Boycott Woodchipping Campaign
Boral Ltd Corporate Profile
Company Introduction
Boral produces a wide range of building and construction materials such as bricks, roof tiles, concrete and plasterboard. Boral's "building and construction materials division" generates about three quarters of the group's revenue and profit. The majority of this business is concentrated in cement, premixed concrete, bricks and pavers. Boral is also a big supplier of Liquid Petroleum Gas (LPG) to customers in Australasia and the Pacific Islands. Boral employs 23,250 people in over twenty countries. Its activities are concentrated in Australia with the majority of sales in 1995 occurring there. Overseas operations in the UK, Germany, Poland and the USA are likely to pick up as the world economy improves1. However Boral is currently experiencing depressed share values due to a slump in the building industry which is not expected to turn around for twelve to eighteen months.2
In 1995, profit after tax and abnormals was nearly AUS 294 million.dollars (121.8 million dollars for 1994), while total assets stood at 5978 million dollars.
Indications are that Boral's sales for the first quarter FY 96 are continuing to fall, down 30% on the equivalent quarter for 199584.
Boral's largest shareholders include National Nominees Ltd, Westpac Custodian Nominees Ltd, Australian Mutual Provident Society, ANZ Nominees Ltd, Chase Manhattan Nominees Ltd, Queensland Investment Corporation, State Authorities Superannuation Board, MLC Life Ltd.1Boral's Australian Bankers are National Australia Bank Ltd and Westpac Banking Corporation
Peter J W Cottrell (app.1992), Chairman: also Director of the National Australia Bank Ltd and Chairman of Email Ltd, Pacific BBA Ltd, Scania Australia Pty and the companies in the Adelaide Steamship Group.
Antony R Berg (app.1993) Managing Director: Chairman of Oil Company of Australia, (85% Boral owned ) Chairperson of Musica Viva Australia, a director of the Sydney Institute and a member of the board of management of the Australian Graduate School of Management at the University of NSW. Tony Berg has been given approval to receive 2,500,000 shares worth $7,850,000 and at the last Annual General Meeting (AGM) was approved an additional 500,000 shares worth approximately $1,800,000. These free shares are received when the company shareprice reaches a certain level, giving Mr Berg a strong personal incentive to make profits for the company.3
Elizabeth A Alexander (app.1994) Non-executive Director; also Director of Amcor Ltd and CSL Ltd, partner in Price Waterhouse member of the Australian Defence Force Academy and the Corporations and Securities Panel of the Australian Securities Commission.
Rodney T Halstead (app.1992) Non-executive Director; also Director of Amcor Ltd and Asarco Australian Holdings. Senior Partner in the Clayton Utz law firm in Sydney and is head of that firms National Mergers and Acquisitions Practice Group.
Member of Prime Minister's Economic Planning Advisory Committee form 1983-1987.
Donald J Hughs (app.1988) Non-executive Director; also Director of Goodman Felder Ltd. Has been at Managing Director level, in the national and international consumer goods industry since 1967. Ex-Chief Executive of Cadbury-Schweppes Australia Ltd.
Gilles T Kryger (app.1992) Non-executive Director, also Chairman of Lang Corporation Ltd, Jamison Equity Ltd, Laporte Group Australia Ltd, the Mercentile & General Reinsurance Group of Australia and the GPT Supervisory Board and a Director of Volvo Ltd. Founding member Sydney Theatre Company.
Sir Bruce Watson (app.1990) Non-executive Director; also Chairman of Boral's wholly owned utility Gas Corporation of Queensland Ltd. Director of National Australia Bank Ltd. Ex chief executive of MIM Holdings Ltd, Ex National President of the Australian Institute of Mining and Metallurgy and The Australian Mining Industry Council, Ex Vice President Business Council of Australia.
H. Ohkawa Non-executive Director of Sawmillers Exports Pty Ltd
T. Mitsui Non-executive Director of Sawmillers Exports Pty Ltd.1
When Executive Director Tony Berg was questioned about Boral's history of anti competitive activities at the AGM in November 1995, the Chairman Peter Cottrell dismissed the question, saying that the price fixing was from a time before Mr Berg's appointment. However, Boral has since been charged with its worst case of pricefixing. It was recently fined 6.6 million dollars and some executives fined $350,000 for fixing premix concrete prices in Queensland.4
This is the third time Boral has been found guilty of price fixing. The Royal Commission into the NSW Building Industry found that Boral had engaged in anti-competitive practices. Boral and CSR were found to have fixed prices in the 480 million dollars a year plasterboard market, as they were the only two main competitors, giving the two companies average gross profits of more than 30%.5 Again in 1995, Boral, CSR and Pioneer negotiated a penalty of $100,000 with the Trade Practices Commission for being "knowingly involved in" price fixing in the concrete roof tile industry in South Australia via contractors working under the South Australian Roof Tiling Association.6
Boral is the second largest hardwood eucalypt woodchip exporter in the world, exporting 947,000 tonnes pa. from Tasmania and licensed to export up to 500,000 from NSW, although it has never reached this level7 - 320,000 tonnes pa in 1993 for example.8 Boral also owns several sawmills and has a sawmilling capacity of 622,000 cubic metres8 as well as a hardboard plant in Launceston and interests in Malaysian timbers via its Malaysian subsidiary; RCN Sdn Bhd.9
Woodchip export sales and profits jumped in 1995. Demand has doubled in the past eighteen months.1 Extracting and exporting woodchips is very profitable, with a low level of capital investment for high returns. While other sectors of Boral are not doing so well it is currently strongly in Boral's interest to stay in the woodchip business. However, a present slump in world pulp prices does not inspire confidence.
In 1994 Boral's timber interests contributed about 6% of earnings before interest and tax10 Boral's timber interests remain small enough for the company to shed - thus avoiding consumer action.
This is the NSW-based subsidiary of Boral responsible for exporting woodchips. SEPL is 20% owned by Japanese interests: 10% owned by the Japanese pulp and paper trading multinational, Itochu Australia Ltd (which is a major shareholder of Harris- Daishowa) and 10% owned by Tomen Aust Ltd and Tomen Corporation.11
SEPL operates out of Newcastle NSW and has a Federal export licence of 500,000 tonnes per year, although it has never reached this level. In 1995 profits increased by one million dollars totalling 3.69 million dollars.1
SEPL obtains all its woodchips from the native forests of NSW. The actual harvesting of the forests is contracted.
This woodchip trading company of Boral Timber operates out of Longreach (Bell Bay), Tasmania, and has an export licence volume of 947,000 tonnes per annum, although it exported 760,000 tonnes in 1993.14 Forest Resources was bought in 1992 from Petersville Sleigh who had been operating as an export woodchip company for some years.15
Export woodchips produced in Tasmania come primarily from publicly owned forests, although Forest Resources is the exception, having commenced operations in 1972 with no committed access to crown forest. The company, active in north eastern and central Tasmania, now obtains 60% of its pulpwood from private property, with 40% coming from Crown forests.8 Historically, most of this mill's resource has come from the clearance of private land or from salvage logging of forest areas destroyed by bushfires, mining or hydro developments. The company owns numerous tracts of native forest which it has either cleared for establishing plantations, or which it manages for ongoing wood production from the native forest.16 Harvesting of pulplogs on private property is often the first stage of land clearance.
In 1992 Boral acquired Tasmanian Board Mills, a large sawmill in the north of the state wholly owned by Forest Resources as well as Risby's Sawmill, the state's second-largest sawmill based just outside Hobart. These operations, along with Forest Resources, were "rationalised" resulting in the total loss of some one hundred and twenty jobs. Boral's sawmilling operations in Tasmania take over 70,000 tonnes per annum of high-quality native forest sawlogs.17
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