Visy Industries

Visy Industries
Headquarters Melbourne, Australia
Website www.visy.com.au

Visy Industries was established in Melbourne, Australia in 1948 and has since grown to become one of the world’s largest privately owned paper, packaging and recycling companies. Today, Visy employs more than 9500 people in Australia and the United States (where it is known as Pratt Industries USA), with total sales exceeding more than $5 billion. Visy was owned by Richard Pratt until his death on 28 April 2009.[1] when his son Anthony Pratt assumed the role of Executive Chairman. He has also presided over a major expansion into the Asian packaging market and moved to position Visy as a key player in food security for the region.

Today, Visy’s operational footprint extends from Sydney to Singapore, from Shanghai to San Francisco, with more than 180 facilities worldwide.

History

Visy Industries began in 1948 with a 1000-pound loan from Richard Pratt’s aunt, Ida Visbord, for whom the company is named. Originally, there were three partners – Visbord’s husband Max Plotka, Richard Pratt’s father Leon and engineer Les Feldman. From the day Visy opened for business in a Fitzroy, Melbourne factory there were indications this would be a company devoted to recycling and sustainability – the first corrugator it used was made from spare parts and recycled scrap metal.

After Leon Pratt’s death in 1969, his son Richard Pratt took over the reins and oversaw a dramatic expansion. Throughout the 1970s, Visy established new plants in New South Wales and Queensland, and by the end of the decade was making more than 100,000 tonnes of boxes a year.[2] In the late 1970s and early 80s, Visy continued to grow but this time its major expansion was spearheaded by the decision to build 100% recycled paper mills, the first at Warwick Farm, Sydney. This decision not only signaled a shift in Visy’s corporate philosophy but placed the company at the forefront of the recycling movement in Australia, setting the company on the path to record growth and profits. By 1990, Visy’s national market share was over 40% with more than 2000 employees.[3]

Richard and Anthony Pratt then set their sights on the huge American market, with the younger Pratt moving to the U.S. to oversee the start-up and development of Pratt Industries USA. Through a combination of acquisition and greenfielding 100% recycled paper mills and state-of-the-art corrugators, Pratt Industries USA showed remarkable progress in the ensuing two decades, growing from the 46th largest corrugated packaging producer in America to the 5th.[4] Today, Pratt Industries USA employs more than 4000 people, more Americans than any other Australian company. It is the only major paper company in the US that is 100% recycled.

2001-2003 - Tumut and Southcorp

In 2001, Visy undertook the-then largest development in its remarkable history was the construction of a $450 million kraft paper mill in Tumut, New South Wales – the first kraft mill built in the world in 20 years. It was the biggest investment in regional Australia since the Snowy Mountains Scheme (RP Speech), and was hailed by Australia’s leading environmentalists for its commitment to sustainability.[5] It also boasts an advanced water usage system, with near-zero levels of effluent leaving the site. In fact, the Tumut mill is the most water efficient in the world - requiring just five tonnes of water to produce every tonne of product, compared to the global average of 25 tonnes. And it uses only forest thinnings and off-cuts for fibre.[6]

The project was so successful that 10 years later Visy built Stage 2 on the same site – a second kraft paper mill bringing the total investment to Tumut to almost $1 billion. Stage 2, which was opened by NSW Premier Barry O’Farrell, was also hailed by environmentalists, and was a winner of the Australian Business Awards for “Environmental Sustainabilty."[7]

Visy continued to grow by acquisition as well as green-fielding. In 2001, the company effectively doubled in size when it acquired Southcorp Packaging. Visy was now operating at over 100 packaging and recycling sites in Australia, New Zealand and the U.S. Moreover, Visy expanded its product mix to include steel and aluminum cans, PET bottles, beverage cartons and plastic packaging. It also continued to be a world leader in recycling and during this period Visy opened Australia’s largest Materials Recovery Facility (MRF) in Smithfield, NSW.[8]

Philanthropy

The Pratt Foundation was established by Richard and Jeanne Pratt in 1978 to support various charitable causes and initiatives throughout Australia. Since then, it has donated more than $250 million. In addition, Jeanne and Richard Pratt helped raised a further $250 million by opening their home, Raheen, to other charitable fundraisers. The Foundation is chaired by Anthony Pratt’s sister, Heloise Waislitz. Its chief executive is Sam Lipski, a Melbourne-based journalist, and supports areas including medical research, education, the arts and relief of poverty.[9]

The Pratt family is also behind VisyCares, a non-profit begun in 1995 which promotes social responsibility at Visy through donations to establish community-based projects such as youth, immigrant and learning centres.[10]

Controversy

In December 2005 the Australian Competition and Consumer Commission (ACCC) commenced prosecution against Visy for alleged involvement in a cartel in the packaging industry. In 2007, Richard Pratt and the Visy group received a A$36 million fine for price fixing, representing the largest fine in Australian history at the time. That same year it was also learned that Visy was also one of a number of Australian companies that had used a trucking company later proved to be run by a former Hell’s Angel.[11][12]

In 2009, upon Anthony Pratt’s ascendency to Executive Chairman, Visy appointed former ACCC Chairman Professor Allan Fels to chair its Governance Committee.[13]

In addition, Pratt also announced former advisor to President Obama and the outgoing US Ambassador to Australia Jeffrey Bleich would join his company’s advisory board. Bleich, an ex-clerk for former U.S. Supreme Court Chief Justice William Rehnquist, was a one-time special counsel to the President before being appointed Ambassador. He joins other advisory board members including Sir Dryden Spring, the former chairman of the Australian New Zealand National Bank, Allan Moss (AO), the former CEO of the Macquarie banking group and Jeanne Pratt (AC).[14]

In 2016 the Australian Taxation Office revealed that in 2013-14, despite earning more than $2.5 billion in revenue, the holding company Pratt Consolidated Holdings had paid no tax. Further, that Thorney Investments, operated by Richard Pratt's son-in-law Alex Waislitz, which earned $430 million in revenue, had also paid no tax.[15]

Visy Industries has strong links with the outlaw motorcycle group, the Hells Angels. Visy Industries employs a trucking company run by Stephen James Rogers, a convicted drug trafficker and founding chapter boss of the Hells Angels. Rogers was sentenced in 2007 to three years' prison for drug trafficking, and a senior Visy Industries manager gave character evidence for Rogers at his trial and stated the company would stand by him despite his conviction for trafficking amphetamines.[16] In 2012 Visy Industries was accused of using the Hells Angels to collect their debts. Police and industry sources state Visy founder Richard Pratt, who died in 2009, personally approved the deal with the Hells Angles. Visy Industries have called the accusations "nonsense".[17]

Post 2009 leadership under Anthony Pratt

Anthony Pratt

Following Richard Pratt’s death in April, 2009, Anthony Pratt returned to Australia to assume the added responsibility of Global Executive Chairman of Visy Industries. This was in addition to him continuing in his long-time position as Chairman of Pratt Industries USA. Just two years after he assumed leadership of the company, Visy jumped from 43rd to 3rd in the AMR Corporate Citizenship Index, part of an annual survey of more than 60,000 Australians.[18]

Under Anthony Pratt’s leadership the company has also expanded its Asian presence and participation. Earnings from its Asian operations have increased by $100 million a year.[19] This was achieved in several ways. Firstly, Visy established Build Run Repair, an engineering services company headquartered in Singapore to design and build sustainable pulp and paper mills and clean energy plants, leveraging the company’s experience gained from building its own 15 paper mills and 4 clean energy plants.

Its internal team of more than 40 engineers is also charged with maintaining Visy’s worldwide portfolio of factories as well as source equipment and products from China, Vietnam, Malaysia other Asian countries. In addition, the Singapore operation houses a trading company. Its mission is to buy hundreds of millions of dollar worth of goods and services for both Visy and external customers.[20] This period has also seen the growth of Visy’s Thailand operations, which produce plastic products. The Thailand success builds on Visy’s strategy of following its multinational customers into Asia.

Visy has also set up warehouse distribution centres outside Shanghai and Beijing, as well as a trading office in Shenzhen which is selling Visy paper into the Chinese market. Visy’s growing focus on Asian markets received a major boost in 2013 when Anthony Pratt announced plans to double the company’s earnings in the region by building new packaging plants in at least four South-East Asian countries. They will be modeled on the group’s existing plastics plants in Thailand, Vietnam and Malaysia.[19]

Work on the $260 million project is scheduled to begin in March, and will take 16 months. The 360,000-ton capacity plant will be built on a 50-acre site adjacent to Pratt’s box-making plant in Valparaiso, Indiana, the world’s largest. The new mill is expected to propel Pratt’s USA sales to $2 billion.[21]This follows other mills Pratt built in the USA, most notably in New York City. That facility represents the largest manufacturing investment in the city since World War 2. And it is the only paper mill ever built in New York. New York Mayor Michael R. Bloomberg designated September 17, 2013, as “Pratt Industries Day” in the Big Apple, in tribute to the company’s commitment to recycling and the environment.[22] In a video posted on YouTube, entitled “NYC Mayor Salutes Pratt Industries,” Bloomberg cited a proclamation honoring Pratt’s mill for having recycled 5 million tons of discarded paper since start-up in 1997.

Pratt also wants to ramp up Visy’s logistics operations to help spearhead a four-fold increase in Australia’s food exports to Asia, especially China.[23] Visy is already the largest exporter of shipping containers from Australian ports at approximately 60,000 per year.[24] Since his return to Australia, Pratt has taken a strong interest in sustainable agriculture and food security. More than 70 percent of Visy’s customers are in the food and beverage industries.

In April 2013, Pratt gave the keynote address at the Global Food Forum, a major international conference on food security he organized in partnership with The Australian newspaper. Pratt said it was possible for Australia to sustainably quadruple its current food production through greater support for farmers and food companies and eventually feed 200 million people.[25] The conference attracted leading political, agribusiness, food industry and academic figures.[26]

In September 2013, Pratt was elected an executive member of the Australia-Japan Business Cooperation Committee, a group dedicated for more than 50 years to strengthening ties between the two countries. It includes some of the most prominent business leaders in Australia, and is chaired by former British Airways CEO and current News Corporation director Sir Rod Eddington (AO).[27] In October, Pratt’s growing business interests in Asia prompted Australia’s new Prime Minister Tony Abbott to invite him on an official visit to Indonesia – the first overseas’ trip by the incoming leader.[28]

Sustainability

Pratt has organised the build of a $50 million, 100% recycled plastics plant in Sydney. This plant will enable Visy to make its PET and HDPE bottles out of 100% recycled plastic resin for everything from soft drink bottles to shampoo bottles to milk bottles. At full capacity, this facility will remove some 2 billion plastic bottles from the waste stream and recycle them into new bottles.[19]

Visy-Pratt Industries USA have continued to build clean energy plants which now include facilities in Tumut, Atlanta, Ga., Melbourne and Queensland. These not only provide coal-free energy – thus reducing the company’s carbon footprint – but they allow Visy to expand its recycling capabilities to beyond converting paper and plastics into 100% recycled products. It will also enable the company to convert almost all remaining garbage into clean energy, thus helping close down landfills.[29]

Awards

Visy has won awards including the 2011 Australian Packaging Design Awards where it was named Overall Show Winner at the Packaging Council of Australia annual awards.[30]

In 2013, Visy and the Banksia Foundation – a leading Australian non-profit which promotes environmental excellence - teamed up to inaugurate the Richard Pratt-Banksia CEO Award. The award recognizes an individual executive’s contributions towards the economic, social and environmental sustainability achievements of the organisation or company he/she leads. The award was named in honour of Pratt, who was seen as one of Australia’s leading agents of change in the environmental sector. The 2013 winner was Ravi Naidu, CEO of the Cooperative Research Centre for Contamination Assessment and Remediation of the Environment. Naidu is a national leader in his field.[31]

Visy was also the 2004 Banksia Environmental Gold Award winner.[32]

References

  1. ↑ "Richard Pratt dies". Brisbane Times. April 28, 2009. Retrieved 17 May 2012.
  2. ↑ "Visy Report 2011" (PDF).
  3. ↑ "Visy - Our History". Visy.
  4. ↑ "FibrBox.org". Fibre Box Association.
  5. ↑ "'Greenies' rare approval as Tumut pulp mill opens". Canberra Times. 2011-11-23.
  6. ↑ "Visy paper mill expansion gets go ahead". ABC.net.au. Retrieved 05/02/2007. Check date values in: |access-date= (help)
  7. ↑ "Visy recognized with Australian Business Award for Environmental Sustainability". SustainabilityMatters.net.au. Sustainability Matters. Retrieved 08/03/2010. Check date values in: |access-date= (help)
  8. ↑ "Dick Pratt's $3.5bn succession plan". Australian Financial Review. 2005-09-09.
  9. ↑ "Our heroes philanthropic". Herald Sun. 2013-03-25.
  10. ↑ "Ali wins hearts with intimate combination". The Age. 09/12/2000. Check date values in: |date= (help)
  11. ↑ "Amcor, Visy settle $500m cartel claim". The Australian Financial Review. 03/09/2011. Check date values in: |date= (help)
  12. ↑ "Bikies for hire - Cops uncover Hells Angels link to corporate giant". Herald-Sun. 2012-05-14.
  13. ↑ "Pratt takes reins as CEO departs". The Australian Financial Review. 2009-08-20.
  14. ↑ "US ambassador for Pratt advisory board". The Australian. 10/11/2013. Check date values in: |date= (help)
  15. ↑ "98 private companies earning over $200m pay no tax: ATO". ABC News. Retrieved 2016-04-04.
  16. ↑ McKenzie, Nick (6 July 2009). "Visy linked to Angels bikie boss". The Age. Retrieved 17 May 2012.
  17. ↑ Moor, Keith (14 May 2012). "Cops uncover Hells Angels link to corporate giant Visy". Herald Sun. Retrieved 17 May 2012.
  18. ↑ "JB Hi-Fi tops but crisis effect not over for DJs". The Australian Financial Review. 2011-04-16.
  19. 1 2 3 "Visy bid to double Asia earnings Pratt unveils strategy for regional growth". The Australian. 03/11/2013. Check date values in: |date= (help)
  20. ↑ "Visy expansion rolls on with US35m US Plant". The Australian. 2012-05-05.
  21. ↑ Kitney, Damon (23 September 2013). "Paper giant Pratt plans US boost". The Australian.
  22. ↑ "Staten Island Mill Marks Its 5 Millionth Ton of Recycled Paper". SILive.com.
  23. ↑ "Planting seeds for food security". The Sydney Morning Herald. 2011-11-16.
  24. ↑ "Pratt sees future in food exports". The Australian Financial Review. 2012-11-19.
  25. ↑ "Global Food Forum". The Australian. April 2013.
  26. ↑ Asia food bonanza 'our next boom', says Anthony Pratt - "The Australian" April 18, 2013
  27. ↑ AJBCC Members List (PDF)
  28. ↑ Maher, Sid (2 October 2013), "Abbott's focus on international trade delights CEOs", The Australian
  29. ↑ "Visy flags $306 million clean-energy plan". Plastics News. 2011-12-12.
  30. ↑ "2011 Southern Cross Packaging Design Awards".
  31. ↑ "Banksia Award for Cleanup Leader".
  32. ↑ "Package deal is a winner". The Australian. 2004-10-22.
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