A discussion with the president of Villazon & Co., makers of Hoyo de Monterrey and Punch.
(continued from page 2)
Llaneza: During that period before the embargo, we were still getting tobacco in Cuba. In fact, we bought all the Cuban tobacco we could possibly buy. There were many manufacturers that got desperate because of the political situation, and they started to make cigars with different blends from different places. And they sold their Cuban inventory. We bought it.
CA: Did you suspect at the time that the embargo might be coming, and that's why you bought so much tobacco?
Llaneza: Yes. A lot of the people that I had met in Cuba were getting their properties confiscated, so the signs were there. But a lot of tobacco people whom I knew also knew where their tobacco was being kept in Havana. They told me to buy it from the communists, from the people who had taken it over. And so when I bought it, I bought it cheaper, and I gave the rightful owners the differential in price. There were people also bringing any Havana tobacco they could find that was already in the United States to me. I was stockpiling it. I was able to stretch out putting Havana tobacco in Bances for years.
CA: Do you have any recollection of how much Cuban tobacco you bought during that period?
Llaneza: I remember that I bought American Tobacco Co.'s entire inventory of Cuban tobacco. If I remember correctly, it must have been about 1,000 bales just from them alone.
CA: Was Mr. Blumenthal part of that decision, too?
Llaneza: Oh yes, sure. That allowed us to drag out mixing in Cuban tobaccos until we had tobaccos in Nicaragua and Honduras.
CA: How long did you blend Cuban tobacco into Bances?
Llaneza: It must have been at least until 1965, about three years after the embargo.
CA: When did you start working on tobacco growing in other countries? And, when did you realize after the revolution that you were going to need those tobaccos for your cigars?
Llaneza: Angel Oliva and I took the first Cuban-seed tobaccos to Jalapa in Nicaragua in 1954. And, by the end of the 1950s, he took some of the tobacco from Nicaragua back to Cuba to some of the farmers there so they could make cigars with it and smoke it just to see the possibilities of tobacco from Nicaragua. It was primitive in Jalapa back in those days. You couldn't get there. There was no road. You had to cross two rivers and there were no bridges. But after that, Mr. Oliva bought farms all over that area and built barns. We were finally able to use that tobacco as we needed it after we ran out of Cuban tobacco. At the time, there wasn't anything that even resembled Cuban tobacco anywhere else in the world.
CA: Why Jalapa?
Llaneza: Because the soil is so fertile there. And we just looked at the burley [a variety of cigarette tobacco] growing there wild and we could see the tremendous size of the leaf and the quality of the leaf. We figured that Cuban-seed tobacco would do well there, and it did. We had some beautiful tobacco there. The reason that happened was it got support from the Anatasio Somoza government. The government agency, INFONAC [an agency charged with tobacco cultivation], started taking over all these farms soon after the American embargo of Cuba and started growing wrapper and filler. They had a big inventory of tobacco but they had no customers.
CA: As far as you know, is that the first time that cigar tobacco was grown in Central America?
Llaneza: No, cigar tobacco was already being grown, but it was for crude cigars. In Honduras, they had copaneco, a wild tobacco that they grew there and were making cigars out of it. They were very poor cigars. But they had never grown any Cuban seed.
CA: Was that the first time you were involved with the Olivas in Central America?
Llaneza: Yes. But the Olivas also started working farms later on that had been developed by the INFONAC. They made a tremendous amount of investment.
CA: Was it around this time that you began to focus on your operations in Honduras?
Llaneza: That's right.
CA: When did you realize you would need a place to make cigars?
Llaneza: In 1960.
CA: Tell me about the decision to focus more on Honduras than Nicaragua.
Llaneza: Honduras had a head start on Nicaragua. Nicaragua was just an experiment. The development of Honduras came first because the government there had a program to plant more tobacco.
CA: Was that in San Pedro Sula?
Llaneza: No, that was out of Tegucigalpa, out in the Jamastran area. And the area up around Santa Rosa de Copán was also part of the Olivas' operations.
CA: Was that Cuban-seed tobacco?
Llaneza: Yes. They were natural Cuban-seed wrappers under shade, and filler tobacco, too.
CA: This was in the 1950s?
Llaneza: Yes. Oliva was making fire-cured wrappers [shade tobacco that's heated immediately after picking to retain the green color in the leaves] for the American Tobacco Co. That was actually the stimulus that brought Oliva to Honduras. It worked out beautifully, because American Tobacco was interested in fire-cured wrappers and I was interested in natural tobacco and the Olivas were able to supply both.
CA: When did the industry as we know it today really begin to evolve in Honduras? When did you form Honduras-American Tobacco S.A.?
Llaneza: HATSA was formed about 1964. I started it in Danlí.
CA: The original factory was in Danlí, Honduras?
Llaneza: Yes. I started it with a fellow named Enrique Rivera; he was my partner. But he had problems and left, so then I had to take it over. Then I brought people in and I started making a few cigars. We were the only factory there. We started making 10,000, 15,000 cigars a day.
CA: Were you the first cigar factory in Danlí?
Llaneza: No. I think the factory started by Jimmy Corral with Julio Eiroa was the first one. They were partners but they didn't run it for very long. They were not successful at all, and the cigars didn't sell. Then I started. After that, others came along.
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