Friday, November 28, 2014

Cuba’s Toilet Paper Shortages Revisited

Cuba's Toilet Paper Shortages Revisited
November 27, 2014
Isbel Diaz Torres y Jimmy Roque Martinez

HAVANA TIMES – Though Cuba's toilet paper shortages this year caused
something of a stir in local and foreign media, no one clearly explained
why this product suddenly "disappeared" from the country's stores.

In February, even Granma, Cuba's major official newspaper, published a
letter from a customer who was complaining about the fact "people aren't
being given an explanation". A month later, the sales and purchases
manager for Cuba's TRD Caribe chain – one of the few stores that sell
the product on the island – had the courtesy of going on Radio Reloj and
declaring that the shortage would last till the end of May.

According to this official, Cuba's industry "fails to satisfy" the
demand for the product, but he didn't care to offer any more details. Is
this the case because of technical issues, the lack of investment, raw
material shortages, the US blockade, poor management, lack of incentives
for workers?

The fact of the matter is that toilet paper shortages on the island are
almost chronic, and the volumes of the product produced have never fully
satisfied the demands of the population. In January of this year,
however, something different happened and the result was a 55 % deficit
of the product at stores by April.

A "Little Setback" at the Plant

When we asked about this, we managed to obtain several answers from the
officials closest to the truth. One of them was Alfredo Casanova, sales
manager of Matanza's Empresa de Productos Sanitarios ("Sanitary Products
Company"), who answered a number of our questions.

According to Casanova, first there was "an extraction problem at
stores", and, "as of the month of January, we have a 'bit of a setback'
at the plant." This had a negative impact on overall production. "We
were producing at 70 % capacity for nearly 4 months" because of that
breakdown, the sales manager told us.

The damage in question resulted from sending a deteriorated roller
abroad for repairs. The roller is a rubber cylinder that is nearly 4
meters long.

Without the roller, they were forced to reduce the machine's production
speed from 380 to about 240 meters per minute. "But production
continued. The truly sad thing would have been to shut down the plant
for three months," the technician added.

At the end of the first half of the year, the plant managed to guarantee
102 % of the production planned for that period, and we have been able
to confirm that, even though it's not always easy to find toilet paper,
one comes across it more frequently than at the beginning of the year.

Making Up For the Deficit

According to Casanova, the demand at stores is of 33 million rolls a
year, but Cuba's domestic industry can only deliver 23 million. These
figures, however, are different from those offered by Jose Elias Prats,
sales and purchases manager for TRD Caribe, who declared on Radio Reloj
that the national demand for 2014 had been estimated at 13 million rolls.

Was he referring to demand at TRD stores alone? At any rate, to try and
make up for that deficit, TRD ordered 46 containers of toilet paper from
Vietnam, Guatemala and Mexico.

When we interviewed Casanova, TRD and CIMEX, the two largest store
chains that distribute this product, had imported around 15 containers
of toilet paper. "When you distribute this across Cuba, it's practically
nothing," the manager admitted.

That said, the official from the plant in Matanzas believes that, with
the repairs and imports planned, it is unlikely that a shortage as
severe as the one experienced at the beginning of the year will repeat

Havana Times approached another employee from the plant's commercial
department, named Jose. According to him, under normal conditions, a
truck supplies TRD and CIMEX stores on a daily basis.

It is worth pointing out that Cuba's manufacturing plants, in addition
to store chains, cover two other gigantic sectors: tourism and defense.

Price Speculation

The cheapest roll of toilet paper costs 0.30 CUC (Cuban Convertible
Pesos). This is the so-called "green" paper, whose fiber is obtained
from recycled paper obtained entirely in Cuba (though some other
elements, like the ink and nylon for the packaging are imported).

In addition to this type of paper, Cuba produces others of greater
quality (whiter, softer and more resistant) which are more expensive. It
is curious that the price of the imported brands does not differ
substantially from these.

Casanova informed us that the total cost of producing a single roll of
toilet paper is 0.15 CUC, but that the sale price at stores are decided
by the chains themselves.

That said, the current price has a "ceiling." "The Ministry of Finances
and Prices established a price ceiling for toilet paper because it is a
crucial item for the population, and said that store chains have to
sacrifice some of their profit margin, that it can't be 2. I believe it
was left at 1.82," the official commented.

The plant in Matanzas sells its products at 0.172 CUC the unit,
obtaining a minimal profit margin, while stores get a good slice, as is
the case with other products sold on the island.

Capacity and Potential

Cuba could produce all of the toilet paper it needs. Buying a roll of
toilet paper from Mexico costs US $ 0.22. If this money were given the
factory, however, the cost would be far less, Casanova tells us. "It is
in the interest of the country that its factories produce the paper
using salvaged left-overs. It would save a lot of money," he added.

"We want to go from a 5 to a 10 thousand ton capacity, but that requires
a degree of investment we haven't had to date." According to the expert,
the only limitation is the money invested.

In Casanova's opinion, to reach its goals, the factory in Matanzas
requires a de-inking and a purfying machine. It also needs to modernize,
installing flat filters, new fiber recovery equipment and another thickener.

Cuba can supply all of the raw material needed to guarantee the
production needed by the populaton, and would only need to import white
paper for "finer products", like luxury napkins for tourism, facial
towels and others.

"The plant knows what it has to do, but the country doesn't have the
money to spend. We're a joint venture company. This year, our partner
invested some six hundred thousand pesos. We did some things with that,
but that's far from being all we need," he regretted.

According to the technician, with around 4 million dollars, the plant
could be taken to "an almost international level."

Unmet Demand

Before the economic crisis of the 90s, Cuba had three toilet paper
plants: one in Cotorro, the other in Puentes Grandes and the one in
operation today, in Matanzas.

Even after the year 2000, the industry covered the country's demand and
exported to Jamaica, Trinidad and Tobago, Guatemala and Dominica.

Today, Cuba's per-capita consumption of toilet paper is behind Haiti's:
it is less than a kilogram per inhabitant every year.

The demand is growing at an accelerated pace. "Last year, when we were
delivering the same volume of products to stores, the toilet paper
deficit was below 15%," Casanova explained.

Manufactured products and imports are distributed in certain cities and
sectors, such as tourism, to the detriment of the population in
non-privileged areas of Cuba.

On average, 60% of the toilet paper produced is sent to the capital,
while there are provinces that have experienced a 100% deficit, the
manager told us. The Isla de la Juventud faces the most critical situation.

The fact of the matter is that there are no solutions at hand for the
shortage of this product, though the new foreign investment law could be
an opportunity in this connection.

The growing network of small, private businesses and street vendors
makes indiscriminate use of large volumes of quality white and even
chromium paper, which could be replaced with napkins made of recycled paper.

That could also mean a break for Cuba's predatory and polluting paper
manufacturing industry and an incentive for toilet paper producers.

Source: Cuba's Toilet Paper Shortages Revisited - Havana -

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