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Tobacco Plus Convenience Expo

THE DOMINICAN REPORT
A Unique Vantage Point
by Mike Jessee

Manolo Quesada is standing in his office, talking about his most recent art acquisition. It’s a painting he commissioned from a local artist, Candido Bido. He’s absolutely glowing, as well he should; it’s a brilliantly rendered depiction of a typical Dominican tobacco field. The varying abundance of the greens in the tobacco leaves are highlighted with streaks of crimson along the veins. An azure sky rests on the hilly horizon, and a small group of workers in blue shirts are bunching the harvested leaves and preparing them for the drying huts. For Manolo, the aesthetics of the scene translate a great sense of history and personal fulfillment. His whole life has been shaped by the world of cigars and tobacco.

It also glimpses the future: Manolo is considering using the scene for the new labels of his Fonseca Reserve line.

A quick look around Manolo’s office reveals that his appreciation for art is as great as his passion for cigars. The office is filled with paintings from another Dominican artist, Juan Rodriguez. These paintings also depict the Dominican countryside, as well as portraits of time-worn tobacco workers, in a style reminiscent of the French Impressionists.

However, Manolo’s primary concern is cigars. Just back from a 10-day ski vacation in Vail, Colorado, (“I only did business on four of those days!” he quips), Manolo looks tan, rested, and ready to move his company, MATASA, into the next millennium as one of the top premium cigar manufacturers in the world. With brands such as Fonseca, Fonseca Vintage, La Primera, and Cubita, Manolo’s cigar holdings are well established, and carry a great reputation for quality and taste.

While Manolo stands in his office, located near the entrance to Santiago’s Zona Franca (Free Trade) Zone, several hundred employees are at work in his factory. The place is humming. At another warehouse just outside Santiago, more workers oversee the storage of tons of wrapper and binder tobacco, enough to meet the company’s production needs for three years.

He pulls out an advertisement mock-up for his Fonseca brand and points to what appear to be bales of tobacco.

“Do you know what these are?” he asks. His question is a leading one.

Something about the bales is different than those I’ve seen in other Dominican factories. I say, “It looks like a boatload of tobacco bales, maybe your wrappers.”

He smiles. “It’s wrapper bundled the old Cuban way, held together by palm tree bark and cord, instead of burlap. You want to take a look?” he asks.

“Sure,” I say, and with that we hop into a shiny Mitsubishi Montero and drive through the bustle of mid-afternoon Santiago, to the MATASA warehouse. MATASA general manager Julio Fajardo, a longtime friend of Manolo’s, is driving. He’s a few years younger than Manolo, who’s an athletic 52, and he definitely has the tobacco bug found in all the Dominican cigar manufacturers.

Manolo was bitten by the bug early on. His father, grandfather, and great-grandfather were all involved in the cigar business. His paternal great-grandfather, a Havana baker, turned to the tobacco trade when the bakery would no longer support the family. A couple members of each subsequent generation have found themselves involved with tobacco as a point of heredity. “Among my generation - there were 12 of us - me and my brother Alvaro were the only ones who got involved,” he says.

Manolo proudly mentions that some of his cousins have found success in medicine and accounting, but for him, it was tobacco. He started MATASA 25 years ago with a handful of workers. Now he is president of one of the major producers of Dominican cigars. Alvaro, vice president of MATASA, who also has an immense knowledge of tobacco, oversees the company’s farms and warehouse, and directs its recently purchased cigarette operations.

It’s apparent that Manolo’s knowledge and appreciation of fine tobacco is unparalleled. It’s that knowledge, along with the confidence it has forged, that comes across in conversation. He’ll talk about a number of subjects - travel, skiing, tennis, a healthy diet, art, life in New York, politics - easily and with genuine interest. But when the subject is tobacco, Manolo moves to a level unto his own.

On the way to the warehouse, Manolo talks about the growth of Santiago. He’s not fond of the increased traffic. The number of car owners has doubled over the past few years, and congestion and poor roads can turn a simple cross-town jaunt into an hour-long nightmare. It might not be so bad, if the new Dominican drivers knew what they were doing. But only a few people, mainly those who have been at it for years, understand the traffic laws. It sounds a lot like the cigar boom of the mid-’90s. The metaphor is not lost on Manolo Quesada.

At the height of the boom, Manolo, like so many of Santiago’s traditional cigar makers, found himself in a harried position. He was under constant pressure to produce an enormous amount of cigars, and it forced him to confront a number of troubling issues.

He had two primary concerns: continuing to manufacture expertly made cigars, and obtaining enough high-quality tobacco to produce those cigars. His first concern was abetted by the lack of experienced cigar rollers. Many of Santiago’s new cigar makers were literally stealing rollers, showing up at work sites and offering them inflated wages to jump ship and come to work for Don Nobody. Manolo wasn’t joining the bidding war. He and other members of ProCigar (the Dominican Republic’s cigar manufacturer’s association), which at the time included Fuente, Consolidated, Cia. Anonima Tabacalera, General Cigar, Leon Jimenes, and Davidoff, decided they would not raise wages to secure the rollers they had trained. They told their workers that their factories had been there before the boom, and when the inevitable flag in demand came, they would be the ones who could still promise the rollers steady work. To a large extent, the plan worked.

The scarcity of tobacco and the lack of dependable suppliers was a more difficult problem. Again, Manolo’s insight and forward-looking business style carried MATASA through. Unlike many smaller and less experienced manufacturers, MATASA could get tobacco from its own farms, to meet at least a portion of the enormous demand. But there were still problems. Some tobacco farmers began inflating prices, and there were thieves raiding the crops in the Dominican Republic and in Connecticut. Manolo says he even had problems with people stealing the rationed irrigation water.

Nonetheless, MATASA came through unscathed, with a nice surge in revenue from the boom. Sure enough, when demand started to slip in 1998, many of the small companies folded up their tents and left town. Manolo and the other ProCigar manufacturers found themselves with a large, well-trained labor pool. Things have been much less frantic ever since.



Continued on next page...

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