Caterpillar Inc. (NYSE:CAT) has confirmed plans to expand into Cuba once the US lifts a five-decade trade embargo against the communist nation. The announcement comes as the company’s chief executive officer Doug Oberhelman holding talks with ministers in the country. His visit is part of the company’s effort that seeks to promote open markets and free trade between the two nations.
Focus On Cuba
Oberhelman says that he has held meetings as the company looks to play a key role in some of the projects in the country. Given that the communist nation is in the initial stages of building the Mariel Harbor, the industrial conglomerate believes it can play some role in it.
Cuba is investing big on the harbor project, which it believes will act as a distribution center and gateway to the Caribbean and South America.
Caterpillar becomes the latest company to reiterate intentions of expanding into the communist held island after President Barack Obama made his maiden visit a few months back. Given that, the trade embargo remains in place even with the opening of diplomatic ties; it could take some time before US companies start trading directly.
Caterpillar-Rimco Deal
Once the trade embargo is, lifted Caterpillar Inc. (NYSE:CAT) plans to sell products in Cuba just as it does in emerging markets. Given that it is not expected to happen anytime soon, the company has inked a deal with privately held Puerto Rico Company Rimco to oversee its interests in the country.
“The idea is for our dealer to set up a facility here in Cuba,” he said. “We would supply most of our products from Brazil,” said Mr. Oberhelman.
Some of Caterpillars products that could find their way into Cuba include construction machines, power systems turbines, and engines.
Rimco has already opened talks with US authorities about starting to sell some of Caterpillar Inc. (NYSE:CAT) products. Given that, it is not a US company it should be able to get the much-needed approval even with the trade embargo still in place.