Grupo León Jimenes

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Grupo León Jimenes
Private
Industry Brewing
Tobacco industry
Banking
Founded 1903
Headquarters Santo Domingo, Dominican Republic
Key people
José León Asensio, President (Chairman)
Products Beer
Cigars
Cigarrettes
Revenue ~ US$600 million
Website http://www.glj.com.do

Grupo León Jimenes, C. por A.,[1] is one of the largest companies in the Dominican Republic with annual revenue of approximately $600 million and is headquartered in Santo Domingo. This corporation enjoys virtual monopolies in two local markets—beer and cigarettes—as well as having banking and printing operations. It brews Presidente, Bohemia, Miller and Heineken beers, and makes Marlboro cigarettes. It is also the parent company of La Aurora S.A., the maker of Aurora and León Jimenes cigars. The executive vice-president of La Aurora S.A. is Guillermo León Herbert.

History[edit]

In 1903 Eduardo León Jimenes opened a cigar factory in the Dominican Republic, making La Auroras cigars. The country was an undeveloped Caribbean nation, and had only gained independence from Haiti in 1844 after twenty-two years of occupation, and from Spain in 1865, after four years of colonial reannexation. Fine cigars, in the eyes of the world, came from Cuba and nowhere else. While today the Dominican Republic has stabilized as the most advanced of the major cigar-producing countries, the past century saw border disputes with neighboring Haiti, occupation by American troops, dictatorship and civil revolt. In the early 1900s, the country was mired in debt, and no one considered it a vacation destination. Because his father, Antonio León, was a tobacco grower, the 20-something-year-old figured on abundant raw material to make cigars for the local market. The factory was located in Guazumal, near Tamboril, which is now famous for its cigar rollers. Some tobacco came from that area, and other fields were in Gurabo, Jacagua and El Ingenio, five or six miles away. In 1903, the Dominican Republic still had dirt roads and in order to make cigars La Aurora had to pack tobacco in wood and ship it by donkey. The rainy season created a quagmire. The beasts of burden trudged through the muck to deliver tobacco to the tiny fábrica. The first La Auroras were perfectos, pointed at each end with a bulbous middle. The cigars were called preferidos. Sales, like the cigars, were entirely Dominican.

Civil strife shut down production at times before La Aurora's 30th anniversary. U.S. military forces marched into the Dominican Republic and occupied the country from 1916 to 1924. Various local generals vied for power and civilians took to the streets. With the revolutions and the uproar, the company was sometimes forced to stop production. In 1930, General Rafael Trujillo seized power from president Horacio Vazquez, creating a dictatorship that would last for more than three decades. Trujillo brought order to the country, but business opportunities became limited. La Aurora wanted to expand from cigars into the lucrative cigarette trade, but Trujillo owned the only company that was producing cigarettes at the time, and he passed laws making it impossible for new entrants to compete due to the duties.

Growth and expansion[edit]

Trujillo's assassination in 1961 created more civil unrest, but it did provide an opportunity for La Aurora to expand. As soon as Trujillo was killed La Aurora began to establish contracts and build its first cigarette factory. By 1963, La Aurora was making cigarettes, and six years later the company forged a relationship with Philip Morris, that continues to this day. The American cigarette giant owns a minority stake in Empresa León Jimenes, which produces Marlboros for the Dominican Republic. The money from cigarettes began to turn La Aurora into a dominant force in the country and it steered the company toward its next grand venture in beer. In 1980, Empresa León Jimenes purchased a brewery in Alaska, and shipped the brewery by boat to the Caribbean. The first year the company captured 28 percent of the market. Since local turmoil made it impossible for foreign companies to repatriate profits, the Leóns were able to buy their largest competitor, allowing it to control nearly 98 percent of the market. Presently, León Jimenes brews some Heineken and Miller beer at Cervecería Nacional Dominicana, but its king brand is Presidente, which can be found almost anywhere in the Dominican Republic.

Cigar production[edit]

The company says it makes 8 million cigars a year. In addition to the La Aurora brand, the company has made León Jimenes since 1987, and in 2002 it introduced Independencia, an inexpensive line of Dominican-wrapped smokes. It also produces small, handmade flavored cigars packed in tins for C.A.O. International Inc. Cigars account for only 1 percent of León Jimenes's sales, and even during the peak of the cigar boom, profits from cigars paled in comparison with its twin core businesses. León's youngest son, Guillermo, 43, has run La Aurora's cigar business for most of the past decade. La Aurora released a celebratory line of Dominican puros called Aurora Cien Años, Spanish for "100 Years", to celebrate its milestone.

Centro León in Santiago.

Twentyfirst century[edit]

In 2002 the marketing magazine Mercado says that results of a survey conducted by Read & Asociados rank Empresa Leon Jimenez as “the most admired company” in the Dominican Republic, followed by Banco Popular and Codetel. In 2003 Empresa León Jimenes inaugurated a 10-story, $10 million corporate office building in Santo Domingo, publishing two books, and opening a cultural center in Santiago. The shrinkage of the cigar segment among the company's holdings continued, as León Jimenes expanded its banking business by acquiring the fourth-largest bank in the Dominican Republic in the same year. Expanding its reach so that it does not depend solely on regulated interests is part of a conscious strategy at León Jimenes. At a ceremony attended by then President Hipólito Mejía on 2 December 2003, the Leon Jimenes family announced the creation of the Banco León, which will represent a union between the Banco Profesional and Banco Nacional de Credito (Bancredito).[2]

On 25 May 2011 Guillermo León purchased the remaining shares of the La Aurora and León Jimenes brands from Grupo León.[3]

On 16 April 2012 Anheuser-Busch InBev's Brazilian unit AmBev agreed to buy a controlling stake in the Dominican Republic-based brewer Cerveceria Nacional Dominicana (CND) from Grupo Leon Jimenes for over $1.2 billion, forming the biggest beverage company in the Caribbean.[4]

Notes[edit]

  1. ^ C. por A., Compañía Por Acciones, "Shared Company"
  2. ^ DR1 Daily News, 3 December 2003
  3. ^ Minato, Charlie (TheCigarFeed). "News: La Aurora Purchased by Guillermo León". 26 May 2011.[dead link]
  4. ^ "AmBev to buy control of Dominican brewer CND". reuters.com. Retrieved 8 May 2012. 

External links[edit]

List & Ranking of Leon Jimenes Cigars [1]