UNIVERSAL Corp. on Thursday said its subsidiary is increasing sales of leaf tobaccos in the Philippines as it signed a new leaf supply agreement with Philip Morris International Management SA (PMIMSA).
Under the new deal, PMFTC, Inc., an affiliate of PMIMSA, will buy processed grades of tobacco from Universal Leaf Philippines, Inc. (ULPI), starting with this year’s crop.
Previously, PMFTC bought leaf tobaccos produced by its own contracted grower base and process these using its own facility.
“The expansion of direct contracting by ULPI will provide procurement synergies and economies of scale that will promote efficient leaf utilization of tobaccos supplied to PMFTC and our other customers, and will support the competitiveness of Philippine tobaccos in the global leaf markets,” Universal Corporation Chairman, President and Chief Executive Officer George C. Freeman III said in a statement on Thursday.
“In addition, this new arrangement exemplifies our commitment to prioritize investments for the growth of our core tobacco business consistent with our capital allocation strategy,” Mr. Freeman added.
Universal Corporation, which is based in Richmond, Virginia, is a global supplier of tobacco leaf in more than 30 countries. It started its business in the Philippines in the 1960s.
PMFTC is the joint-venture company between Philip Morris Philippines Manufacturing, Inc. and Fortune Tobacco Corp. — R.J.N. Ignacio