18 5 月, 2024


Processing Machinery

Borrowing billions of dollars during the epidemic, is he crazy?!

13 min read

In the past three years, many large enterprises have had a difficult time. At a light level, performance may shrink, business may regress, or even debt may peak, leading to difficulties.
But there is a company that has invested over 200 billion yuan in just two years.

Spending 200 billion 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 were launched in Zhangjiagang City, Jiangsu Province.
This is the biggest move in the field of energy storage batteries since the beginning of the year. The Shenghong Holdings Group, which is already a giant in the industry, has operated this project that many people have not heard of.
This is not Shenghong’s first major investment. Since entering the energy storage track in October last year, it has increased its investment four times in a row, with a cumulative investment of over 80 billion yuan in three months, and a total planned production capacity of up to 135GWh.
In the field of photovoltaics, Sheng Hong also has a huge hand.
At the end of 2021, Dongfang Shenghong, a subsidiary of Shenghong, invested 14.36 billion yuan to achieve 100% control of its subsidiary, Silbon Petrochemical. In terms of photovoltaic grade EVA and acrylonitrile, two new energy raw materials, Shenghong suddenly has the largest production capacity in China.
But Shenghong was not satisfied. In September of the following year, it added investment to double or even more its production capacity. Throughout 2022, it has become a mainstream supplier of adhesive film materials in the photovoltaic field.
In terms of its original main business, Shenghong has shown even greater magnanimity.
Shenghong’s main business consists of three major sectors: printing and dyeing processing, chemical fiber, and chemical engineering. On May 16, 2022, the largest single process integrated refining and chemical project in China, the Shenghong Refining and Chemical Integrated Project with a total investment of 67.7 billion yuan, was officially put into operation.
From refining to processing chemical raw materials such as olefins and aromatics, Shenghong can achieve a revenue of 100 billion yuan per year, with profits and taxes exceeding 20 billion yuan.
Whether it’s refining or new energy, every project of Shenghong is a “black hole” that attracts gold. Since 2021, Shenghong Group has invested over 200 billion yuan.
Although few people have heard of Sheng Hong, which has a huge scale and astonishing handwriting, it is actually closely related to our lives.
Its products range from fabrics, textiles, automotive interiors, to packaging materials for Apple phones, petrochemical raw materials, and more. So many people commented, “There are very few brands in the world that dare to say they have no connection with Shenghong
Because he holds a chemical fiber industry chain in his hand, Miao Hangen, the head of Shenghong and the chairman of Shenghong Group, once joked, “If we continue to swim upwards, we will go to explore oil fields.
Even with such an industrial landscape, Miao Hangen is still not satisfied.
In 2020, when Shenghong became the only newly added Fortune 500 enterprise in China, Miao Hangen only lightly said:
This is just the beginning, we are still very 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 national consumer brands such as Midea and Xiaomi.
But looking back at the shocking expansion of the past two years, Miao Hangen’s summary is still simple: “We have achieved results that are proud of us.
How ambitious is Miao Hangen? From a small detail, perhaps one can tell a bit.
When investing in Silbon Petrochemical in 2010, Silbon’s name 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 weaving factory in the village. At that time, in village enterprises, high school students were also in high demand, so he was entrusted with a heavy responsibility as an accountant.
Miao Hangen cherishes the hard-earned opportunity and works hard. Afterwards, I worked as a warehouse keeper one after another, and then went to the deputy factory manager in charge of management, gradually exploring the business path.
After 9 years of struggling, 27 year old Miao Hangen was appointed as the director of the newly established Shenghong Sand Washing Plant. At the beginning of his tenure, he faced many thorny issues.
In the only two workshops of the yarn washing factory, the equipment is rudimentary and the funds are limited, but they have to support over a hundred employees. The companies such as “Yingxiang Printing and Dyeing” and “Dongfang Printing and Dyeing” in the town have already gained some fame, and the neighboring Yonghe Village has also established a yarn washing factory, causing great market competition pressure.
The stubborn Miao Hangen did not retreat, “To survive in the cracks, we must innovate.
So he ran to major cities across the country to capture popular information on the market, and then returned to the factory to repeatedly study. In order to learn a hazy printing process, he traveled 7 times in two places in a month, conducting over a hundred experiments alone.
Once, Miao Hangen was on a business trip to Shanghai and was attracted by a product pattern resembling a palm. After understanding, he learned that there were only three machines in China that could produce this pattern.
Miao Hangen keenly smelled the business opportunity and came up with a bold idea. He bought the machines from Shanghai Silk Printing and Dyeing Factory for a high price of 200000 yuan and managed to secure two more. Shenghong, who has invested heavily in the market, has also made overnight technological breakthroughs and achieved a breakthrough in formula.
This is a dangerous move. But once the new printing and dyeing products were launched, they became popular in the homogeneous market dominated by “grey fabric coloring”. Shenghong, which has achieved a monopoly on single products, has earned income from previous years in just a few months.
Two years later, Shenghong developed a new imitation cashmere printing product. At that time, the sales were very crazy. The customers first transferred the money to their accounts and then waited for the factory to ship, “recalls a Shenghong executive. In this way, the factory’s assets achieved a magnificent transformation from 2 million to 30 million within a few years.
In 1997, Shenghong was restructured into a private enterprise, and Miao Hangen, who became the helm, was not happy but worried. Due to the outbreak of the Asian financial crisis, the domestic printing and dyeing industry has been greatly impacted, resulting in a large-scale decline in Shenghong’s operations.
Even Dongfang Silk, a well-known state-owned printing and dyeing enterprise in Suzhou, reported bankruptcy the following year. After a friend heard about it, he advised Miao Hangen, “You are already a privately owned boss with a huge amount of money. You can live a life without worry, and you won’t be able to spend it all your life. Don’t continue to take risks in this industry
But Miao Hangen had a crazy impulse: Do you want to take the Eastern Silk?
After careful consideration, Miao 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 to eat the Oriental Silk, which was twice the size of Shenghong. Afterwards, he acquired no less than 10 companies through the method of “snake swallowing elephant”.
Miao Hangen is not reckless in expanding, he is skilled in reallocating acquired resources. For example, Eastern Silk has been divided into three subsidiary factories, producing products that better meet market demand; And the idle factory buildings will be converted into hotels for blood transfusion for the main business.
In addition to his courage and business acumen, Miao Hangen’s accumulated good reputation has also greatly helped. He once did business with a coal boss in Shandong, but the payment was not yet made, but the other party went to prison. Two years later, when the coal boss was released from prison, only Miao Hangen’s 2 million yuan payment was credited to the account.
This matter spread within the circle, and Miao Hangen’s “reliable” theory deeply rooted in people’s hearts. When Sheng Hong encountered a crisis of fund chain rupture, business partners provided support and banks were willing to lend to help him overcome the difficulties smoothly.
In 1999, the Southeast Asian economy bid farewell to recession, and the global textile industry also experienced a decline. The companies acquired by Shenghong began to make profits, with profits increasing to over 100 million yuan per year. Miao Hangen completed a counterattack against the Jedi.
Others say I’m crazy.
Miao Hangen still remembers that at that time, the industry was generally not optimistic about Shenghong’s merger, believing that it would be “propped up”. But it was precisely this craziness that made Sheng Hong uncontrollable and ultimately became a new leader in the textile industry.
The Later Dominate
One day in 2003, a crucial meeting was taking place.
Miao Hangen simply opened the conversation and sat down without saying a word. The executives of Shenghong mostly lean forward and are eager to speak at any time. The entire meeting lasted for 40 minutes, with two opposing speeches from supporters.
One side believes that Shenghong should enter the chemical fiber field upstream of printing and dyeing and immediately launch a melt direct spinning project. Opportunity cannot be lost. If transformation is achieved, Shenghong will no longer be limited by the traditional textile industry.
On the other hand, it is claimed that not only is there no machine in the world that can achieve 0.5 dpf (0.5 grams per 10000 meters) of ultrafine fibers, but even such machines have not been invented. If it fails, the company’s loss scale will reach 2 billion, and the cost is unbearable.
In a room not far from the conference room, the CEO of German company Bamag paced back and forth, waiting for a response.
Originally, when Shenghong firmly took the top spot in printing and dyeing, the domestic chemical fiber industry, which replaced cotton cloth, had just emerged. Its products, such as polyester filament and ultrafine fibers, are mainly imported, with high prices and limited quantity, and the domestic market is simply not satisfied.
The lifeblood of the enterprise is in the hands of others, which Miao Hangen cannot accept. He decisively decided, “Let’s make upstream chemical fiber raw materials to replace imports
But Sheng Hong, who entered too late, how to break through is a big challenge. Therefore, Shenghong has established an innovative approach of “not engaging in repetitive construction, not producing conventional products, and not using conventional production technologies”, focusing on differentiated and functional fiber products that are different from ordinary conventional chemical fibers.
In Miao Hangen’s mind, microfiber is the “killer” product. Its concept originated from Japan and is a high-quality textile raw material. The fineness is equivalent to 1/200 of a hair strand, but its strength, water absorption, and other characteristics are much better than ordinary fibers.
For the production of ultrafine fibers, Bamag Company, founded in 1922, can provide corresponding tools. In the end, the CEO of Bamag and others received long-awaited news. Miao Hangen has decided to invest 2 billion yuan in developing 0.5dpf ultrafine fibers!
Kung Fu pays off to those who have a heart, and Sheng Hong has successfully passed the technical level. Excited, Miao Hangen immediately embarked on a 200000 ton melt direct spinning project to mass produce main products such as ultrafine fibers.
This move shocked the textile industry, but also dragged Shenghong into a global competition.
Especially as one of the main production areas of ultrafine fibers, Japanese enterprises feel deeply passive. Japanese carbon fiber giant Toray Corporation took the lead in launching the challenge and broke the “world’s thinnest fiber” record held by Shenghong in 2005, developing 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 through it! After hearing this, Miao Hangen repeatedly asked himself: Do you admit that you can only follow others’ buttocks, or do you break through this “limit”?
The answer must be the latter. Miao Hangen, who refused to admit defeat, immediately brought in two teams of people. One is located at the headquarters of Shenghong Group, and the other is located at the European Research Center, and has collaborated with experts from Tsinghua University and Donghua University to study.
In order to break the record of Japanese companies, Shenghong invested nearly 700 million yuan in experiments and experienced countless failures. In the end, Shenghong not only successfully broke through, but also achieved 0.15 dpf in its latest product – a full 50% reduction in fineness compared to Dongli Company’s products!
With product advantages beyond the limit, Shenghong immediately launched a 400000 ton melt direct spinning ultrafine fiber project. In 2007, the production of Shenghong ultrafine fibers exceeded the sum of countries and regions such as Europe, America, Japan, and South Korea, earning it the title of “global ultrafine fiber expert”. Its 49 ultrafine fiber production lines are the world’s largest, with only 4 in India ranking second, indicating a significant disparity in strength.
In 2008, a financial crisis swept across the world, affecting tens of thousands of small and medium-sized enterprises in the textile industry within six months. In Shengze Town, Suzhou, where Shenghong is located, hundreds of businesses have also closed down, accounting for one-third of the local total.
But Sheng Hong lived like her peers couldn’t even imagine. Its profit margin has remained around 12% for two consecutive years. In 2008, sales exceeded 10 billion yuan for the first time, reaching 10.6 billion yuan, ranking among the top three in Wujiang District, Suzhou.
The “industry miracle” of opposing the trend has become the best reward for Miao Hangen’s daring to gamble on technological innovation.
Ambitious “careerists” without ambition
As a commercial hub in Shengze Town, there was a saying that “if you don’t make less than 10 million yuan a year, you can’t be called a boss.” Miao Hangen, who broke out here, was naturally not satisfied with the idea of “small wealth is safe.
But Miao Hangen didn’t like the word ‘ambition’. I don’t have that much ambition “is almost his catchphrase. He emphasized that his only idea was “a bit of vanity, wanting to make the company bigger
In the early stages of entrepreneurship, he explored the “way to become bigger”: to start a business, one must start solidly. But at a certain stage, in order to achieve great things, it is necessary to continue to break through the main business and expand in a rolling manner.
‘If you don’t swim up, you’ll never do much’ has become Miao Hangen’s winning rule.
Adhering to this philosophy, he started from textile printing and dyeing, continuously adjusting his course, and built Shenghong into a giant integrating chemical fiber, petrochemical, and refining, firmly holding the lifeline of the enterprise in his own hands.
A reporter once visited Miao Hangen’s office and found that the furnishings were very simple, with the only highlight being two calligraphy works written with “ordinary heart” and “diligence and diligence”. He explained that this is a reminder to himself: the bigger the boss does, the more he needs to have a sense of normalcy; The larger a company is, the more diligent it must be.
In his dealings with others, Miao Hangen possesses the humility and prudence of a businessman from southern Jiangsu. But when it comes to making risky decisions to achieve great things, Miao Hangen is never vague, let alone timid. “Generally, if I have a 60 to 70% chance of doing something, I will do it
Before 2015, China implemented a special operation for refined oil products, and all refined oil products from private refineries had to be handed over to state-owned enterprises such as “Three Barrels of Oil” for wholesale. In February of that year, the National Development and Reform Commission issued relevant policies, and private enterprises gradually obtained crude oil import qualifications.
As the overall environment had just loosened, Miao Hangen believed that this was an excellent opportunity. “If the country allows us to do it, we will do it again.” Therefore, Sheng Hong did not try a small project first, but instead planned a super project with a total investment of about 67.7 billion yuan.
Yu Huiyong, who was once the director of a state-owned refinery, still remembers seeing Miao Hangen for the first time in March 2018 at the Kunlun Hotel in Beijing. Previously, he believed that private refining was just a “quick money making” business. But this prejudice quickly dissipated.
After chatting with Miao Hangen, he realized, “He (Miao Hangen) is someone who wants to do big things, not for money, because he is no longer short of money
But the road ahead is still dangerous. Four months after Yu Huiyong became the head of the Shenghong Refining and Chemical Integration Project, he was informed that the environmental assessment report had been returned and the project was temporarily put on hold.
The team was a bit at a loss, but Miao Hangen calmly gathered 15 managers at or above the deputy general manager level to have a meal and comforted them, saying, “Our project is fine, the environmental impact assessment is a matter of time
In fact, Miao Hangen himself did not have absolute certainty, but he had the ordinary heart of a person who did great things. “At that time, he thought to himself, if he really couldn’t do it, it was fate’s will, and I couldn’t do anything about it
Six months later, at a grand commencement ceremony, all the local provincial and municipal leadership teams were present. In the final window period, Sheng Hong 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 expand the enterprise.
This ambition also allowed Miao Hangen to silently cultivate the textile industry for 30 years. He, who has also worked in real estate and hotels midway, always emphasizes that “real estate and hotels have never been the focus of Shenghong, we still adhere to industry”.
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