Pratt & Visy Board – a history of trading

THE PACKAGING INDUSTRY AND HOW THE MARKETS CAN CHANGE
As a salesman selling label printing to packaging buyers in the sixties I often shared the waiting rooms with the now late Richard Pratt. In particular for three years nearly every Tuesday morning, we shared the same circuit, with us both having our first meeting at the Heinz factory in Dandenong, then to Burwood to the Biscuit maker Brockhoff’s. So in and over many conversations we got to know each other reasonably well.
In those days Richard Pratt when he took over the business of Visy Board from his father The late Leon Pratt, were buying their paper stock for corrugated board manufacturer from the then APM. It is believed that even today they Visy are by far the largest and biggest buyer of paper stock from the company. In those days loyalty, and support for each other were common amongst suppliers, and APM assisted Richard and Visy Board in the early seventies in getting his business moving forward.
In the late seventies and early eighties Visy board saw the opportunity to supply the fruit, and vegetable market, with corrugated cartons instead of wooden boxes. They expanded through the early eighties in having supply points throughout Australia, where ever there was a need such as the Riverina where fresh fruit and vegetables were being produced, they supplied printed boxes, but also large corrugated bins for bulk products such pumpkins. As I believe Richard was astute enough to see where his market expansion really was. APM stayed with the servicing the manufacturing market basically within the industrial zones of each capital city. The then directors of APM then started in the eighties of taking over other companies including the Paper making facilities of APPM (Australian Pulp & Paper Manufacturers) which was at the time enjoying huge expansion due to supply of paper to offices where computers were demanding paper reams for ink jet and Laser printers. They had taken their interests away from the basic interests of board production, even trying to move into international markets. Later on, they split the Paper making away by forming the business called Paperlinx. The board and printing divisions became listed as AMCOR.
In the late eighties Richard and his company decided to start a board making plant in the USA and took on the competition of New York State. This action upset the Americans, they in retaliation decided to move into Australia setting up a plant in Dandenong.
This American box plant in Dandenong in the early nineties started under cutting the market, with ‘E’ grade fourth and fifth generation recycled pulp corrugated board. This product was indeed of very low quality with no rigidity and little substance.
Also at this point the New Zealanders, decided to raid the Australian packaging market through Carter Holt Harvey and also set up in Australia.
By the mid nineties Visy board had also tied up the new expanding wine Industry, with cartons supply, including putting an ‘in line’ packaging box erection machinery from printed reels of corrugated board, into the bottling lines of Southcorp Wines, saving both man power and packaging costs. (At this point in history, Southcorp were exporting from Australia three containers to every other container of wine)
In the early nineties and throughout the nineties Amcor were in deep trouble with old out dated machinery, and plant. Their market place was in decline due to the constant closures of the Australian manufacturing industry, which since the early sixties has been closing down, or going off shore. They had divested the paper divisions, plus the competition from the new arrivals which were encroaching into a market where there was little room. The share price of Amcor was not looking strong, and the directors were looking for any way out.
They approached Richard Pratt and requested his help, especially where the American Box Company was concerned, which was also an annoying influence to the Visy board market. As those who approached Richard Pratt were basically the same people who twenty years earlier, had assisted his company in getting started, and because Richard is the type of person who would help anyone. Richard could also see it was better to have a true competitor, which was Australian, so no doubt accepted the offer or the proposition that was made to him.
As someone who was servicing the market with labels, and talking to buyers of packaging, up to the turn of this century, I can say that Visy Board never had need to increase prices in the supply of the packaging corrugated cardboard boxes, nor do I believe that was ever the case. If it were true I would be aware of it, from the many conversations with those many buyers of packaging. When you visit the same buyer so many times in a year, they do confide in you especially asking questions if they suspect something is or may be wrong with in the Industry.
On the other hand Amcor may have lifted their pricing, as they still had not improved the plant or equipment, their markets had disintegrated by the clientele of manufacturers who had either moved overseas, or had closed down. It is to be remembered that they never really had any need to approach Visy board, thus to do a deal with the end intention so to increase pricing of the end product, when it is believed that Amcor was the sole, or if not the major supplier of brown paper to their opposition – all they had to do surely was to increase the pricing of the base product which was supplied from Amcor to the Visy Company. The dilemma for the Amcor Directors is that Amcor was both a major supplier and in opposition to their main rival company.
The bottom line was that Visy board with Richard Pratt had identified the market changes, and set their course, and serviced into markets where there would be future expansion, whereas the Amcor directors not having grown up or had grass roots experience within the packaging industry, were asleep to the movement off shore of manufacturing clientele, or the closure of those plants which could not sustain a profitable ventures in Australian business.

It is little wonder that they the directors of Amcor turned on Richard Pratt and his company Visy Board in an effort to regain market share, by going to the ACCC. In an effort to justify the creditability of the ACCC it is a great pity that they the ACCC did not do more, with wider, deeper research into the facts of claims to the project, and the information before them. It is interesting to note that it has been suggested that the ex-director of now defunct Corrugated Box supplier, was in direct opposition to Visy board, is believed now to be the paid adviser to the ACCC. It is also rumoured that this adviser may have had very little lifetime experience within the packaging industry.
There appears that there has been dishonesty, greed, and maybe even threats made, so to try and in an effort to discredit a man whom has done so much in so many ways for the people of Australia without seeking credit or fame.
Richard Pratt is, has been, a true, honourable, and great Australian. Richard with his fine voice has been a friend, to so many in so many ways, so to accuse him of dishonesty, just portrays the small mindedness of those who are jealous, and envious of such a rich character, in the man such as Richard Pratt who always showed and gave you a fantastic smile. A smile one shall never forget.