The Pratt family’s $3 billion Visy paper, packaging and recycling empire will spend $500 million building a raft of clean energy plants around Australia as it ramps up plans to be a worldwide leader in generating electricity from waste.
Visy executive chairman Anthony Pratt said the company planned to spend an initial $100m to build a 30MW clean energy plant on the site of the group’s Tumut pulp and paper mill in southern NSW.
“I have a dream that in the not-too-distant future, Visy Tumut will spend around $100m to expand our clean energy generation here and take in additional waste forest wood to generate clean renewable energy and sell it into the power grid,” Mr Pratt said at the official opening of Visy’s $550m expansion of the Tumut mill on Saturday by NSW Premier Barry O’Farrell.
“An additional 30MW clean energy plant here at Tumut would be another big step along the way towards my vision of making clean energy a whole new business division for Visy,” Mr Pratt said.
The expansion doubles the production capacity of the Tumut mill and takes total investment in the project to almost $1bn, the biggest single investment on any one site that Visy has ever undertaken.
Mr Pratt’s plans for the clean energy plant at Tumut follow his commitment four years ago to invest $US1bn in paper recycling and waste-to-energy infrastructure at a Clinton Global Initiative meeting in New York. The Tumut plant will be the second such plant in Australia and the Pratt family’s third in the world.
Visy is building a similar plant at its Coolaroo manufacturing and recycling plant in Melbourne.
Last year, Visy’s US associate, Pratt Industries, commissioned a $US60m energy plant in Georgia that converts waste from its manufacturing into gas.
The next Australian clean energy plant after Tumut is expected to be at Smithfield in Sydney’s west. It is expected to cost between $50m and $100m.
Visy currently generates renewable energy from waste wood and other bi-products to help power the Tumut mill.
Mr Pratt said that over the past decade, 1.2 million MW of energy had been generated from renewable sources at the plant, enough to power 160,000 homes in NSW for a year.
In the 2009-10 financial year, the first to incorporate the upgrade, the mill’s on-site renewable and co-generation system produced 73 per cent of total energy and 42 per cent of power for the plant.
It also generates 190,000 to 250,000 NSW greenhouse gas abatement certificates each year through renewable energy production and energy-efficient investments. “My vision for Visy Tumut is not only to keep our position as an example of world’s sustainable manufacturing, but to build on it,” Mr Pratt said.
The mill’s expansion is also expected to add an estimated 20 per cent to Visy’s total EBITDA.
This year, Mr Pratt revealed he was planning to return to Australia to run Visy.
He said that after two decades in the US running Pratt Industries, he wanted to return to his homeland. He currently spends six weeks out of eight in Australia.
Under the late family patriarch Richard Pratt’s succession plan for Visy, his three adult children each inherited a one-third stake in the company.
But Mr Pratt, who is executive chairman of Visy, has the ultimate decision-making rights. His mother, Jeanne, is co-chairman.
Under the succession plan, Mr Pratt also inherited ownership of Pratt Industries.
His youngest sister Fiona and her partner, Raphael “Ruffy” Geminder, took control of the old Visy Packaging business now called Pact Group. Ms Geminder is also actively involved in the Visy business.
Mr Pratt’s elder sister Heloise and her partner, Alex Waislitz, inherited the family’s investment arm, Thorney Holdings.
