Month: October 2020

Lubrizol and Grasim Industries Limited to Build India’s Largest CPVC Resin Plant

Post author By David Mazor
Post date October 30, 2020

(BRK.A), (BRK.B)

To meet growing demand for chlorinated polyvinyl chloride (CPVC) pipe and fittings in India, Berkshire Hathaway’s Lubrizol Advanced Materials, a global specialty chemical leader and the market leader for CPVC, and Grasim Industries Limited, a flagship company of the Aditya Birla Group, have entered into a definitive agreement to manufacture and supply CPVC resin in India.

Once commissioned, this near 100,000 metric-ton state-of-the-art CPVC plant at Grasim’s site in Vilayat, Gujarat, will be the largest single-site capacity for CPVC resin production globally.

The project will take part in two phases, with the first phase of production expected to be operational in late 2022. The CPVC resin produced at Vilayat will enable product sold under Lubrizol’s FlowGuard® Plus, Corzan® and BlazeMaster® brands.

This collaboration, in support of the Government of India’s “Make in India” initiative, is expected to bolster economic development in the state of Gujarat. To further support the local market, Lubrizol will make additional investments in the coming years to expand its existing CPVC compound plant in Dahej, Gujarat and establish a local innovation center as demand continues to grow.

India is amongst the largest consumers of CPVC, primarily in the form of plumbing pipe and fittings, and growing needs for clean water in all residential and commercial buildings will drive continued growth. Lubrizol is the inventor and largest manufacturer of CPVC resin and CPVC compounds worldwide. With billions of feet installed globally, Lubrizol’s CPVC solutions enable long-lasting systems and reliable access to clean, safe drinking water to millions of homes, in alignment with the company’s mission to help the world Live Better.

To-date, Lubrizol products have been instrumental in delivering safer water to some 200 million citizens in South Asia. Lubrizol has plans to introduce other advanced water management solutions in India in the future.

With this investment to supply resin to its existing compounding plant in Dahej, Gujarat, Lubrizol becomes the only company in India with end-to-end CPVC capability. In addition to its regional manufacturing capabilities, Lubrizol continues to strengthen its customer network, collaborating with local leaders like Ashirvad Pipes, an Aliaxis company, and Prince Pipes to ensure robust distribution in India and South Asia. As part of its regional support, Lubrizol is also committed to the ongoing development of plumbers in India, having trained nearly 100,000 local plumbers on installation of advanced plumbing systems.

“This alliance will help Lubrizol better serve our customers in India and South Asia, as well as support the Indian economy,” said Arnau Pano, Vice President, Lubrizol Advanced Materials, South Asia. “Connecting with Grasim Industries Limited, a reputable global conglomerate, who share our commitment to sustainable chemical production, will allow us to provide our customers with increased, reliable CPVC supply and further our goal of improving access to clean, safe drinking water for millions of global citizens through the advantages offered by FlowGuard® Plus plumbing solutions.”

“This collaboration with Lubrizol Advanced Materials is part of our long-term direction to bring in world-class technologies to India and additionally complements our growth strategy in Chlor-Alkali and Derivatives platform,” said Kalyan Ram Madabhushi, CEO-Global Chemicals & Group Business Head-Fertilisers & Insulators, Aditya Birla Group. “The collaboration will support the ‘Make in India’ initiative and is expected to create local jobs and downstream opportunities.”

This collaboration also will enable Aditya Birla Group and The Lubrizol Corporation to explore collaboration opportunities across additional segments, such as water management, construction, textiles, automotive and piping by leveraging the technologies and market channels of both groups.

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.

Tags Lubrizol

Berkshire Hathaway-Backed BYD’s Stock Continues to Rocket Skyward

Post author By David Mazor
Post date October 30, 2020

(BRK.A), (BRK.B)

Shares of Berkshire Hathaway-backed Chinese battery and vehicle manufacturer BYD Co., Ltd. have continued to rocket upward, jumping 11.5% on Thursday.

BYD’s stock (BYDDF), which had been as low as $4.35 on March 23, hit $21.30 on intraday trading before closing at $20.60.

The company has had strong demand for its Han EV luxury automobile, which debuted in July and sold 4,000 units in August.

BYD is the world leader in electric buses. BYD recently secured Finland’s largest eBus order – 106 vehicles for Nobina, one of Scandinavia’s largest public transport operators.

The company also manufactures EV batteries, a market that is projected to grow at a CAGR of 22% over the next five years.

A Profitable EV Company

BYD recently reported a net profit of 1.66 billion yuan (roughly 242 million U.S. dollars) for the first half of 2020. The net profit rose 14.29 percent over the same period in 2019.

Through June 30, BYD had revenue of 60.5 billion yuan, down 2.7 percent year on year, according to BYD’s financial report filed with the Shenzhen Stock Exchange.

Despite the global pandemic, BYD projects 2.8 billion yuan to 3 billion yuan of net profit in the first three quarters of this year, which would be an increase of 77.86 percent to 90.56 percent from the same period of 2019.

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 has grown in value twenty-fold.

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway and BYD, 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.

Tags BYD Co, Stock Portfolio

Berkshire Hathaway HomeServices Real Estate

Berkshire Hathaway HomeServices Announces First Hawaii Island (Big Island) Location

Post author By David Mazor
Post date October 28, 2020

(BRK.A), (BRK.B)

Berkshire Hathaway HomeServices, part of Berkshire Hathaway’s HSF Affiliates LLC family of real estate brokerage franchise networks, has opened its first franchised office on Hawaii Island. The independently owned and operated real estate office will operate as Berkshire Hathaway HomeServices Hawai’i Island Properties.

The Hawaii Island entity was developed by Berkshire Hathaway HomeServices Maui Properties, an established network member since 2014.

“As the only current Berkshire Hathaway HomeServices network member on the Island of Hawai’i, our initial goal is to gain market share in the West Hawai’i real estate market,” said Alex Iskenderian, CEO of Hawai’i Island Properties. “We feel confident that our full service, hands-on approach coupled with the resources and trust of Berkshire Hathaway HomeServices will allow us to accomplish our client’s goals in the most efficient way possible.”

Hawai’i Island Properties will serve the unique housing needs, attractions, and cultures of Hawaii Island. “Sellers looking to list a house, condo or piece of land on the Island of Hawaii want and need a dedicated specialist,” said Alex Iskenderian. “We wanted to expand our reach but retain that local expertise and trust that home buyers and sellers expect from a Berkshire Hathaway HomeServices network member.”

“Berkshire Hathaway HomeServices Hawai’i Island Properties new office is an exciting addition to our network,” said Chris Stuart, CEO of Berkshire Hathaway HomeServices. “Alex Iskenderian embodies a similar vision to ours with the intent to establish a Forever Brand. Combining forces with Maui Properties to serve West Hawai’i, Alex is making decisions to impact decades to come.”

Hawai’i Island Properties agents gain access to Berkshire Hathaway HomeServices’ active referral and relocation networks, and its “FOREVER Cloud” technology suite, a powerful source for lead generation, marketing support, social media, video production/distribution and more. Berkshire Hathaway HomeServices has aligned with best-in-class technology platforms to deliver world-class support to its network members far into the future.

The brand also provides global listing syndication, professional training and ongoing education and the exclusive Luxury Collection marketing program for premier listings.

Iskenderian added, “The tools that Berkshire Hathaway HomeServices provides are the best in the industry by far. We are able to streamline the buying and selling process allowing more time to do the most important tasks.”

Gino Blefari, Chairman of Berkshire Hathaway HomeServices, also extended a warm welcome to the new office.

“Berkshire Hathaway HomeServices Hawai’i Island Properties demonstrates a commitment to their community beyond real estate sales that is a wonderful example of the Berkshire Hathaway HomeServices mission to be dedicated to their clients and continuously improve their lives.”

Iskenderian continued with, “We have a focus on second homes, vacation rental properties, raw land and everything in between. We have dedicated specialists for each of the resorts and each market segment.”

Tags Berkshire Hathaway HomeServices, Real Estate

NetJets

NetJets Launches Worldwide Sustainability Program

Post author By David Mazor
Post date October 26, 2020

(BRK.A), (BRK.B)

NetJets has launched its expanded Global Sustainability Program, a commitment to reducing the environmental footprint of the brand and its Owners. As the leader in private aviation with more than 750 aircraft worldwide, NetJets’ position in the market comes with the responsibility to drive awareness and action for important issues industry-wide. As such, the brand is developing a multi-tiered program to address sustainability and continuing to examine all aspects of its business with environmental impact in mind.

NetJets’ Global Sustainability Program focuses on:

• Sustainable Fuel
o NetJets is purchasing enough sustainable aviation fuel (SAF) to account for all flights out of San Francisco, California, where the fuel supply is located, and its home base of Columbus, Ohio, in partnership with Signature Flight Support.
 This totals up to 3 million gallons of SAF produced by Neste, the largest provider of renewable jet fuel and diesel globally, and the world’s third most sustainable company according to Corporate Knights’ 2020 ranking.
 This commitment amounts to an unprecedented volume of sustainable fuel in the private aviation space and supports the continued industry availability of SAF, which can reduce greenhouse gas emissions by up to 80% compared to conventional jet fuel.
o NetJets is continuing to explore additional SAF purchase opportunities in both the U.S. and Europe.
• Corporate Responsibility
o NetJets Europe has been carbon neutral since 2012, going above and beyond European Union regulations to participate in the Emissions Trading System, which imposes a cap and cost on emissions but does not necessitate carbon neutrality.
o NetJets will offset its administrative and training flights in the U.S. beginning in 2021, amounting to approximately 1,600 flights annually.
• Consumer Participation
o The NetJets Blue Skies program encourages Owners worldwide to take responsibility for the environmental impact of their flight by seamlessly purchasing the equivalent amount of carbon credits to ensure their flight activity is carbon neutral.
 NetJets partners with ClimateCare to offset emissions through projects that protect forests, capture and destroy landfill gas and scale up renewable energy distribution, supporting several UN Sustainable Development Goals. All projects adhere to the highest leading global verification standards.
 As of October 2020, NetJets Owners in the U.S. have offset 75,000 metric tons of carbon. In Europe, Owners have offset over 1 million metric tons.

By nature of its fractional ownership model, NetJets facilitates a sharing economy that eliminates the need to reposition flights to a home base and makes full-time ownership of an aircraft unnecessary, ultimately leading to more efficiencies and less surplus time in the sky.

“As the largest and most experienced company in the private aviation space worldwide, NetJets’ promise of exceptional safety and service to Owners and employees must extend to the larger global community we impact as well,” said Brad Ferrell, Executive Vice President of Administrative Services. “Our Sustainable Aviation Fuel purchase is crucial for the continued availability of the product in the market, and we’re excited to help create that opportunity, as well as to announce the next phase of our Global Sustainability Program. There remains more to be done in the sustainable aviation space, and we look forward to being on the cutting-edge of those innovations and evolving this program in our ongoing efforts to address sustainability in the air, on the ground and with our team members.”

In order to remain accountable, NetJets will track a number of metrics, including percentage decrease in carbon emissions and miles offset to carbon neutral, to share in bi-annual updates with Owners, employees and the larger aviation community. A subsidiary of Berkshire Hathaway, NetJets’ Global Sustainability Program aligns with the holding company’s commitment to the U.N. Sustainable Development Goals.

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 Special Report

Special Report: Berkshire Hathaway May Be Sitting on the Saudi Arabia of Lithium

Post author By David Mazor
Post date October 21, 2020

(BRK.A), (BRK.B)

What Saudi Arabia’s oil fields are to the fossil fuel era, lithium reserves are to the dawning battery-powered electric vehicle era.

A dying California lake could be the Saudi Arabia of lithium if new extraction methods prove viable, and Berkshire Hathaway could be in position to profit handsomely from the coming boom in the metal.

With the rise of the electric vehicle, global lithium demand is projected to grow tenfold by 2030, as lithium-ion powered EVs move from the fringe to the dominant mode of transportation, eclipsing fossil fuel powered vehicles.

The transition is already underway. California, which has the most car registration in the U.S. with over 15 million, recently announced that it will phase out the sale of all gasoline-powered vehicles by 2035.

With the demand for lithium-ion batteries growing rapidly, the need for raw lithium is increasingly under pressure. As of 2020, 95% of global lithium extraction comes from Australia, Chile, Argentina and China.

However, California may be on the verge of taking its seat at the table.

Key to meeting worldwide lithium demand may be the Salton Sea, a roughly 400 square mile inland sea that was accidentally created in 1905 when high spring flooding on the Colorado River crashed the canal gates leading into the developing Imperial Valley. For the next 18 months the entire volume of the Colorado River rushed downward into the Salton Trough. By the time engineers were finally able to stop the breaching water in 1907, the Salton Sea had been born. Over a hundred years later, the Salton Sea now has a higher salinity than the Pacific Ocean.

The lake has one asset that may turn it from environmental disaster to one of the key assets in the global climate change battle, and that’s an abundance of lithium. Its briny water may contain enough lithium to meet one third of the world’s current lithium demand if it can be economically extracted.

The Salton Sea’s Riches Have Not Gone Unnoticed

A group of investors is hoping to turn the area into a “Lithium Valley” that may join Silicon Valley for economic impact. The goal is to make the Salton Sea area of California a world-wide hub in lithium extraction and battery production. It is a goal already supported by state officials, and Gov. Newsome recently signed a bill to create a “Blue Ribbon Commission on Lithium Extraction in California.”

On October 6, 2020, New Energy Nexus an international non-profit that supports clean energy entrepreneurs, released a report “Building Lithium Valley.” The report notes that the U.S. is only “1% of global lithium supply. But according to the USGS, the U.S. has 8.5% of the world’s lithium resources.”

The report goes on to state that a “Lithium Valley anchored ‘Clean Energy Hub’ focused on attracting battery component, battery cell and electric vehicle manufacturers to Imperial County could supercharge the state’s financial recovery while also promoting the sustainable wellbeing of a county with the highest unemployment rate in the state.”

Among the key companies already involved is Oakland, California-based Lilac Solutions, which is commercializing a new ion exchange technology for lithium extraction from brine resources that it claims is significantly faster, cheaper, and more scalable than existing technology.

The technology was developed by CEO Dave Snydacker, a battery expert and materials engineer focused on bringing lithium extraction into the 21st century.

Ion exchange technology has been in operation for 80+ years in various industries including mineral recovery, and Lilac tailored this technology to be highly selective for lithium achieving recovery rates of about 90%. Lilac states that it has successfully demonstrated the technology at large scale, and with dozens of brine resources from around the world.

Money is already pouring into Lilac to see if they are right. In February 2020, Lilac raised $20 Million in Series A funding that included money from Breakthrough Energy Ventures, a Bill Gates-founded fund with more than $1 billion in committed capital to support bold entrepreneurs building companies that can significantly reduce emissions from agriculture, buildings, electricity, manufacturing, and transportation.

Berkshire Hathaway’s Role in Lithium Extraction

Berkshire Hathaway Energy owns ten geothermal energy plants in the Salton Sea/Imperial Valley area of California, putting it at the heart of a potential lithium boom. The plants sell power to Southern California Edison Company, City of Riverside, Salt River Project, Sacramento Municipal Utility District, Imperial Irrigation District (IID) and Arizona Public Service.

Currently, the wastewater from geothermal energy plants is reinjected into the geothermal reservoirs from which it came. However, this wastewater is rich in lithium and other minerals, including manganese and zinc.

The goal of extracting commercial quantities of lithium from the Salton Sea is already moving forward. The California Energy Commission awarded $6 million to Berkshire Hathaway Energy for a demonstration project to produce battery-grade lithium carbonate.

BHE Renewables, a wholly owned subsidiary of Berkshire Hathaway Energy, is working on modifying its existing geothermal power plants operating in the Salton Sea for lithium extraction. These power plants are operated by another wholly owned subsidiary, CalEnergy, and will serve as the site for BHER’s pre-commercial geothermal brine pre-treatment for the lithium recovery.

BHER is working with AquaMin to scale up its lithium recovery technology to process 100 gallons per minute (gpm) of geothermal brine from the Region facilities to recover lithium chloride and convert it into lithium carbonate, and BHE Renewables currently produces 350MW of its 4,000 MW of renewable power with geothermal generation in Imperial Valley.

There is an estimated 5.5 year timeline until full commercialization, measured from end of Q2 2020. Initial operating plant estimated to be operational after 30 months and reach capacity of 1,000mt in the following year. The initial plant will serve as pilot and example for cash generation to validate full scale plant ideas.

According to the Nexus report, BHER’s resources alone could produce as much as 300,000 metric tons per annum of high-quality, battery-grade lithium carbonate equivalent.

If good luck comes down to being in the right place at the right time, Berkshire Hathaway certainly seems to be in for some very good luck.

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.

Tags Berkshire Hathaway Energy, Special Report

Berkshire Hathaway Energy

BHE Renewables and MidAmerican Energy Renew Contract with Uptake Technologies

Post author By David Mazor
Post date October 18, 2020

(BRK.A), (BRK.B)

BHE Renewables and MidAmerican Energy, two subsidiaries of Berkshire Hathaway Energy, have renewed their contract with Uptake Technologies. Uptake has previously worked with both companies to deliver AI-enabled SaaS products to optimize maintenance operations and increase energy production across their wind fleets.

The new contract builds on the previous engagement, expanding use of Uptake’s product from the current 4,914 megawatts across 23 sites to an additional 13 sites and 2,283 megawatts.

“Three years ago, our companies recognized the potential of Uptake’s AI capabilities at a time when Uptake’s products were promising, though still emerging,” said Tom Budler, president, wind, at BHE Renewables. “We have been pleased with the results and look forward to expanding the application to additional sites and collaborating with Uptake to develop and implement application enhancements over the next three years.”

Uptake’s power performance AI application enables engineering and operations teams to quickly identify power production issues and their root causes, correcting for confounding variables; leverage supporting evidence to decide on and take action or improve service provider management; and prioritize machine learning recommendations based on potential energy production gains. Uptake has proven to increase annual energy production up to 2% at typical wind customers’ sites, including those under warranty maintenance.

The original engagement between Uptake and MidAmerican and BHE Renewables began in 2017 with the goal of increasing the energy production of the companies’ wind turbines through predictive data analytics.

Since then, Uptake has been deployed across 16 MidAmerican and seven BHE Renewables sites. Between January 2019 and September 2020 alone, Uptake has delivered a total of 981 validated power performance alerts for MidAmerican and BHE Renewables.

“It’s incredibly validating that one of our largest and longest-standing customers is doubling down on Uptake,” shared Brad Keywell, Founder and CEO of Uptake. “These companies represented our first customer in the energy industry — they believed in our software and our ability to uncover operational recommendations from the available data coming off their wind turbines. I’m proud that our products have delivered helpful and impactful insights that have enabled legitimate value to Berkshire Hathaway Energy’s business.”

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Minority Stock Positions Stock Portfolio

Ocala, Florida Purchases BYD Battery-Electric Refuse Trucks

Post author By David Mazor
Post date October 16, 2020

(BRK.A), (BRK.B)

Berkshire Hathaway-backed Chinese battery and vehicle manufacturer BYD has announced that the City of Ocala, Florida will add five Class 8 battery-electric refuse trucks to its fleet, making it one of the first cities in Florida to adopt BYD’s innovative zero-emission technology.

The trucks will be assembled in the United States with union labor.

BYD, the leader in commercial electric truck deployments in the United States, is the world’s largest manufacturer of electric vehicles and the global leader in battery-electric trucks with more than 12,000 electric trucks in service around the world.

The Ocala City Council pre-approved the 2021 purchase of three quiet, clean-electric BYD refuse trucks and will buy two more in 2022. The BYD vehicles will replace older- model internal combustion powered trucks that are currently in use.

“The community of Ocala has taken a leadership role in Florida with the purchase of these BYD electric trucks,” said John Gerra, Sr. Director of Business Development with BYD Motors. “All BYD trucks are purpose-built and utilize our proprietary safe battery technology that exceeds the requirements for some of the most rigorous safety-testing programs around the world.”

Ocala officials estimate the operation of BYD trucks will result in fuel cost savings of nearly 78 percent. In addition, with fewer moving parts making them less costly to maintain, the city estimates there will be a cost savings of nearly 75 percent in maintenance costs. The BYD trucks are estimated to provide a total life cycle savings to Ocala of approximately $270,000 and a return on the taxpayers’ investment in under 5 years.

BYD’s Lancaster, California manufacturing facility employs 750 men and women, many are members of the Sheet Metal, Air, Rail and Transportation Workers Union, (SMART), Local 105.

A Profitable EV Company

BYD recently reported a net profit of 1.66 billion yuan (roughly 242 million U.S. dollars) for the first half of 2020. The net profit rose 14.29 percent over the same period in 2019.

Through June 30, BYD had revenue of 60.5 billion yuan, down 2.7 percent year on year, according to BYD’s financial report filed with the Shenzhen Stock Exchange.

BYD and Berkshire Hathaway

Tags BYD Co, Stock Portfolio

Minority Stock Positions Stock Portfolio

Berkshire Hathaway-Backed BYD Delivers eBuses to Columbia, Missouri

Post author By David Mazor
Post date October 13, 2020

(BRK.A), (BRK.B)

Berkshire Hathaway-backed Chinese battery and vehicle manufacturer BYD delivered four American-made battery-electric K7M buses to the City of Columbia, Missouri’s transit agency Go COMO.

BYD’s nimble, state-of-the art zero-emission 30-foot K7M battery electric buses, manufactured in the United States, are perfect for helping maintain Columbia’s college town feel, shuttling students and workers to their destinations in quiet comfort.

“We are thrilled to partner with Go COMO,” said Patrick Duan, BYD North America Vice President. “Our American-built buses are well-made, reliable and bring innovative technology to Main Street in communities around the nation like Columbia.”

With the launch of these award-winning BYD buses, Columbia becomes the first city in Missouri to put zero-emission transit vehicles into revenue service.

“We are excited to already have our four new buses in circulation at Columbia. We are dedicated in continuing to provide sustainable transportation options to residents and visitors of Columbia,” said Dale Lynn, City of Columbia, Missouri transportation superintendent.

Working at BYD’s factory in Lancaster, Calif., members of the Sheet Metal, Air, Rail and Transportation Workers – SMART Union, Local 105 – constructed the innovative and technologically superior K7M for the City of Columbia to include 22 seats, and a range of up to 150 miles. The bus has a charging time of 2.5 to 3 hours.

In August, BYD delivered three K7Ms to another Missouri customer, the Kansas City International Airport, bringing the airport’s total fleet of BYD’s American-made electric buses to seven. KCI was the first airport in the nation to deploy electric buses, using the K7Ms as parking lot shuttles, bringing passengers to the airport’s terminals.

A Profitable EV Company

BYD recently reported a net profit of 1.66 billion yuan (roughly 242 million U.S. dollars) for the first half of 2020. The net profit rose 14.29 percent over the same period in 2019.

Through June 30, BYD had revenue of 60.5 billion yuan, down 2.7 percent year on year, according to BYD’s financial report filed with the Shenzhen Stock Exchange.

BYD and Berkshire Hathaway

Tags BYD Co, Stock Portfolio

Precision Castparts

Commentary: Precision Castparts to Face Long Term Negative Impacts From Airplane Manufacturers’ Woes

Post author By David Mazor
Post date October 8, 2020

(BRK.A), (BRK.B)

Berkshire Hathaway’s Precision Castparts will have reduced demand over the next decade for its aerospace parts that it supplies to the commercial airline industry, according to a new report issued by Boeing.

Precision Castparts manufactures parts for both Boeing and its rival Airbus, and in February the company laid off 150 Oregon workers as the production Boeing’s 737 MAX was halted. Boeing’s market projections show that its troubles are broader than just the issues it has faced with the 737 Max.

The 2020 Boeing Market Outlook projects that the commercial aviation and services markets will continue to face significant challenges due to the COVID-19 pandemic, while global defense and government services markets remain more stable.

Airlines globally have begun to recover from a greater than 90% decline in passenger traffic and revenue early this year, but a full recovery will take years, according to the Boeing outlook.

As it relates to Precision Castparts’ revenues, the 2020 Boeing Market Outlook projects an overall demand for 18,350 commercial airplanes in the next decade – 11% lower than Boeing’s 2019 forecast.

On the positive side, in the longer term, with key industry drivers expected to remain stable, the commercial fleet is forecasted to return to its growth trend, generating demand for more than 43,000 new airplanes in the 20-year forecast time period.

The BMO also projects a $2.6 trillion market opportunity for defense and space during the next decade. This spending projection reflects the ongoing importance of military aircraft, autonomous systems, satellites, spacecraft and other products to national and international defense. This demand continues to be global in nature with 40 percent of expenditures expected to originate outside of the United States.

In addition to the 2020 Boeing Market Outlook, Boeing also released its 2020 Commercial Market Outlook. Its Commercial Market Outlook is the longest-running jet forecast and is regarded as the most comprehensive analysis of the commercial aviation industry. The Commercial Market Outlook forecast projects:

• Over the next 20 years, passenger traffic growth is projected to increase by an average of 4% per year.

• The global commercial fleet is expected to reach 48,400 by 2039, up from 25,900 airplanes today. During this period, Asia will continue to expand its share of the world’s fleet, accounting for nearly 40% of the fleet compared to about 30% today.

• Single-aisle airplanes such as the 737 MAX will continue to be the largest market segment, with operators projected to need 32,270 new airplanes in the next 20 years. Single-aisle demand will recover sooner due to its key role in short-haul routes and domestic markets as well as passenger preference for point-to-point service.

• In the widebody market, Boeing forecasts demand for 7,480 new passenger airplanes by 2039. Widebody demand will be affected by a slower recovery in long-haul markets – typical after air-travel shocks – as well as uncertainties from COVID-19’s impact on international travel.

• Air cargo demand, a relative bright spot in 2020, is expected to grow 4% annually and generate further demand for 930 new widebody production freighters and 1,500 converted freighters over the forecast period.

In summary, the 43,110 projected airplane types projected by Boeing are:

Regional jets 90 and below 2,430
Single-aisle 90 and above 32,270
Widebody 7,480
Freighter widebody 930

Lastly, as it impacts Precision Castparts, the 11% projected decline in demand for commercial airplanes in the next decade does not take into account competition from China’s budding commercial aviation industry. While only in its infancy at this time, it is not clear what threat it will pose to established manufacturers Boeing and Airbus, and whether Chinese commercial planes will use parts manufactured by Precision Castparts, or instead use parts from domestic suppliers.

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Minority Stock Positions Stock Portfolio

BYD Gets Large eBus Order From Finland

Post author By David Mazor
Post date October 2, 2020

(BRK.A), (BRK.B)

Chinese battery and vehicle manufacturer BYD Co., Ltd. has secured Finland’s largest eBus order – 106 vehicles for Nobina, one of Scandinavia’s largest public transport operators.

Nobina will also be the first transit operator in the world to order BYD’s new 50-foot, three-axle low-floor eBus model. An impressive 42 of the new vehicles will go into service in the southwestern city of Turku in Summer 2021.

BYD’s new 50-foot eBus model offers 47+3 seating capacity. Of course, like all BYD heavy duty vehicles, BYD’s latest model features the safest batteries in use anywhere in the world.

A Profitable EV Company

BYD recently reported a net profit of 1.66 billion yuan (roughly 242 million U.S. dollars) for the first half of 2020. The net profit rose 14.29 percent over the same period in 2019.

Through June 30, BYD had revenue of 60.5 billion yuan, down 2.7 percent year on year, according to BYD’s financial report filed with the Shenzhen Stock Exchange.

BYD and Berkshire Hathaway

Tags byd, Stock Portfolio