Universal Corporation, headquartered in Richmond, Virginia, was founded in 1918 and is the world's leading leaf tobacco merchant and processor, based on volumes handled by its subsidiaries and affiliates. In its fiscal year ended March 31, 2009, Universal's revenues were $2.6 billion.
Universal's tobacco operations have been its principal focus since its founding. The company conducts its business in over 30 countries (including the United States, Brazil, Malawi, Indonesia, and the Dominican Republic). As an independent tobacco leaf merchant, the company purchases tobacco from farmers for processing and sale to manufacturers of cigarettes, cigars, and other tobacco products. Processing tobacco involves removing the stem from the leaf, drying the lamina to a level appropriate for long-term storage and proper aging, and packing for delivery to customers. Universal is a major purchaser and processor in the chief exporting regions for flue-cured and burley tobacco throughout the world. The company estimates that it usually purchases between 20% and 30% of the annual production of such tobaccos in Brazil and between 35% and 45% in Africa. Universal also handles between 35% and 45% of U.S. flue-cured and burley tobacco production.
Universal's strength is due, in part, to a policy of not carrying unplanned uncommitted inventory; successful strategic alliances with customers; strong local management; financial flexibility; and the highest level of service to its customers. Universal's board of directors has declared 38 consecutive annual dividend increases. The company uses its resources to increase value to its shareholders by investing in its operations where returns exceed its cost of capital and managing its balance sheet prudently, with due consideration given returning funds to shareholders while maintaining a conservative capital structure.
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