JAMES Fazzino, the recently retired CEO of Incitec Pivot, first came to my attention several years ago when I read a story about this newly appointed company boss who drove his Valiant Charger to work every day.
At the time he was quoted as saying something like that as the CEO he could choose to drive any car that he wanted, but that he loved his Valiant.
In fact I found that he restores his Valiants personally (he has eight!) as a form of peaceful time to think and plan.
Think and plan is what he has done best. When he began with Incitec Pivot it was a Victorian fertiliser co-op that sold agricultural products, with a value of $400 million.
As he leaves Incitec Pivot it is a a global company, operating in 13 countries.
It is the world’s second-largest explosives company, Australia’s largest fertiliser company, with its company value now at $8 billion.
What is disturbing is that Fazzino, along with other chief execs, saw Australia’s energy problem coming, particularly the gas shortages and price hikes.
Business warned governments, but nothing worthwhile was done to address the looming shortfall.
Fazzino achieved part of Incitec Pivot’s growth through his $1bn investment in the US.
It was not just energy policy that drove the decision, but it played a big part.
Just listen to this: Fazzino says in the US, through adopting new technology, gas prices have fallen from $12 to $3 while Australia has allowed our gas prices go from $3 to $12!
How can Australian industry compete?
Free trade agreements are all very well, but only if we are sensible enough to ensure a level playing field.
As an example, Victoria has abundant gas in Gippsland without fracking, and surplus water as a by-product, but ideologically driven governments won’t allow Australia to harness this resource.
As if gas prices weren’t enough of a handicap, Fazzino tells the story of Incitec Pivot’s $1billion chemical plant investment in Louisiana versus setting up a $1billion plant in Newcastle.
“I can remember going and visiting Bobby Jindal, who was Governor of Louisiana. He got wind of the fact I was in town, cancelled his meetings for the day, and he sold Louisiana to me. And then we had this wonderful regulator that we were dealing with who really wanted to create jobs,” he said.
When Fazzino needed a tighter time frame to complete the build, he says it was the American way that we all dream about.
“The regulator said, our standards aren’t going to change, the amount of work we’re going to do is not going to change but if you pay the overtime, you can have your approvals within six months.
“And, you know, the Louisiana plant was approved, built, and operating, in the time it took for the Newcastle plant to get approved,” former ABC Business reporter Ticky Fullerton reported Fazzino as saying in a story in The Australian.
Note this carefully: The Louisiana plant was up and operating while red tape was delaying Newcastle jobs!
We need more James Fazzinos running Australian companies.
We need more enterprising companies willing to invest in Australia.
Next time someone mentions low national wages growth, ask if it is energy costs, red tape, or world-high company tax that is robbing Australia of investment, and higher paying, full-time jobs.