What do investors seek in Cuba? When anyone makes the decision to invest in a country, they are seeking primarily a viable site with conditions that match their interests. Cuba has many characteristics to offer. Its attributes of dignity, a highly skilled professional work force, security, as well as political and social stability are among features to be considered. But, investors also expect economic advantages and this is being seen today in the Mariel Special Development Zone.
Along with its strategic regional location, size, infrastructure, proximity to the capital, and other advantages, the Zone has, since its opening in 2014, projected expanding in stages.
The Zone's 465.4 square kilometers are divided into nine sectors, and work is underway in Sector "A," devoted specifically to such pillars as biotechnology and pharmaceuticals, logistics, and advanced manufacturing.
This sector, located to the west of Mariel Bay, has an area of 43.7 km² and represents 9% of the total. The Land Use and Urbanization Plan projects its development in three stages, with the second phase now underway, focused on consolidation and incorporation of high value added activities.
Attracting companies and businesses in accordance with this area's characteristics, and the country's interests, is the responsibility, to a large degree, of the Special Development Zone's Office, explained Ana Teresa Igarza, its general director.
"On the basis of development and business programs, we have identified the fundamental industries, the principal countries, companies present around the world, the different markets, and with this information invite possible investors.
"We have attracted several enterprises, and have been supported in this by many Cuban embassies abroad. Our diplomatic missions have made a turn toward the country's economy as an issue, and have collaborated in the recruitment of businesses. As the number of users grows, we will achieve greater results in the Zone and this is what we want," she added.
THE INVESTMENT PROCESS
How is this whole process undertaken in Mariel? Ana Teresa Igarza explains that the results depend on all involved in the process and the seriousness with which they approach completing work plans.
"The first thing we do, even before approving an investment, is develop a timetable with the investor. This way, everything related to licenses, permits, authorizations (commercial registration, banking license, environmental license, and location specifics, etc) can be processed to initiate the construction project," Igarza notes.
On this basis, with required documentation in order, the timeline is followed. The work of the Zone Office, that of the Evaluation Committee, and the Council of Ministers is coordinated, and to date, timelines established for approval of projects have been completed on schedule for the Zone's 34 users.
Once this step has been taken, construction begins. Its initiation, however, implies that technical plans are ready, that construction permits have been approved, and contract negotiations with the on-the-ground workforce concluded. The director explained that this phase - initiating construction - continues to be when most delays are encountered.
"These are pending questions on which we must continue working, and for which the office is responsible, in certifying the work of companies. There are foreign constructors, that even with all conditions in place to begin work, have not done so because of internal organizational problems and those regarding preparations for the investment project," Igarza said.
We have perceived, she said, that problems with preparations for the investment are not only on the Cuban side. Experience has shown that foreign companies also have deficiencies in this regard, and that is why the office has been obliged to get more involved in the process. Now, members of its Directorate Council are responsible for at least two projects in the Zone and keeps tabs on the progress of construction, the director continued.
She emphasized that 2018 is a decisive year, because operations are increasing, and the year should end with at least 15 projects underway. For this reason, a system of attention has been created to follow up on every project on a weekly basis. The office checks on the processing of all licenses and certifications during the construction process, which of course obliges the investor to keep paperwork in order. On occasion, the office has found itself in the position of having to levy fines on Zone users, which is not the kind of relationship the office is working to establish, Igarza insists.
"Our intention is to conduct the work in harmony. There are projects that have functioned very well, showing that it is possible. Womy Equipment Rental B.V began earth moving in January, and by October was already operating. Logística Hotelera del Caribe S.Aadvanced smoothly. While BDC TEC S.A and BDC LOG S.A, (affiliated with the Belgian company. Business Development Cooperation International S.A.) ran into difficulties, but has managed to stay on schedule. However, there are others which have progressed more slowly, and this has been related to problems with the importing of supplies needed for the investment," Igarza stated.
Even when following the timeline has been problematic for certain Zone investors, with certain delays, progress in construction can be made.
In addition to Sector "A" with 10 projects underway, planning has advanced on "H" - for tourism and food processing companies - and talks continue regarding projections for the industrial sector "B."
HOW IS THE WORKFORCE RECRUITED?
In the Mariel Special Development Zone, the hiring of workers is open but not direct, as is common in most zones of this kind, and is conducted by an employment agency. Why? Because foreign investors are arriving in a country they don't know and need many workers with different skills.
The employment agency - which includes human resource recruiters for the companies Almacenes Universales S.A., BioCubaFarma, Cubatabaco, Tecnosime, Petroempleo, and for construction - is provided information by the Zone office, and determines the users’ needs. At this time there is a pool of workers available with required skills, to which direct requests can be made.
“The employment agency is the Zone’s catalyst, needed by the economy to supply the workforce. This is a task that involves the participation of the Ministry of Labor and Social Security, the office, universities, and branches of secondary education,” Igarza said, explaining that the office is working to provide a complete, effective process, with the investor knowing where the workers needed are, and can choose them, and even when they must be to let go or replaced, the agency handles the request.
Currently 56% of the more than 2,000 workers contracted within the Zone were proposed by the agency. The other 44% were proposed by investors. Managers and executives are chosen by the investor and can be either Cuban or from abroad. The experience, according to Igarza, has been positive. There are Cubans in managerial positions in many of the projects, reflecting the success of the agency’s work.
“The employment agency did not play the same role initially. Four years ago, it was a source of income for the country and was not seen as a service provider. Now the vision is different, and there are many ideas about how to improve this work. Currently, salary scales have been established for basic positions in the Zone, (previously 12 categories, five now) and are specialized for logistics, construction, and industrial needs, among others.
“Another of the employment agency’s functions is negotiating salaries of workers with the enterprise hiring them. This work of recruiting has a cost that may reach 20% of the employer's salary costs, and work is being done on this. We need to be minimizing these charges so that it is seen as a more professional, agile service,” the director added.
YOUTH IN MARIEL
The presence of young women in key positions of the Cuban economy and in management is a daily reality here, and an example is engineer Nathaly Suárez Palmero, director of project administration for the Zone’s Construction and Erection Enterprise.
Impressive is her detailed knowledge of each one of the extensive geographic areas where the megaproject is being constructed, conceptualized to promote the production and distribution of a wide range of goods and services as Cuban exportable lines.
She relates that, after graduating in Civil Engineering, she was hoping to work in Mariel, seeing it as important for the future of her country’s economy, saying, “I feel totally fulfilled, because here I have seen the a great technological take-off, and we put into practice what I studied at the university. I work on the roads, architecture, and construction of buildings.”
Suárez Palmero is responsible for administering and supervising the budget of each one of the works undertaken by the state enterprise for others, both Cuban and foreign. At this stage, her company is also responsible for urbanization of the site, with the construction of bridges, streets, parks, and plazas.
“Today we are working on 36 projects,” she said, “I’m referring to the construction of buildings, beginning with earth moving through interior design. We are responsible for the railroads, warehouses, offices, and we satisfy the clients’ desires with the agreed upon architectural design, gardens, and outdoor spaces.”
There are some 4,000 workers under her direction, along with more than 1,000 pieces of equipment, including trucks, busses, and heavy equipment, plus high-tech machinery to fabricate sidewalks and curbs, and an asphalt plant, to provide durable road surfaces, plus two cement factories.
One of the fundamental elements of the construction process is quality control, that is the responsibility of every worker on the job, Suárez Palmero explained, “If a job is not certified as meeting the required standard norms, the workers is simply not paid, and must do it again, and face a salary fine. We demand and enforce attention to quality.”
The Mariel Construction and Erection Enterprise was constituted in December of 2014 with the goal of satisfying the growing demand for construction services in the Special Development Zone, via efficient management of quality, costs, timelines, and financing of projects and works, throughout their different stages.
This young director emphasized that the state enterprise guarantees the sustainability of the investments it carries out and contributes actively to the sustainable development of the country. Its intention is to become a leading construction company on the national level, effectively and efficiently executing contracted projects, surpassing clients’ most demanding expectations.
To do so, careful attention to environmental impact is required, and all actions must be taken on the basis of continuously improving its quality management system, to allow for competitive results that consolidate its position in the market.
Incorporating young workers has been one of the Zone’s main objectives since the beginning, but now its aspirations are greater, and links are being established with the nation’s universities.
While some investors have been reticent in this regard, they have been able to see the professional level of Cuban youth and understand the importance of training them outside of the classroom.
“We are working with more purpose to see how we can develop a policy that encourages work. We want students in the university to be able to do their practical assignments in the Zone, even accompanied by their professors, because we are an environment in which good values must be maintained. We want them to be incorporated, to do their on-the-job training here, and later, that the enterprise might say: This is who I want, when he or she graduates, since they have already shown they can do things well,” Ana Teresa Igarza said.
There are enterprises willing to accept students, and projected is the placement of classrooms within facilities, to train youth in activities related to the erection and repair of buildings, and maintenance of machinery.
The Mariel Special Development Zone is growing, in more than one way. High expectations, professional development, and constant constructive criticism are key to all working here. Contributing not only to the country’s economy, the training of future university graduates is an initiative that has added value to this project, facing new challenges that go beyond the economic.
What is the objective of investment in Mariel?
Investment in the Mariel Special Development Zone has as its specific objective the development of selected anchor industries. The country’s interest is attracting large industries and developing basic service providers to support these key companies. Projected next year is the construction of the first commercial center in the Zone, where services related to sales and distribution transactions can begin. When conditions are created, these activities will lay the foundation for the provision of new services.
Land Use and Urbanization Plan for Sector “A” in three stages:
- Launch. In the short term, this includes logistic and industrial activities around the port.
- Consolidation. In the medium term, activities providing greater added value are incorporated.
- Maturity. In the long term, the high tech sector is consolidated.
Anchor industries in Sector “A”
- Logistic services
- Biotechnology and pharmaceuticals
- Advanced manufacturing, with priority for industrial food processing; containers and packaging, construction materials and technology, steel working, and the production of energy efficient, automated consumer goods.