ZED Mariel Envisioning a Greater Role in Cuban Economy

The Special Development Zone (ZED) Mariel in Cuba, with barely three and a half years of existence, is now the focus of the regional and international market, says its director general, Ana Teresa Izarga.

According to the expert, this is one of the main results of the initiative, aimed at promoting sustainable development, by attracting foreign direct investment, technological innovation and industrial concentration with strict protection of the environment.

Located to the north of the western province of Artemisa, the ZED currently has 24 approved users: 14 foreign-owned companies, five mixed firms, four Cuban companies and an international economic association based on a service administration contract between France and Cuba.

The data reflect that there are few Cuban enterprises based there, due, in part, to the insufficient understanding of the advantages offered by this project, Izarga said at a recent trade convention in Havana.

As provided in Decree-Law No. 313, the Special Development Zone (ZED) Mariel includes areas such as customs, workforce, taxes, insurance, monetary and banking activity, with notable incentives to investors.

According to Izarga, for national companies, it would be advisable to settle in Mariel in alliance with foreign partners 'although in some cases they can not participate in a majority way in the business', because 'it is the possibility of accessing managerial know-how, new practices and to insert themselves in international trade. '

'We intend to continue working on attracting more Cuban companies', she said.

After more than three years of work, the ZED registers discrete but sustained advances in its objective of encouraging integral projects that allow to substitute imports, promote exports with national products of high added value and generate jobs, in line with the international trade and national economy, Izarga said.

With 465.4 square kilometers of land, the ZED envisages its development in stages, which is currently concentrated in Sector A, close to the Bay of Mariel and representing about nine percent of the total area.

The industrial pillars of this sector are logistics services, biotechnology, pharmaceutical industry and advanced manufactures, with priority in the food and packaging sectors, materials and technologies for construction, steel transformation and consumer goods.

Just 28 miles from Havana, the ZED has maritime, rail and road access, and is near two airports, the José Martí International Airport and San Antonio de los Baños, whose expansion will be directed towards transportation of goods.

The Cuban State has invested about 300 million dollars annually to develop this special area; according to Izarga, 'all this offers an important support to those who export to Cuba or use the country as a gateway to foreign trade.'

In terms of infrastructure for trade, the ZED also has 46,784 square meters of roofed warehouses, 30,000 square meters in open-air warehouses, as well as 8,500 cubic meters in refrigerated warehouses.

Designed and equipped to receive mid-sized cargo ships Neo Panamax, the container terminal of the ZED stands out for the quality of its management that is in charge of PSA International of Singapore, world leader in that branch, she added.

According to Izarga, the container terminal, is inserted in the symbiosis of companies and procedures to create a suitable environment 'a logistics seeking perfection', that allows the quick entry and exit of the goods demanded by customers, using state-of-the-art equipment. Our aspiration is that the terminal can become a transshipment port at regional level, with its proximity to 32 of the most important ports in the area, she said.

From the current dock with 702 meters, the facility can operate 824.000 containers per year and its expansion projections contemplate up to 2.400 meters of dock front and three million containers per year, said the specialist.

Among the users of the ZED are six logistics companies, but this number is still insufficient to meet national and regional expectations, explained Izarga to Prensa Latina.

'We are taking the first steps; we have to attract much stronger and bigger companies that are linked to the rest of the Cuban economy, and that is still not covered at full capacity', she added.

Because of its geographical location, the ZED is privileged to be in the center of the Caribbean Sea and very close to the northern and southern crossings of international shipping; in addition, it has an excellent interconnection within Cuba, whose foreign trade benefits from multiple agreements with other states, she explained.

In 2016 the tourist industry registered here a record number of four million international visitors. Acording to Igarza, this gave continuity to a growing trend that also represents greater business opportunities in the ZED.

The branch's outlook indicates the need for high volumes of imports and exports, which requires a specialized logistics base in order to bring products to final customers in the time and form they request.

With this vision, the mixed company Logistica Hotelera del Caribe, between the Cuban AT Comercial Company and the Spanish Iberostar Hotels & Resorts works from Mariel in order to provide specialized logistics services to tourism.

The national hotel projection envisions an increase from the current number of 65,000 rooms to 130,000 in the next years; 'therefore we will need a personalized service to each hotel and customer', Igarza stressed.

Another encouraging factor is the increase in air operations: 'airlines demand the continuous supply of products to service their customers, as well as assortments with a view to maintenance of equipment, and Cuba with its special zone could be primordial in this activity', she explained.

Among the users of the ZED is also the company BDC Log, dedicated to cargo transportation, equipment rental, repair and maintenance of heavy vehicles, which at the moment evaluates its expansion towards storage activity.

During its first year of operations in Mariel, the company tripled the expected revenue in the feasibility study, due to its efficiency and productivity in the handling of cargo, said Izarga.

Logistic activities are one of the fundamental axes in the present stage of the enclave, which will incorporate more and more activities of high technology and industry, she insisted.

The goal is to create a logistics platform that ensures transportation services, storage, packaging, unpacking and distribution of goods to offer personalized services to each of the customers, she added.

According to Izarga, 'the ZED has not gained everything we wanted, but has gradually taken steps to insert in the international market, in order to guarantee trade on the basis of Cuba and the possibility of exporting to other regions of the world.'

Within the national context, it represents one of the most attractive proposals for foreign direct investment which, according to government assessments, should become a key tool for economic development.

Official estimates confirm that the country requires 2 to 2.5 billion USD annually of external investment to stabilize a rate of accumulation of between 20 and 25 percentage points, in order to achieve rates of growth of the Gross Domestic Product higher than five percent.