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The Dominican Cigar Explosion

With 1996 Cigar Exports up 70.9 Percent to About 140 Million, Cigarmakers in the Dominican Republic Have Shifted into High Gear
James Suckling
From the Print Edition:
Claudia Schiffer, Jul/Aug 97

I wish I could help you," says Hendrik Kelner, the owner of several cigar factories in the Dominican Republic and producer of Davidoff, Avo and various other brands. The Spanish speaker on the telephone from Chicago wanted to buy 300,000 cigars from the Dominican cigar man. "We have our customers and we can't take on any new ones."

"I understand," says the slightly distressed voice on the telephone. "But surely you have a few extra cigars for sale."

"The structure in the market is very different now," answers Kelner. "We have more demand than we can produce cigars. However, there are many new factories now in the Dominican Republic and maybe one of those can help you."

"Can you recommend one?" asks the voice.

"I wish I could, but I really can't," replies Kelner. "I can say that most of these new factories have no tradition for making good cigars. They make everything from the very best to the very worst. Good luck."

Kelner puts down the phone and shakes his head. He says that he receives two or three calls like this every day. "It is unbelievable," he says. "The demand is crazy. Where are all the new people getting tobacco to make their cigars? Are they using palm tree leaves?"

The unprecedented demand for cigars from the Dominican Republic is nothing short of phenomenal. Dominican handmade cigar exports to the United States grew 70.9 percent in 1996, to 138.6 million sticks. To meet the demand, hundreds of acres of new tobacco are in production in the Yaque Valley, the country's premium cigar-tobacco-growing region, and about 60 factories--up from less than 10 five years ago--in and around Santiago are manufacturing hand-rolled cigars.

These days, there's a boom-or-bust atmosphere in Santiago, the largest city in the northern tobacco growing region of the island. Driving down the dusty streets, new office buildings, shopping centers and apartments are replacing run-down stores and houses. McDonald's, Burger King and Pizza Hut have replaced the dozens of street-side food vendors. Santiago even has its first cigar bar, El Tope, complete with private cigar lockers and the finest whiskeys, rums, brandies and Ports. This once-dreary town is undergoing a major facelift, and the cigar business is footing a lot of the bill.

"The situation today is like you are living in your neighborhood and somebody finds gold," says Litto Gomez, the maker of La Flor Dominicana cigars, who is finishing a new factory in Villa González. "The only problem is that everybody wants some of it."

There's a similar change in the countryside. Farmers were once reluctant to grow tobacco because of the low prices for their crop and the dwindling demand. Last February, the fertile lands that stretch from the outskirts of Santiago and continue northeast about 30 miles to the town of Esperance were packed with green fields of tobacco. Driving through the tobacco towns of the region such as Jacagua and Canela, it was difficult to find quality tobacco land left unplanted. Some farmers even had tobacco growing in their gardens.

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