Competitive disadvantages exist that prevent Honduras from exploiting its true potential in the global premium cigar market, stated CLE Cigar Company President Christian Eiroa, as he urged the Honduran government to set aside excessive bureaucracy and create a genuinely business-friendly environment if it wishes to compete on an equal footing with neighboring Nicaragua.
Speaking at the expert panel “The Honduran Tobacco Industry: Challenges and Opportunities” during the eighth edition of Fuego & Barrica, he shared compelling figures highlighting the sector’s relative stagnation in Honduras.
“About 17 years ago, Honduras exported 15 million more cigars than Nicaragua. Today, Nicaragua has roughly 64 factories and exports four times as much as Honduras, where we barely operate 11 to 12 large-scale factories.”
Eiroa attributed this disparity to the speed of administrative procedures, noting that while in Nicaragua the approval of a free trade zone or a temporary importation regime takes just 48 hours, business owners in Honduras must endure months or even years of administrative hurdles.
He also outlined the immense capital challenges facing producers, noting that doubling production from five to ten million cigars requires approximately two million dollars in liquid working capital dedicated solely to maintaining the inventory of curing raw material.
In that regard, he criticized domestic banks for lending exclusively through rigid, fixed-term credit lines, rather than offering flexible revolving lines of credit like those available in the United States.
Furthermore, Honduras lacks an agricultural insurance system and education for smallholder farmers. Planting 300 acres of tobacco, he noted, represents a $1.5 million investment over a four-month period. When faced with pests like blue mold, droughts, or excessive rainfall, Honduran producers face total financial loss without institutional support, unlike their counterparts in other countries.
There is also a lack of a strong base of certified independent growers: “The Dominican Republic has 6,000 independent growers and Nicaragua has 1,500. In Honduras, we are forced to import tobacco from abroad because we don’t have enough certified local growers. The government should support us by constructing $75,000 community curing barns to foster tobacco agriculture.”
Finally, Christian Eiroa emphasized the need for logistical infrastructure to accommodate international buyers. Following the airport’s relocation to Palmerola, ground travel times for clients visiting Danlí increased significantly. For this reason, he formally requested that the government construct an airstrip in the Jamastrán Valley.
“If we can have a foreign client land directly in the valley in 30 minutes, rather than enduring a long overland trip, sales momentum and international tourism will skyrocket. The government is what can either help us or hold us back. We need a state that cooperates, understands the industry’s needs, and gives us the necessary agility and flexibility. Danlí is currently the city with the lowest unemployment rate in the country thanks to tobacco; if they support us, we can grow exponentially,” he concluded.
