An Interview With Guillermo León
President, León Jimenes Cigars
(continued from page 3)
CA: Is it made in the same factory?
León: Yes, it is. We have had a very favorable customer response.
CA: What's the production level on Savinelli Oro? How much did you produce in '97?
León: In 1997, we made about 600,000. In 1998, we are projecting about one million. It was a project that started recently, and the start-up coincided with the collapse of the market. So, we don't have projections for beyond 1998, but they are working hard on the brand.
CA: Does that mean you are not producing it now?
León: No, because we have some in inventory. There is no problem when they ask for more product. We ship it immediately. We still plan on meeting our target for 1998.
CA: Are there others?
León: Yes. We make a cigar for Lone Wolf. We made about 175,000 in 1997 and we expect to do about the same amount in 1998. MATASA makes one of their other labels.
CA: Do you make other private brands?
León: We make cigars for Daniel Marshall. It is not a large quantity. The brand is working well for Daniel.
CA: How much did you produce in '97?
León: Not much at all. Remember that he dedicates himself more to his humidors, so what it seems like he did was keep his humidors full of his product. We made about 175,000 units, and we'll make about 150,000 in 1998.
CA: So you are going to stay at about the same level, maybe a little less?
León: Yes. Based on my conversations in the last few weeks, I think we will maintain that level.
CA: Are those the major brands you produce?
León: I would say those are the largest. We also produce Maxius, which we made about 75,000 in 1997, and we'll make 50,000 in 1998. We also have just started making Don Lino cigars, which used to be made in Nicaragua; we plan to make about 750,000 of them. And, we make a private-label brand for Europe called Chambrair; we produced about 75,000 in 1997 and we'll push that up to 100,000 this year.
CA: So, out of the 12 million to 13 million cigars produced in 1997 in your factory, about 9.5 million of them were for León Jimenes and Aurora. Is that right?
León: Yes. It ends up being about a 50-50 split, because in the U.S. we sell more of one brand and here we sell more of the other.
CA: You joined the Dominican Republic cigar association in 1994. After several years of being very inactive, I hear it is beginning to step up its activities again. Can you tell us about what's going on?
León: We worked very hard in the beginning to raise the reputation of the Dominican Republic. I think that objective was accomplished. We always had the traditional manufacturers as part of the original group. And yes, we had some misunderstandings in the group. But when we got together, we'd always talk about the market, and the meetings would last three to four hours. We never wanted it to end. We have all always worked with the same mission in mind: to improve the image of Dominican cigars. We have never changed that goal, nor do I think it will ever change. Now, I don't know if you noticed recently that the boxes have started coming with the organization's seal; we always wanted to do that. There were some reasons that have stopped us in the past. When all the other factories were started, there was a competing association, but we didn't want to create any problems. We waited for all that to pass. As I just said, we were all concentrating on producing the best quality.
CA: Do you think that the image of the Dominican cigar has changed since you got involved in the business?
León: Before the boom? I think that when people speak of premium cigars today, what they think of is the Dominican Republic. They don't think first of Cuba, Nicaragua or Honduras. It's not that those places don't have quality cigars, but the Dominican Republic comes to mind first. We are number one in volume. That shows the consumer has faith in our cigars. It's because we have worked on the quality of our cigars. Our tobacco is as good or better than any in the world today. The growers now receive so many incentives that the quality of the tobacco can't really be improved. In fact, all the tobacco of today can't be compared to what was harvested in the past.
That is what has been the most favorable development for the Dominican cigar. For that same reason tourists go and buy cigars now in the Dominican Republic. I would have to say that it is as big an attraction as the beaches. The Dominican Republic gets a lot of tourism, but we have been receiving a lot more tourists who specifically want to have a look at the process of making a cigar and at tobacco. I can document that increase because of how many more people come visit our factory.
CA: You have one of the largest visitor operations in the Dominican Republic, don't you?
León: That is correct. Last year around 60,000 tourists came to our factory, and we welcome people almost every day. Our factory is something special. We've brought back the tradition of reading aloud in the factory to the workers. The reader recites the news, sports and horoscopes, for example. We've been doing that for a year. That is one of the things that my father always wanted brought back. Excuse me if I go on about this subject, but since almost no one else has it, it's very interesting. The reader is one of the rollers who is elected by the workers, and they pay him. It's great to see, and as a result, we really welcome [tourists] into our factory. When they arrive, we give them refreshments, perhaps coffee, juice, even beer--whatever they like. All that is free and whoever is interested in taking a tour, we are happy to comply.
We also have a store for accessories for cigars.
CA: In the history of your company, cigars went through a period when they were less important to the bottom line. But it seems you are returning to the roots of the company.
León: Yes, that is true. The importance has always been there. The cigar company did operate with losses for a couple of years. But the thought of closing it never crossed our minds. It would have been absurd. But for us, Aurora is our pretty girl. It is a tradition that runs through our veins. It is what has taken us to where we are today. It is the soul of the company, whether or not it was lucrative.
CA: If the embargo on Cuba is lifted someday, do you plan to use Cuban tobacco, perhaps open a factory there? Do you have any plans concerning that?
León: That's not in our league. People already prefer our cigars the way they are. The brands are already established. I can't say that using Cuban tobacco or whatever would never happen. I think Cuba has good tobacco. If some day that is what the consumer asks for, why not? There are people that like tobacco from Nicaragua, Honduras or Indonesia. Cuba is a good producer of tobacco, so why not contemplate all the possibilities. To speculate about whether we would create a factory in Cuba, I doubt it. First of all, our roots aren't Cuban; we are very traditional and very Dominican, and we have defended our national pride to the end. When the Dominican market was not appealing to anyone, we maintained it. Even when we had the chance to increase our profit margin by moving the production to somewhere else, we maintained our tradition here, which is to give the people the cigars they wanted. We have good relationships with people from Havana. They have visited us at La Aurora. But that's it.