A pioneer of crocodile farming in Australia, John Lever, has built up a successful business but now wants to double its size. In this case study, professors John Thompson (University of Huddersfield) and Phil Bretherton (Charles Darwin University) tell a tale of skins, meat and thrill-seeking tourists.

Twenty-five years since he founded the Koorana crocodile farm, John Lever has multiplied 3 crocodiles into 3000. He currently hosts some 50,000 visitors a year. The business pulls in over AU$1.5 million a year, with about half of the money coming from crocodile skins and meat and the other half from tourist revenues. He has just won a major contract to supply crocodile skins to an Italian tannery partly owned by Gucci (see box). Yet, he aspires to stretch his numbers further to 5000 crocodile eggs per year and 10,000 visitors. Professors Thompson and Bretherton show us how Lever built the business to its present state and how he might grow it further.

Discovering his love for crocodiles
John Lever, a Melbourne native, graduated from agricultural college and first worked with beef cattle. He discovered his love for crocodiles in Papua New Guinea (PNG) where he was transferred to take charge of a number of wildlife stations. There he created a business plan to develop the emerging crocodile farming industry. Supported by a United Nations program, he secured $1 million. Years later, his ideas are still in operation and PNG is one of the foremost crocodile farming countries in the world.

Planning his return back to Australia in the 1980s, Lever knew his ultimate aim was a commercial Australian saltwater crocodile farm. Australia, however, did not have any policy or plan for crocodile farming. Lever secured a license by agreeing to deal with problem crocodiles that threatened civilians. It was these rogue crocodiles that provided the foundation of his business.

Farming crocodile skins and meats
Thus began the Koorana farm. Lever wanted to be away from the hot tropics so he chose a site with a more seasonal climate in Queensland (eastern Australia). Koorana came from an aboriginal word meaning “bringing forth young.”

Although crocodile farming had begun in Queensland in 1969 to conserve young saltwater crocodiles (stocks were dwindling) and provide employment to the aboriginals, commercial farming was nascent in the 1980s.

Thanks to his experience in Papua New Guinea, he knew how to farm crocodiles. But the beginnings were not easy, in particular due to the infrastructure and lead times (a crocodile is harvested for its skin only around the age of 3) associated with crocodile farming (see box).

He leased his crocodiles to local investors and earned money from a management charge to rear the eggs that belonged to the investors. Several tax incentives helped make leasing crocodiles attractive to the investors. By the time Lever had made enough money to buy out his investors, he had eleven investors and five breeding females.

He found innovative ways to keep the farm running. When he couldn’t afford to get the skins tanned, he struck a deal with the tanner to keep part of the skins as payment. Sometimes the stores he supplied went bust and he would lose his stock. So when the Internet became available, he tackled poor payers and other such impediments through direct sales on the Web.

In the beginning, he had to live out of a caravan on the farm with his wife and four sons. Only after a few years was he able to graduate to a shed, and still later able to build a house on the farm. But, after the business had taken off, he was able to add a modern abattoir, partly financed by three of the four sons, where they slaughtered the crocodiles that they were harvesting. Most of the meat went to restaurants and meat stores; a part of it was kept for their own restaurant.

Today Lever hatches around 1600 baby crocs in a good year. Before tanning, high-quality saltwater crocodile skins can fetch around US$600. The main markets for Australian skins are Japan and France, with Italy and Singapore not far behind. The skins often end up in handbags: Koorana’s high-end bags cost around US$1400 while Hermes best bags can require US$50,000. For men, the Australian sombrero made out of crocodile skin fetches US$750 while wallets range from US$150 to $US400.

Entertaining and educating tourists
Approximately half of the farm’s revenues come from tourists. When it began operations, Koorana was open to visitors for only two days a week, but success led it to welcome visitors seven days a week with two guided tours per day.

Visitors to the farm pay AU$20 per adult and AU$10 for children. Some 50,000 people a year come to peer at the ponds where 3000 pairs of green eyes gaze back at them. Taking into account the fact that children form a slight majority of the visitors, those visitors contribute nearly AU$750,000 in sales.

The restaurant serves 60 covers at lunchtime and obviously features crocodile meat. Professors Thompson and Bretherton do not report the existence of crocodile ice cream, a bit of a surprise given the number of children who visit the farm.

Finally, a store offers the visitors crocodile products, meat and skins. To take care of the crocodiles and the tourists Koorana Farm employs thirteen people. Futhermore, Koorana hosts volunteers as well as paying students on training programmes. Diversification is part of  Koorana’s success.

Side attractions
In a more Crocodile Dundee-like vein, Koorana also provides a crocodile removal service. Stray crocodiles that pose a menace to the public are captured by Lever who can then keep them, hopefully as breeding stock. One such adventure took him all the way to Hong Kong in 2003, where authorities asked him to capture a crocodile, thought to be an escapee from the mainland.

Lever is also trying to work with aboriginal communities in two ways. He would like to empower them to harvest the crocodiles they breed. Secondly, it is currently illegal to collect wild crocodile eggs. Birds, pigs and rains cause huge egg losses each year. Lever would like to see aboriginal communities derive income from egg collection, eggs which farms such as his would then incubate.

The succession question
As with all successful small family enterprises, the issue of succession eventually becomes an important one. John and his wife Lillian have four sons. The eldest runs his own business but maintains an interest in Koorana. The second son is uninterested while the last two work at the business.

Lever sees his business as composed of three parts, the farm and hatchery, the abattoir, and the tourist sites, which would make it possible for each son to have a part to run. To make such a vision viable, he feels he needs to more than double the size of the business to 5000 eggs per year and 100,000 visitors per year.

The last part of the case is devoted to the ways that Lever might achieve this growth goal. Professors Thompson and Bretherton present the readers with some ideas for driving more revenue from the current businesses or for offering new, revenue-creating attractions. And from there the crocodile discussion can begin.

Reference:
ECCH 8080-052-2
“The Koorana Crocodile Farm”
Professors John Thompson (University of Huddersfield) and Phil Bretherton (Charles Darwin University)

By Sunaina Anand
Published December 2009