2010-02-06 05:00:03.0 GMT

By Andrew Frye
Feb. 6 (Bloomberg) — Warren Buffett, the billionaire
chairman of Berkshire Hathaway Inc., told employees of the
firm’s hog-products unit he expects the operation to expand for
decades.
“CTB has been moving ahead every year since we bought
it,” Buffett said in a video posted on the Web site of CTB
Inc., Omaha, Nebraska-based Berkshire’s agriculture-equipment
unit. “We’ll hit a bump in the road every now and then but
we’re looking at a superhighway out there in front of us.”
Buffett became the second-richest American by investing in
businesses he expects to grow for decades. He’s said his $26
billion takeover of railroad Burlington Northern Santa Fe Corp.,
announced in November, will benefit Berkshire “over the next
century.” CTB, which Berkshire bought in 2002, may produce
profits beyond the year 2200, Buffett, 79, said in the video.
“Most years are going to be good, a few years will be
standouts, and there will be a few that are bummers,” Buffett
said. “But that’s the way we look at everything here at
Berkshire Hathaway. We’re going to be in these businesses for
100 years or 200 years.”
CTB, which sells feeders and stalls under the PigTek and
Chore-Time Hog brands, has expanded abroad by buying businesses
in Israel, Germany and the Netherlands. Chief Executive Officer
Victor Mancinelli persuaded Buffett to buy his firm. Howard
Buffett, a farmer and the billionaire’s son, endorsed the deal.

Good Things

“I checked with Howie; he told me CTB was an absolute
first-class company and he’d heard good things about Vic,”
Buffett said. “Howie would rather spend an evening on a tractor
in the field than a date with Angelina Jolie, which is not true
of all members of the family, but that’s true of Howie.”
Howard Buffett has been picked to succeed his father as
Berkshire’s chairman when Warren Buffett’s tenure, entering its
fifth decade, comes to a close. The elder Buffett, who owns
about a quarter of Berkshire and is its CEO, has said settling
on his eventual replacement as chief is the No. 1 responsibility
of the firm’s board.
In the CTB video, Buffett praised Mancinelli. “Vic is a
manager that could run any company in the Fortune 500,” Buffett
said. “He’s done a wonderful job for us.”
U.S. hog farmers have shrunk the size of sow herds to the
smallest since at least 1976, as feed prices jumped to a record
in 2008 and the recession and an outbreak of swine flu sapped
pork demand in 2009.

‘Year After Year’

“There will be low prices and there will be high prices,”
Buffett said. “But the one thing you can be sure about is that
our industry is going to be there year after year after year.”
Berkshire’s acquisition of CTB was valued at $177 million,
according to Bloomberg data. Six years later, in 2008, the unit
produced pretax earnings of $89 million, Buffett said in the
company’s 2009 annual letter. CTB bought six companies in the
interim, including Swine Services Specialists Inc. and Porcon
group of Deurne, the Netherlands.
“The CTB story is just starting,” Buffett said. “I am 79
so I’ll be 100 in 2030. Stay tuned for a rebroadcast at that
time and I’ll be telling you about all kinds of wonderful things
that have happened in the company. It’s in the right industry.
Farming is as fundamental as things get in this country.”

For Related News and Information:
Berkshire earnings news: BRK/A US TCNI ERN
Stories about hogs and Nebraska: TNI HOG NE
Berkshire’s balance sheet: BRK/A US CH3 Q
Suggested search on merger speculation: STNI MERGERSPEC
Top insurance news: TINS
Global insurance company securities monitor: INS

–With assistance from Whitney McFerron in Chicago and Joel
Schectman in New York. Editors: Dan Kraut, Erik Holm.

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