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Universal Corp. reports jump in world-wide tobacco crops
Tobacco crops worldwide look to be on the rise this year, the Richmond-based firm that dominates this market says.
Even so, Universal Corp. said it expects supplies will continue to be tight for flue-cured tobacco, the main type in American-style cigarettes and the sole variety used in British and Canadian-style cigarettes.
Supplies of burley tobacco, another important component of American-style cigarettes are also tight.
“Despite tight tobacco supply conditions, we were able to secure the leaf tobacco needed by our customers,” said Universal chairman and CEO George Freeman.
“The Brazilian flue-cured crop is larger than the crop produced” last year, he said.
Inclement weather, including Cyclone Freddy, which made two high-intensity landfalls in Mozambique, has reduced African burley crop sizes, though these are still looking larger than last year’s severely reduced crop, he said.
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Supply chain and shipping constraints that hurt Universal and many other firms through the pandemic have returned to more normal conditions, Freeman said.
That allowed Universal to move a large amount of leaf from earlier years that had been stalled in storage.
Universal’s other plant-based businesses, which focus on extracts and flavorings, are expanding manufacturing operations, while the company has increased its sales and research and development efforts.
For the fiscal year that ended March 31, Universal reported a 22% increase in sales to $2.57 billion. Net income rose 43% to $124.1 million.