Businesses Eye Return to a Post-Castro Island

The Souto family fled Fidel Castro’s Cuba four decades ago with nothing but their good name and a love of cafe Cubano that no dictator could take from them.

Through years of hard work, the Soutos went from hand-delivering bags of roasted beans on the streets of Little Havana to owning a multimillion-dollar coffee conglomerate that makes most of the specialty espresso sold in the United States.

But something is still missing from their rich and potent Cafe Pilon brand: actual Cuban coffee. If Cuba’s communists fall from power -- a moment many exiles consider imminent now that Castro is ill -- the family plans to fix that by phasing out arabica beans from Ecuador and Guatemala in favor of beans from Cuba’s Sierra Maestra region.

“The day Cuba is free, we will be back in that market,” said Jose Enrique Souto, 63, who left the island as a teenager and joined his father in the family business. “It will not be easy, because there is no infrastructure,” he said. “But someday soon, we will be selling Cafe Pilon in Cuba, and eventually, we will be making coffee there again.

“I know that in my heart.”

Filled with a passion to recreate the elegant Cuba of their forefathers -- and to trade on the public’s enduring fascination with the island’s fabled cigars, anejo rums and sultry nightclubs -- exiles and their children are dusting off old ideas to make money from Cuba’s potential reconstruction.

Restoring the grand old homes of Havana and taking back family tobacco plantations and sugar mills are among the ambitious dreams of Cuban immigrants -- those who became millionaires in Miami, as well as those who never regained their wealth.

“I don’t think a day goes by that my father does not dream about going back to Cuba,” said Christian Eiroa, president of Camacho Cigars, a company that grows fine tobacco in Honduras but longs for a return to the Bordeaux of cigars, Cuba’s Pinar del Rio region.

“The people who made the Cuban cigar industry are the people who left,” added Eiroa, 34, who was born in Honduras and runs the business with his father Julio, a 67-year-old Cuban exile. “We built that industry, and we will build it back.”

Corporations banned from doing business with Cuba under the U.S. embargo of the island also are assessing potential investments, though they are doing so more cautiously.

The most obvious interest comes from the gambling and tourism industries, which have long marveled at the untapped potential of a Cuban coastline, less than 100 miles from the United States, that once was considered the jewel of the Caribbean.

During Cuba’s tourism heyday in the 1950s under dictator Fulgencio Batista, Havana casinos, such as the Riviera run by mobster Meyer Lansky, rivaled those of Las Vegas.

“Cuba’s gaming history certainly demonstrates that a casino resort would work there,” said Gordon Absher, a spokesman for MGM Mirage, the world’s second-largest gambling company. “It’s a special island. Like many other locations, we would be interested in looking at Cuba if gaming there became a real possibility.”

Amid the excitement, however, some Cuba experts are voicing caution.

John S. Kavulich, the founder of the U.S.-Cuba Trade and Economic Council, said he gave the following advice to an executive from a multibillion-dollar American corporation: “Do not fuel up your corporate jet. Do not reassemble your Cuba team. Do nothing.

“The lawyers and consultants that have been trumpeting the illness of Fidel Castro as a business opportunity are usually trying to line their own pockets,” added Kavulich, now a senior advisor to the nonprofit group.

The Helms-Burton Act, a 1996 law that toughened the U.S. embargo of Cuba, specifically forbids the United States from recognizing any transition government headed by Raul Castro, Fidel’s brother, who is now in power in Cuba. So even if Raul Castro attempted to usher in economic reforms, as some believe he might, American companies could not take advantage.

What’s more, Cuban exiles who lost everything when Castro seized assets and nationalized the island’s industries have filed more than 6,000 claims for compensation with the U.S. government. Resolving the thicket of property rights disputes if a new government is established in Cuba is expected to take years. In the meantime, uncertainty over who really owns land in Cuba could have a chilling effect on reinvestment.

Then there is the crumbling state of Cuba’s roads, waterworks and telephone networks, which are in even worse shape than those of the former communist states of Eastern Europe.

“This is a country where almost nothing has happened for 50 years,” said Julio Alvarez, a leading Miami architect. His company, Wolfberg Alvarez & Partners, conducted a study of Cuba’s electrical grid, which found it prone to blackouts because it was pieced together with incompatible old Soviet and U.S. equipment.

But the biggest challenge to massive outside investment may be working with the more than 11 million residents of Cuba, who will surely want more than a token role in their country’s reconstruction.

One of the more grandiose proposals for rebuilding Cuba -- a Florida International University master plan funded by Miami developer Sergio Pino -- contemplates moving out all Cubans currently living in Havana while the old town is redeveloped, presumably for the Cubans in Miami.

“This is not about money for a lot of people. But some people have an arrogant attitude in Miami,” architect Alvarez said. “They need to understand that the people down there [in Cuba] are not going to let them come in and make all the decisions.”

Over the years, Cuba experts have noted, Fidel Castro has masterfully conjured up the specter of a Miami “mafia” eager to hoard the spoils of Cuba as a way to foster fear of a return to capitalism. His favorite boogeyman was Jorge Mas Canosa, a fire-breathing anti-Castro exile leader who lobbied U.S. presidents to take a harder stand against Cuba. (Mas Canosa died in November 1997.)

His multimillionaire son, Jorge Mas Santos, has tried to assure those in Cuba that they have nothing to fear from the exiles.

“For years, the Cuban government has spread propaganda that the Cubans in Miami want to take everything back,” said Mas Santos, who heads the Cuban American National Foundation, the powerful lobbying group his father founded. “But there is nothing more that Cuba can give me. There is a lot I can give Cuba.”

The Souto family, which has been in the coffee business since the 19th century, believes it has something to offer Cuban consumers that they have lacked since capitalists left the island: a really good shot of espresso.

Their company, Rowland Roasters, roasts the most popular espresso brands in the United States, including Cafe Bustelo and Medaglia D’Oro, as well as Cafe Pilon and Cafe Souto. Although Starbucks and other companies sell more coffee that is used to brew espresso drinks such as lattes and cappuccinos, Rowland is the market leader in coffees specifically roasted for the purpose.

The family’s plan in Cuba is to begin by selling, not making, Cafe Pilon. It was once the island’s most popular brand, after all, with the assistance of an advertising jingle by salsa songstress Celia Cruz.

Once the Soutos broaden the market for their products, they plan to slowly ramp up Cuban coffee production. It is a riskier venture that may not yield a profit for years, because long-neglected coffee bushes will have to be replanted.

“You are talking about almost 12 million people who we know love our style of coffee because they did before,” said Jose Enrique Souto.

“But this is more than business for us,” he said. “It’s about reviving the mystique of Cuban coffee and taking back what was taken from us.”

Perhaps the most famous example of Cuban exiles longing to reclaim treasures of the past is the Bacardi rum family, which has never forgiven Castro for seizing its original factory in Santiago de Cuba.

Bacardi officials declined to discuss the company’s post-Castro plans. But a famous piece of Bacardi lore, immortalized in company literature, speaks volumes. It tells the story of El Coco, a stately palm planted by the founder’s son Facundo M. Bacardi in the front of that first factory. As the business expanded, the family built around the tree to respect its seniority.

Months before Castro seized the factory and began using it to make rum in the name of his revolution, El Coco withered and died. But it was never forgotten. Bacardi, now a global powerhouse, puts a palm in front of every factory it builds. And the Bacardis have always vowed that they will plant another, in a spot dear to them.

“One day, hopefully not too far away, a new coconut palm will be planted in Santiago de Cuba,” the Bacardi website declares. “This palm will be planted in the same patch of green earth where Facundo Bacardi planted the coconut palm in 1862.”