ST Group Buys Toraño Factories

January 12, 2009 · Posted in Cigar Industry 

ST Group, the parent company of CAO, has bought The Toraño family’s cigar factories in Nicaragua and Honduras. But don’t worry CAO and Toraño fans, while some things change other things remain the same.

From EXCLUSIVE: ST Group Acquires Toraño Cigar Factories:

The factories make a combined 20 million handmade cigars annually, including most C.A.O. brands and all Carlos Toraño cigars. The factories were owned and run by the Toraños and the Fidel Olivas family.

Charlie Toraño, president of Toraño Cigars, said in an interview that he and the Olivas would continue to operate the factories.

The deal does not include the Carlos Toraño cigar brands, which the Toraños will continue to own. They will still be distributed by C.A.O.

For those of you who are more business-inclined this looks like nothing more than a vertical integration-type merger. ST Group has decided to take more control over the assembly line for its cigars. This means reducing the risk by buying the rights to the cigar factories that makes its cigars and, I’m guessing, the contracts for the tobacco that goes into those cigars as well. In exchange for a premium on the Toraño factories ST Group is buying some security.

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