Buffett ‘Magic’ Assists Iscar in Bid to Double Tools Business
“When you go around the world with him it’s like magic,” Eitan Wertheimer, chairman of the Tefen, Israel-based company, said in an interview in Caesarea broadcast today on Bloomberg TV. Wertheimer has traveled with 82-year-old Buffett to India, China and Japan. The business “couldn’t afford” not to have him come along, Wertheimer said.
The company, known as Iscar, was founded in 1952 by Eitan’s father Stef Wertheimer from an old rented shack. It makes cutting gear for industries including aerospace and auto manufacturing. Buffett’s Omaha, Nebraska-based Berkshire paid $4 billion in 2006 for an 80 percent stake in the company, which has about 11,000 employees worldwide.
“I would love to see Iscar doubling itself,” said Eitan Wertheimer, 61, declining to provide a time frame or financial details on the company. “I think we have a good chance to double ourselves.”
It will probably take Wertheimer a decade to meet his goal, said Martin Prozesky, a London-based analyst at Sanford C. Bernstein.
Iscar controls about 8 percent of the market, compared with about 20 percent held by competitor Sandvik AB (SAND), Prozesky said. “Positioning yourself as a good growth brand in China is a key challenge,” he added.
Israel is seeking to boost sales to fast-growing economies such as China as Europe continues to struggle and global trade has slowed. Exports account for about 40 percent of Israel’s gross domestic product.
Even with slower growth, China is “an amazing market” for Iscar, Wertheimer said.
Buffett’s involvement is a “huge” endorsement for Iscar and “definitely helps them gain new customers,” Prozesky said.
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