An Interview With Guillermo León
President, León Jimenes Cigars
(continued from page 13)
In the early 1990s, cigars were a secondary business for the León family. With the beginning of the cigar boom in the United States, Guillermo León in 1993 was named executive vice president of La Aurora S.A., charged with developing the U.S. market for the brands. He became an avid booster of the Dominican Republic's cigars, and is a stalwart member of ProCigar, the Dominican cigar association.
Today, León divides his time between the company's factory in Santiago and his market in the United States. He is overseeing an expansion at the factory, and hopes to increase production once the current glut in the U.S. market has ended. León recently met with Gordon Mott, the managing editor of Cigar Aficionado, to talk about his family's businesses, León Jimenes cigars and his plans for the future.
CIGAR AFICIONADO: Guillermo, tell us about your family's history in the cigar business.
León: I have told this story so many times that I think I know it by heart. The factory was started in 1903. It was founded by my grandfather, Eduardo León Jimenes. He was a young man in his twenties.
CA: Was he a native of the Dominican Republic?
León: Yes, he was born in the Dominican Republic. He founded the cigar company because his father grew tobacco. My grandfather did the same work as his father, so he founded the cigar company with the family's own tobacco. We can't really tell you how many generations back the involvement with tobacco goes before my great-grandfather. But we know they were involved in the growing of tobacco. W e suppose that there have been more. We can't verify it.
CA: Were they landowners?
León: Yes, they harvested tobacco from their own land. They already had the tobacco, so my grandfather founded the cigar company with three rollers. That was in Guazumal, a small town between Tamboril and Santiago. It was a very small town. My grandfather started with the three rollers, and he started adding on. It began to grow. But he had problems supplying the product to other cities. To get to those markets, they had to carry the cigars on donkeys. So, he moved to the bigger city of Santiago in the 1930s, because it was simply more convenient. By then, the company was solvent and he was a cigar man.
CA: What was he producing at this time, was it cigarettes?
León: No, the cigarette operation began in 1963. From the 1930s when he moved to Santiago, he made cigars there, almost all for the Dominican market.
CA: What was the brand?
León: Aurora. Inside the factory of La Aurora we had various sizes and brands that today no longer exist. This is one of them. [He holds up a large perfecto cigar.] We also had various brand names. But I can't mention them because others might want to register them. We still have about 13 different sizes that are made in the factory.
In the 1960s, La Aurora began production of cigarettes. The project followed the death of [Dominican dictator Raphael] Trujillo. Trujillo had not allowed anyone else to start a cigarette factory because he was a partner in the only cigarette factory at the time in the Dominican Republic. The Compania Anonima Tabacalera also produced cigars, which they had started about the same time as our factory. But it was shortly after his death that we started producing cigarettes, including Marlboro and some local brands.
In 1983, we constructed a brewery called Bohemia. Then around 1987, we acquired the largest brewery in the Dominican Republic. That brewery produced the Presidente beer, which is the leading brand in the national Dominican market. In the early '90s we began to export that beer. We introduced it in Miami, New York, New Jersey and Puerto Rico. This has been a very successful brand for us and we are going to continue to expand the market. We are very pleased with it.
CA: Is there a member of the family that is in charge of the brewery?
León: Yes, my uncle. My uncle is León Jimenes, and he is in charge of E. León Jimenes CXA, the parent company of the Dominican National Brewery. The other parts of the company include the tobacco side, which is divided into cigarettes and cigars, the latter of which is called La Aurora. And, then we also have our food subsidiary, Indal, which is run by my brother, Franklin. It makes juices such as Tang and Kool-Aid and some candies.
CA: What are the total sales of the company?
León: It is in the neighborhood of $500 million a year.
CA: You have a business association with Philip Morris, the U.S.-based cigarette, beer and food conglomerate. Could you please explain?
León: We have been associated with Philip Morris since 1963.
CA: In the cigarette business?
León: In all parts. But they do not have a person here in our offices. We have managed the company the way it has always been managed--by my family. We have an excellent relationship with Philip Morris. They are people that have a great deal of trust in us, and they have a great deal of know-how in many things, especially on the manufacturing side. For instance, with cigarettes, they have so much experience in machinery and production, that we have been able to take advantage of it. In the area of distribution, we are able to distribute El Presidente in many areas through the Miller Brewing Co., and we reach duty free in Europe with our cigars through them. We also are exploring the possibility that Philip Morris could distribute our cigars throughout South America.
CA: Are they minority partners?
León: Yes. We don't talk about exact percentages of ownership, but they are minority partners. It is a very good relationship.
CA: How did you start with La Aurora, the cigar company?
León: I have been involved with the cigar industry since I was a small child. We used to go and play in the fields around the factory. There are seven kids in my family--two girls and five boys. We are all one year apart from each other in age. We were always involved with all that has to do with tobacco. We would be at the factory after school. I studied at the university in Santiago. I was the only one of the siblings that didn't study outside of the Dominican Republic. All of my brothers studied in the U.S.
CA: And why did you stay?
León: You ask me that question and I don't know the answer. I don't know the reason why. Perhaps not to leave my parents alone, since I was the youngest. So I stayed, and I'm glad I did. I studied business administration. When I graduated, I worked in my own company for a few years. In 1987, I joined the family company. I wasn't directly involved with La Aurora at that point, but I was with the holding company that ran the group of companies. From then they took me to La Aurora in 1994, and I have quite a bit of satisfaction from having seen it grow.
CA: I've been told that you had spent a few years as an actor; is that true or not?
León: No. [Laughter] No, no. I have never been inclined toward that, but many people have asked about that. I don't know why.
CA: So, when did you start at La Aurora?
León: I joined La Aurora in 1994. The brand sales were basically concentrated in the local market. We did export to the U.S. and Europe, but there wasn't anyone directly responsible for the Aurora brand 100 percent of the time. Still, Aurora has always been protected in the family because it was like the seed that bore all the fruitsfor the company. I remember that it had some very difficult years, economically speaking. But we still maintained production.
CA: How many cigars were being produced when you arrived in 1994?
León: When I arrived, we produced around three million.
CA: And how many were exported?