BYD Cuts Ribbon on New Hungarian Electric Bus Plant

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China’s BYD Company, the Shenzhen-based new energy technology company, has opened its newest electric bus assembly plant in the Hungarian town of Komarom. The plant will officially be known as the BYD Electric Bus and Truck Hungary Kft.

The new plant sees an investment by BYD that will total some €20 million (or about HUF 6.2 billion) in the three years to 2018.

Currently, there are 32 employees of whom 68% are factory workers. Eventually it will employ some 300 people, the vast majority being locally recruited Hungarians with a technical background, who will assemble up to 400 electric buses a year on two shifts. Those buses will be exported to customers across continental Europe.

Initial output will be electric buses and coaches but other products will soon follow, including electric forklift trucks and then light commercial vehicles.

The plant consists of five buildings: a main office, a battery test and maintenance center, an inspection line and water leak test booth, a bus and truck assembly hall and a paint shop.

It is planned that the Hungary plant will produce the bus chassis for the UK (for assembly into complete vehicles under the BYD ADL partnership) and the newly announced BYD factory in France. There are plans to deliver up to 40 vehicles by the end of this year.

For BYD the more than 66,000 square meter complex is just the first of a series of European production facilities it is planning. The event today follows an announcement just two weeks ago of the acquisition of an 80,000 square meter site for bus making in Beauvais, to the north of Paris.

According to Isbrand Ho, Managing Director of BYD Europe, BYD is completely confident that it will need this extra bus making capacity. “The answer is simple – air quality – or, perhaps I should say, bad air quality, something which impacts the citizens of every major city worldwide. Not a week goes past without another report linking the serious detrimental health consequences of breathing polluted air and most of that pollution comes from road vehicles, largely diesel powered.

“City buses are not only a prime contributor to this but also, since they have totally predictable route patterns, are one of the easiest classes of vehicles to be electrified. Learning from the streets of major Chinese cities where poor air quality is not new, we are targeting our world leading battery technology on the city bus sector, although our ambitions stretch way beyond this humble type of vehicle.

“It is no coincidence therefore that BYD electric buses already make up the largest fleet of zero emission buses at a major international airport – Amsterdam’s Schiphol – and the largest fleet of electric city buses – in service on the streets of London”, Mr Ho said.

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 $1.77 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.

Rocky Mountain Power’s 20-Year Plan Boosts Solar and Wind

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Berkshire Hathaway’s Rocky Mountain Power has unveiled a 20-year plan to provide electricity to its customers that includes adding more solar and wind and making existing wind turbines more efficient.

The $3.5 billion plan also incorporates building a segment of the Gateway West transmission line to facilitate the wind expansion.

The Integrated Resource Plan (IRP) was filed with utility regulators and is used as a road map to help the company provide reliable electric service to customers at the lowest cost. The 2017 IRP includes the following:

• Upgrading more than 900 megawatts of existing wind plants with larger blades and newer technology to generate 20 percent more energy in a wider range of wind conditions and capture federal production tax credit value for customers

• Beginning construction on a segment of the Gateway West 500-kilovolt transmission line between Medicine Bow, Wyoming, and the Jim Bridger power plant in the southwestern part of the state. The 140-mile line would enable additional wind generation, improve efficiency and relieve transmission congestion

• Facilitating construction of up to 1,100 megawatts of new wind projects, primarily in Wyoming, by the end of 2020, capturing federal production tax credit value for customers

• Adding up to another 859 megawatts of new wind – 85 megawatts in Wyoming and 774 megawatts in Idaho – between 2028 and 2036

• Building up to 1,040 megawatts of new solar between 2028 and 2036. Approximately 77 percent of the solar is assumed to be built in Utah and 23 percent to be built in states served by Pacific Power.

• Continuing a cost-conscious transition that adds more energy diversity, the plan incorporates the company’s environmental compliance obligations for its coal plants.

“This plan provides more diversity in the energy we use, which helps us keep electricity prices low for customers and improves the economies of our states,” said Cindy A. Crane, Rocky Mountain Power President and CEO. “The proposal is also a major investment that will produce more jobs, provide a stronger tax base and build transmission lines that will deliver reliable energy more efficiently for years to come.”

By moving to complete the wind upgrades and new wind developments by 2020, the company will be able to use federal production tax credits, which will help cover the costs of the investments and provide a net savings for customers over the life of the projects.

“This ambitious plan – a nearly $3 billion investment in Wyoming – diversifies Wyoming’s economy, expands markets, presents workforce training opportunities, adds jobs and strengthens the tax base in local communities,” said Wyoming Governor Matt Mead. “I look forward to working closely with Rocky Mountain Power. I see great potential for Wyoming workers and rate payers as this plan is implemented.”

Energy efficiency continues to play a key role in the company’s long term plans. The 2017 IRP anticipates energy efficiency will meet 88 percent of the energy growth needs during the next 10 years – up from 86 percent from the 2015 forecast.

A full IRP is developed every 2 years and an update is filed during off years.

© 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.

Marmon Engineered Components Acquires PRISM Plastics, Inc.

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A subsidiary of Berkshire Hathaway’s Marmon Engineered Components Company has acquired PRISM Plastics, Inc. headquartered in Chesterfield, Michigan.

PRISM Plastics is a manufacturer of high-precision injection molded plastic components with a focus on tight tolerance automotive parts used in safety critical, electronic components, fuel systems products, steering systems and drivetrain components. The company has manufacturing facilities in Chesterfield and Port Huron, Michigan, Meadville, Pennsylvania, and Harlingen, Texas.

The Harlingen, Texas facility is located near Reynosa, Mexico and supports customers with Mexico-based manufacturing.

The company manufactures more than a billion parts per year, and in 2016 PRISM doubled the size of its business through the acquisition of Tech Molded Plastics.

PRISM Plastics was acquired from investment firm Altus Capital Partners, which acquired the company in 2014.

Rod Bricker, President and CEO of PRISM Plastics, stated, “With the financial and strategic resources from Altus, we were able to accelerate growth and stay competitive in an increasingly complex and technology-driven industry. We look forward to our new partnership with Marmon and our continued success.”

© 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.

McLane Company and Burger King Expand Service Agreement

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Berkshire Hathaway’s McLane Company, Inc., a leading supply chain services company providing grocery and foodservice supply chain solutions, has signed an expanded agreement between McLane Foodservice Inc., and BURGER KING.

Under the new agreement, McLane Foodservice, Inc., will provide support to an additional 600 BURGER KING restaurants located in Tennessee, Georgia, Florida, and Alabama.

This addition brings the total number of BURGER KING stores McLane services to 2,467 locations from eight distribution centers across the U.S.

Since 2000, BURGER KING has counted on McLane Foodservice as its primary distributor. The extended relationship ensures the restaurant chain will continue receiving McLane’s dependable service offerings and support as the business grows.

“In the highly competitive QSR industry, BURGER KING continues to up its game in terms of menu offerings and the locations served,” said President of McLane Foodservice, Inc. Tom Zatina. “We are honored the company has entrusted us with their foodservice supply chain needs over time and we look forward to further contributing to their success.”

© 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.

BNSF Sees Light at End of Tunnel with Higher Shipping Volumes

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Things are turning around at BNSF Railway now that higher carload numbers are continuing to remain strong.

Slumping volumes in 2016 saw the total intermodal and carload volumes down 4.94% from2015 levels, with coal shipments slumping 20.88% from 2015 levels.

This time, coal is leading the way in the recovery, with shipments up a robust 19.11% year-to-date over the same period in 2016.

Also up a solid 4.26% are intermodal shipments.

While petroleum shipments continue to slide, with year-to-date numbers down 10.14%, the combined intermodal and carloads numbers are up 6.15% in the aggregate.

© 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.

25 More Years Together for McLane Company and Walmart

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Berkshire Hathaway’s McClane Company has inked a 25-year extension to its service agreement with long-time client Walmart.

As part of this extended agreement, McLane will continue to deliver to Walmart stores across the U.S., in addition to becoming the sole provider of candy and tobacco products to the vast majority of Walmart’s retail locations.

The contract is scheduled to renew in May 2017, and with it McLane will now become the exclusive provider of Walmart’s seasonal candy products to all locations nationwide.

“McLane’s ability to deliver temperature-sensitive products to all of our stores and manage our large volume of seasonal goods will ensure we have the best selection of high-quality products at the lowest cost for our customers,” said Vice President of Candy and Impulse Merchandising at Walmart, Joe Grady.

“McLane is proud to be a long-time partner of the world’s largest retailer. We are excited to expand our product mix with Walmart as we continue to serve all of Walmart’s U.S. locations,” said Tony Frankenberger, President of McLane Grocery.

Walmart has a long history with McLane. The company was originally acquired by Walmart in 1990, and later sold to Berkshire Hathaway in 2003.

© 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.

See’s Candies Manhattan Store Now Open

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See’s Candies lovers in New York City now have a permanent retail location to call their own.

The store is located at 60 West 8th Street in New York City’s Greenwich Village neighborhood, and serves more than 100 varieties of candy—all made from scratch with quality ingredients.

This is the first See’s location on the East Coast with a candy counter, which allows guests to build their own custom boxes of chocolates. And yes, the 625-square-foot shop features the iconic black-and-white checkered floor.

See’s partnered with Bill Rhodes, CEO of Travis Melbren Inc., to open its newest shop.

“What makes See’s Candies so special is the chocolate maker’s commitment to using only the finest and freshest ingredients, where employees are treated like family and customers are warmly greeted with a sample,” said Bill Rhodes. “I’m looking forward to providing this experience and iconic tradition to the residents of New York City.”

As a company, See’s Candies has over $400 million in annual revenues with just under a quarter of that as profit.

A Slow Move East

Currently there are more than 200 company-owned See’s Candies shops in the western half of the U.S., and limited distribution in department stores, along with a handful internationally in Hong Kong, Macau, Taipei, and Tokyo, and additional pop-up stores for the holidays all across the country.

However, until recently, you couldn’t find a full-fledged store east of the Mississippi River. That began to change in 2013 with See’s opening stores in Ohio (in Cincinnati and Columbus) and two stores in Pittsburgh, Pennsylvania.

No word yet as to whether the new Manhattan store will mean we will find See’s Candies outlets sweetening up places like Boston, Philadelphia or Washington, DC.

© 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.

MiTek’s SAPPHIRE Supply Brings Big Results for McCabe Lumber

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Berkshire Hathaway’s MiTek USA has announced that Cincinnati-based McCabe Lumber has implemented MiTek’s SAPPHIRE Supply, resulting in a 50% reduction in the time required to generate estimates and material take-offs.

McCabe Lumber is a long-time user of MiTek’s SAPPHIRE Structure for designing and manufacturing prefabricated components.

Using SAPPHIRE Supply, the newest SAPPHIRE module, McCabe can now create the most-accurate 3-D BIM structural frame in the building industry. With SAPPHIRE Supply, a wide range of structural products can be designed for roofs, floors, and wall applications, including proprietary EWP products, dimensional lumber, and MiTek’s USP Structural Connectors’ metal connectors.

SAPPHIRE Supply can also estimate non-structural materials such as drywall, roofing, and housewrap. A flexible formula-builder gives SAPPHIRE Supply users the power to define their own accumulation rules, further increasing accuracy.

McCabe Lumber has a staff of 120 and generates $40 million in annual revenue, Its customers are predominantly high-end custom production home builders and professional remodelers.

“With SAPPHIRE Supply, our material counts and delivery stages are so accurate, we see a clear path to reducing the error and waste rate from as much as 8% down to 2%, which is near-perfect accuracy,” said Dave Renchen, McCabe Lumber’s Estimating Manager.

“SAPPHIRE Supply uses a single shared structural model, and that offers McCabe a unified solution for efficient, consistent and accurate modeling, estimating, on order fulfillment across their organization,” explained MiTek’s Brian McCormick. “SAPPHIRE Supply eliminates the classic problem of inconsistent sales estimating, because it delivers accurate modeling and estimating on every structure.”

© 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.

Intero Real Estate Services Recognized with Leading RE Awards

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Intero Real Estate Services, Inc., a Berkshire Hathaway affiliate and wholly owned subsidiary of HomeServices of America, Inc, received recognition at the Leading Real Estate Companies of the World annual Awards Gala on March 2, 2017 in Miami.

Leading RE is a global community of more than 550 high quality independent real estate firms with offices around the world.

Intero serves Northern California with 16 offices throughout the greater Silicon Valley. The Intero Franchise network is comprised of nearly 50 affiliates located in Alabama, Arizona, California, Nevada, Tennessee and Texas. The company is headquartered in California’s Silicon Valley.

In addition to the awards received, Intero collected a record number of nominations this year. The dedication Intero applies to excellence in real estate is reflected not only by devoted and skilled associates, but also Intero as a whole for its outstanding accomplishments in 2016.

Intero was one of the recipients of the Top Five Outgoing Closers Award, given to companies with the highest volume of property sales. Having received this award, Intero has accepted its position by improving outgoing referral equivalent closings by 217% in 2016, as well as continuing its commitment to offering unparalleled service and advocacy for their clients. In addition, Intero also received the Momentum Club Award from LeadingRE for its continued efforts in expanding its scope of influence in their field.

Tom Tognoli, President and Chief Executive Officer at Intero says of the awards received, “The dedication our agents put forth in order to not only service our clients, but also giving their time and expertise to the greater community of real estate professionals is something we take great pride in. And, this year, we are very happy to see one of our own acknowledged for her outstanding contributions.”

Diana McGrogan, Director of Relocation at Intero, was acknowledged individually by receiving the President’s Service Award. Her efforts on behalf of Intero and her clients is well-recognized not only by her co-workers and customers, but also by receiving this esteemed accolade from LeadingRE. Diana works hard for her clients, ensuring they are represented by only the most dedicated agents and brokers.

Diana says of her award, “It’s been a great opportunity to work at Intero, and having received this award. Being a member of Leading RE’s Relocation Advisory Council, I recognize the importance of working with our associates out in the field.” Diana continues, “Our team at Intero has received these recognitions not only through our individual contributions, but by working together to achieve our company goals.”

© 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.

Berkadia’s L.A. Office is Top Freddie Mac Lender in Western Region, Again

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Berkadia, Berkshire Hathaway’s joint venture with Leucadia National Corporation, has announced that its Los Angeles team was recently recognized as the 2016 top conventional seller/servicer office by Freddie Mac in the western region for multifamily loans.

This is the third consecutive year that the L.A. office has topped the ranking.

The L.A. office originated $3.16 billion with Freddie Mac in 2016, representing 72 loans secured throughout the country. The L.A. office’s 2016 production with Freddie Mac increased more than a 25 percent over 2015, a year in which they were also the top office in Freddie Mac’s western region.

“Berkadia is proud to recognize our Los Angeles mortgage banking team for the third year in a row. Their continued in-depth knowledge of the programs, deep relationships with the Freddie Mac team and relentless desire to serve their clients has clearly led to their success,” said Ernie Katai, executive vice president and head of production at Berkadia. “It’s work like this being completed by Berkadia offices—in Los Angeles and across the country—that underscores the reason why, on a nationwide combined basis, Berkadia is number one with Freddie Mac, Fannie Mae and HUD, as well as having the distinction of being the one and only lender ranked in the top four within all of these organizations.”

In 2015, Berkadia’s Los Angeles team originated $2.52 billion, and in 2014, they secured $1.79 billion in financing through Freddie Mac.

About Berkadia

Founded in 2009 as a 50/50 joint venture between Berkshire Hathaway and Leucadia National Corporation, Berkadia is a third-party commercial mortgage servicer, as well as an approved lender for Fannie Mae, Freddie Mac, and HUD/FHA.

The company is among the top Freddie Mac and Fannie Mae multifamily lenders.

Berkadia owes its origins to GMAC Commercial Mortgage Corporation, which was acquired in 2009 by Kohlberg Kravis Roberts & Co., Five Mile Capital Partners LLC, and Goldman Sachs Capital Partners. Christened Capmark Financial, the company had $10 billion of originations in 2008 and a servicing portfolio of more than $360 billion before running into bankruptcy in October 2009.

In a deal approved by the bankruptcy court, Capmark sold its mortgage loan and servicing to the newly formed Berkadia in a deal worth $515 million.

The deal brought Berkshire into the heart of the commercial loan serving business, and the company has one of the largest commercial real estate servicing portfolios.

© 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.