Universal Corp. expanding facilities in Africa

Published November 1, 2013 by Robert Powell, III

Richmond-based leaf tobacco company Universal Corp. is expanding in Africa.

George C. Freeman III,  the company's chairman, president and CEO,  announced several capital projects in Africa designed to enhance the company's infrastructure there.  Universal operates in six African nations.

“We expect Africa to continue to grow in importance as a tobacco source and to eventually lead increases in tobacco production outside of China,” he said in a statement.  “Due to our expertise in working with grower communities there, we believe that we will continue to be a leader in this important region.”

The largest of the projects is in Mozambique, where the company will expand tobacco production and processing capabilities. The project includes a second processing line at the company's factory in Tete, doubling its capacity there.

The Mozambique facility, opened in 2006, processes tobacco purchased from more than 100,000 farmers in the country.

The company will redeploy idled equipment from Brazil, where the company recently consolidated operations, to lower expansion.  The Mozambique project also includes investments to expand crop production.

The cost of the project is expected to run between $40 million and $45 million during the next two years.  The new processing line is scheduled to begin operation next September.

Other African projects involve efficiency improvements and equipment enhancements at facilities in Tanzania and Malawi.

Freeman said the investments will position the company for future growth.

Universal conducts business in more than 30 countries.  Its revenues for the fiscal year that ended March 31 were $2.5 billion.