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The Cuban cigar industry has gone through a multitude of changes since the 1990s. Take a

guided tour through the key turning points and developments as they unfolded, and what

they have meant for the highly-regarded Havana cigar. > By Gerry Cohen

In order to understand the changes that have affected the Cuban cigar industry over the past decade and-a-half, one needs to revisit the old days. The Soviet Union collapse of 1991 brought with it the end of the Council of Mutual Economic Aid (CMEA). This organization provided an infrastructure for the international economic relations among its member socialist countries, including Cuba. The demise of CMEA resulted in a significant decrease in the demand for Cuban products. A sharp decline in foreign currency availability followed, which in turn reduced Cuba’s ability to buy oil, fertilizers, pesticides, and agricultural machinery. This translated into a precipitous fall in productivity, specifically in the agricultural sector: crop yields fell due to the lack of much-needed fertilizers and pesticides, and the amount of land area harvested diminished.

In response, the Cuban government adopted a new program known as “The Special Period in Times of Peace”: the Cuban people were required to adapt a more austere lifestyle. This period radically transformed Cuba but it survived by implementing sustainable agriculture (permaculture), decreasing its use of cars and dependence on fossil fuels, and overhauling its industry, health, and diet.

Agriculture had always been an important part of Cuba’s history, as had its significant use of pesticides. Much of the land had been damaged (de-mineralized), so it took some three to five years for its soil to heal. This was accomplished by using compost, green manure, and crop rotation which returned the soil to healthy conditions. Biofertilizers and biopesticides had replaced most chemicals. Today, 80 percent of Cuba’s agricultural production is organically grown.

Additionally, there was a huge shift from machine to manual labor. Farmers abandoned their previous industrialized agricultural methods, including tractors and other farm machinery, and substituted human and animal labor. Older farmers who were familiar with oxen trained others. Chemical fertilizers were replaced with organic farming techniques which required more labor but less dependence on oil.

These prolific adaptations boded well for one Cuba’s most prized agricultural crops: its unique and highly revered tobacco. Cuba enjoyed a long history of producing premium tobacco and had built an industry creating fine cigars. The Havana cigar’s legacy was

intact, so it came as little surprise that export demand for the nation’s treasured product would grow and along with tourism help the country move forward.

The number of factories producing cigars in 1995 was 17. To meet the explosive demand for both the domestic and foreign export markets, the amount of factories grew to around 50 in 2000. Cigar exports would increase some two-and-a-half times during the last half of the 1990s. However, this dramatic increase may have been fueled in part by the U.S. cigar boom (1994–98), which may have created an artificially inflated demand and thus unrealistic production goals.

If one examines the infrastructure of Cuban cigar making in the old days, it did not support the creation of high-quality premium cigars. There was very little synergy among the multitude of processes and more importantly a lack of communication, as separate organizations handled agriculture, production, and marketing.

In February 2000, Habanos S.A. sold 50 percent of its stock to Altadis S.A., the European tobacco conglomerate created in 1999 by the merger of Tabacalera de Espana and SEITA of France. The deal was valued at $500 million and was designed to maximize the sale of

Havana cigars around the world. Habanos S.A. has met the marketing challenge by reinventing itself. In 1990, the first La Casa del Habano retail store came into existence. This global franchise now boasts some 140 shops around the world, each designed to offer the cigar smoker the best selection of habanos, a comfortable smoking lounge and bar environment, and a knowledgeable service staff.

Also in 2000, Tabacuba (formerly known as Cubatabaco) was created. Oscar Basulto was appointed its head and co-chair of Habanos S.A., in charge of leading the restructuring of the Cuban cigar industry. Tabacuba has a workforce of some 250,000 people, both tobacco farmers and specialists, and manages the annual production of between 280–300 million cigars per year, half for the domestic market and the balance for export. These entities are for the first time linked together in every aspect, from cigar making to marketing. This new

approach is focused on improving the lines of communication and enhancing the coordination among the many sectors of the industry. Now all stages of the cigar industry are fully integrated, from production and quality control, to R&D, marketing, sales, exporting.

Cuban Cigars: Past, Present and Future

As one can see, there have been many steps taken in the evolving Cuban cigar industry. It has moved at its own pace through out the 1990s, taking small but historically significant steps. The Millennium brought with it a new deal and hope for the industry as a prolific structural alignment occurred, financed by a market savvy global partner. With newfound capital resources, the dream of integrating each step of the cigar-making process could finally be realized.

The positive effects of this alignment included more realistic production goals, maintaining higher quality standards for the exportmarket, improving tobacco strains with more disease-resistant hybrids, using new technologies to reduce curing times and shortening the plant growth cycles, continuing to be less chemically dependent by improving production using floating systems for tobacco seedlings, using drip irrigation systems, and implementing more uniform procedures among the main tobacco plantations on the island.

Focusing brand production within a specific factory while closing older factories and re-establishing them in more modern renovated facilities equipped with the latest machinery means better working conditions with happier workers, resulting in better quality cigars. If Cuba continues to focus on the “material prima” or raw materials (tobacco) coupled with its dedicated commitment to the quality needed to produce the Habano, then its continued dominance in the global premium cigar market (estimated at 70 percent) should be secure.

For those of us who have the opportunity to enjoy an authentic Cuban cigar, including one of the many major and niche brand line extensions or the special releases in both the Limited Edition or Regional Edition Series, we can all celebrate that these cigars have delivered and will continue to deliver on its promise of transporting us to cigar nirvana.

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