Cubalse Corp. Closing Questions

HAVANA TIMES, June 16 (IPS) – Cuban authorities said they decided to close the huge Cubalse holding company “to reduce expenses, increase negotiating power, concentrate the administration of service providing entities, and in order to carry these out with greater efficiency.”

The firm, a managerial group that was founded in 1962, was first created to serve the diplomatic corps and other foreigners living in Cuba in terms of housing and property management services. Over time the company became involved in commercial wholesale and retail services that ranged from gas stations and food services to pet clinics.

Though not officially announced, the news of Cubalse’s demise began circulating in sectors linked to tourism, light industry and the media a little over a week ago and drew lot of attention.

According to an agreement of the Council of Ministers, by late August the liquidation of Cubalse will be completed and its activities and goods transferred to other Cuban state-run companies.

“It’s strange; since it (Cubalse) was one of the things devised by Celia Sanchez (former president Fidel Castro’s close collaborator from the times of the guerilla war against Batista),” commented Jorge Jimenez, a driver with the state-run entity.

Jimenez said he’s heard that “Now (Cubalse functions) will be transferred to TRD (Foreign Currency Collection Stores), administered by the managerial system of the armed forces, whose stores generally less supplied than those of Cubalse.” On the other hand, a manager in the industrial sector said, “In negotiations with its suppliers, the specialists were quite professional.”

Some Are Suspicious

Other people had a different take on the closing. Armando Sosa said, “If they decided to shut it down, there must have been some kind of mess, and later on we’ll find out the real reasons.” Mirtha Rodriguez said the Cubalse markets had “good quality food, better than other chains that sell those types of products, although some are pretty expensive.”

According to reports, the Cubalse-run Oro Negro gas stations will be transferred to the control of state-run company Cuba Petroleum (CUPET), while the services of restaurants, cafeterias, veterinary clinics and the sale of automobiles will be absorbed by the Cimex Corporation, another of the large commercial groups on the island.

All real estate activities such as the renting of houses to diplomats and other foreigners, and the agency employed for recruiting of personal for foreign firms and embassies, will reportedly become part of the Palacios de las Convenciones Company, while wholesaler trade will be incorporated by Almacenes Universales.

The agreement of the Council of Ministers stipulated that Cubalse offices abroad will be placed under the authority of the Group of Managerial Administration (GAE).

In addition to Cimex, TRD, Caracol and Cubalse, there existed in Cuba other commercial entities involved with foreign currency, such as the Cubartesania stores, which have already been transferred to Cimex.

Trasval Gains Market Share

Although Cubalse is being dissolved for the above stated reasons over the last few years there has actually been growth by the Trasval chain, reportedly administered by the Ministry of the Interior.

Moreover, one of the last large repaired and remodeled stores in Havana has become Trasval’s banner store, located on Galiano St. one of Havana’s more important commercial arteries. “The store has good products, with lots of hardware supplies and equipment that not available in other stores, but the prices are sky high,” said Luis Hernandez, a 52-year-old university graduate.

Rolando Roque, an employee with another chain, reasons that seeing the development experienced by the Trasval chain, there is something incongruous in the arguments used for the closing of Cubalse, which has a long tradition and was seen as a serious and solid company.