Science Technology

He borrowed hundreds of billions of money during the epidemic. Is he crazy?!

Dare to be the first.
Article | Geng Kangqi, Chinese businessman’s strategy
In the past three years, many large enterprises have had a hard time. At a minimum, the company’s performance has shrunk, its business has regressed, and even its debt has collapsed.
But one company has invested more than 200 billion yuan in just two years.
[200 billion spent in two years]
On January 31, 2023, the energy storage battery super factory and new energy battery research institute project with a total investment of 30.6 billion yuan will be launched in Zhangjiagang City, Jiangsu Province.
This is the biggest work in the field of energy storage battery since the beginning of the year. This project is operated by Shenghong Holding Group, which has not been heard of by many people, but has long been a giant in the industry.
This is not Shenghong’s first big investment. Since entering the energy storage track in October last year, it has increased its investment for four consecutive times. The cumulative investment in three months has exceeded 80 billion yuan, and the total capacity planning is up to 135GWh.
In the field of photovoltaic, Sheng Hong also has a huge hand.
At the end of 2021, Shenghong Oriental, a subsidiary of Shenghong, invested 14.36 billion yuan to achieve 100% control of its subsidiary, Sierbang Petrochemical. In terms of photovoltaic grade EVA and acrylonitrile, two new energy raw materials, Shenghong suddenly has the largest capacity in China.
However, Shenghong was not satisfied. In September of the next year, it increased its investment to double or even more its production capacity. Throughout 2022, it has become the mainstream supplier of adhesive film materials in the photovoltaic field.
In its original main business, Shenghong has shown more magnanimity.
Shenghong’s main business consists of printing and dyeing processing, chemical fiber and chemical industry. On May 16, 2022, China’s largest single process refining and chemical integration project – Shenghong Refining and Chemical Integration Project with a total investment of 67.7 billion yuan, was officially put into operation.
From oil refining to processing olefins, aromatics and other chemical raw materials, Shenghong can achieve a revenue of 100 billion yuan a year, with profits and taxes exceeding 20 billion yuan.
Whether it is refining or new energy, every project of Shenghong is a “gold black hole”. Since 2021, Shenghong has invested more than 200 billion yuan.
Although few people have heard of Sheng Hong, which has a huge scale and amazing handwriting, it is actually closely related to our life.
Its products range from fabrics, textiles, automotive interiors, to packaging materials for Apple mobile phones and petrochemical raw materials. So many people commented, “There are few brands in the world that dare to say they have no connection with Shenghong.”
Because we have a chemical fiber industry chain in hand, Miao Hangen, the head of Shenghong Group and the chairman of Shenghong Group, once said with a smile, “If we go up again, we will go to exploit oil fields”.
Even with such an industrial landscape, Muhagen is still not satisfied.
In 2020, when Shenghong became the only new Fortune 500 enterprise in China, Miao Hangen just said in a light way:
“This is just the beginning. We are still young.”
Two years later, among the top 500 Chinese private enterprises in 2022, Shenghong ranked second among Jiangsu private enterprises with a revenue of 347.979 billion yuan, ranking above Midea, Xiaomi and other national consumer brands.
However, looking back at the shock expansion in the past two years, Miu Hangen’s summary is still simple: “We have achieved enough proud achievements”.
How ambitious is Muhagen? From a small detail, we may see something.
When investing in the company in 2010, the name of the company was taken from the three major international chemical new material giants – BASF, Bayer and DuPont.
[“People say I’m crazy”]
In 1983, Miao Hangen, who failed the college entrance examination, entered a silk factory in the village. At that time, in village enterprises, high school students were also hot cakes, so he was appointed as an accountant.
Miao Hangen cherished the hard-won opportunity and worked hard. After that, I worked as a warehouse keeper one after another, and then went to the deputy factory director in charge of operation, and groped for the way of operation.
After nine years of struggling, 27-year-old Miao Hangen was appointed as the director of the new Shenghong Sand Washing Plant. At the beginning of taking office, he faced many thorny problems.
In the only two workshops of the yarn washing plant, the equipment is simple and the capital is limited, but it has to feed more than 100 employees. The “Yingxiang Printing and Dyeing”, “Oriental Printing and Dyeing” and other companies in the town have become famous. The neighboring Yonghe Village has also set up a yarn washing factory, which is under great pressure of market competition.
The stubborn Miao Hangen did not retreat. “To survive in the cracks, we must innovate!”.
So he went to major cities across the country to capture the popular information on the market, and then returned to the factory for repeated research. In order to learn a kind of hazy printing technology, he has traveled seven times in two places in a month, and has done hundreds of experiments alone.
On a business trip to Shanghai, Miao Hangen was attracted by a product design that looked like the palm of his hand. After understanding, he learned that there were only three machines capable of producing this pattern in China.
Miao Hangen keenly smelled the business opportunities and came up with a bold idea. He bought the machines from Shanghai Silk Printing and Dyeing Factory at a high price of 200000 yuan and managed to get another two. Shenghong, who has made a lot of efforts, has made technical breakthroughs overnight and achieved a formula breakthrough.
This is a dangerous move. However, as soon as the new printing and dyeing products were launched, they became popular in the homogeneous market dominated by “grey cloth coloring”. Sheng Hong, who has achieved single-product monopoly, has earned the income of previous years in just a few months.
Two years later, Shenghong developed a new cashmere printing product. “At that time, the sales were very crazy. It was the customers who paid the money to the account first, and then waited for the factory to deliver the goods,” recalls a Shenghong executive. In this way, the factory’s assets have changed from 2 million to 30 million in a few years.
In 1997, Sheng Hong was restructured into a private enterprise, and Miao Hangen, who became the helm, was not happy but worried. Because of the outbreak of the Asian financial crisis, the domestic printing and dyeing industry has been greatly impacted, and Shenghong’s business has declined in a large area.
Even Dongfang Silk, a well-known local state-owned printing and dyeing enterprise in Suzhou, also reported that it had closed down the following year. When a friend heard about it, he advised Miao Hangen, “You are a private boss with huge capital. You can live without worry. You can’t spend all your life. Don’t continue to take risks in this business.”
However, Miao Hangen had a crazy impulse: whether to take the Oriental Silk?
After much consideration, Miu Hangen decided to go against the trend and seize this rare opportunity. He took out all his savings and even mortgaged his property. With a desperate determination, he ate the Oriental Silk twice the size of Shenghong. Since then, he has acquired no less than 10 enterprises by means of “snake swallowing elephant”.
Miu Hangen is not reckless expansion, he is good at redeploying the acquired resources. For example, Oriental Silk has been divided into three subordinate factories, and the products produced are more suitable for market demand; And the idle factory buildings will be converted into hotels for blood transfusion.
In addition to bravery and business acumen, Miao Hangen’s good reputation has also helped a lot. He once did business with a coal boss in Shandong, but the payment for the goods had not been paid, but the other party was in prison. When the coal boss came out of prison two years later, only Miao Hangen’s 2 million payment for the goods had been paid by a lot.
This matter spread in the circle, and Miao Hangen’s “reliable” was deeply rooted in the hearts of the people. When Sheng Hong encountered the crisis of capital chain rupture, his business partners supported him one after another, and the banks were willing to lend money to help him get through the difficulties.
In 1999, the Southeast Asian economy said goodbye to the recession, and the global textile industry also turned around. All the enterprises acquired by Sheng Hong began to make profits, and the annual profit increased to hundreds of millions. Miao Hangen completed the Jedi counterattack.
“People say I’m crazy”.
Miao Hangen still remembers that at that time, the industry was generally not optimistic about the merger of Shenghong and believed that it would be “propped up”. But it is this crazy force that makes Sheng Hong go out of control and finally become a new leader in the textile industry.
[The latter dominates]
One day in 2003, a crucial meeting was being held.
Muhagen just opened the speech and sat down without saying a word. The senior executives of Sheng Hong mostly lean forward and are eager to speak at any time. The whole meeting lasted for 40 minutes, and the two kinds of speeches with supporters were tit-for-tat.
One side believed that Shenghong should enter the chemical fiber field in the upstream of printing and dyeing and immediately launch the melt direct spinning project. There is no time to lose. If the transformation is realized, Shenghong will no longer be limited to the traditional textile industry.
On the other hand, there is not only no microfiber in the world that can reach 0.5 dpf (0.5 grams per 10000 meters), but also no such machine. If it fails, the company will lose 2 billion yuan at an unbearable cost.
In a room not far from the meeting room, the CEO of Germany’s Bamag Company paced back and forth, waiting for a reply.
It turned out that when Shenghong was firmly in the “top spot” of printing and dyeing, the domestic chemical fiber industry, which replaced cotton cloth, was just emerging. Its products, such as polyester filament and superfine fiber, are basically imported, with high price and small quantity, and the domestic market is simply “hungry”.
The lifeblood of the enterprise is in the hands of others, and Miao Hangen cannot accept it. He decisively decided, “Let’s make upstream chemical fiber raw materials instead of imports!”
However, Sheng Hong, who entered the game too late, how to break through is a big challenge. To this end, Shenghong has determined the innovative idea of “no repetitive construction, no conventional products, and no conventional production technology”, focusing on differentiated and functional fiber products different from ordinary conventional chemical fibers.
In his mind, microfiber is the “killer” product. The concept originated from Japan and is a high-quality textile material. The fineness is equivalent to 1/200 of a hair thread, but the strength, water absorption and other characteristics are far better than ordinary fibers.
For the production of microfiber, Bamag Company, founded in 1922, can provide corresponding tools. Finally, the long-awaited news came from the CEO of Bamag. Miao Hangen decided to invest 2 billion yuan to develop 0.5dpf microfiber!
Kung Fu pays off to those who want it. Sheng Hong has successfully broken through the technical barrier. The excited Miao Hangen immediately launched a 200000 ton melt direct spinning project to mass produce major products such as microfiber.
This move shocked the textile industry, but also dragged Shenghong into a global competition.
In particular, Japanese enterprises, as one of the main production areas of microfiber, are deeply passive. Toray, a Japanese carbon fiber giant, took the lead in launching the challenge and broke the record of “the world’s finest fiber” held by Shenghong in 2005, and developed the ultimate product of 0.3dpf.
Dongli proudly claims that this is the upper limit of industrial spinning technology, and no one in the world will break it! After hearing this, Miao Hangen repeatedly asked: Do you admit that you can only follow others’ buttocks, or break this “limit”?
The answer must be the latter. Miao Hangen, who did not admit defeat, immediately found two teams of people. One is located in the headquarters of Shenghong Group, and the other is located in the European Research Center, and has cooperated with experts from Tsinghua University and Donghua University to tackle key problems.
In order to break the record of Japanese companies, Sheng Hong invested nearly 700 million yuan to carry out the experiment, and experienced numerous failures. In the end, Shenghong not only made a successful breakthrough, but also achieved 0.15 dpf for its latest product – a full reduction of 50% compared with the fineness of Dongli products!
With product advantages beyond the limit, Shenghong immediately put into production the 400000 tons melt direct spinning microfiber project. In 2007, the output of Shenghong microfiber exceeded the sum of countries and regions such as Europe, America, Japan and South Korea, and was honored as the “global microfiber expert”. Its 49 microfiber production lines are the largest in the world, and India ranks second with only 4, which shows the great disparity in strength.
In 2008, a financial crisis swept the world, and tens of thousands of small and medium-sized enterprises in the affected textile industry closed down in half a year. In Shengze Town, Suzhou, where Sheng Hong is located, hundreds of enterprises also closed down, accounting for 1/3 of the total number of local enterprises.
But Sheng Hong, however, has lived a life that his peers dare not think of. Its profit margin has remained around 12% for two consecutive years. In 2008, the sales volume exceeded 10 billion yuan for the first time, reaching 10.6 billion yuan, ranking the top three in Wujiang District, Suzhou.
The “miracle of the industry”, which is going against the trend, has become the best reward for Miao Hangen’s daring to put all his bets on technological innovation.
[Ambitious “careerists” without ambition]
As an important commercial town, Shengze Town once circulated a saying, “If you make less than 10 million a year, you can’t call your boss.” Miao Hangen, who broke out here, is naturally not satisfied with the idea of “making money when you are small”.
But Miu Hangen didn’t like the word “ambition”. “I’m not so ambitious” is almost his mantra. He stressed that his only idea was “to be a little vain and want to make the enterprise bigger.”
At the beginning of his business, he found out the “way to become bigger”: to become an enterprise, we should start solidly. But at a certain stage, if you want to do great things, you must continue to break through the main business and expand.
“If you don’t swim up, you will never do much” has become the winning rule of Miao Hangen.
Adhering to this idea, he set out from textile printing and dyeing, constantly adjusted the course, built Shenghong into a giant integrating chemical fiber, petrochemical and refining, and firmly held the lifeblood of the enterprise in his own hands.
A reporter once visited Miu Hagen’s office and found that the furnishings were very simple. The only highlight was the two calligraphic works written with “ordinary mind” and “diligence and diligence”. He explained that this was to remind himself that the bigger the boss did, the more common he should be; The bigger an enterprise is, the more diligent it is.
In his life, Miao Hangen has the humility and prudence of businessmen in southern Jiangsu. But when it comes to making risky decisions to accomplish great things, Miu Hangen never hesitates, let alone is timid. “Generally, I will do a thing when I have 60 or 70% confidence.”
Before 2015, China implemented the special operation of refined oil, and all refined oil from private refineries should be delivered to state-owned enterprises such as “three barrels of oil” for wholesale. In February of this year, the National Development and Reform Commission issued relevant policies, and private enterprises successively obtained crude oil import qualifications.
As soon as the general environment was loosened, Miao Hangen decided that this was a great opportunity.
Yu Huiyong, who used to be the director of a state-owned refinery, still remembers seeing Miao Hangen for the first time at the Kunlun Hotel in Beijing in March 2018. Previously, he thought that private refining was just a business of “making quick money”. But this prejudice soon dissipated.
After talking with Muhagen, he found that “he (Muhagen) is a person who wants to do big things, not for money, because he is not short of money.”
But the road ahead is still dangerous. Four months after Huiyong became the head of Shenghong Refining and Chemical Integration Project, he was informed that the environmental assessment report was returned and the project was temporarily suspended.
The team was at a loss, but Miu Hangen calmly summoned 15 managers above the level of vice president to have a meal and reassured them: “Our project is OK, and the environmental impact assessment is a matter of time.”
In fact, Miu Hagen himself was not absolutely sure, but he had a common mind of doing great things
Half a year later, at a grand commencement ceremony, all the local provincial and municipal leaders were present. In the final window period, Shenghong successfully landed on the beach.
It can be said that Miao Hangen’s determination, sensitivity and optimism in entrepreneurship cannot be separated from his desire to make the enterprise bigger.
This kind of ambition also made Miu Hangen work hard in the textile industry for 30 years. He has also worked in real estate and hotels in the middle of the way, always stressing that “real estate and hotels have always