Packaging group Visy heads the IBIS Top 500 list of private companies

THE Top 500 titleholder has private etched into the DNA of its company structure — and that’s the way Visy’s CEO likes it.

HE runs Australia’s biggest private company. But don’t expect Anthony Joseph Pratt to crow about it. Or follow the lead of his brother-in-law, Raphael Geminder, to get even bigger by listing on the sharemarket.

Being private is just the way Pratt likes it. “Private is our DNA, in my DNA. It enables us to make decisions for the long term,’’ he says. Besides, his mother would have a fit if the day ever came when the family’s Visy paper, packaging and recycling empire went public. “And you’d better believe it,’’ Pratt, Visy’s executive chairman, says with a wide smile.

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Established in Melbourne in 1948, Visy employs more than 9600 people across its Australian and United States operations (where it is known as Pratt Industries USA). Seventy per cent of its customers are in the food and beverage sector. Pratt reveals in an interview with The Deal that the combined sales of the combined group this year will be $4.8 billion, up from $4.1bn last year. In five to seven years, he wants turnover to grow to $10bn and reveals for the first time that earnings before interest, tax, depreciation and amortisation will then be more than $1bn. Earnings are currently said to be over the $750m mark.

Pratt ran Pratt Industries from the US for nearly two decades before returning to take over as Visy executive chairman in 2009 following his father Richard’s death from prostate cancer. Pratt himself is said to be a hands-on chairman. He regularly walks the factory floors, as his father once did. Friends say he has grown into the role as the family patriarch after declaring in the months following his father’s death that “this is my time’’. “Anthony worked it out from his dad — he knows what his weaknesses are and has people around him to deal with them. He then focuses on his strengths,’’ says a friend.

Asked how his style differs from that of his father — who was said to rule with an iron fist, covered on chosen occasions with a silky, velvet glove — Pratt responds: “That is for other people to judge.’’ But when pushed, he answers: “Richard had a fantastic and very successful style and to the extent I can be like that, I am very happy.’’ He says his leadership style is simple: “I back excellent people to do excellent work. That is very important.’’

The months after his father’s passing were largely focused on mending relations with customers after the company’s infamous and damaging price-fixing scandal with arch-rival Amcor. But operationally, one key change to the group’s strategy under the son was to promote a vision to convert waste to energy. Gasifiers fed by waste in Melbourne and Atlanta now power the paper and recycling machines in both cities and Pratt’s vision is to scale up the technology to sell energy from waste into the power network of both countries. At the Clinton Global Initiative two years before his father died, Pratt pledged to spend $US1bn in recycling and clean-energy infrastructure over the ensuing 10 years.

The other change in focus has been Visy’s Asian expansion. Pratt plans to double revenues Visy generates from Asia over the next decade by setting up plants in a raft of Southeast Asian countries and using a trading company in Singapore to sell more products to meet demand in the region. The vision replicates the growth story of Pratt Industries, which has expanded over the past two decades to become one of the largest box-makers in the US, with operations in more than 20 states. That vision is to double the sales of the US business to more than $US4bn by 2020. And Pratt says its operations are “booming”.

He says the focus now is to standardise the leadership and processes across both businesses. “We are trying to create a one-team approach between the two countries. The thesis of backing excellent people applies equally to both countries,’’ he says. Last year, Pratt recruited former US ambassador to Australia Jeffrey Bleich to Visy’s advisory board to help with the US expansion. It also took onboard long-time Packer family lieutenant Ashok Jacob. The other external directors are former Nestle Waters North America chief executive Kim Jeffery and London-based venture capitalist Ross Fitzgerald. There are six executives on the board including current Visy global chief executive Brian McPheely, Australian chief executive John Wheeler and Visy group finance director Vin O’Halloran.

“Ashok and Jeff are the best in their respective fields and we are grateful and privileged to have them on our board,’’ Anthony Pratt says. “Brian is our global CEO and is doing a fantastic job as the global CEO.’’ Fitzgerald, who went to Melbourne’s Monash University with Anthony Pratt, is his best friend and closest confidante. Those who know Visy well say he advises on the group’s broader global view and its political and strategic positioning. “But Brian is the person who can say to Anthony ‘We should do this or we should do that’ operationally. He trusts him implicitly,’’ says one observer. And the ace in Pratt’s pack has been the veteran Wheeler, the man he brought virtually out of retirement two years ago to slash Visy’s cost base. The pruning is said to have put the group in a strong position to weather the high Australian dollar and patchy domestic demand. “Wheeler does a fantastic job at implementation — he gets the job done and doesn’t listen to excuses,’’ says one adviser to the family.

While Pratt’s prime focus has long been on America, he now reveals much more of his time will be spent in Melbourne, the city of his birth and the home town of his mother, who is co-chairman of Visy. Jeanne Pratt celebrates her 80th birthday next year. As well as sitting in on all family board meetings, she attends most family business and private functions.

The genius of Richard Pratt’s succession plan for Visy has done all that it intended since his tragic death by allowing the next generation to pursue their own dreams without crossing swords over the family crown jewels. Under the plan, his three adult children each inherited a one-third stake in Visy but they each also had their own businesses to run. His daughter Fiona and husband Raphael Geminder run Pact Group, Heloise and her husband, Alex Waislitz, run investment group Thorney and Anthony Pratt runs Pratt Industries.

Geminder took the unprecedented step last year of floating Pact on the ASX while Waislitz followed Geminder’s lead by launching a listed investment company Thorney Opportunities, which has seen him manage public money for the first time.

The public moves have led to questions about what they might mean for the future of Visy. But five years after her husband’s death, Jeanne Pratt remains the matriarch revered by all the family members — including the various brothers-in-law, who may sometimes not see eye to eye. It seems none would dare cross her in seeking to take Visy in a direction against her will. And where Pratt had a difficult relationship with his father, he has a special affection for his mother.

“Anthony and his mother and are very close and Anthony doesn’t like going against her. What is important to her is keeping the company private and keeping the family together,’’ says one observer who knows the family well. Asked about his relationship with his mother, Anthony Pratt simply replies: “My mother is a great source of support and wisdom to me.’’ But right now she is performing an even more important role for Anthony Pratt and Visy — providing the glue that is keeping the family together. And private.