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Growing Nicaragua

Despite Dictators, Revolution, War and, Last Fall, Hurricane Mitch, Tobacco Men in Nicaragua Keep Planting and Rolling
Alejandro Benes
From the Print Edition:
Orlando Hernandez, Mar/Apr 99

(continued from page 5)

"Various companies visited us," Plasencia continues, cautiously. "We were increasing our production of plantings and manufacture. We make a very good quality product at a good price. We started making cigars for many companies and our production increased considerably. Our production represented a large segment of the market. A production of 50 million cigars, made totally by hand, had an impact. A lot of large companies took notice: 'What's happening there? What's going on with Nestor? He's got farms in Honduras, farms in Nicaragua. Factories in Honduras, factories in Nicaragua. Farms in Costa Rica. Nestor is alone. We've got to go see Nestor. We've got to go buy from Nestor.' Then, various companies came to visit. But really, we like what we do. We are in love with what we do apart from the economic part, which is very important. I form part of the fourth generation of the family in this business. So, they come to see us, and one of them [Tabacalera S.A.] made us a generous offer, one that was very attractive: 'If you won't sell us the whole operation, why don't you sell us one factory in Honduras and one factory in Nicaragua?'"

For how many dollars, he is asked. "For a few, for a few," he answers, and laughs.

Other makers have struggled a bit more. Henry Berger runs the World Cigars factory in Estelí, maker of the 5 Vegas brand. The company opened in Miami in 1995 and added the factory in Nicaragua a year later.

"We have a group of people who make investments. We get into different businesses and we saw cigars coming in," Berger explains as two visitors, Drug Enforcement Administration agents from the U.S. embassy, shop for cigars. "My father was a cigar smoker back in Cuba. I've always liked cigars. I wasn't a big smoker, but I had a little bit of knowledge tasting different cigars and that's about it. We opened up this business, we brought a guy in, and the first three months that he was here, we had problems with him. Weird things were happening and it gave me no choice but to come down. I was the only one who was able to come down out of all the partners. So I took over the factory and I had to learn everything from scratch, practically."

Berger's is one of the many cigar companies that was created during the boom. To prevent financial problems that could arise from the post-boom slowdown, Berger says he has reduced the number of workers from a high of 290 to about 150. He and his partners have a total of $3.5 million invested, including the "5 Vegas Mansion," a guest house in Estelí for visitors, where the rooms bear the names of cigars and show off the company brand everywhere.

"It was more of an emotional thing," Berger admits. "I came down to Nicaragua to see the factory. To be honest with you, I thought everything was fine. One day we open up a box of cigars and find that it's not our brand. [Our factory] had made a mistake and shipped us the wrong cigars. I said, 'Uh oh, something ain't kosher here.' No control. Now that I've gotten into it and now that I've really learned the business, I understand it in a different way. I don't know that I'll ever leave it, because I fell in love with this thing. I like cigars. I've learned from some of the best." He acknowledges the help he has received from Jose Padrón and Juan Francisco Bermejo by saying they are some of the best people he has ever met. Along with 5 Vegas, Berger is now producing about 5,000 flavored cigars a day under the Lacuna label: rum, vanilla and amaretto. He says they're selling well.

The road between Estelí and Jalapa to the north has always been unpaved and crowded with livestock. This is the source of Alex Gimelstein's love-hate relationship with the country. He loves the cigar business here and the people in it. He just hates taking nearly four hours to drive 90 miles. And that was before Hurricane Mitch.

"The road is very bad. The bridges are horrible. The telephone service is horrible," says Gimelstein, the owner of the Havana Republic brand. "But Jalapa is the most productive land in Nicaragua because of the soil and climate. If Jalapa had the roads that Estelí has, nobody would be in Estelí."

Gimelstein, who says he has been in the industry since he was eight years old, and his partner, Medardo Padrón (no relation to Jose), who has been in the business 57 years, are in front of the TV at the Hotel Moderno watching Mark McGwire try to hit another home run.

"From 1995 until now," says Medardo Padrón (who seems to become truly animated only when he talks about fishing), the country's economy and infrastructure "has improved 50 percent. There is more security." He says this even though everyone warns about ambushes from car jackers and others on the way to Jalapa. "Once the highway is finished, Jalapa will increase another 50 percent. The land will be more valuable than in Estelí."

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