The world’s largest factory, hit by US sanctions against Chen Zhi, is operating at 40-45% of its production capacity, according to our sources.

 

Tabacalera de Garcia (TG), the world’s largest cigar manufacturer located in the Dominican Republic, is currently operating at 40-45% of its capacity and has had to lay off approximately 600 rollers, according to multiple sources.

Due to sanctions imposed on Chen Zhi in October, Tabacalera USA, TG’s largest customer with the American versions of Montecristo, Romeo y Julieta, and H. Upmann, has suspended its purchases from this manufacturer and from the Flor de Copan factory in Honduras.

TG, which previously employed 2,000 people, including 1,000 rollers, is now only producing cigars for markets outside the United States, primarily those under the VegaFina brand. Before this crisis, TG claimed a production of 40 million units, 23 million of which were destined for the United States.

 

Tabacalera de Garcia now only manufactures VegaFina cigars

“Flor de Copan’s situation is even more difficult because it is even more dependent on the American market,” a very reliable source in the US industry told us.

Since the announcement of the US sanctions, Tabacalera USA has reorganized to transfer its production to other suppliers, particularly AJ Fernandez and Plasencia, “but also other manufacturers in Honduras and the Dominican Republic,” the same source added, without naming names. These alternative manufacturers will have no difficulty absorbing a demand of approximately 30 million cigars, according to this industry professional.

 

TG Visit During Procigar Cancelled

According to our information, Tabacalera USA has more than a year’s worth of stock in the United States to meet demand.

After three months on the run, Chen Zhi, accused of massive cyber fraud, was arrested on January 7 in Cambodia and immediately extradited to China.

When questioned in early January about the extent of staff reductions resulting from US sanctions, Tabacalera SLU in Madrid and Tabacalera USA declined to comment.

In two weeks, several hundred enthusiasts and professionals will gather in the Dominican Republic for the Procigar Festival. Participants learned last November that the traditional visit to Tabacalera de Garcia for the 2026 edition had been canceled.

 

Laurent Mimouni
Photos: Tabacalera de Garcia in February 2024. © Luc Monnet