Usually our family business stories are uplifting, inspiring tales of success, but not this one. Well, actually I think Brisbane’s Packer family are inspiring, and they were successful for the first 118 of their 122 years in the tanning business, but now their story is one of adversity and pain.
You see, Packer Leather has become a victim of what I wrote about yesterday (The Japanese threat to manufacturing, February 20): the grinding struggle of Australian manufacturing caused by the high dollar and rising energy costs. Revenue and margins collapsed four years ago and the business is now running at a loss; staff numbers have been cut from 200 to 90 and annual sales are down from $30 million to $12 million.
The Packers are hanging on, but it’s hard, and the 69-year-old patriarch, Lindsay Packer, is getting tired. "It was tough in the early 70s,” he says, "but I’ve never seen it like this. It’s an indictment, what this country is doing to itself.” You can feel his anger and disappointment.
Packer Leather started as the Packer & Knox tannery in Chermside near Brisbane 1891. Joseph Packer bought out the Knoxes and then 20 years later, around 1921, he brought his sons George, William and James into the business and renamed it GWJ Packer. George eventually took over management of the company from his father and then passed it to his own son Roy (William’s and James’ children were apparently not interested).
Unfortunately Roy died suddenly in 1967 at the age of 57. His son Lindsay, a wool classer by trade, was only 23 at the time so the three third generation families brought in an outsider to manage the business until he was ready to take over, which he did five years later, in 1972. He’s now been managing director of Packer Leather for 41 years.
Back then the business was still on the original land that Joe Packer had bought in Chermside, but the three families decided to sell the land and go their separate ways. They got $300,000 – $100,000 each – and young Lindsay decided to start Packer Leather all over again and preserve his great grandfather’s legacy.
So he borrowed that $100,000 from his mother Norma and bought some land at Narangba, 25 kilometres further up the Bruce Highway from Brisbane and applied to the council to build a tannery there. But the Shire of Narangba knocked him back, so he took them to the Supreme Court – and won.
It was hard going in those early days: Lindsay had brought four staff with him from Chermside and he was running Brisbane’s smallest tannery.
But he was good at it, and the business took off. His brother Graham, then working for a bank, joined him in 1974 and two of them turned Packer Leather into Australia’s largest kangaroo tannery and an export success story. Kangaroo hide is still the company’s main line, with about 25 per cent cowhide, including the leather for Kookaburra cricket balls and Sherrin footballs.
They built the business into a global force in leather through relentless innovation and exporting, with Graham handling the sales, travelling to Europe every year to deal with clients. In their own lab they developed fire and heat retardant leathers, sophisticated anti-microbial treatments, and high durability and abrasion resistant leathers for sporting and military footwear.
The latest innovation involves developing kangaroo hide labels for clothes, mainly jeans, which Lindsay says is very high tech indeed.
"When I took over this business in 1972 I never dreamed we’d be able to achieve the sophistication we did. We installed a lot of new equipment in 2000 and really hit a peak in 2004/5.
"In those years we were making a lot of money, and thank goodness we did because we wouldn’t be able to survive now without those reserves. We’ve lost about $6 million in the past four years.
"And it’s not just the dollar that’s hurting us. Our energy costs went from $6 a kilowatt hour to $16 overnight last July and on top of that we got the carbon tax. Water costs have done much the same thing.”
There are now two family companies: GWJ Packer Tanning Pty Ltd contains the land and equipment and is owned by all four of Roy’s children (Lindsay, Graham, Daryl and Pam); Packer Leather is the operating company and is owned by the three males and their families – not Pam. As managing director, Lindsay and his wife Dale own a "little more” than the others.
Lindsay’s son David is now sharing management of the business and his younger daughter Susan also works for the company in the logistics department. His brother Graham still looks after sales.
When Lindsay retires, David will take over, but the details of the ownership transition haven’t been worked out yet. Says Lindsay: "Graham and I are the fourth generation and we were given the opportunity to take on the family business, and I want to make sure the fifth generation gets the same opportunity.”
But it’s getting hard now. "We keep telling ourselves we’ll survive. If you believe in something then you keep going – the dollars aren’t what count. We’ve got a stack of people who rely on us.”
So this Packer family are Aussie battlers, unlike their Sydney namesakes, but they are also the embodiment of the two qualities that Australia’s manufacturing industry will need to survive the next few years: innovation and a fighting spirit.
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