Trillions Magazine Construction and Business News

Bringing American Manufacturing to Cuba -- A Trillions Interview

October 5, 2016

An interview with Saul Berenthal, cofounder of Cleber LLC, a Cuban immigrant who is using the lifting of the U.S. embargo on Cuba to bring back manufacturing expertise to the land he was born in.

(Image credit:  possohh / Shutterstock.com )

Saul Berenthal is a Cuban immigrant who left the country shortly after the Castro revolution. He is like many such immigrant entrepreneurs to U.S. shores: smart, creative and determined, with the unique combination of leadership, innovation, persuasion and business skills to create new opportunities where other people were not even remotely aware that there was a possibility for something new.

After coming to the United States, Berenthal enrolled at Long Island University, graduated in the mid-1960s with a B.Sc. in physics and went to work immediately at IBM as a software engineer. He continued his professional career in various engineering and consulting roles for 18 years, with positions held both in the United States and Europe.

Later, he went on to start his own major new enterprise that linked together all that he had learned to date but applied it to something very different. That new entity, founded with longtime friend and business partner Horace Clemmons, was in a still relatively young business area related to software for automated checkout transactions (later referred to as “point of sale”), with applications starting first in supermarket checkout systems and later moving into all aspects of retail sales.  Berenthal eventually expanded that company, Post Software International, to over 400 employees, with operations in North America, Europe, Asia and Latin America. Eventually he sold off the business to Fujitsu and had the time to look at what big things he might want to do next.

One of those things turned out to be what could end up being the most important for Berenthal to date. That business, Cleber LLC, which he also cofounded with Horace Clemmons, was created just as it was becoming clear that the over-50-year embargo the United States had in place with Cuba was soon to be lifted. The goal of Cleber LLC was to help bring modern manufacturing back into Cuba in the form of a deceptively simple tractor product line.

Cleber LLC is well on the way to opening its first factory in Cuba. And it would definitely not be anywhere near as close to where it is without someone like Saul Berenthal at the helm.

We spoke with Mr. Berenthal at his corporate office in Paint Rock, Alabama, on August 29, 2016.

Trillions: We [first] ran into your story back in early May, when we saw a press release that was talking about how you and Mr. Clemmons were the first ones to be able to establish (or at least plan for) a manufacturing facility in Cuba for the very first time. You yourself are a Cuban immigrant. Could you talk a little bit about your background and the journey that brought you to Cleber?

Saul Berenthal: I left Cuba pretty much after the revolution. Castro’s revolution started in January 1959, and I left Cuba and came to the States in October 1960. [I] became an American citizen, went to school in the States – I was 16 years [old] at the time – finished up my degree in math and physics in Long Island University in New York and went to work for IBM and lived the American dream. I pretty much went into business with my partner Horace Clemmons, the same that’s now the cofounder of Cleber, the company that’s going to be building the tractors in Cuba. And, like I said, [we] lived the American dream, became successful, started our own business after IBM and here we are again, starting another venture – this time to help bring the Cuban people and the American people together.

Trillions: You, of course, have been away from the country for a long time, and I’m sure that there were multiple visits and thoughts and discussions before this began to happen. How did you come to even consider bringing this back to Cuba? I’m sure that the challenges were many along the way.

Saul Berenthal: Indeed. And there still are many challenges. But, yes, to try to give you a synopsis of the story, after we [sold] the business that both of us, Horace and I, cofounded, Post Software International, I began to travel back to Cuba in 2007. I started going back there just to see what had happened to the country that I had left. And [I] got to meet interesting people, among them many people who were associated with the University of Havana.

I started organizing some trips – academics between the U.S., North Carolina universities and the University of Havana – and got occasion to meet a few people who were professors at the Economics Department in Havana University. So I got a little bit of introduction to at the time what was being thought of in terms of changing the Cuban economic model. It was pretty much [changing from] established stuff in the minds of the Soviet Union – that Cuba had to change their economic model into something that was a little bit more in line with the global economy.

So my interactions with the academics led me to believe that some things were going to happen in Cuba that would one day open up opportunities for businesses to invest. And, sure enough, in 2011 Cuba organized a new economic model where they encouraged foreign companies to invest in Cuba. Of course, the U.S. – because of the embargo at the time and still the embargo as it exists today – was not allowed to invest. It was 2014, when President Obama started to modify some of the regulations of the embargo, that we saw an opportunity to start up some business in Cuba.

And since what President Obama opened up was in the areas of agriculture and construction, in those two industries, we started thinking in terms of what we could do that would be a good opportunity to invest and a good thing to bring to the Cuban people. And we decided that a tractor would be the thing to do.

Horace has a lot of experience – Horace is my business partner – in agriculture. He was born and raised on the farm, [a] small farm, a family farm in those days, and has a good understanding of what is needed in the Cuban model of agriculture, which is small farms. There’s about in excess of 300,000 small farms in Cuba, and most of them are still using livestock. And being that Cuba wanted to increase their output in agriculture, so that they could start to reverse the fact that they have to import 80% of what they eat, we thought that would be a good opportunity to come to them with a proposition to build a tractor for their environment. And that’s how the idea started.

Trillions: So the business from the beginning, it sounds like, was envisaged as something where you were going to transfer technology and develop manufacturing in Cuba. It’s not like you had an existing business. You instead were saying from the beginning “Let’s see if we can find a way to do something for these many farmers [who] are, basically, making a major transition at the same time as the embargo is helping out.”

Saul Berenthal: Correct. It was a combination of events. In other words, nothing that we could have done until President Obama took the initiative to open our ability to invest in Cuba. [That’s] number one. Number two, it had to be in line with Cuba’s desires for foreign investments. They pretty much define that foreign investments should bring to Cuba technology, should bring to Cuba the ability for people in Cuba to learn and understand management of businesses, create jobs for Cuban people and bring technology that is in line with their desires to increase their productivity.

So it was a combination of all these elements that made us believe that we could build a factory in Cuba in Mariel, which is a special zone of development that they’ve created, where they have a great deal of incentives for people to invest and also have a big, modern port able to bring, import and export components as well as products. All these things were part of us putting together a business plan that has been approved by the U.S. as an investment in Cuba and has been approved in Cuba for us to build the plant there and produce tractors.

Trillions: I’m sure that your background, with that being your home, also helped. Admittedly, all these many years is one thing. It’s several generations of time and a world of development apart that made a difference. As an example, I had a good friend who escaped from East Germany about the time that the wall was coming across. And he was in college. But when he crossed the border, it was like he went through a time warp. He said there were things that they were not letting you know about, they wouldn’t tell you about, that were, basically, being hidden. Regardless of the whys, it was just not there. Yet many members of his family were left behind in the process. And when the wall came back down, he could see people he hadn’t seen in decades. When you went back and re-entered to consider this, what was it like to go back to Cuba? I’m not trying to describe it as backward, that way – it’s just that it’s in a different world.

Saul Berenthal: We call it – more than anything else – “frozen in time.” No question about it. A good example is the 1950s’ vintage cars that people talk so much about. Much of the infrastructure in Cuba is based on 1950s – no question about it. We look at it more from a point of view that says it has been frozen in time. It has its pluses and minuses. There’s a lot of beautiful things that are from that era that are still intact in Cuba. So it has both the good and the bad part of it.

There’s no question that having been born and raised in Cuba was a good thing for me. Because not only do I know the language but I know and understand the culture. And the culture has ramifications in the way that they do business and the way that they act and react to the American initiatives. So it does give me an edge in terms of being able to understand and be understood in Cuba, as we go through the processes that we’re going through, in terms of being able to set up shop and in terms of being able to meet all the conditions that they have for us to be able to get the factory going.

But, aside from that, I think that Cubans being isolated for so many years, not only because they are from a different culture and not only because they have an ideology that is Communist (and they recognize that they are a Communist country), [is important]. But [you should always also remember that] there has been an embargo for all these years that has prevented a lot of the interaction between Cubans and not only the U.S. but the rest of the world – and that is something that as of 2014, when President Obama started relaxing some of the regulatory systems from the embargo, has improved. I’ve seen over the years a lot of improvement, in terms of how well the Cubans know and understand the outside world, but also in terms of how well the outside world, including the Americans, are beginning to understand Cuba: its culture, its people and its ideology.

Trillions: You’ve mentioned several times about understanding the culture. Certainly, in my travels around the world, I’m aware that we Americans sometimes come across as a “bull in a china shop” – or [acting like] “we’re right and you’re not.” Can you talk a bit more about some of the cultural differences? You’ve mentioned the family farm and the frozen in time concept. But, culturally, what kinds of things did you have special insight into that maybe some of the others that are interested in this might not understand?

Saul Berenthal: It has a lot to do with the fact that Cubans are of European descent, mainly Spanish. Cubans are very much like Spanish people in terms of the element of time.

To U.S. people – to Americans – time is money. Everything that we relate to in terms of time has to be done according to how fast [we can] do it, how efficient [we are] in utilizing time – be on time for the meetings, start and stop at a certain time, establish logistics such that things happen in a way that when something is here, it’s ready to be transported, it’s ready to be received, etc.

Cuban people are a little bit more laid-back. Coming in for a meeting, we Americans are used to saying “We’ll meet at 8 o’clock.” Cubans will say “We’ll meet in the morning.” People will say “Why don’t you look me up next week sometime?” when we Americans would say “How about Tuesday at 2:30 in the afternoon?” Things like that are shocking to Americans in terms of: How do you run a business? How do you establish times for meetings and durations, and keep a calendar, when people in Cuba only talk in terms of “We’ll see you next week” or “We’ll meet in the morning”? Those things are shocking to Americans, but they’re very much in line with the Cuban culture. To them time is an element that is not as exact as it is to us.

When it comes to filling out paperwork, they’re very [precise] about the type of lettering, the organization of the questionnaires, about the proper way of using the fonts, etc. We [Americans] are more concerned with content. Cubans are more concerned with process.

So those are things I use as examples of the differences in culture that we need to understand – because if we’re going to do business with them in their country, we have to get used to the way that they do business in their country.

The other thing has to do with the fact that, to us, business is business. To them, business is a combination of business, making money, making investments [and] making a return on your investment but also contributing to their society, contributing to the wealth of the society itself and not necessarily for the stock owners or for the owners of a business enterprise. To them, it’s very important that a business has the ability to be financially rewarding, but it also has to be socially rewarding.

Trillions: That is certainly a difference from what we experience in American business. I know from my own experiences in business that we would regularly run into the American approach that the contract has to be detailed and thorough (if it’s not written in the contract, then it didn’t happen – that sort of thing) and the contract controls everything. In most of the world, the contract is only one piece of the puzzle. I think a great example [of the difference] between doing business in Europe and [doing business in] the United States (and with your background, I’m sure you ran into this) is that the French are notorious in that to get something done [in business], you’d better have a chance to meet the family, have dinner, get connected and then – after some time – start talking contracts.

Saul Berenthal: That is correct. The social aspects of business are very important to them. The meeting in person, the shaking of hands, the sitting at the same table, the talking about your family, the talking about your politics, the talking about your view of the world – those things are very important even before you start talking about business.

Trillions: Where do things stand in the development of the factory? You at the very beginning mentioned that there are some challenges. So where are you on your – I’m sorry, I’m American – time line?

Saul Berenthal: [Laughs] It is a process. And, in Cuba, this time it’s further complicated because of the embargo, number one, and, number two, because of our election cycle. So much of what’s going on right now is being pretty much determined in terms of how the rest of the relationship between the two countries [has been] evolving. Much of the time that they spend in reviewing our project has to do not only with evaluating the technology but evaluating the relationship between the two countries. So right now everything is pretty much on hold, waiting on the results of our election cycle. To them, it’s very important for them to know who’s going to be in charge here before they proceed with any of the approvals that we need to have in place.

Trillions: Interesting, interesting. Of course, that’s been one of the things that in the past [has been] a curse and a blessing. The American process was not that affected by who gets elected.

Saul Berenthal: But in this particular instance, you need to be aware of the fact that the embargo – whether the lifting of the embargo is going to occur and how soon – is very important for anybody to do business in Cuba, let alone the U.S. So that unknown in itself is part of the whole process.

Trillions: Sounds like things are moving forward IF things go as you might predict. I won’t get into the elections because that will keep us tied up a lot longer.

Saul Berenthal: [Laughs] Yes.

Trillions: If things go as you expect them to, what does this mean for when the factory might be turning out its first tractor?

Saul Berenthal: We’re waiting for the official approvals of all the paperwork we put in place. After that, we would start with what they call the process of certification of the technology, where we would be shipping up some of the tractors that we put in place for them to do testing across the island. And that will be followed by negotiations with their employment agencies that provide the workforce for the factory, [then] followed by negotiations with the people who would be building the facility, then followed up by negotiations in terms of where it’s going to be located, how much land we’re going to need, how much we’re going to pay, etc., etc.

So the process is still to be developed, and we foresee that much of it is going to happen in the first quarter of 2017 – after all the results of the election cycle are known and all these processes get started and approved.

Trillions: Again, we want to congratulate you very much. This is a great example of doing it right when you’re entering a country for the very first time. [It is also a tremendous] opportunity that you not only [get] to develop a good business and give back to your homeland, in a lot of ways, but it is also going to set a model that others I’m sure will follow.

Saul Berenthal: Thank you. One thing that I’d like to comment is that it is not only doing it right but it is also doing the right thing.

For more information about Cleber LLC, please go to their website at: http://cleberllc.com/

Copyright: North America Procurement Council, Inc. PBC