Looking After Workers Pays off, says Cuban entrepreneur

HAVANA, Cuba. Improving working and living conditions for the workforce of a Cuban aluminium products company were the key factors in achieving an outstanding five-fold increase in production, Yuri Perdomo, general manager at NOVALUM, revealed today in this city.

In an exclusive interview this morning with ACN news agency on the 35th anniversary of this media outlet, Perdomo explained how this factory works and its results since 2004.

“In 2004-2005 we were totally inefficient, billing for only one and a half million dollars” he recalled, a situation they have gradually turned around, so that by last year “our revenues were close to 9 million dollars, and this year we are sure the 10 million mark can be
broken.”

Perdomo went on to emphasise that it was not technological advances that were responsible for such an abrupt rise in sales, but a better understanding of workers needs and more control over the productive activity.

“Back in 2004, a worker used to make around 225 pesos a month on average. Their working conditions were far from acceptable. We reinvested some of the monies into repairing toilets, built a cafeteria, and implemented a salary incentive based on production and quality,”
said Perdomo.

The strategy paid off, production picked up, and efficiency was achieved. Now workers are making over 500 pesos on average per month, plus a percentage in hard currency. Staff turnover dropped drastically, and hundreds of young people are now employed there, including some 110 women.

The “Elio Llerena” Company (NOVALUM) produces all the ranchers’ buckets and 40-liter milk containers, as part of the efforts made by the Cuban government to substitute local products for imports. In 2007 they produced 6,000 units which were sold to farmers and the Agriculture
Ministry. Last year production increased over four times and the plan for this year is 30,000.

Formerly bought abroad at 62 dollars per unit, NOVALUM is currently covering national needs at half that price. “It could be even cheaper, without affecting our profitability, but having to buy raw materials in Germany, China and other faraway places, doesn’t allow us to reduce
costs in that regard” said Perdomo.

The production line includes some 500 items, from all types of cutlery and pans, to cigar aluminium cases, which allow the famous Habanos to preserve their unique flavour.

“We can still do better. We are now looking to increase our exports, especially to the Caribbean market in which we already have had some results” said a grinning Perdomo, and added “and when we start upgrading our machinery the results will be just great. There is still a lot of
untapped potential in our workers.”