After recently consolidating operations in Brazil, Universal Corporation (NYSE: UVV) announced today that it intends to redeploy idle equipment from the consolidation and invest $40 to $45 million over the next two years to significantly expand its current tobacco processing and production capabilities in Mozambique.
Universal has operated a tobacco plant in Tete since 2006, located in West Central Mozambique, that runs one processing line, the company said. Universal's plans are to invest in another line at the existing facility, effectively doubling its capacity.
In addition to the new processing line in Tete, Universal said in its statement that part of the $40- to $45-million investment will be used to enhance the area's tobacco crop production. Universal already processes tobacco leaves from "more than 100,000 Mozambique farmers" at the Tete facility.
Citing "strong customer demand" as the driving force behind its expansion in Africa, Universal chairman, president and CEO George C. Freeman III added, "Mozambique tobacco is a compliant product that is highly desired by many of our customers, and we believe that these investments position us favorably for future growth."
With operations in more than 30 countries, Universal is the largest tobacco merchant and processor in the world, as measured by volume.
Universal Corporation stock closed today at $53.03 a share, down 1.67%.
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