The Business Year

Hendrik Kelner

President, Tabadom Holding

Yomar Hernández

Vice-President, Puros Don Roger

What are the implications of President Danilo Medina’s agricultural policies for the tobacco industry? HENDRIK KELNER Our President has prioritized two key economic sectors, namely tourism and agriculture. Despite current […]

What are the implications of President Danilo Medina’s agricultural policies for the tobacco industry?

HENDRIK KELNER Our President has prioritized two key economic sectors, namely tourism and agriculture. Despite current budgetary constraints, the Ministry of Agriculture is making great efforts with programs to improve productivity. And in the specific case of tobacco, the Tobacco Institute continued implementing its program of assistance to producers and has, additionally, initiated a study along with the Development Association to define the future strategic plan for the industry. The report should also identify our strengths, weaknesses, opportunities, and threats, becoming the basis for the implementation of future policies and actions in the sector.

What is the profile of a Puros Don Roger consumer?

YOMAR HERNÁNDEZ Quite often, it is a person new to smoking, or who is curious to try a cigar while in the Dominican Republic. They are keen, too, to try our coffee and rum, which are also truly popular here. However, our main customers are regular cigar smokers to whom we provide excellent quality at an affordable price. Our cigars are mild in strength and medium in flavor. Women tend to prefer the petit flavored cigars available in vanilla, whiskey, cinnamon, and 15 other flavors.

As the Dominican economy expands do you anticipate greater activity in the domestic market?

HK In the past, tourists kept the local market afloat, although such consumers were not necessarily true cigar smokers—many bought cigars out of curiosity, or as a present for someone back home. That resulted in the market becoming flooded with counterfeit products that negatively impacted the high-quality reputation of our products. In fact, the local market was not an interesting niche for our company. Today, however, the overall number of cigar smokers in Santo Domingo and Santiago has risen, and Dominicans tend to better appreciate the quality of cigars, and are willing to pay for it. As a result, the local market is becoming more interesting over time, and we ensure our commercial presence in local stores that showcase the quality of our traditional products.

What challenges does your business face, and what solutions are you applying?

YH The market has been steady and we are looking into ways of expanding the business. A rising dollar directly affect my business as all my costs are US dollar denominated. Naturally, I cannot pass that markup onto the client whenever prices rise, because they would stop buying. Instead we have to consider alternative revenue streams, such as a premium blend, or else the sale of accessories such as humidors and lighters, which are highly popular. In fact, I am in talks regarding the distribution of a specific brand of accessories and lighters. We have also been working to position our products in supermarkets, and expect this to ultimately boost sales. Additionally, we are keen to export to the Caribbean region, where there is great potential for high-quality and affordable cigars.

What is the touristic potential behind the cigar industry in the Dominican Republic?

HK Cigars are a true national brand—the only products manufactured and internationally distributed with a proud “Made in Dominican Republic” stamp. Additionally, we are the largest and best producers of cigars in the world. However, we have not taken advantage of this condition to stimulate tourism under the “The Cigar Country” brand, as industry insiders have labeled the country. Currently, with neither an official marketing campaign, nor slogans to foster this idea in people’s minds, the Dominican Republic solely sells sun and beaches. I believe we need a strategic alliance with the tourism industry to develop this potential. In this context, Procigar, the Association of Cigar Producers of the Dominican Republic, holds the annual Procigar Festival in February, which brings together some 270 people from over 20 countries, including journalists from international publications to experience our culture at first hand and enjoy the best cigars in the world. However, the event has not yet fully leveraged cigars to stress that the Dominican Republic offers much more than sun and beach.

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