May 24, 1999

Cuba makes 50 million cigars for export in 1st quarter

                  HAVANA (Reuters) -- Cuba produced 50 million Havana cigars for export
                  in the first quarter -- a 22 percent increase from the year-ago period -- and
                  was on target for record annual production of 200 million, industry officials

                  The first-quarter production figure compared to an output of 41 million
                  cigars at the same stage last year, officials said over the weekend in
                  comments carried on state media.

                  Under pressure to hike output but preserve quality, Cuba's tobacco industry
                  turned out a record 160 million cigars for export in 1998. The Caribbean
                  island's cigars have traditionally been seen as the world's finest.

                  The 1998 figure, worth more than $380 million in revenues for the
                  cash-strapped country, was a big leap from the 100 million cigars produced
                  in 1997 and the 70 million in 1996.

                  Lazaro Aguilar, head of the national cigar workers' union, said nine tobacco
                  factories would soon be added to Cuba's existing 51, "with the aim of
                  guaranteeing demand in the world market, where Cuba stands out for the
                  quality of the product it offers."

                  Spain, France and England are the main buyers of Cuba's cigars, whose
                  best-selling brands last year were Montecristo, Romeo y Julieta, Partagas,
                  Quintero and Cohiba.

                  Cuba is banking on a boom in output and sales of tobacco -- the island's
                  third biggest export earner after sugar and nickel -- to help an economy
                  short of hard currency revenues.

                  But the trend has raised concerns among some importers and foreign
                  industry specialists about the continued quality of Cuba's cigars.

                  Stung by such quality concerns, Cuban cigar industry leaders have tried to
                  demonstrate that every aspect of their business -- from seed planting to
                  tobacco wrapping -- is still rigorously checked in factories.

                  Despite Washington's trade embargo on the island, Havana estimates that
                  between seven million and eight million Cuban cigars enter the United States
                  illegally each year.

                  Cuba also produces about 100 million cigars annually for national
                  production, although they are mainly of inferior quality to cigars made for