One of Richmond’s biggest tobacco companies is making a major overseas investment.
Universal Corp., a leaf tobacco supplier and processor headquartered on the Southside, said it plans to spend between $40 million and $45 million to expand its operations in Africa.
The bulk of the capital investment will be made at Universal’s factory in Tete, Mozambique, near the southeastern tip of the continent. The company is adding a second processing line and doubling the capacity of the seven-year-old facility. It will also spend money to improve efficiency at its facilities in Tanzania and Malawi.
Universal declined to comment on its investment or operations in Africa beyond what was in a prepared statement released Thursday. Universal has operations in six African nations.
“We expect Africa to continue to grow in importance as a tobacco source and to eventually lead increases in tobacco productions outside of China,” Universal chief executive George Freeman III said in the statement.
Universal has a niche role in the tobacco industry, serving as an intermediary between farmers and manufacturers of cigarettes and other tobacco products. Its five largest customers are Philip Morris, Imperial Tobacco, Chinese Tobacco, British American Tobacco and Japan Tobacco.
It also does seed research and development and in August announced its entrance into the burgeoning electronic cigarette market through a joint venture to produce liquid nicotine. That venture, dubbed AmeriNic, is expected to begin production this year, according to the company’s recent investor presentation.
The company was founded in 1918 and has a massive presence globally. With more than 25,000 employees worldwide, it does business in 30 countries on five continents, although its presence in Richmond is much smaller. It keeps its headquarters in an office park at 9201 Forest Hill Ave.
Universal brought in $2.5 billion in revenue in its most recent fiscal year. For the quarter ending June 30, it reported revenue of $433 million, down from $461 million. Its net income for the quarter was $58 million, up from $23 million. That was fueled in part by a favorable result in a lawsuit over Brazilian federal taxes.