Categories
Forest River

Forest River to Locate New Plant in LaGrange, Indiana

(BRK.A), (BRK.B)

RV manufacturer Forest River, a subsidiary of Berkshire Hathaway, has purchased a 100-acre-plus industrial site in the town of LaGrange, Indiana. The move brings much needed activity to a facility that has been sitting empty for the past eight years, and much needed jobs to the community of roughly 2,700 people.

The site is the location of the former Dutch Housing plant and a special public hearing will be held on Jan. 16, 2017, at the Town Hall to designate the former Dutch Housing plant an economic revitalization zone.

It is expected LaGrange officials will approve Forest River’s request for a proposed 10-year $1.7 million tax abatement on the property and equipment at that time.

The move by Forest River to locate a facility in LaGrange will be a boost for area employment, with as many as 250 jobs expected the first year, and as many as 450 by the end of 2018.

Forest River has not announced exactly what it will be building at the new facility, but part of its production line from its Topeka plant is expected to be relocated to the facility.

The RV business has been brisk in 2016, and according to the Recreational Vehicle Industry Association, 2017 should be the eighth consecutive year of growth with shipments predicted to reach 404,800 units.

The RVIA cites “continued gains in jobs, incomes and household wealth combined with relatively low levels of inflation, unemployment and interest rates,” as the reason for optimism.

© 2016 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
MiTek

MiTek’s New Atlanta Warehouse and Distribution Facility Offers Rapid Delivery Within 500-Mile Radius

(BRK.A), (BRK.B)

MiTek, a Berkshire Hathaway company, has opened a new warehouse and distribution facility in Atlanta GA.

The new facility is the third warehouse opened by MiTek in the past 13 months, and it joins other strategically placed manufacturing, warehousing, and distribution facilities already located in New Jersey, Florida, Indianapolis, Minnesota, Houston, Phoenix, and California.

The new Atlanta facility enables rapid distribution of MiTek building products to customers within a 500-mile radius. Fully functional on February 1, 2017, the new facility offers products that include USP Structural Connectors, USP Epoxy and fastener products, as well as MiTek truss connector plates. The facility will primarily serve MiTek’s two-step customers and support MiTek’s rapidly expanding sales network.

The new warehouse offers 45,600 sq. ft. of space, of which 3,500 sq. ft. will be dedicated to offices, training, and customer support. The address of the new facility is 4380 International Parkway, Atlanta, GA 30354. The warehouse has immediate access to I-75, I-285, I-85, and is one mile from the Hartsfield-Jackson Atlanta International Airport.

“This is the third new MiTek warehouse and distribution center we have opened recently. With its strategic location, it provides us with even more coverage areas for one-day or two-day delivery of MiTek products,” said Todd Asche, Senior Vice President of Operations. “This new warehouse and distribution facility is clear evidence that MiTek is ‘on the march,’ with a goal of distributing our products at an expansive geographical scale

© 2016 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
Dairy Queen

Dairy Queen Plans Major International Expansion in Korea

(BRK.A), (BRK.B)

International Dairy Queen, Inc. has signed a multi-unit development agreement to expand into the Republic of Korea with plans to open 50 DQ Grill & Chill locations within the next five years.

The agreement is with the privately held M2G USA Investment, Inc., whose diversified business portfolio includes ownership of restaurants, hotels, public storage businesses, household appliance manufacturing, shoes and an extensive global real estate portfolio.

“The DQ® brand continues to expand in new international markets,” said John Gainor, President and CEO of International Dairy Queen, Inc. (IDQ). “We are looking forward to working with M2G USA Investment to bring our renowned menu, signature treats and quality service to the Republic of Korea.”

The DQ Grill & Chill locations in Korea will serve a full range of food options including its signature GrillBurgers™, fan favorite chicken strip baskets, chicken sandwiches, a variety of salads and sandwiches. The DQ Grill & Chill restaurants will also feature the full menu of its world famous DQ treats, including the signature Blizzard® Treats, MooLatté Frozen Coffee Flavored Beverages, soft-serve cones with the signature curl on top, sundaes and DQCakes.

“Our goal is to be the most desirable QSR (Quick Service Restaurant) company in Korea that believes in the vision of people, product and process,” said John Park of M2G USA Investment, a partner in the ownership of Taco Bell restaurants in Korea and in the U.S. “DQ is one of the most respected, exceptional and popular brands in the world. We are thrilled to partner with the DQ system here in Korea.”

The DQ system has more than 6,700 locations with more than 2,200 of those units operating outside of the United States.

For more information on Dairy Queen’s world-wide plans, read a Mazor’sEdge special report on Dairy Queen.

© 2016 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
MiTek

New MiTek Lab is “Quantum Leap” in Capability

(BRK.A), (BRK.B)

Heat Pipe Technology (HPT), a division of Berkshire Hathaway’s MiTek Industries, has opened a new laboratory at its Tampa location, expanding its ability to research, develop, and test new products, while expediting the time-to-market for such products.

With 3,800 square feet of new testing and research space, HPT now has the capability to test to the Air-Conditioning, Heating, and Refrigeration Institute (AHRI) Standard 1060. Indeed, HPT’s facilities are comparable to those offered by Intertek (AHRI’s official test agency) for Energy Recovery Ventilator (ERV) testing. Although HPT’s products may still be subject to the third-party AHRI testing and approval process, HPT can now pre-test its products to AHRI standards. This not only dramatically compresses the product development cycle-time, it also opens up more time and capability for HPT personnel to create new product innovations.

Situated on-premises, the new state-of-the-art HPT lab is fully equipped to support heat pipes testing up to 16 feet in length. With a robust automation and data-acquisition system, this facility offers the capability to run tests overnight and on weekends without human oversight.

“This new lab is a quantum leap in capability for HPT,” said HPT’s Dr. Onieluan Tamunobere, a resident scientist and engineer. “Our capability to innovate has been expanded, and our time to move innovations from concept to market has been compressed to a fraction of what it was before we had the lab.”

© 2016 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
Dairy Queen

Hot Phoenix Area to See Blizzard of New Dairy Queen Outlets

(BRK.A), (BRK.B)

Add Phoenix, Arizona to the list of cities that will have an expanded presence for Dairy Queen. Five new DQ Grill & Chill restaurants are planned for the Phoenix metro area.

Locations already opening in the West Valley, and Surprise and Goodyear will be opening by the end of December.

The emphasis on the Phoenix area comes as the city of Surprise ranked number five on a list of fastest growing cities in the United States.

Additional locations will be opening their doors in 2017, including Laveen, which will open in January, and two restaurants in Chandler in March and October.

Other locations are planned in Tempe, Gilbert, Scottsdale, Mesa and Glendale.

All the new Dairy Queen’s will be franchises, in keeping with Dairy Queen’s strategy to avoid company-owned stores. The chain has only three company-owned locations among its over 6,000 locations worldwide.

Other cities and states that have seen the “Fan Food” and frozen treats chain announce big expansion plans include Massachusetts, South Carolina, California, as well as Upstate New York, Chicago, and Knoxville, Tennessee.

For more information on Dairy Queen’s world-wide plans, read a Mazor’sEdge special report on Dairy Queen.

© 2016 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
Acquisitions MiTek

M&M Manufacturing Snaps Up Snappy Company

(BRK.A), (BRK.B)

Berkshire Hathaway’s MiTek Industries, Inc., through its subsidiary, M&M Manufacturing, has acquired Snappy Company, a leading supplier of metal duct systems for the residential HVAC market.

Snappy has manufacturing facilities in Detroit Lakes, MN; Medina, NY; and corporate offices in Marietta, GA.

According to MiTek, Snappy will complement M&M Manufacturing, a leading producer of sheet metal products, primarily servicing the air distribution and ventilation markets. M&M Manufacturing will invest in Snappy’s manufacturing capabilities, expertise, and infrastructure.

“We are excited to welcome Snappy in the family of MiTek companies,” stated Tom Manenti, Chairman and CEO of MiTek. “The experience and relationships of Snappy and M&M will be leveraged across all of our manufacturing platforms in order to expand capacity and customer service levels. Combining the manufacturing capacities of M&M Manufacturing and Snappy will allow both companies to better serve our customers and grow in the markets we serve together.”

“Snappy has been a market leader for more than 60 years,” added Rob Felton, President of M&M Manufacturing, “and Snappy’s reputation has been built on a heritage of great customer service, product innovation, and a focus on people. That’s a perfect fit for M&M Manufacturing, and we look forward to leveraging each others’ expertise and capabilities.”

Snappy is a leading supplier of metal pipe and fittings for the residential HVAC market, and the company is recognized for remarkable innovation, quality products, and impeccable service. Since 1955, Snappy has been a trusted resource to HVAC distributors and contractors. With a full line of components that fit together seamlessly and are safe for end users, the company manufactures approximately 4,000 SKUs of galvanized pipe, duct and fittings, as well as complementary accessories, including drain pans, aluminum and venting products.

© 2016 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
Duracell

Sonoco Products Company Creating Packaging Facility to Support Duracell

(BRK.A), (BRK.B)

Sonoco Products Company, a global provider of packaging products and services, is investing $20 million in a new packaging center that will provide packaging services for Berkshire Hathaway’s battery manufacturer, Duracell.

Sonoco’s Display and Packaging unit will be located in Duracell’s new leased facility in the Atlanta area. Sonoco will install and operate state-of-the-art primary packaging equipment at the new center and provide all packaging materials. In addition, the Company will produce retail merchandising displays which will also be packed out at the same facility.

“This unprecedented go-to-market packaging solution for Duracell is unlike any effort provided in our industry,” said Jack Sanders, Sonoco president and chief executive officer. “Because Sonoco is a solutions company which offers multiple packaging products and services, we are able to meet all of Duracell’s unique packaging and retail merchandising needs.”

Full production is expected in the fourth quarter of 2018. Sonoco’s sales of packaging and services annualized over the five-year contract period are expected to be more than $50 million.

© 2016 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

Special Report: When Will Berkshire Finally Hit it Big in Natural Gas?

(BRK.A), (BRK.B)

In November 2015, Berkshire Hathaway Energy’s Australian subsidiary, CalEnergy Resources, drilled a test well in Western Australia in what the company called modestly a “significant gas field.”

The test well heralded a potential profit gusher as it confirmed an enormous gas field that is four trillion cubic feet of gas-in-place “significant.”

First the Facts

Exploration permit EP 408 is located approximately 280 kilometers south of Perth, and covers both the Whicher Range and Wonnerup gas fields. These gas fields have long been known, and were first discovered in 1968 and 1971, respectively. The fields are located in ancient sandstone reservoirs nearly four kilometers underground.

The fields contain an estimated four trillion cubic feet gas-in-place, and Berkshire’s share currently stands at approximately 84%. Other partners include Which Range Energy.

Slow But Steady Progress

Peter Youngs, the Managing Director of CalEnergy Resources Group, which is owned by Berkshire Hathaway Energy, recently updated MazorsEdge on the progress on the development of the gas field.

“We have over 50 years of data from all of the prior activity on the field that we are assimilating and integrating with our well testing results,” Young states. “Parts of our recent well test were encouraging but it has also shown us that we have not yet answered all of the technical issues that might impinge on a commercialization decision and hence the detailed integration work.”

Young anticipates updating stakeholders on the current status of the work and CalEnergy’s next steps towards the end of the second quarter 2017.

So, will 2017 be the year that Berkshire finally gets to profit from the Whicher gas fields? Not likely at the current pace, but 2018 is not so far off.

© 2016 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
Berkadia

Berkadia Completes $43 Million Sale for Arizona Multifamily Property

(BRK.A), (BRK.B)

Berkadia, Berkshire Hathaway’s joint venture with Leucadia National Corporation, has announced the recent sale of Coronado Villas, a 432-unit multifamily property in Tucson, Arizona. Senior Managing Director Art Wadlund and Associate Director Clint Wadlund of the Tucson office completed the $43 million sale at a price-per-unit of $99,537.

The seller was Prime Residential, based in San Francisco, and the buyer was Oregon-based Tokola Properties.

“Tokola Properties was looking to purchase a quality property in Arizona,” Art Wadlund said. “With apartment occupancy increasing and job growth accelerating in the Tucson area, the buyer recognized the opportunity Coronado Villas presented to be located within a growing multifamily market.”

Built in 1994, Coronado Villas is located at 9225 E. Tanque Verde Road and affords convenient access to Catalina Highway. The one-, two- and three-bedroom units feature a washer/dryer, double-sided wood burning fireplaces and vaulted ceilings in select units. Community amenities include a fitness center, three swimming pools and spas and a clubhouse. Saguaro National Park East is situated four miles from the property, and top employers in the area include Tucson Unified School District and the Arizona National Golf Club.

About Berkadia

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

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

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

In a deal approved by the bankruptcy court, Capmark sold its mortgage loan and servicing to the newly formed Berkadia in a deal worth $515 million.
The deal brought Berkshire into the heart of the commercial loan serving business, and the company has one of the largest commercial real estate servicing portfolios.

© 2016 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
Marmon Group UTLX

Low Oil Prices Spur More UTLX Permanent Layoffs

(BRK.A), (BRK.B)

Continued weakness in demand for shipping domestic crude oil has prompted Berkshire Hathaway’s Union Tank Car Co., more commonly referred to as UTLX, to announce major layoffs in Houston, Texas.

UTLX will cut a third of its staff from its facility in northeast Houston.

In a letter to the Texas Workforce Commission, the company stated that it will permanently cut 106 jobs commencing Jan. 20, 2017.

The move is no surprise, as in April 2016 UTLX announced that it would be cutting its tank car production by 50-percent.

At the time, the Berkshire Hathaway-owned company announced that it also planned to lay-off employees at its plant in Alexandria, Louisiana.

© 2016 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.