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Oscar Basulto, Vicepresident of the International Corporation Habanos S.A

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Fernando Domínguez, Vicepresident of the International Corporation Habanos S.A

Habanos are always in full swing. The leaves that make them have long since stepped in the limelight as the world’s unrivaled kings of cigars, a title that will get a much mightier prop during its upcoming seventh festival.

That assertion is fully backed up by the co-presidents of Habanos S.A., Cuba’s Oscar Basulto and Spain’s Fernando Dominguez, two men who hold a highly professional relationship and are, above all else, close friends whose characters make them two of the best-known faces in the realm of the world’s best cigar.

Dressed in executive three-piece suits, their inquisitorial looks and smiling faces are outdone by jaunty comments and pinpointing phrases that reveal a combination of logical thoughts and brave hearts. As simple as it can get, these two men command a five-year-old joint venture that merged Altadis and Habanos together in an effort to beef up the distribution of Cuban cigars around the globe, a commodity that’s now selling in over a hundred countries.

Excellencies: What’s the ranking of Cuban cigars in today’s world market? What have been the major achievements and drawbacks for Habanos S.A. in 2004? Fernando Dominguez: Habanos S.A. is the world’s leading company in the Premium market, that is, cigars that are completely rolled by hand, with a 30 percent share of the world market that could climb to 70 percent if we rule out the United States of America, a country we cannot do business with or sell our products to for reasons we all know too well. Our job, marked by difficulties you can find in any trade of deluxe items, is very sensitive to the existing economic cycle, as well as to the movement of travelers that could be hampered by crisis situations, conflicts or widespread international uncertainty. In this sense, the environment in the course of 2004 was favorable, or at least, it did no harm to us. That, coupled with the ever-growing strength of our brands, the nonstop renovation of the assortment of products and the superb job done by our network of dealers, combined to make 2004 a pretty good year for Habanos S.A., a company that’s conducting an increasingly larger volume of business operations. Oscar Basulto: One of last year’s major developments was no doubt the launch of the Montecristo Edmundo, the first cigar from our best-known brand to hit the market in three decades. Its robust format –exclusively designed for this brand- together with unique flavor and aroma, have made this cigar catch on rapidly among Habanos aficionados, clearly outdoing our wildest expectations. As far as drawbacks are concerned, one of the biggest bumps on the road is the implementation and enforcement in many countries of increasingly tighter restrictions that forbid smoking in public places. And, you know, one of the best moments to enjoy a good cigar is after having a meal in a restaurant.

Excellencies: How do you assess these years of joint operations between the foreign and Cuban parts within the company? Francisco Dominguez: As a matter of fact, Habanos S.A. is these days celebrating its fifth anniversary as a joint venture. The best assessment I can possibly make is that in our company we don’t refer to a Cuban part or a foreign part. To put it in a colloquial way, we speak the same language, and each and every member of Habanos S.A. contributes the best knowledge and abilities to get this show on the road and make our business thrive.

Excellencies: The Habano Festival, what benefits have they chipped in to the company’s operations? How do you foresee the future of this event? Oscar Basulto: The Habano Festival, that will hold its seventh edition this time around, is our company’s main PR event, and make no mistakes about it; it’s the reference event in the realm of cigars at a world level. The weeklong festivity in Havana gathers over a thousand people from more than ninety countries who share a common passion for Cuba and Habanos. Participants, ranging from dealers, retailers, journalists and cigar enthusiasts, attend the festival’s traditional functions, including the welcome dinner, tours to tobacco plantations and cigar factories, an international seminar, the Habano Sommelier Contest, the Whiskey & Cigar Challenge and, to top it all off, the glamorous gala dinner. The festival has been growing on a regular basis with each passing year and for this time around we’re going to unveil an array of new products. Is there any better place on earth to do that than in the land of the world’s best tobacco?

Excellencies: What have been the top achievements of Limited Editions and other specialties in the sale of Cuban cigars? Oscar Basulto: Limited Editions, an other special serial productions, have made an unprecedented splash and are the fruit of our painstaking efforts and nonstop commitment to providing the most demanding Habano aficionados with the most exclusive products money can buy. Produced for our most prestigious brands, Limited Editions contain an extra layer that has been aged for at least a couple of years and that serves to underscore the organoleptic features and the quality of the whole blend. That, together with a nontraditional format presentation for each brand, has managed to capture the hearts and souls of cigar buffs everywhere, quickly turning Limited Editions into a classic.

Excellencies: How’s the sale of Habanos doing in Cuba’s domestic market? Oscar Basulto: Cuba, and it’s hard to imagine this otherwise, is one of our top markets. Its evolution in recent years has been very positive and it’s got what it takes to improve in the future due to the fast-paced advance of tourism, the specialization of the sale outlet network, the hardworking and high-quality professionalism of those retailers we work with. Fernando Dominguez: Cuba has the largest amount of Habano Houses in the world, our international mesh of franchised stores which is synonymous of quality warranty for the product we offer and keep a watchful eye on the kind of tailor-made and exquisite attention we give our customers. Oscar Basulto: On the other hand, there’s no better place than Cuba to puff at a Habano! Its conditions as a huge, natural humidor make this island nation the perfect place to perceive the whole scope of our product’s one-and-only and unmistaken flavor and aroma.

Excellencies: Can you give an updated appraisal of such recurrent nagging problems as fakery and smuggling? Fernando Dominguez: Like in any other deluxe item, forgery can’t be nipped in the bud altogether. However, Habanos S.A. is putting out all the stops in this battle by taking often and timely actions aimed at thwarting this problem. Oscar Basulto: We’re working very closely and in a coordinated way with customs officers around the world in this sense. In the case of Cuba, thanks to the collaboration of its administration, it’s been over a year since authorities implemented a set of guidelines that bans the export of more than 23 cigars –and therefore no case or box at all- that do not have the holographic seal stamped on them, or in case the outgoing traveler fails to produce the invoice receipt. Fernando Dominguez: We’re also urging our dealers around the world to create and post seals of their own that could guarantee the quality and place of origin of the product. These actions are complemented, on our part, by information and communication campaigns that seek to raise awareness among our customers that only if they buy a product that carries all identification markings, and if it’s bought at any of our stores and sale outlets, they will be putting a pure Habano between their lips.

Excellencies: Can you give us an advance of some novelties as far as the marketing of Habanos is concerned? Perhaps new brands. Oscar Basulto: We’re not considering to unveil a new brand. However, during this year’s Habano Festival we’re going to present two major novelties that we hope will delight our cigar aficionados.

Excellencies: It’d be interesting for our readers to have a small resumes of your careers and take a little peek into your personal lives. I mean, your studies, posts and experience. Oscar Basulto: I got a degree in Economics. From 1962 to 1999, I served in a number of posts at the Ministry of Agriculture, from the grassroots to the top. Since 1999, I’ve been President of the Tobacco Group and Co-President of Habanos S.A. Fernando Dominguez: I’m a an industrial engineer and I’ve spent virtually of all my lifetime linked to the realm of tobacco and cigars. I cut my labor teeth 20 years ago at the Engineering and Projects Division of Altadi (the former cigar factory) in Madrid. Shortly after that, I began working at the International Diversification Division and served a tenure as Chief of Management Control and Manufacture at the Cigar Division, also within Altadi. After that, I traveled to Cuba to join Habanos S.A. as Economic Vice President until I moved up the ladder to Co-President a couple of years ago. As you see, tobacco has been a part of my life, as well as Habanos, because I feel great passion for them.

Excellencies: Can you refer for a minute to your preferences as smokers? What brands do you like the most? What kind of food and beverages do you like to combine them with? Oscar Basulto: As we speak, the Montecristo Edmundos and the Robustos are my favorite brand and size. For me, nothing in this world compares to puffing at a good cigar after a healthy Cuban meal and a cup of coffee. Fernando Dominguez: Well, for me, there’s no greatest satisfaction than smoking a thoroughbred Habano. Depending on the moment and the spare time I might have, I choose this one or that other one from the huge assortment of Habanos, picking cigars from different brands, each and every one of them with flavors, aromas and sizes of their own. But at the end of the day, I tend to pick thick cigars, especially the Cohiba Siglo VI.