Foreign investors keen on sugar production

HAVANA (IPS) - Foreign direct investment in the sugar industry is acceptable to the Cuban government for producing alcohol and other derivatives, but it continues to be a topic that the authorities prefer not to talk about, at least in public, although experts regard it as desirable for the recovery of the industry.
At present there are seven joint ventures involving capital from Spain, Italy, Canada and Mexico, all of which concentrate on the diversification of the sugar industry, Liobel Pérez, the Sugar Ministry’s chief communications officer, told IPS.
Pérez said six of the joint ventures between Cuban and foreign capital are based in this Caribbean island nation, and one is based in Mexico, where it markets technological expertise and technical assistance for optimizing sustainable sugar production.
Discreet approaches made some two years ago by foreign companies interested in investing in sugar production did not prosper. “Conversations were held, but they did not produce concrete results,” Deputy Minister Juan Godefoy of the Sugar Ministry responded to an enquiry by IPS, without elaborating.
At the time, according to experts, no agreement was reached, among other reasons because the investors held out for greater decision-making power over the use of funds, although these reports were not confirmed by the government.
When Cuba began to restructure its sugar industry in 2002, it closed down about half of its sugar mills and reduced the crop area under sugarcane, citing the goal of boosting efficiency in the face of the steady decline of international market prices.
Of the 156 sugar mills in operation prior to the beginning of this decade, only 61 are now working. Prices began to improve in late 2005, and the Cuban government responded by devoting extra resources to reactivating the sector and increasing the area under sugarcane cultivation.
In 2006 and 2007, output stood at around 1.2 million tones, and the country was forced to import between 200,000 and 250,000 tones each of those years to supply the needs of its 11.2 million people.

source:dosmundos