The state enterprise group Tabaco de Cuba (Tabacuba) is undertaking an extensive program of construction and modernization of its industrial facilities, putting the company in a better position to meet the demands of the local and international markets, with a more a efficient, competitive, and sustainable performance.
Miguel Vladimir Rodríguez González, Tabacuba first vice president, explained to the Cuban media that the company is immersed in a process of improvement and restructuring, as one of nine Central State Enterprise Management Organizations (OSDE) associated with the Ministry of Agriculture (Minag), while at the same time beginning the construction of a new factory of cigarettes in the Mariel Special Development Zone (ZEDM), a project involving more than 100 million dollars, set to be operational by the end of 2018.
Rodríguez indicated that the new plant, being built with the latest technology, will have an annual production capacity of eight billion units of exportable-quality cigarettes, saying, “It is an ambitious project that we are undertaking with our commercial associate, the Souza Cruz company, an affiliate of one of the planet’s largest transnationals, British American Tobacco (BAT).”
He explained that the Luyanó factory in Havana can only produce four billion units for export a year, emphasizing that the new plant will allow the Cuban tobacco industry to meet domestic demand, plus that of tourists visiting the island and the export market.
Exports through May of this year had reached a value of 86.4 million USD. Photo: Yaimí Ravelo
The Lázaro Peña factory in the eastern province of Holguín will also launch an ambitious investment project this year, Rodríguez reported, to expand and modernize its production for the domestic market, and make adjustments to meet international standards.
“One of the state enterprise group’s objectives,” he said, “is precisely to standardize all of our products, and ensure that they are of exportable quality, or approach international norms.”
Another important project involves the construction of a mechanized cigar factory for national consumption, in the eastern province of Granma, he reported, “By the end of the year, the first machines will arrive in the country, and the erection of the industrial plant will begin.”
Rodríguez likewise described plans to expand and modernize the only mechanized cigar factory in the country, that of the joint enterprise Internacional Cubana de Tabacos, S.A., formed by Tabacuba and the Imperial Tobacco Group (ITG), the world’s fourth largest tobacco company.
Some 24.5 million stakes of tobacco leaves were produced last year. Photo: Jose M. Correa
With this step, he said, the company is preparing for an eventual incursion into the U.S. market, when the unjust restrictions of the economic, commercial and financial blockade of Cuba are ended, and trade between the two countries is again allowed.
Rodríguez commented, “The 7th Congress of the Communist Party of Cuba (PCC) considered the Economic and Social Development Plan through 2030. The strategic lines (of this plan) are in the popular consultation phase through the beginning of next year, and parallel to this, our Enterprise Group is moving forward with a development program for the tobacco industry, covering the period through 2020, which will require an updating based on directives emerging from the PCC Congress.”
The Tabacuba executive said that the enterprise is obliged to prepare, because the situation has changed with the reestablishment of diplomatic relations between Cuba and the United States.
He emphasized that the U.S. is the world’s main market for tobacco products, consuming “more than 300 million hand-rolled cigars, and nine billion machine-made cigars, It is an important market for any country producing tobacco. It is a challenge to enter this market, and the enterprise group is obliged to include it in our strategic projections, and to take the particularities of the U.S. market into consideration, in the event that trade with this country is freed up.”
THE 2015-2016 TOBACCO HARVEST
Meanwhile, amidst this important process, the 2015-2015 tobacco cultivation season, which began in October, is drawing to a close. Periods of inclement weather have had an impact – first severe drought, followed by unseasonably heavy rain – with sowing extended through May 30.
“This is the first time we have faced a situation like this, and given these issues, Tabacuba and its enterprise system adopted timely measures to prepare for the dangers of drought, heavy rain, and high temperatures, which led to the appearance of pests and diseases,” Rodríguez explained
“Training of managers, technicians, and producers; their determination to move ahead with the agricultural campaign under adverse conditions; the introduction of new varieties; and the timely delivery of inputs were decisive, as well as support provided by the Ministry’s Soils and Plant Health leadership, the national insurance enterprise, and the country’s banking system.
“Of the 25,582 hectares of tobacco to be planted according to plans, 30,033 were done, a 117% fulfillment. That doesn’t mean we are satisfied with what was achieved, but we managed to save the tobacco harvest in a very difficult year, in terms of climate,” he said.
Of the 34 million stakes of tobacco planned (a smooth, unfinished wood plank on which the tobacco leaves are placed after they have been strung for aging) farmers harvested 24.5 million. Plans projected reaching 25 million, no doubt affected by the loss of more than 4,000 hectares of plantings, given the aforementioned problems.
By comparison, during the 2014-2015 season, 23,798 hectares of tobacco were planted, yielding a harvest of 24,300 tons, that is 1.02 tons per hectare (t/ha).
For next season (2016-2017), which began April 1, projected are 28,010 hectares to be planted, with 95% of this already under contract with producers, looking to harvest 29,911 tons of tobacco, based on productivity of 1.07 tons per hectare.
INSIDE THE INDUSTRY
The Tabacuba enterprise group includes 40 state enterprises, three joint ventures with foreign capital (Habanos S.A., Internacional Cubana de Tabacos S.A. & Brascuba Cigarrillos S.A.), one entirely Cuban trading company, and a research institute with three field stations.
The organization employs some 40,000 workers, and annually involves some 200,000 in other state enterprises; Basic Units of Cooperative Production (UBPC); Agricultural Production Cooperatives (CPS); Credit and Services Cooperatives (CCS); and families of producers.
Cuba’s tobacco industry currently produces almost 300 million hand-rolled cigars, of which some 100 million are destined for export, plus about 130 million machine made cigars, 90% for export, as well as some 15 billion cigarettes.
Exports through May of this year had reached a value of 86.4 million USD, surpassing plans for this period of approximately 65.7 million, a 131.4% performance.