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News from the Caribbean as of
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Sherritt plans to expand in Cuba
Saturday, October 7, 2006
by Dale Crofts
CHICAGO, USA (Bloomberg): Sherritt International Corp., a Canadian company that produces nickel and oil in Cuba, plans to expand on the island nation because executives are confident the investment will be safe after Fidel Castro cedes power or dies.
Nickel production at Sherritt's Moa facility in Cuba will rise almost 50 percent to 50,000 tons a year by about 2010, Chief Financial Officer Guy Bentinck said today at a conference in Toronto. The company also will produce more than 20 percent of Cuba's electricity within the next few years, he said.
Shares of Sherritt trade at a discount because of its joint ventures in Cuba, Bentinck said. The executive said he is counting on the company's investment in key parts of Cuba's economy and relationships with the government and workers to secure its investments after Castro leaves office, he said.
“Our relationships in Cuba are exceptional, and no matter who's in power, that will continue,” Bentinck said. “We operate all the assets and control the technology, that's one of the reasons that our position is so strong in Cuba.”
Shares of Sherritt are discounted because its business in Cuba prevents it from accessing US capital and markets, Bentinck said. The US imposes restrictions on companies that seek to do business with Cuba and bans flights to the country.
Castro on July 31 said he was handing over power temporarily to his brother Raul after undergoing surgery, the first time he had ceded control of Cuba in 47 years. Since then, the ailing dictator has appeared in photos published on his 80th birthday, on August 13, and in video footage. He also has been visited in hospital by Venezuelan leader Hugo Chavez.
Sherritt expects to increase nickel production by about 4,000 tons per year by the end of 2007 and boost output by a total of 11,000 tons per year in two phases thereafter. The company is grappling with a shortage of workers in both Alberta and Cuba, where investments to improve the island's infrastructure are stoking demand for laborers, Bentinck said.
Sherritt is also expanding its Boca de Jaruco power plant by 65 megawatts at a cost of $60 million, he said.
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