In 1862, Jos Arechabala y Aldama arrived in Havana, Cuba at the age of fifteen. At thirty-one, he founded Arechabala Industries, a small distillery in Crdenas, Cuba, which was then a small but rapidly growing seaport city with a bustling port and budding railroad industry.
In 1888, this city was devastated by a hurricane. Don Jos’s company suffered $50,000 in damages (roughly $1.3 million in 2015 dollars), but it survived and continued to grow. In 1921, Don Jos incorporated the company as Jos Arechabala, S. A., and two years later, he died. His family was driven back to Spain after a series of tragedies (one of his son-in-laws was murdered by kidnappers), and the company was taken over by Don Jos’s thirty-six-year-old godson Josechu.
Another hurricane hit Crdenas on September 1, 1933. This time, more than thirty people were killed, and the company suffered $500,000 in damages ($9.25 million in 2015 dollars). As part of the recovery strategy from this massive loss, Jos Arechabala, S. A. introduced Havana Club Rum. In 1935, this brand of rum was registered with the US Patent & Trademark Office.
In the 1930s, 40s, and 50s, Jos Arechabala, S. A. was the primary reason Crdenas remained competitive with Havana. By the 1950s, the company owned sugar refineries, candy manufacturing plants, Cuba’s oldest distillery, and various other plants for emerging technologies, including some that were attempting to replace gasoline with alcohol to power cars.
This post was published at Ludwig von Mises Institute on Jan 5, 2016.
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