John Risley’s first business breakthrough came from selling gnarly crustaceans whose shells and claws contain the juiciest, tastiest meat in the sea.
And yet, the man who built Halifax’s Clearwater Seafoods Inc. into a dominant shellfish supplier is lunching today on the blandest of food – plain omelette, no cheese – and, astonishingly, no seafood. Mr. Risley is in a Toronto restaurant and he is, as always, in a rush, which means no chance to indulge in his favourite fare of seafood and salad.
Mr. Risley clearly pays a lot of attention to diet, for he is as lean and hungry as 40 years ago, when he and his brother-in-law Colin MacDonald were selling lobsters out of the back of a rented pick-up on Halifax’s Bedford Highway. Since then, he has amassed a fortune estimated at about $1-billion – and has remained the major shareholder in Clearwater through rough times and, more recently, much clearer sailing.
But these days, as he looks out over the ocean from his Chester, N.S., mansion, he dreams not of lobster, shrimp or clams, but of fibre-optic cables laid out across the sea floor or slimy algae infused with micro-oganisms to be harvested as biofuel.
His latest entrepreneurial obsession is a tiny bug that the scientists he employs discovered in Bay of Fundy algae – and that is why he has come to Toronto, to talk to potential investors about mass producing this organism for clean energy, and to grab a quick bite between meetings at the Ritz-Carlton Hotel.
“I’m in a hurry, like I am with anything,” he says in his relentless, rapid-fire way. “If someone says to me, ‘Here is a three-year plan,’ I say ‘I want a one-year plan. We don’t have three years to wait around.’”
Such bristling impatience is rare on the laid-back East Coast where the business culture tends to favour big-government solutions over risk-taking panache. Mr. Risley has always been an odd duck – a proud son of Nova Scotia, but a global entrepreneur whose insatiable drive to build businesses was spawned as a no-hope university dropout who lost his first business in real estate and turned in desperation to selling lobsters.
Mr. Risley has never subscribed to the play-it-safe mantra of Atlantic business, and if the region is going to climb out of its economic hole, it needs new John Risleys – economic players who are not just deputy ministers or members of old family dynasties, but upward strivers who come out of nowhere. Mr. Risley is an evangelist for an enterprise culture modelled on Silicon Valley that would reduce dependence on public handouts and give entrepreneurs room to flourish or fail in markets around the world.
“Damn it, I’m 65, and there is a point when you say, ‘The community has been great to me and I will do my best to help the community.’ If there are those who do not agree with me, I have no problem with that – but let’s have the debate,” he says.
And who else in Atlantic Canada, or the entire country, has the chutzpah to so gleefully sink millions into tankfuls of fermenting sludge – as part of a business that only a PhD could truly understand? Yet he brings a down-to-earth pragmatism to the game.
“It’s so much fun to learn about a business you know nothing about,” he says. “When we started in the seafood business, we knew nothing and we asked stupid questions. People would look at you and say ‘You stupid bugger, what do you know?’ And yet, he says, “It’s the guy who asks the stupid questions who sees where the industry is going to go, while the industry itself may not have thought about it.”
He has lots of opportunity to play the wide-eyed rube in his role as serial entrepreneur. He devotes about half his time to startups – such as the prospective biofuel business and a pharmaceutical venture that would produce a natural compound to combat heart disease.
Both emerged from research undertaken at Ocean Nutrition Canada Ltd., a company he founded in 1997 that has become the world’s largest producer of Omega 3 fatty acids from fish oil. He and his partners sold ONC a year ago for $540-million – which may just be his most satisfying deal, and not just in financial terms. It validated the idea of building a science-based company in the Maritimes, a region best known for exporting commodities.
Much of the rest of his time is devoted to Columbus Communications, a Caribbean telecom company co-founded with Jamaican-born investment tycoon Michael Lee-Chin. Columbus is an industry consolidator in Latin America, and now offers cable services to 500,000 customers and fibre-optic links for 21 countries in the region. While shellfish is a business limited by the harvest, this is a growing company in a high-growth region, and grosses $1.6-billion a year, a number that Mr. Risley expects to double in three years.
Those prospects were reinforced last week, when Columbus struck a strategic alliance with Britain’s giant Cable & Wireless Communications to combine their undersea fibre-optic networks in a $500-million deal. It would leave Columbus with about 72.5 per cent of the combined Latin American venture. For Mr. Risley, it means more cost synergies, the ability to offer scale to companies that use the fibre networks – and to take on a big partner in a capital-intensive business.
Mr. Risley is still Columbus’s majority owner, but Mr. Lee-Chin recently sold his minority interest to John Malone, the legendary U.S. communications tycoon, who in addition to his Liberty Media interests is the largest private landowner in the United States. Mr. Risley says the presence of Mr. Malone is an indication that Columbus has truly arrived. And the two men, both rugged, take-no-prisoners personalities, are kindred spirits. When they first met, they were supposed to talk for an hour but it stretched into five.
Meanwhile, Mr. Risley remains a director and largest shareholder at Clearwater Seafoods. He spends no time on day-to-day stuff – the company is headed by Ian Smith, who became chief executive officer three years ago after more than two decades at food and consumer products giants such as Campbell Soup and Colgate-Palmolive. With naturally sourced seafood in huge demand, Clearwater has been on a nice roll, and Mr. Smith brings a strong marketing focus.
Clearwater has not always been a good story. Mr. Risley and Mr. MacDonald, who is now chairman, took it public a decade ago as an income trust at the equivalent of $10 a share and watched the stock fall to below 50 cents. At one point, they tried to take it private, but the deal fell through in the post-2008 meltdown – and there is conjecture they will try again. (Mr. Risley would not comment on this prospect.) Now, under Mr. Smith, there have been strong sales and the stock price has climbed back to above $4.60.
The rebound failed to quell criticism that while Mr. Risley may be a splendid entrepreneur, he has not made much money for other shareholders. “That’s a great comment and I accept that,” he answers. It was not pleasant to watch the Clearwater stock collapse after going public, he admits. “The only thing to say in our defence is we never sold any shares through any of this and we still believe in the business long term.
“You don’t take a company public to screw the public. Nobody does that,” he says, but he could not have anticipated the Canadian dollar would soar so quickly after going public. “The exchange rates bit us in the ass.”
A happier topic is Ocean Nutrition Canada, a private company that he built and sold to the Dutch multinational nutrition company Royal DSM. “I don’t start companies to sell them, but it reached the point where it really needed global distribution and we couldn’t do that from Halifax,” he says. The best way to grow was by teaming up with the world food giants, but Mr. Risley says ONC was constantly rebuffed. Royal DSM was a willing buyer, which already had relationships with these large companies.
Meanwhile, the ONC story lives on in his two new businesses, which were not included in the DSM deal. One of them, the fuel venture built on his fast-breeding bug, is in early stages of commercial production. He has decided to raise the stakes dramatically by taking production beyond the lab to a 200,000-litre tank. “We’re in the process of rolling the dice,” he says.
This is a guy who shows no signs of slowing, and yet he knows he doesn’t have 30 to 40 years of runway ahead. He wants to see a wave of new Atlantic risk takers – “guys who don’t need to take naps in the afternoon.”
So does John Risley take naps? No, he barks, before admitting: “Well, maybe on a Sunday afternoon if my grandchildren have worn me out.”
President and CEO of Clearwater Fine Foods, the holding company that controls Clearwater Seafoods Inc.
A director of Columbus Communications, Freeport, Bahamas
Born April 26, 1948 in Halifax.
Left Dalhousie University just shy of a degree; he’s a big Dalhousie donor today.
He and wife Judi have two children, Michael and Sarah, and four grandchildren.
Home is a 32,000-square-foot Georgian-style mansion on his estate at Lobster Point, in Chester, N.S.; the property was once owned by the Pew family of Sun Oil.
Sailing and skiing – he recently added a ski retreat near Bozeman, Mont. – walking his dogs, raising cattle and horses, and owning equestrian facilities.
On biofuel’s potential: The energy industry is a monster, monster business and you say to yourself, ‘It is not a winner-take-all thing, but there will be multiple winners. Is there a legitimate chance I can be one of those winners?’
On whether he is a billionaire: I don’t think anyone goes away and counts it – you can’t count it.
On what he brings to the game: I hope I bring common sense. When people get very technical and sophisticated and you can’t communicate at that level, the escape is to get above it all, above the technical issues, and you get into the common sense realm.
On why he won’t retire: How many rounds of golf do you really want to play? Frankly, I’m not into retiring. Think about how stupid it is when you have spent your life accumulating knowledge, building contacts and generating this huge experience base – and then you walk away from it.
On lobsters: The perception is that selling lobsters is like selling champagne and you make a lot of money. In fact, we never made any money in the lobster business. We’re still in the business because it is part of offering a portfolio of products to the customers. And there are romantic reasons – it is where we got our start.
On the challenge in Atlantic Canada: My worry is we are really good at identifying our problems and talking about them; we are really terrible about implementing solutions.
On Canadian timidity and the Keystone pipeline We don’t say things [to the U.S.] like, ‘Do you want to buy your oil from Venezuela or do you want to buy it from Canada, who is your friend?’ Or ‘Our relationship would be fundamentally changed if you don’t approve the pipeline?’ It upsets me we don’t tell Americans that this is a big frigging deal for us.