Hard worker hasn't wasted a moment

Terry Peabody is at present working on a merger proposal with New Zealand's Waste Management. Picture / Paul Estcourt

Terry Peabody has led a lucky life. During World War II, when he was just a baby, he was lucky to be on the last boat out of Guam as Japanese forces bore down on the Pacific island.

More than 60 years later, as the executive chairman of Transpacific Industries - the waste management company he founded - Peabody is sitting on a shareholding worth around A$1 billion.

His business career has involved developing waste fly ash into a commercial product, becoming a trucking magnate, building a waste disposal heavyweight and making New Zealand wine.

His involvement in these markets was mostly unplanned, perhaps even lucky, but the success that followed wasn't.

"The real story is we did take advantage of opportunities when they arose ... and whether it's convenient or not you have to take advantage of them if you're going to be successful."

Turning opportunities into success, however, takes hard work and Peabody isn't the kind of boss to sit and watch.

"The best-run businesses are run by hands-on people, not by people sitting in an ivory tower," he says. "I know what's happening in my businesses all the time."

Peabody was on holiday in Italy when interviewed by the Weekend Herald and he wasn't sleeping in.

He was up at 6am checking on his business, which is at present dominated by the proposed merger of Transpacific Industries, which specialises in liquid waste, with New Zealand's Waste Management, which specialises in the solid variety.

The merger requires 75 per cent shareholder support at a meeting this Wednesday and has taken flak from some investors for being a takeover in all but name. Had it been structured as a takeover it would have required 90 per cent support under the Takeovers Code.

The idea for the merger structure came from Waste Management, Peabody says.

The initial plan was to offer a mixture of Transpacific shares and cash, which would have made the institutions happier. But Transpacific's continuing involvement in the bidding process for waste company Cleanaway prevented this approach, he says.

Offering Waste Management shareholders shares in the merged entity would have made putting out a prospectus difficult and delayed the meeting and a decision on the merger.

"And the Waste Management board were loath and not prepared to allow that to happen ... because the company would have been frozen for the whole period of time. We're talking now from the beginning of April to the end of August."

Because it was structured as a merger, the deal could be sealed at next week's shareholder meeting, although the reaction to the $8.64 a share cash offer has surprised Peabody. In Australia a similar offer would have been snapped up, he says.

"We didn't understand what had happened in New Zealand in the past. Apparently, some of these institutions have done well by dissenting on matters such as this and then the people come in [and] put the price up."

Peabody has consistently said there would not be any increase to the offer - a stance which he says is bound by regulations in Australia.

"If you say you're not going to do something and you turn around and do it, you're deceiving the public, and people make decisions on statements from chairmen and CEOs."

He does, however, think a better job could have been done selling the deal to investors.

"I think that because the offer was so high in our estimation we took them for granted and we shouldn't have done that."

The merged company will relist on the NZX and Peabody plans to visit every fund manager personally to build relationships.

Building strong teams has been central to his success, he says. "It's just so basic but it's absolutely essential."

Just how successful Peabody's business approach has been is hard to quantify because he doesn't talk bank balances - although his stockholding in Transpacific alone is worth around A$1 billion.

It has been a long journey from being born on Guam, the son of a civilian engineer with the US Army. After escaping the occupation of the island and the internment suffered by family friends, he was moved first to Virginia in the US and then to Bainbridge Island near Seattle.

Uprooted again, he found himself, aged 9, living for the next five years in the country from which he had escaped - Japan.

Immersion in a foreign culture was a mind-broadening experience. "It was just after the war, so it was early occupation, and a lot of Japanese had never seen a Caucasian person.

"They feared the West and felt happy about the way the Americans and Westerners came in and treated them and worked with them."

Later, he followed in his father's footsteps, studying civil engineering at the University of Maryland, but dropped out after two years.

"I was married very young and I was in a hurry to advance my career. I think I was meant to be in business."

Peabody started work as a sales engineer but it wasn't until he moved to Australia in 1965 that his career took off.

His parents had already gone to live in Australia, which he says at that time was a land of opportunity compared with a United States struggling with union power, inflation, social unrest and crippling tax laws.

"It looked like the land of milk and honey compared to where we were living then."

His start in Australia came as a partner in a concrete business, which led to the formation of fly ash company Pozzolanic in 1966.

The company developed a process for removing heavy metals, unburned carbon and sizing the particles in fly ash - a waste product from burning coal in power stations. The resulting material was usable as a replacement for cement in ready-mix concrete and other products.

It was a model for success Peabody took to North America and Asia before Pozzolanic was floated in 1985 and subsequently taken over by Queensland Cement and Lime in 1987 for A$40 million. Meanwhile, the fly ash business inadvertently led Peabody to build a trucking empire.

Apart from designing its own pneumatic tankers capable of pumping material hundreds of feet into silos, Pozzolanic became one of the largest owners of trucks from White Motor in Australia, a move which in 1983 presented Peabody with his next opportunity.

"The manager of the company [White Motor's Australian asset] rang me up one morning and said I've got some good news and bad news - the bad news is the company's gone broke ... the good news is you can buy the company."

So he did. He then formed an association with Canadian firm Western Star Trucks, rebranded White Motor as Western Star in Australia and started selling through the Pozzolanic group.

In 1991 Western Star also ran into trouble and with some help from the British Columbia Government he bought it as well.

Peabody floated Western Star in the US and Canada in 1994 and by 2000 had built it into an operation turning over C$2 billion and employing more than 5000 people.

The Western Star business was then bought by DaimlerChrysler for C$632 million "but that was another success along the way".

When Pozzolanic was sold in 1987, the fly ash market had matured and Peabody had already started moving into liquid waste.

"I felt there was a great opportunity in Australia in the liquid waste business so we took those companies out [of the sale], we took Western Star out and we formed a company called Transpacific in 1987."

After the subsequent purchase of Western Star in Canada, flotation and eventual sale to DaimlerChrysler in 2000, Peabody bought back the Australasian group which is now part of Transpacific.

The rest, you could say, is history. Transpacific employs more than 2300 people and runs 1100 trucks throughout New Zealand and Australia.

Last year it was floated on the Australian Stock Exchange for A$480 million.

Well, it would be history if Peabody had any intention of slowing down, but the desire to make businesses flourish still burns brightly. "That's how I get my kicks," he says.

Peabody also owns the Craggy Range Winery in Hawkes Bay, which gives him an opportunity to mix business and pleasure on another level.

"My wife and daughter didn't particularly like the industrial-type businesses I was involved in and decided I should go into the wine business," he says.

"I love spending time in the vineyards."

Terry Peabody

Executive chairman, Transpacific Industries.
Born: Guam, 1939.
Age: 66.
Family: Wife and three children.
Home: Brisbane.
1965: Moves to Australia.
1966: Sets up fly ash business Pozzolanic.
1983: Buys Australian assets of White Motor.
1987: Sets up Transpacific.
1991: Buys Western Star Trucks.
2005: Floats Transpacific for A$480 million.
2006: Proposed merger with Waste Management.