HSA Stock Update

[El Presidente]

13 minutes ago, BrightonCorgi said:

How is the farming to curing part of the manufacturing cycle going?  If leaf sits in a warehouse for longer than needed; could produce some quality cigars when they are ready & able to do so.

Tobacco is not the issue. Plenty of good cured tobacco available.

The challenge is that they have never been ahead of the curve in terms of supply. There has always been a touch of "smoke and mirrors" but they got by. 

Covid - factory shut-downs- no tourism dollars- few freight options- critical brain drain - side door factory withdrawals, have all contributed to where they are today in terms of production.

If they had a cigar genie.

To restock the world today? 80m sticks of premium cigars would be required.

+ maybe 6m cigars a month from that point on. It would barely scratch the itch.

They can barely do the 6 so I am not sure where the circuitbreaker is.

They have a challenge right now. Price rises may appear attractive  but a very risky undertaking.

 

 

[Huckleberry]

One of the toughest issues to combat is lack of work force, as well as the portion of said work force that is skilled and experienced in the craft.  When fleeing to Nicaruagua or Honduras is your better option, how shitty does it have to be to work and live in Cuba?  Revolution dies when you can no longer coerce or brainwash the populace into believing that someday it will indeed be as you promised it would be.

I see this lasting a more than measurable amount of time.  I hope the people of Cuba find freedom and opportunity without having to leave their home country.

[NapaNolan]

Even in the last couple of months that I've been active here again, it seemed like there was a fair amount of consistency across 24:24 offers that I started to wonder if the int store would reopen. Oh well, those dreams are crushed.

[BrightonCorgi]

20 hours ago, El Presidente said:

Tobacco is not the issue. Plenty of good cured tobacco available.

Do you think they would consider wholesale tobacco exports, even temporarily?

[bmac]

All issues solved once Cuban Tobacco starts being rolled in the US.More to come….

[MrBirdman]

48 minutes ago, BrightonCorgi said:

Do you think they would consider wholesale tobacco exports, even temporarily?

Hard to imagine them sanctioning that (at least officially) - besides the branding/image complications, the tobacco is much more valuable in a Habano. I just hope they don't make the mistake again of ramping up production by drafting an army of inexperienced rollers. If we start seeing boxes where 50%+ is plugged or with other major construction issues, it won't matter how good the tobacco is.  

[SCgarman]

2 hours ago, bmac said:

All issues solved once Cuban Tobacco starts being rolled in the US.More to come….

Who in the US is going to be rolling cigars? Virtually every business in the US is hiring and cannot find adequate staff. Who is going to train these US "rollers"? No disrespect but you can't be serious.

 

23 hours ago, El Presidente said:

Tobacco is not the issue. Plenty of good cured tobacco available.

The challenge is that they have never been ahead of the curve in terms of supply. There has always been a touch of "smoke and mirrors" but they got by. 

Covid - factory shut-downs- no tourism dollars- few freight options- critical brain drain - side door factory withdrawals, have all contributed to where they are today in terms of production.

If they had a cigar genie.

To restock the world today? 80m sticks of premium cigars would be required.

+ maybe 6m cigars a month from that point on. It would barely scratch the itch.

They can barely do the 6 so I am not sure where the circuitbreaker is.

They have a challenge right now. Price rises may appear attractive  but a very risky undertaking.

Why doesn't Habanos just start running 3 shifts a day. 7 days a week. If the tobacco is plentiful, increase the production. 8 hours/day M-F isn't gonna cut it. Oh, and since Havana hotels are barron due to no tourism, convert some into more cigar factories is the current factories limit production. Start thinking outside the box........

[MrBirdman]

7 minutes ago, SCgarman said:

Why doesn't Habanos just start running 3 shifts a day. 7 days a week. If the tobacco is plentiful, increase the production. 8 hours/day M-F isn't gonna cut it. 

Are you daring to suggest they starting running their operation like a business?! Blasphemy! May the spirit of Fidel forgive you.

Seriously, I doubt there are any trained rollers to work the other two shifts. 

[SCgarman]

1 minute ago, MrBirdman said:

Are you daring to suggest their run their operation like a business?!

Seriously, I doubt there are any trained rollers to work the other two shifts. 

Indeed, merely pipe dreams on my part! 😁 

[Corylax18]

1 hour ago, SCgarman said:

Why doesn't Habanos just start running 3 shifts a day. 7 days a week. If the tobacco is plentiful, increase the production. 8 hours/day M-F isn't gonna cut it. 

Hahaha

Why dont they just become capitalists? Why dont they just change everything about how the country works? Why cant they just fix all their problems with a snap of the finger? The entire country and its culture are set up to fail at this point. 

They dont have enough money for food and medicine, where are they going to get a 6+ month loan to hire, train and pay all of these new rollers over night?

Cubans dont do over time, they barely do single time. If you think the brain drain is bad now, try working someone 12 hours a day for 2 dollars. 

 

1 hour ago, MrBirdman said:

Are you daring to suggest they starting running their operation like a business?! Blasphemy! May the spirit of Fidel forgive you.

Seriously, I doubt there are any trained rollers to work the other two shifts. 

They could/should be running double shifts, but again why would they do something logical? Haha

They have been running the factories at half capacity to encourage social distancing, essentially every other rolling table is empty. But, they cant even keep all the factories open at half staff right now. 

Infections, people leaving, material shortages, etc. 

[Rhinoww]

22 hours ago, El Presidente said:

Tobacco is not the issue. Plenty of good cured tobacco available.

The challenge is that they have never been ahead of the curve in terms of supply. There has always been a touch of "smoke and mirrors" but they got by. 

Covid - factory shut-downs- no tourism dollars- few freight options- critical brain drain - side door factory withdrawals, have all contributed to where they are today in terms of production.

If they had a cigar genie.

To restock the world today? 80m sticks of premium cigars would be required.

+ maybe 6m cigars a month from that point on. It would barely scratch the itch.

They can barely do the 6 so I am not sure where the circuitbreaker is.

They have a challenge right now. Price rises may appear attractive  but a very risky undertaking.

 

 

Yikes. So let’s say they can get a 50% increase in production to 9m/month (assumes current production is 6m/month), with 3m sticks a month to chip away at the 80m restock number. That’s roughy 26 months/2.5 years to get back to the baseline of the extra 80m cigars needed to restock shelves. 
My illustration is based on the magical assumption that production of quality cigars can instantaneously increase by 50%, which seems a bit of a pipe dream given the inability and to really increase production over the past what 6-9 months. 
Yikes.
This could be a long haul. 

The bigger question to me is what happens to the leaf that is being produced. As others have mentioned can this be some sort of a “release valve”. 

[Corylax18]

3 minutes ago, Rhinoww said:

My illustration is based on the magical assumption that production of quality cigars can instantaneously increase by 50%

It also assumes demand is going to continue to Sky rocket, un abated for that entire time as well. 

Unless world governments continue to pump 10 trillion in free money into the economy every year, this demand will slow down. Maybe the Ukraine situation gets solved over night, maybe nobody will care if governments default on their loans. Maybe. 

But, if history is any indicator, we're at the end of this current cycle, and about to kick off the next one. Governments where able to buy there way out of the last few shocks to the system, I dont see everybody buying there way out this next one. 

[El Presidente]

14 minutes ago, Corylax18 said:

Cubans dont do over time, they barely do single time.

 

12 minutes ago, Corylax18 said:

They could/should be running double shifts, but again why would they do something logical? Haha

They have been running the factories at half capacity to encourage social distancing, essentially every other rolling table is empty. But, they cant even keep all the factories open at half staff right now. 

Infections, people leaving, material shortages, etc. 

They can't find enough rollers. They have management holes. 

Double shifts would require big motivaltional financial carrots.  Hard to see that happening with the shortage of dinero. 

Working in a Tobacco factory is far less attractive given the dearth of foreign tourists who haven't returned in any numbers. 

 

1 hour ago, bmac said:

All issues solved once Cuban Tobacco starts being rolled in the US.More to come….

Would love to see it! Unfortunately it would require a world where the Cuban military didn't own the business.

[El Presidente]

5 minutes ago, Corylax18 said:

It also assumes demand is going to continue to Sky rocket, un abated for that entire time as well. 

 

That may be their strategy. 

"Jorge, if we increase prices 10% and lose 30% of customers, we make the same profit.

Si si Manuel!  Let's raise prices 30% and  lose 50% of customers!  It will mean we can keep current production levels and make mucho dinero!

Let's sing!

Guantanamera.......$10 Guantanamera......Gringos smoking Guantanamera!.......$10 Guantanamera....

 

 

[Corylax18]

17 hours ago, El Presidente said:

Working in a Tobacco factory is far less attractive given the dearth of foreign tourists who haven't returned in any numbers. 

I dont know if this can be overstated enough. The 5 cigars a day that they get are worth a lot less on the wholesale market then they are to a tourist walking through the factory. They're still finding their way out of the country, obviously, but through a much more winding and expensive route. I guarantee you the mules aren't taking a haircut on the. 

[bmac]

1 hour ago, SCgarman said:

Who in the US is going to be rolling cigars? Virtually every business in the US is hiring and cannot find adequate staff. Who is going to train these US "rollers"? No disrespect but you can't be serious.

Yes I’m serious- like you said”need to start thinking outside the box”😉

[zuhaib]

On 2/20/2022 at 4:00 PM, El Presidente said:

We are reviewing the situation weekly and thank PCC for their continued support of FOH. Hell, you will even see some Behike, COLA etc this week and next. 

So do I send my email to Diana now for the Behike, or, do I send it Now...

How much of all this shortage is also the increase demand coming out of Asia (China being the one most people seem to talk about)?  Or are people just looking for a scapegoat for Cuba supply issues and not being able to retain talent.

[El Presidente]

9 minutes ago, zuhaib said:

So do I send my email to Diana now for the Behike, or, do I send it Now...

 

Under my instruction, Di just deletes such requests .....and ensures the person never sees that cigar again from us. 

10 minutes ago, zuhaib said:

How much of all this shortage is also the increase demand coming out of Asia (China being the one most people seem to talk about)?  Or are people just looking for a scapegoat for Cuba supply issues and not being able to retain talent.

100% scapegoating with a nice little slice of racism thrown in. 

[El Presidente]

3 hours ago, Rhinoww said:

Yikes. So let’s say they can get a 50% increase in production to 9m/month (assumes current production is 6m/month), with 3m sticks a month to chip away at the 80m restock number. That’s roughy 26 months/2.5 years to get back to the baseline of the extra 80m cigars needed to restock shelves. 

On paper they could do it in 3 years. 

In reality, under the current system and with the embedded challenges, getting to  6 M sticks a month would be a monumental win. 

 

[Fuzz]

Just kidnap a bunch of Dominican rollers and tell everyone they are Cuban....

 

[Chas.Alpha]

This whole thread is nudging me one step closer to my “Dumbest E-mail of the Year” entry. I’m close people, very close...

[LordAnubis]

On 2/22/2022 at 4:42 AM, El Presidente said:

Tobacco is not the issue. Plenty of good cured tobacco available.

You really think so? I think it's half their problem... ok maybe 15%... i would bet your left nut that they are scalping the cream tobacco to go into habanos, and whole shit tonne is going under the table to "custom" rollers. It solves a huge issue i think. Why diminish your brand by putting shit tobacco into a product when you can sell the rarit to custom rollers and pal moff all your rubbish and leave the good stuff for yourself.

I would be very surprised if in 5 years we were anywhere higher from a supply point of view than the current state of affairs. I'll put that out there.

I think Habanos has found themselves in a good balance right now production wise with minimal pesky workers, high sale prices, no hard work for farmers. I would say their profit margins have gone through the roof and they like the look of that. The number of satisfied customers, overall revenue, amount manufactured means nothing to them i think. A lot less work, a little bit less money, and almost immediate cashflow. From a maximising returns perspective, i think they've nailed it. If shipping costs decrease a bit and shipping availability increase they'll be absolutely laughing to the bank. 

[Shrimpchips]

21 minutes ago, LordAnubis said:

I think Habanos has found themselves in a good balance right now production wise with minimal pesky workers, high sale prices, no hard work for farmers. I would say their profit margins have gone through the roof and they like the look of that. The number of satisfied customers, overall revenue, amount manufactured means nothing to them i think. A lot less work, a little bit less money, and almost immediate cashflow. From a maximising returns perspective, i think they've nailed it. If shipping costs decrease a bit and shipping availability increase they'll be absolutely laughing to the bank. 

Are the price increases and revenues reflected on the HSA side though? I thought that their prices remain relatively stable, with annual increases.  Are the distributors that are getting the product off the island and to the world the ones incurring higher costs but also taking advantage of increased demand?  With the shitty supply, I can’t imagine anyone is laughing to the bank right now in the CC world given that the price increases are probably offset by the massive loss in volume.  

[MossybackR]

In addition to scarcity and price hikes in CC, premium cigars from Nicaragua, Dominican Republic, and Honduras appear to have risen in prices and decreased in availability. My observations, YMMV. However, CA says we may be experiencing a *boom* in such cigar production not seen since 1997. WTF??

https://www.cigaraficionado.com/article/cigar-imports-exceed-400-million-with-one-month-of-data-still-not-in
 

[Huckleberry]

1 hour ago, MossybackR said:

In addition to scarcity and price hikes in CC, premium cigars from Nicaragua, Dominican Republic, and Honduras appear to have risen in prices and decreased in availability. My observations, YMMV. However, CA says we may be experiencing a *boom* in such cigar production not seen since 1997. WTF??

https://www.cigaraficionado.com/article/cigar-imports-exceed-400-million-with-one-month-of-data-still-not-in
 

One of the main differences is that by 1997 the cigar stores were a lot emptier and what was left was mostly crap   Good cigars had become very hard to find versus the sheer amount of sticks, and the crazy amount of pretty high quality sticks we have today.