An Interview with Jose Padrón

Chairman, Piloto Cigars Inc.

(continued from page 2)

CA: When did you start making Padrón cigars with Nicaraguan tobacco?

Padrón: 1967, in Miami. I was already making 7,000 cigars a day at that time.

CA: How much is that in a year?

Padrón: More or less two to three million. But even that wasn't enough to supply to the Cubans. So, I went to Nicaragua [in 1970] to try it out there with four rollers.

CA: But it hasn't always been easy in Nicaragua. What's happened to you there? Where was your factory?

Padrón: The factory was located at the center of Estelí, about 100 miles north of Managua. In 1978, Pedro Joaquin Chamorro, the editor of the newspaper La Prensa, was killed. The day was January 10, 1978. At the time, there were about 20 Cuban exiles involved in the tobacco business there.

CA: How many factories existed?

Padrón: At first, just three. The one owned by the president, Anastasio Somoza, Fonticiella and mine. After that, there were some smaller ones, but they didn't have any strength; they were small. I never liked to get involved with the country's politics. You can't really make allies. I had a friendship with Somoza; I helped him and they were grateful for the help I gave regarding tobacco. In truth, all the Cubans in the tobacco business had dealings with Somoza. I told them I would help out but that I wanted to continue being independent. In April 1978 the riots in the streets began. On May 24th the mobs burned more than 20 houses, including my factory, Fonticiella and another small factory that was there.

I was in Costa Rica at the time because I figured it was a good idea to check out the situation there, considering all that was going on in Nicaragua. The mob burned the factory and some small quantities of raw tobacco, but not all of it. The people of Estelí were upset that the factory had been burned, and within a month we were operating at full capacity again. But I still continued looking for a new location, just in case, and that's when I began preparations to open a factory in Honduras.

CA: Was that in the summer of '79?

Padrón: Yes. I had the tobacco, because to me the most important thing in a factory is to have the prime material ready. A manufacturer can be without money but he has to have his prime material ready if he wants to maintain his blend. I had close to 350 bales of tobacco. On July 16, before the [Nicaraguan president's] palace fell, we chartered a plane. We loaded those bales that I had and flew them to El Salvador, and from El Salvador to San Pedro Zula to Puerto Cortez and then on to Tampa. I still have a few bales there with the numbers.

CA: It was your tobacco?

Padrón: Yes. I knew I had to save my prime raw material. I had chartered the plane because I needed to save it. We took it to Tampa first; from Tampa it went to Honduras. We even ended up using some of it again in Nicaragua.

CA: What happened after the Sandinistas won?

Padrón: When the Sandinistas had won, my laborers put on a demonstration in the village: "Bring back Padrón!" In the main park, you know the people that are always there. My workers called me from there, "What do we do? Do we continue with the factory? You have tobacco here." In fact, there were 700 bales.

CA: But there had been a lot of fighting in that part of the country, and Estelí was bombed more than once.

Padrón: Yes, but the workers had protected the factory, because I had told them to guard it or I would never return. The factorytook three hits, knocking down a wall. But the only thing I lost during the war was a $70 tobacco scale.

CA: Incredible--even during September of '78 when the city was taken over by the Sandinista rebel army for three weeks?

Padrón: Yes. We only lost that amount. So what to do? I told [my employees] to start manufacturing again. I had confidence in them, and they did it. Now I didn't go there right away. After about a year I went back because they needed more tobacco. There were about 300 people in the factory. The local commandant was there and I spoke to him, saying that he knew me and he knew I had worked with everyone, including Somoza and the Sandinistas.I asked him if they thought I was the right person to continue operations at the factory. I said to him that "if you tell me that I am in the way here, then you are saying it to me for the first time. Do you see all those people there? They have all made their living from this factory for 10 years now. I think you have the final word, and I would like for you to tell me what it is that you think." Just like that. In front of all of them, the Sandinista official told me, "We know who you are and we also know what you are. You can remain here. We are going to give you a guarantee that you will not have problems again."

CA: This was in 1980?

Padrón: Yes.

CA: What was happening in the fields at this time? Were you planting and harvesting?

Padrón: No. Before the revolution we were able to plant at traditional times in October and November. After the revolution, the blue mold disease became a serious problem and we had to push the plantings back. But our problems were greater than that. First the contra war started and there was fightingaround the frontier and throughout the tobacco-growing regions. Then, on April 30, 1985, the blockade was ordered by Reagan. I suddenly had another problem. I had tobacco in the warehouses and I was in a situation where I wouldn't be able to bring it or the cigars to the United States. The U.S. government gave us seven days to get out our contracted shipments to the United States. We chartered two planes to bring the tobacco back to Tampa. But we couldn't get it all out, because the planes had to be back in Tampa by May 5, or they would have seized the planes coming in. We did get an exemption from the Treasury Department that gave us until October to get the rest of the tobacco out. In those six months we worked until 9 every night, getting the tobacco out of Nicaragua by rolling it into cigars. We made 6 to 7 million cigars in that time, but when our extension ran out there was still tobacco there. So they kept making cigars, about 600,000 of them, which were left there until the blockade was lifted in 1990.

CA: How many cigars were you producing in Honduras during those five years?

Padrón: It depended. There were days that we were producing 10 to 12 thousand cigars a day. Today, we are producing about 5,000 a day in Honduras and 12,000 in Nicaragua.

CA: After everything, why did you return to Estelí in 1990?

Padrón: I had a factory, a house and six warehouses. In Honduras, I didn't really have anything.

CA: What's happening in Estelí now?

Padrón: At one point, there were about 19 factories and now there may be 10 left. Of those 10, not all of them are working every day.

CA: Do you think that some of those factories have ruined the industry here by producing inferior cigars?

Padrón: I have said this many times. That is one of the things that in Cuba had to be controlled in the early 1940s, when there was a boom in cigars in Cuba. When the boom stopped, how many factories were left standing in Cuba? Only the ones that were true cigar factories, the ones that had brands behind them and control over the quality. That is the same thing that is happening now. Many people have gotten into the cigar business without knowing anything about it. As a result it discredits the good cigars on the market. There has been no control of quality.

CA: Of those 10 factories, how many will remain?

Padrón: I think about four will survive. Maybe some of the smaller ones will survive, but we won't know that for a while.

CA: Do you own land in Nicaragua?

Padrón: I own two farms. One is occupied right now by some vandals; they destroyed the barn about seven years ago. We haven't been able to get that farm back. Hopefully we are going to get it back in the next few months.

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