Warren Buffett: WE LOVE THIS COMPANY IN ISRAEL 💙 Munger: It's our biggest investment outside the US💰

Warren Buffett and Charlie Munger are talking about their favorite company in Israel, namely ISCAR.

Warren Buffett and Charlie Munger bought 80% of ISCAR in 2006 for $4 billion and a few years later, they acquired the remaining 20% for $2 billion.

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Iscar (IMC) has five primary product lines: milling tools, gripping tools, turning/thread tools, drilling tools and tooling. The main products are split within each product line between consumable cemented tungsten carbide inserts and steel tool holders. Inserts comprise a major portion of IMC’s sales and earnings. Metal cutting inserts are used by industrial manufacturers to cut metals and are consumed during their use in cutting applications. IMC manufactures hundreds of types of highly engineered inserts within each product line that are tailored to maximize productivity and meet the technical requirements of customers. IMC’s staff of scientists and engineers continuously develop and innovate products that address end user needs and requirements.

Iscar's global sales and marketing network operates in nearly every major manufacturing center around the world, staffed with highly skilled engineers and technical personnel. IMC’s customer base is very diverse, with its primary customers being large, multinational businesses in the automotive, aerospace, engineering and machinery industries. IMC operates a regional central warehouse system with locations in Israel, the U.S., Belgium, Korea, Japan and China. Additional small quantities of products are maintained at local IMC sales offices to provide on-time customer support and inventory management.

Iscar competes in the metal cutting tools segment of the global metalworking tools market. The segment includes hundreds of participants who range from small, private manufacturers of specialized products for niche applications and markets to larger, global multinational businesses (such as Sandvik and Kennametal, Inc.) with a wide assortment of products and extensive distribution networks. Other manufacturing companies such as Kyocera, Mitsubishi, Sumitomo, Ceratizit and Korloy also play a significant role in the cutting tool market.

Cemented tungsten carbide powder is the main raw material used in manufacturing cutting tools. Most of IMC’s insert products are made from tungsten. While supplies are currently adequate, a significant disruption or constraints in production processing facilities could cause reduced availability and increased prices.

IMC is committed to following and complying with all government and environmental rules, regulations and requirements and applicable laws. IMC considers environmental preservation and pollution prevention as important factors in all operations and activities. IMC production facilities are built with the highest standards and follow all applicable regulations.

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Here's som key points from the video:

The best company in its field in the world.

extremely well-managed, profitable, really extraordinary company called ISCAR.

No, this is a real quality enterprise, and these people know how to do some things that we don’t know how to do. A lot.

The business has done terrifically. The people have behaved magnificently, and ISCAR will be part of Berkshire forever

Sandvik is a very good company, and ISCAR is a much better company.
The advantage it has is brains and incredible passion for the business.
It’s interesting to reflect on ISCAR because if you go back to — what would it be? — 1951 or thereabouts, when Stef Wertheimer, who had come from Germany, was in Israel, started ISCAR, just think of the prospect that was facing him.

Here was a company like Sandvik, or in this company — country — Kennametal, or different countries, well-entrenched companies, well-entrenched, well-financed.

And here’s this fellow in Israel, 25 years old, and the raw material for these cutting tools comes from China. It isn’t that the raw material is in Israel.
So everybody buys their tungsten from China, and they sell to customers that are using large machine tools throughout the world, but they’re selling it to heavy industry to a significant extent.

So they’re selling to people like Boeing or General Motors or big industrial companies in Germany, and there’s no great locational advantage, in terms of being in Israel doing this.

But here’s this 25-year-old fellow getting the tungsten from thousands of miles away, selling it to customers thousands of miles away, competing against people like Sandvik, and this remarkable business, ISCAR, comes from that.

[jeferson_s]

I really appreciate all the efforts that you put into making these videos which includes adding subtitles, presenting some important and relevant facts about the company that is being discussed.
Please keep posting. It is such a great learning resource for all value investing enthusiasts.
Much Love ❤

[becut]

I admire Buffet. But he was quite ignorant about what Israel has done and continues to do to the Palestinians. The right thing to do is to divest from Israel.