Universal Leaf Tobacco Company, Inc. has long been committed to being the
premier leaf tobacco merchant in the world. For over eighty-five years, our dedication to forging strong bonds with our customers, the proven abilities of our employees, and our unwavering pursuit of excellence has been our
Click HERE to view "A History of Success" timeline (Adobe Acrobat Reader).
The Birth of Universal Leaf Tobacco Company
In the wake of World War I, the landscape of the tobacco business was changing rapidly. The break-up in 1911 of
the American Tobacco Company under the terms of the Sherman Antitrust Act of 1890 created a number
of smaller tobacco companies. In addition, the popularity of cigarettes among the armed forces and the growth of
cigarette smoking among women fueled demand for tobacco.
Against the background of the evolving post-war marketplace, Jacquelin P. Taylor, founder of the J.P.
Taylor Company of Virginia, set out to build the largest leaf tobacco dealer organization in the world. In 1918, he
orchestrated the combination of six leaf dealers into one company. Universal Leaf Tobacco Company was
born. The advantages of the new company were numerous. The leaf tobacco merchants now had consolidated buying power,
unified sales efforts and combined financial and operational resources.
In 1924, Pinckney Harrison won support of Universal's board to organize Universal Leaf Tobacco Company of
China. James E. Covington was hired to run the new company and soon was named president of the China company.
From the mid-1920's until World War II, the China operations imported America tobacco, bought local Chinese leaf for sale to small Chinese manufacturers, and processed leaf for Chinese companies. The diversity of Covington's
operation, the ability of Universal as the parent company to provide financial aid, guarantee loans and provide
American leaf, and the multiple ties through processing and sales with Chinese manufacturers gave the company a
competitive advantage in China.
Canada was recognized in 1925 as a potential new source of flue-cured leaf tobacco, and the Canadian Leaf Tobacco
Company was born. Herbert Worth Jackson, Jr. was given the responsibility of on-site management for the new
company, a position that turned out to be a stepping-stone on his later ascent to the presidency of Universal.
By 1941, the Canadian operations were firmly entrenched as a consistent profit center for Universal.
By 1927, the popularity of cigarettes had overshadowed the cigar market. Numerous cigar dealers and manufacturers
failed. Despite the bleak outlook, Universal decided that one more low-risk venture into the cigar market had the
potential to be profitable. Henry Hitchcock was sent to Pennsylvania to develop a cigar leaf business. With
dedication and diligence, Hitchcock called on thousands of small cigar factories. He called on some customers for
over twenty years before he made a sale. Hitchcock's commitment helped Universal's cigar leaf business prosper
even during the depression decade of the 1930s.
In 1946, Herbert W. Jackson, Jr. became President of Universal. Under his leadership Universal invested heavily in infrastructure. Plants were renovated culminating in the super plants of the 1960s. These large, automated,
and highly efficient processing facilities brought the leaf tobacco business into the modern technological age.
Expansion throughout the world characterized Universal's post-war operations. Universal expanded operations
in Africa. In Greece, Universal entered into a partnership with NV Deli-Maatschappij to purchase, pack, and sell
burley tobacco. Under of the leadership of Gordon L. Crenshaw, who succeeded Jackson as President, Universal became a worldwide organization. Universal expanded into South America, the Far East, and Southeast Asia. By the end of the 1960s, Universal was operating in 15 countries outside of the United States.
Until the late 1960's, Universal dealt exclusively in leaf tobacco. When Crenshaw became President of Universal in 1966, he made diversification a priority. In 1976, Congoleum Corporation, a floor coverings manufacturer, announced a takeover bid for Universal. Through a protracted legal battle, Universal was able to fend off Congoleum's hostile takeover bid. A lesson that Universal took away from this experience was that an abundance of excess cash on hand made it an attractive takeover target. This realization increased efforts to reduce the excess cash through diversification.
Several smaller acquisitions were made between 1966 and 1980, but Universal's first attempts at diversification
did not produce the return on investment that was expected. In 1984, Universal acquired Lawyers Title Insurance
Corporation in what was a very successful transaction for Universal shareholders. In June 1991, Lawyer's Title was spun off to the shareholders of Universal Corporation.
Universal's acquisition in 1986 of NV Deli-Maatschappij, which had operations in tobacco and commodity trading, was one of its most successful forays into diversification. The Deli acquisition gave Universal a larger presence in the flue-cured and burley markets of Brazil, Italy, and Greece as well as an extended reach into several international markets for dark tobacco. At the time of acquisition, Deli's commodity trading included dealings in coffee, tea, rubber, vegetable oil, sunflower seeds, and timber.
Focus on Core Business
Several major changes took place at Universal in 1987. Henry H. Harrell was appointed President, and the holding company, Universal Corporation, was created. Harrell, who became Universal's Chairman and Chief Executive Officer, refocused the company on its core businesses. He emphasized strong local management in Universal's operations throughout the world. All regional tobacco managing directors became active participants in the development and implementation of Universal's global strategy. Universal focused its non-tobacco businesses on niche markets where it can add value and provide superior service.
Universal Corporation's Board of Directors elected Allen B. King to succeed Mr. Harrell as Chief Executive Officer, effective January 1, 2003, and as Chairman of the Board, effective October 28, 2003.
Mr. King has been with Universal since 1969, and began his career in the areas of finance and international operations. He became Vice President of Universal Corporation in 1987, was elected Executive Vice President in October 1989, President in 1991, and President and Chief Operating Officer in December 1992.
The Company decided to change its fiscal year end to March 31 from June 30, effective March 31, 2004, bringing all consolidated subsidiaries to the same reporting date. The Company filed a Transitional Report on Form 10-K for the nine months ending March 31, 2004.
In September, 2006, the Company completed the sale of its Dutch non-tobacco businesses which included its lumber and
building products distribution segmnet, and most of its agri-products segment. Universal retained its dried fruits and
nuts businesses, but, in December 2006 announced plans to sell all of its remaining non-tobacco agri-products businesses. The sale allows Universal to focus on its core leaf tobacco business.
George C. Freeman, III has been the Chief Executive Officer of Universal since April 1, 2008, and President since December
2006. He was elected Chairman on August 5, 2008. Mr. Freeman joined Universal's legal department in 1997 and was elected
General Counsel and Secretary in February 2001.
Universal continues to nurture strong bonds with customers, foster a knowledgeable and competent workforce, and strive to provide value and excellent service to its customers.
Sources: Tobacco Merchant: The Story of Universal Leaf Tobacco Company by Maurice Duke
and Daniel P. Jordan and company documents.