Alabama company gets U.S. permission to build tractors in Cuba

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US OK's First Factory In Cuba Since Revolution

HAVANA, Feb 15 (Reuters) - The U.S. government has granted an Alabama company permission to build tractors in Cuba, one of the company's co-owners said on Monday, making it potentially the first American manufacturer to open shop in Cuba since the 1959 revolution.

Co-owners Horace Clemmons and Cuban-born Saul Berenthal plan to self-finance a $5 million to $10 million factory at the Cuban port of Mariel just west of Havana to build small tractors for sale to private farmers and builders in Cuba.

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The U.S. Treasury Department's Office of Foreign Assets Control (OFAC) informed Clemens and Berenthal last week they were cleared to do business under new regulations issued by the administration of President Barack Obama that expand commerce with Cuba.

Clemmons and Berenthal, who call their Paint Rock, Alabama-based company Cleber LLC, are in advanced talks with Cuban authorities and hope to get official permission in March.

See the ceremony commemorating the new US embassy in Cuba:

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Alabama company gets U.S. permission to build tractors in Cuba
HAVANA, CUBA - AUGUST 14: Marine Corps veterans Larry Morris, James Tracy and Francis Mike East, who took down the U.S. flag in 1961, pose for a photo after the flag-raising ceremony at the U.S. embassy led by U.S. secretary of State John Kerry, on August 14, 2015, in Havana, Cuba. The first American Secretary of State to visit Cuba since 1945, Kerry presided over the flag-raising ceremony at the recently reopened U.S. Embassy, a symbolic act after the two Cold War enemies reestablished diplomatic relations in July. (Photo by Sven Creutzmann/Mambo Photo/Getty Images)
HAVANA, CUBA - AUGUST 14: Cubans and press stand outside the newly opened US embassy as they follow the flag-raising ceremony led by U.S. Secretary of State John Kerry, on August 14, 2015, in Havana, Cuba. The first American Secretary of State to visit Cuba since 1945, Kerry presided over the flag-raising ceremony at the recently reopened U.S. Embassy, a symbolic act after the two Cold War enemies reestablished diplomatic relations in July. (Photo by Sven Creutzmann/Mambo Photo/Getty Images)
HAVANA, CUBA - AUGUST 14: Employees of the newly opened US embassy in Cuba wave US flags, prior to the flag-raising ceremony led by U.S. Secretary of State John Kerry, on August 14, 2015, in Havana, Cuba. The first American Secretary of State to visit Cuba since 1945, Kerry presided over the flag-raising ceremony at the recently reopened U.S. Embassy, a symbolic act after the two Cold War enemies reestablished diplomatic relations in July. (Photo by Sven Creutzmann/Mambo Photo/Getty Images)
HAVANA, CUBA - AUGUST 14: The U.S. flag flies at the U.S. Embassy in Cuba, facing flag poles of the tribuna Antiimperialista after the flag-raising ceremony led by U.S. secretary of State John Kerry, on August 14, 2015, in Havana, Cuba. The first American Secretary of State to visit Cuba since 1945, Kerry presided over the flag-raising ceremony at the recently reopened U.S. Embassy, a symbolic act after the two Cold War enemies reestablished diplomatic relations in July. (Photo by Sven Creutzmann/Mambo Photo/Getty Images)
Former US Marines Jim Tracy (2nd-R), Larry C. Morris (C) and Mike East (2nd-L) arrive at the US Embassy building to take part in the reopening ceremony in Havana on August 14, 2015. These Marines are the same who on June 4, 1961 lowered the US flag of this Embassy when Cuba and US broke their relationship. AFP PHOTO/ADALBERTO ROQUE (Photo credit should read ADALBERTO ROQUE/AFP/Getty Images)
HAVANA, CUBA - AUGUST 14: A Cuban flag flies on one of the many flag poles of the Monte de las Banderas with the Embassy of the United States behind it before the opening ceremony of the US Embassy in Havana, Cuba on August 14, 2015. The Monte de las Banderas was build by the Cubans in order to blog a scrolling news sign placed atop the then US Interests Section which broadcast anti Cuban propaganda. (Photo by Samuel Corum/Anadolu Agency/Getty Images)
HAVANA, CUBA - AUGUST 14: An American and Cuban flags are hung next to each other from a window in an apartment building next to the American Embassy during the opening ceremony of the Embassy of the United States of America in Havana, Cuba on August 14, 2015. (Photo by Samuel Corum/Anadolu Agency/Getty Images)
HAVANA, CUBA - AUGUST 14: A crowd of mostly Cubans with some Americans gather to watch the opening ceremony of the Embassy of the United States of America in Havana, Cuba on August 14, 2015. (Photo by Samuel Corum/Anadolu Agency/Getty Images)
HAVANA, CUBA - AUGUST 14: A crowd of mostly Cubans with some Americans gather to watch the opening ceremony of the Embassy of the United States of America in Havana, Cuba on August 14, 2015. (Photo by Samuel Corum/Anadolu Agency/Getty Images)
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The small tractors, which have yet to be mass produced, were designed with the Cuban market in mind, drawing on farm history to suit the needs of small farmers as they began to mechanize, Clemmons said.

"Small farms are going to need a small, low-cost tractor that can be repaired in the field or a local shop. We looked back at ones we believed would be the best model to use as a starting point for designing a new technology tractor," Clemmons said.

Named "Oggun" after the god of iron in the Afro-Cuban religion Santeria, the base model will be priced at $8,000 to $10,000 and can be converted into a backhoe, a forklift or an excavator with additions, Clemmons said.

The United States and Cuba restored diplomatic relations last year after a 54-year break, but the U.S. trade embargo remains in place.

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Obama has asked the U.S. Congress to lift the Cold War-era sanctions against Cuba's Communist government, but the Republican majority in Congress has resisted. Instead, Obama has used executive authority to promote trade in ways he says will benefit the Cuban people.

The new regulations have allowed ever more trade with Cuba's small but growing private sector. Much of Cuba's formerly state-owned farming has converted to cooperatives, and Cuba also allows private building contractors. Under the terms of the U.S. permission, Cleber will be eligible to sell freely to them.

Clemmons said the Cuban government has encouraged them to also export from the proposed factory at Mariel, a Chinese-style special economic development zone that is the keystone of Cuba's export strategy. (Reporting by Daniel Trotta; Editing by Frances Kerry)

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