Tag: Duracell

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Acquisitions Duracell

Berkshire Hathaway’s Duracell a Potential Player for Eveready in India

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Berkshire Hathaway’s Duracell and Energizer Holdings’ Eveready brand are competitors in the US market, but India may soon be another story. At least as to who owns the rights to market Eveready for the country.

In India, the Khaitan family, is looking to sell a majority stake in their exclusive right to manufacture and market Eveready batteries.

It’s a valuable market, as India and China make up the largest markets for non-rechargeable batteries. The markets are not only the largest, but consumer demand is pushing their annual growth to a spectacular 6-7 percent rate.

Based in Calcutta, the Khaitans also have the rights to the Energizer brand, as well.

The Khaitans control Eveready Industries India Limited, and in 2015 were reportedly selling 1.2 billion batteries annually.

The 2015 death at age 59 of Deepak Khaitan, who served as Williamson Magor Group’s non-executive vice-chairman, set in motion a division of assets between his wife Yashodhara Khaitan, son Amritanshu Khaitan and daughter Nitya Bangur.

The Khaitans are also well-known as the largest bulk tea producers in the world, through their ownership of McLeod Russel India.

Duracell’s interest in India goes back to 2015, when it hired DKSH to help with the effort. Based in Zurich, Switzerland, the company is a Market Expansion Services Group that focuses on Asia.

Berkshire Hathaway acquired Duracell when it cashed out of its minority stake in Procter & Gamble in 2016, and an expansion into India, where Duracell is not a major player, would be a for a company that already has $2 billion in annual sales.

© 2019 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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Duracell

Duracell to Benefit from Growth of Alkaline Battery Market

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The trusty alkaline battery will continue to play a major role in the world’s battery needs according to a report released by KD Market Insights, “Alkaline Battery Market.”

Berkshire Hathaway’s Duracell, and other battery manufacturers, including Panasonic, Toshiba, Energizer Holdings, Zhongyin (Ningbo) Battery Co.Ltd., GPB, International Limited, Spectrum Brands Holding, Sony, Samsung, and Fujitsu should see a CAGR of 1.3% during 2018-2023.

According to the report, the market is anticipated to reach USD 8,468.7 Million by the end of 2023 from USD 7,946.6 Million in 2017.

Benefits and advantages cited for the alkaline battery include higher energy density, easy availability and lower cost will power the growth of alkaline battery market.

Just a few decades ago, flashlights and toys were the primary uses of disposable batteries, but today, alkaline batteries are used in a host of applications, including everything from wireless mice to medical devices.

© 2018 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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Commentary Duracell

Commentary: Energizer’s Purchase of Spectrum Brands Battery Division Increases Competition for Berkshire’s Duracell

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The announcement that Energizer Holdings, Inc. has entered into a definitive agreement to acquire Spectrum Brands’ Global Battery and Portable Lighting Business for $2.0 billion in cash means increased competition for Berkshire Hathaway’s Duracell Batteries.

The acquisition puts the Varta and Rayovac brands into Energizer’s product portfolio.

Spectrum Batteries generated 2017 revenue and EBITDA of $866 million and $169 million, respectively.

The acquisition price represents a transaction multiple of 7.5 times Fiscal 2017 EBITDA, net of tax benefits with a net present value of approximately $100 million and including estimated run-rate synergies of $80 to $100 million and the costs to achieve.

The transaction is expected to deliver modest accretion to Energizer’s adjusted earnings per share and free cash flow in the first year, excluding one-time transaction and integration costs, and will achieve additional favorable accretive impacts following our realization of targeted synergies.

“The acquisition of Spectrum Batteries represents a compelling strategic, operational, and financial fit for Energizer,” said Alan R. Hoskins, Chief Executive Officer of Energizer. “The combination will enable us to leverage Spectrum Brands’ manufacturing assets, significantly expand our international business and enhance our long-term brand building capabilities as we broaden our portfolio with the Varta and Rayovac brands and our geographies with Spectrum Batteries’ passionate global colleagues. We have great respect for Spectrum Batteries and the strong business its colleagues have built, and are excited to bring together the talented colleagues from around the globe from both organizations to drive our business to new heights. In addition, the top-line and free cash flow growth from this acquisition, combined with the opportunity to realize meaningful synergies, will further enhance our ability to drive long-term shareholder value.”

Energizer intends to fund the acquisition through a combination of existing cash and committed debt facilities, expected to consist of a new term loan and senior notes.

As for Berkshire’s Duracell, it will still be the biggest player in the alkaline battery market. Sales of Duracell batteries in the U.S. alone topped $1 billion in 2016, eclipsing Eveready’s and Rayovac’s combined sales.

© 2018 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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Commentary Duracell

Commentary: Strong 2017 Sales for Duracell Show the Continued Utility of the Alkaline Battery

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Berkshire Hathaway’s battery-maker Duracell, which it acquired from Procter & Gamble in 2016, is proving the continued value of tried and true alkaline batteries.

While much of the focus in the press these days is on lithium-ion and nickel-metal-hydride batteries, and the search for batteries with more exotic chemistries, the trusty alkaline battery, which was first patented by Union Carbide in 1960, has continued to be a big sales winner.

According to reports, Duracell’s third quarter sales rose 6 percent year-to-year from 2016, as the demand for alkaline batteries continues to grow.

Sales of Duracell batteries in the U.S. alone topped $1 billion in 2016, eclipsing its major competitor brands, Eveready and Rayovac, combined sales.

Alkaline Batteries Essential During Disasters

The 2017 hurricane season that devastated the Caribbean, Florida and Houston, Texas, showed that rechargeable batteries are of limited use when the power grid goes off-line for weeks or months. They also have the downside of energy loss when stored long term. Durable alkaline batteries, which have a storage life of over 10 years, have an important place in helping people prepare for and recover from disasters.

It was a point that Duracell was able to make through its own disaster relief teams.

In Puerto Rico, Duracell’s PowerForward teams have been on the ground across the island. Its emergency response teams have given out tens of thousands of batteries, and provide charging stations through their specially outfitted vehicles. The vehicles are delivering more than $1 million worth of batteries, making this the program’s largest deployment to date.

Duracell’s PowerForward fleet consists of five trucks, custom-designed to handle specific disasters, and strategically stationed to get to any U.S. location within 24 hours. Each one is equipped with mobile charging stations and stocked with thousands of Duracell batteries.

In Puerto Rico, Duracell deployed two of its highest capacity vehicles. The Heavy Haulers pull trailers that help them transport over 100,000 AA batteries – more than any other vehicle in the fleet. Normally, one is stationed in San Francisco, California while another is kept in Portsmouth, New Hampshire. These trucks specialize in handling earthquakes, floods, landslides, wildfires, hurricanes and winter storms.

The Battery for Everyday Use

While natural disasters draw attention to the continued usefulness of alkaline batteries, for most of us it is their continued utility for more mundane needs, such as toys, electronic devices, and smoke detectors where their low cost, long storage life, and durability win out.

And Berkshire’s got the sales revenue to prove it.

© 2018 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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Duracell

Berkshire Hathaway Promotes Thom Lachman to CEO of Duracell

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Berkshire Hathaway has elevated Thom Lachman to CEO of the Duracell Company, effective January 1, 2018. Roberto (Bobby) Mendez will take over Lachman’s former role, being promoted to President of Duracell North America.

Angelo V. Pantaleo, who served as CEO of the Duracell Company since Berkshire Hathaway’s acquisition of the company was completed in March 2016, has accepted the new position of President & COO of Marmon Holdings, Inc., a Berkshire Hathaway Company. He will also continue to provide oversight as Chairman of the Duracell Company Board of Directors.

Lachman joined Berkshire Hathaway as a member of Berkshire Hathaway’s Duracell Transition Team on November 1, 2015, and has served as Duracell’s President of North America since March 1, 2016.

Before coming to Berkshire Hathaway, Thom gained over 30 years of experience with Procter & Gamble (P&G). His last role as President of P&G Canada was preceded by a role leading the North America integration of the Gillette acquisition. He also served as the Global Marketing Director for PUR Water Filtration. Rounding out Thom’s P&G career is a variety of brand and manufacturing management roles, having earned both his B. S. in Chemical Engineering and his MBA from Tulane University.

“Thom and Bobby are crucial members of the Duracell leadership team,” said Angelo Pantaleo. “We are excited to see them flourish in these new roles and strengthen even further the success of this great company.”

Bobby joined Berkshire Hathaway officially on the date the Duracell acquisition was completed: March 1, 2016, and has served as Duracell’s President of Latin America & OEM business since that time. Prior to coming to Berkshire Hathaway, Bobby enjoyed a career with Procter & Gamble that spanned over 23 years. For the last 6 years of his P&G career, Bobby served as Duracell’s CFO. Before Duracell, Bobby held a number of financial roles including CFO for P&G Mexico, LA HQ Corporate Finance Associate Director, and Group Manager for Puerto Rico/Caribbean Finance. Bobby earned his BSBA in Finance from Georgetown University.

© 2017 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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Duracell

Duracell PowerForward Team on the Ground in Puerto Rico

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Duracell’s PowerForward teams are on the ground in Puerto Rico. The emergency response teams give out thousands of batteries and provide charging stations through their specially outfitted vehicles.

The vehicles wiil deliver $1 million worth of batteries, making this the program’s largest deployment to date.

Since 2011, Duracell PowerForward has been helping affected communities across the country by distributing free Duracell batteries, charging mobile devices, and providing Internet access to those in need so they can connect with family. They have given out over 463,000 batteries in 30 deployments
.
The Duracell PowerForward fleet consists of five trucks, custom-designed to handle specific disasters, and strategically stationed to get to any U.S. location within 24 hours. Each one is equipped with mobile charging stations and stocked with thousands of Duracell batteries.

In Puerto Rico, Duracell has deployed two of its highest capacity vehicles. The Heavy Haulers pull trailers that help them transport over 100,000 AA batteries – more than any other vehicle in the fleet. Normally, one is stationed in San Francisco, California while another is kept in Portsmouth, New Hampshire. These trucks specialize in handling earthquakes, floods, landslides, wildfires, hurricanes and winter storms.

“We at Duracell have been deeply moved by the resilience of those in Puerto Rico. Through our PowerForward initiative, a program I am most humbled and proud to be a part of, we will be distributing more than $1 million worth of batteries to local residents over the next month or more,” said Ramon Velutini, Vice President of Marketing at Duracell. “Trusted power is absolutely critical following widespread power outages caused by storms like Hurricane Maria, and we will be offering free Duracell batteries to help residents stay safe and connect with their loved ones by powering mobile devices, radios and flashlights, and providing trusted power for critical medical devices like dialysis machines, hearing aids and ventilators.”

© 2017 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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Duracell

Duracell Believes in the Alkaline Battery

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While lithium batteries are always in the news, Duracell, which is the king of the alkaline battery, believes that the alkaline battery will continue to be relevant and can even increase its share of the battery market.

That’s good news for Berkshire Hathaway, which purchased the venerable brand from Proctor and Gamble in 2016.

The key Duracell believes are the many performance benefits of the alkaline battery. The alkaline battery is safe, it doesn’t get hot, and it has a long shelf-life. Duracell offers its batteries with a 10-year guarantee in storage. It also has a level of availability and ease of use that can’t be beat.

Just a few decades ago, flashlights and toys were the primary uses of disposable batteries, but today, alkaline batteries are used in a host of applications, including everything from wireless mice to medical devices.

Sales of household batteries are still growing and will reach $4,750 million by the year 2020, up from $4,125 million in 2015, according to Research and Markets’ report, “Household Batteries: Consumer Market Trends in the U.S.”

According to the report, the compound annual growth rate for the period is projected to be 2.9%.

Under Berkshire, Duracell’s in a new position as its own company rather than as a division of P&G (and before that Gillette). With Warren Buffett’s legendarily hands-off management style, which lets his CEOs chart their own course, Duracell’s in position for the first time to have total control over the direction of its brand.

For Berkshire, Duracell looks to be a brand that can continue to shine brightly.

© 2017 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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Duracell

Duracell Sues Wholesaler Over Grey Market Batteries

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Berkshire Hathaway’s battery-maker Duracell has sued a St. Louis-based battery wholesaler that is selling grey market Duracell batteries in the U.S. market.

The wholesaler, JRS Ventures Inc., has been sued for trademark infringement by Duracell in The United States District Court for the Northern District of Illinois.

According to Duracell the batteries were never intended for direct purchase by consumers.

In its lawsuit, Duracell noted:

“Although the batteries appear to be authentic Duracell products, many of them were manufactured in China, for the sole purpose of being distributed to [original equipment manufacturers] only, and not for the importation and direct sale to consumers in the United States,” Duracell states in its filing.

While Duracell admits that the batteries are genuine, it notes that the batteries that JRS Ventures are selling lack Duracell’s consumer information and its 10-year guarantee.

Duracell asserts that purchasers of the batteries “are likely to be confused and indeed disappointed.”

“Further, such sales of infringing products cause great damage to Duracell and greatly damage the goodwill in Duracell’s valuable trademarks.”

Duracell is asking for the court to halt the sale of the batteries and award unspecified punitive and triple damages.

© 2017 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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Duracell

Sonoco Products Company Creating Packaging Facility to Support Duracell

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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.

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Duracell

Duracell to Close Cleveland, Tennessee Packing Plant

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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.