Cloudbuster and Maui:
Wesfarmers seem to be going ok, maybe you need to revisit business economics 101
Generally appreciate your posts, however your statement about conglomerates ignores he success of the chaebols in Korea.
Pre Asian Financial crisis 8th largest world economy, dominated by a handful of conglomerates. Samsung and Hanjin for e.g.
With the greatest of respect, you are missing the point. Of course these businesses are successful, but the individual (and unrelated) units of the business would be even more successful if they were on their own and not as part of a larger entity.
Take Wesfarmers for example:
"Wesfarmers Industrial and Safety division is the leading provider of industrial and safety products and services in Australia and New Zealand. It also has a presence in Indonesia, export activities across the region and sourcing and logistics operations in China. Customers across mining, oil and gas, retail, construction and infrastructure, manufacturing, health and government rely on our generalist and specialist businesses."
"Blackwoods is the largest Australian distributor of industrial, engineering and safety workplace needs. A single source supplier, Blackwoods aims to deliver great customer service, competitive prices and fast delivery. The company has recently introduced an innovative shutdown and inventory management solution for customers.
Blackwoods export into southern Asia, Africa and the south Pacific regions. The company’s business-to-business and internet ordering solutions are supported in-house by Blackwoods’ dedicated e-business team, catering for all business sizes, types, needs, technology and processes.
The Blackwoods business also includes Bakers Construction and Industrial and Blackwoods Electrical Supplies."
" CSBP Ammonia, Ammonium Nitrate and Industrial Chemicals
CSBP manufactures and supplies ammonia, ammonium nitrate and industrial chemicals to the Western Australian resource and industrial sectors."
"Australian Vinyls is Australia's leading manufacturer and supplier of polyvinyl chloride resin. Australian manufacturers convert AV's resin into a variety of products including pipe, electric cable insulation, packaging, floor coverings and profiles. AV's subsidiary ModWood produces wood-plastic composite products from recycled wood and plastic."
"CSBP Fertilisers manufacture, import and distribute phosphate, nitrogen and potassium based fertilisers in blended, compound and liquid form for the Western Australian agricultural sector. CSBP also offers farmers a comprehensive soil and plant analysis service supported by the NUlogic interpretation model delivered by its network of staff and accredited partners in regional WA."
"Premier Power Sales Pty Ltd is a retailer of electricity to customers connected to the South West Interconnected System (SWIS) in Western Australia, with a particular focus on large commercial and industrial sites."
"Wesfarmers operates the Curragh mine situated 200 kilometres west of Rockhampton in Queensland’s Bowen Basin. As one of Australia’s largest independent coal producers, Curragh produces around nine million tonnes of metallurgical and steaming coal annually."
Add to that retail consumer stuff and insurance.
I defy any Board to be across the finer points of due diligence that it is a Boards duty to keep track of. The Board meetings must be a hoot. One minute we are talking coal mines, then fertilizer, then safety gloves then milk prices and the cost of nails.
At some point Wesfarmers will stumble because they are trying to be all things to all men, at which time the predators will buy in and break it up.
But don't take my word for it. Read the regular news stories about companies paying stratospheric prices for other companies, only to sell them for peanuts a few years later as "non performing assets" - at which time the private buyers clean up the mess and make a killing.