QUESTION: name all the globally known Australian brands. ANSWER: Qantas and Foster’s. That’s right. There are only two. One is the result of John Elliot and his successors spending more than $2billion of profits largely generated by Victoria Bitter in Australia developing a global beer barnd that is barely drunk br Australians these days.
QUESTION: Name all the globally known Australian brands.

ANSWER: Qantas and Foster’s.

That’s right. There are only two. One is the result of John Elliott and his successors spending more than $2 billion of profits largely generated by Victoria Bitter in Australia developing a global beer brand that is barely drunk by Australians these days.

And the other is the national carrier of a country which is a highly popular tourist destination.

It took Stan Wallis and his committee which reviewed our financial system to really bring the chickens home to roost on the question of foreign ownership in Australia.

Included in the Wallis report was a table which showed that foreign investors owned $450 billion worth of OUR assets yet Australian companies only owned about $150 billion worth of assets overseas.

Australia’s three fold deficit when it comes to foreign investment is close to the most lopsided record of any large, modern, western economy. Now Crikey is not about to advocate foreign investment restrictions but it is very sad that our companies have made relatively little headway overseas while the foreigners have swooped time and again on our prime assets.

The following list is the first step Crikey is taking to raise awareness of this problem of corporate Australia becoming a branch office for the rest of the world.

We can barely come up with 40 Australian owned companies that generate more than $200 million a year offshore yet there is more than 100 foreign companies doing exactly that in Australia.

The lists are done in alphabetical order but there are a few industries where we really have failed to develop our own companies.

Foreigners Dominate Hotel Industry

If we’ve got a national airline flying tourists to Australia all the time, why don’t we have an international hotel management or development company? We have hundreds of quality hotels but the vast majority of them are run by companies such as US giants Starwood and Marriott, French monolith Accor or the British company Bass. Alan Rydge has built a good chain of Australian hotels so if you want to help an Australian company, buy shares in Amalgamated Holdings and qualify for the shareholder discount when you stay at Rydges.

We Even Struggle In Mining

Now if there was one industry where Australia should dominate the world then surely it is mining. We have the richest mineral deposits of any country but can anyone name a truly global Australian mining house. Hugh Morgan and WMC are enjoying a share price recovery but the majority of their value and profits is tied up in their 40 per cent stake in the worldwide alumina and bauxite joint venture with Alcoa of America. And this entire operation is managed by Alcoa – WMC just enjoys the profitable ride. BHP stuffed it with many of their overseas operations with the exception of the Escondida copper mine in Chile where many people argue the Poms at Rio Tinto tell them what to do anyway. MIM might have doubled their share price in recent times but they were once Australia’s second biggest company. Apart from smelting operations on the Thames they haven’t got much left overseas except for Alumbrera in Chile which is causing it and their partner North Ltd all sorts of problems.

And with all this oil and gas around us, why don’t we have a global Australian oil company. BHP leaves the operating of Bass Strait to the world’s biggest oil company, Exxon-Mobil, and foolishly sold out of North West Shelf operator Woodside at a paultry $2.82 a share back in 1990. The stock is now at $14 and controlled by British-Dutch giant Shell. Ampol Exploration was the Arnotts of the oil industry but was snapped up in a $1.6 billion takeover by Mobil three years back.

Foreigners Love Those High Growth Telcos

Telecommunications is another area where we have failed to make any sort of global impression. Telstra’s international division is very small and our second biggest telco, Cable & Wireless Optus, is controlled out of the UK, just like the third mobile carrier Vodafone. Motorola snapped up a key stake in emerging technology company ERG and MCI-Worldcom gobbled up Ozemail for about $300 million two year ago. Now Telecom NZ is gobbling up AAPT, our third biggest long distance player but at least One.Tel has emerged as a serious player in the ISP market, mobile and now the local call market.

We Consume The Foreign Consumer Goods

Then we move along to Australia’s pathetic record in consumer goods and food where we have not produced a single company with a well known global product. The likes of Phillip Morris, which own Kraft, Proctor & Gamble, the American personal products giant, Unilever, which gives us Streets ice cream, Coca Cola Amatil, Mars Corporation, Swiss dairy giant Nestle and the Idaho spud farmer who bought Pacific Dunlop’s pastry brands such as Four ‘N Twenty and Big Sister, are the biggest names in this roll call of foreign invaders.

The best known Australian consumer goods companies are Goodman Fielder and Pacific Dunlop and both are performing dreadfully at the moment with the prospect of a foreign takeovers rising all the time as their share prices drift further south.

Banking Ain’t So Bad

One industry in which we have done okay overseas is financial services, but even then our reach is limited. The New Zealand banking industry is dominated by the major Australian players and NAB has done well buying four regional banks in the UK and the Homeside mortgage processing business in the US. National Mutual saved itself from bankruptcy through its spectacular performance in Hong Kong but then French insurance giant Axa swept in and took control when they were still in a distressed state. AMP and Colonial have both done reasonably well in the UK, although there are some emerging problems for the AMP now. Westpac got seriously burnt overseas when it almost went broke in 1992 and ANZ dropped $500 million trading Russian bonds out of London over the past two years.

And Wine Is Fabulous

The stand out Australian export industry in which we have largely retained local ownership is wine. Although we still haven’t built any true global giants, partly because the wine industry is enormously fragmented around the world. The wine export story – it now earns more than $1 billion a year on the export market – is a great one and a model to all others. The likes of Foster’s Brewing, BRL Hardy and Southcorp Wines have all done tremendously well over the past five years and, whilst not exactly rushing in, they are slowly buying some offshore operations to complement the Australian exports.

The car industry is a good story in that we have an industry, but wouldn’t it have been nice to have an Australian car company. Afterall, the Italians have got Fiat, the French Peugeot, the Swedes Volvo and the Koreans Daihatsu. We have all the raw materials required to build cars so why did it have to be all built on foreign capital that gets shipped offshore.

Lowy, Murdoch And Pratt : Own Only Heroes

So who are our true national corporate heroes, the big players who are making it internationally. We’ve clearly got the management talent with Australians now running American giants such as Ford, the Coca Cola Company, Phillip Morris and the Campbell Soup company. We probably only have three genuine corporate heroes, the most obvious being Rupert Murdoch, who has built a $90 billion global media empire from one afternoon newspaper in Adelaide. The second is Frank Lowy, who is now the third biggest retail landlord in the world through his Westfield group which is kicking serious butt in the US and dominates the Australian shopping centre market. Thirdly there is Dick Pratt who has a fabulous paper and packaging business in Australia which he is increasinly taking to the US.

Lend Lease and Brambles are the next two standout performers, both now generating about half of their profit offshore and enjoying strong support on the share market. Having been cut loose from ICI two years back, Orica is making a brave fist of the global explosives market but it is a tough game and its shares are not performing well.

Foster’s Brewing lost plenty in the UK and China, but is trying to build an impressive wine club operation in Europe. Pacific Dunlop’s Ansell business is a world leader but even that can’t be that good with the stock now down at a miserable $1.80.

WE’RE AN EMERGING SHARE REGISTRY FORCE

In the exciting growth area of managing share registries we now have Melbourne-based Computershare kicking some serious goals with operations in Hong Kong, South Africa, the UK, Ireland and the US.Isn’t strange how we are the greatest share owning democracy in the world and also one of the most foreign owned countries at the same time.

Construction A Mixed Bag

The construction industry is a mixed bag with Boral, CSR and James Hardie all doing quite well in the US after some earlier hiccups but Pioneer International has now been taken over by UK giant Hanson Plc. Two German-controlled giant in Leighton Holdings and Baulderstone Hornibrook are the leading players in the Australian construction game. Transfield and the Grollo brothers fly the Italian immigrant corporate flag in Australia and have done a great job building their businesses. Lend Lease is an unusual best because its CEO David Higgins is now based in London and chairman designate Jill Kerr-Conway lives in the US. Still, this Australian company has now emerged as a global player in the property development and management business, partly thanks to the recent acquisition of the Bovis construction group from P&O.

So while we rule the world in sport, our performance on the business front is very disappointing. The following lists demonstrate this. Over time we are going to try and get the specific revenue figures for each entry on the list so if anyone knows figures for some of the companies please send them through to [email protected]

Australian Companies Generating More Than $200M A Year Offshore

Amcor: US, European, NZ, Asian paper

AMP: NZ, UK and Chile

AGL: NZ gas assets

ANZ: NZ and the Grindlays network

Amcor: European, NZ and US paper and packaging

BHP: Escondida, Canadian diamonds, US copper etc

Boral: US bricks, tiles, flyash. Asia plasterboard

Brambles: Chep, records business etc

BRL Hardy: wine

Burns Philp: US and European herbs, spices, yeast

Commonwealth Bank: NZ and limited Asian operations

Computershare: UK, HK and South African registry businesses

Colonial: UK, NZ and Asian insurance operations.

CSR: US building products

Faulding: US pharmaceuticals

Foster’s Brewing: China, Molson and European wine clubs

Goodman Fielder: Nth and Sth American food operations.

HIH: New Zealand and US insurance

Lend Lease: UK property, US property management, Asian development

Liberman family: property, banking

Macquarie Bank: Asian property development, global trading

Mayne Nickless: Indonesian hospitals, UK express freight, US security

MIM: Alumbrera mine in Argentina, UK smelting

News Corp: global media

NAB: UK banking and Homeside in US

Normandy Mining: Gold mines and base metal assets

North: Canadian iron ore, Alumbrera mine, Swedish base metals.

Orica: Worldwide explosives business.

Pacific Dunlop: Ansell, batteries

Pasminco: US zinc

PBL/Packer: chemical, publishing, gambling, film production, cinemas.

Qantas: airline business

QBE: various insurance operations

Telstra: international operations

Visy: US paper

Village Roadshow: cinemas

Westfield: US, NZ and Malaysian property development and management

Westpac: NZ operations

WMC: aluminium/bauxite operations

Foreign Companies Generating More Than $200m In Australia Each Year

ABB: Swiss, engineering, Redbank power station

ABN Amro: Dutch, investment banking and funds management

Accor: French, Manages dozens of Australian hotels

AIG: US, Insurance

Air New Zealand: NZ, 50% of Ansett

Alcoa: US, aluminium and bauxite joint venture with WMC

Anglo America: South African, bought Acacia

AOL-Time Warner: internet, magazines, film production, theme parks

Axa: French, 51% of National Mutual

Babcock & Brown: bought AIDC

Bass Group: UK, various hotels

BAT: UK, tobacco

Baulderstone Hornibrook: German, construction

Billiton: South African, QNI nickel business

Brierley Investments: NZ, retail, James Hardie and Wills

British Airways: UK, stake in Qantas

British Telecom: UK, various telco investments

Cable & Wireless: UK, 51% of CW Optus

Cadbury Schweppes: UK, confectionary and drinks

Campbell Soup: US, control of Arnotts

Canwest: Canadian, controls Ten network

Cargill: US, various agribusiness investments

Carter Holt Harvey: US/NZ, forestry

CED: US, bought cable company Metal Manufactures

CGEA: French, transport, water

Chevron: US, oil and gas

Chemcor: US, chemicals

CITIC: Portland aluminium smelter, beef

Citigroup: US, banking and financial services

CMS: US, 50% of Loy Yang A power station

Coca Cola Company: US, control of Coca Cola Amatil

CS First Boston: Swiss-US, investment banking

Dairy Farm: HK, Franklins

Deutsche Bank: German, investment banking

Du Pont: US, chemicals and textiles

Duke Energy: US, gas pipelines

Edison Mission: US, owns Loy Yang B power station

EDS: US, Commonwealth Bank IT contract

Erricson: Swedish, telecommunication products

Exxon-Mobil: US, oil and gas

Fletcher Challenge: NZ, construction, forestry

Ford: US, car manufacturing

General Electric: US, card processing

General Motors: US, car manufacturing

Glaxo-Wellcome/Smithkline Beecham: UK, pharmaceuticals

Glencore: Swiss, various mining projects

GPU: US, Vic energy distribition

Granda: UK, Seven Network stake, production

Grand Hotel Group: Malaysian, various hotels

Hanson: UK, coal and bought Pioneer

Heinz: US, food, Weight Watchers

Hilton Corp: US, Jupiters casinos and various hotels

Hochtief: control Leighton Holdings

Hoechst: German, chemicals, food

Homestake: US, Kalgoorlie super pit

Huntsman: US mormons, chemicals

Hutchison: HK, telecommunications

IBM: US, computers, IT

Illinois Tool Works: US, bidding for Siddons Ramset

ING: Dutch, investment banking, insurance

KPN: Dutch, bought TNT

Kumugai Gumi: Japanese, hotels and property

Li Ka Shing: Hong Kong, bought SA power industry

Lion Nathan: NZ, brewing

LVMH: French, leather goods and drinks

Malaysia Mining Corp: Malaysia, Ashton Mining, Plutonic

Marriott: US, hotels

Mars: US, chocolates pet food

MCI-Worldcom: US, telecommunications, Ozemail

Merrill Lynch: US, stockbroking

Metro Cash & Carry: Sth African, controls Davids Holdings

Mitsubishi: Japanese, car manufacturing

Motorola: US, stake in ERG, telecommunications

National Express: UK, Vic public transport

National Power: UK, Vic power station

Nestle: Swiss, former PacDun assets and various other food

Norwich Union: UK, financial services

Nufarm: NZ, chemicals

Obayishi: Japanese, tollroads

Ong Beng Seng: Singapore, hotels, retail

Orlando: French, wine

Parmalat: Italian, dairy industry

Pearson: UK, Grundy TV production, financial information.

Philip Morris: US, food and tobacco

Placer Dome: US, gold mining operations

P&O: UK, stevedoring, ports, cold storage, resorts.

Principal Group: US, BT funds management

PowerGen: UK, Vic power assets

Rio Tinto: UK, Comalco control and various mining assets

Rothmans: South African, tobacco

Royal-Sun Alliance: UK, insurance

San Miguel: Phillipines, beverages (20% of Coca Cola Amatil)

SBC: Swiss, investment banking

Service Corp International: US, death industry

Shell: Dutch-UK, oil, coal and gas

Spudman: US, bought PacDun pastry businesses

Sony: Japanese, music, electricals

Starwood: US, hotels

Telecom NZ: NZ, AAPT

Texas Utilities: US, Vic gas and electricity assets

Thames Water: UK, water

Toyota: Japanese, car manufacturing

Unilever: Dutch-UK, detergents and ice cream

UnitedGlobalCom: US, control of pay-TV group Austar

Vivendi: French, Victorian public transport, publishing, water

Vodafone: UK, mobile phone business

Peter Fray

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