Richmond, Va.-based Universal Corp. (NYSE:UVV), the largest leaf tobacco supplier to the cigarette industry, announced this week that it is branching out into liquid nicotine production for electronic cigarettes.

The e-cigarette industry has enjoyed exponential growth in recent years, rising from sales equivalent to essentially zero traditional "analog" cigarettes annually in 2007, to the equivalent of 600 million analog cigarettes in 2012, to a projected 1.5 billion analog cigarettes replaced this year, according to an April report by Business

Looking to participate in this growth trend, Universal is partnering with botanical extraction company Avoca to form a joint venture that will be known as AmeriNic, Through this JV, Universal plans to produce liquid nicotine for use in e-cigarettes, with production beginning later this year. Pharmachem Laboratories, headquartered in New Jersey, is the parent company of Avoca.

Universal CEO George C. Freeman III explained: "We continually evaluate opportunities to meet the evolving needs of our customers and our industry. The electronic cigarette industry is developing rapidly, and as a leader in leaf tobacco sourcing and agronomic research, we are pleased to bring our expertise to this dynamic market."

Universal does not expect the formation of AmeriNic to affect its financial results this year.