Research reports have Cuba holding the raw materials to make 2 to 3 billion gallons of ethanol a year. The problem? They lack the capital to make it happen.
Either of these amounts would vault the tiny nation into 3rd place on the global stage in production of the biofuel. Now, we know Archer Daniels Midland (ADM) tried to enter the Cuban market in the mid 1990’s but their advances were shunned by Raul’s brother, Fidel.
Rumors are that Raul in a much more pragmatic person that Fidel. His interests lie more in leaving a legacy of prosperity behind for “his people” that spreading “la revolucion”. Fidel has claimed biofuels hurt “poor people” around the globe and thus has hampered production progress in Cuba. His argument, unfortunately for him, is more suited to corn ethanol, not the sugar cane ethanol his country would produce and profit handsomely from.
Cuba has been improving ethanol facilities in the nation but even they admit they are 4 or 5 years away from producing amounts sufficient to power cars.
Could there be any better partner for the nation that the worlds largest producer of the fuel? ADM is able to provide the nation a “plant to market” solution for the fuel.
Cuba has already allowed private investment albeit on a limited scale in its tourism industry in order to accelerate its proliferation. There is no reason for Raul to resist the same in his energy sector.
Perhaps this is why we have not heard anything from ADM about constant rumors they are entering the Brazilian ethanol market? Why go there when they can stay closer to home..
Disclosure (“none” means no position):Long ADM
