Month: October 2017

Categories
Minority Stock Positions Stock Portfolio

BYD Powers Up in Australia Market

(BRK.A), (BRK.B)

BYD Company Ltd., the world’s leading manufacturer of rechargeable batteries, is focusing on the Australian renewable energy market with its proprietary Lithium-Iron Phosphate battery.

At All-Energy Australia 2017 – the country’s largest renewable energy exhibition, BYD exhibited its MINI-ES, B-Box – in high-voltage and low-voltage versions – and Containerized Energy Storage solutions to provide the market with increased efficiency, economy and flexibility.

The BYD B-Box Storage System comes in two versions: low-voltage B-Box LV and high-voltage B-Box HV. The B-Box LV system operates with a Goodwe S-BP inverter, making it the cost effective; and the B-Box HV system operates with an SMA Sunny Boy Storage inverter, which raises the system’s level of efficiency. Both are aimed at the retrofit market that is booming in Australia, that is, a market in which people already have solar panels installed and want to install an energy storage system.

Another advantage of the BYD B-Box systems is that they are modular and scalable from 2.5kWh to 442kWh – users can increase the capacity of parallel battery rack to meet different requirements of energy storage – whereas major competitors only reach 13.5kWh with a large-sized system.

A variety of configurations of the two versions of the BYD B-Box can also be used for commercial purposes.

The MINI-ES is a small-sized, all-in-one residential energy storage system that is easy to install and maintain, with an original capacity of 3kW / 3kWh that can be expanded to 6kWh. This system is fully certified by Australia’s SAA, in line with the latest Australian AS / NZS 4777.2: 2015 standard, and has become very popular with a number of Australian local power grid companies and electricity retailers.

Over 500 Australian households have already installed the BYD MINI-ES.

The BYD Containerized Energy Storage has a modular design to meet different large-scale energy storage projects demands, and features extreme safety, reliability and efficiency. It can be used for peak load and frequency regulation to stabilize renewable energy or as a back-up system to prevent outages.

Current installed capacity of BYD ESS exceeds 400MWh globally.

BYD and Berkshire Hathaway

In 2008, Berkshire Hathaway bet on BYD’s potential, purchasing 225 million shares. It’s an investment that has paid off handsomely. Berkshire’s original investment of $230 million is now worth roughly $1.8 billion.

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

© 2017 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.

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NetJets

NetJets Gives Up On China, For Now

(BRK.A), (BRK.B)

Berkshire Hathaway’s NetJets has scrapped expanding to China, at least for now.

NetJet’s had a small presence in the country through its China subsidiary, NetJets Business Aviation (Zhuhai), which also had Hony Jinsi Investment Management Ltd., and Fung Investments as stakeholders.

NetJet’s push into the China market began in 2014 when it received its Chinese Air Operator’s Certificate. It got its toe into the China market flying two Hawker 800s , but demand for fractional ownership has been weak from the outset.

“We still foresee tremendous long-term opportunities for business aviation, however, current economic and operating conditions are not yet ideal for business expansion,” NetJets said in a statement. “NetJets’ customers will continue to enjoy private aircraft travel to and from China and other Asian countries using aircraft from our programs in the US and Europe.”

© 2017 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.

Categories
Minority Stock Positions Stock Portfolio

BYD ADL Pure Electric Buses Running in Liverpool

(BRK.A), (BRK.B)

The city of Liverpool is now the first British provincial city to run pure electric buses from the BYD ADL partnership.

The BYD ADL buses will be operated by Arriva Merseyside and begin service later this month on the City Centre Circular Routes 26 and 27, known as The Belt.

In July 27, 2015, BYD announced a joint project with British bus manufacturer Alexander Dennis Limited to build single-deck zero-emission buses.

The delivery of the buses follows a joint bid under the Government’s OLEV scheme by Arriva North West and Merseytravel. The new buses will operate an intensive service from the Liverpool One bus station and be based at Arriva’s Green Lane bus depot in Liverpool. BYD chargers have been installed in the depot.

The order is significant in that it is the first to be won by the ADL BYD partnership (with ADL as prime contractor on this occasion) outside London where the partnership has enjoyed considerable success, winning every Transport for London (TfL) tender so far for full size pure electric buses – a total of 157 are now in service or on order to serve TfL routes.

The buses for Merseyside will cover 100 to 130 miles per day (most will operate 12 hours a day but one duty cycle calls for a 19-hour operating schedule) and will be charged overnight. In line with all ADL BYD joint products, the new buses are designed to operate a full day’s duty cycle on one charge, without the need for disruptive ‘top up’ charging during the working day and enjoy the benefit of lower cost off peak electricity. The BYD ADL solution ensures that operators do not have to purchase additional buses beyond the number of their current diesel fleet in order to maintain service on the route due to the outstanding battery capacity and range.

The ADL BYD Enviro200EVs being supplied to Arriva feature a provincial specification with the fitting of 38 seats. There is space for another 32 standing passengers and there are USB charging points throughout the buses.

Howard Farrall, Arriva Merseyside managing director said: “Arriva is committed to ensuring its fleet meets the latest clean vehicle standards. We are extremely proud to be joining forces with ADL and BYD UK at the forefront of the electric bus revolution. This new partnership will further contribute to Arriva’s ‘Destination Green’ environmental goal, which includes ambitious plans to reduce carbon emissions, conserve energy and invest in renewable sources”.

“This is a landmark moment not just for the successful BYD ADL partnership but for the roll-out of zero-emission electric buses in British cities. We are delighted as prime contractor to help Arriva Merseyside and Merseytravel make buses an even cleaner and greener option for Liverpool. Arriva’s Enviro200EV demonstrate that the technology is ready to roll out fully electric buses in provincial towns and cities without compromising on operational efficiency,” said Arthur Whiteside, Managing Director – UK Sales at ADL.

“Liverpool is pioneering a route for other British cities and one which they can follow with full confidence that the BYD ADL partnership can deliver a range of proven, efficient and attractive products which can play a key role in improving city street air quality. We will be working hard to build on our leading role in London in other cities”, said Isbrand Ho, Managing Director, BYD Europe.

BYD and Berkshire Hathaway

In 2008, Berkshire Hathaway bet on BYD’s potential, purchasing 225 million shares. It’s an investment that has paid off handsomely. Berkshire’s original investment of $230 million is now worth roughly $1.8 billion.

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

© 2017 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.

Categories
Minority Stock Positions Stock Portfolio

BYD Expands North American Facility

(BRK.A), (BRK.B)

BYD, the world’s largest manufacturer of electric vehicles, is celebrating the addition of a new wing to the current BYD Coach and Bus facility in California.

The expansion of its Lancaster, California facility brings it total manufacturing space to nearly 450,000 sq. ft. This expansion nearly quadruples BYD’s facility from its initial 2013 footprint.

The growth of BYD Coach and Bus reflects a rapid transition to electric transportation and will allow BYD to build up to 1,500 battery-electric buses annually. Since BYD established its U.S. electric bus manufacturing capabilities in Los Angeles County, the company has created nearly 800 full-time jobs throughout the state. This manufacturing facility expansion will enable BYD to hire up to 1,200 full-time workers at top production-line capacity.

This manufacturing facility is powered 100% by renewable energy, which is provided by the City of Lancaster’s Energy Company, Lancaster Choice Energy.

BYD is the undisputed leader as North America’s largest electric bus manufacturer, having delivered 137 electric buses in the U.S. and Canada, including more than 75 buses delivered in 2017. BYD is currently producing an additional 300 buses based on current customer orders and has options for more than 300 additional electric bus purchases.

BYD’s buses operate in transit agencies, universities and airports across North America, with more than 40 customers including LA Metro, Los Angeles Department of Transportation, Stanford University, UCLA, UC San Francisco, UC Irvine, Anaheim Resort Transportation, Long Beach Transit, Denver Regional Transportation District, City of Albuquerque, SolTrans, SunLine Transit, Link Transit, COMO Connect, Antelope Valley Transit Authority, and many others.

The BYD Coach and Bus facility also supports R&D and assembly for BYD’s battery-electric medium- and heavy-duty trucks, including delivery, drayage, refuse, and yard trucks, among other product lines. These trucks incorporate the same proven core components that are used in BYD’s commercialized buses and vehicles with several hundred million service-proven miles. By the end of 2017, BYD will have delivered 70 all-electric trucks to 15 customers in North America, with orders for more than 140 trucks to-date.

BYD and Berkshire Hathaway

In 2008, Berkshire Hathaway bet on BYD’s potential, purchasing 225 million shares. It’s an investment that has paid off handsomely. Berkshire’s original investment of $230 million is now worth roughly $1.8 billion.

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

© 2017 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.

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GEICO Insurance

GEICO on Ward Group’s Top 50 Insurers for 27th Year

(BRK.A), (BRK.B)

Few companies are able to stand the test of time and maintain an outstanding financial performance spanning nearly three decades.

GEICO has notched a spot on Ward Group’s 2017 list of 50 top performing insurance companies. GEICO is one of only a few companies to have earned a top 50 designation for 27 consecutive years.

“The ability to remain in this position for more than two decades is a remarkable achievement in our company’s history and demonstrates a high-level of trustworthiness from our growing customer base,” said Bill Roberts, GEICO president and chief operating officer. “We are proud to be recognized by The Ward Group as a top performing insurance company.”

To develop its annual top 50 list, Ward Group analyzes the financial performance of nearly 3,000 property and casualty insurance companies domiciled in the U.S., and identifies the top performers over the previous five year period (2012-2016).

Jeff Rieder, partner, head of Ward Group mentioned that low investment returns, rising loss costs, and competitive market conditions continue to impact financial returns for the industry. “In selecting the Ward’s 50, we identified companies that pass financial stability requirements and measure their ability to grow while maintaining strong capital positions and underwriting results,” said Rieder.

© 2017 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.

Categories
Insurance Minority Stock Positions Stock Portfolio

Berkshire Takes Stake in Italian Insurer

(BRK.A), (BRK.B)

Berkshire Hathaway Inc. will buy an approximately 9 percent stake in Italian insurer Societa Cattolica di Assicurazioni Scrl from Banca Popolare di Vicenza SpA.

The transaction will be at 7.35 euros per share for a total of cost 115.9 million euros.

On August 3, Standard & Poor’s confirmed Cattolica’s rating as BBB – and the outlook as stable.

Cattolica’s stand-alone credit profile (SACP) was confirmed at bbb+.

© 2017 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.

Categories
BNSF

BNSF to Benefit From $11 Million Oakland Rail Spur

(BRK.A), (BRK.B)

A refrigerated gateway to Asia for U.S. meat exports has cleared its last big hurdle in Oakland, California.

The access will benefit Union Pacific Railroad and BNSF Railway.

Port of Oakland Commissioners last week approved an $11 million rail spur to Cool Port Oakland. It’s the final piece of an ambitious plan to make this city a vital link in the food chain.

The spur will connect Union Pacific tracks with Cool Port, a 280,000-square-foot distribution center now under construction on 25 acres of Port property.

BNSF will also have rail access to the rail spur at no cost.

When the project is completed, in mid-2018 an estimated 27,000 20-foot containers of meat could ship from Oakland annually. The final destination will be export markets across Asia.

“The concept is to bring vast quantities of chilled or frozen beef and pork to Oakland via the rails,” explained Port of Oakland Maritime Director John Driscoll. “At Cool Port, the product would be transferred in a temperature-controlled setting from rail cars to shipping containers, then whisked across the street to outbound vessels.”

International logistics specialists Lineage Logistics and local operator Dreisbach Enterprises are building Cool Port under a lease agreement with the Port. The Port has agreed to oversee construction of the 2-mile-long rail spur. The Port will share rail costs with the developers. A $5 million grant will offset part of the cost. Union Pacific will construct a portion of the spur on its property.

Oakland is already a leading U.S. gateway to Asia for agricultural products including meat. Port officials say Cool Port could significantly increase shipments of beef and pork from the Midwest. The products would be exported overseas to satisfy growing Asian demand for U.S. premium meat. Proximity to the docks means cargo could be quickly transferred from rail to ship with minimal cost.

© 2017 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.

Categories
Dairy Queen

Dairy Queen to Get New President and CEO

(BRK.A), (BRK.B)

Dairy Queen CEO John Gainor has announced his retirement effective Dec. 31, 2017. Current Chief Operating Officer (COO), Troy Bader succeed him as President and CEO beginning Jan. 1, 2018.

Gainor originally joined IDQ in 2003 as Chief Supply Chain Officer. He was promoted to President and CEO in 2008.

In his nearly 10 years as IDQ President and CEO, Gainor continued to modernize the iconic 77- year-old brand. Under his leadership, the company has focused on improving the Dairy Queen fan experience in order to drive system sales and profitability resulting in record reinvestment in facilities, as well as continued world-wide new store development. Berkshire Hathaway Chief Executive Officer and Chairman,

Warren Buffett stated, “John has done everything I hoped for – and more – in accelerating IDQ’s growth in the U.S. and internationally. I thank him for both that and for the development of an outstanding successor, Troy Bader.”

IDQ places significant value on the active process of talent development and succession planning. With this in mind, Gainor recommended Bader to assume the role of IDQ President and CEO to Warren Buffett. Gainor stated, “I have worked with Troy for most of his time at IDQ. His love of the brand, commitment to franchisee success, knowledge of the vendor community and concern for all IDQ employees is evident every day. I am confident he will continue to lead the system toward positive growth and ongoing success.”

Bader currently serves as COO for IDQ in the U.S. and Canada. He is responsible for leading all IDQ core functions for the U.S. and Canadian businesses, including marketing, operations, franchise development and supply chain as well as our various concept evolution initiatives. Bader joined the company in 2001. Prior to accepting the role of COO in 2011, he served in various executive leadership positions with the company.

“IDQ is a strong company with a history of great leadership,” said Bader. “I am honored to be entrusted to lead IDQ and to continue to represent the iconic Dairy Queen brand. I look forward to working with our world-wide team of dedicated employees, franchisees and vendors to grow the brand even further through the delivery of exceptional products, great service and memorable experiences for our fans throughout the world.”

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

© 2017 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

Categories
Acquisitions Insurance

BHIIL & MedPro Group Acquire Leading UK Provider of Contractual Medical Indemnity Insurance

(BRK.A), (BRK.B)

Berkshire Hathaway International Insurance Limited (BHIIL) and MedPro Group Inc. (MedPro) have announced the addition of Premium Medical Protection Ltd. (PMP) to the Berkshire Hathaway group of healthcare liability companies.

BHIIL, MedPro and PMP have been working together since 2014 to deliver industry-leading contractual medical indemnity insurance and patient safety & risk management solutions to UK private practice consultants and surgeons. Subject to regulatory approvals, this transaction is expected to close by year-end.

“PMP was created nearly a decade ago to provide UK consultants and surgeons with the best contractual medical indemnity insurance and patient safety solutions available,” said Juliet Bentley, PMP’s founder & CEO. “Our combination of top customer service, winning defence and leading contractual insurance protections have resulted in delighted customers and sustained PMP growth. Joining BHIIL/MedPro Group in the Berkshire Hathaway group of companies offering healthcare liability solutions continues our mission and allows us to further expand our capabilities and services to even more healthcare providers throughout the UK.”

With offices in Leamington Spa, Glasgow and London, PMP and its BHIIL/MedPro partners serve nearly 2000 private practice consultants and surgeons throughout the UK. Ms. Bentley will remain as president, and its employees and operations will continue as is, and PMP and BHIIL/MedPro will work together to ensure all customers continue to receive the best service and solutions.

“We are delighted to be able to work even more closely with PMP, and – with this acquisition – further highlight and strengthen the Group’s commitment to the UK medical malpractice market,” commented BHIIL/MedPro International Vice President John Bartlett. “The Group will be a great home for PMP and its dedicated employees.”

MedPro Group CEO Tim Kenesey added: “For over a century, MedPro has been the leading defender of the reputations and assets of USA healthcare providers. The collaboration with our BHIIL affiliate and others has resulted in new and improved insurance options for Europe’s healthcare providers. With PMP joining BHIIL/MedPro, we expect to grow our over $US 90 million international business and – most importantly – continue to expand our offerings and solutions to more healthcare providers.”

© 2017 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.

Categories
Lubrizol

Lubrizol Opens State-of-the-Art Drumming Facility

(BRK.A), (BRK.B)

The Lubrizol Corporation has opened a state-of-the-art drumming facility and warehouse at its Painesville Township, Ohio manufacturing facility, both of which are part of the company’s previously announced phased investment at the site.

The total $70 million investment better positions the company to meet the changing demands of customers and ensures the integrity and quality of its products while reinforcing personal and environmental safety.

Construction on the 180,000 square feet combined buildings began in April 2015. With a focus on enhancing safety and business processes, the new buildings will be instrumental in reducing risk and achieving the company’s business objectives of improving effectiveness, efficiency and consistency.

“Historically, the Painesville Township site has been of great importance to our business, operating for more than 60 of the company’s nearly 90 years,” said Tom Curtis, incoming president of Lubrizol Additives. “This latest investment reinforces our commitment to the community by further ensuring the site as a key source in Lubrizol Additives’ global supply chain.”

With more than half of all Lubrizol Additives products worldwide containing at least one component manufactured at the Painesville Township site, adding new manufacturing capacity and updated automated packaging capabilities was a necessity. Furthermore, these efforts are important to ensure product integrity and to improve the overall safety and efficiency of handling product drums and totes.

“With our new drum filling facility, we will be able to improve safety by minimizing the manual packaging of drums, reducing packaging time for a single batch by more than 50% and minimizing the number of times a drum is handled by more than 70%,” commented Craig Hupp, Lubrizol Painesville Township plant manager. “And, with 100% indoor storage provided by our new warehouse, we will improve the quality and appearance of packaged products delivered to our customers. All of these improvements will be a tremendous value to our overall organization.”

© 2017 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.