Odebrecht Bets on Castro, Big Time

Wednesday, February 12, 2014
Note to Miami-Dade County.

From Cuba Standard:

Brazilian corporation forges ahead in Cuba, despite backlash

When President Dilma Rousseff announced in January during the opening of a new container hub at the Port of Mariel that Brazil wanted to become a “first-rank economic partner of Cuba,” executives of one of Brazil’s largest corporations were very busy behind the scenes to make that possible.

Helped by the Brazilian government, Grupo Odebrecht is betting on Cuba, big time. Odebrecht’s commitment is underlined by the fact that this engagement may already have cost the company hundreds of millions of dollars in lost revenues in South Florida.

The conglomerate not only built the $957 million container terminal, and will likely be the contractor for infrastructure construction at the Mariel Special Development Zone, but Odebrecht subsidiaries are among the first companies to open shop at the 180-square mile export development zone surrounding the new deepwater port.

On Jan. 28, Odebrecht subsidiary COI  signed an agreement with Cuba’s Grupo Empresarial de la Industria Ligera to study the creation of a plastics conversion plant at the Mariel Zone. Odebrecht confirmed to daily Folha de São Paulo in January that a subsidiary is already performing feasibility studies. The company is a majority owner of petrochemical giant Braskem, which is currently building a $4.5 billion polyethylene complex in Coatzacoalcos, on Mexico’s Gulf Coast.

On the same day, Odebrecht and Cuban officials signed a letter of intent to establish a bio-pharmaceutical joint venture at Mariel. Using Cuban know-how and Brazilian capital, the  joint venture plans to produce monoclonal antibodies for a cancer vaccine. This is the first time a Cuban biotech entity sets up a joint venture with a private company in Cuba. Odebrecht, well-known for construction, agribusiness and petrochemicals, has no track record in pharmaceuticals. However, Emilio Alves Odebrecht, son of company founder Norberto Odebrecht, in 2007 invested several million dollars in Recepta, a Brazilian cancer research company.

Mariel aside, the company announced two other investments in Cuba over the past two years. Odebrecht last year garnered the $200 million overhaul contract for five airports in Cuba, $176 million of which will be financed by BNDES. And in 2012, COI signed a 13-year, $120 million joint production agreement with state holding Azcuba to operate the 5 de Septiembre sugarmill near Cienfuegos, the first such project for a foreign investor in Cuba.