Insurer cashes in on Cuba’s electrical shortage, needs
A state export insurer will be able to collect unpaid export-related payment of 3 billion won ($31 million) from Cuba. The payment was due seven years ago. Cuba could not dodge the payment because the country was suffering from an electrical shortage and needed Korean-made power generators and low-energy consuming electronics.
The Korea Export Insurance Corporation said yesterday that the head of the company, Cho Hwan-eik, plans to visit Cuba on Thursday and recoup 2 million euros. That was the payment for tires exported by Hankook Tire in 2001. The amount is 1.4 million euros plus 6-percent annual interests. These are good conditions for collecting unpaid balance.
Relations were rocky at the beginning. The corporation and the Havana branch of the Korea Trade Investment Promotion Agency tried to persuade Cuban bureaucrats to pay, but they were unwilling. The country’s electrical shortage, however, got serious two years ago and relations improved. Cuba came to desperately need Korean goods.
Chinese products swept the Cuban market, but Korean-made goods like LG refrigerators and washing machines from LG and Samsung Electronics were much more energy-efficient. Technological development and an energy-efficiency grading system aided Korean products. Korea’s exports to Cuba jumped sevenfold in the last four years because of surging exports of electronics to the communist nation.
Korean power generators are also a necessity in Cuba. Hyundai Heavy Industries has delivered $800 million worth of portable power generators to Cuba since it started exporting them in 2005.
By Kim Young-hoon JoongAng Ilbo [firstname.lastname@example.org]