Month: September 2022

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Appointments Berkshire Hathaway Specialty Insurance

Berkshire Hathaway Specialty Insurance Promotes Two in Ireland

(BRK.A), (BRK.B)

Berkshire Hathaway Specialty Insurance has announced a pair of promotions in Ireland: Shane O’Neill has been named Head of Property, while Ciaran Reddin has been appointed Head of Professional Indemnity and Cyber.

“Shane and Ciaran have played pivotal roles in building our portfolio and bringing BHSI’s values, bespoke solutions and excellent service to our customers and broker partners in Ireland,” said Louise Kidd, Country Manager, Ireland, BHSI. “I am pleased to recognize their contributions with these promotions. In their new leadership roles, they will further elevate our service and solutions and advance our growing and talented teams in Ireland.”

Shane joined BHSI in 2019 as Senior Property Underwriter and has 20 years of industry experience. Ciaran has nearly a decade of industry experience. He joined BHSI in 2019 as Senior Professional Indemnity Underwriter, Executive & Professional Lines.

Both Shane and Ciaran will continue to be based in BHSI’s office in Dublin.

© 2022 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 Orders Battery-Powered Locomotives

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BNSF Railway will test battery-electric locomotives in its Southern California rail yards.

Built by Progress Rail, a Caterpillar Company, the EMD Joule electric locomotives do not use diesel fuel and emit zero exhaust emissions.

Scheduled for delivery in 2024, Progress Rail will supply up to four EMD Joule battery electric locomotives to BNSF.

“The EMD Joule is a switcher locomotive meant for railyards not long distance hauling, and the environmentally friendly locomotive could help BNSF reduce emissions at locations in California. BNSF has faced stiff opposition to its proposed rail yard near the Port of Los Angeles by environmental groups that say it would increase pollution in West Long Beach.

The Joule locomotive is an exciting advancement in battery-electric locomotive technology with more energy storage and faster charging,” BNSF’s Vice President of Environment and Sustainability John Lovenburg said. “The project is well aligned with BNSF’s commitment to innovation and leadership in sustainable freight. We are focused on continuing to reduce the environmental impact in the communities where we operate and proud to do our part to assess the commercial and operational viability of emerging technologies that reduce emissions.”

Caterpillar’s Progress Rail is one of the largest integrated and diversified providers of rolling stock and infrastructure solutions and technologies for global rail customers.

© 2022 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: A Franchisor Has to Have a Good Business for the Franchisee

Corporations that rely on the franchise model can’t just focus on squeezing the maximum amount of revenue out of their franchises if they want to truly be successful. According to Warren Buffett, who in 1998 purchased International Dairy Queen, a quick service restaurant chain that relies on the franchise model, you have to focus on building a great business that franchisees can be successful owning, and even eventually selling at a profit down the road.

Investors looking to buy shares in companies that rely heavily on the franchise model, would be wise to look beyond corporate financial reports, and personally visit franchisees to learn whether they feel they own a business that they can be successful with over the long term.

“You have to have a good business for the franchisee to, over time, have a good business for the parent company,” Warren Buffett said at the 1998 Berkshire Hathaway Annual Meeting. “A successful franchisee can sell his operation for significantly more than he has invested in tangible assets. And we want it that way, obviously, because that means he’s got a successful business, and it means that, over time, we will have a successful business. You want the franchise operator to make money and you want him to create a capital asset that’s worth more than he’s put in it. That’s the goal.”

Hear Buffett’s full explanation

See the complete Lessons From Warren Buffett series

© 2022 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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Berkshire Hathaway Specialty Insurance

Berkshire Hathaway Specialty Insurance Offers Multiple New Policies in Spain

(BRK.A), (BRK.B)

Berkshire Hathaway Specialty Insurance has introduced new Property Damage, General Liability, D&O, Professional Indemnity and Marine Cargo Insurance policies in Spain.

“Launching our proprietary policy wordings in Spain is indicative of our commitment to leading domestic and international insurance programs for customers,” said Eduardo Guinea, Head of Customer and Broker Engagement for Spain, BHSI. “Each of these new policies reflect BHSI’s simple, clearly understood wordings and deliver the certainty of comprehensive, flexible coverage to customers.”

BHSI underwrites on a net capacity basis, without accessing the reinsurance markets, which vests the company with flexibility in designing coverage and facilitates responsive, local decision-making. Foundational to all BHSI products is its CLAIMS IS OUR PRODUCT philosophy, which underscores the company’s willingness to offer coverage and respond with excellent service when customers face claims.

“The introduction of these new policies is an important step in our steady expansion in Spain. We look forward to continuing to grow, hiring talented professionals, launching new products, entering new segments, and expanding our geographical presence,” said Constanza Gallegos, Country Manager for Spain, BHSI.

The new policies are available immediately in Spain.

© 2022 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 Specialty Insurance

Berkshire Hathaway Specialty Insurance Expands Into Belgium

(BRK.A), (BRK.B)

Berkshire Hathaway Specialty Insurance has opened a new office in Brussels, Belgium, and made several senior-level appointments.

Louis du Ché has been named to the role of Country Manager for Belgium. Louis joined BHSI in 2019 as Head of Property, France, and will retain that position as well.

Frederic de Blieck has joined BHSI as Head of Executive & Professional Lines in Belgium. He comes to BHSI with more than 20 years of experience, most recently as Head of Financial Lines, Belgium and Luxembourg, at another global insurer.

Bram Boets has joined as Head of Property in Belgium. He has more than a decade of experience spanning both the underwriting and brokerage sides of the business, most recently as Senior Manager, Property, at a global brokerage firm in Brussels.

David Bogaert has joined as Head of Customer & Broker Engagement in Belgium. He has 20 years of industry experience and was most recently Head of Distribution, Belgium, at another global insurer.

Koen Dupont has joined as Head of Casualty in Belgium. He has more than two decades of experience at brokerages and insurers and was most recently Head of Casualty, France, Belgium and Luxembourg at another global insurer.

“With the opening of our newest office in Belgium, we continue to enhance our ability to serve customers and brokers throughout Europe and deliver BHSI’s certainty and CLAIMS IS OUR PRODUCT philosophy,” said François-Xavier d’Huart, Head of France & Belgium, BHSI. “Already we have assembled a highly experienced leadership team in Belgium, headed by Louis as Country Manager. This excellent team will spearhead our efforts to further build our team, our broad range of products, and our customer and broker relationships in this key market.”

All of these BHSI leaders will be based at BHSI’s new office, which is located at 54 Avenue Herrmann-Debroux, 1160 Auderghem, Belgium.

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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Berkadia

Berkadia Completes $110.88 Million Sale and Secures Over $58 Million in Financing for Multifamily Property in Colorado

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Berkadia, Berkshire Hathaway’s joint venture with Jefferies Financial Group, the sale of and financing secured for Springs at Foothills Farm, a 264-unit garden-style multifamily community located in Colorado Springs, Colorado.

Senior Directors Nick Steele and John Laratta and Directors Nate Moyer and Tyler King of Berkadia Denver completed the $110.88 million record setting sale on behalf of the seller, Wisconsin-based Continental Properties Company, Inc. The buyer was California-based Hamilton Zanze & Company, and the deal closed on September 7. The sale of Springs at Foothills Farm represents the largest transaction in the history of Colorado Springs.

“This was an exciting asset to work on given the size and location,” said Steele. “It’s the largest single asset sale ever in Colorado Springs. Despite turbulent market conditions, we were able to procure more than 20 offers for the asset which speaks to the amount of interest for high quality, well located multifamily assets in Colorado. The fact that the transaction was consummated is a testament to the parties involved. We are grateful to have played a small part.”

Managing Director Clay Akiwenzie of Berkadia Incline Village secured $58.145 million in permanent acquisition financing on behalf of the buyer. The 10-year loan was financed through Freddie Mac.

“Closing on time on terms negotiated 90 days ago amidst such extreme capital markets volatility requires calm and seasoned hands on every edge of the transaction,” said Akiwenzie. “We had that here.”

About Berkadia

Founded in 2009 as a 50/50 joint venture between Berkshire Hathaway and Leucadia National Corporation (now known as Jefferies Financial Group), 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.

© 2022 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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Lessons From Warren Buffett

Lessons From Warren Buffett: You Don’t Have to Do Anything

Investing can be such an active process that it is easy to forget that you don’t have to do anything. It is a point that Warren Buffett makes when he notes that the stock market gives you a constant stream of prices that you can buy or sell at, but you don’t have to accept them.

“The stock market is the most obliging, money-making place in the world because you don’t have to do anything,” Warren Buffett said at the 2012 Berkshire Hathaway Annual Meeting. “You know, you sit there with thousands of businesses being priced at the same price for the buyer and the seller…and it changes every day, and you’ve got lots of information about most of those businesses, and you don’t have to do anything.”

Hear Buffett’s full explanation

See the complete Lessons From Warren Buffett series

© 2022 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Categories
Berkshire Hathaway Energy

BHE Renewables and WV Announce $500m Global Aerospace Manufacturing Hub Powered by Renewable Energy Microgrid

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Berkshire Hathaway’s BHE Renewables has entered into an agreement with the State of West Virginia to purchase more than 2,000 acres of land in Ravenswood, West Virginia, to be developed as a first-of-its-kind renewable energy microgrid-powered industrial site.

Berkshire’s Precision Castparts will be the first company to locate on the site and will develop a state-of-the-art titanium melt facility that will use 100% renewable energy to manufacture titanium products for the aerospace and other industries.

The West Virginia Economic Development Authority will work with BHE Renewables to bring additional businesses to the site to take advantage of the prime manufacturing location and renewable energy infrastructure.

“This is a monumental announcement that will pay dividends for generations to come,” Gov. Jim Justice said. “The partnership we are forging with BHE Renewables and PCC is testament to West Virginia’s ability to compete on the world stage and recruit world-class companies like these to our state. I couldn’t be more proud of the fact that West Virginia will help lead the way into a new era of renewable energy microgrid-powered manufacturing. I can never thank BHE Renewables and PCC enough for their commitment to West Virginia and for the jobs and economic ripple effects this partnership will bring.”

“This project demonstrates how investing in clean energy can revive economies that have served our country’s energy needs for decades,” BHE Renewables President and CEO Alicia Knapp said.

“We are thrilled to partner with PCC and West Virginia to deliver this landmark renewable energy solution, hundreds of jobs and significant economic development,” PCC Metals President Steve Wright said. “Our future facility is an outstanding opportunity to use clean energy as we invest in further strengthening our position as a world leader in titanium metals. Manufacturing our products with 100% renewable energy benefits PCC and our customers as we strive to minimize the impact of our operations and wisely use natural resources.”

On Saturday, Gov. Justice called a Special Session of the West Virginia Legislature to consider a bill establishing a “Certified Industrial Business Expansion Development Program,” within the Department of Economic Development, to encourage the continued development, construction, operation, maintenance, and expansion in West Virginia of high impact industrial plants and facilities, in certain circumstances where the availability of electricity generated from renewable sources is demonstrated to be necessary.

At the conclusion of the announcement today, Gov. Justice signed the bill after it passed both houses of the West Virginia Legislature.

Earlier today, the West Virginia Economic Development Authority voted to authorize an agreement for Berkshire Hathaway Energy to purchase more than 2,000 acres of land in Ravenswood, West Virginia. They also voted to approve a high-impact economic development project designation for Timet, which is the world’s largest producer of titanium airplane parts and a subsidiary of Precision Castparts.

“Today’s announcement is fantastic news for the people of West Virginia and domestic manufacturing efforts here in the United State,” United States Senator Joe Manchin said. “I’m excited by Berkshire Hathaway’s decision to invest in the Mountain State and look forward to seeing the benefits of this investment – including long-term, good-paying jobs and supporting our regional economies – for years to come.”

“Today’s announcement that Berkshire Hathaway Energy Renewables and West Virginia have reached an agreement to invest in Ravenswood is welcome news,” United States Senator Shelley Moore Capito said. “This unprecedented project has the potential to rapidly transform the Ravenswood area, and spark the economic development our communities need to grow and thrive. My staff and I have been involved in this process from the very beginning because we recognize the importance of smart economic and environmental growth to our state. I am thankful for the work of Governor Justice, Mike Graney, Mitch Carmichael, and especially Senator Glenn Jefferies and the West Virginia Legislature for helping make this possible. There is strong momentum growing behind business in West Virginia right now, and we must continue to build off of this economic success into the future.”

“It’s teamwork across the board that gets companies just like Berkshire Hathaway Energy Renewables and others to come to the State of West Virginia,” West Virginia State Senate President Craig Blair said. “I hope this is the beginning of a long and fruitful relationship, not just a single announcement”

“To the entire team that made today’s announcement possible, we are deeply thankful for the confidence that you’ve expressed in us,” West Virginia Speaker of the House Roger Hanshaw said. “It’s a privilege for us to be able to create an atmosphere and an environment that allows us to create a 21st century economy and we’re pleased to welcome people who represent everything that a 21st century economy means to the world. Having you here in West Virginia does more than just help the men and women who are going to work in your factory and be in your facility every day. It helps our state, it helps our economy, it helps the entire image of the State of West Virginia to be your partners. Welcome to West Virginia, we are delighted to call you our new friends and our new neighbors.”

“Two world-class companies selected West Virginia because we created the best environment for them to do business,” State Senator Glenn Jeffries said. “That includes being home to a world-class workforce. Something this big doesn’t happen without the ingenuity and work ethic of West Virginians.”

“I’m grateful to Gov. Justice, Secretary Carmichael, and everyone who worked together to secure this transformational development for our Jackson County community,” Delegate Jonathan Pinson said. “Our region and our people have long been poised to kick off this kind of resurgence in manufacturing and 21st century job creation, and I’m incredibly excited about what this most recent economic development announcement will mean for our families and future generations.”

“Our state’s growth-focused economic policies are second-to-none,” West Virginia Secretary of Economic Development Mitch Carmichael said. “West Virginia is investing in smart new ways for businesses to build success around clean energy that’s here to stay.”

© 2022 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.

Categories
Dairy Queen

International Dairy Queen Appoints New Chief Operating Officer, International

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Berkshire Hathaway’s International Dairy Queen Inc. has appointed Nicolas Boudet as its new chief operating officer, international. Boudet will lead the international business, including operations, franchise development, supply chain and marketing in more than 20 countries outside of the U.S. and Canada. He brings more than 20 years of business leadership experience at well-known, globally recognized hospitality and quick-service restaurant brands.

Boudet most recently served as senior vice president global development and president of international at Wingstop Restaurants, Inc. Before joining Wingstop in 2018, he was executive vice president and group president international at Focus Brands where he was responsible for Auntie Anne’s, Carvel, Cinnabon, McAlister’s, Moe’s and Schlotzky’s. Boudet also held leadership positions at YUM! Brands serving as: head of franchising and development for Taco Bell U.S., and chief development officer Latin America and Caribbean for KFC, Pizza Hut and Taco Bell.

“Our international business is our largest growth opportunity and bringing in a strong international franchise leader is paramount to deliver on our future success,” said Troy Bader, president and CEO at International Dairy Queen. “With decades of increasingly successful franchise experience in the quick-service restaurant industry, Nicolas Boudet brings a vision and growth business mindset as we continue to expand in existing countries and enter new markets.”

“I am honored to join International Dairy Queen at a time when global growth is a key strategic business priority,” said Nicolas Boudet, chief operating officer, international, at International Dairy Queen. “I am committed to empowering this talented team to its full potential, building relationships with current and prospective franchise owners, and introducing new fans around the world to the DQ experience.”

Boudet holds a master’s degree from ESSEC Business School, Paris, France, in a program administered by Institut de Management Hôtelier International (IMHI) and Cornell University. He is based in Dallas, Texas, where he resides with his family.

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 Expands TPU Manufacturing in China

(BRK.A), (BRK.B)

Despite U.S. and China tensions being much in the news, it is not slowing down Berkshire Hathaway’s wholly-owned companies from expanding their manufacturing capacity in China.

Berkshire’s Lubrizol Corporation has opened a new thermoplastic polyurethane (TPU) production line at its Songjiang manufacturing site in Shanghai.

According to a company statement, this move is another milestone of Lubrizol Engineered Polymers’ investment in Asia Pacific, expanding the company’s TPU production capacity and strengthening regional business support.

The new line will provide additional TPU production capability for Lubrizol Engineered Polymers, including the ESTANE® TPU portfolio, meeting increasing demands from various markets such as automotive, footwear and electronics.

“The launch of our new TPU line showcases our strong confidence in this market,” said Jane Cai, senior business director APAC of Lubrizol Engineering Polymers. “We are continually investing in production capacity, product development and innovation in Asia, helping us collaborate with our customers, understand their diverse needs and provide tailored solutions that differentiate their products in the market.”

ESTANE TPUs not only improve performance and aesthetics of finished products, but also ultimately help our customers achieve their sustainability goals. In early 2022, Lubrizol’s Songjiang site was certificated by the International Sustainability Carbon Certification (ISCC Plus). The operation of the new TPU line will comply with the requirements to produce ISCC-certified TPUs and signifies the company’s responsible production to reduce environmental impact.

“Sustainability is a critical part of our business’ strategy,” stated Arnau Pano, vice president and general manager, Lubrizol Engineered Polymers. “As a material solutions provider, Lubrizol Engineered Polymers is dedicated to sustainability and delivering innovative and unique products to our end use markets.”

Lubrizol owns and operates more than 100 manufacturing facilities, sales and technical offices around the world, and has approximately 8,600 employees.

© 2022 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.