Brazil to invest in Cuban sugar

A significant step in Cuba’s long march to market-orientated economic reform is about to begin next week, when a unit of Brazil’s Odebrecht reopens a shuttered sugar mill in the southern province of Cienfuegos.

Sugarcane was an icon of the island’s economy both before and after the 1959 revolution, but since the fall of the Soviet Union, Cuba has dropped out of the Premier League of the world’s sugar exporters.

Last year, Cuba produced 1.4m tonnes of sugar, down from 8m tonnes at its peak. But Odebrecht aims to invest in modern equipment and management techniques at the Cienfuegos mill to spearhead a resurgence of the industry.

Several foreign sugar firms have listened to overtures from the Cuban authorities about the possibilities of setting up a unit on the island, but Odebrecht is the first to take up the invitation.

Odebrecht, which is already involved in the $800m construction of an industrial container port at Mariel near Havana, should slot handily into what is a relatively new structure for the Cuban sugar industry.

Just over a year ago, the sugar ministry was replaced by a state holding company, known as Azcuba, which is responsible for 13 provincial companies, each of them ripe – at least in theory – for privatization.

Nor is Odebrecht planning to produce only sugar but also ethanol as well as biomass, in the form of cane bagasse. These are areas in which Brazil has the know-how and energy-starved Cuba has a pressing need.

(Ron Buchanan | Financial Times)