EU companies moving to deepen economic relations

Knauf, a major multinational producer of construction materials based in Bavaria is, according to Cuban sources, at an advanced stage of negotiations to establish a plant that will make use of Cuban gypsum to produce construction materials.

It is one of several negotiations underway with EU enterprises that are seeking to take advantage of the hiatus in economic relations with the US.

According to Cuban sources the objective is that the joint venture with Knauf, which produces walling materials and related products, will enable Cuba to meet all its domestic requirements and export to the region.

Knauf is the largest plasterboard manufacturer in the world. The Iphofen based company founded in 1932 which produces materials for drywall construction, plasterboard, cement boards, and other products in multiple locations around the world, is close to completing negotiations with Prodimat SA, a Cuban enterprise attached to the Ministry of Construction. The project under discussion involves the establishment of a plant co-located beside an existing gypsum quarry in Matanzas. Cuban reports say that the company will transfer technology as well as developing a range of new gypsum by-products.

In a further indication that the decision-making process for foreign investment is accelerating to offset the country’s sluggish economic growth, Ceiba Investments, a long-established Guernsey-registered investment vehicle for real estate and tourism ventures in Cuba, has announced that it is to invest US$150m to build one new hotel and upgrade four others with Cubanacan and Spanish hotel group Melia.

The news comes as other reports suggest that other EU- based multinationals are hoping to conclude investments in Cuba following the Trump administration’s decision to roll back President Obama’s policy of détente.

Reuters reported among other EU companies currently engaged in commercial negotiations with Cuba are France’s Total SA and Germany’s Siemens AG for the construction of a 600mw gas-fired power plant.

Quoting diplomats and businessmen, the news agency said that the two companies are looking at an LNG power project that would enable Cuba to develop a sustainable and modern electricity system.  The plant, which would be located in Matanzas Bay to the east of Havana, would require imported liquified natural gas (LNG) from an unspecified overseas source.

Meanwhile it has been confirmed that the first meeting of the EU-Cuba Council will take place in Brussels on May 15. The meeting is expected to discuss a wide range of issues from commercial and economic relations through to more complex political issues including human rights.

Earlier this year the EU High Representative, Federica Mogherini, said that the EU would not close its doors to Cuba. “We are closer to you than ever. While some want to build walls and shut doors, we want to build bridges and open doors through cooperation and dialogue”, Mogherini told students and invited guests in a lecture to the University of Havana (Cuba Briefing January 9, 2018).

This is an extract from the Caribbean Council’s weekly editorially independent publication, Cuba Briefing, which provides in depth information on current economic, political and commercial developments in Cuba and news on events in Europe and the US that affect the region. Business people, academics, and those with a general interest in Cuba find it an invaluable tool for developing and maintaining knowledge and providing an insight into political, economic and commercial events in the region

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