Manati Industries, Inc (MNII)

[MONEYMADE]

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The U.S. embargo of Cuba bans U.S. citizens and corporations and even foreign subsidiaries of U.S. corporations from investing in Cuba. But investors from other parts of the world, especially Europe and Canada, have invested in Cuba.

Annual sugar production on the island has dropped from 8 million metric tons to 4 million metric tons since 1989, when Cuba lost preferential access to the markets in the former Soviet bloc.

Much of the decline has been attributed to a lack of fuel and spare parts for U.S.-made trucks and sugar mills. But the industry's main problem may be that workers are not being paid enough to even show up for work.

"They are not getting paid according to the work they do," said a U.S. State Department official who requested anonmyity. "In order to really boost productivity, they would have to undertake a more thorough privitization of industry to give managers incentives."

Foreign investors will also be discouraged by millions of dollars in legal claims filed against the Cuban government for expropriating the assets of U.S. sugar companies.

The U.S. State Department will continue monitoring deals in Cuba to protect U.S. companies with claims against the government.

Virtually all of Cuba's 152 operating sugar mills were expropriated by the Castro government in the 1960s. Thirty of the largest and most modern were expropriated from U.S. corporations, which have registered $375 million in claims against the Cuban government with the U.S. Department of Justice.

The balance were expropriated from Cubans, most of whom now live in South Florida and elsewhere, said Nicolas J. Gutierrez Jr., a Miami attorney and chairman of the Cuban Sugar Mill Owners Group.

"This could make it more complicated to get our properties back, but we are confident we will get them back," Gutierrez said of Lage's announcement.

FOLLOW-UP TO THIS STORY: US GOVT BLOCKED LAGE IN 2007

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http://articles.sun-sentinel.com/1994-11-01/business/9410310435_1_sugar-production-sugar-mills-sugar-industry