Five Key Companies for the Cuban Economy
Five Key Companies for the Cuban Economy
The Cuban economy achieved a slight recovery of 1.6% in 2017, largely due to the growth of key sectors such as tourism, telecommunications and transport. For this year, the authorities aspire to a moderate increase in GDP close to 2%; although reaching that figure seems complicated, taking into account the cooling of relations with Washington and the difficulties faced by Venezuela, one of the main Caribbean country’s economic partners.
Which are the most known Cuban companies in the world? PanamericanWorld proposes to approach five of them, which generate multimillion-dollar income each year and which offer employment to a large number of employees.
Tourism is the second largest income source for Cuba, only behind the sale of professional services abroad. This industry was the fastest growing in 2017, with an increase in revenues of 10.5%. Currently, the country has 382 hotels, 88 of them managed by 20 international hotel chains.
In 2017, Cuba had a record of visitors, 4.7 million, 200 thousand more than the previous year. The figure could have been higher, but two factors came together to slow the growth: Hurricane Irma, which caused serious damage to the hotel infrastructure and spread fear among potential tourists and the restrictions adopted by the Trump Administration that tried to obstruct visits by Americans to the Caribbean country.
Among the main hotel groups in Cuba is Gaviota, which manages more than 50 facilities of 3, 4 and 5 stars, located in the main Cuban tourist centers (Pinar del Río, Havana, Varadero, Topes de Collantes, keys north of Villa Clara, Jardines del Rey, Holguin, Santiago de Cuba and Baracoa).
Gaviota is very strong in Varadero and in the keys of Villa Clara, where it has associations with groups such as Royalton, Iberostar and Meliá; in addition, Gaviota controls five marinas, has a travel agency and a transport company.
Empresa de Telecomunicaciones de Cuba (ETECSA)
Telecommunications was one of the fastest growing sectors in Cuba in 2017. In the last twelve months, the state company ETECSA (the only one of its kind in the country) activated 600.000 new cellphone lines, so that the total of active lines exceeded the 4.5 million. In addition, the company expanded the marketing of Internet service, through WiFi points, enabled in more than 500 public places in all municipalities and also took the connection to homes, through the Nauta Hogar program, which already has more than 12 thousand customers.
For 2018, ETECSA assured that it will start commercializing data plans for Internet access through mobile devices.
Cuban cigars are the most famous in the world and their sale represents the fourth commercial line in Cuba. The high quality of its leaves, combined with the handmade elaboration by skilled twisters, makes this Premium product a reference. Today, Cuban cigars, with 20 emblematic brands such as Cohiba, Montecristo, Partagás, Romeo and Julieta, occupy 70% of the 400 million units sold each year in the global market. This industry offers employment to approximately 200.000 people in the country, although that amount grows to 250.000 in the moments of the harvest’s greatest intensity.
By 2018, Habanos expects to increase the commercialization of its products by 2%, according to the corporation’s commercial director, Leopoldo Cintra. Currently, cigars are sold in 150 markets around the world, with Spain, France, China and Germany as their main buyers. Still Habanos cannot reach the US market, because of the Embargo. Despite the freezing of relations with the Trump Administration, the authorization is maintained so that each American visitor can take up to 100 Cuban cigars to northern territory.
Grupo empresarial BioCubaFarma
The Pharmaceutical Industry is another of the most important export items for the Cuban economy. In 2012, the authorities decided to create the BioCubaFarma Business Group, which integrated the work of 38 institutions belonging to the Western Havana Science Center and the former QUIMEFA Business Group. This broad Group coordinates the work of 31 companies and employs 22.000 workers. The Group has exported, over the last five years, on average, more than five billion dollars each year, in pharmaceutical products.
Among the most well-known creations of the Cuban pharmaceutical industry is the Heberprot-P, a unique medicine of its kind in the world, very useful for diabetic patients, because it greatly reduces amputations due to ulcers in the foot. It’s currently registered in 23 nations and is used and marketed in 10 countries.
Another very famous drug is the vaccine CimaVax-EGF, which stimulates an immune response of the body against a protein in the blood that enhances the growth of lung cancer and, therefore, promotes an increase in the life quality of patients suffering from this illness.
Havana Club Internacional S.A (CubaRon y Pernod Ricard de Francia)
Cuban rum is also world-famous, especially the Havana Club, made from a process of aging cane liquor deposited for more than two years in American oak barrels.
Havana Club is a union between the state company CubaRon and France’s Pernod Ricard group (each part controls 50% of the business). This brand has been registered in more than 140 countries and is marketed in about 130 (not in the United States, because of the Embargo). In 2016, the company sold 118.5 million dollars after selling 4.2 million boxes of nine-liter rum, including white rums, 3 years, white aged and the entire range of dark rums.
Cuba is the main Havana Club market, followed by Europe, Canada, Mexico and Chile. The British magazine Drink International places Havana Club between positions 21 and 23 of its ranking of the 100 best spirits in the world.