Fire in the belly: Thomas Foods CEO Darren Thomas on the company’s long road back from the brink of disaster
When the company’s abattoir at Murray Bridge was destroyed by fire, Darren Thomas vowed to rebuild, now he believes the company will emerge from the disaster stronger than before
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It had been a busy year for Darren Thomas. Keeping track of a growing global company like Thomas Foods International requires the kind of overseas travel that would make a Qantas pilot wince. Thomas likes to work hard. His father Chris, who started the company with Bob Rowe, says his son is “a bit of a perfectionist”.
But as 2017 rolled into 2018, Darren Thomas decided he needed a rest and took some time off, heading to the family’s beach house at Port Elliot. “I said to my father, ‘I’m going to try and get a couple of weeks off down the beach’.”
The holiday lasted five days. That’s when the future of one of the state’s most successful and fast-growing companies was suddenly thrown into doubt as fire swept through Thomas Foods’ most important asset – its Murray Bridge abattoir on January 3.
By SA standards, Thomas Foods is a big company.
It turns over $1.5 billion a year, employs about 1000 people, exports to more than 80 countries and owns businesses in Europe and the US.
At its Murray Bridge facility it processed 11,000 sheep and lambs a day, as well as 6000 head of beef.
It was the heartbeat of the operation and it was burning.
The first hint of trouble arrived by text to Thomas, now 46, from one of the plant’s managers at around three in the afternoon.
“We’ve got a small fire at the plant but it’s under control,” it said.
Thomas rang his 70 year-old father and told him there was a blaze but not to worry.
He felt comfortable enough to head to his next-door neighbour in Port Elliot to enjoy a summer beer.
Half an hour later he took a call from the company’s chief operating officer David McKay. Simultaneously, another text arrived. This time the message was more serious.
The fire had not been contained. It had accelerated and the plant’s 900 workers were being evacuated.
Over the next few hours McKay sent updates, and then photographs started to appear on social media. “There’s photos coming up of the smoke on Twitter,” Thomas remembers.
“So, from that point we knew it was fairly serious.”
His first thought after the fire started had been for the safety of the workers.
“The next level of emotion is well, is this real?” he says.
Thomas’s next thought was for his father.
“I probably at that time felt more for my dad than anything. Working his whole life and putting his heart and soul into it, to see that taken away in such a short time.”
Darren Thomas didn’t make the 90km trip from Port Elliot to Murray Bridge that night.
First he hit the phone, talking to staff at Murray Bridge as well as customers and suppliers across Australia and overseas; then he drove to the company’s city office on the edge of Victoria Park to co-ordinate the response.
It wasn’t until the next day he was confronted with the full horror of the situation.
“I arrived the next morning with my father to see the enormity of it,” he says.
“It wasn’t like disbelief. I had sort of prepared myself for that. It was just amazing how quickly and how much the plant had been damaged.”
Chris Thomas and Bob Rowe had bought the Murray Bridge facility in 1999. At the time it was a giant risk. The size of the company, then called T & R Pastoral, grew exponentially overnight. And it had kept growing to a point where its annual revenue was about $1.5 billion.
But now, the scene was one of devastation. Both Darren and Chris were stunned by the intensity of the fire, by seeing their life’s work burning down in front of them.
“Just the ferocity. I remember seeing 600mm steel beams sagging nearly a metre,” Darren says.
“You’re just seeing steel girders looking like spiral spaghetti,” recalls Chris.
“It was difficult to comprehend just how ferocious that fire was.”
Establishment 533, as the Murray Bridge plant is known in the livestock world, covers an enormous area. It has been built, rebuilt and added to over many decades, and spanned more than six levels.
On the day of the fire, around 900 people were working there. And the fire happened at the worst possible time. The second shift of the day had just started, meaning hundreds of workers from the first shift were still on site.
“It could have been a tragedy of multiple fatalities, so to not even have one injury for our staff or first responders with the enormity and the ferociousness of the fire was just a testament to all those people,” Darren Thomas says.
Not that he calls it a “miracle”. What it is, he says, is proof of the talents of those who worked there and the systems put in place to cope with emergencies. Just weeks before the blaze started, there had been a fire drill at the plant. So everyone knew what to do.
Operations manager David McKay says there was a “comfort” in having a process. “Yes, those people have been accounted for, that’s confirmed by a second person. It’s not just ‘I think’, or ‘I know’. It’s ‘I’m sure’.”
The fire burned for 10 days.
But on day one, Thomas fronted the media and promised the plant would be rebuilt. It was a big call. To build a replacement would cost hundreds of millions of dollars. And people were already asking whether Thomas Foods could recover from what some regarded as a fatal blow.
In the months to come, Thomas heard the doubts and the rumours that the company was finished. That this “could break them”.
Certainly, Darren and Chris could have taken what would likely have been a massive insurance payout and disappeared into a life of luxury.
But, from the Thomases point of view, there was a sense of obligation. To those whose livelihood depended on them, to the farmers who sold to them, to their customers.
“Because that is one thing that dad and I have always enjoyed. We provide, and have a sense of responsibility … for people’s welfare and families,” Thomas says.
The question was how to do it.
“That was the start of sleepless, lack of sleep, nights,” he says.
“I’d be lying if there weren’t nights you were lying awake thinking … It’s more not about yourself, I can deal with that, but just the rest of the team and what lay ahead.”
The answer was that the company needed to be split in two.
One part of Thomas Foods would continue as its operating hub. There was still a large, global company to run that exported all around the world and had facilities interstate and overseas.
The second part would run “Operation Phoenix” and plot what needed to be done next to rebuild the plant and the company. The Phoenix group would meet every day to talk about what a new plant would look like. Would it be rebuilt on site? Or somewhere else? What design was needed? How should they deal with the insurance process?
It was an mighty task. The Murray Bridge abattoir was processing up to 6000 cattle a day and more than 11,000 sheep and lamb. Alternatives would need to be found quickly to keep Thomas Foods in business in the short-term.
Thomas Foods has plants at Lobethal in the Adelaide Hills, about 60km from Murray Bridge, and in Tamworth in New South Wales. Both would need to be quickly upgraded to cater for more demand. This included strengthening fire prevention systems.
Nothing was simple. You can’t just flick a switch and double production at a place like Lobethal. For a start there are all sorts of rules and regulations that need to be adhered to.
For example, Thomas Foods had to apply for a permit to allow B double trucks to enter the Hills town. SA Water had to be asked to increase water supply into and out of the site. Even the eventual clean-up at the Murray Bridge site took months longer than expected.
Lobethal, which did move to a double shift in 10 days, and Tamworth took the smaller stock but neither were able to take cattle. There was an unsettling flashback for Thomas last December when the devastating Cudlee Creek bushfire threatened the small Hills town. The plant was not damaged but it was evacuated and some livestock were lost.
“While it (the Murray Bridge fire) did cross my mind, it was a different situation and our main priority was to ensure the safety of our employees,” Thomas says.
The cattle were a bigger problem. A Victorian firm called O’Connor allowed them to process around 1000 head of cattle a week at their plant, but that was only a fraction of Thomas’s usual load.
Thomas says a government taskforce, instigated by the previous state Labor government and continued by the incoming Liberal administration, proved invaluable in smoothing the way through all the regulatory hurdles. He was humbled by the support from all sectors of the community. And he also had support from high places. Former prime minister Malcolm Turnbull was a regular caller, just to check how it was all going.
It was a favour Thomas returned when Turnbull was booted out by his party and replaced by Scott Morrison.
“He (Malcolm Turnbull) obviously went through his own tough times so I rang him and said, ‘How you going, mate?’”
Looking after the workers was also a priority. Around 400 workers found employment at Lobethal, while another 300 jobs were added at Tamworth. Buses were arranged to transport employees from Murray Bridge to Lobethal.
A community centre was set up in Murray Bridge so the company could talk to as many of its employees as possible. Monthly catch-ups were organised, barbecues were held.
Another focus was the worker who accidentally started the fire while welding an offal bin.
The man tried to extinguish what started as a small fire but it spread into a highly combustible wall.
Thomas spoke to him a few days later. “He was obviously quite traumatised by it, but we had the appropriate care,” he says. “As you do in a family business we got around him. (During the conversation) he said, ‘It’s been tough, but what you said the other day really made me feel better’.”
Thomas was initially at a loss as to what he had said, but the worker had seen his boss on TV saying it had been an accident.
“And I said, ‘I have made plenty of mistakes and accidents in my life’. He said that made him feel really well.”
The man is still working for Thomas Foods.
Positions within the company were found for “everyone bar 60 or 70 people”.
Mining companies took some workers.
Others decided to take a different direction in life. Thomas says more left after that initial adrenaline subsided. Some became tired of having to make the trek to Lobethal.
“Some people cope very well with it and some people don’t,” he says.
“Some people took a few months and it eventually just wore them down. When we look back on it now, the way we were able to manage the people in such a tragic circumstance was pretty good. Was everyone pleased? I am sure not everyone. But … I can put my head on the pillow and know my team, our company, our people, did everything within its power to try to accommodate everyone, not only just from a work point of view but just their own wellbeing.”
As for himself, Thomas took the tack that he had to be the resilient public face of the disaster. He wrote a daily blog which he shared with his staff to talk about how he was coping.
“Really, for myself, it was about ensuring we get the job done and there would be a day for rest or reflection once it was done,” he says.
“That was the way I did it. It wasn’t downplaying the scene, but that’s really the way it was. I had to stay strong as did Dave (McKay) and our team members. We had to stay strong in order for other people to remain calm.”
This was also a family that had previously dealt with terrible tragedy.
When Thomas was 21 his younger sister, Kylie, died in a car accident.
His father Chris recalls: “When we lost our daughter and his sister … people say the fire was a very difficult time but losing a child was much more difficult than a business.”
So during another time of crisis it was natural the family looked after each other, Chris says. “He would probably say from day one his focus was on his parents and our focus was on him.”
Chris saw enough in his son at an early age to hand over the keys to the family company when Thomas was only 30.
“One (bit of) advice I would give to people with succession is that you can never do it early enough,” he says. “You can never lay that foundation early enough.’’
Chris says the experience his son had built up over the years helped to give him the tools to manage when disaster struck.
“You look back and think if you had not, things may have been different.”
There is still a lot of work to be done before the company is back to where it was.
The decision was taken to start again on a greenfield site out of Murray Bridge, rather than rebuild on the old location. The new plant will be about 8km from the old one.
Thomas says the company was approached by investment attraction agencies looking to move them out of SA.
“Don’t worry, in the early days there were people thinking maybe we could relocate interstate,” he says. But it was never really an option.
“We are very loyal to all the people here and all the people who supported us so that never really entered our mind.”
He also says Murray Bridge is an ideal spot. It intersects the flow of livestock from north, west and east. The long-mooted sealing of the Strzelecki Track, the 472km dirt road that links the towns of Lyndhurst to Innamincka in the northeast of South Australia would also be a big bonus, he says.
Thomas is hopeful some construction of the new facility will begin this year.
The design process is ongoing and then there is the approval process to negotiate. He’s even hopeful that some production could start next year. Getting beef production back up and running is the first priority.
“This is probably unlikely, but I had an aspirational date of 3rd January, 2021, the three year anniversary. I think I’m wearing rose-coloured glasses there,” he says.
Thomas won’t give precise figures on how much the rebuild will cost.
“I have been saying several hundred millions because we don’t have a final figure.”
The insurance payout will certainly help. It totalled $395 million, which covered the destroyed plant and the associated interruption to business.
After all the trauma, all the pain and stress, Thomas is optimistic about the future.
Not just in Australia. He says, since the fire, Thomas Foods has grown.
The business has expanded in China, a new office has been opened in Japan, a company has been bought in the Netherlands which serves as the company’s European base.
There has been more investment in its US operations.
The next market Darren wants to enter is the Middle East.
All that has meant even more travel than usual. As a believer in face-to-face meetings, the married father of three brings buyers from around the world to his home in the Adelaide Hills.
“Whether it’s some of the biggest supermarket chains in the world or food service companies. They will know my family, they will know my kids. Business is business but having that personal relationship and understanding is really important.”
Part of his travel schedule has been to investigate what’s happening in other countries to build the most modern plant possible, whether it’s energy efficiency, animal welfare or hygiene.
He is also looking at better ways to package products.
The company already re-uses water and captures biogas, a fuel produced from decomposition of organic waste.
“We certainly want to do our bit as a business, whether it’s from any sort of environmental or corporate social responsibility,” he says.
“When we look at renewable energy, anything we can do at the moment to lessen our impact we are doing as a business. My dream is to have that plant off grid. We are looking at that.”
Thomas is estimating the new facility will employ around 2000 workers. The optimist in him runs beyond just how far he thinks he can push Thomas Foods.
Thomas is something of a spruiker of his home state.
“I think it’s fair to say that over the years we (South Australians) have been our own biggest critic,” he says. “I see that rhetoric changing a little bit now. I see more people with a can-do positive attitude.”
Both Darren and Chris Thomas are feeling optimistic about the future.
“I look now from 2020, the next decade being the foundation of getting the beef business back and also recovering completely what we lost,” Chris says.
His son is also looking to push the business further into branded Thomas Foods products and into the ready-to-eat meals market, which he thinks is still “immature”. Australia is in prime position to help feed an increasingly hungry world, he says.
“We have here in Australia some of the best products in the world and, if you talk about meat, some of the safest, cleanest products.”
Thomas will be travelling a lot again this year. Despite the challenges of the fire, there’s a sense it has opened up new possibilities for the company. He says the experience now forms “part of our DNA”.
“Look, sure there are lots of emotions along the way but also out of the negativity came the opportunity to build something pretty special,” he says. “This is being built for 2050 and beyond.”