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The new billionaire on the block
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"More wealth for me means that I can contribute more to the society," says Zhu Baoguo
Zhu Baoguo
1962: Born in Henan Province.
1985: Graduated in Chemistry, Henan Normal University
1985-86: Technician in a chemical plant
1988: Head of a chemical enterprise
1992: Bought old beauty recipes and started a health products company in Shenzhen
1993: Put the first Taitai tonics on the market
1997: Switched to the pharmaceutical sector through acquisitions
2001: Listed on the Shanghai stock market
WHEN Zhu Gaoguo told his taitai (wife) Liu Guangxia that he wanted to list the other taitai, Shenzhen Taitai Pharmaceutical Industry, on the stock market, Liu shook her head.
"She said we've got enough capital for the company's future development, so why bother going public?" Zhu, founder and chairman of the SZ Taitai, one of the mainland's largest privately owned makers of health and beauty tonics, mused.
Zhu went ahead with his idea and he is now worth 5.4 billion yuan (US$655 million) after his company's stock was listed on the Shanghai stock market on June 8. The 38-year-old Zhu now finds himself one of richest men in China, though he just shrugged off the idea claiming it's only "wealth on paper".
"If it's only about money, I wouldn't have thought of going public," Zhu said, proudly claiming that he already had made enough money to sustain several future generations of the Zhu family. The self-made man, who says he much prefers "a bowl of noodles" to "dishes of shark's fin or swallow's nest", is looking beyond the pursuit of personal wealth. He has set his mind on expansion.
He wants to use China's accession to the WTO to transform his Shenzhen Taitai into a world-famous pharmaceutical company.
In the 1980s, the young and enterprising Zhu had two alternatives: to try his luck in an official career or to head a loss-making chemical plant.
Zhu chose the latter. He explained that his habit of speaking up whenever he saw something he did not aggree with could hardly be valued as a "merit" of an official.
In 1990, Zhu visited Shenzhen for the first time and was attracted to the promising young city.
The chemical technician-turned-entrepreneur set up Shenzhen Taitai at the end of 1992, with an initial investment of 22 million yuan--the bulk of it financed by banks.
Its main products, herbal tonics for women--based on a recipe Zhu bought from an old doctor in his native Henan Province for 90,000 yuan--have attracted millions of loyal users, especially Hong Kong women. It is said that almost every Hong Kong container truck driver who travelled between HK and Guangdong would bring a box of Taitai tonics back to HK.
However, 1998 was a gruelling year for Zhu. The sales volume plummeted with many Hong Kongers tightening their belt in response to the Asian financial crisis. So Zhu turned to focus on the wallets of mainland urban women and successfully launched a new product which was advertised to relieve pre-menopause syndrome.
Many have attributed Zhu's success in his bare-knuckle business brawls with hundreds of competing health and beauty companies to a combination of glossy, western style marketing and a traditional Chinese formula.
Over years, Zhu's advertising campaigns have featured famous actresses and singers.
While most traditional Chinese medicine products are dark in colour, rough in packaging and difficult to swallow, Zhu's Taitai uses bright red tubes with easy pop-up tops--which have helped the company ward off counterfeiters, as they are unable to copy the complex packaging technique.
Despite the tight family control, Zhu believes it is better to have outsiders in senior management posts. And he hopes that the public offering would further dilute the family ownership and transform his Taitai into a modern enterprise.
Zhu lays out his grand vision: "I hope that in 20 to 30 years, a group of Chinese enterprises can rise to the challenge of the world's top-notch multinationals. I would love to see my Taitai on that list."
Zhu feels that his mettle will be tested with China's entry to the WTO as he strongly believes that private companies like his Taitai have a front runner status in future competition. However, he has to admit that being at the head of a public company, there are still a lot of things he has yet got used to. "I enjoyed certain management flexibility in the past but now the important decisions have to be made by the board of directors, or even at a shareholders' meeting. I understand that standard and transparent practices are for the good of the company."
With the capital raised from the stock market estimated to be around 1.7 billion by some sources, Zhu said he would increase investment in research and development of new drugs, especially diet pills.
(SD News)
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