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Nicaragua: The New Start for Nicaragua

This Central America country makes a strong comeback in the cigar business
David Savona
From the Print Edition:
Gen. Tommy Franks, Nov/Dec 03

(continued from page 1)

The New and the Small

The cigar boom of the mid-90s found the cigarmakers of the Dominican Republic battling over tobacco and rollers when a horde of newcomers flooded the country in the mid-1990s at the height of the cigar boom. Some newcomers came to Nicaragua at the time, but not on the same grand scale as in the Dominican Republic. One cigarmaker estimates that there were 40 companies making cigars in Nicaragua in the mid-1990s, and that today there are 20.

A handful of relative newcomers have weathered the storm at the end of the cigar boom. One is Tabacalera Tambor, one of the smallest cigar factories in the country, which relocated from Costa Rica to Estelí in 2001. The factory makes Bahia cigars. Oliva Cigar Co. (no relation to Tampa's Oliva Tobacco), known for its Oliva "O" cigar, which comes in a circular box, was at work building a new factory in Estelí in June. A third company, Tabacalera Tropical (known as Tropical Tobacco until this year), was acquired in 2002 by Eduardo Fernandez, who has planted massive crops of shade in Jalapa. Tabacalera Tropical and its cigar factories, called Tabaco del Valle de Jalapa S.A., are turning Fernandez's leaves into premium cigars.

Philip Wynne, owner of Felipe Gregorio Inc., bucked trends by building a cigar factory in the tobacco town of Condega in 1994. Wynne's company was once known as Cigars of Honduras, but when Consolidated Cigar Corp. (now part of Altadis U.S.A. Inc.) acquired the Flor de Copan factory in Honduras where Wynne once made his cigars, he shifted all of his production to Nicaragua, including the Felipe Gregorio and Petrus brands. In addition to producing his own cigars, Wynne also makes private-label brands for Thompson and Finck Tobacco.

Kiki Berger, a rotund man with an easy smile and friendly demeanor, has been making cigars in Nicaragua for eight years. The 47-year-old has a small factory on the outskirts of Estelí attached to a practically empty building the size of an airplane hangar where he intends to build a new factory, when time allows. Berger looked rather silly when he planted a tobacco field alongside a road several years ago, but today that leaf is powering many of his blends, including the well-received Savinelli Nicaraguan Selection cigar, a dark, box-pressed beauty.

"I still have to build my offices, everything," says Berger, moving through the dark, empty rooms of the larger building. His wife, Karen, a young, slim blonde, helps him run his operations: Berger has to travel to Managua several times a week for dialysis, and when his health improves he hopes to focus on finishing the new factory. In the meantime, Karen practices her cigar-rolling technique.

The existing building is rough around the edges, but Berger has grand hopes. "I'm not looking for a pretty factory," he says, "I'm looking for quality."

 

Under the Radar


Father and son team Charlie (left) and Carlos Toraño. "We're going to take you to what we call our stealth factory," says Charlie Toraño, a tall, lanky, soft-spoken 36-year-old. His grandfather was one of the biggest names in Cuban tobacco in the final years before Castro nationalized the industry, but Toraño worked as an attorney before becoming vice president of Toraño Cigars in 1996. "I remember asking my father if I would have a chance to work with him. I distinctly remember him saying, 'I don't think so.'" The revival of cigar sales allowed him to join the family business. "It's one of those businesses that gets under your skin," he says.

The car pulls up to a building without a sign. A passerby would never give it a second glance, but inside 140 very active cigarmakers are making such brands as C.A.O. Criollo and Carlos Toraño Nicaraguan Selection.

Toraño Cigars has owned the factory—called Latin Cigars de Nicaragua S.A.—for six years, and has expanded the production by 200 percent since opening. Fidel Olivas and his sons run the day-to-day operations. Unlike most cigar factory managers, who have Cuban roots, Olivas, a burly, large-framed man with a shock of thick black hair, was born and raised in Nicaragua. He has worked for Nestor Plasencia and at the Joya de Nicaragua factory.

He has a new boss: In late January, the Toraños partnered with client C.A.O. International Inc. to form C.A.O. Fabrica de Tabacos in Nicaragua and in Danlí, Honduras. In Honduras, half the building is now used exclusively for making C.A.O. cigars. In Nicaragua, the front of the rolling gallery is inhabited by C.A.O. rollers.

"Two years ago this place was so much smaller," says Tim Ozgener, the vice president of C.A.O. cigars. Standing in front of the rolling gallery wearing jeans, a loosely buttoned white shirt and a pair of Italian sunglasses, his shaved head gleaming, the 34-year-old looks like a Hollywood star who has wandered off course. "It was teeny. C.A.O. was maybe two tables."

Today, half the workers are making C.A.O.s, including the company's Gold line and the L'Anniversaire Maduro, which had been made at Tabacalera Perdomo. The Toraño partnership gave C.A.O., which has always had its cigars made under contract, the ability to acquire and stockpile its own supply of tobacco, as well as more control over how its cigars are made.

There isn't much room left. The tables for the first row of workers are pressed nearly up to the front wall. "It's close to maxed out," says Toraño, as he and Ozgener look about the room, as if they're trying to imagine other ways to add space. "We may have to change that, Charlie," says Ozgener with his ever-present smile. "I need those maduros."

 

A Focus on Growing

Back in Ocotál, Ozgener and Toraño are examining the leaves put before them by Plasencia Jr., who is describing the company's new method of tobacco fermentation. Typically tobacco is aged in primings—groups of three tobacco leaves that define different heights on the plant. The higher up the plant, the stronger the tobacco. Plasencia uses a more exacting method of sorting that takes into account that different varieties of tobacco and different methods of cultivation create different ratios of the three categories if the tobacco is defined by strength of flavor. Those types are seco, the mildest type of tobacco; viso, stronger leaves that grow higher on the plant; and ligero, the most powerful variety. While they generally appear in ascending order on the plant, some plants may have larger or smaller segments of each type. The new method separates leaves by these three types, and each is fermented separately.

"People say the first priming is seco," Nestor Plasencia Sr. says in his typical enthusiastic, staccato voice. "No, no, no, no, no. It depends." Seed variety, the time the plant is put into the ground, the amount of rain that falls as the crop grows, the soil and fertilization, and at what point—if at all—the flower bud is removed from the top all can change the ratio of tobaccos on a plant.

The Plasencias also make a considerable number of cigars on both sides of the border, including the Bering brand, which the company owns, as well as the Indian Tabac brand, made under contract for Rocky Patel, of Naples, Florida. But growing tobacco is the heart of their business. By having technicians sort the crop early and determine what is what, seco can ferment with seco, viso with viso, and so on. Seco needs the least work to treat; ligero the most. The Plasencias have been doing it this way for the past two years. Now, in addition to making what the Plasencias believe is better tobacco, the extended sorting even allows the company to offer customers three tones within each color style, along with all the varieties in strength, from filler to binder to wrapper.

Ten years ago, the Plasencias primarily grew filler. Today, they've switched their focus to wrapper, which commands a far higher price. The business is booming. Much like Nicaragua itself.

"If you want to keep in this business," says Plasencia Jr., "you have to improve all the time."

Photos by Angelo Cavalli


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