It is Saturday night in late April at the luxurious Mar-a-Lago resort in the billionaires' playground of West Palm Beach, Florida. Inside the dining room – a faithful replica of that in the 15th-century Palazzo Chigi in Rome – the 50 or so formally dressed guests have risen from their tables to applaud the President of the United States as he arrives for his 8.15pm dinner appointment.
Donald Trump pauses at the door and momentarily soaks in the applause before waving and calling out "enjoy your dinner!" to the gathering of super rich and Florida elite. The President then strides purposefully towards Anthony Pratt, who has been given a table directly next to his, and says without hesitation: "Anthony, great to see you and thanks for the ad!"
The ad was a full-page advertisement placed in The Wall Street Journal that same day headlined with the words "Making good on our pledge" and "Creating jobs in the Midwest". Next to a photo of Pratt leaning in towards the camera, along with his signature, the accompanying text sets out how, in 2017, Pratt Industries pledged to invest $US2 billion to create 5000 manufacturing jobs in the United States. "And today, we are breaking ground on a billion-dollar investment in a new paper mill and box factory in Wapakoneta, Ohio," it reads, with more box factories planned for Indiana and Pennsylvania. Pratt supports Trump more than most, and he does so in a very outward manner.
The billionaire box-maker quickly motions for his dining companion (your correspondent) to step forward to meet the President, at which time we inform Trump that Pratt tops this year's Financial Review Rich List.
Rich List 2018: Behind the scenes with Australia's richest man
"Wow, in Australia? Well, he's the number one person here," replies Trump who in person is slimmer than he appears on TV and yet even more larger-than-life. Secret service agents line the wall, keeping a constant watch on all present. Trump then adds with a flourish: "You know, he was with me before I ran", in reference to a $100,000 bet Pratt made, after the third presidential debate in October 2016, on Trump beating Hillary Clinton at the election.
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Trump: 'The great Anthony Pratt!'
Trump then walks towards his table where he is to dine with a small group of friends, including US billionaire Isaac Perlmutter, the former owner of Remington Products and Marvel Toys. Suddenly, before taking his seat, he turns and points to Pratt for the whole room to see, and booms: "Ladies and gentlemen, the great Anthony Pratt!" Every diner is now applauding Pratt, who beams in appreciation.
Over dinner featuring Chilean sea bass and meat loaf, the latter following the recipe of Trump's late mother, Mary, Pratt sets out why he believes Trump will win the next US presidential election, due in November 2020.
"I think President Trump will win a second term because he's creating jobs," Pratt says. "There are three things that are important to hard-working Americans: jobs, number two is jobs and number three, jobs. I think he's doing a fantastic job."
Once the main course is cleared, desserts of crème brûlée and bread-and-butter pudding are ordered. Upon their arrival comes a surprise in the form of an extra dish. "The President ordered his favourite ice-cream sundae for the table," a waitress explains as she puts down a large plate featuring three scoops of vanilla ice cream, sides of chocolate, strawberry (the President's favourite flavour, a staff member later reveals) and caramel sauce, nuts and raisins.
Trump picks up the tab
After polishing off two desserts each – it is quickly deemed inadvisable to not eat the presidential sundae – another waitress returns to whisper: "Mr Pratt, the President just wanted you to know he has taken care of your meal tonight."
Yes, that actually happened. The 45th President of the United States of America just paid for dinner for Australia's richest person and the AFR Magazine. The most powerful person in the world takes time during his last visit to Mar-a-Lago before it shuts for the American summer to lavish attention on an Australian billionaire. In the following week he will meet with German Chancellor Angela Merkel, entertain French President Emmanuel Macron at a glittering state dinner where the flowers and table arrangements are directed by his wife Melania, and then take all the credit for a historic peace deal between North and South Korea.
On his way out of the room and, presumably, back to the affairs of state, Trump shouts to Pratt: "Hey Anthony, I heard you got a little something there you didn't order. I hope you enjoyed it. I heard you ordered something else, [but] it wasn't as nice as this, was it?"
The President shakes hands with guests, waves to an adoring room that again gives him a standing ovation, and departs. Pratt is grinning, elated.
Creating manufacturing jobs
Anthony Joseph Pratt, 58, has quickly become a Trump favourite, ticking some big boxes with the President by building factories in heartland states, which swung Republican in the 2016 election, and creating the manufacturing jobs that Trump had promised.
Pratt's interactions with President Trump have been many. In May last year he was pointed out at a function aboard the USS Intrepid, where the guest of honour was Prime Minister Malcolm Turnbull, an occasion for the President to make up with the PM after hanging up on him during a phone call four months earlier. Trump and Pratt spent time together at a New Year's Eve party at Mar-a-Lago and then again at a visit to the White House in February this year alongside other Australian business identities and Turnbull.
These semi-regular encounters typify a tale of the intersection of power, politics and money, as well as some fortuitous timing and canny strategies used by the Australian billionaire to make every post a winner.
So well is his Pratt Industries performing in the US that Pratt tops the Financial Review Rich List for the second consecutive year, with record personal wealth of $12.9 billion. His American business now has 70 factories and plants producing more than 3 billion tonnes of cardboard boxes and other paper products annually, while also recycling waste. The US economy's strength and its manufacturing comeback has helped keep his wealth higher than Australian-based billionaire peers such as Gina Rinehart, Frank Lowy, Andrew Forrest and James Packer.
$4 billion in US revenue
Pratt Industries' business in the US has annual revenue of almost $4 billion, grown from the one factory the family owned in Macon, Georgia, when Pratt was sent to America at the behest of his late father Richard in 1991.
Visy Industries in Australia, the business Pratt inherited leadership of when his father died in 2009 and now owns jointly with sisters Fiona Geminder and Heloise Pratt, has turnover each year of just over $4 billion. The son, who co-chairs Visy with his mother Jeanne Pratt, has built a business that is about to eclipse that of his father's.
The US is, according to Pratt, the land of endless opportunity where "growth is forever". And he has big plans to keep growing and growing, targeting a lift in Pratt Industries' market share in the US from 6 per cent to 10 per cent during his lifetime.
He spends about 60 per cent of his time in Melbourne, where his two children are at school, and the rest at his New York penthouse apartment atop the historic Sherry-Netherland Hotel on Central Park. Pratt says he likes moving between the two countries, always by private jet, because "whenever you arrive, there's always a lot to do".
$US200,000 to join Mar-a-Lago
When in the US, Mar-a-Lago has become a favourite stalking ground of the Australian billionaire, who last August took out a membership costing about $US200,000 plus annual fees of at least $US14,000 and additional food and accommodation costs. Pratt is greeted warmly by staff at the salmon-pink estate.
It was opened in 1927 by Marjorie Merriweather Post, once considered the richest woman in the world. She had inherited her wealth from her father C.W. Post, the owner of the Postum Cereal Company, and over three years built a huge mansion, with features of Spanish, Venetian and Portuguese-style architecture, using three boatloads of Dorian stone from Genoa, Italy and 36,000 antique Spanish tiles.
Upon her death in 1973, Post left the house to the federal government in the hope it would become a "winter White House". A decade later, the government put Mar-a-Lago up for sale, having decided the estimated annual upkeep of $US1 million was simply too onerous. Trump bought it in 1985 for $US10 million. And then, in 2016, he became President. Thirty-one years after Marjorie Merriweather Post passed away, her dying wish had come true.
Over a mild spring weekend at the resort, Pratt flits between a house on the estate owned by the President's son, Eric Trump, and the resort's communal areas – the main dining room, which is lined with marble from an old castle in Cuba; the living room with its high ceilings and walls adorned with gold-plated motifs; a bar featuring a painting of a young Trump in a cricket jumper; and the tiled patio terrace that is the centrepiece of the estate and where Trump famously dined with Japanese Prime Minister Shinzo Abe as North Korea fired a missile towards Japan in March 2017.
The morning after that memorable presidential meeting in the dining room, over breakfast on the sun-drenched patio, Pratt explains how the secret behind his relationship with President Trump is his partner Claudine Revere, who has a long-standing relationship with the Trump Organisation through her New York business, Relish Caterers. "She runs the kiosk – other people would call it the concession stand – at the skating rink at Central Park. And the Trump Organisation has the 10-year rights to run that skating rink, and so together they applied to the Central Park management to get their 10-year licence renewed."
Revere and Pratt have been together for 12 years; she's been a sub-tenant of the Trump Organisation for 15 years. "She jokes it's her longest relationship," say Pratt, adding that's exactly what she told the President on board the USS Intrepid. "She knows President Trump and as a result of her relationship, I was able to be, as they told me, the last member accepted into Mar-a-Lago."
Breakfast on the patio
Each morning, while staying at Mar-a-Lago, Pratt works out at the gym next to the huge swimming pool built after the then real estate mogul converted the mansion into a members-only club in 1995. He then takes breakfast on the patio. Lunch is also taken outdoors and in inclement weather dinner is held inside.
Secret service agents are a constant presence – one says "nice ad in the paper" to Pratt during his photo shoot for the AFR Magazine in the living room. The Wi-Fi and phone reception are occasionally jammed. A gunboat patrols the water between the mainland and the island where Mar-a-Lago sits. An armoured all-terrain vehicle cruises the resort's private beach, which is linked to the mainland by tunnel under a West Palm Beach road. Further offshore is another patrol boat. Bomb checks are performed on every vehicle entering the property and visitors have to pass airport-style security on the way to the main building.
Pratt says he brings important customers to Mar-a-Lago to entertain them. It's hard to make cardboard boxes stand out from the competition, so hospitality helps keep customers close. "Relationships are everything, largely," he says. It's here that he's dined with Home Depot's billionaire founder Bernie Marcus, a fellow Mar-a-Lago member. Pratt Industries now sells about $200 million worth of cardboard boxes at Home Depot outlets throughout America. He also brings close friends such as fellow Australian billionaire Gina Rinehart.
While the sheer size of the American market is an important part of Pratt's growth story, so are two business-friendly policy changes introduced by the Trump government. The first is the cut in the corporate tax rate from 35 per cent to 21 per cent, announced last December. Pratt believes the change gives Pratt Industries a $US100 million boost annually.
'Investment tsunami'
At the same time Congress passed laws allowing business a full depreciation of capital spending in one year rather than spreading it out over several. In any one year Pratt Industries might spend hundreds of millions on machinery for a single factory.
"What it means is you can write off capital expenditure in one year, and we spend massive amounts, instead of over seven years," Pratt says. "And I think that is going to lead to an investment tsunami in America, which in turn will create massive amounts of jobs. I can't say enough of how big this is as part of the suite of things that make America a good place to invest.
"There's very much a sense that America is open for business, and President Trump has been successful in business as well as television, as well as being President. So I think he really does understand. What drove the tax bill is his understanding of what drives business."
Since the tax changes, and while the Australian Parliament prevaricates over Turnbull's proposed business tax cuts, Pratt has accelerated his plans for a giant paper mill in Wapakoneta, Ohio, the birthplace of astronaut Neil Armstrong, as part of his $US2 billion pledge to create those 5000 manufacturing jobs. A new factory is being built in Allentown, Pennsylvania.
"That pledge was because we do have a view that America is a great country to invest in," Pratt says before breaking into the Billy Joel song Allentown but with its second line changed to: "And they're opening all the factories up …"
The Amazon effect
Among his customers are Amazon (Pratt has previously joked that given everything sold online gets shipped in a cardboard box, he is one of the few in business to welcome the global giant to Australia), the Energizer battery company, Domino's Pizza and drinks company Diageo. When he is in the US, he criss-crosses the country relentlessly in his $50 million Bombardier Global Express jet to see his customers, often surprising them by turning up in person. In this industry it can be considered unusual for the billionaire business owner to arrive in person for a meeting to clinch a new contract.
During the month after the Mar-a-Lago visit, Pratt's schedule includes taking Walmart consultant and former Woolworths boss Roger Corbett through a paper mill in Indiana, and meeting Clorox executives in Atlanta and attending Anzac Day commemorations in New York. Pratt then travels to Texas to meet with the owners of a box factory, another potential acquisition, before flying back to Florida for lunch with Home Depot's Marcus, followed by a Denver meeting with US Postal Service management and a trip to Minnesota to visit Hormel Foods and MyPillow.
"You tend to do a lot more flying here," says Pratt. "In Australia it's more Melbourne to Sydney. America is massive. We've got two main cities in Australia, maybe three with Brisbane. Here there's tens and tens of big cities."
We're still having breakfast on the Mar-a-Lago patio when there is suddenly a frisson of excitement. A group of secret servicemen about 10 metres away jumps to attention. The President emerges from his quarters wearing a white polo shirt and red cap and strides towards a waiting motorcade. He is off to play golf. "The President just walked past," Pratt exclaims. "What other place have you been to where that happens!"
His father's son
When Richard Pratt passed away in 2009, Visy Industries had turnover of $3.5 billion and his family wealth was $4.3 billion. He sent his son to America to tend to new fields and that son has sown a business that has seen his family's wealth more than triple. Yet as big a deal as Anthony Pratt has become, he's still capable of feeling star-struck when he's in the presence of the American President. Perhaps he is wondering at his good fortune. It is access that even money cannot buy.
He then returns to discussing the Wapakoneta project. "That paper mill will be attached to a corrugated box factory also being built on the site, and it happens to be in Ohio, which we hope supports President Trump." Ohio is one of four so-called "swing states" along with Michigan, Wisconsin and Pennsylvania. The Democrats will need to win some of them back if their candidate is to beat Trump in 2020.
So will Pratt campaign for the President in those heartland states where so many of his factories sit? "[As a foreign resident] I can't in any way provide help, but I speak well of him wherever I go and I think he's doing a great job," he replies.
But scroll down far enough in Pratt's Instagram feed, past photos of him smiling with Trump at the White House and Mar-a-Lago, and you'll find an image of him with both former US president Bill Clinton and daughter Chelsea. He attended at least one Clinton family fundraiser in New York in 2015, well before the Democratic primaries. In 2007 he told Bill Clinton's Clinton Global Initiative that he would invest $US1 billion in clean energy pursuits. And he was already betting on a recovery in the US manufacturing sector well before Trump was elected. At a time when manufacturers were leaving the US in droves after the global financial crisis in 2008, Pratt bought up box factories, built recycling operations and opened new waste to energy plants, while chasing new customers and expanding into new product categories.
"We are a company, not a political organisation, so whatever is the government of the day we will fit in with that and we just hope they have good economic policies that support economic growth and job creation. It's all about jobs, because if jobs are being created it means business is good."
And business certainly is good now, as a contented Pratt notes: "There's been a lot of growth here in America, and I want to continue that. I want to keep doing this until the day I die."
The author travelled to the US with Visy and Pratt Industries.
The Financial Review Rich List 2018 is published in the June issue of AFR Magazine, out on Friday, May 25.
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