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Question: Name all the globally known Australian brands.

Answer: Qantas and Fosters.

That’s right. There are only two. One is the result of John Elliot and his successors spending more than $2 billion of profits largegly generated by Victoria Bitter in Australia developing a global beer 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 120 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
Chase Manhattan US, investment banking
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
DBS Land Singapore, control Australand and Walker Corp
Deutsche Bank German, investment banking
Dresdner German, 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
HSBC Hong Kong, banking and broking
Huntsman US mormons, chemicals
Hutchison HK, telecommunications
IBM US, computers, IT
Illinois Tool Works US, bidding for Siddons Ramset
Itochu Japanese, mining, energy and engineering
ING Dutch, investment banking, insurance
KPN Dutch, bought TNT
Kumugai Gumi Japanese, hotels and property
Kwok family Singapore/HK, 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
Marubeni Japanese, aluminium and mining
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
Mr CK Ow Singapore, Stamford hotel chain
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
Salomon Smith Barney US, investment banking
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
Singapore Govt Singapore, telecommunications, energy
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
Thakral family Singapore/HK, hotel chain
Thames Water UK, water
Toronto Dominion Canadian, discount broking and banking
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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