May 7, 2012 6:00 AM GMT+0800 Warren Buffett, the billionaire chairman of Berkshire Hathaway Inc.(BRK/A), said he s pursuing more opportunities in Asia afterboosting reinsurance sales and expanding the Iscar MetalworkingCos. unit on the continent. Korea, Japan and you name it, Buffett, 81, said May 5 at Omaha,Nebraska-based Berkshire s annual meeting. Buffett visited South Korea, Japan and India last year, and Chinain 2010. |
Berkshire owned almost 4 million shares of South Koreansteelmaker Posco and a stake in Chinese carmaker BYD Co. (1211) asof Dec. 31, according to regulatory filings. Japan, rebounding froma March 2011 earthquake and tsunami, and Thailand, which sufferedrecord floods last year, are among countries where Berkshire hasincreased sales. The reinsurance unit has done far more business in Asia inrecent months that it did a few years ago, he said at the meeting.Berkshire s International Dairy Queen Inc.
ice-cream unit, led byCEO John Gainor, recently opened its 500th store in China, wherethe Green Tea Blizzard dessert is the No. 1 seller. The subsidiaryhas more than 270 outlets in Thailand and expanded into Singaporelast year. China is far and away our fastest-growing market, Gainor saidyesterday in an interview for Bloomberg Television s In theLoop program with Betty Liu. Asia, a region with the world s two-fastest-growing majoreconomies, has become a focus for Berkshire as subsidiaries seeknew markets.
China s gross domestic product expanded by 9.2percent last year and India s by 7.1 percent as U.S. GDP growthslowed to 1.7 percent from 3 percent a year earlier, according todata compiled by Bloomberg. Huge Companies China s got some huge companies, Buffett said. They mayeclipse in market value some of the ones such as Coca-Cola thatwe re talking about. Berkshire is Atlanta-based Coca-Cola Co.
(KO) s biggest owner,with 200 million shares on Dec. 31, a stake of almost 9 percentthat was valued at $15.4 billion at the end of last week. A shareholder at the meeting asked Buffett and Berkshire ViceChairman Charles Munger what advice they might give China spolitical and business leaders. We re not spending much time giving advice, Munger said. China s been doing very well from a tough start.
In some ways weshould seek advice, he said. Demand for electric cars such as those produced by Shenzhen-basedBYD will grow and the automaker s products will take market sharein the U.S., Munger said. The car market in China is a huge market, he said. I think thefirst cars they start to bring here will be fleets to California. Neck Breakers Berkshire announced its entry into India s insurance market lastyear by selling motor coverage after striking a deal withPune-based Bajaj Allianz General Insurance.
The company is expanding in Europe, too. CTB Inc., thefarm-products firm that Buffett bought in 2002, agreed to acquireOostzaan, Netherlands-based Meyn Holding BV to expand into neckbreakers and eviscerators for chickens. Buffett, who s also Berkshire s chief executive officer, visitedJapan in November to tour a factory run by Iscar s Tungaloy unit,which makes tools for the automobile and aviation industries. Hehad canceled a trip in March 2011 after the earthquake and tsunamitriggered a nuclear meltdown.
Buffett said the event created a buying opportunity for investors because it wouldn t changethe country s economic future even as it would take time torebuild. Cutting Tools Buffett paid $4 billion in 2006 for an 80 percent stake in Tefen,Israel-based Iscar, which also has invested in TaeguTec Ltd., acutting-tools maker based in Daegu, South Korea. The products they sell are going to be sold around the world, Buffett said of Iscar at the meeting. Lubrizol Corp., the chemical maker Berkshire acquired in September,is building a manufacturing plant on a 400,000- square-meterproperty within the Zhuhai Gaolan Port Economic Zone in southernChina at a cost exceeding $200 million, Berkshire said in itsannual report.
Berkshire units related to aircraft also are expanding in Asia.NetJets Inc., the private-plane operator based in Columbus, Ohio,said in March that it will form a venture in China as rising wealthand trade spurs demand for luxury flights. Millionaires in theAsia-Pacific region outnumbered those in Europe for the first timein 2010, Capgemini SA and Merrill Lynch Global Wealth Managementsaid last year. The China operations will be part-owned by investors including HonyCapital Ltd. and Fung Investments, and based in Zhuhai, which is anhour from Hong Kong by ferry, NetJets said in a March 26 statement.
Learning Center Berkshire s FlightSafety International Inc., which provides flightsimulators and aviation-safety training to commercial pilots andthe U.S. military, has bolstered its Asia presence. The NewYork-based firm, along with Gulfstream Aerospace, opened a HongKong learning center as the number of training events thatFlightSafety has provided to operators of Gulfstream aircraft inthe Asia-Pacific region rose 230 percent in the past five years,according to a Feb. 14 statement.
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