Tag: Universal Corp.

  • MLT Cuts Production in Mozambique

    MLT Cuts Production in Mozambique

    Photo: Taco Tuinstra

    Mozambique Leaf Tobacco (MLT) plans to reduce production in Niassa during the upcoming growing season due to difficulties of selling leaf during the Covid-19 pandemic, reports Club of Mozambique.

    Claudio Ferreira, MLT manager for the Niassa and Zambezia provinces, told Noticias that some countries that are potential markets for Mozambican tobacco have reduced their imports significantly to protect the health of their citizens during the pandemic. Health experts believe the inherent risks of smoking are exacerbated by Covid-19.

    “The World Health Organization has also been advising smokers to abandon tobacco, and these appeals are being listened to”, said Ferreira.

    Ferreira said MLT will work with 36,500 smallholder growers this season, about 4,000 less than in the 2019-2020 year. The area under tobacco cultivation will shrink, he added, but did not say by how much.

    Niassa Governor Judite Massenguele said the provincial agricultural directorate has already begun to persuade tobacco farmers to switch to crops such as cotton, soya and sesame.

    The Niassa government is also eager to set up a tobacco processing plant in the province, believing that this will create jobs. But so far, no private sector partner seems interested in such a plant.

    MLT, a subsidiary of Universal Corp., operates a tobacco processing plant in Tete Province.

  • Universal Buys Silva International

    Universal Buys Silva International

    Photo: Jerzy Górecki from Pixabay

    Universal Corp. has entered into a definitive agreement to acquire Silva International, a privately held, natural, specialty dehydrated vegetable, fruit and herb processing company, for $170 million in cash. Following the close of the transaction, Silva will operate as part of Universal’s plant-based ingredients platform, which includes FruitSmart and Carolina Innovative Food Ingredients.

    Founded in 1979, Silva procures over 60 types of dehydrated vegetables, fruits and herbs from more than 20 countries around the world. In addition to sourcing, the company specializes in processing natural raw materials into custom designed dehydrated vegetable- and fruit-based ingredients for a variety of end products. Headquartered in Momence, Illinois, Silva employs more than 200 people and has a 380,000 square foot manufacturing facility.

    George Freeman

    “We’re excited to have reached this agreement with Silva as we continue to diversify our offerings and generate new opportunities for value creation,” said George C. Freeman III, chairman, president and chief executive officer of Universal Corp. “This acquisition builds on our investment in FruitSmart and expands our plant-based ingredients platform. With this acquisition, we expect these businesses to represent 10 percent to 20 percent of our EBITDA by fiscal year 2022, ahead of our previously stated target outlined as part of our capital allocation strategy.”

    Universal Corp. expects the transaction to close in October of this year, subject to customary closing conditions. The company anticipates its acquisition will be accretive to earnings in the first fiscal year following closing and expects to fund the transaction with cash on hand and borrowings under its committed revolving credit facility.

  • Universal Welcomes Clearance of Imports

    Universal Welcomes Clearance of Imports

    Photo: Taco Tuinstra

    Universal Corp. has welcomed a decision by U.S. Customs and Border Protection (CBP) to admit imports from its Limbe Leaf Tobacco Co. subsidiary in Malawi.

    On Nov. 1, 2019, CBP issued a withhold release order (WRO) on imports into the U.S. of tobacco from Malawi based on a suspicion that forced labor was used in Malawi to produce the country’s tobacco crop.

    Universal Corp. subsequently filed a comprehensive explanation of Limbe Leaf’s supply chain social compliance program, its efforts to identify and minimize the risks of forced labor on contracted farms from which it purchases tobacco in Malawi, and its ability to trace such tobacco once processed and shipped from the shipping vessel back to the individual farms on which it was produced.

    CBP evaluated the company’s filing and concluded that Limbe Leaf’s program and on-farm efforts produced evidence that sufficiently supported the company’s claims that tobacco purchased from Limbe Leaf is not produced or harvested using forced labor.

    The agency recently confirmed that tobacco imported from Limbe Leaf is again admissible at all U.S. ports of entry.

     “Universal Corporation is committed to the sustainable production of tobacco,” said George C. Freeman III, chairman, president and CEO of Universal Corp. “Our commitment is evidenced by our Agricultural Labor Practices program and other sustainability policies, and by the implementation and maintenance of those programs and policies by our operations around the world. We are proud of Limbe Leaf’s dedication to the sustainable production of tobacco in Malawi, and we appreciate CBP’s recognition of those efforts.”

    Earlier this year, CBP cleared Malawi tobacco sold by Alliance One International for entry into the U.S.

  • Universal Reports ‘Respectable’ Quarter

    Universal Reports ‘Respectable’ Quarter

    George C. Freeman III

    Universal Corp. reported net income of $7.3 million for the first quarter of fiscal year 2021, which ended on June 30, 2020. Those results were up from $2.1 million in the first quarter of fiscal year 2020.
     
    Excluding certain nonrecurring items, net income declined by $4.3 million for the quarter ended June 30, 2020, compared to the quarter ended June 30, 2019. Operating income of $8.5 million for the quarter increased by $1 million over the previous year’s quarter.
     
    Segment operating income was $4.3 million for the first quarter of fiscal year 2021, down $3.2 million compared to the same period last fiscal year, mainly because of earnings declines in Universal’s Other Regions and Other Tobacco Operations segments.

    “Our fiscal year 2021 is off to a slow but respectable start as nearly all of our origins continue to make good progress moving through their various tobacco growing and processing activities. The first fiscal quarter is generally the weakest of our fiscal year given seasonal timing,” said George C. Freeman III, chairman, president and CEO of Universal.
     
    “This fiscal year, as a result of the Covid-19 pandemic, we are also experiencing later openings of the tobacco buying seasons and slower processing due to social distancing and other local government safety requirements,” Freeman added. “We have also had some slower receipts of customer shipping instructions and orders. However, to date, we have not seen a material impact to our supply chain or seasonal planting or harvesting requirements.”
     

  • Universal CFO on medical leave

    Universal CFO on medical leave

    Universal Corp.’s senior vice president and chief financial officer, David C. Moore, will be on a temporary medical leave of absence, effective immediately.

    During the absence, other Universal executive officers will assume Moore’s management duties while remaining in their current positions.  George C. Freeman III, chairman, president, and CEO, will also act as the company’s principal financial officer.

    Headquartered in Richmond, Virginia, Universal Corp. is the world’s leading global leaf tobacco supplier and conducts business in more than 30 countries.  Its revenues for the fiscal year ended March 31, 2016, were $2.1 billion.