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David Farley learnt his first lessons in business as a jackaroo at Boonoke Station,
in southern NSW, which was then owned by Rupert Murdoch.
"The relationship I had with Murdoch and his lieutenant Ken Cowley was excellent,”
says Farley, who will take up the position of CEO of Australia's largest cattle
company, AAco, next month.
"To be able to be an observer in their business conversations, how they strategically
positioned themselves, was just amazing."
A turning point came on the Boonoke tennis court, listening to Murdoch outline his
media vision.
“For months, I wondered ‘how can I achieve what he intends to do—how can I do that
in agriculture?’”
One year later he left the wool industry and joined the cotton-producing Colly Farms.
By the time he left, in 1999, Colly had grown from 160ha of cotton to 30,000ha.
It had expanded into marketing and the US, it was in the top 10 traders in the world.
In his 19 years at Colly, the company was the subject of a takeover tussle between
Kerry Packer and Anglo American, was floated in 1984, acquired by Commonwealth Funds
Management in 1989, and floated again in 1996.
Farley's time at Colly ended in 1999 when the Kahlbetzer family gained a majority
share.
Realising he would not fit the family's business model; Farley made the painful
choice to move on.
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"My leaving was fortuitous because it didn't rain again for years”.
Farley, who will be the sixth CEO at AAco in a decade joins the company after two
hard years. Drought, followed by floods, and high fuel and grain prices followed
by a high Australian dollar led to a loss of $38.7 million for 2008, and a half-year
2009 loss of $30m.
This week the company warned it did not expect “any significant earnings before
interest and tax contribution in the second half of the financial year on the company's
yearend results”.
AAco's board has just come through two turbulent years. The AGM last year threw
out chairman and acting CEO Nick Burton Taylor, ostensibly because the company had
failed to divest itself of Futuris, now Elders, and its 43 per cent stake.
Earlier this year, the main board, Futuris appointee Charles Bright, Philip Toyne
and Brett Heading, recommended the purchase of Tipperary Station, owned by lawyer
Alan Myers, who proposed to then purchase a 19.9 per cent stake in AAco.
But that proposal was rejected by an EGM in May. Neither Bright nor Toyne stood
for the board at the June AGM, and Heading was voted out. Nick Burton Taylor who
had lobbied against the Tipperary purchase, was returned to the board, along with
former board member Chris Roberts, who had stood down after Burton Taylor was dumped.
Well-respected cattleman Peter Hughes
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and businessman Stephen Lonie, who were appointed in April, were endorsed with Lonie
becoming chairman Arunas Paliulis from the company's biggest shareholder IFFCO,
who also opposed the Tipperary purchase, joined the board.
Farley readily admits that leading AAco is going to be challenging. But he is impressed
with the current AAco board. “I was impressed with ... the skills base across it,
but more importantly the integrity of the gentlemen that are representing the shareholders.”
Lonie says Farley was chosen because of this very broad experience in agribusiness,
“a very strong empathy and understanding for the source of the business, an understanding
of the remote locations where our people work, an empathy for the industry and a
very strong managerial capability, analytical skills and very strong leadership
qualities”.
Over the past decade, Farley worked with Dick Pratt on the Southcorp packaging take
over as CEO of US company Calcot, and a director of the Farmers Cooperative Marketing
Association of America. He then set up his own company, Matrix Commodities.
His first task at AAco will be to meet management and staff, and visit the company's
19 stations and two feedlots. “My focus will be to really make sure that what assets
we have are working at their best level. And if we can't make them work, we will
take that capital and turn it into something else.”
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