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Berkshire Hathaway Energy

Berkshire Sets Sights on Alamo 6 Solar Farm

(BRK.A), (BRK.B)

While some have questioned whether the new Trump administration will change any of Berkshire Hathaway’s renewable energy plans, it doesn’t seem to be affecting their acquisition strategy.

Berkshire Hathaway Energy is reportedly looking to purchase the Alamo 6 solar farm from San Antonio, Texas-based solar developer OCI Solar Power.

OCI Solar Power has filed for state approval of the sale.

The 110-megawatt solar project will supply power to CPS Energy under an already signed agreement.

While Berkshire, has not released a statement, Berkshire’s purchase price is said to be $385 million.

OCI Solar Power is a subsidiary of OCI Company, a Korean chemical and renewable energy company.

Working with Utility-Scale Developers

Berkshire has a strategy of purchasing solar projects from outside developers, including the 579 megawatt Solar Star Projects (formerly Antelope Valley Solar Projects), which are two co-located solar installations in Kern and Los Angeles Counties in California that were purchased from SunPower in 2013. And Berkshire acquired two solar projects from Geronimo Energy in 2015 and 2016.

© 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
McLane

McLane Company Awarded 29 More Stores by Mirabito

(BRK.A), (BRK.B)

Berkshire Hathaway’s McLane Company, Inc., a leading supply chain services company providing grocery and foodservice supply chain solutions throughout the U.S., has been awarded services for 29 Xtra Mart c-store locations recently acquired by Binghamton, New York-based Mirabito Holdings Inc.

As part of the multi-year agreement, McLane will begin servicing the 29 Xtra Mart locations in central New York and Northeast Pennsylvania starting January 1, 2017.

With the addition of the 29 Xtra Mart locations, which will be rebranded as Mirabito c-stores, McLane now handles all of Mirabito’s c-store locations in the eastern region, bringing the total to more than 100 stores.

“Mirabito has had a long standing relationship with McLane Company and have trusted the support of the company’s senior leadership team for over 20 years,” said President and Chief Executive Officer Joe Mirabito. “Their commitment to our future is invaluable and we look forward to a long and successful relationship.”

“McLane Company has been servicing our current stores for 20 years and we are excited that McLane will be servicing our newest addition to the Mirabito Family. McLane has been a critical part of our success and growth. Their commitment to our business, professionalism, customer service, and ability to adapt and develop technology applications aligns with our future growth plans and superior customer shopping experience,” added Chief Operating Officer Rich Mirabito.

A customer of McLane since 1997, Mirabito has stated the supply chain’s strategic leadership, operating excellence, and tech solution offerings as contributors to its growing footprint in the eastern region over the years.

Specifically, through its participation in McLane’s Center for Category Innovation and inclusion of the supply chain’s foodservice solution, McLane Kitchen, Mirabito plans to roll out newly remodeled stores and introduce specialty, fresh and frozen items and equipment starting in 2017.

“Mirabito is a well-respected and a long-time customer of McLane, so it’s an honor they have chosen us to provide services for the acquired Xtra Mart business,” said Tony Frankenberger, president at McLane. “Our portfolio of services will enable Mirabito to provide a wider variety of foodservice offerings and upgraded footprint experience to its rapidly growing customer base.”

© 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.

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Minority Stock Positions Stock Portfolio

BYD to Supply Pure Electric Vehicles to Iran

(BRK.A), (BRK.B)

Chinese renewable energy technology leader BYD Company has become the first company to supply pure electric vehicles to Iran.

BYD’s strategic partnership with the country’s largest private passenger car manufacturer Kerman khodro will also see the Shenzhen-based company export other leading technological products to Iran including hybrid vehicles, electric commercial vehicles and rechargeable batteries.

“Our partnership with Karmania is an important step in expanding our Middle East operations,” said AD Huang, General Manager of BYD’s Middle East and Africa Auto Sales Division. “Iran’s new energy vehicle market has vast potential because the government of Iran has the foresight of sustainable development. We endeavor to use our excellent technology to provide quality products and service to the people of Iran.”

“We are very positive about the future of new energy vehicles in Iran because of BYD’s mature technology, the scale of its production and operational success,” said Karmania CEO Pooya Salari Sharif. Karmania is a subsidiary of Kerman that specially for BYD.

BYD’s commercial initiatives in the Middle East and Africa presently include energy storage, new energy vehicles and solar power generation.

According to a statement by BYD, Iran is just one of several Middle Eastern countries responding to climate change concerns through various environmentally friendly policies such as tax breaks for new energy vehicles. These initiatives also assist nations in reducing their dependence on fossil fuel.

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 is now worth roughly $1.77 billion.

For More on BYD, read the Special Report: BYD, Berkshire’s Tesla.

© 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.

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Lubrizol

Lubrizol Launches Lubricant Market Advocacy Website

(BRK.A), (BRK.B)

The Lubrizol Corporation’s Lubrizol Additives business segment has launched a new, all-encompassing industry insight website, LubrizolAdditives360.com.

The website serves as a convenient single source for content that covers the entire lubricant market and reinforces Lubrizol’s role as a market leader in the industry.

The new site incorporates all the information and insights customers have come to rely on from Lubrizol’s previous industry insight websites, DriveLineNEWS.com, FluidLineFlash.com, GF-¬6.com, HDDEO.com, MCEO.com and PCEO.com. Content on the site is arranged in a format that aligns with the following specific business focus areas and the correlating opportunities in the marketplace:

• Passenger (including passenger car and motorcycle)
• Commercial (including on-road and off-road vehicles)

Key features of LubrizolAdditives360.com include:

• announcements on the latest engine oil specifications;
• information on advancements in passenger vehicle technology;
• reports on new trends in automotive gear manufacturing;
• intelligence on driveline and engine oil lubricants and fuels; and
• insight into innovative solutions for off-highway vehicles.

“Lubrizol Additives has always taken great pride in being a market leader and an advocate for the use of higher performing lubricants,” said Mike McCabe, director, Lubrizol Additives global marketing. “We are confident that this new industry insight website will provide valuable content for our customers and continue to drive the industry forward in a positive direction.”

© 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.

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Fruit of the Loom Warren Buffett

Fruit of the Loom Names Melissa Burgess-Taylor New Chairman & CEO

(BRK.A), (BRK.B)

Berkshire Hathaway’s Fruit of the Loom has announced the appointment of Melissa Burgess-Taylor as the company’s new Chairman and Chief Executive Officer.

Ms. Burgess-Taylor is currently the Senior Vice President of Brand Management and Sales for Fruit of the Loom and Vanity Fair Brands. She has been with the company more than 17 years focusing on the interests of Fruit of the Loom employees and customers while delivering meaningful results.

Warren Buffett, Chairman and CEO of Berkshire Hathaway, addressed the Fruit of the Loom leadership team today following the unexpected passing of Rick Medlin last week.

“Rick lived and breathed Fruit of the Loom, and he was an inspirational leader to everyone associated with the company. He will be greatly missed. His contributions were significant and his legacy will continue through the success of Fruit of the Loom and the employees.” Mr. Buffett continued, “I am excited to have Melissa take on this important role as CEO. Already an accomplished Fruit of the Loom leader, she is passionate, smart, and cares deeply about Fruit of the Loom customers and employees. She understands the importance of building a great brand, and she’ll add tremendous value to Fruit of the Loom going forward.”

“I’ve been fortunate to be a member of the Fruit of the Loom family and this great company for many years. We have succeeded due to our people, our strong brands and the powerful relationships we have with our customers,” stated Ms. Burgess-Taylor. “I am grateful for Mr. Medlin’s strong leadership and mentorship, and I am deeply committed to continuing to move us forward.”

Ms. Burgess-Taylor has held various leadership roles within the organization. In her current role, she leads Marketing, Merchandising, Sales, Brand Communications and Creative Services for Fruit of the Loom, Vanity Fair, Lily of France, Vassarette and Curvation brands. Prior to joining Fruit of the Loom, Ms. Burgess-Taylor held roles with Hanes Brands and Mercantile Department Stores. She received a Bachelor of Science degree in marketing with a minor in textiles and clothing from Western Kentucky University in Bowling Green, Ky., and currently resides in Bowling Green with her husband and two children.

© 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

San Diego County to Double the Number of Dairy Queens

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Good news for ice cream lovers! California’s San Diego County will double the number of Dairy Queens over the next five years.

Dairy Queen plans to open two new Dairy Queens per year with the first one to open by the end of 2017. All of the locations will be “DQ Grill & Chill” restaurants.

Dairy Queen has a long history in the San Diego area, with its 12260 Woodside Avenue location in Lakeside going all the way back to 1958.

The challenge is finding suitable locations due to the high cost of real estate in the area.

A Grill & Chill outlet ranges in size from 1,886 – 2,612 sq ft and requires a lot size of 20,952 – 29,670 sq ft.

Major California Expansion

Dairy Queen is also planning to triple its northern California locations, adding another 200 locations to its existing 98 locations, as Dairy Queen hasn’t been a common sight in the Bay area, with only 12 locations currently open.

In all, Dairy Queen, which has moved from a summer treats business to a year-round food and ice cream business model, plans to add 400 locations in California.

For more information 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
Duracell

Duracell to Close Cleveland, Tennessee Packing Plant

(BRK.A), (BRK.B)

Berkshire Hathaway’s recently acquired battery maker Duracell will close its Packing Plant in Cleveland, Tennessee by 2018. The move will lay off 140 workers.

Duracell President of Global Operation Robert Lorch said that the closure “makes Duracell’s supply chain more efficient.”

Duracell’s manufacturing plant in Cleveland, Tennessee will not be affected by the closure.

Berkshire Hathaway acquired Duracell in February 2016 when it swapped its shares of Procter & Gamble for the company’s Duracell division.

With Duracell’s $2 billion in annual revenue, Berkshire now owns the market leader in batteries for the home and workplace. The company has highly recognizable brands that consumers in home and work settings are willing to pay more for than private label store brands.

According to the company, Duracell’s CopperTop® and Quantum® batteries command the highest average percent of spending among battery brands, with 33% and 16%, respectively.

Combined, the two product lines now account for close to 50% of the market.

© 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
McLane

New Online Portal Gives McLane’s Retailers Key Analytics

(BRK.A), (BRK.B)

Berkshire Hathaway’s McLane Co. Inc. is continuing its investment in analytics and performance tracking tools through the rollout of McLane Link, an online portal solution that provides retailers access to key performance and operational data including the ability to see order and delivery data by store and by item.

McLane Link also improves operational efficiencies by providing a web-based guide that gives retailers quick access to key metrics, the company said. Retailers can customize reports and resolve issues without needing to contact their McLane representatives, and reports can be viewed online or exported as Excel or PDF files.

Additionally, the scheduling feature allows each customized report to be emailed directly to the customer or any number of other company employees.
Other McLane Link features include:

• Service-Level Reporting. A detailed status report for all orders placed, received and en-route including the fill rate of each item as well as an overall service percentage.

• Delivery Reporting. A performance view of current and past delivery arrival times. A calendar feature allows for the review of delivery detail on a weekly, monthly or several month basis.

• Delivery Scheduling. A comprehensive directory of key account information for all retailer locations including billing cycle and mailing address. Retailers can view reroutes, load days and other scheduling information pertinent to each store location.

• Credits. An account of all credits issued by delivery drivers searchable by date range. Filtering can be applied to review specific locations, amounts or geographic details.

• Planograms. Corporate and store-level access to the latest planograms created from McLane’s Center for Category Innovation. Retailers are able to include their own store-level planograms and upload them directly into the McLane Link portal.

• Slice and Dice Report with Conditional Alerts. Each field can be reordered, removed or have column-level filtering, enhancing the user experience. Alerts can be added to notify retailers when specific conditions or thresholds have occurred.

Four retailers have already rolled out the solution and 10 more are scheduled to be in production by the end of November, the company stated. McLane Link is customized to match the look and feel of each customer’s branding strategy for a familiar user experience, and additional features requested by customers will be rolled out over the coming months.

“With McLane Link, our retailers can quickly locate the exact information they are looking for and customize a report specific to what is needed,” said McLane Vice President of Customer Technology Deon Johnson. “It’s exactly what our customers have asked for and just what they need, when they need it — a fast, simple and easy way to drive their business forward.”

© 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
Fruit of the Loom

Fruit of the Loom Team Mourns Death of President and CEO Rick Medlin

(BRK.A), (BRK.B)

Rick Medlin, President and CEO of Fruit of the Loom, Inc., passed away of natural causes on November 27, 2016. The entire Fruit of the Loom, Inc. team worldwide, with nearly 30,000 employees, is incredibly saddened by the loss of their sincere and principled leader.

“Rick was a special leader and a special person. He was extremely proud of the progress and success we have shared in the last 6 years,” said the Fruit of the Loom leadership team. “We owe it to his legacy and honor to continue taking this company forward in accordance with his vision. Our thoughts and prayers go out to the Medlin family at this time of loss.”

The company will name an interim CEO in the coming days who will continue to lead the organization with the same core values and integrity established by Mr. Medlin.

© 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
BNSF

Surface Transportation Board Refuses to Hear Tesoro’s Claim in Swinomish Tribe’s Dispute with BNSF

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The Surface Transportation Board has refused to hear Tesoro’s petition on a rail service dispute between the Swinomish Indian Tribal Community and BNSF Railway.

BNSF Railway’s oil train service to two refineries in the state of Washington could be in jeopardy due to an ongoing Federal lawsuit.

Filed in April 2015, the lawsuit stems from the Swinomish’s assertion that the railroad is violating the terms of a Right-of-Way easement granted to allow the railroad to cross the reservation.

The Swinomish are concerned that trains carrying Bakken crude oil run over bridges spanning the Tribe’s fishing grounds in the Swinomish Channel and Padilla Bay.

The Easement Agreement enables BNSF to bring Bakken crude oil to the Tesoro refinery in Anacortes, Washington by crossing the portion of the Swinomish Indian Reservation located on Fidalgo Island in Skagit County, Washington.

Under the terms of the 1991 Easement Agreement, BNSF is allowed to run one 25-car train per day in each direction. The tribe sued in April 2015 contending that BNSF was running as many as six 100-car “unit trains” per week.

In petitioning to the Surface Transportation Board, Tesoro hoped to get the STB to declare that the dispute fell under its purview through its role in the regulation of the Interstate Commerce Act. However, the STB ruled that Tesoro is not a party to the Swinomish’s dispute with BNSF.

A ruling in favor of Tesoro would have benefitted BNSF, as the refiner claims that as a shipper it has a right to receive rail service.

“Given that the district court has already denied a motion to refer the preemption issue to the board, that courts as well as the board can decide issues involving … preemption in the first instance, and that the court has clearly expressed its preference to decide the preemption issue itself, the board will decline to issue a declaratory order in this matter,” the STB said in its ruling.

Contentious History of Rail

Train travel across the tribe’s land has a long contentious history, with the original track having been laid in the late 1800s without consent from the Swinomish or the U.S government. The tracks cross the northern edge of the reservation, and the Swinomish, as the present day political successor-in-interest to certain of the tribes and bands that signed the 1855 Treaty of Point Elliott, first sued the railroad in 1976, alleging a century of trespassing on tribal land. The resulting settlement led to the 1991 Easement Agreement that allowed only the 25-car train limit without the Tribe’s permission.

The Tribe contend in its lawsuit that “BNSF never notified the Tribe that it intended to exceed the limitation of one train of 25 cars or less, nor did it request permission from the Tribe before it began to do so.”

A Deal is a Deal

“A deal is a deal,” said Swinomish Chairman Brian Cladoosby. “Our signatures were on the agreement with BNSF, so were theirs, and so was the United States. But despite all that, BNSF began running its Bakken oil trains across the Reservation without asking, and without even telling us. This was exactly what they did for decades starting in the 1800s.”

“We told BNSF to stop, again and again,” said Cladoosby. “We also told BNSF: convince us why we should allow these oil trains to cross the Reservation. And we listened for two years, even while the trains kept rolling. But experiences across the country have now shown us all the dangers of Bakken Crude. It’s unacceptable for BNSF to put our people and our way of life at risk without regard to the agreement we established in good faith.”
Under the terms of the Easement Agreement, the Tribe agreed not to “arbitrarily withhold permission” for BNSF’s request to increase the number of trains or cars.

Arbitrary or Not?

The Tribe contends that its refusal to grant permission is not arbitrary and is “Based on the demonstrated hazards of shipping Bakken Crude by rail, paired with the proximity of the Right-of-Way to the Tribe’s critical economic and environmental resources and facilities — and the substantial numbers of people who use those resources and facilities on a daily basis — the Tribe is justifiably and gravely concerned with BNSF’s shipment of Bakken Crude across the Right-of-Way in a manner and in quantities at odds with the explicit terms of the Easement Agreement.”

In addition to Swinomish’s concerns to possible environmental impacts on the Tribe’s fishing grounds, hey also note that the track runs across the “heart of the Tribe’s economic development enterprises,” which includes the Tribe’s Swinomish Casino and Lodge, a Chevron station and convenience store, and an RV Park, as well as a Tribal waste treatment plant.

The Tribe noted that these enterprises are the “primary financial source for funding of the Tribe’s essential governmental functions and programs.”

The 1991 Easement Agreement granted the Right-of-Way for an initial 40-year term, along with two 20-year option periods. The current agreement will expire no later than 2071.

The tribe is seeking a “permanent injunction prohibiting BNSF from (1) running more than one train of twenty-five cars or less in each direction over the Right-of-Way per day and (2) shipping Bakken Crude across the Reservation.”

The Swinomish are also seeking monetary damages for the prior trespasses and breach of contract in an amount to be determined at trial.

© 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.