Herald business leader of the year: Graeme Hart

By JIM EAGLES business editor

On Christmas eve two years ago entrepreneur Graeme Hart and his team sat round a table and developed a $3 billion strategy to quadruple the size of the food empire that had already made him the country's richest man.

Hart already owned Australian-based Burns Philp and the plan called for him to snap up South American yeast giant Fleischmann's, New Zealand Dairy Foods and Australasian food conglomerate Goodman Fielder.

This Christmas Eve he can sit back and reflect on a strategy successfully implemented.

All three target companies have been acquired and Hart says the integration process is running ahead of schedule.

"I'm comfortable that by the end of our financial year in June we'll have completed the process."

That exercise will undoubtedly have made him even richer and its ambitious size and smooth implementation have resulted in him being chosen by the Business Herald as its Business Leader of the Year for 2003.

But it's obvious that neither riches nor awards are what motivate Hart.

After a certain point, he says, "money has little to do with it. You only have so many cars and material assets. I think about it more as a by-product of what I happen to do."

As for personal publicity, he avoids it like the plague. Indeed, he agreed to be interviewed about being named as business leader of the year only because "it would perhaps be ill-mannered of me just to say, oh well, good on you, that's your decision, I'm not going to waste my time".

What he is motivated by, what he does get excited about, is simply "business, the process of building great businesses".

And Hart, it quickly becomes clear, is someone who is very, very focused about whatever he is doing.

To avoid unwanted distractions his office in Auckland does not have an address in the phone book, the company name is not listed on the directory in the building's lobby and the floor he occupies is dark, devoid of signs and all the doors are locked.

A visitor who makes it through the security system to the boardroom, with its spectacular views of the Auckland waterfront, finds that Hart, like many tycoons, is capable of radiating an almost overwhelming mixture of energy, enthusiasm and charm.

But when the questions start he switches from charm to an intense focus on exactly what is being asked - clarifying where necessary - and answering with an almost clinical care.

It makes for an easy interview but it's not difficult to imagine the same intensity and precise attention to detail being focused on, say, buying Goodman Fielder.

That strategy meeting on Christmas Eve two years ago is typical of the way he plans ahead.

"We're always looking for opportunities. It's rare that they pop up one day and they're not already on our screen."

For example, Hart decided several years ago that Fleischmann, the dominant yeast company in South and Central America, would make a perfect fit with his Burns Philps yeast business, but it wasn't for sale.

Then US giant Kraft launched a successful takeover bid for the parent company and indicated it would be divesting non-core businesses.

"We were ready and we made a pre-emptive move on the sale process and we secured the asset.

"I got my guys in from South America ... we sat in this boardroom for a week in fact, and ensured that we had right information, that we were confident in what we would do with the business if we were successful, that we understood where the weaknesses were, where the strengths were ... then we just went after it."

Similarly, he had worked out well in advance that Dairy Foods would have to be sold as part of the process of creating Fonterra, and "I would have looked at Goodman Fielder for at least a decade".

Those three purchases, he agrees, mean 2003 was "without a doubt" his biggest year.

"We must have spent the thick end of $3 billion in the course of the last 12 to 18 months ... and that's quite a significant amount to invest."

But, he emphasises, the significant thing for him is not so much the amount of money involved but the amount of work that went into making it all happen.

"Behind that investment is all the necessary research and analytics to get comfortable (for example with Fleischmann).

"Then you've got to work out the tactics of how you achieve that (such as with the likes of Goodman).

"Then you've got to put in place a set of very complex financial arrangements.

"Then you've got to actually succeed in completing the acquisition.

"And when you get there, really your day's just starting, because then you've got to successfully integrate those businesses and realise the potential that you believe lay in them.

"And that's really the hardest part, that's where you start getting tested."

So, with the implementation of that Christmas Eve plan going so well, will there be a new vision this Christmas Eve? "Absolutely. That's part of the job."

That job, he says, obviously involves the day-to-day running of the business group.

But it also means "keeping a close eye on tomorrow. And more so these days because the world changes at a more rapid rate than ever before.

"So I'm always thinking about today and tomorrow ... but," he laughs, "I'm not going to tell you what I'm thinking!"

Specifically, he declines to indicate whether his thinking includes a strategy to expand Burns Philp into a truly significant global food company.

"What I can tell you is that, like a mountaineer or yachtsman, I enjoy business, I enjoy the challenges that come with business.

"I am relatively young and imagine that I've got a few years in front of me yet, so I expect that we will continue to develop our businesses and to acquire and grow."

And, to continue the sporting analogy, there's always another mountain to climb? His eyes flash.

"I hope so. I hope so."