The land where the world’s best tobacco is grown

[El Presidente]

 

Not a recent article but one that showcases their efforts to expand wrapper  production into the provinces. 

The land where the world’s best tobacco is grown

Progress in the tobacco planting season, and sales of world famous Cuban cigars, discussed in interview with an industry leader

Author: Juan Diego Nusa Peñalver | [email protected]

march 6, 2019 15:03:53

Miguel Vladimir Rodríguez González, first vice president of the Tabacuba Enterprise. Photo: Juan Diego nusa Peñalver

The Cuban tobacco industry has maintained a tradition that is passed down from one generation to the next, and has made tobacco one of the island’s traditional exports, along with rum and sugar.

It is a legacy inherited from our aboriginal ancestors, the Taino, and the leaf is now planted and sold across the planet, encompassing more than 500 years of history that have marked the culture and identity of the Cuban people.

The largest of the Antilles, without a doubt, is the land of the best tobacco in the world, where seasoned men and women craft by hand the famous habanos, as the final product sold in the international market is known.

But to manufacture a habano, whether it’s a Cohiba, a Montecristo, a Partagás, a Romeo and Julieta, a Hoyo de Monterrey or an H. Upmann (the six Cuban brands best known in the world), more than 500 manual processes must be completed, in the cultivation of tobacco leaves and then at cigar factories.To learn how the 2018-2019 tobacco season is progressing, with the participation of over 600 growers, including 20 state companies and others organized in cooperatives or working individually, in which a total of some 200,000 people are employed, Granma spoke with Miguel Vladimir Rodríguez González, first vice president of the Tabacuba Enterprise Group, the single entity in the country that directs this activity in all phases of its production chain, from the fields to distribution on the international market and within the country.

How is the 2018-2019 cold season planting campaign advancing?

The 2017-2018 season was very successful. More than 30,000 tons of tobacco were obtained, for the second year in a row, which puts us on schedule with the Tobacco Development Program through 2030, and the goals we had set.

The fundamental problems we still have are related to agricultural yields; we must work purposefully to increase results, efficiency, and investment, as well as obtain the types of tobacco we need to increase exports.

For this 2018-2019 planting campaign, that began this past October 10, and is not yet concluded, we are looking to plant some 31,000 hectares of tobacco in all the tobacco growing regions of the country, of which we have assured almost 30,000. The full plan projects 31,167.6 hectares.

Cuba has unique soils that favor tobacco cultivation. Photo: Jorge Luis González

We have had some setbacks (planting was projected to end January 31) as a result of rain and inclement weather, during the months of December and January.

How has the climate impacted the campaign and how are you addressing this?

Tobacco farming is not exempt from climate change and we have been victims of recent meteorological events that have hit the country. We had heavy rain last spring, and during the months of December and January, strong winds and precipitation.

Our decision is to adapt to these conditions and move forward in the development of Cuban tobacco. We have no other alternative, and must increase the application of new technologies and make these campaigns more secure.

In this sense, we have increased the introduction of greenhouses for the production of seedlings in a controlled environment (the so-called tunnels) to obtain plants that are more resistant and better protected; we are trying to meet projected planting and harvesting timelines; improve conditions for processing and storage of tobacco during the curing phase; and continue to disseminate curing practices in controlled conditions to avoid weather effects, among other measures that allow us to adapt to the new conditions.

Likewise, the government and Party’s mandate has been to extend production of tobacco throughout the entire country. Currently, the aromatic leaf is being grown across the island, with the exception of the eastern province of Guantánamo.

Special attention continues to be offered to the planting areas in the Vuelta Abajo region of Pinar del Río that have Protected Declaration of Origin (DOP) certification, where wrapper and filler leaves are grown for export quality cigars, and also the area known as Partido, in the western province of Artemisa, that is internationally recognized as a region were export quality wrapper leaves are grown.

Cultivation has been extended to Matanzas, Villa Clara, Sancti Spíritus, and Cienfuegos for the production of wrapper leaves, since studies conducted by our Institute show that there are soil types here that can produce export quality wrapper leaves, using different varieties and greenhouse techniques. This is being done.

The Development Program through 2030 projects growth in the number of hectares under cultivation, but first infrastructure must be created to process and store the tobacco, although the productive units have been created.

In the island’s eastern region, from Camagüey to Santiago de Cuba and Holguín, including Granma and Las Tunas, here has been growth in cultivation, but the harvest is directed toward the national market.

What are the industry’s principal accomplishments and goals?

The results are encouraging, although we are not satisfied. This past year, we were able to produce 300 million hand-rolled cigars, almost 100 million of them for export; plus more than 130 million machine rolled cigars, 14,000 million cigarettes. These figures give an idea of the industrial and human capacity we have.

Export sales reached almost 260 million dollars and income for the country surpassed 250 million USD.

Among the strengths of the Cuban tobacco system, that we always talk about, is precisely this closed cycle, that includes everything from the production of seed to sales of the finished product abroad and in the Cuban market.

This allows us better conditions for efficient productive chains, not entirely achieved as yet, but with the development program we are on the way, especially in terms of tobacco logistics and the supply of raw materials and inputs.

We should point out that our system depends on other industries in the country, like that of packaging, printing, and chemical products, as well as fertilizer and pest control products, that must also develop to integrate themselves efficiently in assuring Cuban tobacco production and that of other branches.

To assure the development in our sector, in 2018 we completed almost 60 million pesos in investments, with the main works directed toward improving infrastructure and expanding our industrial capacity.

At this time, the most important investment we have is the new cigarette factory project in the Mariel Special Development Zone, a joint enterprise with the Brazilian company Souza Cruz, which involves an amount that surpasses 116 million dollars. Production should begin around the end of the year, and the plant will be completely ready by April of 2020.

We are also constructing a new machine-rolled cigar factory in the province of Granma, which should ostensibly raise the quality and availability of so-called national consumption cigars.

The third focus of our investments is the pre-industrial stage, with important works in deveining, selection, and storage facilities, and the repair of other existing installations.

The group aspires to make investments involving amounts greater than 100 million pesos annually through 2030, but to do so, we must improve our results and income, to support the Cuban Tobacco Development Program that allows Cuba to maintain its leadership and our products on a world level, and above all, prepare ourselves to reach higher goals and meet the demand in new markets that may open up for the tobacco recognized as the best in the world.

[Cjake75]

Awesome read. 

[LordAnubis]

Interesting, never paid attention ot these numbers. If 300million were rolled, and 100 million were exported..... are 200 million in the anejados program?

On a more serious note, with tourism down the drain, i wonder if more will be eported now considering cigar sales through global retailers would be going through the roof right now.

[El Presidente]

5 minutes ago, LordAnubis said:

Interesting, never paid attention ot these numbers. If 300million were rolled, and 100 million were exported..... are 200 million in the anejados program?

On a more serious note, with tourism down the drain, i wonder if more will be eported now considering cigar sales through global retailers would be going through the roof right now.

The numbers are extremely rubbery.  Well under 100m were exported (hand rolled). I would hazard a guess closer to 60m. 

They have slowed production since March. Precious little export until mid July (no/few flights). Getting better now but still limited.  It will be at least 12 months before any sense of normality will resume. 

 

[LordAnubis]

Ah yes, the old slow down the supply trick. Forgot that. 

[NSXCIGAR]

7 hours ago, El Presidente said:

The numbers are extremely rubbery.  Well under 100m were exported (hand rolled). I would hazard a guess closer to 60m. 

Even so, they are suggesting a 2:1 ratio of export to domestic. Are they really keeping twice as many cigars on the island than they export? 

[NSXCIGAR]

7 hours ago, LordAnubis said:

If 300million were rolled, and 100 million were exported..... are 200 million in the anejados program

As above, I'm confused about the ratio. But Anejados are still exported at some point. Are twice as many cigars retained vs. exported? I'd like to know how that's possible. 

[oneizzzz]

Great read, thanks.

[kb_]

Thank you for sharing. Approx 4 MM boxes of hand rolled for export (100 MM cigars) producing $260 MM in revenue at $2.60 per cigar (ignoring the machine rolled exports, which only lowers the price per unit). Seems very low or maybe the super premium yields aren’t as high as assumed and the value cigars make up the majority of the market. 

Then you have wholesale and retail markup and currency exchange rates to deal with along the way. I’m almost glad the US market is closed (officially) because I suspect the additional demand would only further drive wholesale price and limit supply even further. Very interesting article just for the economics. 

ETA: if the production estimates are lower at 60 MM cigars, as El Pres suspects, wholesale revenue is closer to $4.33 per cigar, which makes more sense. 

[Mickey D]

Very interesting. Thanks for sharing.