ALAN Green jokes about how he is going to improve his golf handicap after June 30, the date he steps down from his management position at EG Green & Sons, the company behind Harvey Beef and Western Australia’s dominant force in meat processing.
ALAN Green jokes about how he is going to improve his golf handicap after June 30, the date he steps down from his management position at EG Green & Sons, the company behind Harvey Beef and Western Australia’s dominant force in meat processing.
But the humour is a bit forced.
At nearly 50, Mr Green has made the toughest decision anyone in a historic family business like EG Green could ever make.
In the interests of the company, he, his brother Graeme and cousin Peter have all agreed to quit their positions within the management team at the end of the month to allow non-family members free rein to implement a new strategy.
It is the first time in 84 years that a member of the Green family will not play a management role at the company.
After 30 years with the company, Mr Green said he knows of little else, although he admits to other business interests that are sure to keep him busy if golf loses its attraction.
However, he knows the perils of surviving as a family business and had accepted, along with the rest of the Green clan, the need to give CEO of the past nine years, Garry Minton, room to make changes recommended by an independent review.
“We are the sacrificial ones in this case, we are saying we will step aside and give it a go,” Mr Green said.
He said the decision was the conclusion of a long period of review, most recently by independent experts, such as Perth-based GEM Consulting in conjunction with a human resources-focused consultant and then a four-person working party whose members will soon join the board.
All of this reached a head within the past two months, when the working party recommended, among other things, that the family members step out of the day-to-day management of the business started by their grandfather Ernest Green in 1919.
There was, it appears, a perception that shareholders in management may have proved an obstacle to the change needed to restructure the business – although Mr Green denies this would ever have been the case.
“The family has spent the past few weeks coming to grips with the recommendations,” he said.
“There have been many family discussions to try to reach an accord.
“It’s a big pill to swallow.”
Mr Green acknowledges that as shareholders working in the business, he, his brother and their cousin had to lead the way in accepting the changes.
Otherwise, he said, how could they expect other employees, many with decades in the company, to agree to the restructuring – which he stresses is about operational changes such as marketing and procurement, and not job losses outside of management.
About 10 family members own EG Green Holdings Pty Ltd through three companies that represent Ernest’s children who inherited his Harvey abbatoir and chain of South West butchers’ shops in 1945.
The second generation built an export business, selling meat to Asia and the US.
There was also a big shift in the late 1970s to becoming major pastoral landholders in the Kimberley, in a bid to ensure their Harvey plant ran at capacity.
By 1991, with the purchase of Springvale station, it had accumulated six leases covering 1.3 million hectares and a herd of 50,000 head.
The peak of this operation coincided with the arrival of the live export trade, something that competed fiercely with the Green’s own meat export business.
Mr Green said the impact of live shipping had not been anticipated and the competition was damaging.
At the same time, however, the group’s now famous Harvey Beef brand was born from the Harvey Meat label used on export product.
“We found with the exports we were getting repeat business that wanted the Harvey brand,” Mr Green said.
“It was from that that the idea grew.”
That brand is set for a relaunch as part of the recommendations from the working party – with the imagery set to change from the stylised cow logo.
Domestically, there will be some other changes.
EG Green is negotiating to buy Sealanes out of a joint venture meat supply business called Kings Choice, a move that will leave it with 84 per cent of the company and a minority with two founders.
This company will become the domestic marketing arm of the group.
The company also effectively exited the Kimberley, awaiting ministerial approval on the sale of its last assets.
Instead, the company has moved to acquire a station in the Pilbara as well as looking for leased properties in the southern part of the State. Young River near Esperance and Wedderburn near Brunswick are already signed up.
Mr Green said properties within three to five hours drive from Perth were favoured and the move to leasing had unleashed significant capital for the business.
“We would rather put $10 million into buying cattle and feed than buying land,” he said.
“This changes the business model quite a bit.”
In a State where EG Green represents 40 per cent of all meat production, that is significant.
“Obviously we want profits but what we want to do is ensure the survival of the business in the longer term.”
Mr Green said he wanted to make sure EG Green was there for the next generation, two of whom will remain employees on traineeships and there was nothing stopping a suitably qualified Green family member from taking the reins in the future.
The Greens are also looking at restructuring the holding company so it might be easier for family members to liquidate their holdings as well as raise capital or even float some time in the future.
“When that evolves it will help deal with the succession plans for our fourth and fifth generation members,” Mr Green said.
“The Smorgan family [Victorian-based steel industry players] had all sorts of problems and our intention is to beat it before it gets to that.”
