A worker packs cigars at the Quesada cigar facility in Santiago de los Caballeros, Dominican Republic, on May 4, 2017. CREDIT MUST BE: Bloomberg photo by Dennis M. Rivera Pichardo
Banned smokers around the world are proving to be a boon to the Dominican Republic’s cigar and tobacco industry.
The Caribbean nation is already the world’s largest cigar maker and is well on its way to exporting $ 1 billion worth of tobacco products this year. That would represent a 6% jump from the $ 942 million overseas sales in 2019, according to government figures.
The cigar industry has become a ray of hope for the region’s largest economy, which is expected to shrink 5.5% this year as the critical tourism and service sectors face coronavirus-related restrictions.
Since global cigar lovers have not been able to visit bars and restaurants, they are spending more money and time on their smoking habits, said Hendrik Kelner, president of the Dominican Cigar Manufacturers Association.
“At first we were very concerned about seeing all of these shops and smoke shops close – some of them forever,” he said on a phone call from the Dominican Republic. But sales went online quickly and were strong, he said. “Despite everything, we are seeing strong export levels – the tobacco industry will not be hurt.”
If Dominican tobacco exports cross the 10-digit mark this year, it will become the country’s fifth export industry valued at $ 1 billion, along with gold, electrical products, textiles and medical devices, according to the central bank.
The Dominican Republic is considered to be one of the birthplaces of the cigar. Islanders rolled and smoked tobacco centuries before Columbus set foot on the island. When Cuba nationalized its cigar industry during the 1959 revolution, many of the top producers moved to the neighboring island and promoted the Dominican industry.
Since then, the sector has grown rapidly due to consolidation, diversification and foreign investment, said Ebell de Castro, development director for free zones and industrial parks at the Ministry of Industry.
The country has long been a top producer of hand-rolled “puros”, but is now also a leader in machine-rolled cigars and cigarillos, he said. In 2018, Swisher – manufacturer of Swisher candy and premium cigars – relocated part of its production from the USA to the Dominican Republic. Earlier this year, Imperial Brands sold its Dominican premium cigar factory to a group of private equity investors in a $ 1.5 billion deal.
The rise in cigar exports is due to the increase in the consumption of all types of drugs during the virus lockdown, even if some of them make the user more susceptible to Covid-19 complications. However, Kelner is not surprised by the resilience of the “Puros”.
“A cigar,” he said, “is like a loyal friend who accompanies you when times are tough and you are lonely.”
A worker rolls tobacco into a cigar at the Quesada cigar facility in Santiago de los Caballeros, Dominican Republic, on May 4, 2017. MUST CREDIT: Bloomberg photo by Dennis M. Rivera Pichardo