Rolling out a well-cured industry.

• Author: Garcia, Gabriel
• Position: Honduras's cigar industry

HONDURA'S BOOMING CIGAR BUSINESS WRAPS SOME OF THE BEST PRODUCTS IN THE WORLD, WHILE EMPLOYING THOUSAND OF WORKERS

Early in the morning, at a business meeting in a hotel in downtown Tegucigalpa, Honduras, Pierre Nakache and Geoffrey H. Ranck puff on their cigars and regard them carefully. A waiter, stationed nearby, discreetly observes the two and silently sweeps in to freshen their coffee. Even at this hour, the air is beginning to thicken with heat, but that does not seem to bother the two men.

Nakache, president of South Beach Cigars, in Miami, Florida, smiles and exclaims with an enthusiastic French accent, "Myth is the only thing that differentiates a Cuban cigar from this Honduran one." Ranck, owner and manager of the Domestic Tobacco Company, in Lancaster, Pennsylvania, agrees. "The Cubans are concentrating on numbers of cigars sold and have lost some of their former quality," he says.

The two men are meeting to discuss the products they will buy during their upcoming visits to Danli or Copan, the cigar production centers of Honduras. In 1996 alone, Ranck bought more than a million and a half cigars for his clients in the United States. Nakache would like to surpass that total in sales to his French homeland. For now, though, both men concentrate on the booming U.S. cigar market. Remarkably, they not only do not compete with each other but they also maintain ongoing communications on prospective purchases and news of the trade. A code of honor, universally respected, has always existed among tobacco distributors, buyers, and manufacturers. Orders are still placed without contracts.

Since last year, buyers and distributors like Nakache and Ranck have proliferated in Honduras. In the U.S., the cigar's traditional stogie profile has been replaced by a sleeker, more sophisticated one, and restrictions and negative publicity on the cigarette have only further served to puff up the image of the cigar. According to the Cigar Association of America, premium cigar sales in the U.S. increased 67 percent from 1995 to 1996, for a total of approximately 280 million cigars. In three years, 1994 96, total sales increased by one billion--from 3.7 to nearly 4.7 billion units. This extraordinary boom has also spread to Europe. And it is Honduras that has been one of the primary beneficiaries. In 1974 there were only four tobacco factories in the country; together they produced an average of 10 million cigars a year. Today, with five times that number, Honduras produces and exports more than 110 million cigars yearly, for which the buyer will pay US$2 to $25 a piece. As for quality, in Connoisseur magazine, one of the many new glossy cigar publications that has appeared in recent years, an expert's survey concluded that some Honduran varieties, like the Excalibur, made by Hoyo de Monterrey, are among the best in the world.

Like many other buyers, Nakache and Ranck travel to Danli several times a year. Forty-five miles east of Tegucigalpa, Danli is a beautiful city with colonial vestiges, nestled in the mountainous department of El Paraiso. It has grown rapidly in the last few years, thanks to the tobacco factories that have situated there. More than 30 percent...