ENTERPRISING POCKETS OF SOUTH AUSTRALIAN HOME-GROWN BUSINESS kept shining through in the 20th Century, despite the state’s economy taking some major blows.
The big hits were, firstly, the loss of a major car makers Chrysler/Mitsubishi and General Motors Holden’s, part of a general vulnerability of the protected industries brought into the state under premier Tom Playord’s era.
The other big blows were the loss of established 19th Century companies, the Bank of Adelaide, Elders Smith and Adelaide Steamship, through the 1980s corporate excess that would also deal the biggest catastrophe: the State Bank’s collapse.
Iconic state companies and brands such as South Australian Brewery, Jacob’s Creek and Farmer Union Iced Coffee were lost to overseas and interstate in a continuing theme that reflects South Australia’s inability to compete with bigger outside resources.
And yet the 20th Century South Australian business is a ongoing story of inventive enterprise, flowing on from the 19th Century, despite the state’s limited size. That enterprise produced its range of big department stores; the Holden family and J.D. Richards as major car builders; and Simpson and Pope as dominant whitegoods brands.
Rossi Boots, R. W. Williams, Steriline, Ennio International, Seeley International, Hills, Caroma, Argo, Sam Remo, Hickinbotham, Codan and the internet companies Adam and Internode represented a formidable litany of exceptional examples of business produced during the 20th Century.
A theme among the home-grown companies is the philanthropic commitment to the state by their founders.
Another theme is that the state government has to nurture and protect strategic local companies such as Santos and SeaLink from the sometimes-destructive effect of bigger outside forces.
EXTENDING ADELAIDE'S 19th CENTURY TRADITION OF MIDDLE-CLASS FAMILY ENTERPRISES
Vivian Lewis and the Elliot brothers created businesses that made the most of South Australia’s cycling boom’s peak continuing into the 20th Century. Lewis started with Ormonde Bicycle Depot in Freeman Street (later Gawler Place), Adelaide, in 1896 to make and import cycles. Beyond the success of his roadster cycles, Lewis experimented with building a six horsepower two-cylinder three-speed Lewis Motor Car. At the 1913 Spring Show (later the Royal Show), his 3.5 horsepower water-cooled three-speed gear hub motor cycle was popular and, by 1914, his motor cycles won every event except one and, in an Australasian first, set a 24-hour ride world record. Super Elliot was founded by Bertrand and Laurie Elliot in 1902 making cycles in a small Payneham shop where Laurie finished first in the SA League 25-mile road race. After extending to Norwood, Elliot Brothers also added imported motor cycles to the bicycles offering. From 1908, the Elliott Bros were hosting their own one-mile scratch race at Payneham where they displayed and sold their range. This included a special cycle for road champion Charlie Baulderstone. In the 1920s, Vic Elliot joined brother Bertrand to continue the business as Elliott Bros with a store in Pirie Street, Adelaide, and later in a factory in Gawler Place. Vic Elliott, who oversaw company growth and buit the Super Elliots brand, also recruited factory expertise to the factory, including Jack Wise and Frank Duckett who were top grade speedway motorcyclists. Super Elliotts Cycles at 200 Rundle Street, is still one of Adelaide's leading bike stores.
Carl Wilhelm Laubmann and Harold Pankin 1908 in Victoria Square, Adelaide, founded an optometry practice that, by the 1930s, was Australia’s largest retail optical business. Laubmann was born in Adelaide inner suburb Stepney, the eldest of seven with German parents. He left Norwood Primary in 1892, aged 14, to be trained as an optician by noted Adelaide ophthalmologist Dr T. K. Hamilton. A perfectionist, Laubmann used woodworking learnt from his carpenter father to make his own optical cabinets and metal tools. In 1900, Laubman noted a demand for optician services in regional areas and set up his own business in Broken Hill. He married local musician Maude May Sullivan. In 1907, young Adelaide optometrist, Harold Pank contacted Laubmann while visiting Broken Hill as a cellist. A firm friendship formed, particularly as Pank and Maude Laubmann shared an interest in music. With changed family circumstances, the Laubmanns moved to Adelaide where Carl took up Pank’s idea of a partnership. Laubmann & Pank soon moved from Victoria Square to busy Rundle Street, where business flourished. In 1913, Carl was a founder of the South Australian Optical Association. Due to anti-German attitudes, he anglicised his name to Charles William Laubman. The now-Laubman & Pank diversified into selling optical instruments. Their field glasses were popular parting gifts to military officers. With Laubman as technician and Pank the entrepreneur, they invented and developed important optical instruments, lenses, and processes. They also pioneered taking optometry to rural and remote areas.
The 1885-1910 turn-of-the-century era saw W. Menz and Co. making more leaps of growth. The Menz biscuit story had started in 1850 with a small Wakefield Street, Adelaide, grocery shop/bakery run by John Menz and his wife Magdalena who arrived in Adelaide from Hamburg on the Steinwaerder the year before.
When John, a qualified architect, died in 1856, Magdalena ran the store until one of her two sons, William, became one of Adelaide’s first biscuit makers and, in 1867, took control of the small company. In 1885, W. Menz and Co. built a plant to increase biscuit production and, in 1893, expanded into confectionary. During 1910, it grew again to produce more chocolate under the name Menzona. Over the next 30 years, it increased production and introduced new products, including the honey-flavoured Yo-Yo biscuits, in 1932. As a public company in 1951, the company kept expanding in a bigger Marleston factory with its Yo-Yos, Crown Mints (1892) and FruChocs (1948), now South Australian icons. By the mid-1960s, after takeovers and mergers, W. Menz & Co amalgamated to form Arnott-Motteram-Menz. Arnott’s took over biscuit and confectionery production and was eventually sold in 1992 to the Sims family’s South Australian dried and confectionary Robern Dried Fruits, later to become Robern Menz of Glynde. The former Menz products still are being produced but Arnotts removed Yo-Yos from their family assorted packets in 1997 because they weren't popular enough Australia wide. Menz FruChocs was declared a South Australian icon by the National Trust in 2005.
Motteram is a lost name in the rich legacy of Adelaide biscuit making, even through its identity survived into the second half of the 20th Century. Charles Motteram, who founded Adelaide’s Motteram & Sons biscuits, in 1919, was the London-born son of a Bendigo solicitor. After two years as assistant librarian at Bendigo Mechanics Institute, he moved in 1873 to South Australia where he joined the Aerated Bread and Biscuit Company in Adelaide. By 1881, he was manager of the company whose products included Pilot Bread, Arrowroot biscuits and Bush biscuits. Motteram and fellow-employee engineer Edward Williamson took over the business in 1894 and Motteram & Williamson became South Australia’s leading biscuit manufacturer. In 1909, Motteram left to start his own company; Williamson continued as E. Williamson & Co. in Waymouth Street, Adelaide. He sold it to E. Williamson Ltd, three years before he died in 1927. In 1919, Motteram opened his new factory in Grote Street, Adelaide, near West Terrace, as Motteram & Sons. The Motterams joined in 1950 with the New South Wales-based Arnotts. In the 1960s, more amalgamations and buyouts in the Australian market resulted in the Australian Biscuit Company. This included Arnotts and other companies such as Menz in South Australia, Brockhoff and Guest’s in Victoria. Australian Biscuit Company was later renamed Arnott’s Biscuits but regional varieties such as Menz Yo-Yo were kept. Arnott’s became a subsidiary of US Campbell Soup Co. It cut 30% of biscuit production at the Adelaide Marleston bakery in 2014.
Welshman William Lewis set up kilns at Brighton, in 1880, using limestone from Precambrian formations at Marino, Reynella and Hallett Cove. Brighton Cement Works began in 1882 with a large kiln to replace the 8,000 tons of Portland cement imported each year. But it closed in 1883, with the local product considered expensive and inferior. In 1892, Lewis and others founded South Australian Portland Cement Company with a plant at Marino. In 1896, its quality was good enough to construct Happy Valley Reservoir. By 1900, the company was selling more than 3,500 tons a year but a fire in 1909 destroyed the Marino works. The revived South Australian Portland Cement Company, in 1911, upgraded Marino, including the first electrified cement mill. In 1913, the company had 74 horses cart cement to the city and return via Brompton with coke. Horse-drawn trolleys carted stone from Reynella quarries to the railway station, to be freighted to Marino. The Reynella horses were replaced eventually by the “flying fox” labour-saving ropeway that became a tourist attraction. A.W.G. Pitt, in 1913, founded rival Adelaide Cement Company at Birkenhead. It used Yorke Peninsula limestone and black mud from Port River. With a lack of stone reserves, South Australian Portland Cement Company moved from Marino to Angaston in the 1950s. After failed attempts back to 1927, Adelaide Cement Company and South Australian Portland Cement Company merged in 1970 as Adelaide Brighton Cement. Today, the company makes and distributes cement products nationally.
Joseph Florey, father of Howard Florey – one of Adelaide’s four Nobel Prize winners – was manager of the Standard Shoe and Leather Company, a manufacturing and importing business with factories in Adelaide and Melbourne entering the 20th Century. Standard Shoe and Leather was part of the largest boot making operation in the southern hemisphere with 1,000 staff nationally. The Adelaide factory had nearly 300 staff and produced 1,000 pairs of footwear a day. At a time when the sweated labour issue was at the forefront (Florey had escorted a royal commission that looked at conditions in shops and factories in 1892), Standard Shoe and Leather was reported to have no one under the age of 14 employed. The staff were paid weekly for 48 hours of work (Saturday 8am to 12.45pm) with a 30-minute lunch break each day. The Advertiser in 1907 reported on the company’s annual picnic at Long Gully, with Florey toasted as a “keen businessmen and a kind and popular employer”. The company made “rapid and satisfactory progress” that year, with a big factory being opened in Melbourne. But, in 1909, Standard Shoe and Leather Company factory in Gawler Place, Adelaide, was bought by Lewis Cycle Works, makers and importers of cycles, motorcycles and motor cars. Florey appeared in the 1910 Lewis register, holding 3,050 shares. Florey had the wealth to move his family in 1906 to historic Coreega House on Carrick Hill Road, Springfield. His son Howard could attend St Peter's college and Adelaide University. Joseph Florey died in 1919 – the same year as Vivian Lewis of Lewis Motor Works.
Harold Darling in 1914 took over the huge South Australian milling and grain business, John Darling & Son, set up by his grandfather and father. They also paved the way for him to become chairman of Australian industrial giant Broken Hill Proprietary (BHP). The original “wheat king” John Darling Snr had invested early in BHP and John Darling Jnr in 1892 became a director and then chairman in 1907 until he died in 1914. Educated at Adelaide’s Prince Alfred College, Harold Darling moved the family company’s headquarters to Melbourne when he took over. He volunteered for World War I military service but agreed to prime minister Billy Hughes’s request to serve on the Australian Wheat Board advisory council. He joined the BHP board to fill his father’s place and, eight years later, still its youngest member, became chairman. Darling took the company through tough years but after a restructure, in 1937, BHP made its largest profit so far, passing £1 million. Anticipating war, in 1934, Darling had BHP ready for a government request to begin shipbuilding at Whyalla in 1939. By 1936, a BHP syndicate was set to build aircraft. During World War II, Darling worked brilliantly with another South Australian, general manager and later managing director Essington Lewis. Darling kept links to South Australia in 1929 with £10,000 for Waite Agricultural Research Institute work on soil conservation and £15,000 for Adelaide University medical school equipment. After Darling died in 1950, BHP set up the H. G. Darling Memorial Scholarship, through the South Australian School of Mines and Industries.
HOLDEN'S AND T.J. RICHARDS MAKE HUGE LEAPS INTO VEHICLE-BODY PRODUCTION
IN THE FIRST HALF OF 20th CENTURY
In its short life, South Australia’s Southern Cross Feature Film Company made some of Australia's most famous silent films, mostly directed by Raymond Longford. Adelaide businessman David Gordon was a prime mover in setting up the company in 1917. One hundred shares were offered at £1 a share. Southern Cross said it would make five dramas and three comedies over the next 12 months. Another report predicted making “six or eight five reelers” over 12 months. It offered cash for Australian stories but initially employed American Walter May Plank as film director. When Plank left Australia, Raymond Longford was called in. Longford’s first feature for Southern Cross was the successful The Woman Suffers (1918), followed by two hits in the UK and US, The Sentimental Bloke and Ginger Mick, based on the poems of South Australian-born C. J. Dennis. In 1920, the buoyant company paid a dividend of a shilling per share. In that year, Southern Cross Picture Productions Ltd was incorporated with a value of £37,600 and directors including E.J. Carroll, Snowy Baker and David Gordon. Carroll-Baker Australian Productions made films starring Snowy Baker and had a five-twelfths interest in Southern Cross Picture Productions. The company made The Jackeroo of Coolabong, Rudd’s New Selection and The Blue Mountains Mystery. Southern Cross financed an interstate film, Longford’s The Sentimental Bloke (1919), the most profitable Australian feature film to date. It also had success with Ginger Mick, another character created by South Australian-born poet C. J. Dennis.
Guinea Airways emerged from an airline formed in Adelaide in 1926 to carry freight as part of its parent company's gold-mining operations in New Guinea. The Bulolo area in Papua New Guinea, 64 kilometres inland from Lae, was, before World War I, in German New Guinea. Several Australian miners, looking for gold, had crossed into the German colony but, after the war, it became an Australian mandate and many prospectors made fortunes there. One of these was Cecil John Levien. He believed in the district’s potential and, in 1926, at a meeting in Adelaide arranged by his friend W.P. A. Lapthorne, other Adelaide businessmen also offered support. They formed a company, Guinea Gold No Liability, to test the Bulolo Flats. As the operation grew, Levien saw that the only way to effectively mine the gold in reasonable quantities was to use dredges to be carried over impenetrable jungles and steep mountains by aeroplanes. To be able also to carry passengers plus carry freight, Guinea Gold in 1927 registered Guinea Airways Ltd and commissioned one regular plane. Guinea Airways’ Adelaide directors were C.V.T. Wells, W.P.A. Lapthorne, G. Jeffery, A. Scarfe and Levien. By 1928, Guinea Gold had spent £45,000 on New Guinea operations including the air service, testing its Bulolo South leases, marking the Koranga lease and set up a field organisation. The goldfields continued to prosper with annual production, running into millions of pounds, sent to the Australian mints. Guinea Gold later had less interest in practical mining and more with options, leases and dividends. It wound up in 1968.
Adelaide Airways was formed as a subsidiary of the Adelaide Steamship Company in 1935, operating out of Parafield airport. Its fleet had varying aircraft, including the Short Scion, the General Aircraft Monospar ST-25 and the De Havilland DH.89A. During the next year, Adelaide Airways bought West Australian Airways, set up by Norman Beardley in 1921 as Australia’s first scheduled air service, for £25,000. Ivan Holyman then approached Adelaide Steamship to amalgamate with his airline (operating between Victoria and Tasmania), aiming to form Australia's most powerful airline to effectively control airline traffic between Perth, Adelaide, Melbourne and Sydney. In 1936, Adelaide Airways and Holyman's companies merged and, along with orient Steam Navigation and Union Steam Ship Company of New Zealand, formed Australian National Airways (ANA), the giant among Australian domestic airlines before and after World War II. Adelaide Steamship retained part ownership in ANA until Holyman's death in 1957. The Australian National Airways board then unsuccessfully tried to sell out to its new competitor, the federal government-owned Trans Australia Airlines (TAA) launched in 1945, before it reached agreement with Reg Ansett to sell the airline to him for £3.3 million. Ansett-ANA eventually became Ansett Airlines that collapsed in 2001.
ADELAIDE MANUFACTURERS READY FOR 20th CENTURY WAR WORK AND WHITEGOODS REVOLUTION
Alfred Muller Simpson brought back ideas from the Paris Exhibition 1878 for labour-saving machinery and for new products and refining existing products from A. Simpson and Son – the company originating in 1864 when he became partner in the Adelaide business started by his father. In 1885, Alfred Muller Simpson became the first maker of munitions, including submarine mines, in South Australia. This was in response to Australia’s fears of a Russian invasion. A new Simpson plant in Wakefield Street, Adelaide, in 1894, included electroplating and furnaces for hollowware and porcelain enamelling – a first for Australia. Enamelled street and advertising signs from Simpson’s soon appeared in most Australian capitals, making the firm’s name known throughout the country. Besides creating the largest metal manufacturer in the country, with three factories and 500 employees, Alfred Muller Simpson was also prominent in public life including being elected in 1887 to the Legislative Council, representing the Protectionist Party. With World War I, Simpson’s returned to making munitions but also enamelled water bottles, harness fittings and mess tins for the Australian forces, and boilers and enamel ware for hospitals. With the next Simpson generation, Allen (Alfred) and Frederick, as directors, the company expanded further in the 1920s. A new factory was opened at Dudley Park in the 1940s and the company began making whitegoods.
LOSS OF AN ARRAY OF HOME-GROWN ADELAIDE MAJOR SHOPS IN 20th CENTURY
Miller Anderson’s 148 years of trading made it the oldest survivor of “scores of” drapery shops in early Adelaide city and the longest-surviving department store. Miller and Gale, a small drapery shop, opened at 52 Hindley Street in 1839. Robert Miller of the original Miller & Gale drapery shop in Hindley Street (opposite Rosina Street) had several drapery partnerships (Sanders & Miller, Miller & Bryden, Miller & Lucking) before he returned to Scotland in 1848 but kept a link in the business through nephew J.M. Anderson. After a third partner Robert Hawkes died, the business in 1859 became J. Miller Anderson & Co. that built a shop on the site of Jaffrey’s Waterloo House in 1863. This became a department store for the next 100 years. The company was floated as Miller Anderson & Co. Ltd. in 1914-15 and in the 1920s built a five-storey store at 16-26 Hindley Street. As a public company from 1927, it was soon bought by Marcus Clark and Co. Ltd of Sydney. In 1966, Waltons took over Marcus Clark and in turn was bought by Venture Stores in 1987. Miller Anderson’s finally failed in 1988 after an short-lived move to Station Arcade. Miller Anderson’s owners had bought Hindley Street’s Theatre Royal, opened in 1868, for £175,000 in 1955. The theatre had become rundown and the company said it was concerned by the safety of the proscenium wall. This became the determining factor in demolishing the theatre in 1962, to build a multi-level carpark. The store made a big early effort in having assistants help motorists use the carpark but this doesn’t quell the controversy over the loss of the old theatre
Moore’s on the Square was the bold and beautiful gamble by Charles Moore who, in 1914, opened a department store in Victoria Square away from Adelaide’s main retail streets, Rundle and Hindley, at that time. Moore had arrived in South Australia in 1881 and worked briefly for John Martin and Co. store before starting his own merchant and import business on Rundle Street in the 1890s. Moore’s bold vision for a new store extended to wanting to match palatial emporiums, such as Galleries Lafayette, he visited while at the Paris Exhibition in 1878. Arthur Garlick and Herbert Jackman were architects for his Adelaide building and William Lucas came from England to fit the grand marble central staircase he’d designed. Moore’s store traded successfully until 1948 when it was gutted by a spectacular fire that only some ground floor structures, the external shell and the staircase survived. The shop was rebuilt under the architects Garlick, Jackman and Gooden and business returned until a gradual decline in the 1970s. In 1979, the building was sold to the state government’s South Australian Superannuation Fund Investment Trust. The building’s closeness to the supreme court and strong public sentiment for it to be preserved saw the former store redeveloped into law courts for the state government. It was remodelled in the early 1980s, with a tiled roof and dome added. Some original features were retained, including the staircase, as it became home to 26 courtrooms, library and administration from 1983, as Sir Samuel Way Building, in honour of South Australia’s longest-serving chief justice.
LOSS OF SOUTH AUSTRALIAN CONTROL TO INTERSTATE INTERESTS IN 1970s/80s
John Bonython’s drive was crucial in launching, with school acquaintance Robert Bristowe, South Australian and Northern Territory Oil Search (Santos) Ltd in 1954. As chairman, he led Santos to one of Australia’s largest 10 companies. Bonython was born in 1905 into one of South Australia’s wealthiest and most famous families, with grandfather John Langdon Bonython, proprietor of the Adelaide Advertiser. John Bonython matriculated at St Peter's College at 15 and studied law at King’s College, Cambridge. Exposure to J. M. Keynes and later Friedrich Hayek confirmed his view about capitalism and free enterprise. Bonython was called to the bar at Gray’s Inn, London, but returned to Adelaide in 1929. He expected a newspaper career but his grandfather had just sold his controlling interest in Advertiser Newspapers to Melbourne-based Herald & Weekly Times. Instead, he practised law with Baker, McEwin, Ligertwood & Millhouse. Active in public affairs, he nominated, unsuccessfully, for Liberal Federation preselection for Alexandra in 1929, while a Political Reform League member. He had long directorships of National Mutual Life, Eagle Star Insurance, Argo Investments, Executor Trustee & Agency of South Australia, and Herald and Weekly Times. He became Advertiser Newspapers chairman in 1971. Bonython’s strong desire to make his own mark led to the Santos venture. Port Bonython hydrocarbon plant, near Whyalla, was named in his honour. An annual John Bonython lecture commemorates his support of the Centre for Independent Studies, fostering ideas of free enterprise and capitalism.
In the 1970s, South Australian premier Don Dunstan claimed a “financial royal family” ran the state. That “family” was the directors of the Bank of Adelaide, SA Brewing and The Advertiser newspaper. By 1979, one of those three pillars, the Bank of Adelaide, had collapsed. Yet, in the early 1970s, the Bank of Adelaide was picking up the pace of interstate expansion it started after World War I. Sydney (1919) was the bank’s first interstate branch, followed by Melbourne (1920), Perth (1922) and Brisbane (1927). Its corporate strength improved dramatically. The savings bank business, started in 1962, expanded solidly, increasing market share. Bank of Adelaide with Bank of New South Wales (now Westpac) and Colonial Sugar Refining were the few Australian companies that had always paid dividends to shareholders. In 1969, the Bank of Adelaide bought the Finance Corporation of Australia to increase its flexibility. The bank also was a leader in computer banking by forming Adelaide Group Data. Dandenong (1963) and Hobart (1970) were later interstate additions and the move into the Australian Capital Territory was successful with the Canberra City (1968), Woden (1975) and Belconnen (1977) branches. Townsville branch followed in 1978 – the year the bank discovered that its subsidiary Finance Corporation of Australia had run up a fatal level of bad debts. In September 1979, at an extraordinary and angry meeting of bank shareholders at Adelaide Town Hall, board chairman Arthur Rymill successfully urged them to accept a takeover by the ANZ Bank.
John Spalvins, as chief executive of Adelaide Steamship Company from 1977, took a conservative South Australian shipping giant from the 19th Century on a risky splurge of national expansion. Spalvins became one of the most feared takeover specialists in corporate Australia. He used vast debt to launch huge takeovers. The borrowings came from about 200 banks including the State Bank of South Australia that had an exposure of more than $500 million in 1989. At its height, the Adsteam group included Woolworths, David Jones (that bought John’s Martin’s stores in 1985), brewer Tooth and Company, the Petersville Sleigh food group, the Farmers Union dairy group, Metro Meat, premium wineries (including Penfolds, Seppelts and Wynn’s Coonawarra Estate) and many others. Other entities bought and sold include SAFCOL, Bridgestone, and Lockwood locks. Adsteam held, at times, a 15% stake in Westpac, a 20% of Bell Resources, along with significant investments in ANZ Bank, BHP and Royal Insurance and many other “strategic” holdings. As the last relic of the old Adelaide Steamship company, it had 156 tug boats in more than 40 Australian, Indian, Pacific Ocean and British ports. The Spalvins-led company was Australia's fourth highest capitalised company during the 1980s. A characteristic was a complex cross ownership where many companies of the group owned not quite 50% of each other. This prevented parts of the group from takeover but it did not demand the financial reporting of a consolidated set of accounts. The inevitable spectacular collapse arrived.
A key moment for Elder Smith and Co in the early 1950s was appointing Norman Giles from Elders WA as managing director. Giles took Elders Smith and Co to nationally dominating the wool market. Elders continued expanding by moving into Victoria by buying Commonwealth Wool and De Garis and Sons. Its banking business for rural clients was significant, lending more than $400 million. In the never-repeated 1950s wool price boom, Elder Smith controlled 10% of the national wool clip behind Dalgety and Goldsbrough Mort. Giles’ masterstroke in 1962 was to merge Elder Smith and Goldsborough Mort, with headquarters in Adelaide, as Australia’s top wool broker with a 34% share. Giles expanded Elders Smith into Gove Alumina and Robe River mining ventures, launched Elders Finance and Investment Co. and bought Beef City, a high-quality feedlot in Toowoomba. By the 1980s, predators were circling Elders Smith and its huge cash reserves. Robert Holmes a Court secretly bought a major stake in the company. Court sold his holding when John Elliot, using canning company Henry Jones IXL, bought a controlling stake in Elder Smith. The company became Elders IXL and one of Australia’s corporate giants. In the 1980s, it took over Carlton and United Breweries and, competing with Holmes a Court, made a bid for BHP, and bought Britain’s Courage Brewery. But, by 1989, Elders IXL, hit by the recession, had been sold to the J.M. Smucker Co. Carrying huge debt, Elders Pastoral became a division, and no long owner, of what became Foster’s. (In 2005, Elliot was declared bankrupt.)
After the takeover of Adelaide Steamship Company, the lack of transparency of the AdSteam Group of companies, with its complex cross holdings, caused rising concern in the late 1980s. When a 25c dividend (per share) against a much lower share price was announced at the 1990 annual general meeting, investors fled and shares crashed from over $5 to under $1 in a day. The 200 banks’ demand for return on their loans to the group forced a receiver-type arrangement in 1991 for ayselloff of Adsteam group assets. This included The Adelaide Steamship Company becoming The Residual Assco Group.. National Foods, Woolworths (in 1993, as the biggest share sale in Australia’s history), David Jones and Adsteam Marine were assets all floated on the stock exchange. But Adsteam's loss of $4.49 billion represented one of Australia's largest corporate collapses. The collapse of Adelaide Steamship – “a humiliation for the accounting profession” – did lead to major change in Australian rules. Legal fights over the Adsteam collapse continued for years. For South Australia, the effect was to lose a home-grown company that had achieved national success in several areas. Exposure of the State Bank of South Australia to AdSteam's 1980s excesses contributed to that state government entity’s collapse. The David Jones takeover of John Martin’s stores took its management focus interstate and brought the end of that South Australian icon.
The State Bank of South Australia opened on July 1, 1984, a merger of the old State Bank and Savings Bank of South Australia, with Marcus Clark as managing director. This was when the traditional conservative approach of the two public banks was transformed into a culture of risk. Labor premier Don Dunstan had first floated the idea of merging the State Bank and Savings Bank but the banks’ conservative trustees were strongly opposed to this idea and suspicious of the Labor party. The suspicion grew when the Labor government appointed the Savings Bank chairman and allowed trustees to sit on both boards. Dunstan also took funds from the banks’ reserves for health, education and arts schemes. The new boards asked for a merger of the banks but it was blocked by Liberal premier David Tonkin and didn’t come until Labor premier John Bannon arrived. In 1984, the Savings Bank had bought Beneficial Finance and its subsidiaries became part of the merged State Bank Group. The combined State Bank grew rapidly in the 1980s boom. But this was based on a loan-writing deal-based frenzy that continued even after the 1987 stock crash. In 1988, the bank grew 39.5%, its assets rising from $7.8 billion to $11 billion. By 1990, the bank was dangerously overexposed to commercial property. It had branches in London and New York and tax havens in the Cayman Islands, financing ventures such as (Rundle Mall) Myer complex, renovating (London’s) Wembley Stadium, mezzanine financing of apartments in New York, office blocks in Sydney and Melbourne, and resorts on the Gold Coast.
STATE'S TRADITION OF CREATIVITY CONTINUES
Besides inventing the world’s first disposable plastic hypodermic syringe in Adelaide in the late 1940s, Charles Rothauser, a pioneer of the injection-moulding of plastics, also developed the first all-plastic toilet cistern. Hungarian-born Rothauser, educated as an architect in Vienna, had begun making dolls with his wife Christine in Adelaide in 1939 as the Quality Toy Company. Finding a niche in the nascent plastics field enabled Rothauser to invent the plastic hypodermic syringe – a medical breakthrough that benefited millions of people. Starting with a factory in Norwood in 1941, his Caroma company became Australia’s leading manufacturers of bathroom products, including the world-first dual flush toilets system in 1982. He developed the Caroma Deluxe, the world’s first all-plastic one-piece moulded toilet cistern to combat Adelaide water’s corrosive effect on brass fittings. He built on the Caroma innovations with the first two-button dual flush and smartflush technology. Caroma was the first company to achieve the Australian water efficiency labelling and standard (WELS) five-star rating. Rothauser won a swag of export and design awards for his Caroma products out of the factories in Wetherill Park, Sydney (closed in 2014) and Norwood (closed in 2017).
Caroma products continue but are now all made overseas, with the Norwood plant shutting in 2017. The Caroma Dorf group of companies continues to offer bathroom, kitchen and laundry products from brands such as Fowler, Dorf, Clark, Epure, Radiant and Irwell. But its products are now made in Malaysia, China and Europe.
First astronauts on the Moon in 1969 wore lightweight eye lens developed by Don Schultz for Adelaide-born SOLA International. SOLA (Scientific Optical Laboratories of Australia) was the legacy of Schultz’s intellect in the instrument construction department of South Australian optometry firm Laubman & Pank that Schultz ran with David Pank from 1947. Among his innovations, Schultz’s big break was his interest in CR39 resin and applying it to plastic lightweight eye lens that Laubman & Pank had made for many years. Schultz approached colleagues at Adelaide University (where he lectured in optics), who helped develop isopropyl peroxy percarbonate, used for the next 20 years to make hundreds of millions of lenses. . A trip to Europe and UK in 1959 convinced Schultz the lens were commercially viable and the subsidiary SOLA was born with basic premises at Black Forest, later moving to a big plant at Lonsdale, south of Adelaide. Sola made its first big international move in 1975 when it set up manufacturing operations in Sunnyvale, California. Four years later, it was bought out by English glass manufacturer Pilkington. Pilkington’s takeover of SOLA was such as success that it launched into launched into other buyups that left it awash with debt. In 1993, Pilkington sold SOLA to AEA, an investment firm of American high flyers. More major acquisitions and innovations saw SOLA expand further as an international entity. In 2004, German optical group Carl Zeiss and a Swedish private equity firm, EQT Partners AB reached an agreement to buy Sola.
ADELAIDE QUALITY 20th CENTURY PRODUCTS STILL MAKING AN IMPACT GLOBALLY
The world’s most prestigious thoroughbred racing clubs rely on Mount Barker-based Steriline Racing’s race-track infrastructure for perfect starts and finishes. The Mount Barker-based South Australian company designs, manufactures, installs and services everything from starting gates and running rails to finishing posts and presentation podiums. Steriline Racing began in the 1950s when it built the first movable starting gates in Australia and has grown into a global powerhouse exporting to more than 50 countries. Already holding 100% of the British market (including Royal Ascot), Steriline Racing’s racetrack equipment is now used at virtually every racetrack across Australia and it has most of the South East Asian market. Many major horse racing organisations including the Hong Kong Jockey Club (Happy Valley and Sha Tin Racecourses), Singapore Turf Club (Kranji Racecourse), Victoria Racing Club (Flemington Racecourse), Australian Turf Club (Royal Randwick Racecourse), Meydan in Dubai, and Riyadh Equestrian Club in Saudi Arabia use Steriline equipment. Starting gates involved sophisticated engineering but it also has to consider the psychology of horse and rider. This involves understanding the dynamic of the horses and also the thought processes of the jockey Safety is a key consideration. This pressure is on to load horses quicker so they are not standing in the gates for such a long time, because that reduces the risk. In 2015, the company was given the South Australian Regional Exporter Award and was a national finalist in the 53rd Australian Export Awards.
Ennio International of Holden Hill has built up a global market for its seamless smallgoods netting. This is a triumph in innovating for a company that started life as fashion business. Husband and wife Gervasio and Giovanna Mercuri brought their design experience to Australia from Italy in 1957 and founded Mercuri Knitwear in Adelaide. They built their business with quality garments winning numerous Australian awards. But the dropping of tarrifs on imported textiles in the 1980s forced the Mercuris to diversify. They realised they could use their machines to make netting for meats and smallgoods. Forming Ennio Pty Ltd in 1983, they soon added several new purpose-built knitting machines. The Mercuris were among the first in the world to make seamless smallgoods netting. Ennio International went global in the late 1980s with an improved design of elastic netting launched as String Cling. It now exports to Europe, China, the USA and Canada, as well as dominating the Australian and New Zealand markets. It won a $2 million federal government manufacturing grant to buy high-tech textile equipment for meat packaging. The Mercuris have launched more patented netting and casing products to fill gaps in the Australian and international market with quality packaging solutions for the meat, poultry and smallgoods worldwide. Ennio International was inducted into the Family Business Australia hall of fame in 2016 and won its distinguished family business of year award in 2017.
NEW SOUTH AUSTRALIAN NATIONAL BUSINESS REPLACING THOSE LOST
SeaLink Travel Group has become a boom national tourism company on the back of the Kangaroo Island ferry service that staff members, island residents and other investors took over the from Malaysian owners in 1994. Among its ventures since, SeaLink has taken over New Zealand's Subritzky Ferries (2004), the Captain Cook Cruises on Sydney Harbour and Perth; ferries between Townsville, Magnetic Island and Palm island in Queensland; South Australian Murray River cruises on Murray Princess; and holiday packages throughout Australia. In South Australia, it owns Adelaide Sightseeing that does Barossa Valley tours. SeaLink's ferries SeaLion 2000 and Spirit of Kangaroo Island cross Backstairs Passage from Cape Jervis to Penneshaw in about 45 minutes up to 10 times daily. SeaLink bought the previous ferry service founded by Peter March. Its first vessel was Philanderer 3, the first of March’s vessels to carry vehicles. The later Island Navigator (1990), also taking cars, carried freight and fuel. Other competitors, including Western Australia’ Boat Torque (1994-97) and Kangaroo Island Ferries (2004-05) failed to break SeaLink’s monopoly, mainly due to its lease from the state government that, until 2024, stops other operators using Cape Jervis berth for one hour before and one hour after any SeaLink service. Family-owned Kangaroo Island Connect had plans to cut ticket prices with a Penneshaw-to-Cape Jervis service for up to 95 passengers in 2018. Meanwhile, SeaLink pushed its own growth. Listed on the Australian Stock Exchange in 2013, it had 1600 staff nationally in 2019.
RESPONDING AND ADAPTING IN SOUTH AUSTRALIA TO 20th CENTURY CHALLENGES
Adelaide Development Company, founded in 1922 by Jack Roche, with his family’s third generation in control into the 21st Century, has remained a South Australian property leader with commercial enterprises and opening more than 40,000 home sites. Jack Roche got the jump on his Melbourne rival T.M. Burke in securing prime land around Adelaide in 1922. Between world wars, Roche again bought land in suburbs to be created by the South Australian Government rollout of tramlines. Roche also set up Estates Development Company in Perth and employed 400 land salespeople in the two states. It was among first to sell allotments on terms helping first home buyers and attracting investors. More big growth came when son John Roche, managing director in the 1950s, led an active land buyup, creating much of Fulham, Hope Valley, Holden Hill and Newton suburbs. In the 1960s, John Roche created prestigious projects in suburbs such as Roslyn Park – often selling land from his car’s boot – and developed innovative Wattle Park shops centre and a ground-breaking 10-flats complex in Ward Street, North Adelaide. In the 1970s, Adelaide Development Company pioneered partnerships with builders to create house/land packages and display villages. By the 1980s, Adelaide Development Company was one of Australia's largest land developers when it adapted principles of estate masterplans to its holdings or made partnerships, such as with Minda Inc. at Blackwood Park and estates like Flagstaff Pines; Encounter Lakes, Encounter Waters and Franklin Island at Victor Harbor.
Luigi Crotti founded what became the San Remo pasta brand company when he arrived with his wife in Adelaide from the Lombardy region in 1936 – when there were about 2000 Italians in the state. San Remo is still a family company, based at Windsor Gardens, but now the No.1 dry pasta producer in Australia and exporting to 35 countries from its 750 products. Luigi Crotti’s son Aldo was founding partner in his family business that survived the days when pasta was still a niche product in Australia. When pasta was more common in the 1960s, the Crottis’ San Remo brand was competing with nine others. The San Remo Marcaroni Company turned to a high-quality product at low cost through economies of scale. It was the first manufacturer to foster distribution to supermarket model developing in Australia. San Remo is Australia’s No.1 pasta brands, with a 50% market share, and one of its largest manufacturers. Since the 1990s, San Remo has worked with farmers and Adelaide University’s Waite Agricultural Research Institute at Roseworthy developing a better-quality durum wheat. San Remo’s special durum wheat mill is one of the largest and most sophisticated mills in the Australian and South-East Asia. San Remo semolina mill at Windsor Gardens is also the largest in Australasia. The company had been inducted into the Family Business Australia Hall of Fame. In 2008, San Remo bought another iconic South Australian food business: Balfour's, maker of pies, parties, sausage rolls and famous green frog cake.
Greg Hicks (Adam Internet) and Simon Hackett (Internode) put Adelaide at the early internet cutting edge with their service providing companies. Hicks’ venture started as a hobby from his home in Flagstaff Hill in 1986 and formed Adam in 1991 – the same year as Hackett’s Internode was introduced. Both companies grew rapidly with their pace-setting ventures and were taken over in 2011-13 in multi-million deals by Western Australian provider iiNet but have retained their own identities. Greg Hicks began in 1986 by creating bulletin boards that preceded the internet with users dialling into a computer. Adam Internet became a leading South Australian internet service provider and data warehouse supplier from 1991. Between 1996 and 2012, its market value from $100,000 to $70 million and, at its peak, employed more than 200. Hicks and Adam won entrepreneur and second generation family business of the year awards. Simon Hackett’s Internode pushed the boundaries in internet service. Among its strings of innovations were: • The Coorong (2001) and Yorke Peninsula (2001) communications networks offering low-cost voice and data services to regional customers. • The largest gaming network in Australia (in daily player count. • Internode’s infrastructure company Agile installed its own equipment in the Telstra exchange at Meningie in 2003: the first in regional Australia where ADSL was available from a non-Telstra DSLAM (digital subscriber line access multiplexer). • In 2008, Internode launched a national Internet Protocol version 6 (IPv6), the first in Australia.