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Entrepreneur Cy Tokmakjian brings Hyundais to Havana
CubaNews / December 2002

By Larry Luxner

HAVANA — Armenian by heritage, born in Syria, ed-ucated in Canada and making a fortune in Cuba. That about sums up the life and career of Cy Tokmakjian, one of the most successful foreign investors in Cuba today.

The 61-year-old entrepreneur is president of Tokmakjian Group Inc., a Toronto-based family of companies servicing the bus, truck and industrial equipment industries in both Canadian and foreign markets.

In Cuba, Tokmakjian is the exclusive distributor for Hyundai and Isuzu vehicles through another subsidiary, Caribbean Auto S.A. Tokmakjian also remanufactures engines at two factories — one in Camagüey and the other in Havana — through a second subsidiary, Caribbean Diesel Inc.

In addition, the company has a lab in Hav-ana for manufacturing fuel-injection pumps. Tokmakjian said that last year, company revenues exceeded $100 million, with Cuba accounting for $47 million of the total. Profits from Cuban operations came to $1.7 million.

“I expect more growth here than in any of our other businesses,” he told CubaNews over lunch in Havana. The company, with offices around the corner from the Pabexpo convention center, employs 200 Cubans and eight Canadian expatriates.

The shrewd but casual executive spends six months in Cuba, the other six months in Canada. He says dealing with Cuba’s bureaucracy is “time-consuming,” to put it politely.

“You want to do business in Canada, and it takes you five hours. Here the same thing used to take me two weeks. Now they know me, but still it takes longer than in Canada.”

Even so, he adds, “if the Cubans say they’re gonna pay, they delay, but eventually they pay — unlike some places, where they don’t pay at all. I trust these people, and by nature they’re very good. They have high ethics.”

Tokmakjian founded his empire in 1971. From its base in Concord, Ont., a suburb of Toronto, it eventually established offices in Havana, Seoul, Minsk, Orlando and Bogotá. Subsidiaries include Can-ar Coach Service, a bus transportation company serving eastern Canada; S.N. Diesel Service, and National Refurbishing Inc., which is today Canada’s leading transit bus and coach rebuilder.

Tokmakjian said he started negotiating with the Castro government in 1988, and a year later, delivered its first buses, which happened to be manufactured by Motor Coach Industries of Winnipeg.

He is also the distributor of Belarus tractors in Cuba and the Dominican Republic, and recently began supplying spare parts to the Soviet-built KTB combine factory in Holguín.

Asked why he got hooked on Cuba, Tokmakjian says “the Cubans came to me to purchase buses and get technical assistance.”

Since then, Tokmakjian estimates he’s exported over 10,000 Hyundai vehicles to Cuba — mainly for use by taxi and rental-car fleets, as well as foreign embassies in Havana. The Korean-made cars cost anywhere from $6,000 to $25,000 each.

He’s also shipped over 200 Canadian-made buses, costing upwards of $40,000 each. Tokmakjian’s main customers for these buses are Cubanacán, Transtur and other entities within Cuba’s Ministry of Tourism.

This year, Tokmakjian will probably end up selling between 1,100 and 1,200 cars — with an increasing amount of them being bought by average Cubans with access to dollars. His main competitors are European carmakers like Peugeot, Mercedes-Benz, Fiat and Citroën — all of whom have dealerships in Havana.

Besides vehicles, Tokmakjian supplies about $10 million worth of food products to Cuba annually. Most of that is Canadian beef, which is well-accepted in this market.

“We sold chicken, but no more. Now you guys are stealing from us,” he joked, refering to a recent jump in U.S. frozen chicken sales, now that Washington permits American exporters to supply Cuba with food commodities on a cash-only basis.

But the embargo still prevents U.S. auto-makers from selling cars to Cuba — one of the few places in the world where an estimated 60,000 vintage 1950s Chevys, Buicks and Fords share the road with Soviet Ladas and more recent Japanese and Korean imports.

“I don’t know why the Americans are squeezing the Cubans so much. They didn’t kill any Americans,” he said. “You guys lost 58,000 men in Vietnam, and you’re dealing with the Vietnamese.”

Tokmakjian says he feels safer in Cuba than virtually anywhere else in Latin America.

“I can drive to Camagüey, a distance of 600 kilometers, and stop on the road at night without any fear at all. Can you imagine doing that in the Dominican Republic, Mexico or Haiti?”

Another thing he doesn’t fear is an end to the U.S. embargo. Despite the captive market it has handed him, Tokmakjian says he looks forward to the day it’s completely abolished.

“That will hurt some of my businesses, but will help others,” he told CubaNews. “We’ll lose the chicken business, but if the embargo is lifted, the economy will improve, and part of my business will get better. In my opinion, it should be lifted.”

When that happens, predicts Tokmakjian, the Cuban new-car market will jump 14-fold, from 5,000 vehicles a year to about 70,000. “Instead of 17% of the market now, I may end up with only 5%,” the businessman told us.

Then he added, smiling: “But of course 5% of 70,000 is higher than 17% of 5,000.”

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