AUSSIE INVASION : Influence in U.S. Ranges From Movies and Hot Dogs to Banking and Big Business

Times Staff Writer

When actor Paul Hogan began appearing in television commercials two years ago touting Australia to Americans, he was just an unknown Australian with a funny accent and a catchy line, "We'll put another shrimp on the barbie."

Today, he's a top box-office hit in the United States, and Australia seems to be capturing the imagination of Americans. The Aussies are cashing in on it.

They are hitting U.S. shores with something for everyone: movies, clothes, music, concrete tiles, auto parts, beer and unusual Australian hot dogs called Dinkum Dogs. They are spending money, too--millions of dollars to buy U.S. factories, businesses and other investments.

"Australia has been the flavor of the month for a while with Americans," observes Gerald Watkins, Australian trade commissioner and deputy Australian consul general in Los Angeles. "It looks like the honeymoon between Australia and the United States is continuing and growing."

It used to be that Australia conjured up far-away images of cute koalas and bouncing kangaroos. Now it's just as likely to bring to mind high-profile Australians such as investor Rupert Murdoch, financier and corporate raider Robert Holmes a Court, actors Hogan and Mel Gibson and singer-actress Olivia Newton-John.

And of course there's the America's Cup. U.S. teams battled other challengers last week in waters off the Australian coast to earn the opportunity to win back the world's premier sailing competition title snatched away by the Australians in 1983. It had been in American hands since 1853.

Australia's ties to the United States, however, run much deeper. The United States is Australia's second-largest trading partner after Japan. Its exports to the United States rose to $2.84 billion in 1985 from $2.16 billion in 1979, according to the U.S. Commerce Department.

Direct investment by Australians saw equally impressive growth. Investment in the United States totaled $2.7 billion in 1985, nearly five times the $572 million invested as of 1981, according to the U.S. trade statistics.

Australian investment in the United States seems to grow by the day. Just last week, Australians announced three new deals involving U.S. ventures in advertising, air freight and financial services.

The Aussies are moving into the United States at a time when their economy back home is stagnating. For years, Australia's U.S. imports have exceeded exports. But the country has been especially hard hit because prices of its primary agricultural exports and other commodities such as coal, iron ore and wool have been down on the world markets.

Aggravating the trade deficit is the drop in the value of the Australia dollar, which was devalued in January, 1985. Since then, the currency has plunged 22% against the U.S. dollar. It has also fallen against the Japanese yen and West German mark. Australian companies are looking abroad to the United States for new markets to grow. Despite a land mass equal in size to the continental United States, Australia has a population of only 16 million--equivalent to 7% of the entire U.S. population--and it is clustered around southern coastal areas.

"Companies that want to do more business have to leave Australia because the market is so limited there," explains Frank Lowy, chairman of Westfield Holdings Ltd. of Sydney, which owns U.S. shopping centers, including the Westside Pavilion in Los Angeles.

The Australian government has helped encourage overseas investment and exports by removing a system by which overseas investments had to be approved by the government. In addition, it has allowed foreign banks to enter Australia, which has helped the country to become more competitive in the world economy. It has set up trade offices in Los Angeles, San Francisco, Chicago, Houston and New York.

"Because of deregulation, Australian business is becoming focused on the international scene more than ever before," said Lowy.

The West Coast, particularly California, is a favorite location for Australians because of its similarity to Australia in climate and life style. Most Australians enter the United States through either San Francisco or Los Angeles, and Australia is California's sixth-largest trading partner.

More than 400 Australian companies are operating in the United States, primarily along the West Coast and in the Sun Belt, according to the Australian government. They include a handful of Australian computer software and hardware companies operating in the high-tech Silicon Valley section of Northern California and Buffums, the Long Beach-based department store chain now owned by Australian retailer David Jones Ltd., which is a unit of Adelaide Steamship Co. of south Australia.

Trade Commissioner Watkins says about 40 Australian business executives come through his Los Angeles office each week with inquiries doing business here.

"When you look at the West Coast, what is particularly attractive is the perceived similarity of life style," says Watkins. "The Southern California market with its 60-mile base and 16-million population is about the same as all of Australia. The size of the Australian market is right here."

Banks Open Offices

Most of Australia's major banks began doing business in New York years ago but now Westpac, National Australia Bank, Commonwealth Trading Bank and Australia New Zealand Bank all have offices in the Los Angeles area, as well.

Security Pacific Corp. has operated Security Pacific Australia Ltd. as an investment banking firm since the early 1970s. The Australian unit opened an office in Los Angeles late last year to service its Australian clients with U.S. subsidiaries. Nevertheless, Australian direct investment in the United States at $2.7 billion pales in comparison to other foreign holdings. U.S. trade statistics show that Canada's direct investments in 1985 totaled $16.68 billion, the United Kingdom's $43.8 billion, Japan's $19.1 billion and West Germany's $14.4 billion. Closer to Australia is, say, Sweden with $2.4 billion.

It is perhaps through consumer goods and movies that most Americans have made the Australian connection. "Crocodile Dundee," a tale of a romance between an Australian crocodile hunter and an American reporter starring Paul Hogan, topped box-office charts for seven consecutive weeks, grossing more than $62 million. A new small-budget movie from Australia is also getting rave reviews in the United States. The film "Malcolm," which won eight Australian Film Institute awards, is being shown in a few theaters in major cities.

Neiman-Marcus featured Australia in its current Christmas Book as well as at its annual Fortnight gala celebration last month. It transformed its Dallas store into a showcase of Australia designers, crafts and clothing.

It even re-created an in-store replica of Koala Blue, the Los Angeles boutique on Melrose Avenue, complete with its Aussie Milk Bar. The successful three-store boutique owned by Olivia Newton-John, Pat Farrar and David Sidell, features items with an Australian theme ranging from 25-cent stickers to a $400 hand-knit sweater.

It also sells magazines, candy, the Australian yeast extract called Vegemite, cookies and other items from Australia. With the interest in Australia, Farrar says Koala Blue is working on licensing the store name in Florida, Hawaii, Sacramento and Dallas. Other retail outlets cashing in on the Australia craze are Aussie Imports near Los Angeles; Australia Collection in San Diego, Australian Fair in San Francisco and Australian American Inc. in Santa Ana.

Restaurants also are jumping on the Australian theme, including Australian Restaurant in Silicon Valley, Mary Gullis on Nob Hill in San Francisco, Billabong in Pasadena, the Great Australian Bite at Laguna Beach, the Australian Bakery Cafe in Albuquerque, N.M., and Wallaby Darned in San Pedro.

Then there is the Dinkum Dog, the only fast food sold at the prestigious Sydney Opera House. The Aussie version of a hot dog is being sold at Magic Mountain, Marineland, Los Angeles Zoo, Anaheim Convention Center and some colleges, including Whittier, Pasadena and Los Angeles City College. The Santa Fe Springs company is currently planning to expand into other states.

"If Australia can sell hot dogs to California, nothing can hold us back," Australia Trade Minister John Dawkins recently told the Australian American Chamber of Commerce in San Francisco.

The interest in things Australian has also spurred an increase in travel there. This year, a record 250,000 U.S. tourists will head Down Under. U.S. investors also seem to be showing interest. First Australia Prime Income Fund, a mutual fund specializing in Australian investments, was oversubscribed when it held a public offering last spring.

When it comes to U.S. investments, Australians say they prefer buying into existing businesses in which they have some experience, such as home building or oil and gas.

"There was a period some years back when some Australian investments in the U.S. didn't go very well," explains Nils Allquist, vice president and Los Angeles representative of Security Pacific Australia. "When you look at the U.S. market, it is so different because it is so much bigger. It was necessary to start cautiously. There was a restructuring away from starting from scratch into buying existing companies,"

TNT Worldwide of Sydney, for example, moved ambitiously into the U.S. trucking business in 1968 when the business was still regulated by the U.S. government. Its U.S. business, which is profitable today, suffered losses throughout the 1970s.

Underestimated Market

"We underestimated the U.S. market," explained Douglas Christensen, marketing manager for the firm's TNT North America subsidiary in Chicago. About $400 million of the company's annual North American sales of $700 million are derived from U.S. operations.

Despite a rocky start, TNT has been expanding its U.S. trucking business since 1981. It has acquired three U.S. motor carriers: Pilot Freight Carriers, Holland Motor Express and Bestway Transports.

Australia observers believe the top three Australian investors in the United States are Broken Hill Proprietary Co. Ltd., or BHP, Australia's biggest company; Rupert Murdoch's News Corp. and Westfield Holdings of Sydney, the largest shopping center developer in Australia.

BHP, a Melbourne-based steel, petroleum and minerals company that has operated in the United States since 1912 on a very limited basis, has paid about $4 billion in the last two years for U.S. businesses, some with extensive Australian holdings.

From its U.S. headquarters in San Francisco, the company oversees investments ranging from oil and gas to steel and employs 2,500 U.S. workers.

The company purchased Utah International, which has big holdings in Australia, from General Electric Co. for $2.4 billion. It also paid $570 million for Energy Reserves Group of Wichita, Kan., and $800 million for Monsanto's oil and gas division. Other smaller purchases include Omego Steel, a Dallas steel fabricator, and March Pipe in Los Angeles, according to Denys Harraway, BHP's corporate representative in San Francisco.

"We feel very comfortable with American business practices . . . we're bullish on the long term for the U.S.A.," explains Harraway. "We see ourselves now as an oil company, and we think America is a good place to have petroleum assets. We look to further expansion and growth in the United States. We're interested in the whole California coast. We see it as a thriving, vital economy, looking out to the Pacific."

Bought Media Properties

Murdoch, who has become a U.S. citizen, is the controlling shareholder of Australia-based News Corp. which has been acquiring a string of U.S. media properties, including the New York Post, New York Magazine, 20th Century Fox and the Metromedia television stations. In the fiscal year ended June 30, 1986, U.S. operations accounted for half of News Corp.'s worldwide revenue of $2.6 billion and about 55% of its total profits of $372.4 million.

Westfield Holdings paid $363.5 million recently to Macy Merger Corp. for three shopping centers: Garden State Plaza in Paramus, N.J., South Shore Mall in Bay Shore, N.Y., Bay Fair Mall near San Francisco, plus a 44-acre development tract adjacent to the Garden State Plaza center. The purchase brings Westfield's total U.S. investment in eight shopping centers to nearly $1 billion since 1976, according to Lowy. The firm earns nearly a third of its $3 billion in annual sales from the U.S. centers.

The firm typically buys existing centers in need of expansion and refurbishing. Lowy says Westfield will spend a total of $400 million over the next two years, including $200 million to upgrade the three newly acquired Macy properties, $50 million to add parking and shop space to the Westside Pavilion, another $50 million to expand it Vallco Fashion Park in Cupertino, Calif., and another $30 million to $40 million at Connecticut Post Mall in Milford, Conn.

Some Australian companies are finding other niches in the U.S. market. Three of the top four concrete roof tile makers in California are Australian: Monier, Humes and Boral. The Aussies, in fact, introduced the product to the U.S. housing market. Sydney-based Boral Ltd., a building products company, operates tile-making plants under the name Lifetile Corp. in Rialto and Fremont, Calif., and in Texas. The company, ranked as the largest brick and tile producer in the United States, produces clay bricks in plants across the south and employs a total of of 2,000 in the United States.

Australian industrialist Richard Pratt purchased Citizens Bank in Costa Mesa earlier this year for $12 million. His Pratt Group is the largest producer of corrugated boxes in Australia.

Allquist at Security Pacific Australia points out: "A lot of attention is paid to major companies coming in but it misses the smaller, lesser known but very private investments. They look to diversify their country and asset base." Many of these take the form of joint ventures.

In the last week, three new Australian ventures in the United States were in the news. On Thursday, former U.S. Treasury Secretary William E. Simon formed a Los Angeles investment firm, International Financial Services, in partnership with Ariadne Australia, a corporate takeover company in Brisbane. Ariadne is a fast-growing firm headed by 44-year-old financier Bruce R. Judge, a takeover specialist who is well known in Australian financial circles.

Also on Thursday, TNT announced plans to acquire Seattle-based Airborne Freight Corp. for a total of $172 million cash.

The day before, the San Francisco advertising firm of Allen & Dorwood said it reached an agreement to become part of the Australia Mojo MDA, the ad agency that created the successful Paul Hogan campaign for the Australian Tourist Commission.

Australian business executives say their moves into the United States have been made easier with technological advances in communication and travel. Lowy, for example, recalls that 15 years ago it was necessary to place a call with the operator to reach Australia. Today, he can make a direct call from his plane.

Adds Harraway at BHP: "When you say Australia now, people realize you're not talking about Austria in Europe."

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