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Dairy Queen

Dairy Queen Announces China Expansion Adding 180 Food-Centric DQ Restaurants

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Berkshire Hathaway’s International Dairy Queen, Inc. (IDQ) has recently unveiled its ambitious plans to expand its presence in China’s quick-service restaurant (QSR) industry. In a strategic move, IDQ’s wholly owned subsidiary, American Dairy Queen Corporation, has partnered with CFB Group, a franchise ownership company based in Shanghai, to establish 180 food-centric DQ® restaurants across China by 2034. This collaboration marks CFB Group’s entry into the food-centric DQ restaurant segment in Asia.

Nicolas Boudet, the Chief Operating Officer, International, at International Dairy Queen, emphasized the significance of introducing food-centric restaurants as a crucial component of their international growth strategy. By offering a balanced selection of hot food and treat menus, IDQ aims to cater to the diverse preferences of Chinese consumers. With CFB Group spearheading this venture, the stage is set for a groundbreaking expansion in their fastest-growing market worldwide.

Alan Hsu, CEO of CFB Group, highlighted the fruitful partnership between CFB Group and International Dairy Queen, which has spanned over two decades. During this time, they have successfully developed and launched unique treat products tailored specifically for the Chinese market. As a result, the DQ brand has established itself as a thriving quick-service restaurant brands in China. Building upon this success, CFB Group and International Dairy Queen are now focused on innovation and product development to meet the demands of Chinese consumers craving hot food menu items. The ultimate goal is to position DQ restaurants as leaders in offering both balanced hot food and treats, thereby expanding their fan base to encompass customers seeking complete meals as well as indulgent treats.

Currently, CFB Group operates more than 1,000 DQ restaurants in Mainland China. In March 2022, they committed to opening an additional 600 treat-centric DQ restaurants by 2030. As part of the new plans, 180 of these establishments will be food-centric DQ restaurants, set to be launched by 2034. With this ambitious expansion, CFB Group is poised to consolidate its position in China’s QSR industry and further strengthen its foothold in one of IDQ’s most crucial markets.

China is the fastest-growing market for IDQ, ranking among the top three in terms of size alongside the United States and Canada. Currently, China boasts over 1,300 DQ restaurants, illustrating the tremendous potential for further growth and success in this dynamic region.

© 2023 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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Mouser Electronics

Mouser Electronics Adds Second Customer Service and Support Center in India

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Berkshire Hathaway’s Mouser Electronics, Inc. has recently made a significant move by establishing a customer service and support center in Pune, India. This strategic expansion further solidifies Mouser’s commitment to delivering exceptional customer service and technical support to the world’s foremost design engineers and buyers. It is worth noting that this new facility in India complements their existing primary office located in the bustling city of Bangalore.

Raju Shah, Mouser’s Head of India Operations and Senior Vice President of Information Services, expressed great enthusiasm about this substantial growth. He emphasized the company’s view of its local presence as a valuable contribution to India’s dynamic ecosystem for innovation, design, and manufacturing. The goal is to enhance customer experience in India by providing top-notch local service and swift delivery of cutting-edge products and leading technologies from Mouser’s vast network of over 1,200 manufacturer partners.

With its global corporate headquarters situated in the vibrant Dallas/Fort Worth region of Texas, Mouser has established a total of 12 support locations across the Asia/Pacific region. This enables the company to offer specialized customer support tailored to the unique needs, languages, and cultures of their clientele, following an approach they refer to as “glocal.”

As a global e-commerce distributor, Mouser consistently seeks automated solutions to streamline its performance and ensure precise and prompt service to its customers. The company is dedicated to continuously improving its website, making it more user-friendly and efficient. This, coupled with the availability of local service and technical support via phone, email, and live webchat, guarantees an exceptional experience for engineers and buyers, regardless of their location around the world.

In addition to customer service, the new Mouser Pune office encompasses various other departments, such as Internet Business and Information Service staff members. These teams work collaboratively to provide global support operations across multiple departments, showcasing Mouser’s comprehensive and holistic approach to serving its customers.

© 2023 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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BNSF

Ready to Roll: BNSF Poised for Intermodal Volume Surge on West Coast

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Berkshire Hathaway’s BNSF Railway is gearing up to accommodate the rising intermodal volume through West Coast ports following the announcement of tentative contract agreements by the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA). This development sets the stage for an exciting new chapter in the future of West Coast ports, and BNSF has made substantial investments over the past few years to prepare for the immediate and long-term growth potential in the intermodal segment, which happens to be their largest segment.

Katie Farmer, President and CEO of BNSF, expressed her enthusiasm, stating, “We are beginning an exciting chapter in the future of the West Coast ports, and BNSF has made key investments over the past several years in preparation to support both immediate and long-term volume growth for intermodal, our largest segment with the most growth potential.”

BNSF has spared no effort in expanding its capacity and enhancing its infrastructure. Since 2019, the company has invested over $2 billion in capital expansion, with a focus on increasing the overall capacity of tracks, railcars, and facilities. These investments have resulted in the addition of 58 miles of main line track capacity, approximately 30,000 feet of new production tracks, and around 6,000 new parking spaces at BNSF intermodal facilities. Moreover, BNSF is actively incorporating new technologies to enhance consistency, capacity, and customer experience.

Tom Williams, Group Vice President of Consumer Products at BNSF, elaborated on their strategic approach: “We’re creating an integrated intermodal network, both physically and digitally to ensure we are a supply chain partner of choice into the future.”

To facilitate the increasing intermodal volume, BNSF has recently expanded capacity at its intermodal facilities on the West Coast. They have augmented the parking capacity at their Los Angeles intermodal facility by 500 spaces and implemented new crane stacking technology. Additionally, they have enhanced transloading capacity in the Seattle region. Furthermore, BNSF is actively working on a multi-year project to improve efficiency at its San Bernardino intermodal facility in the Inland Empire. To address potential service disruptions, BNSF has positioned 100 locomotives as a “ready fleet” across the West Coast and other strategic network locations.

BNSF has also focused on expanding capacity and capabilities at its inland intermodal facilities. Notable projects include the addition of 3 miles of production tracks, over 2,000 parking spaces, and a new multi-lane ingate at the BNSF intermodal facility in Alliance, TX. Similarly, at Logistics Park Chicago (LPC) in the greater Chicago area, BNSF has leveraged remotely operated cranes to maximize capacity and improve throughput, gaining 18 hours of productivity each day. They have also expanded parking capacity by approximately 20% through ongoing expansion work at the BNSF Cicero intermodal facility. BNSF has secured an additional 2,000 parking stalls in secondary locations near its intermodal facilities to accommodate volume surges effectively.

Looking ahead, BNSF has planned several critical projects for 2023. They are currently working on adding approximately 45 miles of triple track between Barstow and Needles, CA, with about 30 miles expected to be completed this year. Furthermore, a 50-mile double track segment in Kansas is nearing completion, closing one of the last major single track sections on the Southern Transcon, which connects the West Coast to Chicago. BNSF has also initiated the construction of a new second main track bridge over the Missouri River at Sibley, a significant project expected to span the next couple of years. These developments will not only enhance transit times and consistency but also improve BNSF’s ability to handle seasonal volume fluctuations across the Southern Transcon.

In addition to infrastructure investments, BNSF is actively deploying new technologies to improve consistency, capacity, and customer experience. They are enhancing their driving interface app RailPASS and implementing a new pickup appointment system for stacked units at LPC, slated to launch in the fourth quarter of 2023. These innovations aim to reduce dray drivers’ time spent in facilities and improve overall efficiency. BNSF is also leveraging various technologies to optimize unit loading and de-ramping, improve inventory accuracy, and enable real-time tracking of shipment parking locations. These efforts will contribute to a seamless driver pick-up experience and enhance train loading efficiency.

With an array of measures in place to boost network fluidity, velocity, and capacity, BNSF is well-prepared to handle the increased demand through West Coast ports. Their commitment to meeting customer service expectations and their continued investments in infrastructure and technology position them as a reliable and efficient supply chain partner in the future.

© 2023 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: Reverse Engineering a Good Life

Warren Buffett offers a unique perspective on crafting a meaningful existence. His advice, though unconventional, is a profound invitation to introspection and deliberate living. He suggests that to determine how one wants to live, it is wise to start with the end in mind and reverse engineer the desired outcome.

“You should write your obituary and then try and figure out how to live up to it,” Buffett said at the 2023 Berkshire Hathaway annual meeting. This unconventional approach to personal introspection challenges us to consider our own mortality, prompting us to reflect on the legacy we wish to leave behind.

By visualizing the narrative of our lives through the lens of an obituary, we gain clarity about our core values, priorities, and aspirations. It compels us to ask ourselves: How do we want to be remembered? What contributions do we want to make to the world? What impact do we desire to have on our loved ones and society at large?

Buffett’s full explanation


See the complete Lessons From Warren Buffett series

© 2023 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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Warren Buffett

Warren Buffett Continues Stock Donations to Charities

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Warren Buffett has made a significant donation by converting a substantial number of his shares in Berkshire Hathaway. In a move aimed at contributing to the greater good, Buffett has converted 9,129 A shares into 13,693,500 B shares. The purpose behind this conversion is to donate 13,693,432 shares of Berkshire Hathaway’s “B” stock to five different foundations.

Among the beneficiaries, the Bill & Melinda Gates Foundation Trust will receive 10,453,008 shares, while the Susan Thompson Buffett Foundation will receive 1,045,300 shares. The Sherwood Foundation, Howard G. Buffett Foundation, and NoVo Foundation will each receive 731,708 shares. These generous donations were finalized and delivered June 21.

This significant act of philanthropy has altered the composition of Mr. Buffett’s ownership in Berkshire Hathaway. His holdings now consist of 218,287 A shares and 344 B shares. Upon making these donations, Mr. Buffett provided insightful comments regarding the mathematics behind his lifetime commitments to these five foundations.

He highlighted that the original schedule for annual grants was established on June 26, 2006, and has since been supplemented by significant additional grants to four of the five recipients. At the time the commitments were made, Mr. Buffett owned 474,998 Berkshire A shares, which were valued at approximately $43 billion. These shares represented over 98% of his net worth. It’s worth noting that he has converted A shares into B shares on previous occasions prior to making philanthropic contributions.

Over the course of the following 17 years, Mr. Buffett has refrained from buying or selling any A or B shares, and he has no intentions of doing so in the future. The five foundations have received Berkshire B shares, with an initial value of around $50 billion, surpassing Mr. Buffett’s entire net worth in 2006. It is important to mention that he holds no debts, and his remaining A shares are currently valued at approximately $112 billion, accounting for well over 99% of his net worth.

Mr. Buffett emphasized that there is nothing extraordinary behind Berkshire Hathaway’s success. It is the result of a combination of factors such as a long runway for growth, sound and straightforward decision-making, the favorable economic conditions in the United States, and the compounding effects of investments. This wealth has enabled him to make substantial contributions to philanthropic causes, as stated in his will, where he has designated that over 99% of his estate will be directed towards philanthropic endeavors.

© 2023 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 Touts Largest India-Based Investment in Company’s 50+ Year History

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Berkshire Hathaway’s Lubrizol Corporation, a global leader in specialty chemicals, is reinforcing its commitment to growth in India with a series of noteworthy projects spanning its portfolio. With an investment exceeding $150 million, Lubrizol is embarking on groundbreaking initiatives that include the construction of India’s largest CPVC resin plant in Vilayat, Gujarat, doubling the capacity of its site in Dahej, Gujarat, establishing a grease lab in Navi Mumbai, and facilitating substantial job growth and innovation within the country.

Lubrizol takes immense pride in announcing its continued dedication to India. Through a multi-year plan, the company will make substantial investments that contribute to clean drinking water, enhanced transportation accessibility, job creation, and sustainable innovation for India’s growing population.

Lubrizol’s involvement in India dates back to 1966 when it began local manufacturing of chemical additives supporting transportation and industrial markets. Over the years, the company’s presence and contributions in India have significantly expanded, offering tailor-made products and solutions for a wide range of industries.

The company’s employee base in India has consistently grown to meet both regional and global requirements. It anticipates generating 4,000 direct and indirect jobs through various new investment ventures:

1. Enabling the World’s Largest CPVC Resin Production with Grasim Industries Limited: Lubrizol introduced CPVC to the Indian market in 2001, presenting a significant economic opportunity for the region. Today, India stands as one of the largest consumers of CPVC, primarily in the form of plumbing pipe and fittings. The growing demand for clean water in residential and commercial buildings is poised to drive further expansion. Lubrizol, in partnership with Grasim Industries Limited, a flagship company of the Aditya Birla Group, will commence the first phase of a state-of-the-art CPVC resin plant with a capacity of 100,000 metric tons in Vilayat. This groundbreaking project will establish the largest single-site CPVC resin production globally, supplying Lubrizol’s renowned brands like FlowGuard® Plus, Corzan®, and BlazeMaster®.

2. Providing Access to Clean Drinking Water by Doubling CPVC Capacity and Establishing R&D Capabilities in Dahej, Gujarat: Lubrizol plans to double its existing CPVC compound capacity at Dahej, Gujarat, from 70,000 to 140,000 metric tons. Additionally, the company intends to establish a local R&D center, marking its second global research facility after North America. With this investment, Lubrizol becomes the sole company in India with end-to-end CPVC capabilities, well-positioned to serve the needs of local Indian customers. The expanded capacity will also cater to neighboring high-growth markets such as Nepal, Bangladesh, and Indonesia.

3. Supporting Transportation and Industrial Customers Worldwide with the Mumbai India Grease Lab and Turbhe Expansion: Lubrizol is firmly committed to supplying high-performance, cost-effective industrial grease-thickening solutions to grease manufacturers globally. Earlier this year, the company unveiled a new grease lab in Navi Mumbai, India, dedicated to testing and developing calcium sulfonate greases with significant potential in the industrial grease market. Since 2020, Lubrizol’s Additives business has introduced over 35 new blends for transportation and industrial applications localized in India. The company has also expanded its production site in Turbhe, incorporating a new storage facility and filtration capabilities.

4. Meeting the Personal Care and Home Care Needs of a Growing Middle Class, with a Focus on Sustainability: As the middle class in India continues to expand, there is an increasing demand for beauty and home care products within the region. As a leading provider of solutions for the beauty and home care industries, Lubrizol is committed to innovative, sustainable solutions that unlock opportunities for its partners in India. For instance, the use of detergent bars for cleaning dishes and laundry is a common practice in India. However, these bars can become soft and ineffective if they remain wet for too long, resulting in inconsistent cleaning and significant waste. To address this, Lubrizol’s Home Care team established a Center of Excellence for laundry bars in Mumbai. This initiative helped a global home care leader achieve its sustainability goals while streamlining processes, earning Lubrizol a sustainability award from the customer earlier this year.

In addition to these significant projects, Lubrizol plans to continue investing in Centers of Excellence capabilities to capitalize on the growth opportunities within the region. These initiatives reflect Lubrizol’s steadfast commitment to India’s development and its unwavering dedication to driving innovation, sustainability, and economic progress.

© 2023 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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Minority Stock Positions

Berkshire Boosts Stakes in Japanese Trading Houses

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Berkshire Hathaway’s subsidiary, National Indemnity Company, has announced an increase in its ownership stake in five prominent Japanese trading companies. The companies in question – Itochu, Marubeni, Mitsubishi, Mitsui, and Sumitomo – hold significant positions in Japan’s economic landscape. Berkshire Hathaway’s investments in these companies are currently the only publicly traded holdings it possesses in Japan, and their combined value surpasses that of any other publicly traded stocks owned by the company outside of the United States.

Berkshire Hathaway’s ownership interest in each of the five companies now averages more than 8.5%, excluding treasury stock shares. This disclosure aligns with how Berkshire Hathaway reports its ownership in publicly traded U.S. companies. The conglomerate intends to maintain its Japanese investments for the long term. While the company might consider increasing its holdings in these companies, it has set a self-imposed limit of 9.9% ownership. Warren Buffett, the CEO of Berkshire Hathaway, has assured that any additional purchases beyond this threshold will only occur with the explicit approval of the investee’s board of directors.

Earlier this year, Mr. Buffett, accompanied by Gregory E. Abel, Berkshire’s Vice Chairman for Non-Insurance Operations, visited Japan to meet with the CEOs of the five companies. The discussions were fruitful, leaving both Mr. Buffett and Mr. Abel extremely pleased with the progress made. Their vision for the future may involve gradually increasing Berkshire Hathaway’s stake in each of these companies to 9.9% ownership, if prices warrant it.

Berkshire Hathaway continues to demonstrate its long-term commitment to the Japanese market and its confidence in the potential of these esteemed trading companies.

© 2023 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: Three to Five Years Is Not a Long Time Frame

With so many people trading stocks every day, it might seem wise to look to a longer time horizon than just trying to make money overnight. What is a long term time frame? Warren Buffett points out that even three to five years, a seeming eternity to some trade-happy investors, is not really sufficient to give you the safety you hope to gain as a long term investor.

“If your time frame is three to five years, A.) I wouldn’t advise it being that way, because I think if you think you’re going to get out then, it gets more toward, leaning toward the bigger fool theory,” Buffett said at the 1998 Berkshire Hathaway annual meeting. “The best way to look at any investment is how will I feel if I own it forever? You know, and put all my family’s net worth in it.”

Hear Buffett’s full explanation

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© 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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BYD

BYD Announces Fifth Brand

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BYD has unveiled its new sub-brand, FANG CHENG BAO, which aims to meet the evolving needs of consumers by offering a range of unique and professional-grade new energy vehicle models. As the fifth addition to BYD’s brand matrix, FANG CHENG BAO complements the existing Dynasty series, Ocean series, Denza, and Yangwang.

The FANG CHENG BAO lineup covers a wide spectrum of vehicles, ranging from off-road vehicles to sports cars. The brand’s inaugural model, a rugged SUV with the codename SF, is expected to hit the market later this year. The brand name itself, FANG CHENG BAO, carries a symbolic meaning. In Chinese, it translates to “Formula” and “Leopard,” representing the pursuit of transformative rise and exploration in the digital realm. By blending the standards and rules of Formula with the agility and wild versatility of the Leopard, FANG CHENG BAO embodies the brand’s essence and BYD’s vision of future cars and lifestyles.

According to Wang Chuanfu, Chairman and President of BYD, the global e-mobility transition is often perceived as a revolution where electric cars replace vehicles powered by fossil fuels. However, BYD believes that this perspective only captures a fraction of the true transformation that lies ahead. Wang Chuanfu shared, “A greater realm is unfolding.” FANG CHENG BAO, therefore, serves as the prelude to this revolution in BYD’s vision. The brand embraces an attitude of always staying ahead of trends, envisioning a future where FANG CHENG BAO and its users decode the personalized car life through a diverse range of new energy vehicle products.

© 2023 David Mazor

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.

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Announcements

Berkshire Hathaway Has Another $50 Million to Put To Work After Seritage Prepayment

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Berkshire Hathaway has another $50 million that it needs to invest.

Seritage Growth Properties, a national owner and developer of retail, residential and mixed-use properties, announced that on June 7, 2023, the company made a voluntary prepayment of $50 million toward its $1.6 billion term loan facility provided by Berkshire Hathaway Life Insurance Company of Company of Nebraska.

With the prepayment, $550 million of the term loan facility remains outstanding.

The prepayment will also reduce the amount of interest Berkshire receives from Seritage’s total annual interest expense by approximately $3.5 million.

© 2023 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.