Cigar News: Tabacalera El Artista Joins 38 Member Dominican Republic Tobacco Delegation – Radhamés Rodríguez Makes Statement

Santiago de los Caballeros, September 12, 2020

Mr. Luis Abinades

President of the Dominican Republic

Dear Mr. President,

Thank you very much for setting this space on your agenda and dedicating it to our province, Santiago, to discuss topics of great interest about one of the most important industries in our region and the country. An industry that, according to data from the Dominican Tobacco Institute (INTABACO), contributed USD $ 949 million in foreign currency to the Dominican economy in 2019, has a direct and indirect positive impact on 300,000 to 350,000 Dominicans and provides 125,000 formal and direct jobs, of which approximately 70,000 are in our province.

Currently this sector is made up of an estimated 90 Dominican companies dedicated to the production, industrialization and export of tobacco derived products, and that only in 2019 produced around 7,000 million units of cigars, of which 260 million were high quality and made entirely by hand by Dominican artisans.

Despite the fact that our industry continues to grow in international markets, and that for decades it has placed our country in an outstanding position; many of our products being considered the best in the world, grabbing the majority of the market share; our industry is being threatened by various factors which create uncertainty, both for the companies that we currently operate and for potential new investors.

Among the main weaknesses and threats we can mention: a) Lack of production infrastructure in the field; b) Decrease in the tobacco culture of our nation; c) Dependence on certain types of imported tobacco; d) Greater international competition; e) New regulations in important markets, such as generic packaging in countries such as Australia, New Zealand, Canada and Norway; f) New regulations and restrictions of the United States Food and Drug Administration (FDA) to the tobacco sector; among other.

In order to protect our industry, on which thousands of Dominican families depend, we must strengthen the competitiveness our country and reconquer the tobacco tradition that is part of our culture, Mr.President, today we request your special attention and support to the Dominican tobacco sector. We, on behalf of the sector, present below some proposals to consider:

• Zero or preferential rate for financing crops, processors and manufacturers.

According to the Ministry of Industry, Commerce and Small Business, a large proportion of the country’s tobacco harvest is produced by small farmers, often in subsistence conditions and with limited capacities for investment in infrastructure that guarantees the quality of their product, which causes a deficit in the competitiveness of the sector in relation to our largest regional competitors, such as Nicaragua and Honduras. With the availability of loans with special rates for companies in the sector, we will have the ability to invest in infrastructure in the field and in our companies, to guarantee high quality products, and would help reduce the need to import tobacco from Central and South America, becoming a more independent and capable industry.

• Creation of technical schools that generate specialized labor for the sector in different locations in the province, to train, and improve the skills of our personnel.

For decades, our industry has had a shortage of skilled labor, which limits the growth of our companies. Having technical schools where people interested in learning the art of making handmade cigars, and from where companies can have the opportunity to recruit cigar roller prospects already trained, would guarantee the availability of the personnel that we need so much and would allow us to increase the annual production as a country, as well as further improving the quality of our final product.

• Support from the Ministry of Foreign Affairs with the appointment of an Ambassador who represents the Tobacco Industry.

This with the objective of having a representative on the international community that watches over the interests of the Dominican Tobacco Industry, that attracts new and better businesses for the sector, that mediates on the new regulations and restrictions implemented in countries such as the United States and European Union, which affect small and medium-sized companies in the sector, sometimes putting their continuity in the market at risk. An Ambassador who serves as a link between our companies and international markets, who brings relationships closer and facilitates negotiations.

• Elimination of local taxes and duties for the sale of handmade cigars.

In recent years the local sale of cigars has grown exponentially, but since most of the manufacturers are located in free zone parks, and the fact that it is necessary to go through a customs process, and local distributors pay approximately 40% of the manufacturer’s price between ITBIS (Value added tax) and customs duties. On the other hand, countries that are part of the free trade agreements of our country have the opportunity to participate in the market with products of similar quality and that reach the final consumer with lower prices due to the tax exemptions. That is why we ask that these taxes and duties be exempted, so that our companies can participate in the national market in a fair way and with competitive prices.

• Construction of a Museum of Dominican Tobacco in Tamboril, world capital of handmade cigars.

Our products represent the pride and ability of the Dominican Republic and is part of our culture and history. Thousands of tourists who visit our country come with the interest of knowing our tobacco culture, and some of them visit the town of Tamboril, where this culture was born and still lives. With the construction of a museum in this town, we could increase our exposure as a tobacco country, and increase the flow of tourists in our region, who would not only come to visit our companies, but also a museum where to discover our tobacco tradition and identity, and stimulating the local economy.

There is no doubt about the weight of our sector for the national economy; a sector that harvests, processes, industrializes and exports a final product of world quality, high reputation and highly appreciated by its consumers; which represents our identity and roots. An industry that has important companies with Dominican capital and tobacco families from generations, a great source of jobs and foreign currency, which raises the pride of being Dominican.

We are immensely grateful to our president, Mr. Luis Abinader, for listening to our needs and for ensuring the economic stability of our country.

Confident that our concerns will be taken into account, cordially,

_______________________________

Radhamés Rodríguez Comprés

In Representation the agro-industrial

sector of the Dominican tobacco