Allan Davies OAM GAICD: Logistics, conservation and family governance

Sunday, 01 October 2023

Emma Foster

    'Never give up' is a mantra that’s stood Allan Davies OAM GAICD in good stead throughout his 50-year mining and logistics career, but never more so than in the past decade, since making it his mission to help rhinos survive. 

    The chair of Australia’s largest diversified logistics company Qube Holdings Limited, veteran miner Allan Davies OAM GAICD remembers the words of Taronga Conservation Society Australia CEO Cameron Kerr AO GAICD in 2013.

    “He’d asked us when we thought we might get the rhinos here,” recalls Davies who, among his many philanthropic endeavours, chairs the Australian Rhino Project, an initiative he co-founded a decade ago. “When we told him the hope was a year or two, he said, ‘You may need to be a little more pragmatic than that’. He was right and lucky there’s a piece of my make-up that says, ‘Don’t ever give up’. But we’re now getting closer than we’ve ever been.”

    Speaking from his family’s property near Blackville, on the Liverpool Plains of New South Wales, one of three landholdings that make up the Davies’ 12,000ha diversified farming business, he says the concept of the Australian Rhino Project is quite simple — to relocate several white rhinos from their homeland in South Africa to wildlife parks in Australia and New Zealand as part of conservation efforts, while also supporting conservation in the wild. “The rhino’s horn is more valuable than gold on the black market and it’s a complex problem, but the long and short of it is that the rhino population is reducing,” he says.

    Estimated to number fewer than 16,000, relentless poaching for the illegal trade in their horn is threatening the survival of Africa’s southern white rhino, already brought back once from the brink of extinction in the late-20th century following decades of uncontrolled hunting. “It would just be a terrible thing to see them disappear,” says Davies.

    Unexpected ally

    Davies — better known as one of the country’s most canny coal miners, for his stoushes with labour unions and for the critical role he played in delivering Qube’s strategies and rising to lead its board, traces his interest in rhino conservation back to his childhood.

    Born in 1951, Davies grew up in the remote mining town of Mount Isa in Queensland’s gulf country, where his father, a fourth-generation miner, was working with Mount Isa Mines (MIM), still one of the world’s largest zinc and copper mining complexes. During an international mine study tour in the 1950s, his father had visited Kruger National Park. When the young Davies saw his dad’s wildlife photos, he was hooked. Around 20 years later, his dream to visit the same reserves was realised when he emigrated to South Africa for three years to work with a leading gold miner.

    “We lived just outside Johannesburg, so Kruger was about a four-hour drive away,” says Davies of the time he spent there with wife, Lyn. “Seeing the ‘big five’ in their own habitat is something else.”

    So, when Davies was approached 10 years ago by a friend with the idea of bringing a crash of rhinos to the relative safety of Australia to help protect their species, it didn’t take much to convince him to get involved.

    Crash delivery

    While simple in theory, the project has been far more complex than Davies imagined. “We’re at the point where the zoos have the facilities built with our support, which has taken quite a few years to achieve, so we could actually accept rhinos tomorrow,” he says. “They’ll be housed at various zoos around Australia – the new safari reserve at Monarto, at Taronga and Werribee – and also Orana Wildlife Park in New Zealand.”

    The remaining hurdle is the approval needed to transport the animals in an ever-changing regulatory and political landscape, centred on the Convention on International Trade in Endangered Species of Wild Fauna and Flora. Unsurprisingly, Davies is hesitant to confirm when the first “crash” of rhinos will arrive, but is hopeful it will be before the end of 2025.

    “There’ll be a sigh of relief,” he says. “We have an exceptional team, all pro bono, who have put a lot of effort in. So, it will also be a good day as we will have upheld the expectations of the people who’ve supported us.”

    Underground influences

    The Australian Rhino Project is among a long list of organisations in which Davies is involved, a constant juggling act that’s characterised much of his career. These days, on top of his board responsibilities, he’s also dialled up his involvement in his family’s expanding farming enterprise and large charitable private ancillary fund, the Dalara Foundation. The family’s philanthropic contributions earned both Davies and Lyn Order of Australia medals in this year’s King’s Birthday Honours.

    The spark to formalise and accelerate their philanthropy came after the 2006 sale of Excel Coal, the business he set up in 1994 with his colleagues in the so-called “Gang of Six” (Tony Haggarty FAICD, Chris Ellis, Richard Chadwick MAICD, Andy Plummer and Roger Massey- Greene). The buyout by US oil giant Peabody Energy netted $1.83b, cementing their place as wildly successful investors able to cleverly read the coal market.

    That life-changing windfall came off the back of a three-decade mining career for Davies. After graduating with a mining engineering degree from University of Queensland in 1973, he returned to his home town to join MIM, not long before it would briefly hold the title of Australia’s largest listed company. Two years later, he took the opportunity to work for South African gold miner Union Corporation.

    One door closes, another opens

    On his return to Australia in 1979 with Lyn and the first of their two boys, Davies moved into coal. He worked mainly underground for three years to get his statutory tickets before becoming tech services manager at the Howick mine, then owned by BP Coal, in the Hunter Valley, a region the family would call home for the next 30 years.

    During that stint with BP Coal, including a couple of years as director of mining in Ohio, US, he became friends with four of the colleagues who would form the Gang of Six. In 1989, BP decided to sell its coal business, putting them all out of a job. They quickly got back together, taking on roles with Italian oil company Agip, Davies becoming general manager of its Hunter Valley underground mine.

    In 1993, Agip also decided to get out of coal and told them to prepare to shut down. As it turns out, the job loss turned into an opportunity. “At the time, we were looking at a project in the Gloucester Basin and asked if we could continue to work on that — would they sign the tenements over to us to give us something to do post-retrenchment? They agreed and that’s how Excel Coal started,” he says. “It was a huge jump for all of us to take the dive into backing ourselves, but I had no doubts.”

    They developed the mine and their stake was bought out by a partner for a cool $31m. Instead of retiring, the gang stuck together, using the funds to snap up a few other interests to add to Excel’s growing portfolio. The company listed on the stock exchange in 2004 at $2 a share — prompting Davies’ first stint as a public company director — before Peabody made its offer two years later for $8.50 a share.

    Davies credits the success of the team — some of whom worked together again at Whitehaven Coal and continue to keep their hand in the game through their jointly held venture capital vehicle XLX — to their complementary skills, critical to any management team or board. “We overlapped a bit in each of our disciplines, but didn’t have any gaps, which was really important. It’s what you should be looking for in any team situation.”

    Switching to the logistics lane

    Davies traces his path to becoming chair of the $5.37b (market cap as of September) logistics giant Qube Holdings back to “probably the most stressful time of my life”, his stoush with the mining union, a career chapter that he says was also pivotal in shaping his leadership strengths.

    Having taken on the role of general manager at Rio Tinto’s Hunter Valley No.1 and Howick mines during the formative stages of Excel when no cash was coming in, he was faced with spiralling costs at the mine and needed to make changes. This led to the Hunter Valley “dispute” in the late 1990s, which Rio Tinto eventually won.

    “It was a business decision,” he says. “When you’re losing money, you’ve got to do something about it, so we did. In the process, you open up a can of worms and you’ve got to fix the whole thing.”

    The dispute had sparked the interest of Chris Corrigan, then chief executive of container terminal operator Patrick, who subsequently gained even more union-busting prominence as the “waterfront warrior” in a dispute with the Maritime Union. Corrigan asked Davies to join Patrick in 2000, where he worked as director of operations, playing a critical role in its rail strategy, until it was acquired by Toll in 2006.

    After the sale, Davies stuck with Corrigan and a few other executives, including Sam Kaplan, who raised $200m to invest in logistics opportunities, eventually leading to the formation and listing of Qube Holdings in 2011.

    The company swiftly grew through acquisition — including taking a 50 per cent interest in Patrick Terminals — to become Australia’s largest integrated provider of import and export logistics services. Davies was a founding director of Qube — among a pool of past directorships, including Pacific National, Whitehaven, Queensland Rail (later Aurizon) and Group 6 Metals — before succeeding Corrigan as chair in 2017.

    Becoming chair of a major listed company was not something Davies had set out to do, but he says he became “sufficiently comfortable in my capacity to do a good job for shareholders”. The company has performed strongly under Davies’ watch, most recently reporting FY23 underlying revenue growth up 16.2 per cent.

    He also reflects that the transition to chair required him to adopt a new set of leadership skills. “When Chris vacated the chair, I had to think about how to organise and get the best out of the directors, to have a united and well thought-through view from the board, which is really critical for management.”

    Evolving governance landscape

    Of the many changes Davies has seen in the governance landscape during his 50-year career, elevated scrutiny on directors is the biggest. “To be successful in the role, you have to be prepared to deal with that constant pressure, to be across it and prepared to work your way through it with the other directors,” he says.

    That includes ensuring new board directors have the right industry experience, while also reducing the gender imbalance, which he says is “not easy” in the male-dominated mining and logistics industries.

    “We’re moving as fast as we think sensible for the company because we’ve got to have the interests of all shareholders in mind in making a transition to including more females on our boards,” says Davies. “We’re on the journey. It’s not easy, but you’ve got to start making change.”

    Davies also acknowledges pressures to transition from fossil fuels to renewable energy sources. Indeed, Malabar Coal, XLX’s key resource investment, includes the construction of a complementary solar facility. But he’s convinced there’ll be a role for coal to play for some time.

    “We have extremely high-quality coal in Australia and it’s bizarre to imagine you wouldn’t utilise that to provide the ability for others to get power instead of alternatives that are much more emissions-prone,” he says. “There’s a lot of conjecture about the speed of the transition and whether it will occur by 2050. It’s going to take a lot longer than first thought and we should be careful about cutting off our baseload power before we have firm alternative sources.”

    On the home front

    Davies also takes a “very hands-on” structured governance approach to his growing family interests, Dalara Pastoral and Dalara Foundation, which he sees as critical to its ongoing success for both future family generations, employees and beneficiaries. “For the foundation, initially it was a bit scattergun, but we’ve focused our contributions to make a greater impact,” he says. “You need clear purpose and boundaries around what you intend to do, because bracket creep can become a major issue in the governance sense.”

    The family has narrowed its giving to three key areas — education, medical research, and human and animal welfare — and the organisations to which they contribute include the Hunter Medical Research Institute, the Royal Flying Doctor Service in Queensland, Westpac Rescue Helicopter Service in the Hunter and Tamworth regions, the University of Sydney Veterinary School, the Clontarf Foundation and the Australian Rhino Project.

    “We like to engage with each organisation regularly and it’s quite meaningful to speak to people who’ve benefited,” says Davies.

    Every month, Davies visits Dalara Pastoral’s three farms at Blackville, Denman and Walcha in NSW, as part of a structured governance process with the farm managers. “It’s a financially significant part of our family group and one that I absolutely love to get involved in,” he says.

    A 15-year plan, updated every quarter, keeps the family interests on track, a task he advises all new directors to think about. “As a director, you’ve got to have a bit of structure about your life because that’s what shareholders and governance demand. It’s helped me a lot, thinking about things in that context.”

    Davies shows no signs of being ready to slow down, despite approaching 72. He doesn’t intend to take on any more public company directorships, but still has “plenty of reasons to get up in the morning”. He dearly hopes that one of those reasons will be welcoming a white rhino to Australia very soon.

    This article first appeared under the headline 'Rhinos on my Mind’ in the October 2023 issue of Company Director magazine.

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