Wang Min, chairman of Xuzhou Construction Machinery Group Inc
Chairman of construction equipment maker looks to film hero to inspire his company
Beijing - Like the hero of one of his favorite films, The Shawshank Redemption, Wang Min never thinks of giving up.
"I am the kind of person who welcomes challenges," said Wang, 57, chairman of Xuzhou Construction Machinery Group Inc (XCMG), China's biggest construction equipment maker.
"Over my career, no matter how hard the times have been, the idea of giving up has never occurred to me. Strong determination has led me and XCMG in conquering many difficult challenges and made us what we are today."
One of the company's biggest challenges, he said, was the failure to finalize a deal with the US private equity firm Carlyle Group.
In 2005 Carlyle offered $375 million for a controlling 85 percent stake of XCMG, but trimmed that to 45 percent in 2007.
The takeover bid raised concerns that China had been selling its strategic companies too cheaply to foreign investors, and the approval that Wang eagerly hoped for from the Ministry of Commerce never came.
"The reason why XCMG wanted to introduce Carlyle as its strategic partner was that we wanted to take in some advanced technologies, make things a little easier in terms of overseas expansion and get listed by working with a foreign partner.
"But eventually we missed many golden opportunities then because we could not conduct any structural adjustment or reform but had to wait for government to approve the plan," he said.
Even after six years, Wang still thinks the failure tops his list of regrets. "If the deal had been approved, XCMG could have pressed on with its globalization. At the time, XCMG was also caught up in rivalry with other companies."
For Wang the scar of that setback is obviously deep but, he said, it did give XCMG the chance to exercise its skills in crisis management.
After realizing the deal had been blocked, he moved onto other things, such as looking at restructuring internal assets.
In July 2008, just after the acquisition deal expired, XCMG announced that one of its listed subsidiaries, XCMG Construction Machinery Co Ltd, had begun to acquire the shares of another two branches, Xuzhou Heavy Machinery Co Ltd and Xuzhou Construction Machinery Import & Export Co Ltd. By February this year restructuring was complete.
"Through restructuring of the whole group's assets, XCMG Construction Machinery Co Ltd has become one of the biggest listed domestic construction machinery manufacturing companies," Wang said.
"This is very beneficial for the whole group's further development."
Wang also said that "because the best time to bring in a foreign strategic partner was missed, we will not look for such a partnership in the future, just a Chinese partner.
"Even though it was unsatisfactory and quite disappointing we have to accept the result and move on."
Wang said he is an optimist and because of the hard times of his youth nothing frightens him anymore. Speaking of The Shawshank Redemption, he said: "I suffered as much hardship as the hero but I was quite younger than him then."
He was born in Xuzhou city, Jiangsu province, in 1954, and his work choices were limited after he graduated from high school, and he started working as a laborer in a coal mine when he was 16.
"That time was very hard for me. Actually, the workload was too heavy for a 16-year-old boy."
He said that as a result of heavy work in the mine and a lack of healthy food he became shorter than his father, a rare phenomenon in his family.
But the experience taught him much, he said.
"The coal mine worker experience made me a persistent person. I also came to realize that you have to work hard and grab every valuable opportunity to improve yourself."
In 1972 the page turned for him when he was assigned to XCMG and became a worker at the lowest levels there.
Grabbing the opportunity, Wang put in a lot of hard work and finally became the first of the young workers to join the Communist Party of China. "For me, being allowed to join the Party was a very important reward. It underlined my motto that hard work pays."
It took him 27 years to get from the bottom rung to the position of chairman of XCMG.
In the year it was founded, 1989, its sales totaled 330 million yuan ($52 million, 38 million euros). Now it is China's biggest construction machinery maker, with sales totaling 66 billion yuan last year. It is the seventh biggest construction machinery maker in the world.
Wang attributes rising revenue to its focus on overseas expansion, the domestic market and technological and organizational innovation.
"Overseas markets are really significant for XCMG, and the revenue gained from them is expected to reach $1 billion this year, doubling that of last year. XCMG plans to conduct more mergers and acquisitions in Europe. We also plan to set up a leasing company in the US through mergers and acquisitions or set up joint ventures.
"The world economy is now caught in the deteriorating sovereign debt crisis of some large economies, especially in Europe, that has reduced market confidence. But that does not affect us much because our major overseas markets are not the European Union or the US."
While consolidating its position in traditional overseas markets, XCMG will also lift its profile in emerging markets, Wang said.
"In the modern business world a good entrepreneur should be decisive, strategic and perceptive, making sure no opportunity is missed. Overseas markets provide golden opportunities for us. There is absolutely no doubt that strength in overseas markets will determine which construction machinery companies occupy the top ranks."
XCMG has an established presence in more than 130 countries and regions by working with more than 100 dealers.
It is also making a great deal of effort to consolidate the domestic market and will acquire two Chinese Tower Crane companies within a month, Wang said.
But for Wang, those who want to take on the world in the business realm need more than fleetness of foot with facts and figures. He spends 40 to 50 minutes doing physical exercise to start every day. It's a habit he has kept up over 10 years, and he is happy that even as he fast approaches 60 he can still manage 50 pushups at a time.
"Like Shawshank in the film, I believe a healthy body helps you to overcome obstacles. And doing sports is a good way for me to gain more energy to compete with aggressive opponents, especially the foreign ones."
He worries about the handicap of trying to match overseas rivals with, in effect, one hand tied behind his back. "Chinese construction machinery equipment is very competitive in price, but in terms of core technologies we lag behind the competition."
To tackle this the company has increased investment in recent years in developing key components and parts using its own intellectual property rights.
About 5 percent of XCMG's sales revenue goes toward research and development, he said.
The group now has a comprehensive R&D program, including several testing facilities and the national-level XCMG Technical Center.
Wang said growth has been impressive, but he expects better things. He predicts that the group's revenue will grow to 90 billion yuan this year, an increase of more than a third from last year.
"Despite the current downturn of the domestic construction machinery market, XCMG is confident we will make great progress this year."
But Wang also admits that the poor state of the global share market has forced the group to put some plans on hold. Earlier this year the company announced plans to float shares in Hong Kong, but the $1.2 billion deal was put off because of market share concerns.
"The global stock market is kind of bleak right now. It affected the price of our initial public offering in Hong Kong, and it makes no sense for us to list now. The delay will not affect us that much," Wang said.
He believes there are a great many challenges, and just as many rewards, in working for an ambitious enterprise like XCMG.
"Because I started my career as an ordinary worker I think I can relate to how our workers feel. I also believe even if you need money, it is not the be all and end all. As for me, the most important thing is a sense of self-realization and pride, and that is exactly what XCMG can provide."
He also said he is a tough leader and sometimes loses his temper when employees do not come up to the mark.
"I am strict on both myself and on those who work at XCMG. Sometimes when I am greatly disappointed with someone's work I can be driven to great anger, and that frightens people. It's all because of high expectations.
"I promised to the local government that I would work in the company until I am 63, and there are almost six years to go. I strongly believe that during my term I can lead XCMG to be among the top three construction machinery manufacturer in all-round strengths worldwide, just after Caterpillar and Komatsu, provided they continue on their present path."
From China Daily
