U.S. Companies Line Up to Do Business in Cuba

HAVANA (Los Angeles Times/TNS) -

Chris Rosander was touring a mango grove in Cuba last year with a group of U.S. agriculture leaders when he had an idea: “Why don’t we import mangoes from Cuba?”

Sun-Maid Growers, the California dried-fruit company where he heads international market development, now gets its mangoes from Thailand. Cuba, he said, is “90 miles from the U.S. instead of halfway around the world.”

Rosander is among the American business leaders who see dollar signs in warming U.S.-Cuba relations.

As the United States eases its commerce and travel restrictions in Cuba — with President Barack Obama calling for an end to the embargo now in its sixth decade — hundreds of airlines, hotel chains, telecommunication firms and other companies are jostling for business.

Thirteen United States airlines have applied for permission from the Transportation Department to provide direct flights to Havana, and Connecticut-based Starwood Hotels and Resorts recently announced a contract to manage several hotels owned by the Cuban government. Carnival is already selling tickets for cruises that will dock in Cuban ports later this year, and Google is expected to announce plans to expand internet access in Cuba.

Making the rounds in Havana last week were the chief executives of PayPal, which hopes to launch an online remittance service in Cuba, and Airbnb, which already offers 4,000 rental properties on the island.

But for all the excitement about American investment in Cuba and the flood of new Cuban businesses that have opened after the government here relaxed its rules, significant hurdles remain.

The biggest is the U.S. trade embargo.

While the Treasury and the Commerce Department have made regulatory changes — eliminating certain restrictions on remittances, facilitating trade in the telecommunication and agriculture sectors and allowing some American companies to establish a physical presence on the island — most American companies are still not allowed to invest in Cuba.

If the embargo is lifted, U.S. companies will have to play catch-up with investors from Europe and Latin America, who have been operating in Cuba for decades and supply food, electronics, appliances and other basic goods sold in government stores.

Most Cubans live off government salaries of around $25 a month and are accustomed to limits on what they can buy, whether it’s fish or potatoes.

Rosander, who says his mango export dreams are not feasible under current American regulations, is part of an American agricultural group that is pushing Congress to end the trade embargo. “Real trade is only going to happen when Congress drops the embargo,” he said.

In the meantime, he is trying to lay the groundwork. He plans to meet with Cuban mango farmers this year to figure out whether they would have to change their growing process in order to meet United States sanitation standards.

That long-view approach is what many consultants recommend to their clients.

“You have to be ready to be in this for 10 years,” said Michael Laverty, who runs a consulting company with his brother, Colin, that has more than a dozen clients exploring business opportunities in Cuba.

Their company advises companies to focus on building brand awareness and donating to local causes to build goodwill.

“It might not be legal for you to do business here for a couple of years, but you’ll need a head start,” Laverty said.

The Cuban government appears to be moving cautiously toward increased trade and private enterprise.

In recent years, the socialist government has been allowing more investment from non-U.S. companies. Cubans have opened hundreds of thousands of small businesses in their homes, like restaurants and hair salons — since the government loosened restrictions on private enterprise.

While there is a class of Cubans excited about increased foreign investment, many express skepticism about whether an infusion of outside capital will improve the lives of Cubans. That is especially true outside Havana, in places where fewer tourist dollars flow.