ManufacturerUniversal Corporation

From Cigarettes Pedia
Jump to: navigation, search

Universal Corporation

Universal Corporation (NYSE: UVV), headquartered in Richmond, Virginia, was founded in 1918. The Company is one of the world's leading leaf tobacco merchants and processors, based on volumes handled by its subsidiaries and affiliates, and has operations in agri-products. Universal conducts business in over 40 countries and employs more than 28,000 permanent and seasonal workers.

Universal's tobacco business includes selecting, buying, shipping, processing, packing, storing, and financing of leaf tobacco in tobacco growing countries for sale to, or for the account of, manufacturers of tobacco products throughout the world. Universal does not manufacture cigarettes or other consumer products. Most of the Company's tobacco revenues are derived from sales of processed tobacco and from fees and commissions for specific services.

Universal's tobacco operations have been its principal focus since its founding, and for fiscal year ended March 31, 2006, tobacco operations accounted for 51% of revenues and 78% of segment operating income. In September, 2006, Universal sold its lumber and building products distribution business and a significant portion of its agri-products business.

The Company's tobacco sales consist primarily of flue-cured and burley tobaccos that, along with oriental tobaccos, are the major ingredients in American blend cigarettes. Universal participates in the sales of oriental tobacco through ownership of a minority equity interest in what management believes to be the largest oriental tobacco merchant in the world, Socotab, L.L.C. Universal also has a leading position in worldwide dark tobacco markets. Dark tobaccos are typically used for cigars, pipe tobacco, and smokeless tobacco products. Its dark tobacco operations are located in the major producing countries, such as the United States, the Dominican Republic, Indonesia, and Brazil, and in other markets.

Leaf tobacco is marketed in different ways throughout the world, but in all instances the grade selection and establishment of price has to be done by a corps of experienced tobacco experts. Because tobacco is a perishable commodity, it has to be processed quickly following its purchase to avoid deterioration.

Using the services of a merchant such as Universal, a manufacturer can be assured complete worldwide market coverage. With few exceptions (most notably in the United States), the world's manufacturers of tobacco products leave the selecting, buying, and processing to leaf dealers, who service huge accounts from country to country. Leaf merchants provide manufacturers with lower cost services due to their economies of sale.

A tobacco merchant's business takes different forms with different customers. In some cases, a merchant selects, buys, and delivers the leaf to the customer for an agreed-upon commission. In other cases, a tobacco merchant will both purchase and process tobacco based on a customer's pre-season order. On some occasions immediate delivery and payment are made. In others, a leaf merchant finances the manufacturer until the time of delivery. Finally the merchant may also buy for its own account for later sale. In such cases the tobacco is stored until needed.

In the United States, the process of turning raw tobacco leaves from the fields into a finished product such as cigarettes, cigars, pipe tobacco, snuff, and chewing tobacco begins when the farmer harvests the crop and separates it into rough grades. U.S. government standards provide for eight grades of tobacco and six qualities within each grade. There are eighteen different tobacco colors, plus several combinations of colors, making the various choices of colors, qualities, and types of tobacco number in the thousands. The manufacturer's or merchant's buyers acquire tobacco either by contracting directly with the farmer or on the warehouse auction floors through the process of competitive bidding with other purchasers. After purchase, the tobacco is transported to the processing plants where it is cleaned, sorted, regraded, and threshed to remove the stem from the lamina. There its moisture content is stabilized and it is packed, either to be stored for future sale or to be shipped directly to the customer.


Official site: http://www.universalcorp.com/

Dear visitors of the site if you have more information about this manufacturer,
please insert this info. Thank you for the assistance.

Manufacturers U