US Company Gaining Traction in Cuba

Photo-from-CubaTrade-620x420-300x203Horace Clemmons and Cuban-born business partner Saul Berenthal, owners of tractor manufacturing company CleBer LLC, have been eyeing a deal in Cuba since U.S. relations with Cuba finally eased back in 2014. Eased relations, paired with the Cuban government returning unused state-owned land to the people in hopes of stimulating growth in the agricultural industry back in 2008, have revealed to the two entrepreneurs an opportunity they are still pushing for after 3 years.

Manufacturing has been a shrinking industry in the United States since the end of World War II, when the country’s galvanized work force undertook one of the greatest military industrial efforts in history. Although manufacturing still accounts for a solid twelve percent of the United States’ GDP, today’s manufacturing industry is a far cry from the World War II days, due much in part to cheaper labor sources in countries like China and Mexico. But the industry is far from dead, and one company is looking to go where none have gone before – Cuba.

CleBer LLC manufactures the Oggún tractor, which is a $12,500 tractor named for the Santeria warrior god of metal works and rum making. The idea and production of the tractor started from the Allis-Chalmers Model G tractor introduced in the United States back in 1948. The tractor is unique for its low cost of production and the rear-mounted engine that allowed for a greater view of the belly-mounted implements. The re-branded Oggún is slimmer-looking, but still retains the full utility of its ancestor, making it the perfect machine for countries such as Cuba, whose smaller regional farms and strapped budgets demand such a cheap and utilitarian farming tool.

The Oggún won’t likely be produced on a mass scale for use within the United States, as it is more meant for local, smaller-scale farming. After all, the Allis-Chalmers Model G tractor, though initially very popular saw a steady downward decline in use as the agricultural industry within the U.S. exploded into a mega-industry. But CleBer LLC is well aware of this fact, and looks to corner markets in Cuba and elsewhere abroad where farmers don’t have the equipment they need to keep up with demand.

Last year, the United States government informed CleBer LLC that they were cleared to do business with Cuba under the new regulations issued by the administration of then-President Barack Obama. Though it was a step in the right direction for the company, trade is a two-way street. Despite their tractors hitting production in December of 2016, one month later the Cuban government declined a project to put the tractors into production in Cuba. Berenthal, who left the island as a teenager in 1960, remains optimistic.

“We just now have to convince the Cuban side that it is in their best interest to do business with us here in the US,” Berenthal said. Although CleBer’s planned open source manufacturing project is in limbo, it has been the first U.S. company to obtain the necessary permits to do business in Cuba. According to Berenthal, the U.S. would be much better positioned to serve Cuba’s market even outside of the agricultural industry, as they currently rely on manufactured goods from Russia and China.

Although President Trump has hinted at peeling back some of the Obama-era policies that eased relations between the U.S. and Cuba, Berenthal again remains optimistic, noting that Trump will eventually act as a “businessman” and that CEOs should now start considering how they might capitalize on opportunities in the construction, tourism, agriculture, and transportation industries once the embargo falls.

Sources:

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