There was enough KFC to feed 750 guests who, on Thursday (US time), gathered in Kentucky to celebrate Anthony Pratt’s most significant achievement to date, with the Australian Business Review reporting bluegrass legend Dan Tyminski from Soggy Bottom Boys was on hand for a stirring rendition of “My Old Kentucky Home.”
The celebration coincided with the opening of Pratt Industries AU $ 1 billion-plus recycled paper mill and corrugated box factory in Henderson, Kentucky.
According to Anthony Pratt, Pratt Industries Executive Chair, the mill is part of a “great onshoring trend” driven by a resurgence in Middle American manufacturing.
Billed to be the most technologically advanced and environmentally friendly paper mill ever built, the 1.1 million square foot facility will save 25,000 trees daily- more than New York City’s Central Park!
On hand to celebrate the opening was an all-star guest list, including Lonnie Ali, Muhammad Ali’s widow and co-founder of the Ali Center in Louisville.
Lonnie Ali spoke of her and her late husband’s longtime friendship with Anthony Pratt and her delight that Pratt Industries has located its recycling and box mill here.
“When he said he wanted to put a paper mill in Henderson, I was over the moon” because of the good jobs it would create here, Ali said.
She joined Australia’s US Ambassador and former Prime Minister, Dr Kevin Rudd, the US ambassador to Australia and daughter of JFK, Caroline Kennedy and Kentucky governor Andy Beshear.
Claire Babineaux-Fontenot, CEO of Feeding America, the largest charitable organisation in the United States, was also floating around the room. Pratt Industries recently donated US $1 million to the organisation to help feed the disadvantaged.
Anthony Pratt was all smiles at the launch, telling the Australian Business Review reporter John Stensholt that the new plant encapsulates the comeback of small-town American manufacturing under President Biden.
“We are in the middle of the two biggest trends in America right now, which is sustainability and the renaissance of regional manufacturing here,” Mr Pratt told Stensholt.
Henderson is a small town of fewer than 30,000 residents.
However, Mr Pratt said the great “core-out of American manufacturing “occurred in regional centres like Henderson, where factories closed down, and operations were offshored to cheaper places to do business, such as China.
But he says Biden’s policies are helping reverse the trend.
Mr Pratt believes the Inflation Reduction Act has been a “game changer” for towns like Henderson, spurring investors to accelerate spending on green manufacturing and other measures such as promoting green energy.
And Mr Pratt is putting his money where his mouth is.
The new factory — the sixth of the last eight paper mills in the US built by the Australian billionaire — will produce 1500 tons of 100 per cent recycled paper daily, to be made into cardboard boxes at nearby Pratt plants.
The Kentucky factory is part of Pratt’s US $5 billion spending pledge in the US over the next decade – the pledge will create more than 5,000 green manufacturing jobs.
That includes at least two, potentially three, huge mills like the one in Kentucky over that time, though Mr Pratt says it would be challenging to accelerate his current timeline of building one every four years.
“We’re in a very capital-intensive industry and a private company. So I would like to keep it to about four years per mill.”
“You have to remember that every mill is usually surrounded by 12 box factories under our hub and spoke model [where the mills make paper for the nearby factories], so that is like building 13 factories in a way,” he said.
“That is building one every quarter, which is a lot. But the great thing about America is in this market, steady growth is forever.”
In his opening address, Mr Pratt referenced the US $5 billion pledge, which he said “was a major part of my recent pledge to the United States Ambassador to Australia, Caroline Kennedy.”
The new mill will help reduce landfills, cut methane gas emissions, and “create green-collar American manufacturing jobs as championed by President Biden.”
The Pratt Industries investment in the US economy is staggering in size and scale. They have AU $15 billion in assets and created 12,000 new American green manufacturing jobs.
It now has manufacturing facilities in 25 states across the US, in predominantly small towns Henderson and in states including Indiana, Ohio, Texas, California, Pennsylvania and Georgia, which swing red and blue.
President Biden’s green-friendly policies are the “right wheelhouse,” according to Mr Pratt, who claimed that President Biden “is probably the best President for 30 years since we have been here.”
According to Mr Pratt, the business is “in the landfill reduction business,” and given it recycles all its paper, “it is good for greenhouse gas reduction because as things decay in the landfill, they produce methane gas 84 times worse for climate change than carbon dioxide.”
He said that recycling is an essential weapon against climate change – but it also drives circular Nationally Determined Contributions.
Pratt Industries and its sister Australian company, Visy, have combined annual revenue of US $10 billion — of which the US business accounts for about $6 billion.
Pratt Industries is America’s fifth biggest box maker, having worked its way up from being the 57th largest when Pratt was sent to the US three decades ago by his late father Richard to look after its ageing paper mill in hardscrabble Macon, Georgia.
The company now has a market share of about 8 per cent, has invested $12bn in America over its history and has 12,000 employees — making it the biggest Australian-owned employer in America.
However, Mr Pratt is ambitious for his company to keep getting bigger.
Coming out of the lockdowns, where demand for cardboard boxes dropped, Mr Pratt reports that the industry has experienced a bounce-back in revenue.
“We’re still a relatively small percentage of the market in America. And so we’d like that because it means there’s been a lot of room to grow.”
“We went through a bit of a lull after Covid ended. Before then, people were ordering a hell of a lot online, and that made us go through the roof.”
“Then, all of a sudden, people went back to work and shopping at supermarkets again, and there was less ordering online.”
“But in the last few months, it has kicked back up for us again. We’re unsure of the reasons yet, but we have noticed a surge in activity.”
Mr Pratt tightly holds Visy with sisters Heloise Pratt and Fiona Geminder.
His father, the late Richard Pratt, rapidly expanded the business through the 1970s, 1980s and 1990s following his father’s death in 1969.
In a twist of fate, the announcement came hours before late Richard Pratt’s beloved Carlton Football Club secured their first Semi-Final win in almost 25 years before 96,000 fans.
The Pratts are long-term Carlton powerbrokers, with Richard Pratt serving as President of the football club in 2007 – a period recognised as instrumental in saving the famous club.
Carlton and Collingwood, recognised as the two most powerful sporting clubs in Australia, and playoff for the Richard Pratt Cup, with Mr Pratt’s widow still serving on the Carlton board of directors.
Should Carlton and Collingwood win this week, they will play off in a Grand Final for the first time in 42 years.