Date posted: February 12, 2016

By Tony Kaye

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War in Timor in the 1970s was the kernel for this Northern Territory business.

In times of crisis, sometimes family businesses are forced to take evasive action to survive. After all, staying in business is tough at the best of times. But those basic business survival instincts take on added meaning when it is literally a matter of life death.

That was certainly the case for the Lay family 40 years ago, back in late 1975, when the Indonesian military invaded East Timor, ostensibly to restore order in the former colony after it gained independence from Portugal the year before.

Residing in the capital Dili, the nation’s largest city, commercial centre and chief port, the Lays had already built up a reasonably sized and successful wholesale food distribution business over time by supplying milk power, alcohol, meat products, rice and other food products to local retailers and to the hospitality and government sectors.

The business was being run by Kivi Lay – then aged in his mid-20s – who had taken the reins from his father with the intention of helping the family enterprise to expand and prosper. At least that was the game plan, but circumstances changed very quickly under Indonesian rule with the local population often subjected to harsh treatment. For Kivi, there was really only one solution at the time.

“After the war I had no choice but to leave the country,” says Kivi. “The military were running the country and they wanted to take control of everything.”

Getting out was imperative, and possible destinations to flee included other former Portuguese colonies such as Macao or Brazil, or even Portugal itself. But given its proximity and safe political environment, top of the list was Australia. Darwin, a city already known to Kivi, was the preferred location.

Having escaped to Malaysia after 1975, Kivi hoped for residency in Australia. Yet, despite the appalling situation in his mother country, Australia’s tough immigration regime still proved to be a roadblock. So instead of entering Australia as a refugee, Kivi came on a six-month tourist visa and then applied for permanent residency. Of course, it definitely helped his cause that he was able to prove he had the financial means to stay here without working. His family’s business interests in East Timor were sizeable enough for that, even though they had effectively fallen into Indonesian hands.

Building a new life in Australia

With the hard part out of the way, and after eventually gaining permanent residency in Australia, Kivi set about rebuilding the family’s business interests in Darwin in 1978 using both his knowledge and regional contacts.

Under the company name Lay & Sons Organization Pty Ltd, he began importing agricultural produce from Asia to sell through his own retail store, and to on-sell to local food businesses and supermarkets. Trading under the names Asian Importers Exporter & Co. and United Food Service, the family’s food distribution operations quickly expanded and prospered.

So too did their property interests. Using cash flow and profits from the food operations, Kivi began buying up commercial and residential real estate across Darwin. In addition to buying existing properties, he began constructing his own including shopping centres, warehouses and retail showrooms. Today, Kivi places a conservative value on the family’s property holdings of $20 million. One of Kivi’s brothers, Jackson, currently lives back in Dili and is also involved in property development, construction and logistics.

In 2009 the family’s two food companies were merged to form Asian United Food Service (AUFS), and it is now one of the leading wholesale suppliers for the food service catering industry in the Northern Territory. Kivi’s brothers Nelson and David, aged in their late 40s and early 50s respectively now run the food business, which these days is more focused on reselling and distributing a large range of Australian food produce and catering products primarily sourced from major domestic suppliers. Food produce includes grains, frozen vegetables, spices, dairy, meats, seafood and extensive lines of packaged goods.

The business supplies government departments, restaurants, shops and hotels in the Darwin, Palmerston and Katherine regions as well as servicing some of the more remote communities around the top end. The family also has a retail division, which is open to the public seven days a week.  As well as supplying the retail sector, the AUFS business also is a major supplier to corporates and to various government agencies in Darwin. Last year the food business turned over around $65 million.

Such has been the success of the Lay Group overall that the business was named as a finalist in the 2015 EY Entrepreneur of the Year Awards.

The AUFS business was also named Member of The Year in 2015 by Countrywide, Australia’s largest, national group of independent wholesale food service distributors. This was the 13th time AUFS had won the award.

Strategies for the future

Now aged 65, Kivi is still actively involved in the Lay Group but his daughter Yolanda and son Chris manage both the property business and the family’s retail store.

Yolanda, 35, says the family did begin some early work on succession planning recently, however at this point no formal plan has been developed across the wider family.

“We started down the succession path, but it was a bit too early. KPMG came in to do a presentation to us, and there were a lot of hard questions. But the succession plan is something we will need to resolve over time.”

Whatever the outcome on succession, Kivi says the family has no intention of taking its foot off the accelerator.
“We will continue to grow and to look at properties and other opportunities,” he says. “We won’t stop.” He adds the Lay Group will remain a family business, in every sense of the word. “We all look out for the family and look after each other – all members are the same,” he says. “We share everything and put all our efforts into the company. If you only look after yourself, it’s not going to happen. I know we will grow bigger and bigger.”