All posts by James Cannon

About James Cannon

James Cannon is an experienced hedge fund analyst. He has served on the advisory boards for various different Fortune 500 companies as well as serving as an adjunct professor of finance. James Cannon has written for a variety of Financial Magazines both on and off line. Contact James at james[at]businessdistrict.com

California Rice Grower Signs Deal to Sell Rice to China

News,

After trying for 15 years to break into the Chinese rice market, a 100-year old family business based in Sacramento has cut a deal to sell its rice in China. In July, Sun Valley Rice became the first US company to sell its rice in China.


“China has been tough to get into because for many years it was illegal to sell our rice there,” said Betsy Ward, president of USA Rice, a national trade association.


Until a 2018 agreement was forged between the US and China, it was illegal for the US to sell rice to China. When that law was lifted over 25 US companies were approved to sell their rice to China. Sun Valley became the first to make a deal.


“We would travel regularly to China to research [the market], attend trade shows and meet the industry players,” said Ken LaGrande, who founded Sun Valley Rice with his father Michael in 2000. “It was a commitment we made as a family to persist. So when the opportunity opened up, we were ready.”


The LeGrande Family has been producing rice in the Sacramento Valley since the 1920s LaGrande’s great-grandfather saw that the area’s climate, water supply, and soil was correctly proportioned to perfectly grow rice. Over the years the family incorporated other parts of rice production into their business, including drying and milling. This business became the LaGrande Family Foods Group. Now the Group is composed of many different operations, including farming, sprouting rice and milling sake.

Rice fields north of the City of Sacramento. Photo Courtesy of Mark Miller.


Almost 20 years ago, in 2000, LaGrand and his father Michael saw an increased market demand for high quality, specialized rice. That is when Sun Valley Rice was born.


“Sun Valley Rice now is a fully integrated arm of the family business, ‘from farm to fork’ if you will,” said LaGrande. “We source rice from 200 farms, or about 10% of the rice crop gown in California. And we handle drying, milling, packaging and marketing of the rice.”


It is likely other rice growers will also land deals to sell their rice in China.


“We have the first sale. But we really hope there will be strong continuing demand for American rice in China, and that allows, in turn, more opportunity for farmers back in California,” LeGrande said.

Textbook Publisher Phasing Out Printed Textbooks

Education, ,

Pearson, the world’s biggest publisher of educational books, has taken step one in its journey to eventually discontinue the production of physical textbooks. The company said that from now on students will only be able to rent textbooks, which will not be updated as often as before. The hope is that students will be purchasing the company’s e-textbooks, which will be updated continually.


John Fallon, head of Pearson said that his company is now “over the digital tipping point.”
Fallon explained that today their annual revenue is half from digital sales. Therefore, they decided, similar to other industries like newspapers or music, that it is time to march forward in the way they make and create their products.


Currently Pearson makes 20% of its revenues from US textbooks. However, it has become more difficult as students increasingly switch to renting second-hand textbooks instead of buying new ones, to save money. In response Fallon said that Pearson will put an end to revisions of print books every three years, a practice that has been the industry standard for over 40 years.


This translates to updating only 100 of Pearson’s 1,500 total titles that are in print, significantly down from the 2019 figure of 500.


“There will still be [print] textbooks in use for many years to come but I think they will become a progressively smaller part of the learning experience,” Mr Fallon said. “We learn by engaging and sharing with others, and a digital environment enables you to do that in a much more effective way.”

Ericsson’s First Smart Factory is Coming to Somewhere in the USA

Communications, News,


Although its exact location has not yet been announced, Ericsson confirmed that it is going to build its first smart factory in the USA soon. The factory will be fully automated and will build advanced antenna system radios as well as 5G radios. The products are both essential components for the insertion of 5G networks into North America.


The new factory is an additional component of the company’s global supply chain. Already working closely with its customers in Europe, Asia and America, Ericsson is continuing to insure they meet their customers’ needs.


Vice President and Head of Networks for Ericsson, Fredrik Jejdling, said;


“We continue to focus on working closely with our customers and supporting them in the buildout of 5G globally and in North America. In addition, we are digitalizing our entire global production landscape, including establishing this factory in the US. With 5G connectivity we’re accelerating Industry 4.0, enabling automated factories for the future.”


The company says that they want to open the new factory by the beginning of 2020. Their vision is that the new smart factory will be powered by Ericsson 5G solutions which are built specifically for industry. The operation will help to promote sustainability, including the goal of receiving LEED Gold Certification.


In the early stages the new factory will employ about 100 human workers working in tandem with the automation. The company already has a new R&D facility and software development center in Austin, Texas, which is already near the Austin ASIC Design Center. The Center opened at the end of 2017 and builds core microelectronics for 5G radio base stations.

Economic Growth Passes Previous Record for Duration

Economy

The economy broke a record at the end of June when it surpassed the previous longest period of growth of 120 months, or ten uninterrupted years.


The previous record was set when the US economy didn’t stop growing from March 1991 until March 2001 during which time the average annual real GDP grew by 3.6%. The record-breaking growth we are in now began in June 2009, and is still expanding, although the average annual real GDP has only been 2.3%.


The previous expansion that ended in March 2001 came to its unhappy end when the dot-com bubble burst.


Compared to other expansions, which were far shorter, growth was faster. For instance, during the 45-month expansion from October 1949 until July 1953, the economy grew by 6.9%. Between April 1958 and April 1960, the economy expanded by 5.5%.


Studies have shown that the expansion has not benefited all Americans equally. Steven Pressman of Colorado State University, a professor of economics who is concerned with income inequality, says that 60% of economic gains have benefited the top one percent of the population.


One example Pressman cites are the salaries of schoolteachers. Adjust for inflation, their incomes declined in 2018, by about 0.3%. During the same time period the median pay for top CEOs in the US, including non-salary compensation, climbed by 65%, adjusted for inflation between 2009 and 2018.

Toys R Us Making a Comeback

Companies,


Former global chief of merchandising and present CEO of Tru Kids Brands, Richard Barry, says he would like to open at least two Toys R Us Stores in the United States in 2019, according to someone who is aware of Barry’s plans.


Last October Tru Kids Brands won the rights to the Toys R Us brand after the company went bankrupt last year. Tru Kids also owns the rights to the company’s other assets such as Babies R Us and Imaginarium.


“We’re definitely coming back in 2019. At minimum two stores. There’s more planned for 2020,” the unnamed person said.


That person added that the new stores will be smaller than the old ones and will be more “experiential.”


“We have significant interest about how to bring the brand back to the US,” Barry explained to CNN Business earlier this year. “We’re working 24 hours a day, 7 days a week to bring it to life.”