Category Archives: Marmon Group

Low Oil Prices Spur More UTLX Permanent Layoffs

(BRK.A), (BRK.B)

Continued weakness in demand for shipping domestic crude oil has prompted Berkshire Hathaway’s Union Tank Car Co., more commonly referred to as UTLX, to announce major layoffs in Houston, Texas.

UTLX will cut a third of its staff from its facility in northeast Houston.

In a letter to the Texas Workforce Commission, the company stated that it will permanently cut 106 jobs commencing Jan. 20, 2017.

The move is no surprise, as in April 2016 UTLX announced that it would be cutting its tank car production by 50-percent.

At the time, the Berkshire Hathaway-owned company announced that it also planned to lay-off employees at its plant in Alexandria, Louisiana.

© 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.

Cornelius Says “Concentrate”…Beer That Is

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Cornelius, Inc., a Marmon/Berkshire Hathaway company, and the leading global producer of beverage dispensing systems, is partnering with Sustainable Beverage Technologies, a Colorado based developer of high density beer technologies, to showcase new craft beer formulas to beverage brands and foodservice retailers worldwide at BrauBeviale 2016 located in Nuremburg, Germany.

Sustainable Beverage Technologies (SBT) has partnered with four major breweries: New Belgium, Crazy Mountain, Denali and Flat12 Bierwerks to produce craft beer using high density technology. High density craft beer is a 6:1 concentrate made with traditional ingredients (water, malt, hops, and yeast) that is blended with carbonated water and baseline alcohol. The result, the company claims, is a taste profile that matches the premium beer produced by each brewery.

“These beers taste as good as any other craft beer being served from draft. I wouldn’t know they were produced any differently.” – Grandy Hull, Lead Brewer at New Belgium Brewing.

By creating high density beer using the patented SBT BrewVo® technology, craft brewers benefit from increased production and supply chain efficiencies, allowing their brands to become more accessible to consumers. Delivering high density craft beer through an innovative draft format, this technology will allow draft beer entry into previously inaccessible outlets lacking space for conventional kegs.

Kevin Selvy, Founder and CEO of Crazy Mountain Brewing Company, explained: “We’re excited to be involved with this technology. It is going to fundamentally change the landscape of how the beer industry functions.” Sassan Mossanen, President of Denali Brewing Co., said: “With this approach, we will be able to grow our brand into new markets we couldn’t previously serve [profitably].”

Cornelius touts as revolutionary its next generation tap system that is exclusive to the high density craft beer made by SBT.

The next generation system will support bars and restaurants with a cost effective increase in brand offerings. Jeff Garascia, Senior Vice-President of Growth & Innovation at Cornelius, had this to say,

“Cornelius has partnered with SBT to create a new draft beer platform that provides craft breweries with an opportunity to enter thousands of new locations. The Cornelius Four Paq and Six Paq craft beer dispensers can dispense up to six draft beers in the space used by one today. The use of high density beer dispenser will expand the market for craft beers on draft while providing economic and sustainability benefits across the supply chain. We expect to see high density beer make an impact in the market in 2017 and beyond.”

© 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.

Berkshire Hathaway’s TE Wire & Cable Licenses Ground-breaking Thermocouple Cable Technology

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Berkshire Hathaway’s TE Wire & Cable LLC, a leading thermocouple and specialty wire and cable manufacturer, today announced the completion of a licensing agreement with Cambridge Enterprise for a ground-breaking thermocouple cable technology developed by researchers in the Department of Materials Science and Metallurgy at the University of Cambridge. This dual wall, low-drift type K and type N mineral insulated (MI) thermocouple cable design was developed to improve temperature measurement accuracy, extend thermocouple life and significantly enhance drift characteristics.

The new cable design was developed for high temperature thermocouple applications and thermocouple installations that require longer use at higher temperatures. The technology will be of particular interest to those involved in aerospace/aircraft manufacturing for measuring jet engine temperatures and for processing applications like heat treatment.

Robert Canny, President of TE Wire & Cable, notes, “Even though this is a completely new technology for us, TE Wire is well positioned to promote it to our customers and corresponding applications. Our depth of application knowledge and industry ties in heat treatment and the aerospace world will allow us to refine this technology in cooperation with forward-thinking customers.”

The processes underlying this new technology are outlined in a paper titled “Development of a Low Drift Type K Thermocouple Cable for Aerospace Applications.” The paper is co-authored by Dr. Michele Scervini, a research scientist at The University of Cambridge in the Department of Materials Science and Metallurgy, and Trevor D. Ford, chief metrologist and technical director at CCPI Europe Limited, the company that performed independent testing in its calibration laboratory on the new low-drift mineral insulated thermocouple.

TE Wire & Cable LLC is a Marmon Wire & Cable/Berkshire Hathaway Company, and is a premier thermocouple and specialty wire and cable manufacturer that was formed from the Wire and Cable Division of the Thermo Electric Corporation.

© 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.

Marmon Acquires Pasta Equipment Maker

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Berkshire Hathaway’s Marmon Food, Beverage & Water Technologies Company has acquired Dominioni Punto & Pasta S.r.l., a leading Italian supplier of commercial pasta equipment, by Marmon Pasta Solutions S.r.l.

Terms of the acquisition were not disclosed.

Founded in 1968 by Pietro Dominioni, the family-run business designs and produces professional pasta equipment for the restaurant, hospitality, and catering markets, as well as high-volume pasta manufacturers. The business will continue to operate under the Dominioni brand name and its operations will remain based in Lurate Caccivio (Como). Fabrizio Dominioni, son of the founder, will continue to manage the business.

Fabrizio Dominioni said: “I am pleased that my family’s business is now part of Marmon and Berkshire Hathaway. Marmon is a strong, successful company and a global leader in the foodservice equipment industry. Our new home within Marmon will enhance our competitive position and our opportunities for growth now and in the future.”

The acquisition is Marmon’s second this year of an Italy-based foodservice equipment company. In June, Marmon Italia acquired Angelo Po of Carpi (Modena).

Angelo Po designs and manufactures professional kitchen equipment including horizontal and vertical cooking products and food preservation systems for caterers and restaurants in Europe, Asia, and North America. Dominioni and Angelo Po are both part of the Restaurant & Catering Technologies Sector within Marmon Food, Beverage & Water Technologies Company.

Fabrizio Valentini, President and CEO of Marmon Food, Beverage & Water Technologies Company, said: “Dominioni is an important addition to our organization. With Angelo Po, it will significantly contribute to our company’s growth, both geographically and technologically, as we continue to invest in the worldwide foodservice, restaurant, and catering market.”

Massimo Aleardi, Sector President of Marmon Restaurant & Catering Technologies, added: “We are excited for Dominioni to join our group. Dominioni has established high standards for quality, reliability, and service. Its products, which also complement Angelo Po’s portfolio, are well regarded in the foodservice industry. Its innovative equipment solutions help meet the growing demand for fresh food while also enabling more efficient production. We look forward to building on Dominioni’s excellent reputation not only throughout Europe, but also globally.”

© 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.

Cornelius Ready to Showcase Concentrated Beer Dispenser Technology

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Cornelius, Inc., the world-leader in beverage dispensing systems, is preparing to showcase its beer dispensing technology that uses beer concentrates that are fully hydrated at the point of dispensing.

Cornelius and Sustainable Beverage Technologies (SBT), a Colorado based developer of concentrated beer technologies, will feature beer being dispensed from concentrate at the 2016 National Restaurant Association trade show in Chicago.

SBT has applied its unique BrewVo brewing technology toward developing a portfolio of beers with three craft brewers to create new beers that are concentrated until served from a Cornelius dispenser. The three craft breweries are New Belgium, Crazy Mountain, and Denali.

According to Cornelius, the combination of SBT’s BrewVo technology and Cornelius dispensers will allow these premium craft brewers to share their products with customers in a more efficient and sustainable manner.

Cornelius, Inc., the world-leader in beverage dispensing equipment, was acquired by Berkshire Hathaway’s Marmon Group in January 2014.

In November 2015, Cornelius and Sustainable Beverage Technologies announced a strategic partnership to market concentrated beer dispensing solutions to beverage brand owners and foodservice retailers across the globe.

According to SBT, using only traditional brewing ingredients (water, malt, hops, and yeast), SBT’s patented BrewVo technology utilizes a unique process called “Nested Fermentation”, in which brewers manage the fermentation environment where a highly concentrated beer is produced. When the beer concentrate is later mixed with carbonated water, the result says SBT compares to any premium beer on the market.

Pat Tatera, CEO and founder of SBT, said: “It’s exciting to work with world class breweries that provide exceptional craft beers, and also have such strong values towards the environment and sustainability.”

Drinking beer make you environmentally responsible. Now, that’s a message that millions of beer drinker will raise a glass to.

And, if you are too young to drink beer, Cornelius has a concentrated milk dispenser technology as well. In 2015 the company partnered with Dairyvative Technologies, a Wisconsin-based developer of a patented process that allows pasteurized milk to be concentrated to a liquid that has one seventh of its original volume.

To learn more about Dairyvative’s breakthrough concentrated milk technology, read the MazorsEdge Special Report: Breakthrough Aims to Change the Way You Drink Milk.

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.

Marmon Water Introduces System To Filter Lead From School Drinking Fountains

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With the Flint water crisis making lead in drinking water front page news, schools across the country are testing their water. They are also looking for measures that can lower drinking water lead contamination for their students.

Berkshire Hathaway’s Marmon Water, Inc. has debuted its Safe Fountain System to remove lead and other contaminants from drinking fountains in schools and public/industrial buildings.

The new product line from EcoWater Systems ensures clean, safe, and good tasting water, even in the case of boil water alerts.

Lead and other contaminants in drinking water is an issue nationwide. While much has been said about lead coming from municipal water systems due to old lead pipes in the streets, problems can also exist in homes and buildings built before the early 1990s that used high-content lead in copper piping and lead solder and, to an even greater extent, in pre-1960s homes and buildings where lead pipes were routinely used. Even if a municipality addresses lead problems related to old pipes in the streets, issues may still be present in the home.

Concerns are based on lead’s significant effect on the brain and central nervous system. High lead levels have the greatest impact on fetuses, infants, and children under six years old, potentially causing learning disabilities, hyperactivity, and other medical conditions. In addition, high levels of lead in adults may contribute to medical problems including high blood pressure and diabetes.

According to the company, EcoWater’s new Safe Fountain System uses National Science Foundation-certified lead, bacteria, virus, cyst, and chemical reduction cartridges to ensure the quality of water just before it is consumed from the fountain. Systems come equipped with a range of safety features including real-time Wi-Fi monitoring, automatic shutoff, tamper-proof stainless steel housings, and braided water line connectors, giving users peace of mind. EcoWater’s nationwide network of water treatment professionals monitor usage and perform routine maintenance and cartridge replacement as necessary.

At the 2016 Berkshire Hathaway annual meeting, EcoWater demonstrated its water fountain filtration system.

The company is ready to install the Safe Fountain System this summer in order to have them in place at schools before kids return in the fall.

EcoWater also makes filtration systems that can be installed in school cafeterias, and it has a filtration system that goes in five and ten gallon coolers used by sports teams. The cooler filters are made by EcoWater and sold under the Brita brand through a licensing agreement.

EcoWater also offers NSF-certified microbiological drinking water purification systems as well as a complete line of similarly certified reverse osmosis drinking water systems and a host of other filtration systems for home and/or business applications that also reduce lead and other contaminants from the water supply.

© 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.

UTLX Dramatically Scales Back Tank Car Production

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The collapse in crude oil prices that has shuttered wells in the United States, and lowered oil train traffic for BNSF Railway, is also impacting the Union Tank Car Company (UTLX).

UTLX has announced that it is cutting its production by 50-percent.

The Berkshire Hathaway-owned company will cut 230 jobs in Houston, Texas, and also plans to lay-off employees at its plant in Alexandria, Louisiana, as well.

UTLX has sent a Worker Adjustment and Retraining Notification letter to the Texas Workforce Commission notifying it that the tank car facility located on Old Beaumont Highway 90 will be the source of the Texas layoffs.

UTLX will still employ 323 people at the Houston facility after the job cuts are completed in June.

Jeremy DeLacerda, UTLX manufacturing general manager, cited the “current market conditions and the industry-wide demand outlook for railroad tank cars,” as the reason for the lay-offs and production cuts.

“When the economy rebounds and greater demand returns, I look forward to increasing our staffing levels accordingly,” DeLacerda added.

Not the First Time

This is not the first time that UTLX has had to dramatically scale back production due to soft demand.

The UTLX manufacturing facility at England Airpark in Alexandria, Louisiana, endured similar lay-offs in 2006.

“You never want to hear news like this, but it’s not a surprise,” notes Jim Clinton, president and CEO of Central Louisiana Economic Development Alliance

“We knew they would have to cut production on some level,” Clinton added. “I’m sure they were hoping it would not be to the extent this apparently is. But the market is what the market is. They’re a good company that’s responding to market conditions.”

© 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.

New UTLX Plant Retrofits DOT-111 and CPC-1232 Tank Cars

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Tank Car manufacturer and servicer Union Tank Car (UTLX), which is owned by Berkshire Hathaway, has opened a remanufacturing facility in Marion, Ohio, to retrofit DOT-111 and CPC-1232 specification railroad tank cars.

Under the Enhanced Standards for New and Existing Tank Cars for use in an HHFT— existing tank cars must be retrofitted in accordance with the DOT-prescribed retrofit design or performance standard for use in an HHFT.

An HHFT is defined as a train carrying 20 or more tank carloads of flammable liquids (including crude oil and ethanol).

The need for replacement and retrofitted tank cars impacts shippers that ship by rail, including shippers of LPG, oil producers and refiners, and ethanol producers that own their own tank cars or lease them from leasing companies, and Berkshire’s BNSF Railway’s own fleet of tank cars, which includes a portion of the 25,000 tank cars it acquired in September 2015 from GE Railcar Services.

The retrofitting adds top fittings protection, thermal insulation, an 11-gauge steel jacket, full ½-inch thick head shields, and a bottom outlet valve handle that disengages from the valve when the car is in transit. In addition, DOT-117R cars also have their trucks and brakes reconditioned.

Retrofitting existing tank cars is an important bridge to safer shipping of flammable liquids, as the current backlog of new tank car orders sits at a record 52,000 units.

The new facility currently can retrofit two tank cars a day using a specially designed drum welder that fabricates the tank jackets, and the plant will rewrap 60 tank cars a week when it reaches full capacity.

The Ohio Tax Credit Authority granted a 55-percent, 5-year tax credit to UTLX for the creation of $8,272,000 in new annual payroll, provided that the company maintains operations at the facility for 11 years.

UTLX also received a $75,000 grant from the Ohio Rail Development Commission to cover the cost of on-site rail improvements.

Under the corporate umbrella of Berkshire’s Marmon Group, UTLX owns and manages a total of 120,000 railroad cars.

© 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.

Thorco Closes Plant as Online Retail Reduces Demand for Store Fixtures

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Berkshire Hathaway’s Thorco Industries, which the conglomerate owns as a part of its Marmon Group of manufacturers, is shuttering its Lamar, Missouri manufacturing plant and laying off 93 employees.

The closing will take place this spring.

The company designs and manufactures custom point-of-purchase merchandisers and store fixtures from wire, sheet metal and tubing for the retail industry.

General Manager Debra Probert noted that “retail industry changes, including the growth of e-commerce and the opening of fewer brick-and-mortar stores, has resulted in a continued decline in demand for store fixtures, such as the wire-based merchandising displays and accessories produced by Thorco.”

Thorco Industries has been in Lamar for almost 117 years, with its origins as a manufacturer of wire potato scoopers. The company was founded in 1899 by F.M. Thorpe.

© 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.

Special Report: Dairyvative Gets $2.5 Million Investment in New Milk Technology

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Dairyvative Technologies, a Wisconsin-based developer of a patented process that allows pasteurized milk to be concentrated to a liquid that has one seventh of its original volume, has received a major new round of funding.

Dairyvative received a $2.5 million investment from two undisclosed Wisconsin dairies, and from the BrightStar Wisconsin Foundation.

The money will be used to enable the company to expand its staffing and boost production for more commercial trials.

What’s that have to do with Berkshire Hathaway?

Berkshire’s Cornelius, Inc. and Dairyvative are looking to change the way milk is shipped, stored, and dispensed.

In August 2015, Cornelius signed a strategic partnership agreement with Dairyvative that makes Cornelius the exclusive provider of equipment to hold and dispense the concentrated milk provided by dairies using Dairyvative’s patented SEVENx technology.

One of the newer members of the Berkshire Hathaway family, Cornelius was acquired for $1.1 billion on January 2, 2014, by Berkshire’s wholly owned Marmon Group.

With 4,500 employees, and manufacturing facilities in seven countries, spanning North America, Europe, and China, Cornelius provides beverage dispensing technology to leading food service and retail companies, including PepsiCo, Coca Cola, McDonald’s, Yum, Starbucks, and Burger King.

All of these companies and more are potential customers for Dairyvative’s new technology.

A Whole New Way to Store Milk

Dairyvative claims its SEVENx technology “allows pasteurized milk to be concentrated to a liquid that has one seventh of its original volume. The lactose-free end product is shelf-stable without refrigeration for up to 6 months. The process also keeps milk proteins intact, maintaining nutrient and flavor profiles.”

Unlike milk treated with Ultra-high temperature processing (UHT), SEVENx technology has relatively minimal thermal treatment by comparison.

“I have been working on this process for 28 years,” said Dr. Charles E. Sizer, founder and CEO of Dairyvative Technologies. “There have been a lot of hurdles in maintaining the functionality and freshness of the product.”

One of the first markets for the SEVENx technology will be in quick service restaurants, where using Cornelius’s dispensing technology, the new dispenser will allow individual consumers the choice of adding several different flavors to the milk. Cornelius’ technology also enables the milk to be carbonated during dispensing.

Looking for a World Leader

“We knew Cornelius is the leader in dispensing products, so we approached them and signed an exclusive deal,” Dr. Sizer explained.

While Dairyvative touts the concentrated milk as having the “natural fresh taste of milk,” it does note that it is slightly sweeter due to the conversion of lactose into the sugars glucose and galactose.

Dairyvative also says that the cost for dairy processors to produce the concentrated milk is low, as much of the equipment that processors need is already in place. They also note that the long shelf-life means less spoilage and returns, lower transportation costs, and environmental benefits such as less electricity needed for milk storage.

Reducing the Carbon Footprint

Reducing the carbon footprint is very important to Dr. Sizer. He notes that currently it takes 2.05 kilos of carbon to bring 1 kilo (1 liter) of milk to the consumer.

“We can reduce that by 20%-30% right out of the gate,” Dr. Sizer said. “And by locating in close proximity to the dairy, we can reduce it even further.”

Expect to see the U.S. rollout of the new milk product in 2016, and Dairyvative is already in discussion with multi-national dairies for international markets.

© 2015 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.