James Thomson Editor

James Thomson is the editor of BRW. Previously he was editor and publisher of SmartCompany and a senior editor at Business Spectator. He writes regularly on Australia's wealthiest entrepreneurs and has deep expertise in small business and the mid market.

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Anthony Pratt boxes clever in the US

Published 21 March 2013 17:06, Updated 21 March 2013 17:25

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Given the attention that the Pratt family receives in Australian society, it sounds silly to suggest that any member of the clan can do anything quietly.

But when you hear about the size and scope of Anthony Pratt’s American business, Pratt Industries, it becomes clear that he has built something special with very little attention.

Take a look at the numbers. Since 1990, when Anthony was dispatched to the US by his late father Richard to fix up the family’s struggling US operations, Pratt Industries has risen from being the 45th biggest corrugated box maker in the US to become the fifth.

In 2013, the US business will post revenue of about $1.5 billion, 20 per cent ahead of last year and up about $1 billion over the past decade.

The size of the business is even starting to rival that of Visy Industries, the Australian operations that Richard Pratt spent a lifetime building up. And that only serves to underline how Anthony Pratt has started reshaping this empire since Richard’s death in 2009.

As his father did in Australia, Anthony has built his American empire around the cornerstone of recycling, whereas many of his US rivals continue to take their raw materials from the forest.

But Anthony has added a clever strategy to expand across what is a much bigger market. After finding a town with a suitable source of recycled paper and cardboard, he builds a state-of-the-art paper mill for about $200 million. Then he adds three corrugated box plants around the mill for $50 million each, and then finally he buys about three “sheet” plants selling specialist box products.

The hub-and-spoke strategy has allowed Pratt to build an impressive distribution network across America, which opens up all sorts of possibilities for what Pratt Industries can do for its customers, which range from large corporates to small businesses. No wonder Pratt describes the opportunities in the US as “infinite”.

Anthony has also pushed harder into the area of using waste as an energy source. He has spent $200 million building waste-to-energy plants in the US and Australia, where gasification of waste is used to generate power. At present the plants help Pratt offset his power bills; in the future he wants to generate enough power to sell it back into the market.

Pratt the younger has clearly brought a more global vision to the family empire. As well his burgeoning US operations, he has established operations in Singapore and is casting an eye over European opportunities, once more growth boxes are ticked (and sold) in the US.

How that changes the shape of the wider family empire will be fascinating to watch in coming years.

But one thing will seemingly never change in the Pratt family. This is a fiercely private business and despite previous offers, Anthony is of no mind to sell up.

“Part of taking a long-term view is that you don’t sell,” he tells Andrew Heathcote in this week’s cover story on the US operations. His father would have agreed.

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