Anthony Pratt’s DIY power to avert bill shock

Anthony Pratt says his Visy Group will generate more than half its own power in the future from clean-energy plants.

Anthony Pratt takes Malcolm Turnbull on a tour of Visy’s paper mill in Tumut yesterday. Picture: Kym Smith

Billionaire Anthony Pratt says his Visy Group will generate more than half its own electricity in the future from a raft of clean-energy plants to help offset its soaring power costs in Australia, which are 2½ times those of his US operations.

Three months after he pledged before US President Donald­ Trump to spend $US2 billon ($2.5bn) in America over the next decade, Mr Pratt made the same commitment ­before Malcolm Turnbull yesterday, and said he would create 5000 high-paying manufacturing jobs in Australia.

Part of his $2bn spend would be on clean-energy plants that conver­t paper mill waste into power, to add to the five plants in Australia and the US currently operated by Visy and his American company Pratt Industries. Visy is working on establishing its next plant in Sydney.

“Our cost of energy in America is 2½ times lower than Australia,’’ Mr Pratt said at the opening of the $100 million expansion of Visy’s Tumut paper mill in southern NSW. He revealed that 20 per cent of Visy’s annual costs were on energy and that the company had a power and gas bill of more than $200m a year.

“We can only control Visy and our answer to this is to continue to build clean-energy plants,” he said. “We have built five around the world, we currently generate 30 per cent of our own energy needs and want to increase that to more than 50 per cent.’’

Mr Pratt said that Visy’s three ­Australian clean-energy plants were already profitable. They also saved the company consid­erable landfill costs.

The billionaire praised the Turnbull government for its moves to address soaring power and electricity prices, which have included forcing gas companies to quarantine gas destined for export markets for use by domestic consumers. “What the PM has been doing so far has been great,” Mr Pratt said. “He has made moves to reduce gas and electricity prices and I think that will be good for businesses and households.’’

Mr Pratt told guests at the event that the $2bn investment would ultimately create more than 13,000 permanent jobs in Australia, plus about 14,000 construction jobs. The spending would take Visy’s investment in Australia since the company was established by his late grandfather Leon in 1948 and expanded by his late father Richard to $8bn in today’s dollars.

“I am proud that even though Australia is much smaller than America, the wage dollars we end up spending here will be much more than America — 5000 people here is worth a lot more wages than 5000 people in America, approximately 20 per cent more,’’ he said.

“These are not burger-flipping jobs; they are high-paying manufacturing jobs.’’

The Prime Minister, who saw the marginal electorate of Eden-Monaro in which the Visy plant is located fall to Labor at last year’s election, said Mr Pratt was showing a commitment to investing in regional Australia “and that means jobs’’. “I cannot repeat this too often: we are supporting investment, we’re encouraging investment because we know that means more jobs,” Mr Turnbull said.

“The only way you get more jobs, and better-paid jobs, is if you get more investment.’’

Mr Pratt reiterated his concerns that too many Australian companies were not prepared to invest in their core operations or were too willing to give money back to shareholders in the form of share buybacks and dividends.

He said part of Visy’s $2bn worth of new spending would be supported by borrowings over 10 years from superannuation funds. Visy has already borrowed $150m from AustralianSuper and IFM Investors.

“The benefit of this lending is that it is long-term — you can lock in low interest rates and it is not subject to volatility,’’ he said.

Mr Pratt has long lauded the growth of retailing juggernaut Amazon, because it will require more cardboard boxes — one of Visy’s staple products — to deliver goods to its customers.

Visy is in talks to work with Amazon in Australia as Pratt Industries already does with the retailer in the US. Mr Pratt is developing specialist packaging cold-chain products to allow Amazon to deliver fresh food to customers across the US.

In May, Mr Pratt received a standing ovation from the US President at the 75th anniversary of the Battle of the Coral Sea event in New York after his $US2bn pledge.

There has been an exodus of business leaders from presidential advisory councils in America after Mr Trump was criticised for taking an equivocal stance on the violence that erupted in Charlottesville a fortnight ago. Mr Pratt declined to comment on the Charlottesville issue but said Mr Trump was ‘’very focused on manufacturing and we are engaged in manufacturing’’.