. In If Brazil decides to go with the Cuban proposal, it would be its “Sowing Light” the first time the South American power cooperates directly with program, Fundelec Cuba in a third country. Cuba has recently been seeking — and plans to install 1,531 getting — third-country funding of healthcare and education photovoltaic arrays aid projects in developing nations. Increasingly, wealthier in remote areas. Just Cuba. Corporate executives, company owners, lawyers, politicians, academics, diplomats and other government officials — every month, the relevant players read us.

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9 E c o n o m y $500m ferronickel plant on track ossibly enabling Cuba to benefit from Camagüey province. But the project never Precovering nickel prices, the restart of Holguín materialized. a ferro-nickel plant by a Cuban-Venezuelan Moa The company didn’t explain why it pulled joint venture is on track, a state TV report Las Camariocas out from the project. According to foreign said on Monday. Preliminary work for businesspeople in Cuba, Minmetals yielded the $500 million plant is “underway,” to pressure from Roddy Fleming, who according to the report. controls Omicron. A global mining player “Plans for the project, one of he most Map: CTIN flush in cash since selling his family’s stake important in the country, are being met,” the in British merchant bank Robert Fleming report said, citing progress in civil and technology planning, & Co. in 2000, Fleming reportedly sought international mine surveying and hiring. arbitration over Las Camariocas after Minmetals signed the The news came after a 9-month long official silence and agreement. signs of cash crunch both in Cuba and Venezuela. Finally, in 2007, Venezuela and Cuba formed the Ferroniquel Production at Cuba’s three nickel processing plants — a S.A. joint venture, to feed Siderúrgica del ALBA, a $600 joint venture plant with Canada’s Sherritt International Corp. million Venezuelan-Cuban stainless steel joint venture plant and two aging state plants — declined last year, amid a slow under construction in the South American country. recovery of nickel prices after a 2008 crash. In May 2009, Juan Ruiz, head of Empresa Exportadora de The unfinished Las Camariocas plant in eastern Holguín Níquel, said on state TV that the plant would begin operating province — started by Czechoslovakia in the 1980s — has within two-and-half years. Las Camariocas will raise Cuba’s been mothballed since 1993. Cuba has repeatedly tried to nickel processing capacities from 75,000 metric tons a year restart the plant. to more than 100,000 tons. The plant will produce a stainless Between 1996 and 2004, London-based Omicron Holdings steel feed product containing 38 percent nickel and 72 percent Plc spent millions of dollars and raised some $300 million iron, according to the MetalMiner blog. from investors, mostly Middle Eastern oil money, to get the As early as April 2008, state utility Unión Eléctrica began project started. Omicron completed a feasibility study in 2004, installing a 174.6-mw generator cluster at the nickel plant site. but the project never materialized. The cost is estimated at $140 million. In 1999, Russia’s Norilsk Nickel made a competing offer, only to withdraw, apparently over concern for U.S. investors Cuban offshore partner cutting back in Norilsk. epsol YPF is reviewing its 2008-2012 strategic plan In 2004, China’s Minmetals Corp. announced a major after the Spanish investment at the plant and in nickel mining in neighboring oilR major had to cut its dividend. Cupet facing problems at nationalized oil field Repsol is now likely to n a hint that Cuban state oil company Cupet is facing seek partners for its most Ichallenges at a near-shore field it took over in February expensive exploration plans last year, Sherritt International Corp. blamed a drop in power such as a $10 billion project plant output on spotty gas supplies. in Brazil. The Toronto-based company said in its annual report that Repsol YPF is Cuba’s the Boca de Jaruco combined-cycle power plant produced less best shot for an offshore oil Brufau electricity in 2009 due to “intermittent gas shortages.” find. The company, which The plant is partly fed with gas from Block 7, which the has partnered with StatoilHydro and ONGV Videsh in Cuba, Cuban government took from Sherritt and another Canadian has repeatedly delayed drilling. company in early 2009. On Feb. 25, Repsol announced that net earnings fell 39 Sherritt also said it expected power production at Boca percent to $2.12 billion in 2009, and that it would lower de Jaruco to continue its drop in 2010, “as a result of an its dividend payments. anticipated decline in natural gas supply from Cupet.” A Citibank analyst report Feb. 8 said many targets in map: CTIN the current plan are “unreachable and frankly don’t make any sense.” BOCA DE JARUCO Block 7 In late February, President Antonio Brufau, who resisted Havana calls for his resignation in January, said the company is gas pipeline considering selling the 15 percent it owns of Compañía Logística de Hidrocarburos (CLH).

10 E c o n o m y Two airport expansion projects get go-ahead he government will invest $45 million this year in two Terminal 2, airport expansion projects that have apparently been José Martí delayedT by Cuba’s cash crunch. International Both projects had originally been slated for start in May Airport last year; announcements last year mentioned a price tag of $32 million. Rogelio Acevedo, president of Cuba’s Instituto de Havana Varadero Aeronáutica Civil, said during a meeting at the Jardines del Rey resort Feb. 9 that the expansions at the Juan Gualberto Gómez International Airport in Varadero and at Terminal 2 and customs facilities of José Martí International Airport in Havana will start this year. Opened in 1988 and essentially unchanged since then, Terminal 2 at Havana serves U.S. travelers from and to map: CTIN Miami, New York and Los Angeles; traffic there has picked up considerably since the Obama Administration loosened Varadero International Airport restrictions on family visits last year. Varadero, serving the island’s No. 1 beach resort and the Europeans, the 13-mile stretch of all-inclusive resorts with port city of Matanzas, is the country’s second-busiest airport, 17,000 rooms and white-sand beaches is set to receive a wave absorbing one-fourth of all foreign travelers. Plans call for of Americans once the U.S. travel ban falls. a doubling of capacity; last year, the passenger count rose 6 Acevedo said one of the top priorities of civil aviation is percent. An established budget destination for Canadians and supporting tourism. Two rail track plants getting upgrades nión de is making investments machine. Once the new system is fully operational in the at two plants that will allow to speed up renovations second half of the year, the plant will be able to import rails of Uits dilapidated railroad lines. between 12.5 and 25 meters, and assemble tracks up to 300 The effort is funded by Venezuela, via the ALBA integration meters long. Solcar expects a shipment of rails from Russia agreement. In 2007, Venezuela’s Banco de Desarrollo in the second quarter. (BANDES) agreed to invest $100 million in infrastructure The government is also modernizing the railroad tie plant in improvements and repairs to the island’s rail network, to Santa Clara with a highly automatized new concrete-tie making increase average speeds from 25 mph to 62 mph. In exchange, machine. The plant — expected to make 180,000 concrete Cuban rail engineers are providing services in Venezuela. ties and 1 million elastic fasteners this year — will eventually

map: CTIN export its products. A total of 1.5 million railroad ties will be HAVANA . needed for an all-round renovation in Cuba. Santa Clara . Santiago water project is troubled esponding to complaints about delays and shoddy Camagüey . work in the redo of the water supply network at Ferrocarriles de Cuba Cuba’sR second-largest city, Technology Minister Ramiro Valdés Menéndez urged the Instituto Nacional de Recursos Rail network . Hidráulicos (INRH) and construction ministry to “eliminate deficiencies and negligent attitudes,” according to Communist Deteriorated tracks have led to major accidents, even on the Party daily Granma. trunk line from Havana to Santiago. To stop the deterioration, Valdés, who is also heading a commission to fix an energy the state rail company has been recycling unused rails from crisis in Venezuela, toured Santiago de Cuba Feb. 27. idled sugar operations as a stopgap measure. Responding to the problems, Valdés ordered the creation of This year, only 12.6 of 4,226 kilometers will be renewed, a “central command” in charge of the $40 million project. but that’s up from a minuscule 5.6 kilometers last year. Dubbed “colossal” by Granma, the Santiago project is a test Central to the effort are the Solcar rail soldering company in run for the refurbishing of other cities’ water infrastructure. Placetas and the railroad tie and fastener plant in Santa Clara. After two-and-half years, none of the 32 sub-projects in The Solcar plant is in the process of replacing its Soviet-era Santiago has been completed, and a leak left some residents equipment with a new, automatized MCP 6301 soldering without water for 100 days. 11 E c o n o m y Cuba assists in birth of new hemispheric bloc uba played a prominent role at a summit that decided Cuba was welcomed last year as the 23rd member of the Rio the creation of a Latin bloc, sin Estados Unidos y Group, a loose association of Latin American nations founded CanadaC . in 1986. Raúl Castro was a participant in the first Summit of During the “Summit of Unity,” Feb. 22-23 at the Grand Latin America at Sauipe, Brazil in December 2008. Velas All Suites & Spa Resort in Playa The Rio Group does not have a del Carmen near Cancún, the presidents permanent secretariat or permanent of 33 nations agreed on a road map to body and relies on annual meetings. forge the Rio Group and the Caribbean The summit in Cancún also passed Community into a single bloc, similar a resolution condemning the U.S. to the Organization of American States embargo against Cuba, agreed on more (OAS). cooperation in times of economic crisis The summit in Cancún built “the and on coordinated post-earthquake aid foundation of a regional organization, for Haiti, and backed Argentina’s claim unheard of at this point, that will on the Falkland Islands. integrate the 33 nations South of the Presidents-elect Sebastián Piñera of Rio Grande down to Patagonia, without Chile and Laura Chinchilla of Costa unjust exclusions, but also without Summit inauguration in Cancún Rica participated as observers. The the awkward extra-regional presence by host Felipe Calderón President of Honduras, elected in of the United States and Canada, as November after a coup d’etat, was not happens in the discredited OAS,” says invited. an enthusiastic article by official daily Granma that was re- President Raúl Castro, the last Rio Group head of state to published on the Cuban Foreign Ministry Web site. confirm his participation in the event, helped ease tensions in According to the foreign minister of Ecuador, the new entity a heated discussion between Hugo Chávez and Colombian could also include trade and military mechanisms. President Álvaro Uribe. During lunch the first day of the Preceding the summit, the Rio Group foreign ministers summit Uribe, in a conversation with Chávez, compared signed a document that anticipates the formal creation of the Venezuelan sanctions against Colombian companies with the new bloc on July 5, 2011 at a summit in Caracas, once the U.S. embargo on Cuba. The Venezuelan president, in turn, statutes have been worked out. Venezuela is also aspiring to accused Uribe of sending paramilitary hitmen to kill him. hold the first presidency pro tempore of the new bloc. Castro and Mexican President Felipe Calderón intervened, and Brazilian President Luiz Inácio Lula da Silva aside, the the conflict was settled diplomatically, by creating a “group of Venezuela-led Bolivarian bloc is one of the driving forces friends,” which will moderate conflicts. behind the unification project. The clash overshadowed the first meeting between Uribe and Chile will take over the rotating presidency of the Rio Group Ecuadorean President Rafael Correa since Colombia’s March from Mexico after the summit. 2008 attack on a guerrilla camp in Ecuador. Spaniards eager to get into golf tourism ALBA hotel chain, college get green light ompanies from the Canary Islands will help develop he ALBA ministers of tourism at a meeting in Quito golf tourism in Cuba and hoth governments will seek Tin February refined details for a hotel chain run by the C a direct air connection between regional bloc and decided to create a pre- and post graduate the Spanish archipelago and the tourism education program. island, Paulino Rivero said after The first session of the tourism training program will be held a visit to Havana Feb. 18. this April at the Colegio Universitario Hotel Escuela in Mérida, Tourism Minister Manuel Venezuela, in cooperation with Cuba’s Formatur schools and Marrero “expressed great Bolivia’s Escuela Bolivariana de Turismo. interest that the first initiatives The ministers also agreed on holding the first ALBA Tourism [in golf tourism] should be Fair in Caracas this September, piggybacking on Venezuelan Rivero, l., meets Rodrigo from the Canary Islands,” the tourism fair Fitven. Malmierca, Cuba’s foreign president of the autonomous advertisement investment minister province said. Marrero agreed to send a Cuban delegation to the Canary Islands in June to tour golf facilities there. Another Canary delegation will come to Cuba in December to talk about specific investments. www.progreso-weekly.com 12 E m b a r g o Posturing follows migration talks in Havana t a U.S.-Cuban meeting in Havana Feb. 19 to discuss Interests Section welcomed some 40 Aimplementation of a migration agreement, the U.S. opposition activists at his residence delegation called for the “immediate release” of a USAID to meet for two hours with the U.S. contractor detained by Cuba. delegation, despite earlier warnings The Cuban government did not react publicly to the by the Cuban government. appeal, but it objected in harsh wording to a get-together The U.S. delegation was led of the U.S. delegation with dissidents and Catholic Church by Craig Kelly, Principal Deputy officials the evening after the meeting. The head of the U.S. Assistant Secretary of State for Western Hemisphere Affairs. “Contrary to the spirit of Craig Kelly Double-punch bill aims at supermajority cooperation and understanding fter hitting a glass ceiling in the search of support for a shown by the Cuban side, once the travel-easing bill in this Congress, advocates for U.S.- migration talks were finished, the U.S. delegation convened CubaA normalization launched a bill that combines agricultural dozens of its mercenaries,” said a harsh Foreign Ministry sales and travel. note released the next day, calling the U.S. moves “political HR 4645, introduced Tuesday by Reps. Collin Peterson subversion” and “coarse meddling.” (D-Mn.) and Jerry Moran (R-Ks.), would lift the travel ban The note ended on a conciliatory note, saying the foreign and ease agricultural sales by allowing direct transactions ministry “reiterates its disposition … to sustain a respectful between Cuban and U.S. banks. The bill is co-sponsored by dialog on any topic with the United States, as long as this at least 31 House members. is between equals, without diminishing independence, The anti-embargo Latin America Working Group called the sovereignty and self-determination.” bill “our best chance to end the travel ban in 2010.” “I don’t think that the dialogue has to be interrupted, except A broader measure — the Freedom to Travel to Cuba Act, if [Obama] does what Bush did,” Parliament President Ricardo HR 874 and senate companion bill S 428 — introduced last Alarcón told reporters the day after the meeting, alluding to year, has won the backing of 177 House members and 38 Washington’s withdrawal from migration talks in 2004. senators, according to the Washington-based group. Most of the meeting itself dealt with hands-on migration “As you know, we need 218 votes in the House and a and consular issues. The Cuban delegation, headed by Deputy supermajority of 60 in the Senate,” LAWG said in an email Foreign Minister Dagoberto Rodríguez, repeated its request message to supporters. “It appears that we have gone about for the United States to allow for more personnel at the Cuban as far as we can go in gathering cosponsors for these two Interests Section in Washington, in order to improve consular original travel bills. We need something to attract a new services for Cubans living in the United States. According to constituency, activate educational work on Capitol Hill, re- a State Department communiqué, the U.S. delegation raised focus the Congress, create more momentum, and push us the issue of the U.S. Interests Section in Havana being “able over the top.” to operate fully and effectively,” monitoring of repatriated “That’s where the Peterson-Moran bill comes in. A lot Cubans, and Cuba taking back criminal offenders. of work on Capitol Hill by the agriculture and commodity The two countries restarted the semi-annual talks last communities is making a big difference. Additional members summer, after a five-year withdrawal by the United States. are paying attention, and several new cosponsors have already The talks were scheduled to be held in Havana in December, been attracted to this new bill. Joining travel and ag together but Cuba had requested a postponement. in the same legislation will, we anticipate, give us the boost The postponement came on the heels of Cuba arresting that we need to get the job done.” Alan Gross, a USAID subcontractor who had distributed communication devices while in Cuba on a tourist visa. Arrested on Dec. 4, Gross still is in custody at the Villa Marista prison in Havana and awaiting charges. Cuban officials have Picking up suggested he might be a spy. Caribbean Meanwhile, someone hired a public relations firm to press rhythms? House the U.S. government on the Gross case, John McAuliff Agriculture reported on the Havana Note blog. Committee Anti-Castro activists in the U.S. Congress are urging the Chairman Collin Obama Administration to suspend all talks until Gross is Peterson released. A spokeswoman of the U.S. Interests Section in Havana told the Washington Post that the contractor’s case is photo courtesy Peterson “an issue we raise with the Cubans at every opportunity.” 13 BY THE NUMBERS TRANSPORTATION

Passengers ransportation in 2009 showed slight increases 2009-2008 (‘000s) in passenger services and steep declines in cargoT services. The most dramatic drops can be Type 2009 2008 % chg. 09 share 08 share Total passengers 1,795,801 1,673,455 +7.3 100 100 seen in international shipping (-60.2%) and air Conventional means 909,420 837,700 +8.6 50.6 50.1 cargo (-36.6%). Railroad 7,544.8 7,555.8 -0.1 0.8 0.9 Public buses 700,994.8 621,241.6 +12.8 77.1 74.2 School buses 149,556.4 158,797.1 -5.8 16.4 19 State taxis 46,739.4 45,633.3 +2.4 5.1 5.4 Total Cargo Ship 3,383.1 3,108.8 +8.8 0.4 0.4 % difference % change 2009-2008 55 Air 1,201.7 1,363.8 -11.9 0.1 0.2 50 Source: ONE 40 Other means total 886,381.3 835,754.7 +6.1 49.4 49.9 30 20 Work buses 62,410.1 59,456.5 +5 7 7.1 10 0 Tourist buses 9,648.2 8,578.5 +12.5 1.1 1 -10 -20 Air Alternative means* 814,323 767,719.7 +6.1 91.9 91.9 Ship -30 Truck -40 Railroad *Public-car ride sharing, animal traction, bike taxis, private trucks and cars -50 -55 Source: ONE

Total Cargo Total Cargo by type of transportation 0.0% 2009 vs. 2008 (‘000 tons) 1.9% 0.0% 3.7% 25.1% Type 2009 2008 % chg. 09 share 08 share 18.9% Total cargo 52,497.6 55,077.5 -4.7 100 100 Railroad 9,926.1 13,800 -28.1 18.9 25.1 Truck 41,567.2 39,233.6 +5.9 79.2 71.2 2009 2008 Ship 994.6 2,029.4 -51 1.9 3.7 71.2% Source: ONE 79.2%

Railroad Truck Ship Air Truck Cargo by product, 2009-2008 (‘000 tons) Product 2009 2008 % chg. 09 share 08 share Total 41,567.2 39,233.6 +5.9 100 100 Truck Cargo Sugarcane 13,561.1 14,978.8 -9.5 32.6 38.2 by product, 2009-2008 (‘000 tons) Food 5,371.7 4,472.2 +20.1 12.9 11.4 ‘000 tons Raw sugar 490 545.3 -10.1 1.2 1.4 15,500 Construction mat. 4,497.2 3,531.7 +27.3 10.8 9 Source: ONE 11,625

7,750

Railroad Cargo 3,875 by product, 2009-2008 (‘000 tons) Product 2009 2008 %chg. 09 share 08 share 0 Total 9,926.1 13,800 -28.1 100 100 Sugarcane Food Raw sugar Constr. mat.

Sugacane 5,362.8 5,256 +2 54 38.1 Source: ONE 2009 2008 Raw sugar 1,025.8 941.3 +9 10.3 6.8 Construction mat. 503.9 465 +8.4 5.1 3.4 Source:ONE Railroad Cargo by product, 2009-2008 (‘000 tons) ‘000 tons Ship and Air Cargo 5,500 2009 vs. 2008 (‘000 tons) Type 2009 2008 % chg. 09 share 08 share 4,125 Total ship 994.6 2,029.4 -51 100 100 International 452.9 1,136.7 -60.2 45.5 56.0 2,750 Domestic 541.7 892.7 -39.3 54.5 44 1,375 Total air 9.75 14.5 -32.8 100 100 International 7.67 12.1 -36.6 78.7 83.4 0 Domestic 2.1 2.4 -13.6 21.3 16.6 Sugarcane Raw sugar Construction material Source:ONE Source: ONE 2009 2008

14 C O N F E R E N C E S & E V E N T S News from the •Int’l Meeting on Neurorehabilitation, Havana, March 8-12 •4th Interamerican Congress of Pediatric Surgery, Havana, Sales Department ++Unión de Ferrocarriles de Cuba announced it will buy March 21-26 •US-Cuba Travel Summit, Cancún, March 24-26 an additional 112 DF7G-C •5th Int’l Conference of the Psychiatric Hospital of Havana locomotives from China (Psicohabana 2010), Havana, April 7-9 Northern Rail Corp. •Int’l Congress of Information (Info 2010), Havana, April Ltd. within the next three 19-23 years, according to Prensa •VIII Festival Internacional del Cine Pobre de Humberto Latina. Cuba has already Solás, Gibara, April 19-25, 2010 bought 52 of the diesel- •Montecristo Cup & Esencia Cup (golf tournaments), electric engines. The state Varadero, April 23-24 railroad company will also •2nd Int’l Conference on Security and Defense, Havana, April 27-29 buy a communications •7th Continental Congress of Natural Products and Natural system and more 112 more to come. Photo: Fundariven Medicine, Havana, May 24-27 passenger cars, as well as •5th Int’l Meeting on Justice and Law, Havana, May 26-28 silo and cement cars. UFC •8th Int’l Congress on Disasters, Havana, June 14-18 bought all its recent rail cars from ’s Wagon Pars.++ •1st ALBA Tourism Fair, Caracas, Sept. 28-Oct. 3 ++Vietnam Northern Food Corp., also known as Vinafood •12th Int’l Conference of Food Science and Technology 1, agreed to sell 400,000 metric tons of rice this year to Cuban (CICTA-12), Havana, Oct. 4-8 state food importer Alimport S.A., 11 percent less than •7th Ibero-American Congress on Neonatal Medicine, in 2009. Hanoi-based Vinafood offers 12-month deferred Havana, Nov. 8-12 payment. Vietnam has taken over from the United States as Call (941) 330-0303 or send an e-mail to JWerner@ Cuba’s biggest rice supplier.++ cubatradenews.com for more information on events Em b a r g o E c o n o m y U.S. exports take nosedive in ‘09 Mafia authors battling over turf t’s official now: U.S. exports to Cuba took a 25.7-percent dive in 2009, according to year-end figures released by uban historian and author Enrique Cirules accused a theI USITC. Compared to Canadian and European agricultural U.S. author of plagiarism. exports to Cuba, the U.S. figures actually look good. Hit by C T.J. English, Cirules told official newspaper declining hard-currency revenues and no access to multilateral Juventud Rebelde, “crudely and profusely” credit, the island has had to scale back considerably its copied from his 1993 book on the history imports. of the Mafia in Cuba, “El Imperio de U.S. Exports to Cuba La Habana.” English’s novel, “Havana (mln. $) Nocturne,” was published in New York in 2008. 2007-2009 “There’s no plagiarism,” English told Year Total Cuba Trade. “Wherever and whenever 2009 533.37 Cirules’ work was used as a source for 2008 717.88 Havana Nocturne, it is referenced and 2007 447.06 footnoted. The accusation that I used ‘themes’ from his work Source: USITC is simply not true.” “Sr. Cirules deserves credit for being one of the first to explore the subject of U.S. gangsters in Havana, but he does Menendez under fire for bank support not own the story,” English adds. ew Jersey Sen. Robert Menendez, the Cuban American Democrat leading the anti-Castro caucus on Capitol Cuba forms first foreign cattle JV Hill,N is under fire after the Wall Street Journal revealed he ngola became a partner in Cuba’s first agricultural joint pressed the Federal Reserve in July to help a troubled home Aventure company for beef, pork and poultry production. state bank controlled by major campaign contributors. The Cuban partner, Empresa para la Protección de la Flora y la Going beyond the typical petitions lawmakers make to Fauna, hopes to begin operations in Camagüey in the second government agencies, Menendez asked Fed Chairman Ben half of the year. The Cubans will be in charge of production, Bernanke in a letter to approve a takeover of Union City-based the Angolans take over marketing and distribution. Angola First BankAmericano by another bank, to avoid putting the will also be funding the joint venture. bank in receivership. 15 C o m p a n i e s

Habanos S.A. sales plummeted 8 percent The Toronto Stock Exchange said that Leisure Canada to $360 million last year, announced Inc. was named as one of the TSX Venture 50, a ranking Manuel García, vice president of the joint of strong performers listed on TSX Venture Exchange. TSX venture in charge of marketing Havana Venture 50 is made up of 10 emerging companies in five cigars worldwide. The drop comes after a industry sectors that have been identified as leaders in Canada’s 3-percent decline in 2008. As demand for public venture market. Leisure Canada is ranked No. 2 in the luxury goods has shrunk considerably diversified industries sector. everywhere, Cuban cigars are not *** exempt. Sales have been worst hit in Spain’s Grupo Barceló officially opened its first city hotel Spain, the largest market for Havana in Havana. The 178-room Barceló Habana Ciudad in the cigars outside Cuba; cigar suburb of Miramar is owned by Cuban state company Grupo Gaviota. Barceló manages five hotels in Cuba and wants to sales at airport duty-free shops Humidor auctioned off be in charge of eight by 2012. worldwide are down as well, as at the Habanos Festival air travel declined by 5 percent. *** I m p e r i a l Following a bumpy 2008 marred by drastic nickel price Tobacco Group PLC — the British drops and a loss of oil assets in Cuba, Sherritt International partner in Habanos S.A. — said Feb. 2 that Corp. continued its return to profitability in the fourth quarter premium cigar sales in Spain, some other of 2009, mainly thanks to rising nickel and oil prices. The Western European countries and Asia Toronto-based mining and energy concern — Cuba’s largest have shown signs of recovery during the foreign investor — posted net earnings of $48.3 million for first quarter 2010. Meanwhile, Habanos the fourth quarter, compared to a net loss of $592.1 million in S.A. held the 10th Festival del Habano in the same quarter of 2008. Net earnings for 2009 were $85.7 the Cuban capital, presenting new lines of million, bouncing back from a net loss of $289.7 million in Cohiba and Romeo & Julieta cigars. The 2008. Sherritt shares on the Toronto Stock Exchange rose 42 Julieta usual tours of cigar fields and processing cents to $7.14 immediately after the earnings announcement. plants aside, the festival featured a special In its quarterly report, Sherritt predicted stagnating nickel segment about “Women and Havana cigars,” presenting a new production and slightly lower oil and electricity production line of “female” Habanos called Julieta. for 2010. However, Sherritt expects to invest nearly 50 percent *** more in Cuba in 2010 than last year. The company budgeted Pernod Ricard S.A. saw sales drop 3 percent to euro 3.8 investments of $74 million in its Moa nickel joint venture this billion in the first half of fiscal 2009/10, for net earnings of year (up from $34 million in 2009), $84 million in Cuban oil euro 604 million, 2 percent down. In comparison to other and gas (up from $49 million in 2009), and $31 million in brands, Havana Club rum sales were fairly stable, declining Cuban power plants (down from $45 million last year). 1 percent during the period. The French company is Cuba’s NIckel sales by weight were slightly down in the fourth joint venture partner in Cubaron, the company that markets quarter, to 9.3 million pounds from 9.5 million pounds. For Havana Club rum worldwide. the full year, by-weight sales of 37.4 million pounds were up 1.6 million pounds from 2008. advertisement

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