Good article

[wareagle]

Here is a great article...i may be biased since it is about my father....enjoy




From a cotton empire to a Montana ranch
Billy Dunavant heads for fly-fishing country, but he'll stay in the stream


By Story by Jane Roberts
Contact
July 31, 2005



Billy Dunavant plans to step down from the day-to-day operations of his billion-dollar cotton business, but he says he will "remain chairman of the board forever." The 72-year-old world cotton merchant, who changed the fortunes for cotton producers here and around the world, passes the baton to his sons Monday.

BIG TIMBER, Mont. -- Billy DUNAVant's new Ford F250 Lariat crew cab is waiting for him when his private plane touches down on a Sunday morning in mid-July.

Within 15 minutes, the truck is loaded with items the Memphis cotton magnate doesn't live without in July: boxes and boxes of hand-packed Mississippi tomatoes; half a wine cellar of $50-a-bottle Chardonnays; suitcases of jeans and shirts; and two German shepherds so protective even his private pilot quickly takes refuge.

"They're mean, but they won't maul you. They just bite," Dunavant says.

"C'mon, Montana," he calls to the male shepherd, deaf from a rattlesnake bite. "Stay close to Daddy."

Dunavant is stepping aside this week as chief executive officer of Dunavant Enterprises -- the company he inherited 44 years ago -- and handing it over to his sons in the annual meeting that begins tomorrow.

Dunavant will remain chairman of the board, part of a carefully orchestrated "non-retirement" meant to tell clients that William Buchanan Dunavant Jr., the now-graying, sometimes impish and generous genius who bought their cotton, ginned it and got it to market, will always be the soul of the company.

Still, it's the end of an era. Over five decades, Dunavant nearly single-handedly created a global market for U.S. cotton and built an empire in the process. In the marketing year that ends today, Dunavant Enterprises had sales of $1.4 billion.

"Sometimes when people named William get to a certain age, they want to be called Bill or William," said Joe O'Neill, senior vice president of the New York Board of Trade. "The most successful person I know is Billy. He is the most outstanding cotton merchant for all time, no question."

Dunavant counts his age in the half year, a quirk that shows how much he values time. At 72 and a half, the man whose life is still ordered by growing and hunting seasons, is philosophical, if not restlessly attuned to the cycles of nature and life.

"I don't know whether I will be bored or not," he said at his Montana retreat. "I think I can do this and be OK. I'm going to trade my personal account to keep my sanity and my fingers in the pie."

In retirement, he'll linger longer in his favorite places, including other hunting and fishing hideaways in Mississippi, Arkansas and Texas. But the Montana ranch, a 12,500-acre haven 19 miles from Big Timber, holds his heart. On the three- by five-mile swath of rolling grassland and sage, Dunavant has 1,250 head of black Angus, fields and fields of barley (post-harvest, it attracts ducks better than wheat) and his own fishing stream.

The three-story, 14,000-square-foot lodge has an elevator because in 10 years Dunavant figures it might be hard to manage stairs.

Before he sits down for dinner, he casually asks about tomorrow's breakfast and lunch.

"Billy's habit of always thinking ahead," says his wife, Tommie Dunavant.



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Dunavant heads to his ranch with his two German shepherds, one of which is named Montana. Not too many people get between him and his dogs, who are very loyal and protective.

Dunavant is a cotton merchant, risking as much as the cotton farmer who puts the crop in the ground. Dunavant eventually will own the crop and the risk of selling it.
He hates to be confused with a cotton broker, who by his definition sells cotton "he doesn't own" for a "$1 or $2 a bale commission.

"I like the risk," he said. "If you know what you're doing, your reward is greater."

This spring he pulled off one of the coups of his lifetime, selling 880,000 bales (440 million pounds) of cotton to China -- the second-largest sale in history -- while his competitors barely knew anything was up. The gross sale was $255 million. To do it, he quietly bought up enough cotton to cover the sale by enlisting unknown -- and therefore inconspicuous -- brokers in the pit at the New York Board of Trade.

"That's not the sort of trade he could do himself because everybody knows Billy," said Carl Anderson, retired cotton expert from Texas A&M. "Dunavant starts buying cotton like that and people know something is up. And then the price goes up."

To understand how quickly the game can sour, a merchant selling 100,000 bales at 52 cents a pound loses $500,000 if the price goes to 53 cents. It happens in a second.

"There are skeletons all over of cotton merchants who didn't hedge the price change risk. When they are called on to deliver cotton they don't have, they have to buy it," Anderson said. "Mr. Dunavant simply does not allow his business to be exposed to market risks."

Dunavant became a masterful trader, learning from a relentless teacher he calls the market.

"I didn't go to school for it. But I'm fairly good with numbers. I never write a trade down. I carry them up here," he says, thumping his head. "I'm pretty good."

In all his years in business, Dunavant's only losing year was 2004, "the worst since 1932." In a word, the reason was China, Dunavant's biggest customer and headache.

"China didn't keep its word," he said about the defaults that cost the company $15 million. "I would have to blame the majority of our loss on my poor timing and China. We were in the wrong place at the wrong time."

It's a cautionary tale. China is not only the fastest-growing consumer of U.S. fiber, it's also the biggest enigma, right down to its secretive weather forecasts.

"They do listen to us, yes," Dunavant said. "Have they improved? Yes. But have they adopted our trade rules? No."

Dunavant and the Chinese go way back. In 1973, he made news around the world when he negotiated -- shortly after President Nixon's historic trip -- the first sale of U.S. cotton to the Communist country.

"But, boy, were they tough. They locked me in a room at the old Beijing Hotel for three days. Finally, when you are worn out, exhausted and want to go home, they would do a little business."

It has paid off in the personal relationship Dunavant has with a "politically connected" team in China, headed by David Hardoon in Hong Kong.

"The Chinese love to hunt. I had them down to the farm in Coffeeville, (Miss.), even though they didn't know the front end from the back end of a shotgun."



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[wareagle]

Dunavant's third wife, Tommie, has doctorates in psychology and theology. They are people of deep faith yet share a very playful relationship. They were introduced by a friend after she was widowed and he was divorced.

Dunavant is the longest serving member of the New York Board of Trade, still "the pricing mechanism for almost every bale of cotton traded around the world," O'Neill said.
At the NYBOT, they call him the "Major Memphis Merchant." He credits his father for the early grounding. "He was truly the best cotton man," Dunavant says. "He could roll the cotton out, look at it and decide what it was worth."

When he died at 52 in 1961, Dunavant, an only child, was left to carry on the family business.

When he took over W.B. Dunavant & Co., the small Front Street cotton shipper was handling 100,000-plus bales a year and selling more than 90 percent of it to U.S. mills.

Dunavant made the company one of the first to use "forward contracting," the now-common practice of letting farmers lock in a price before the crop is in the ground. Merchants up and down Front Street lost their shirts when the price went up; not Dunavant.

"It became apparent if we were going to grow, we had to get U.S. cotton involved in the export business," he said. "We began to open offices around the world, primarily to sell U.S. cotton, but when those doors opened, they also opened for us to be merchandising other growths of cotton."

Dunavant's ways are as important as his wiles.

"He's a man of precise time. I would be talking to him, and he'd holler out to his secretary, 'Tell Jimmy to be here at twelve after 3,'" said Pete Aviotti, former president of Dunavant Development.

He's also a man with high expectations, said Dave Jordening, vice president of Dunavant Commodity Corp.

"About five years ago, we got into somewhat of a disagreement on the phone over the company's market position," Jordening said. "In the course of that conversation, I was fired two or three times. But Mr. Dunavant had forgotten that he had invited me to come hunting the next day." Reluctantly, Jordening said, he showed up at Dunavant's Mississippi farm, ready to hunt.

"After a very brief, one-sided conversation, all was forgiven. Anytime you have a person of that caliber, you are going to have someone who is very demanding, direct and to the point. He can come down on people, but he always does it in a manner that is gracious and forgotten in a few minutes. People don't hold it against him, but they try harder."

Today, as the U.S. textile business continues to move to cheaper labor offshore, only 35 percent of Dunavant's cotton is consumed domestically. The shift made it essential for merchants now to also watch weather and politics around the globe.

"One of the reasons he's been so successful is he doesn't sit back and live in the past," Anderson said.

Today, Dunavant Enterprises has agents and businesses in 80-plus countries. It markets well in excess of 4 million bales a year, and at the peak of business, employs more than 10,000 people around the world, about a tenth of them in Memphis.



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Dunavant is always in bed by 8:30 p.m. and up at 5 for a five- or six-mile walk every day with Tommie.

But without fail, wherever he is, Dunavant is in the office or tuned in by telephone when the markets open at 9:30 a.m.

"Billy is pretty regimented," Tommie said.

He's also allergic to cotton.

"In the old days when I was spending 16 hours in the cotton room and the office, I needed a shot three times a week. I gave it to myself," Dunavant says.

"Cotton grown around home affected me much less, but the irrigated cotton that has more fuzz and dust made me feel funky, real funky."



Hunting and fishing clothes wait at the back door of the log cabin for the next guided trip. "He really doesn't like to be by himself," wife Tommie confides.

He persisted and expected the same of his children.

When Bill, his oldest son, graduated from the University of Virginia and told his father he wanted to get an MBA, Dunavant wouldn't hear of it, saying he could teach him "'more around here than any business school in America.'

"Reluctantly, I'll say he was right," said Bill Dunavant. "He shipped me over to Japan, and I happily went. He wasn't going to change anything for me one bit. You earn your stripes all the way up."

By his own admission, Dunavant's drive has cost him. He's in his third marriage and has seen the pain of his divorces in his children's lives.

In 1990, son 'Buck,' then 19, pleaded guilty in Criminal Court with another teen to assault stemming from a brutal parking lot fight near the Cook Convention Center. One victim's cheekbone was broken, requiring extensive plastic surgery. Another said his head was banged on the pavement until he lost consciousness.

Buck Dunavant was sentenced to 180 days in jail, with all but 30 suspended.

"Buck made a mistake," his father says. "He knew he made a mistake, and he is not the same young man that was involved in that altercation. He is now one of the top five in charge of Dunavant Enterprises."

The next year, Dunavant married the former Tommie Smith, a widow 21 years his junior and younger than his oldest child. Her husband, a cousin to FedEx CEO and founder Frederick W. Smith, died in a car crash.

"I think he was struggling with relationships, struggling with divorces, struggling with trust issues and struggling with what someone wants from him," said Tommie, who earned doctorates in theology and psychology from Oxford University.

She married him, she said, because she'd never seen "a more giving man in my life."

"I know many men who are CEOs and their companies give a lot. This is a man who gives of himself. He's very sensitive. He doesn't ever give a speech where he doesn't cry. It's the Holy Spirit in his life, and he gives into it."



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[wareagle]

Dunavant roams his 12,000-acre ranch upon his arrival checking in with his year-round agricultural manager, Troy Kapphan.

In Montana, where the market opens an hour earlier than in Memphis, an antsy, adrenaline-charged Dunavant sits in shorts and cashmere over the cleared breakfast table, waiting for 8:30 a.m. when he will be immediately connected to his world. Dunavant's starting to worry about "the screen," the computer that gives him access to the New York Board of Trade. Dunavant doesn't know how to operate the thing, even how to turn it on, and he's sitting outside his office, where a sun-bedazzled slice of a Montana morning is shining across the desk, shouting "TOM-MIEEEEEEE. TOM-MIEEEEEEE."
She quickly goes to work to get the signal, then asks if the market numbers are supposed to change every half-hour or just "every now and then?"

"Tommie, they change every minute," he says.

When he's settled at his desk, she calls the guide to set up a morning fly fishing trip.

"He really doesn't like to be by himself," Tommie says in a hushed voice.

People say Dunavant is the most competitive person they know but also among the most generous.

By the roughest estimate, Dunavant has given more than $50 million to causes everywhere.

A few Sundays ago, he showed up for services at First Baptist Church Broad Avenue, an African-American congregation trying to rebuild its Binghamton neighborhood with a $7 million renovation of the old Lester Elementary School.

"We'd met the minister, Keith Norman, at a fund-raiser we had for Harold Ford Jr. at our house," said Dunavant, an avowed Republican. "He asked us to come to the church, so we did. I was really impressed with him. That church is doing some good things in that community. And it's a tough area they're trying to survive in. We sent them some money." Ten thousand dollars.

Rev. John Sartell, Dunavant's minister for 28 years at Independent Presbyterian, isn't surprised.

"From the first day I met him, Billy was very aware that he was a turtle on a fence post," he said. "He knows he didn't get where he is by himself and that the Lord could take it away in a heartbeat."

Ducks Unlimited has its headquarters here because Dunavant donated $1 million to the cause and worked behind the scenes to get a 50-year lease at Agricenter Center International for $1 a year. He poured millions in the Memphis Athletic Club, which he purchased in 1975, turning it into The Racquet Club, a venue for national tennis tournaments. He's the largest donor in the history of Memphis University School.

In 1984, Dunavant stepped outside his expertise and bought controlling interest in the Memphis Showboats, the U.S. Football League team. "I wanted to bring first-class football to Memphis, Tennessee, and I was hoping the USFL would merge with the NFL," he said.

In the early 1990s, Dunavant took up the pro-football challenge again, pushing with a cadre of wealthy Memphians, including Fred Smith, Pitt Hyde and Willard Sparks, for a NFL franchise.

His biggest public disappointment was in 1993 when the NFL instead chose Jacksonville, Fla., and Charlotte, N.C.

"We didn't have a chance because we didn't have a facility," Dunavant said. "All of us lost some money. The day we didn't get in, Tommie and I flew out to Montana to buy this ranch. It's been a lot better for me but not better for Memphis."



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Billy Dunavant enjoys grilling out and "fiddling around in the kitchen." He retires each night by 8:30.

Cotton is a gentlemen's game, says Gary Taylor, CEO of Cargill Cotton, one of the three biggest cotton merchants in the world.
In the anonymous world of cotton trading, Taylor knows he's up against Dunavant when the figures start changing fast.

"He's quick to correct his position, and I salute him for that."

As the senior player in the biz, "Billy sets the standard with his behavior," Taylor said. "He is very honest, very forthright and cares about the industry and the people in it. When Billy has somebody trapped in the futures market, he squeezes them, but he doesn't squeeze them to death. You don't see that in the other commodities. It may be a Southern thing."

Or just a Dunavant thing.

The third floor of his Montana home -- where mounts of every description, cape buffalo, lions, zebra, leopard, even a baboon, line the walls -- may be as close as Dunavant comes to parading his exploits.

In every case, except when the "animals were predators, someone, including me, ate those animals. We either had them in camp or the natives or the trackers ate the meat. I wouldn't kill an animal just to kill it."

To say his life in cotton has been about the kill is to miss the point.

"Of course, the pursuit is part of my aggressive nature. But I wouldn't pursue just to kill and leave it lay there."

--Jane Roberts: 529-2512



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Billy Dunavant

Date of birth: Dec. 19, 1932

Hometown: Memphis

Education: Graduate of The McCallie School in Chattanooga. Attended Vanderbilt University; graduate of Memphis State University.

Among his awards: 1998 Distinguished Citizen Award, first recipient of Carnival Memphis's Cook Halle Award and The Fogelman College of Business and Economics Alumnus of Year Award; Civitan Club's 1984 Outstanding Citizen of the Year; 1984 Junior Achievement Master of Free Enterprise; 1983 Distinguished Alumnus Award, The McCallie School; National Society of Fund Raising Executives Hall of Fame and two honorary doctorate degrees.

Key industry boards: New York Cotton Exchange; New York Board of Trade, National Cotton Council; American Cotton Shippers Association; Cotton Council International; New Orleans Commodity Exchange and Memphis Cotton Exchange.

Other boards: National Commerce Bancorporation 1976-1992; Promus Corp., 1986-1993; Partners Inc.; Browning-Ferris Industries Inc., 1987-1993



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Dunavant Enterprises Inc.

2005 Sales: $1.4 billion

Address: 3797 New Getwell Road

Subsidiaries include: W. B. Dunavant Co. of Calif.; Dunavant SSA, Geneva; Dunavant Asia; Dunavant Australia, Dunavant Capital Management, Dunavant South America; Dunavant Commodity Corp.; Dunavant Real Estate; Central States Truck Brokerage; Central States Cotton Co.; Southern Compress; Fambro Warehouse, Calif.; Westside Compress; Dunavant Southeastern Inc.; Dunavant Holding Co. and WBD Holding Inc.

Web site: Dunavant.com

 

[trolln4walii]

Nice article wareagle. Congrats to your dad on his successful career and to his well deserved retirement. :clap: Looks like you've got some big shoes to fill. I'm sure it's a great comfort to him knowing he's turning over the keys to a great son. With his work ethic and time schedule to uphold (although I can't see you in bed by 8:30), and time devoted to your fiance and puppy, I hope we still see you for the football season. Best wishes

 

[JOSHNAUDI]

What a great article War. I printed this out and I'm taking it to work tomorrow. I wish you much success in 05/06.

Bill Gates is the Billy Dunavent of the computer world, and yes, that is the correct order to list them. Your father has opened the door to many markets and kept it opened for us little guys to get in. Although I wish he could do something to simplify those Chinese and Bangladesh Letters of credit.

Sometime I'd like to hear your thoughts on Step 2 if you get a chance.

American Cotton Supplier aka ACSI, ACSI-II, and Amcot Inc., finally went South in Feb. and I'm now working for Ed Hanslik and Ray Ragsdale at Texas Cotton Marketing Corp. in Austin.

Good luck this last week of big step 2.
Godspeed on the Aug 4th sailings.

Take care

 

[Box and one]

Wareagle..great article and wish you the best of luck.I'm sure you will follow in your father's foot steps.

My favorite quote about sucess is

"I've missed 9,000 shots in my career,I've lost more then 300 games,and 26 times, I've been trusted to take the game winning shot and missed.Throughout my life and career I've failed,failed and failed again.And that's why I suceed"
Michael Jordan

Best of luck....
Got that fantasy draft coming up today.To bad about Manning,Holmes,Alexander,and LaDainian all lost for the season with those injuries yest..lol

 

[oldschoolcapper]

Tell your Dad congrats and try to enjoy his retirement. I grew up on a cotton and peanut farm down in south Alabama myself. Let me know if you head down this way for any games this fall and we'll get together.

osc

 

[kneifl]

Congrats Wareagle, rich boy......... :mj07: :mj07:

Just messing with you...lol

Good luck with your cotton business I'm sure you'll do well.

kneifl

 

[sportsnut13]

Great article :clap: :clap: Wareagle Good Luck following in his shoes big shoes to fill. :scared :scared Hope to see you tonight at the draft. :mj14: :mj14:

 

[Mjolnir]

congrats, a very interesting article. i'll see yall at the draft.