PHILIPPINES
George C. Freeman, III, chairman, president and c.e.o. of Universal Corporation announced on February 6, 2019 that the company’s subsidiary, Universal Leaf Philippines, Inc. (ULPI) will be increasing its purchases of leaf tobaccos in the Philippines as part of a new leaf supply arrangement for the Philippines with Philip Morris International Management SA (PMIMSA).
Previously, PMFTC, Inc. (PMFTC), an affiliate of PMIMSA, purchased certain quantities of leaf tobaccos produced by their own contracted grower base and processed that tobacco in their own facility. Starting with the 2019 crop, PMFTC will purchase processed grades of tobacco from ULPI.
The new arrangement is expected to provide important supply chain efficiencies and is indicative of PMIMSA’s and Universal’s strong commitment to the grower communities in the Philippines and PMIMSA’s intent to remain a major purchaser of Philippine-grown leaf tobacco. Universal initiated operations in the Philippines in the late 1960s.
Freeman stated, “We are very excited about this new opportunity to continue to meet the evolving needs of one of our long-standing global business partners while expanding our leaf purchasing and grower support services in the Filipino grower communities.
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. 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.”