BHP relearns its history to return home as The Big Australian

BHP has re-learnt its history and is re-engaging with its Australian small shareholders and the general community.

BHP, “The Big Australian” has returned home as the company relearns its history and re-engages with its Australian small shareholders and the general community.

Back in 1979 BHP was by far Australia’s largest company and was headed by legionary team of James McNeill and Brian Loton. For most of its history, BHP had shunned publicity (I was the first journalist to have a long interview with a post war BHP CEO, Ian McLennan)

Back in 1979 McNeill and Loton believed it was time for the Australian nation to be proud of BHP so they became the first major sponsors of Sixty Minutes.

BHP was introduced to the public and to small shareholders as “The Big Australian” in an incredibly successful television campaign. That campaign was aimed at making the vast number of small BHP shareholders feel good as much as it was aimed at the general public.

A few years later BHP acquired Utah’s Queensland coal and the Chile copper deposits and BHP started its global journey. Then came the battle to stop BHP from being acquired by Robert Holmes a Court. Later BHP was brought to its knees as it lost billions in the Magma takeover and other moves.

In those journeys, while BHP never went back into its shell, it stopped communicating with small shareholders and the general public. It was all about wooing the sexy global and local institutions. Every other large Australian company did the same thing. And when BHP acquired Billiton it was all about being global, and the once treasured name of BHP was scarred with the “Billiton” tag. The company set up a UK company to become dual listed. The words “BHP, the Big Australian” were trashed as the company went global.

As readers will know, I have been urging Australian companies to use the new technologies that now enable much easier contact with small shareholders. BHP chairman Jac Nasser and I have had long conversations on the issues.

BHP has responded and Nasser has personally conducted BHP small shareholder meetings in which the company discovered that while the small shareholders might like big dividends, unlike most institutions they understand that it is necessary for companies to invest in their business and that dividends that are too high can be dangerous.

Small shareholders own about 40 per cent of the Australian BHP Company and 30 per cent of the combined BHP enterprise, including the UK registered arm of the company.

From Nasser’s early small shareholder engagements BHP is now planning a much wider engagement with small shareholders using electronic communication. And that will be supported by a return to the advertising scene with a series of television advertisements that unveil a BHP logo where the dreaded word “Billiton” has been removed. The words “ Big Australian” return from exile and are used in the advertisements. The new slogan is “ Think Big”.

The BHP TV advertisement goes back to the company’s Broken Hill origins when “seven ordinary men gathered in Broken Hill and dared to think big”. The advertisement goes on: “The company they created that day was BHP, The Big Australian. Today the same hard work and imagination valued by our founders has seen us grow into Australia’s global resources company. …. Imagine what we could all achieve if we continue to think big.”

BHP has been spurred into action by the Elliott group which wants to tap institutions’ thirst for the quick dollar, with no interest in the company and growth.

Elliott wants to split oil out of the company and ship BHP off to London. The government (and opposition) has said “No”.

BHP has been in the oil business since Ian McLennan drilled Bass Strait in the 1960s. The institutions and analysts hate it because in their administration the people who study oil are different to those who follow metals so it complicates their lives. BHP says oil investment is no different to other minerals and breakthroughs in oil extraction can be used in minerals and vice versa.

Commenting on the return to advertising using electronic communication, BHP says: “We fundamentally believe that as society changes it is up to us to make the case — more confidently and effectively — for the positive role that well-run and responsible companies play in society.

“The advertisements will talk about the importance of our Australian heritage, our contribution and our commitment to communities where we operate. The campaign will focus on what people can and should expect of us.

Arguably Australia’s greatest capital market asset is self managed superannuation funds which control one third of the superannuation market and that percentage may go a lot higher thanks to the huge administrative burdens being placed on big funds.

Australia’s big banks have never understood that when they took over from BHP as our largest companies they needed to relate to the community and to small shareholders.

They are paying a huge price for that mistake. They are set to be “quasi nationalised”.

BHP must still invest abroad and still relate to global institutions. But the “Big Australian” has returned home. Again welcome back.