San Andrés Tobacco on the Take-Off to International Relevance

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Ever since the 1800s, the San Andrés Valley in the state of Veracruz has been the center of tobacco in Mexico. The valley, surrounded by the northern most tropical forest in Latin America, turned out to be perfect for tobacco growing. Today it is what Estelí is to Nicaragua and Santiago to the Dominican Republic – on a smaller scale, of course. While the annual export of premium cigars in both Nicaragua and the Dominican Republic exceeds 100 million each year, in 2014, Mexico only sent around five million cigars overseas.

One of the reasons for this low figure were the imposed legal restrictions that made it impossible for factory owners to experiment with different blends. Up until eight years ago, it was even illegal to import tobacco, after that, just very expensive. It wasn’t until two years ago that it all changed. “When it was finally allowed, there were still two restrictions: the import duties, and the rules of the Ministry of Agriculture,” says Alejandro Turrent of Tabacalera Alberto Turrent. The tax was 45 percent and the fees about 10 percent, so it was simply too expensive. Now we can make better and more complex blends.”

The new rules make it possible to import tobacco comparatively easily from Nicaragua and the Dominican Republic. “Our argument was that the Swiss are the best producers of chocolate and Italians the best producers of coffee, yet they don’t have any cocoa or coffee beans,” says Jorge Ortiz, owner of Santa Clara Puros.

With the change, a cigar festival was also introduced, organized by AMEFAP, the Mexican Association of Cigar Manufacturers, which comprises five cigar manufacturers from the area, all with their own histories and profiles.

The biggest producer by far is Tabacalera Alberto Turrent. “Last year we produced around five million cigars,” Alejandro says. “We have our own distribution in Mexico, and our major client in the States is Altadis. We also have three major customers in Russia, Ukraine and Slovakia.”

Photo: Simon Lundh

The company was started by Alejandro’s great-great-grand father in 1880, and focused only on tobacco growing, which is still a big part of the business. “We grow three types of tobacco here: Habano Criollo, San Andrés Negro, and Sumatra. Sumatra is only used as a wrapper while the other two can be used as fillers and binders as well. Last year we grew 40 hectares’ worth of Habano Criollo, 100 hectares of San Andrés Negro, and 30 to 40 hectares of Sumatra. We sell mainly to Altadis in the US; My Father Cigars and Agrotabacos in Nicaragua; and General Cigar Company in the Dominican Republic.”

The plan for the cigar side of the business now is to focus on Europe. “We think that now is a good time to invest,” says Alejandro. We’ve been in the market for 12 years and we’ve noticed a change in cigar smokers – that they’re more open to products from other countries than from the Dominican Republic and Cuba.”

The second biggest factory in Mexico is Santa Clara Puros. The owner, Jorge Ortiz Alvarez, comes from a long line of tobacco producers. “My father and grandfather were both big producers, as well as my grandfather on my mother’s side,” Ortiz explains. “They didn’t have insecticides back then. So when I was six, my grandfather paid me ten Mexican cents for every 750 milliliter rum bottle I could fill with worms.”

Photo: Simon Lundh

Ortiz has been manufacturing cigars since 1967, which means that Santa Clara is the oldest, still extant cigar factory in San Andrés. “In the 1960s, a disease completely destroyed my father’s crops,” Ortiz recounts, “and he had to start over with bank loans and everything.”

Jorge Ortiz is the main force behind the aforementioned change. “It was a nightmare to go through all that bureaucracy. When we got the permission I went to Estelí to see Mr. Cura [Gustavo Cura of Oliva Tobacco Company]. ‘We heard there was a crazy guy from Mexico who spent a lot of money to be able to buy Nicaraguan tobacco,’ they told me there. ‘That’s me,’ I said.”

With more exciting blends in their repertoire, Santa Clara is now turning toward China and Europe. “I think there’s going to be a shortage of cigars in Europe when the embargo on Cuba is lifted, so then we want to be there. In China we’re participating in many events. Unfortunately the Mexican government seems to have made mistakes in their international relations with China, so the Chinese aren’t happy with our president. We hope that’s going to change so we can start exporting.”

Photo: Simon Lundh

The cigar world in San Andrés is like a small family. Everyone knows everyone, and noone personifies that more than the owner of the brand Miranda, Fernando López Turrent, cousin of Alejandro Turrent and Jorge Ortiz’s son-in-law. López Turrent started his business in 1996, on initiative of his wife, Carolina. “She thought we should open up a factory, since there was a big demand for cigars in the US,” Fernando says. “But only a couple of years later, the big cigar recession came. She thought that we should close the factory, but I didn’t want to. I liked blending and making cigars, so we stayed open, and in 2004/2005 it started to get better again. We began exporting small quantities to Europe.”

Photo: Simon Lundh

The name of the brand is an homage to Fernando’s grandfather, Emilio López Miranda. “He was a well-known man in San Andrés who did a lot for the farmers in the valley.” Both domestically and internationally, the Miranda clients are small businesses. In Mexico, they mostly sell directly to local distributors in different states; hotels, restaurants and shops; but the goal is to expand. According to Fernando, the change in restrictions will help. “Last year we imported tobacco for the first time, from Nicaragua. Now we can make more complex cigars and compete with Nicaragua, Cuba and the Dominican Republic when it comes to quality. We also want to find bigger distributors. It would make it easier for us to concentrate on making blends.”

The only factory not to be located in San Andrés is Puros Irene. It was founded in 1945 and is located in the city of Veracruz, two hours’ north of the valley. “My grandmother, Irene, was interested in cigars, so she started rolling her own in 1930 and selling them in the main square,” owner Rodolfo Vázquez Andrade says. “Then she founded the brand with two employees, which grew to 20 after a while.” Rodolfo got involved in the business in 1998. “She called me and said she couldn’t do it anymore. Either she’d sell it or give it to me. My dad, who was her only child, wasn’t interested, but I’d always liked cigars.”

Photo: Simon Lundh

At the time, Puros Irene was only selling cigars domestically, but two years later, Rodolfo had started exporting, primarily to Europe, which is still his main market. A desire to expand to the US brought in a well-known partner in the form of Carlos Slim, owner of more companies than one can name and one of the richest men in the world. “He used to buy cigars from my grandmother and he wanted to be partners already in 1998,” explains Rodolfo. “We started negotiating, and he began selling our cigars in his shops, Sanborns. In 2007, he bought 70 percent of the factory.”

Unfortunately it didn’t turn out as Rodolfo had hoped, so last year the cooperation ended. “The bureaucracy of his group works with his bigger companies, but not for us. In these seven years we have barely grown, and haven’t made it into the US market. He still sells and buys my cigars, though.” Now the US market is high priority. “I already export to three small distributors, but now I want to set up an office and begin the paperwork so we can launch our cigars there.”

Photo: Simon Lundh

Last but not least, there’s Tabacalera R. Paxtian, a family run business, headed by Francisco Paxtian. “We’re small but resilient,” Francisco says, presenting a team that consists of his sister, father, nephew and niece when I visit their factory. “It all started 100 years ago when my grandfather started growing tobacco. My father began working with tobacco at the age of 14 and has dedicated his whole life to the company. Now the third and fourth generations are carrying the torch.”

Tabacalera R. Paxtian still produces tobacco, some of which is exported to Nicaragua, and, in 1995, they started producing their own cigars. But like with other tobacco businesses, it wasn’t until the company could import tobacco that it felt it could seriously start competing on a global scale. What the future holds is yet to be seen, but gaining a foothold in China is in the process. “The Chinese market is opening up,” says Paxtian, “and although there’s no free trade agreement with China, we have some people interested in our products. We just haven’t been able to send them anything because of the restrictions.”

This article was published in the Cigar Journal Spring Edition 2016. 

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