Full Description

Universal Corporation (Universal) is a leaf tobacco merchant and processor. Universal in engaged in procurement, processing, packing and supply of flue-cured and burley leaf tobacco to manufacturers of consumer tobacco products. Universal’s primary subsidiary is Universal Leaf Tobacco Company, Incorporated. The Company operates in three reportable segments, North America, Other Regions and Other Tobacco Operations. Through various operating subsidiaries and affiliates located in tobacco-growing countries around the world, Universal processes and sells flue-cured and burley tobaccos, dark air-cured tobaccos, and oriental tobaccos. It also provides value-added services to its customers, including blending, chemical and physical testing of tobacco, just-in-time inventory management, and manufacturing reconstituted sheet tobacco.

The Company has eight operating segments: North America, South America, Africa, Europe, Asia, Dark Air-Cured, Oriental, and Special Services. North America, South America, Africa, Europe, and Asia are primarily involved in flue-cured and burley leaf tobacco operations for supply to cigarette manufacturers. Dark Air-Cured supplies dark air-cured tobacco principally to manufacturers of cigars, pipe tobacco, and smokeless tobacco products, and Oriental supplies oriental tobacco to cigarette manufacturers.

Flue-cured, burley, and oriental tobaccos are used principally in the manufacture of cigarettes, and dark air-cured tobaccos are used mainly in the manufacture of cigars, pipe tobacco, and smokeless tobacco products. The Company generates its revenues from product sales, processing fees, and fees for other services. Universal’s sales consist primarily of flue-cured and burley tobaccos. During the fiscal year ended March 31, 2009 (fiscal 2009), the Company’s flue-cured and burley operations accounted for 89% of its revenues and 82% of its segment operating income.

In the United States, the Company sells processed United States tobacco to cigarette manufacturers, and processes United States flue-cured and burley tobacco on a fee basis, which it also refer to as toll processing. The Company’s dark tobacco operations are located in the producing countries and in other smaller markets. Producing countries for dark tobacco include the United States, the Dominican Republic, Ecuador, Indonesia, Paraguay, the Philippines, Nicaragua, and Brazil. Dark tobaccos are typically used in the manufacture of cigars, pipe tobacco, and smokeless tobacco products, and as components of certain roll-your-own cigarette products.

The Company conducts its business in a number of countries, including Argentina, Bangladesh, Brazil, Canada, the Dominican Republic, France, Germany, Guatemala, Hungary, India, Indonesia, Italy, Malawi, Mexico, Mozambique, the Netherlands, Nicaragua, Paraguay, the People’s Republic of China, the Philippines, Poland, Singapore, South Africa, Spain, Switzerland, Tanzania, Uganda, the United States, Zambia, and Zimbabwe. In addition, Socotab, L.L.C. has oriental tobacco operations in Bulgaria, Greece, Macedonia and Turkey.

The Company competes with Alliance One International, Inc. and British American Tobacco PLC.