Ian Delaney, CEO of Sherritt, decided to visit Cuba in the early 1990’s to negotiate a new a deal to begin with strategic exports of nickel for their Cannadian Company. This brief describes the difficulties of doing business in Cuba and all the challenges a joint venture can overcame to turn a company into a large diversified holding one. Delaney did this while managing a relationship with an authoritarian regime with an anti-capitalist discourse.
Sherritt, a controlled company by Newmont Mining of New York before the late 80’s, was founded in 1927. But it was not until 1954 when Sherritt opened its nickel and cobalt refinery in Alberta, Canada with the only reason of being near from raw materials needed for the process. In 1988, while Sherritt decided to create an independent company it was experiencing insolvency by the decreasing nickel’s prices, which led the company to explore virgin metal markets like Cuba and Russia.
Both countries had adequate amounts of the kind of ore Sherritt needed that was not inder long-term commitments. Nevertheless, despite the past and political and economical factors – socialism system, no legal system to govern property rights, no regulations covering capitalist investment, lack of experience, and excising property rights to the legal code -, the company opted for Cuba under Delaney’s phrase: “Risk is something you can not identify; even advanced nations posed risks… The Cubans and I understood that the risk was huge, and we decided to take it”.
Cuba was seen as a great promise but facing great obstacles needing desperately Western capital and technology. And Sherritt could not jump out to the fact that Cuba had the most important resources needed to keep on tracking, despite the consequences of the agreement signified losing customers in the United States and its market. Basically, the deal was seen as a “mutual assured destruction” pact because Sherritt, being a Canadian company, was accustomed...
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