News and Facts about Cuba

South Florida busineses may gain from revised U.S.-Cuba policy

South Florida busineses may gain from revised U.S.-Cuba policy
12/17/2014 7:31 PM 12/17/2014 7:31 PM

As the United States takes steps to normalize relations with Cuba, South
Florida businesses centered on banking, shipping, trade,
telecommunications and are positioned to reap benefits — over time.

“The immediate implications aren’t anything other than just hopeful
watching towards an environment that ultimately becomes a democratic
transition,” said Adolfo Henriques, chairman and chief executive of
Gibraltar Private Bank & Trust, based in Coral Gables. “It’s going to
take awhile before the actual requirements, opportunities and so on
develop and materialize. It’s not anything that will develop overnight.”

Following a exchange that brought two long-jailed Americans
home, Barack Obama announced Wednesday a major shift in
U.S.-Cuba policy that includes establishing diplomatic relations,
allowing U.S. financial institutions to open accounts with Cuban banks,
boosting U.S. export capabilities and easing travel restrictions.

Obama’s announcement alone won’t enhance economic relations broken 54
years ago. Regulations related to the policy changes are likely months
away, and congressionally mandated economic sanctions against Cuba
remain in place.

Said Barry E. Johnson, president and CEO of the Greater Miami Chamber of
Commerce, “It is premature to comment on the effects of this
announcement. As with all significant and monumental proclamations, the
devil is in details.”

In Miami, the was a hot-button topic among many business
executives Wednesday, who declined to comment on the changes or their
possible impacts. Still, impact on South Florida’s business landscape is
inevitable given the proximity and cultural ties. “There’s a whole slew
of opportunity there,” said Milton Vescovacci, an attorney and
shareholder at GrayRobinson in Miami, citing financial services and travel.

According to a senior U.S. administration official, export of goods
needed by Cuba’s cuentapropistas — the self-employed — will be allowed,
along with farming supplies for small private farmers and building
materials intended for the Cuban populace. Telecommunications and
penetration is expected to expand, creating an opportunity for
U.S. tech companies.

Shipping companies also stand to gain.

“The initial reaction is it’s pretty exciting,” said Jay Brickman, vice
president of government services at Crowley Maritime Corp., which sails
between Port Everglades and Cuba carrying products and medicine
under the Trade Sanctions Reform and Export Enhancement Act. Brickman
spoke by cellphone from Miami International on Wednesday,
awaiting the departure of his Falcon Air Express charter flight to
Havana. “There is so much to be sorted out yet. Generally, there is
going to be much more in the way of conversation, and those are all good
things. I don’t know, I guess I’ll feel better educated when we get
there and talk to people.”

Tom Murphy, chairman and chief executive of Coastal Construction Group,
a big Miami-based construction firm, said President Obama’s move “is a
first step. I’d like to see the embargo lifted. I think a lot of good
developers and builders would head to Cuba. The best thing we could do
is go in and rebuild the place. And while we’re at it, let’s build a
couple of casinos.”

Travel restrictions are also easing. Though the president’s action does
not lift the travel ban for all Americans, it does allow 12 groups of
authorized travelers to now visit Cuba under general licenses — without
the prior approval previously required from the U.S.

“It’s a huge plus for the American people to be able to travel unimpeded
to a place that has been heavily restricted, if not forbidden for the
last 50-plus years,” said Steve Loucks, spokesman for Travel Leaders
Group, which has an office in Miami. Earlier this year, the company
asked its travel agents nationwide if their clients have expressed
interest in traveling to Cuba, and 55.3 percent said ‘yes.’

“Eleven percent said have already booked some of their clients to Cuba,
and we expect that will pick up fairly dramatically,” he said. “Of
course Miami is a key jumping off point for those people-to-people
exchanges, so it can ultimately mean more business for Miami as well.”

U.S. financial institutions will be permitted to open correspondent
accounts at Cuban banks. The new relationship will also eventually allow
U.S. travelers to use credit and debit cards for transactions in Cuba.

“From an initial take this should be a lift for banks in the South
Florida area, in the areas of trade finance and remittances,” said David
Schwartz, president and chief executive of the Florida International
Bankers Association in Miami.

Still, Eddy Arriola, chairman of Miami-based Apollo Bank, doesn’t expect
the change to affect his bank until 2016.

“What we will see [affected] are local businesses in the travel and
hospitality industry, and exporters who want to ship products and go
there and develop relationships,” Arriola said. “Our core customer base
is small businesses, so it’s great for them.”

The news led shares at the Herzfeld Caribbean Basin Fund, a closed-end
fund that focuses on businesses that would benefit from an end to the
Cuba embargo, to rise 29 percent to $8.78 per share on the NASDAQ.

“We are watching an historic event with enormous consequences. One of
President Obama’s greatest achievements will be resuming relations with
Cuba. It’s good, certainly, for American business. It’s good for Cuban
people. It’s good for the U.S. and for relations with Latin America,
where the embargo has been a source of irritation for years,” said
Thomas Herzfeld, chairman and president of Thomas J. Herzfeld Advisors,
a Miami Beach-based advisor to the Herzfeld Caribbean Basin Fund.

Some of the fund’s holdings that he said would likely benefit from
resumed relations with Cuba are Copa Holdings, a Panamanian ;
Coca Cola Femsa, a bottler; Seaboard Corp., a shipping, food and energy
firm; and MasTec, a Miami-based publicly traded company that does
engineering and construction for infrastructure such as electrical
transmission, oil and natural gas pipelines, renewable energy and
wireless networks.

MasTec, he said, “has the technology and resources and the understanding
of Cuba’’ to capitalize on an eventual opening of business opportunity
in the island.

Yet MasTec, founded by the late Jorge Mas Canosa, a co-founder of the
Cuban-American National Foundation and a staunch anti-Castro lobbyist,
is shying away from doing business with Cuba.

Jorge Mas, chairman of MasTec and Jorge Mas Canosa’s son, said that the
liberalization of telecommunications and the enhanced access to the
Internet will lead to greater freedoms for the Cuban people. But
speaking about MasTec, he said: “We would not do business in Cuba in the
present or near future. There is no rule of law, to start with, no
democratic system … There would have to be significant steps for us to
ever consider that.”

Other holdings in the Herzfeld Caribbean Basin Fund include Carnival
Corp., Royal Caribbean Cruises Ltd., and Norwegian Cruise Line Holdings
Ltd. The president “will permit more travel to Cuba, and I hope that
means cruise ships,” Herzfeld said.

Carnival Corp. spokesman Roger Frizzell agreed the destination holds
interest for the industry.

“Cuba is the largest country in the Caribbean, and it presents numerous
opportunities from a cruise industry perspective,” he wrote via email.
“Some infrastructure for cruising already exists in the country, along
with several ports, so it offers great potential, but there are other
issues that will need to be taken into consideration if this market
opens up.”

Miami-based Royal Caribbean Cruises and Norwegian Cruise Line Holdings
said it was premature to comment on Wednesday’s news. In a statement,
the Cruise Lines International Association said it was “assessing the
full implications of President Obama’s announcement today about Cuba.”

“There are a number of factors for consideration before a cruise line
would commit to adding a destination to an itinerary,” the statement
said. “With Cuba, these include infrastructure and port facilities, and
regulatory and policy considerations.”

Still, cruise stocks rose following the announcement, closing 3.5 to 6.6
percent above Tuesday’s close.

In a note to investors, UBS Investment Research analyst Robin Farley
wrote that she believes that adequate port infrastructure could be
developed at a faster rate than American hotels in Cuba, and could be
sold to consumers quickly.

“Cuba would represent a new itinerary with significant pent-up demand
from American tourists and a lack of developed infrastructure,”
she wrote. “Cuba is the largest island in the Caribbean and only 230
miles from Miami, allowing for it to be part of a variety of
itineraries, and has long been in the cross-hairs of the American cruise

Even if Havana couldn’t immediately handle some of the industry’s
largest ships, Farley wrote that she would expect cruise operators to
make necessary investments.

“Cuba could prompt many cruise passengers who’ve already been to many
Caribbean ports to return to a Caribbean itinerary to see a unique and
novel port that has gone unseen by many Americans for decades,” she wrote.

Regardless, easing restrictions on travel to Cuba won’t dampen demand
for travel to South Florida, predicts William Talbert III, president and
chief executive of the Greater Miami Convention & Visitors Bureau.

“Miami is now a luxury destination,” he said. “So I don’t think you’re
going to go to Cuba for luxury travel. It took us a long time to create
this Miami luxury brand, and it will take Cuba equally long.”

Source: South Florida busineses may gain from revised U.S.-Cuba policy |
The Miami Herald –

Leave a Reply

Your email address will not be published. Required fields are marked *

Follow Us
Visit Us On TwitterVisit Us On FacebookVisit Us On Google PlusCheck Our Feed
December 2014
« Nov   Jan »
1 2 3 4 5 6 7
8 9 10 11 12 13 14
15 16 17 18 19 20 21
22 23 24 25 26 27 28
29 30 31  
Donate for Servers
We run various sites in defense of human rights and need support to pay for more powerful servers. Thank you.
Cubaverdad on Twitter
Tweets by @Cubaverdad