Cuba’s revived real-estate sector, energized by new laws that let citizens buy and sell property, will likely create a demand for U.S. lumber.

Whether it’s for a humble Havana studio apartment worth only 9,000 CUC or a sprawling Miramar mansion worth 200,000 CUC, there’s an urgent need to renovate many of these dwellings in order to maximize their appeal especially to local buyers flush with remittances from abroad.

Potential uses for U.S. wood in such residences range from new flooring to kitchen cabinets, living-room and bedroom furniture (including beds) and roofing.

U.S. lumber can be sold to Cuba under the Trade Sanctions Reform & Export Enhancement Act of 2000 (TSRA), since wood products are classified as agricultural goods, and are thus exempt from the U.S. embargo.

One entity eager to cash in is Gulf South Forest Products, based in Fort Lauderdale, FL (see CubaNews, June 2012, page 9).

Gulf South had hoped to supply the island with not only lumber, but also electric utility poles and railroad ties (which tend to rise in demand after hurricanes rip through the island and cause it infrastructural damage). Its top executives promoted Gulf South products at both the Havana International Trade Fair and the International Construction Fair.

Yet over the years, Gulf South has only seen $6 million worth of sales to Cuba, and that’s not likely to go up anytime soon.

For now, Cuban state entities are the only buyers of imported wood, and they’ve been shying away from U.S. sources.

That’s because under TSRA, Cuba must pay in cash for all U.S. agricultural goods. That pushes them more towards lumber suppliers like Brazil, Honduras and Chile, which can all offer credit.

“We have not had any business in Cuba for over four years now,” said Marcela Jiménez, Gulf South’s sales manager. “We have tried to maintain a presence in the marketplace and I was in Cuba last year for FIHAV.”

She adds: I’m trying to attend this year again, but obtaining a visa is very difficult. The contacts we made [with Alimport] have been replaced or have retired. Our license to do business there are still active, but due to payment restrictions we have not been successful in obtaining any new business.” Jiménez said even if she manages to attend FIHAV 2013 this November, she’d be starting from scratch, since there’s confusion as to which state entities are currently in charge of purchasing imported wood. “We know things are slowing changing and there are opportunities [in Cuba], but until a buying entity is established again that can coordinate shipments and especially guarantee payments, there is nothing we can do.” 

If and when market conditions improve, Gulf South is ready to ship immediately from its 153,000-sq-ft facility in Mobile, AL.

One advantage it has over other agricultural suppliers to Cuba is the fact that it doesn’t need to contract with an OFAC-designated shipper like Crowley to ship to Havana. Instead, Gulf South charters its own vessels.

Even with Cuba still off-limits, Gulf South isn’t exactly hurting for business. Its facility is busy filling orders from customers in Haiti, Dominican Republic, Jamaica, China, Taiwan, Africa and other overseas markets.

Last year, U.S. Commerce Secretary John Bryson awarded Gulf South a Presidential “E” Award for Exports at a White House ceremony. The reason for that distinction: Gulf South exported more than 103 million board feet of lumber, plywood and polls in one year.