Monthly Archives: August 2016

Lubrizol Terminates Agreements with Astral Poly-Technik

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The Lubrizol Corporation has terminated its processor agreements with Astral Poly-Technik Limited for the manufacture and sale of FlowGuard®, BlazeMaster® and Corzan® branded pipes and fittings in India.

Lubrizol, which is the inventor of chlorinated polyvinyl chloride (CPVC), is known in India amongst the engineers, builders, constructors and plumbers for its globally approved and certified CPVC compounds used in pipes for plumbing, fire protection and industrial applications.

The move comes out of Astral Poly-Technik Ltd’s recent decision to begin local compounding of material and launch house branded lines of chlorinated polyvinyl chloride (CPVC), which is in conflict with Lubrizol’s long established and successful CPVC branded business model.

With termination of this partnership, starting from October 9, 2016, Astral will no longer have access to Lubrizol’s compound or manufacturing assistance, and will no longer be permitted to sell FlowGuard, BlazeMaster or Corzan branded pipes and fittings.

Lubrizol, the owner of the trademarks, will continue to make its CPVC brands and products available in wide distribution throughout India from other Lubrizol contracted partners.

Commenting on the termination of partnership with Astral Poly-Technik Limited, Mathew Timmons, Managing Director, Lubrizol Advanced Materials India Pvt. Ltd. said, “Lubrizol is dedicated to supplying the highest quality CPVC products to service the Indian market. Our commitment remains steadfast through our support of processors like Ashirvad Pipes Pvt. Ltd. who continue to benefit from our more than 50 years of expertise in compounding and manufacturing CPVC.”

Lubrizol in India

In February 2016, Lubrizol Corporation, a wholly-owned subsidiary of Berkshire Hathaway, opened a chlorinated polyvinyl chloride (CPVC) compounding plant in Dahej, India. Lubrizol invested $50 million U.S. (INR 325 CR) in the plant, which has a capacity to produce approximately 55,000 metric tons of compounds annually.

© 2016 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Berkadia Named BPO Organization of the Year

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Berkadia, a joint venture of Berkshire Hathaway and Leucadia National Corporation, has again been recognized by CMO Asia for its outstanding Real Estate Servicing operations in Hyderabad, India.

Berkadia was named BPO Organization of the Year and one of Asia’s Best Employer Brands at the Outsourcing Excellence Awards ceremony held on August 5 in Singapore.

Ned Mody, Country Manager for Berkadia’s operations in India, was on hand to accept the awards. The ceremony was attended by representatives from nearly 500 companies.

“We are honored to be named BPO Organization of the Year for the second year in a row and one of Asia’s Best Employer Brands by such an esteemed organization as CMO Asia,” said Ned Mody. “To be recognized as one of the Best Employer Brands affirms Berkadia’s core belief that people matter as we foster a culture of collaboration, engagement and support in our day-to-day operations. We are proud to be acknowledged among our peers for our commitment to the development of our employees and our platform.”

Berkadia’s servicing platform supports all commercial real estate products and market sectors including commercial mortgage-backed securities, balance sheet lending, life company portfolios, agency programs, institutional investments and other servicers.

“We thank CMO Asia for their recognition and we commend our teams both in India and the U.S. for their unyielding support and hard work,” said Mark McCool, President of Berkadia Commercial Real Estate Services. “Without their knowledge and expertise, we wouldn’t be able to provide the consistent high-level of service our clients have come to expect from Berkadia. Our Hyderabad and U.S. Servicing operations work together seamlessly and I couldn’t be prouder of them.”

CMO Asia is a leadership and networking organization dedicated to knowledge exchange for senior executives across industries. The Asia Outsourcing Excellence Awards recognize companies who demonstrate best practices, create and sustain competitive advantage, provide business transformation and achieve value that, over time, benefits both the buyer and service provider.

© 2016 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Record Grain Shipments Mean Good News for BNSF

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This has been a year to forget for BNSF Railway, with low oil prices and slack coal demand hitting the nation‘s top freight railway hard. Fortunately, there is finally some good news, as record grain production is boosting BNSF’s grain shipments.

Bin-buster

U.S. wheat and corn farmers are calling this year’s record crops a “bin-buster.” The crop yields will likely set a new all-time high as compared to the final yield in 2015. Grain production has been so good that silos in some areas are already reaching capacity, even before the September 1 start of the harvesting of the fall wheat crop.

Near Hutchinson, Kansas, an old runway is even being used to pile up wheat due to a lack of grain elevator storage space.

Even before the fall harvest, BNSF’s grain shipments are already up a dramatic 25.95 % so far in the 3rd quarter, and are up a very solid 7.91 % year-to-date.

A key factor for BNSF in its increased capacity for grain shipping come from its investment in Great Northern Corridor track upgrades made in 2013-2015.

Back in June of 2014, the average delay for grain shipping was running at 32 days. The improved track and signaling on the Great Northern Corridor, coupled with oil trains running at a level that is half what it was just a year ago, have enabled BNSF to move the grain without significant delays.

BNSF’s grain shuttle trains have hit record numbers, with 130 shuttle trains shipped or scheduled to be shipped during July and August

An additional 137 of BNSF’s 110-car unit trains are scheduled to transport the fall harvest of corn, soybeans and other late season crops.

© 2016 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

U.S. Market for Duracell Batteries Projected to Grow

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Despite some analysts questioning whether Berkshire Hathaway’s 2016 purchase of Duracell from Proctor and Gamble makes long term sense, domestic battery sales look to continue to be a growth area.

Sales of household batteries will reach $4,750 million by the year 2020, up from $4,125 million in 2015, according to Research and Markets’ new report, “Household Batteries: Consumer Market Trends in the U.S.”

According to the report, the compound annual growth rate for the period is projected to be 2.9%.

Three manufacturers dominate the U.S. market for household batteries: Berkshire Hathaway’s Duracell brand; Energizer, maker of both Energizer and Eveready batteries; and Spectrum Brands, which makes Rayovac.

Away-From-Home Market Also Has Growth Potential

For Duracell, the away-from-home battery market also has growth potential. It not only grew 2% from 2012 to 2014, but Duracell’s share of that market grew as well.

© 2016 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

GEICO Expansion in Western New York State to Bring 600 Jobs

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New York governor Andrew M. Cuomo and GEICO Chairman and CEO Tony Nicely have jointly announced that insurer GEICO plans to expand it regional operations office in Western New York with an additional facility at 150 Crosspoint Parkway, Getzville, New York.

With this expansion, GEICO expects to add more than 600 new jobs in Western New York over the next six years. The company will also invest nearly $11 million to fit out and equip its current and additional offices to accommodate the new jobs.

“GEICO is immensely delighted to bring new career opportunities to the Greater Buffalo area,” said Tony Nicely. “We consider our associates to be one of our greatest assets. That’s why it’s important for us to continue to seek out and add highly talented individuals to our GEICO family.”

According to GEICO, the expansion brings new opportunities for careers in sales, customer service and claims service.

“It’s certainly an exciting time for GEICO and the Western New York area,” said Pionne Corbin, regional vice president. “We look forward to continuing to grow and better serve our associates, policyholders, and the local community.”

GEICO (Government Employees Insurance Company) is owned by Berkshire Hathaway, and is the second-largest private passenger auto insurance company in the United States. The company provided coverage for more than 14 million private passenger customers, insuring more than 23 million vehicles (auto & cycle).

© 2016 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Kraft Heinz Dividend Increase Means Extra $10.57 Million for Berkshire

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Kraft Heinz has announced that its Board of Directors approved an increase in the company’s quarterly dividend to $0.60 per share of common stock, an increase of approximately 4.3 percent versus the prior rate of $0.575 per share.

The company, which is 26.78 percent owned by Berkshire Hathaway, posted earnings of $0.85 per share on total revenue of $6.79 billion.

The increase of 4.3 percent will bring Berkshire an addition $10.57 million in dividends.

© 2016 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Dairy Queen Heads to the Beach With Franchise Plans in Five Caribbean Countries

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Cool treats will be coming to Caribbean island locales. Dairy Queen has announced it will open a total of 24 locations within the next five years in five countries in the Caribbean.

Plans call for the development of DQ Grill & Chill locations in Trinidad and Tobago, DQ Grill & Chill and DQ Treat locations in Jamaica, and DQ Treat locations in St. Lucia, Grenada and St. Maarten.

Currently, there are eight DQ Treat locations in Trinidad, the first of which opened in 2012.

“The international marketplace continues to be a huge opportunity for growth for the DQ system,” says John Gainor, President and CEO of International Dairy Queen, Inc. (IDQ). “We’ll be introducing our DQ Grill & Chill concept to fans in Trinidad and expanding the DQ brand in Jamaica. Our presence in these warm weather countries is a perfect fit for us.”

Royal Treats Ltd., which currently operates eight DQ Treat locations throughout Trinidad and Tobago, has signed a multi-unit, multi-country agreement with American Dairy Queen Corporation (ADQ) to develop the new locations.

“We are excited to be expanding this iconic brand’s footprint,” says John Gillette of the family-owned Royal Treats Ltd. “Residents and tourists will now have more opportunities to experience the same exceptional treats and menu items that they have come to know and expect from the DQ system.”

The DQ system has more than 6,700 locations with more than 2,200 of those units operating outside of the United States.

For more information on Dairy Queen’s world-wide plans, read a Mazor’sEdge special report on Dairy Queen.

© 2016 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

MiTek Opens New Distribution Facility in Plainfield, Indiana

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MiTek’s new distribution facility in Plainfield, Indiana, is now fully operational. Offering distribution to a 500-mile radius, the new facility will provide same-day or next-day delivery for a wide range of products, including USP Structural Connectors, USP Epoxy and fasteners, and MiTek truss connector plates.

Offering almost 53,000 square feet of space, MiTek’s new distribution facility will also provide customers with “will call” delivery. Additionally, the facility provides nearly 6,500 square feet of office space where MiTek will provide customer training and support.

The new MiTek distribution facility features 15 dock doors, one oversized drive-in door, and expansive staging bays. Excellent access to key transportation routes is available, including Indianapolis International Airport, I-70, I-455, SR 37, SR 67, and nearby downtown Indianapolis.

“MiTek’s new Plainfield, IN facility will allow rapid delivery – often same-day service – to an expansive 500-mile radius from our new location,” said Todd Asche, Senior Vice President of Operations. “With our recent Houston distribution facility coming fully online and our new Indianapolis facility fully operational, we have made great strides in expanding the reach for MiTek and the products offered by our MiTek Builder Products division.”

About MiTek

Acquired by Berkshire Hathaway in 2001, MiTek is a diversified global supplier of software, engineered products, services, and equipment to the residential, commercial, and industrial, construction sectors. MiTek has operations in more than 40 countries on six continents.

© 2016 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

No Kraft Heinz Hotdogs at Heinz Field

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It might seem logical that Heinz Field, which is the home of the NFL’s Pittsburgh Steelers, would serve Kraft Heinz’s Oscar Meyer hotdogs, but that’s not to be.

On June 28, the Smith Provision Company announced that it entered into a multi-year agreement with Heinz Field, featuring Smith’s Hot Dogs as The Hot Dog of Heinz Field, and Smith’s brand Boski Kielbasa as The Kielbasa of Heinz Field.

“We are thrilled to have developed a partnership with the iconic Pittsburgh Steelers organization,” said Sara Kallner, Vice President of Smith Provision Company. ”

Headquartered in Erie, Pennsylvania, the Smith Provision Company was founded in 1927 by Harry Smith, who operated Smith’s as a small retail butcher shop. The company was bought by the Weber family, which as a fourth generation family owned business, still runs it today.

Oh, well, hopefully Heinz Field will still top the hotdogs with Kraft Heinz’s yellow mustard, ketchup and relish. No telling whether Kraft Heinz’s Grey Poupon mustard will make the cut.

© 2016 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

BYD to Bring Battery Storage and Electric Vehicles to the Port of Los Angeles

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Chinese auto and battery manufacturer BYD Company Limited is bringing its pure electric service vehicles and a battery storage system to the Port of Los Angeles.

The $26 million Green Omni Terminal Demonstration Project will demonstrate zero emission technologies with Pasha Stevedoring and Terminals L.P.

The project will be the world’s first marine terminal generating all of its energy needs from renewable sources at full build-out.

BYD will provide a 2.6 megawatt battery storage system and two class eight electric yard trucks.

The state-of-the-art BYD battery storage system will be used to store solar power to recharge the BYD electric yard trucks, thus providing a sustainable and truly zero emission operation.

This project will be BYD’s first example of taking transportation off the grid and making it 100 percent renewable and self-sufficient in North America.

BYD expects to deliver the trucks and the battery storage system by the end of 2016.

BYD has been expanding the types of pure electric service vehicles it makes, and recently debuted pure electric forklifts.

Integrated Transportation and Energy Storage

BYD has been emphasizing integrated transportation and energy storage.
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In June, BYD signed a global framework cooperation agreement with Enel, a multinational power company and leading integrated player in the world’s power industry.

BYD notes that the agreement signed by Wang Chuanfu, Chairman and President of BYD, and Ernesto Ciorra, Enel’s Head of Innovation and Sustainability, will pave the way for possible cooperation projects in electrified transportation and energy storage aimed at residential, commercial and industrial applications, all based on BYD’s proprietary Iron-Phosphate batteries.

BYD is 9% owned by Berkshire Hathaway, and Berkshire has seen the value of its investment skyrocket as BYD became a world leader in a wide variety of areas.

What are those areas?

BYD is number one globally in EV vehicles. The company vaulted to the number one spot in 2015 from only being number ranked seventh a year earlier.

BYD is the number one maker of rechargeable batteries, and like Tesla even has rechargeable battery home storage already on the market.

BYD is number one in pure electric buses that come in a variety of sizes. From commuter buses to buses for long distance travel, BYD has been quietly conquering the world, and frankly right now has no major competitors. In April 2016, BYD achieved a major milestone, the production of its 10,000th pure electric bus.

BYD’s also rapidly growing a host of other product lines that include LED lighting, photovoltaic panels for solar farms, and other electric vehicles such as forklifts.

As for solar panels, in the U.S., BYD’s already has a total 109MW using its 270,000 PV modules being developed in California. It also has other projects using its modules, including a 65MW plant in Utah, and a 28MW plant in Arizona.

Perhaps you haven’t heard of BYD, but they are no fly-by-night company. BYD has nearly 180,000 employees working in 22 industrial parks across the globe.

BYD and Berkshire Hathaway

In 2008, Berkshire Hathaway bet on BYD’s potential, purchasing 225 million shares, and today owns roughly 9.1% of the company.

It’s an investment that has paid off handsomely. Berkshire’s original investment of $230 million is now worth roughly $1.77 billion.

For More on BYD, read the Special Report: BYD, Berkshire’s Tesla.

© 2016 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.