Joya de Nicaragua Tour, Esteli, Nicaragua

May 12, 2010

Joya de Nicaragua FactoryJoya de Nicaragua – Story Told by Mario Perez, Factory Manager.

To understand the brand you have to understand the history of Nicaragua.  If you were to think about any one brand that is heavily entrenched in Nicaragua’s turbulent history – the brand that would come to mind is Joya de Nicaragua.  The history of the tobacco industry in Nicaragua dates back to the early 1960s after the Cubans vacated the island during the revolution of 1959.  Many of the people came to Nicaragua.  They also traveled to other Central American countries such as Honduras and the Dominican Republic.  The Cubans discovered that in Nicaragua the tobacco that was cultivated was high quality.  They decided to run tests to see if the Habana seed tobacco could be grown there with good results.  The native tobacco plant in Nicaragua is very large and has extremely large leaves.  Before the arrival of Cubans the Nicaraguans used tobacco called Chilcagre.  Chilcagre is a really rough, sweet tasting tobacco that is usually cured inside the earth. This is a very traditional way of curing tobacco in Nicaragua.  Cigars that are made with this tobacco don’t use any molds.  They are hand rolled and used for chewing or for smoking.  Even now in the countryside you can find people who still cure wild tobacco this way.  First it is dried and then put into holes in the earth where it ferments.  Then the tobacco is rolled into cigars.  It’s pretty raw but it has a combination of sweet and bitter flavors.  That is mostly what is known about cigars prior to the arrival of the Cubans in the early 1960s.  They not only brought in their style of making premium cigars to Nicaragua, but they also brought the cultivation of the very first Habana seed tobacco.

In the early 1960s the Cubans started to cultivate tobacco.  They didn’t make cigars there at first, they just cultivated tobacco.  They were experienced with this back in Cuba, so they wanted to continue doing it in different countries.  They realized that different parts of the land in Nicaragua were suitable for cultivating tobacco.  When they did begin to harvest the tobacco there, they also began to sell it to American companies.  From the early 1960s to 1968, two Cuban guys named Juan Francisco Romero, and Simon Camacho decided to start a cigar factory in Nicaragua.  Simon Camacho secured distribution in Miami, and they started the Nicaraguan Cigar Company in 1968, which they established on February 19th of that year. Every business in the country was required to involve the leader at that time, Somoza, a dictator who ran the country for over 40 years and became the majority shareholder of this company.  As president he was involved in every type of business in the country.  He was involved with sugar cane, cotton, coffee, and tobacco – which was known as a very promising business with a lot of potential.  A Cuban man once convinced him that a cigar factory had a lot of potential there, so, of course he followed this tip and obtained about 70% of the company.  The very first cigar made there was named Joya de Nicaragua – the Jewel of Nicaragua.  They began to produce that cigar and started selling it in the United States in 1968.  This was very important because it was Simon Camacho’s vision to bring a cigar to the U.S. market that would share similar characteristics with the Cuban cigars that were no longer available there.  The cigar industry was not very developed in the other Latin American countries at that time, so it was a good time to become involved with this business.  As they started to sell cigars, the response in the United Stated was huge.  The people in the factory worked very hard and soon enough they were making about ten thousand cigars per workday – which added up to about two million cigars per year.  That was an excellent turnout for the first and second year.  They realized that it was important to continue to grow to keep up with increasing demands.  They continued working and growing and by the second year they moved into a larger space.  By the third year they started to build the first cigar factory in the center of town.  It was one of the first two story buildings in the city.  There they managed to double the production.  They grew to make between six and eight million cigars a year by 1976.  At that moment the business was huge. In the beginning of the 1970s Somoza even made an agreement with the U.S. to distribute Joya de Nicaragua cigars at diplomatic events.  So in the early ‘70s, Joya de Nicaragua became the official cigar of the White House in the United States.  Giving cigars as gifts was a very popular practice back then. With the brand and his relationships, Somoza managed to make Joya de Nicaragua the official cigar of the White House – but more importantly it was the official cigar of Nicaragua.  It was distributed at various national events and became very popular.  Production increased so much that in 1976 they decided to build an even bigger building to produce even more cigars.  That is when the current factory was built.  That building, finished in 1978, was created to produce around 35,000 cigars per day.  It was part of a plan to make about 10 million cigars per year with no problem.

At the same time in the mid ‘70s the uprising of the people against the Somoza dictatorship became very intense in Nicaragua.  The people couldn’t take any more.  The guerrillas began to hit Somoza’s army very hard.  The most active part of the guerrillas’ movement started in Esteli and spread throughout all the tobacco land.  The situation became very unstable – politically, socially, and economically – despite the fact that there was good economical growth for everyone.  Foreign investors felt very insecure just being there and even more so to continue working there or to keep their funds invested.  In the mid ‘70s Simon Camacho and Juan Francisco Romero decided to leave the company.  They left it to Somoza to run.  He, in turn, found a couple of people from Nicaragua to run the cigar factory.  At that time there were also a couple of Cubans who ran the production of cigars and packaging there.  They taught all of the people there to make cigars in an industrial way.  In fact, they taught all the laborers how to cultivate, cure, ferment, and roll… everything.  There was a good team in place at that time.  They were very well trained.  That’s why when Romero and Camacho left the company the factory was still able to operate at the same level without any trouble.  Nevertheless, the situation there was extremely difficult.  The construction of the factory had ended in 1978.  It was a very beautiful factory, especially considering the circumstance of being located in such a small town.  The entire area around the factory is about 100,000 square feet.  It was beautiful.  Everyone wanted to work there.  The only problem was that the factory belonged to Somoza.  Most of the people from Esteli were against the dictator.  The factory began to operate in January of 1978, and the first big insurrection started in September 1978.  The aims of the guerrillas were directed at any properties held by Somoza, and they burned the factory down.  It was only operational for nine months when this happened.

Somoza owned about 40% of the private property of Nicaragua.  If you were a foreign investor looking to make money there, you had to partner with Somoza.  This was just on the economic side.  The social situation was very bad as well.  There was a lot of exploitation, and it ended in an insurrection against Somoza.  The Sandinista Front (the FSLN) led one of the biggest movements against his rule. This revolutionary movement eventually led the people to triumph over Somoza.   They managed to defeat Somoza in July of 1979 after 50,000 Nicaraguans were killed.  The war took place in the city of Esteli.  The Sandinistas ruled the country beginning in July 1979.  At that moment the country underwent a huge change.  It was during a time that socialism was effervescent in Latin American countries such as Cuba, El Salvador, and Nicaragua.  The Sandinistas began building a socialist system in Nicaragua following directly in the footsteps of Cuba.  Of course this meant that all of Somoza’s properties were nationalized.  Laws were then enacted so that these properties would never be turned back over to Somoza’s family.  The company was nationalized and rebuilt in 1979.  In the beginning of 1980 the factory began to sell cigars again.  In 1984 the [Ronald] Reagan administration placed an embargo on Nicaragua just as the [John F.] Kennedy administration had previously done with Cuba.

At this point in time, they were making ten million cigars a year.  The brand was very well known, but now there was no market for it.  All of the distribution up until this point was in the United States.  During this time in the 1980s, Dr. Alejandro Martinez Cuenca (the current owner of Joya de Nicaragua) was the minister of foreign trade for Nicaragua.  Not only did he open new markets for tobacco sales, but also for all of the other products that Nicaragua produced.  The U.S. had been Nicaragua’s best economic partner in trade and the country had a strong economic dependence on the United States’ demand for its products.  There was no way to continue manufacturing goods on the same scale without open trade with the United States. Besides that, in 1982 the Contra revolutionary movement started yet another war in Nicaragua.  The worst part about that was that it took place in the tobacco land.  Mostly in Jalapa, which is Nicaragua’s gem of the tobacco regions.  Tobacco is difficult enough to manage with the varying climate, but add to that a war.  People would be harvesting tobacco and at that very moment fighting would break out.  It was just crazy.  The war started in 1982 and lasted until 1990.  That was eight years of continuous war in the region of Nicaragua that included Esteli.

The counter revolutionary movement against the Sandinistas was made up of the Contras, who were against socialism in Nicaragua.  The Reagan administration financed the war on the Contras’ side.  Joya de Nicaragua was then launched in several European countries.  They began to sell to the U.K., France, Germany, and Switzerland.  Of course those markets were not as robust as the American market.  Joya de Nicaragua had to adapt to a completely unknown territory. Dr. Martinez’s help and guidance was extremely important during that change.  He had good relationships with many of the European companies.  The European distribution, however, was only a partial solution because the same production levels couldn’t be maintained without doing business with the Americans.  In Europe, Cuban cigars were legally sold and distributed.  Cuba had a huge market share and a big advantage.  They were everywhere.  Despite all this, Joya de Nicaragua still managed to keep the company alive.  In the ‘70s there were very few other cigar factories in Nicaragua.  Padron arrived in the early ‘70s, and aside from them there were just a few other small ones.  In the 1980s only Joya de Nicaragua continued to work without stopping.

By 1990 the economic situation was so colossal that the Sandinistas moved to Democratic elections and gave a year’s advance notice to prep for the elections.  They never thought that they would have lost the elections, but the war and economic situation were so damaging that the voters decided not to continue with the Sandinistas’ socialist ways and they lost the election in 1990.  A completely new chapter in history began at that point.  The embargo was lifted.  Trade with the U.S. was once again opened.  The situation began to stabilize after over ten years of continuous war and problems.  It was not easy to get used to this peace and economic stability.  It was a very difficult process.   The tobacco business had been in limbo for years, and finally Joya de Nicaragua started to make and sell cigars once again to the U.S. in 1994.

Many of these difficulties revolved around property rights.  Property was a big deal when the Sandinistas left power because there was no one equipped to govern all the properties that were nationalized.  It was clear that all the private properties that were nationalized in the 1980s had previous owners, and those owners had come back to reclaim their property.  All the property was returned to the landowners who showed up to reclaim them.  The property owners that couldn’t reclaim their property, for whatever reason, were compensated monetarily.  But what happened to the property owned by Somoza’s family?  There was a law enacted that barred them from recovering it and Somoza himself was killed in 1981 in Paraguay.  His family would never return to claim his property because the law stated that they could not.  So what happened to those properties, including the Joya de Nicaragua factory?  They were turned over to a national corporation of producers.  The country of Nicaragua owned the rights.  They had to move very fast in order to keep the factory working.  The situation during those four years was very dramatic.  There were a lot of complaints from people wanting to know who owned the factory.  Some said it belonged to the workers.  There were people that had been working there for 25 years.  They had spent the majority of their lives there.  It was a mess.  A choice was made then to hand over the rule of the factory to its workers.  At that time there were around 100 people employed there.  But how could a factory be run with 100 bosses?  It was a little too difficult, especially without a clearly defined market and customer base.  Now that trade was once again open with the United States, none of the workers had the experience to go there and negotiate deals to sell the product.  Nor did they have the money to buy the company from the government.  The workers began to look for someone that they could trust to help them.  Different groups of investors from Europe and the United States started appearing with offers to buy the factory.  But the workers lived and worked here for over 20 years and they didn’t want to sell the company to someone that they didn’t know.  They turned back to Dr. Alejandro Martinez Cuenca.  He was someone that they knew well and trusted.  With his help, they wanted to approach the government seeking a deal that would guarantee all of the workers’ jobs and that included monetary compensation for the property.  They also wanted to continue to run the company.  Martinez was unsure about taking this step.  It was a lot of money.  After the war the market was very unstable and nobody knew what was going to happen with trade to the United States.  They hadn’t sold cigars to the U.S. for about 14 years.  But Martinez was so engaged with cigars, tobacco, and the people that worked there that he decided to take a chance.  He found partners to invest in the business and in 1994 they began to restructure the company.  Again, it was very difficult but they were very fortunate then that the cigar boom had begun. The combination of situations at the time with the reforming of the company and the demands from the boom helped to revive not only Joya de Nicaragua, but the entire tobacco industry in Nicaragua.  By 1995 many Cuban-American investors started coming to Nicaragua to open factories.  Padron came back, Perdomo arrived, Drew Estate started, and by 1997 they could count about 20 different cigar factories that cropped up over a period of two and a half years.  The tobacco land was repaired.  The war ended. Work was easy to get.  Property was returned to its rightful owners.  They began to cultivate tobacco again.  They were able to supply their customers with tobacco.  The industry started to thrive again. All of these factors gave the company the push it needed.  They started to grow (again) very quickly for the next four years up until 1998.  This was when a crisis happened… the boom ended.

Working hard to combat decreased sales from the dying boom and licensing woes with the U.S. market, Joya de Nicaragua stayed afloat during another round of turbulent years.  At this time they also began doing a lot of experimenting to recreate the taste of the Joya de Nicaragua brand in the 1970s.  A lot of people remember those cigars being very strong in character.  Full body and full flavored.  They worked and worked at it, trying to find the exact blend.  Finally, they got their blend back by combining the old with the new.  In the ‘70s their cigars were very full and made in classic shapes such as Coronas, Lonsdales, Churchills, and Rothschilds.  In the beginning of this decade those sizes were not very popular.  Large ring cigars were the ones gaining popularity.  They then combined the blend of the 1970s, with the shape trends of the time.  Cigars were issued with ring gauges of 52, 54, and 60.  They also wanted to make an attractive wrapper that was very dark and rich in color.  They combined those elements and came up with Antaño. Antaño means yesteryears in Spanish.  It’s the blend of the yesteryears, of the 1970s.  That’s why the brand is called Joya de Nicaragua Antaño 1970.  The cigar was so well received in 2002 that sales went through the roof.  Since its introduction into the market, sales of Antaño have never stopped increasing.  It’s a rich cigar and people love it.  Of course now you can find many extremely good and rich Nicaraguan cigars.  Joya de Nicaragua says that one of the first cigars that identifies as a true Nicaraguan puro with all of the elements of the real Nicaraguan brand is the Antaño. Antaño is made with only Nicaraguan tobacco, has a rich character, the earthy elements of Nicaraguan tobacco, a real Nicaraguan name, and is made by a real Nicaraguan company.

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  1. […] began building a socialist system in Nicaragua following directly in the footsteps of Cuba. …Read More Cancel […]

  2. Hey there! This is my first comment here so I just wanted to give a quick shout out and tell you I really enjoy reading through your articles. Can you recommend any other blogs/websites/forums that go over the same subjects? Thanks for your time!

  3. Exceptional post but I was wondering if you could write a litte more on this topic? I’d be very thankful if you could elaborate a little bit further. Thanks!

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