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Lubrizol

Lubrizol’s Commitment to Innovation: $20 Million Investment in Gastonia Plant

(BRK.A), (BRK.B)

Lubrizol, a key player in resin technology for coatings, has unveiled plans for a significant $20 million investment in its Gastonia, North Carolina plant. This strategic move aims to bolster the production of innovative acrylic emulsions, underlining the company’s commitment to pushing the boundaries of coating performance.

Dating back to the 1950s, Lubrizol has been at the forefront of developing and manufacturing acrylic emulsion technologies. These formulations find wide applications across various industries, including paper, textiles, and construction materials. Over the years, Lubrizol has amassed over a dozen patents in North America alone, showcasing its dedication to pioneering advancements in coating performance. From enhancing UV and chemical resistance to improving hardness and toughness, Lubrizol’s acrylic emulsions have been instrumental in driving innovation in the coatings sector.

Luis Carthery, Sr. Business Director-Americas at Lubrizol, emphasized the company’s unwavering commitment to innovation. He noted, “Our commitment to innovation and production of world-class acrylic emulsions will continue, as evident by this significant investment.” Despite the enduring success of products like Hycar® Acrylic Emulsions, which were first commercialized in the 1960s and still enjoy significant sales volumes today, Lubrizol remains focused on bringing modern resin technologies to its customers.

The investment in the Gastonia facility will encompass several key upgrades, including updated processing equipment, storage tanks, and packaging facilities. These enhancements will not only boost production capacity but also ensure that Lubrizol maintains its high standards of safety and operational efficiency. Tom Zagore, Sr. Director for Product Management, highlighted the importance of these improvements, stating, “Safety and operating efficiency are key drivers for the changes. As Lubrizol continues to drive acrylic product performance, we need to be capable of handling product complexity, system optimization, and the safe handling of materials to achieve the highest level of Responsible Care® compliance, employee safety, and operational efficiency.”

With this investment, Lubrizol reaffirms its position as a leader in resin technology, poised to meet the evolving needs of its customers while driving innovation in the coatings industry.

© 2024 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 a 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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MiTek

MiTek Opens MiTek Vietnam Office 2 complex

(BRK.A), (BRK.B)

MiTek, a prominent player in the construction industry that provides integrated software systems, design solutions, and IT services, and a subsidiary of Berkshire Hathaway, has expanded its footprint in Vietnam with the inauguration of the MiTek Vietnam Office 2 complex in Ho Chi Minh City. This state-of-the-art facility serves as the nerve center for the company’s consulting operations, equipped with modern amenities to facilitate efficient administrative functions.

The opening of MiTek Vietnam Office 2 underscores the company’s commitment to the region and providing top-notch services to its clientele. With approximately 2,500 employees already stationed at its headquarters in Ho Chi Minh City, MiTek Vietnam continues to grow and thrive in the dynamic construction landscape of Vietnam.

© 2024 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 a 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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Lessons From Warren Buffett

Lessons from Warren Buffett: EBITDA Gives You B.S. Earnings

In the realm of discussing a company’s financial health, EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) has emerged as a ubiquitous metric. Yet, its widespread acceptance does not extend to all corners of the investing world. Notably, legendary investor Warren Buffett, along with his long-time partner Charlie Munger, have been vocal critics of the acronym, with Munger caustically dubbing it as “bullshit earnings.”

Buffett’s skepticism towards EBITDA was underscored at the 2017 Berkshire Hathaway Annual Meeting. He highlighted depreciation, a key component excluded from EBITDA calculations, as a particularly concerning aspect. Unlike other expenses, depreciation involves spending money upfront and subsequently recording expenses, essentially creating a reverse float. Buffett argues that such an approach misrepresents the true financial position of a company and can lead to inflated valuations.

Moreover, Buffett points out the self-serving nature of EBITDA’s popularity within financial circles. Wall Street benefits from the metric’s emphasis, as it often results in higher borrowing capabilities and inflated valuations, fueling a cycle of misinformation and misrepresentation.

For Buffett, the allure of EBITDA is a “mass delusion,” diverting attention away from more meaningful indicators of a company’s long-term viability. Instead, he advocates for a thorough understanding of a company’s fundamentals, including its capital expenditures and cash flows.

In essence, Buffett’s critique of EBITDA serves as a reminder to investors to scrutinize widely accepted metrics and delve deeper into a company’s financial reality. While EBITDA may offer a convenient shorthand, its shortcomings can lead to misguided investment decisions. As Buffett remarked, “It’s better to be approximately right than precisely wrong.”

Hear Buffett’s full explanation

See the complete Lessons From Warren Buffett series

© 2024 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 Pilots Overwhelmingly Approve New Labor Agreement

(BRK.A), (BRK.B)

In a significant development for the private aviation industry, pilots belonging to the NetJets Association of Shared Aircraft Pilots (NJASAP) have voted to ratify a tentative labor agreement with Berkshire Hathaway’s NetJets. The vote, with an overwhelming majority of 78.31% in favor, signifies a positive step forward in the relationship between the pilots and the company after several years of acrimony.

The newly ratified labor agreement brings about substantial changes, chief among them being a notable increase in compensation for NetJets’ pilots. With a resounding vote of confidence, pilots have agreed to a remarkable 52.5% rise in compensation until the agreement’s culmination in 2029.

NetJets, with roughly 3,100 pilots, is the leader in fractional (shared) ownership with over double the number of flight hours as its nearest competitor, Flexjet.

© 2024 David Mazor

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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Lubrizol

Lubrizol Opens Global Capability Center in Pune, India

(BRK.A), (BRK.B)

Lubrizol, a global player in specialty chemicals and a subsidiary of Berkshire Hathaway, has recently inaugurated its new Global Capability Center (GCC) in Pune, India, signaling a strategic move to bolster its presence in the region and foster closer collaboration with customers and employees.

Situated within the Embassy Tech Zone in Hinjewadi, Pune, the Lubrizol GCC operates from a state-of-the-art facility spanning 42,000 square feet. Notably, the campus is both WELL- and LEED Gold certified, ensuring a workspace that prioritizes safety, health, and environmental sustainability. The design ethos encompasses ergonomic workspaces, wellness rooms, a cafeteria with recreational areas, and ample natural light streaming into training and huddle rooms. Moreover, the facility features a customer experience center showcasing Lubrizol’s scientific prowess, with live plant installations underscoring the company’s commitment to sustainability.

With plans to expand its workforce, the GCC anticipates adding over 200 regional employees across various functions such as Engineering, Supply Chain, Technology, Finance, and HR in the coming year. The facility has the capacity to accommodate up to 300 employees in the future.

Lubrizol’s legacy in India dates back to 1966, when it commenced manufacturing chemical additives for the transportation and industrial sectors. Over the years, the company has played a pivotal role in enhancing the quality of life in India and neighboring regions through innovative solutions that drive mobility, improve well-being, and enrich modern living. Currently, Lubrizol employs around 500 professionals across commercial offices, labs, and manufacturing plants in India, in addition to supporting numerous contract positions.

In a testament to its commitment to India, Lubrizol announced a significant investment exceeding $150 million in 2023. This investment encompasses the establishment of the world’s largest CPVC resin plant in Vilayat, Gujarat, doubling capacity at its Dahej site, opening a grease lab in Navi Mumbai, and fostering substantial job growth and innovation within the country.

JT Jones, Senior Vice President of High Growth Regions at Lubrizol, emphasized the importance of India as one of the company’s fastest-growing markets and a pivotal talent hub for global success and innovation. Bhavana Bindra, Managing Director for India, Middle East, and Africa, highlighted the GCC’s role as an integrated extension of Lubrizol’s global team, offering business processing and digital capabilities to drive impactful outcomes.

Abhishek Jain, India GCC Leader at Lubrizol, emphasized the significance of the Pune GCC in accessing top-tier talent to augment technological capabilities and operational excellence. This move underscores Lubrizol’s dedication to serving customers in India and worldwide through continuous innovation and customer-centric solutions.

© 2024 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 a 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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Lubrizol

Lubrizol Appoints Nitin Mengi as Vice President for IMEA Region

(BRK.A), (BRK.B)

Lubrizol, a subsidiary of Berkshire Hathaway, has reaffirmed its commitment to growth in India, the Middle East, and Africa (IMEA) with the appointment of Nitin Mengi as Vice President, Lubrizol Additives, IMEA, and Chairman & Managing Director, Lubrizol India Private Limited.

This strategic move aims to strengthen the company’s presence and focus on growth in the region, emphasizing collaboration with customers, suppliers, and stakeholders.

In his new role, Nitin will spearhead efforts to drive growth for Lubrizol’s Additives business, particularly in transportation and industrial markets across the IMEA region. Working closely with Bhavana Bindra, Managing Director of Lubrizol IMEA, Nitin will play a pivotal role in executing the company’s regional strategy.

Flavio Kliger, Senior Vice President and President of Lubrizol Additives, expressed confidence in the appointment, highlighting Lubrizol’s commitment to growth in IMEA and the delivery of sustainable solutions that enhance mobility and well-being. Nitin brings over two decades of experience in the gas and oils industry across various regions, including Asia Pacific, India, the Middle East, and Africa. His expertise in leading cross-functional teams positions him well to drive Lubrizol’s growth agenda in IMEA.

Nitin expressed enthusiasm about joining Lubrizol, citing the company’s industry leadership and exciting future plans. His appointment comes at a time when Lubrizol is actively expanding its operations and capabilities in the IMEA region.

Notably, the company is investing $150 million in India, including the construction of a state-of-the-art CPVC resin plant in Vilayat, set to be the world’s largest upon completion in 2025.

Additionally, Lubrizol is establishing a Global Capacity Center (GCC) in Pune, India, to support innovation in the region.

© 2024 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 a 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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Berkshire Hathaway Energy

Shaw Industries Partners with BHE Renewables for Renewable Energy

(BRK.A), (BRK.B)

Berkshire Hathaway’s Shaw Industries Group, Inc., a leading global supplier of carpet, hardwood, tile, and other specialty products, signed a virtual power purchase agreement in Mid-February with BHE Renewables, a subsidiary of Berkshire Hathaway Energy. This landmark agreement reflects Shaw’s commitment to sustainability and its ongoing efforts to reduce its environmental footprint.

Under the terms of the agreement, Shaw will invest in renewable energy generated by BHE Renewables’ 200-megawatt Flat Top wind farm in Texas. The wind farm, operational since 2018, will provide Shaw with a sustainable energy source as it continues to supply residential and commercial markets worldwide.

Kellie Ballew, Shaw’s chief sustainability and innovation officer, emphasized the company’s dedication to combating climate change. “Shaw strives to be a positive force in the global effort to mitigate climate change,” Ballew stated. “That’s a fundamental component of our sustain[HUMAN]ability® strategy, which focuses on people and the planet. This latest endeavor builds upon our decades of work in this realm.”

Shaw’s investment in renewable energy aligns with its ambitious sustainability goals. The company aims to reduce its operational footprint by approximately 15 percent annually over the next 15 years, building on its significant achievements in reducing greenhouse gas emissions. Since 2010, Shaw has already decreased its Scope 1 and Scope 2 greenhouse gas emissions by more than 50 percent.

Moreover, this partnership with BHE Renewables marks a significant step toward Shaw’s objective of achieving net-zero operations (Scope 1 and 2) by 2030. Notably, Shaw’s commercial carpet operations worldwide have been carbon neutral since 2018, demonstrating the company’s proactive approach to sustainability.

Alicia Knapp, President and CEO of BHE Renewables, expressed pride in supporting Shaw’s sustainability vision. “We are proud to support Shaw and its vision to create a better future,” Knapp commented. “We share their commitment to people and the planet and look forward to delivering clean energy to help them achieve their sustainability goals.”

BHE Renewables owns more than 4,000 megawatts of solar, wind, geothermal and hydro projects nationwide, which produce clean energy for both the wholesale market and for customers under long-term power purchase agreements.

Through this collaboration, Shaw Industries, which has more than $7 billion in annual revenue and approximately 20,000 associates worldwide, reaffirms its position as an industry leader in sustainability, leveraging renewable energy to drive positive environmental change while continuing to deliver high-quality products to its customers worldwide.

© 2024 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 a 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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BNSF

BNSF Railway Customers Pour $4.1 Billion into Investments, Creating Over 4,200 Jobs

(BRK.A), (BRK.B)

BNSF Railway, a subsidiary of Berkshire Hathaway, has reported that investments from its customers soared to over $4.1 billion in 2023, marking a significant contribution to local economies and job creation. Notable investments hailed from key supply chain partners and customers such as Cenovus Energy and Green Bison Soy Processing LLC. These investments have not only bolstered infrastructure but have also spurred the creation of more than 4,200 new jobs in communities where BNSF operates.

The surge in investments underscores a collaborative effort between BNSF and its customers to tailor rail development solutions to meet specific needs, thereby enhancing supply chains and driving economic growth. Chris Danos, Assistant Vice President of Economic Development at BNSF, emphasized the company’s commitment to creating customizable solutions that not only streamline logistics costs but also foster sustainability.

Throughout 2023, BNSF facilitated various industrial and agricultural projects across its network, aiding in the transportation of commodities crucial to local economies. Two standout examples include:

Cenovus Energy: With a substantial investment, the Superior Refinery in Superior, Wisconsin, acquired by Cenovus Energy in 2021, underwent reconstruction and reopened its doors in 2023. The rail-served refinery, which produces asphalt, vacuum gas oil, light cycle oil, and LPG products, employed over 350 people and contributed significantly to the economic vitality of the Superior-Duluth area. Annual payroll exceeded $29.9 million, while substantial spending with contractors and vendors further boosted local economies.

Green Bison Soy Processing LLC: In Spiritwood, North Dakota, an investment of approximately $350 million saw the establishment of Green Bison Soy Processing, a soybean processing plant operated by ADM & Marathon Petroleum Corporation. This facility addresses the growing demand for renewable fuels, particularly renewable green diesel, sourcing and processing local soybeans. The complex, featuring over 22,000 feet of new track, can annually ship 14,000 carloads of outbound soy meal and vegetable oil. Notably, the plant has created hundreds of regional jobs and generated an additional 75 positions.

The influx of investments in 2023 represents the largest commitment by BNSF customers and local economic development organizations to new or expanded facilities in the past five years. These endeavors highlight the pivotal role of rail infrastructure in driving economic prosperity and fostering sustainable growth in communities across the BNSF network.

© 2024 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 a 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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Lessons From Warren Buffett

Lessons from Warren Buffett: You Have to Be Your Own Analyst

In the world of stock market analysis, there’s no shortage of experts on both the Wall Street buy and sell sides, along with independent analytical services. However, when it comes to evaluating companies, Warren Buffett, the legendary investor and Chairman of Berkshire Hathaway, stands apart.

According to Buffett, relying on the reports that Wall Street analysts produce is futile; instead, investors must conduct their own thorough research, diving into a company’s annual reports, and those of its competitors.

At the 1996 Berkshire Hathaway Annual Meeting, Buffett expressed his skepticism towards Wall Street reports, stating, “You can’t read Wall Street reports and get anything out of them.” He emphasized the necessity of independent research, stressing that in his many decades of experience, he has never stumbled upon a valuable idea from the reports issued by Wall Street firms. Instead, hehas derived numerous insights from meticulously studying a company’s annual reports.

In essence, Buffett advocates for hands-on engagement with company documents, believing that a deep understanding of a company’s fundamentals is crucial for successful investing. This approach aligns with his renowned philosophy of value investing, where thorough analysis and a long-term perspective reign supreme over short-term market fluctuations.

Hear Buffett’s full explanation

See the complete Lessons From Warren Buffett series

© 2024 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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Lubrizol

Lubrizol Aims to Double Revenues From India

(BRK.A), (BRK.B)

Lubrizol, a global player in specialty chemicals and a subsidiary of Berkshire Hathaway, has set its sights on doubling its revenue from the lucrative Indian market by 2029.

Currently, India contributes ten percent to the company’s global revenues, a figure set to skyrocket with strategic investments and expansion plans underway.

To fuel this ambitious growth trajectory, Lubrizol is injecting a substantial $150 million into its operations in India. One of the pivotal moves includes the construction of a cutting-edge CPVC resin plant in Vilayat, slated to claim the title of the world’s largest upon its completion in 2025. This state-of-the-art facility is poised to significantly bolster Lubrizol’s production capacity and meet the burgeoning demand for specialty chemicals in India and beyond.

Moreover, Lubrizol is establishing a Global Capacity Center (GCC) in Pune, India, aimed at fostering innovation and enhancing operational efficiency in the region. This strategic initiative not only underscores the company’s commitment to driving technological advancements but also positions India as a vital hub in Lubrizol’s global network.

In addition to infrastructure development, Lubrizol is ramping up its manpower, anticipating the creation of approximately 4,000 direct and indirect jobs through its new investments. This move not only bolsters employment opportunities but also underscores Lubrizol’s role as a catalyst for economic growth and development in the Indian market.

Furthermore, recognizing the burgeoning demand for CPVC compounds, Lubrizol has doubled its compound capacity at its Dahej, Gujarat, facility. This expansion reinforces Lubrizol’s commitment to meeting the evolving needs of its customers in India, further solidifying its position as a trusted partner in the specialty chemicals sector.

© 2024 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 a 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.