Chattanooga Times Free Press
By: Alex Green
A start-up tractor manufacturer based in northwest Alabama and owned by a pair of former computer software innovators who took on IBM in the 1980s — and won — will be the first American company to make goods in Cuba in more than 50 years.
Cleber LLC, owned by Horace Clemmons and Saul Berenthal, will produce tractors in Cuba for small-scale farming, beginning as early as this year, after getting approval from both the U.S. and the Cuban governments.
"That's what they need at this point in time," said Clemmons, who lives in Paint Rock, roughly 22 miles west of Scottsboro in Jackson County, Ala.
Clemmons and Berenthal are old business partners, going back to their days at IBM 30 years ago, when the two worked in retail sales technology. The pair developed an alternate point-of-sale software back then and challenged IBM's hold on the retail sector by selling the software to retailers, developing a register for the software and issuing an operator's manual, letting users fix issues on their own.
Clemmons is a former U.S. Marine, drafted into service during the Vietnam War, and Berenthal is Cuban-born. Both in their early 70s, the pair is seizing on the opportunity largely out of Berenthal's commitment to aiding in Cuban reinvestment.
Clemmons said the strategy behind Cleber — pronounced "KLEH-bur" — follows the most basic rules of business: find out what your customer needs, and deliver it.
"I told Saul, 'This is not as complicated as everybody makes it,'" Clemmons said.
The investment in Cuban tractor manufacturing is part of the thawing of nearly six decades of cold relations between the small island country and the United States.
The duo studied Cuba's economy, searching for their opportunity. And they discovered 70 percent of Cuba's land has been returned to the country's private sector to be farmed, and that Cuba, with a population of roughly 11 million people, currently imports 70 to 80 percent of its food, according to the World Food Programme.
The solution: tractors, made in Cuba, by Cubans, for Cuba.
But not large-scale industrial tractors, for use on thousand-acre dirt farms. Single-row tractors, designed for use on small-scale farms, 40 acres or so.
Clemmons and Berenthal aren't the first to spot a market for agricultural industry in Cuba. The Engage Cuba Tennessee State Council released a report earlier this year stating the Volunteer State has the potential to mirror agribusiness exports to the Dominican Republic, a roughly $117 million enterprise.
According to the Engage Cuba Coalition, a bipartisan 501(c)4 public policy organization, Cuba is the fastest-growing Caribbean tourist destination, placing increased strain on the country's food imports.
Cleber, meanwhile, intends to set up an assembly plant in Cuba soon, where local workers will put together imported parts and produce the single-row tractors, which will sell for around $8,000 to $10,000.
Clemmons said Cleber will not be in the repair business. Instead, he imagines Cubans having access to a manual and parts to do repairs themselves — a model Clemmons bases on the late-50s auto industry.
"It is simple," said Clemmons, "and too often we look at what we want to do and what we have and try to push that out the door, and don't really consider what's really the problem."
For the first three years, Clemmons expects Cleber to run an assembly plant in Mariel, Cuba, roughly 40 miles west of Havana on the northwest coast of the country.
Eventually, maybe five years from now, Clemmons hopes to grow the business into a full-fledged manufacturing plant, employing up to 300 employees and producing tractors for countries all over Latin America — and maybe even import some back to the U.S.
"Our strategy long-term is to be the major supplier of light farm and construction equipment manufactured in Cuba," he said.
Clemmons said he is humbled to be the first American company to set up a factory in Cuba since the trade embargo went into place in 1960, and that his phone has been ringing almost constantly since the announcement in mid-February.
"We try to handle as much as we can, because we realize telling our story creates a little bit more momentum to do the right thing about this total problem," Clemmons said. "We're basically saying the embargo needs to be lifted. We need to treat the people of Cuba fairly and kindly."
Clemmons and Berenthal will be in Cuba this month, even as President Barack Obama visits the country in person.
The businessmen will wrap up Cuban paperwork this month and hope to be assembling tractors in Cuba by the end of this year.