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Reviving a Tradition

A Business Powerhouse in the Dominican Republic, Empresas León Jimenes Is Returning to Its Cigar Making Heritage
Juan O. Tamayo
From the Print Edition:
Danny DeVito, Winter 96

(continued from page 1)

Customers have responded: the company's premium cigar sales rose from 2.8 million in 1994 to 3.5 million in 1995 and are expected to hit 6 million this year--about 2 million in domestic sales, 2.5 million in exports to the United States, and the rest in Europe and duty-free stores around the world. León Jimenes also has two deals to manufacture private brands, and back orders totaling more than 1 million cigars.

"We decided last year to pay more attention to cigars, to put the family hands on top of the business again," León says as he leads a visitor on a tour of the company's complex. "It's not that we had not taken care of the cigar side of the business. That was sacred, especially to my father. But cigars was a market that was dying, and we had other businesses."

As León said, it's not as though the family had been sitting on its collective thumbs. A business juggernaut with $325 million in annual sales, Empresas León Jimenes has come far from the day in 1903 when 23-year-old Eduardo León Jimenes founded a cigar factory with six employees in the Cibao Valley village of Guazumal. He bought most of the leaves from his father, a tobacco farmer, and sold most of his cigars from mule trains that he led from one end of the valley to another.

The factory was relocated to Santiago de los Caballeros in 1937, and the company first exported cigars to the United States during the 1950s. Its La Aurora cigars caught on quickly with the Cuban exiles who began arriving in Miami soon after Fidel Castro's Revolution triumphed on New Year's Day of 1959. Today, La Aurora remains a big seller in Little Havana restaurants, where aged exiles still gather to sip strong Cuban coffee, talk a little politics and complain about the rising cost of a good smoke.

"Miami is still a very good market for us," León says in between phone calls from New York asking about prices and visits from South Americans trying to open cigar shops. "Cubans appreciate a quality cigar at a good price."

After the assassination of Dominican dictator Rafael Leónidas Trujillo in 1961, the León family began to expand its operations in the Dominican Republic. The Leóns broke the Trujillo family's monopoly of the cigarette industry in 1963 with a factory making such brands as Aurora, Perla, Premier and Apolo. Six years later, the family signed a licensing deal with Philip Morris to manufacture Marlboros for the Dominican Republic.

The family then went into beer, building a brewery in 1983 to make Bohemia beer, a local brand. The venture was so successful that in 1986 the company bought the National Dominican Brewery, makers of the Dominican market-leading Presidente beer, from U.S. interests. The breweries now make Heineken and Löwenbräu under license and produce two local brands besides Presidente, Bohemia and Malta Morena.

Today, the family's umbrella Empresas León Jimenes controls 98 percent of the Dominican beer market, 89 percent of cigarette sales and 50 percent of cigar sales. Its impact on the domestic economy is so great that the company paid $148 million in taxes in 1995--a whopping 8 percent of the nation's annual government budget. The firm employs 4,000 employees--including 2,000 in beer, 1,200 in cigarettes and 375 in cigars--and operates a fleet of 600 vehicles.

The breweries just underwent a $300 million renovation and expansion program and are exporting 100,000 barrels per year of Presidente to Miami, New York and New Jersey, with plans to expand soon to more U.S. markets.

Two shifts of workers make 18 million cigarettes a day for the domestic market alone, unless you count the massive smuggling of Marlboros to Haiti, the Dominicans' neighbor on the island of Hispaniola. León Jimenes and Philip Morris each owns 46 percent of the cigarette operations.

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