The only way to get from Nicaragua’s capital of Managua to the town of Estelí, the production center of the country’s cigar industry, is to drive northward along the twisting, two-lane CA-1, the Central American stretch of the Pan-American Highway. Since the road was repaved following Hurricane Mitch, which ravaged the region in 1998, the trip takes about two and a half hours—on a good day. On a normal day, dawdling drivers, traffic jams, and occasional wandering livestock add time to the ride.
Until recently, the landscape surrounding CA-1 was pitch black at night. Now, flickers of light emanate from the ramshackle towns and farmhouses that are scattered throughout Estelí. The presence of electricity in the countryside can be viewed as a sign of economic progress under the leftist Sandinista government of Daniel Ortega Saavedra, who returned to power in January 2007.
In the valley of Estelí and in the neighboring region of Condega, the farms produce filler and binder tobaccos. The town of Estelí is home to nearly all of Nicaragua’s 20 cigar factories (which numbered 40 during the cigar boom of the 1990s). In the factories, workers sort and age the tobacco, roll cigars, and build the cedar boxes in which the cigars are sold.
At the edge of the town of Estelí sits a brightly painted factory bearing the brand names CAO and Toraño; CAO International recently became the U.S. distributor for Carlos Toraño premium cigars. In addition to these cigars, Nicaragua is the source of sought-after puros (cigars in which wrapper, binder, and filler all come from the same country), such as the Padrón 1964 Anniversary, the Oliva O series, and the Joya de Nicaragua Antaño. Indeed, two of Robb Report’s Best of the Best 2008 selections, Ashton’s San Cristobal and United Tobacco’s 601 Blue, ?are Nicaraguan puros; José “Pepin” Garcia made both.
Down the road from the CAO and Toraño building is the sprawling construction site of Garcia’s new factory, Tabacalera Cubana. When completed later this year, it will accommodate 110 rollers and have a production capacity of more than 900,000 cigars a month. These will include Garcia’s own Don Pepin, El Centurion, El Rey de los Habanos, and Vegas Cubanas brands, as well as those Garcia produces for other labels, including Troya Classico and Tatuaje. Garcia’s enterprise also has planted 134 acres of tobacco in the Estelí valley.
At one time, Garcia was a supervisor at the Habanos factory in Cuba. He left his native country in 2002 for Nicaragua, rather than going to the relatively more prosperous and developed Dominican Republic, where many of his fellow Cubans emigrated to and established cigar businesses. Garcia says that Nicaragua’s tobacco drew him to the country. “The tobacco that’s being grown in Nicaragua is very close to that of Cuba,” says Garcia. “In taste and texture, the tobacco in Nicaragua today is similar to what Cuba was making in the 1980s.”
The two countries’ tobaccos should be similar. Havana’s cigar makers smuggled Cuban seed out of their country and first planted it in Nicaragua soon after Fidel Castro nationalized their factories in 1960. The Cuban expatriates discovered two fertile valleys, Estelí and Jalapa, in the Pacific lowlands of the northwestern part of the country. ?There the soil was dark and rich, and it produced a spicy leaf with a faint reddish tinge that reminded the Cubans of their homeland’s rare rosado tobacco.
Since that time, Nicaragua—which is about the size of New York state and has a population of less than 6 million—has become the world’s third-largest exporter of non-Cuban premium cigars. Last year, Nicaragua exported 70 million cigars, an amount 22 percent greater than its 2006 total. (The world’s top two exporters, the Dominican Republic and Honduras, last year exported 177 million and 84 million cigars, respectively.) Yet Nicaragua remains the poorest nation in Central America and has the third-lowest per capita income in the Western Hemisphere.
That status left the country ripe for the return of Ortega and the Sandinistas. The period of the party’s previous rule proved disastrous for Nicaragua’s cigar business, and many of the country’s cigar makers are concerned that history might repeat itself.
In 1979, Ortega, who had trained in guerrilla tactics in Cuba, led the Sandinista National Liberation Front in its overthrow of dictator Anastasio Somoza Debayle. The United States responded by funding and arming the pro-Somoza Contras. For the cigar industry, the ensuing civil war resulted in burned tobacco fields, destroyed factories, and thousands of workers being killed or fleeing the country.
Then, in 1980, blue mold wiped out nearly all of Central America’s tobacco crops. Nicaragua’s cigar industry suffered yet another blow in 1985, when the United States imposed a trade embargo that prevented the country’s cigar makers from selling their goods to their largest market. The United States lifted the embargo five years later, when Violeta Barrios de Chamorro succeeded Ortega as president, but by then the damage—both economic and ecological—had been done: The factories were in ruins, the land was scorched, and the quality and reputation of Nicaraguan cigars were tainted. It took many years, more elections, a planting of Criollo and other tobaccos that were resistant to blue mold, and the American cigar boom of the 1990s before Nicaragua’s cigar industry recovered.
Nicaragua’s cigar industry dates to 1964, shortly after the United States imposed its Cuban embargo. Tabacos Puros de Nicaragua, a company based in Estelí and founded in part by Somoza, introduced the first Nicaraguan brand, Joya de Nicaragua. Because the cigar tasted like those produced in Havana, the ?Joya de Nicaragua was an immediate success. By 1976 the company was selling 9 million cigars annually in the United States. However, in 1979 the Sandinistas burned the Tabacos Puros factory. The company quickly rebuilt it, but the ensuing U.S. embargo completed a devastating, one-two punch from which the brand did not start to recover until 1990, when the embargo ended. The Joya de Nicaragua brand now belongs to author and economist Alejandro Martínez Cuenca, a member of the Sandinista party who was Ortega’s minister of trade during the 1980s and ran against him for the Sandinista party nomination in the 2006 presidential election. ?A few years ago, ?the Joya de Nicaragua brand introduced the Antaño 1970, a puro that possesses the deep, meaty flavor that characterized the original Joya de Nicaragua. It also has the earthy undertones of most Cuban and Nicaraguan tobaccos.
“The quality of tobacco in Nicaragua is very consistent,” says Jorge Padrón, whose father, José Orlando Padrón, came to Nicaragua in 1967 and opened his Estelí factory in 1970. Today the Padrón family makes only Nicaraguan puros, which are among the most coveted cigars in ?America. “It’s a country where you can pretty much get every type of tobacco that you need,” says Padrón, “and you’re able to blend it accordingly to produce different tastes for different cigars. You can’t do that in a lot of countries.”
The variety of Nicaraguan tobaccos has expanded in recent years, as companies have supplemented the original Cuban-seed tobacco with strains from other areas, including Connecticut and Ecuador. They also have planted Habana 2000 Corojo hybrids for wrappers and Criollo 98 for filler. Cigar makers do not use Nicaraguan tobaccos only for puros. The Por Larrañaga Cabinet Selección, for example, has a Nicaraguan wrapper, and Fonseca’s Cubano Limitado uses Nicaraguan tobacco in its filler. Both cigars are made in the Dominican Republic.
“We look at Nicaraguan tobacco as something that will add a bit of strength to our blends,” says José Seijas, vice president and general manager of the Dominican Republic’s Tabacalera de Garcia factory, which is owned by industry giant Altadis. “If you look into the average Nicaraguan tobaccos, usually they will be stronger than the average Dominican tobaccos. With Nicaraguan, you will get more of a kick. It is very pliable. It is very manageable, very easy to work with.”
The demand for Nicaraguan cigars is keeping the factories at full capacity. Nicaragua American Tobacco S.A. (NATSA), which owns the Santa Clara and 800-JR Cigar brands, turns out 20 million cigars a year, making it Estelí’s largest producer. Tabacalera Perdomo, the second-largest producer in Estelí, with an 80,000-square-foot facility, has just added a second factory north of the town to keep up with demand. Jonathan Drew, of Drew Estate, which makes such popular cigars as the herbal-flavored Acid (named after a New ?York art studio, Arielle Chester Industrial Design, owned by a friend of Drew’s), constructed a roughly 100,000-square-foot factory in Estelí last year.
Northeast of Estelí, along the Honduran border, is the rugged Jalapa Valley, an area remote enough for both the Sandinistas and the Contras to have used it as a staging area at various times. Jalapa receives substantially more rainfall than does Estelí or Condega, and consequently the tobacco leaves are thinner and have a more delicate flavor than those grown elsewhere in Nicaragua. There are no factories in Jalapa, but the valley is home to some of the country’s largest tobacco plantations, where all three cigar components—wrapper, binder, and filler—are grown, just as is done in the famed Vuelta Abajo of Cuba.
A few years ago, Nestor Plasencia Sr. discovered another major growing area in Nicaragua. Plasencia, a fourth-generation tobacco grower who came to Nicaragua from Cuba with his father in 1965, is the largest tobacco producer in Central America. He owns the Segovia Cigars factory in Estelí and three more facilities in Honduras. His combined factories produce 30 million cigars a year for such brands as Rocky Patel, Alex Bradley, Miami Cigar, and Thompson Cigar.
In southwestern Nicaragua, near the Costa Rican border, lies Lago de Nicaragua, one of the world’s largest lakes. Five miles from the shore is Ometepe, an island formed by twin volcanoes, Concepción and Maderas, that have produced soil remarkably rich in nitrates, phosphates, and phosphorus.
Maderas, the smaller volcano, has not erupted in historical memory; its long-dormant crater has become a picturesque lagoon encircled by rain forest. But Concepción, rising 5,282 feet above sea level, remains active. Thick, white steam constantly cloaks the crater, serving as a perpetual reminder to the island’s 35,000 inhabitants of why everything on Ometepe grows so thick and lush. (The bananas for which the island is famous possess a honeyed sweetness not found in bananas grown anywhere else.) As an experiment, Plasencia planted Cuban-seed tobacco on the island in 1994.
In 2001, Plasencia showed some bales of this tobacco, which he had been aging, to Daniel Núñez, president and chief operating officer of General Cigar. Núñez examined the leaf, smelled it, and said to Plasencia, “I want it. You grow it, and we’ll take everything you can produce.”
Today Plasencia oversees 31 farms on Ometepe, and all of them grow the same tobacco strain for General Cigar. The leaf is extremely thick and pungent, ideally structured for filler, where it can sweeten and enhance any other tobacco with which it is blended. Especially oily, the tobacco holds moisture well. In fact, when a leaf is picked from a stalk and folded over, instead of cracking and breaking, it remains remarkably elastic. “In my 35 years of looking at tobacco leaves all over the world,” says Núñez, “I have never seen this phenomenon anywhere else. It may exist elsewhere, but I have never seen it.”
General Cigar first used the Ometepe tobacco in 2004, in its Dominican-made Bolivar. Later, in the Dominican Partagas Limited Reserve Decadas, the Ometepe leaf helped smooth the spiciness of the 10-year-old Cameroon wrapper. General Cigar is planning to make other cigars from this tobacco. Perhaps even an Ometepe puro? Núñez smiles at the suggestion. These plans presume, of course, that Plasencia’s business and the Nicaraguan cigar industry as a whole will maintain the current status quo during Ortega’s presidency.
Many Nicaraguan factory owners are worried that the government will impose high taxes and tight controls on their businesses, though very few will speak openly about their concerns. “As long as Ortega keeps quiet and does nothing, we are OK,” says one tobacco grower, who asked that his name not be used in this story.
A few individuals have spoken out. Philip Gregory Wynne, maker of Felipe Gregorio cigars, opened a factory in Nicaragua in 1995, setting up operations in Condega. But when Ortega returned to office, Wynne left the country. “It’s a political statement more than anything else,” he says. “Tobacco is a very large part of Nicaraguan exports, so I believe [Ortega] is going to form labor unions and worker committees, and ultimately tax the factories. That’s my opinion. I hope I’m totally wrong. I love the Nicaraguan people, and I think they have the world’s best tobacco, but I think [Ortega and tobacco] don’t mix.”
Other cigar-business owners do not seem to view Ortega as a threat. In Estelí, Miami entrepreneur Henry “Don Kiki” Berger owns 250 acres of tobacco plants, which his company, Tabacalera Estelí, uses to produce Cuban Crafters, J.L. Salazar y Hermanos, and other premium cigars. Like Garcia and Drew, Berger is planning to expand his operation. And in what many in the industry perceive as the ultimate show of good faith in Ortega, the Padrón family recently closed its Honduran factory, which it had operated from 1978 until 2006 in conjunction with its Nicaraguan operations, and consolidated everything in Nicaragua.
“[Ortega’s election] wasn’t a factor,” says Jorge Padrón. “It was just a cost-efficient move. Originally we decided to go across the border to Honduras and open up a second factory in case anything happened in Nicaragua. But all the tobacco we were using was coming from Nicaragua, and it was becoming increasingly difficult to manage two factories in two different countries when we could have it all in one.”