Zhang Yin

Zhang Yin (Yan Cheung): China’s richest man in waste paper, No. 390 on the 2007 Forbes list of global billionaires

Nine Dragons Chairman of Paper Manufacturing Co., Ltd., worth 27 billion yuan. She became the first richest woman in China and the richest female self-made person in the world.

Basic information

Date of birth: 1957

Ancestral home: Jixi City, Heilongjiang Province

Nationality: Chinese citizen (Hong Kong SAR holder) Passport)

Education: University (Accounting)

Family: Seven younger siblings

Working organization: American Mid-South Holdings

Company headquarters : Los Angeles, California, USA

Main industries: waste paper recycling trade, kraft cardboard production

Industry status: the largest waste paper exporter in the United States

Position: < /p>

Member of the 10th National Committee of the Chinese People's Political Consultative Conference

Honorary Chairman of the US-China Business Association

Dongguan Nine Dragons Paper Co., Ltd. (02689.HK, IPO in March 2006) Chairman

President of Zhongnan Group Holdings Co., Ltd.

Introduction to Zhang Yin

Zhang Yin’s ancestral home is Jixi City, Heilongjiang Province. She was born in Guangdong in 1957. Her parents both “went south” "Army cadres. In 1982, her father was rehabilitated, and Zhang Yin finally had the opportunity to study her favorite accounting major, which laid a good foundation for her future success. In 1985, 27-year-old Zhang Yin gave up the generous salary and housing in China and came to Hong Kong with only 30,000 yuan to start a career. In 1990, he went to the United States to establish American Mid-South Co., Ltd. and became the king of waste paper recycling in the United States 10 years later. Zhang Yin invested US$110 million in Dongguan, Guangdong in 1996 to produce kraft paper.

Work hard and do what you can

In just a few years, Zhang Yin's business developed rapidly in Hong Kong and she established her own paper shop and packaging factory. In February 1990, Zhang Yin came to the United States, one of the most developed countries in the paper industry, and started a new business.

In the past ten years, the American Mid-South Co., Ltd. established by Zhang Yin has successively built seven packaging plants and transportation companies in the United States. In 1996, Zhongnan Company ranked fourth in the list of container export consumption in various industries in the United States. Since then, it has improved to a higher level and has been among the best in recent years. However, when Zhang Yin talked about her success, she just said lightly: "I was lucky. I had the right time, place and people." She said that when she started her business, it coincided with the golden period of China's reform and opening up, and after arriving in the United States, it coincided with the U.S. economic recovery. Continued prosperity. In addition, the United States is rich in forest resources, has a developed paper industry, and has a very scientific waste paper recycling system. In addition, after developing in Hong Kong at this time, the company has strong funds and a high starting point. It relies on an honest and trustworthy business style to develop at an alarming rate. . Talking about the secret of success, Zhang Yin said that her biggest characteristic is that she manages her own affairs and does everything according to her ability. In addition, because she has studied accounting, she has unique insights in management. Promote humanized management of "a small personal family and a big corporate family".

There is no difference between women and men

Zhang Yin speaks crisply and looks younger than her actual age. To achieve today's success, Zhang Yin believes that gender is no obstacle to her. Although women are physically weaker at work, they are no different from men in other aspects. As long as you have wisdom, enterprising spirit, and good character, you may achieve success. In life and work, I receive more care because I am a woman.

Zhang Yin believes that what makes her different from other women is that she is more generous and magnanimous, especially when it comes to money and material things. "Maybe because I am confident that I can make money and will make money, so money is not so important to me."

My career is still in China

"Although I I live in the United States, but my career is in China. "This is what Zhang Yin said to reporters in an interview with the third largest news media in the United States. This is what she said and what she did.

Ten years ago, Zhang Yin wanted to be the king of waste paper recycling exports in the United States, and this wish soon came true. Ten years later, she had a new dream, which was to achieve an annual output of 1 million tons of packaging paper in China and become the king of Chinese kraft paper.

Zhang Yin said that China's current economic order is getting better and better, and the investment environment is becoming more and more stable. In the future, she will continue to expand the scale of investment. "Not a penny of the money earned in China will be taken away, all of it must be used to expand reproduction." "In addition, there is another important reason, which is to realize her dream of serving the country through industry.

Zhang Yin's Entrepreneurship Diary

In 1985, he started a waste paper recycling trade in Hong Kong

In 1988, he established his own wholly-owned factory in Dongguan, Guangdong

Immigrated to the United States from Hong Kong in 1990, Zhang Yin and her husband Liu Mingzhong established American Mid-South Co., Ltd. to purchase and provide recyclable waste paper to their factories in China.

In 1996, it invested US$110 million to establish Nine Dragons Paper Co., Ltd. in Dongguan, Guangdong to produce kraft paper.

In 1996, Zhongnan Company ranked fourth in the list of container exports in various industries in the United States

In 1997, the United States ranked the top 500 women-owned enterprises, and Zhongnan Company ranked 95th.

In July 1999, it continued to invest US$110 million in Nine Dragons Paper to carry out the second phase of project expansion

After 2000, it became the king of waste paper recycling in the United States

In 2002, the waste paper exported by the American Mid-South Company from the United States was 3 million tons

In 2003, the wealth was 2.5 billion yuan, the 54th among the top 500 female entrepreneurs in the United States, and the 17th on the China Rich List

In 2004, Zhang Yin once again invested more than 100 million US dollars in the third phase of the project

In 2004, her wealth was 3 billion yuan, ranking 19th on the Hurun Rich List

In 2005, her wealth was 1.5 billion yuan No. 36 on the Hurun Rich List

In March 2006, Nine Dragons Paper was listed in Hong Kong with a wealth of 27 billion. No. 1 on the Hurun Rich List

In 2008, the annual plan for Chinese factories The output reached 2.45 million tons

Introduction to Zhang Yin's Entrepreneurship

In 1985, 27-year-old Zhang Yin gave up her accounting job in a well-paid joint venture in Shenzhen and brought 30,000 yuan to China alone. Traveling in Hong Kong.

Because I was previously entrusted by a Chinese paper mill to purchase waste paper in Hong Kong. Zhang Yin began to get involved in the field of changing straw pulp papermaking to environmentally friendly papermaking. She quickly learned about the shortage of paper in the mainland and the huge market potential. China's forest resources are relatively poor, especially the construction of fast-growing forests for papermaking is seriously lagging behind. Therefore, most of the raw materials for high-grade paper require imported waste paper and wood pulp (the domestic waste paper collection system is not perfect and the level is not enough). Developed countries and regions Waste paper has become an important way to solve the bottleneck of papermaking raw materials in my country. This low-barrier business, known as "rag collecting", attracted many merchants, and Hong Kong became their most important distribution center. So, Zhang Yin started a waste paper recycling business in Hong Kong. Recalling those years, Zhang Yin said: "Although those engaged in waste paper recycling in Hong Kong are relatively low-educated people, they are very loyal and have a special affinity with me. In addition, I insist on the quality of waste paper, and I just happen to catch up. Hong Kong's economy was booming, so I completed a partial accumulation of capital within 6 years." There Zhang Yin met his future husband and business partner, Liu Mingzhong, a Taiwanese compatriot.

In February 1990, Zhang Yin and his wife began to expand the waste paper recycling business in the United States and established Zhongnan Holdings Company. Not only are waste paper resources abundant there, but the waste paper recycling system is extremely efficient and scientific. In addition, the careful Zhang Yin also took advantage of opportunities that others had not noticed - a large number of containers carrying export goods returned to China empty. Zhang Yin transported American waste paper to China at very low freight costs. In the past 10 years, Zhongnan has built seven packaging plants (to package the waste paper it receives) and transportation companies in the United States.

In 2002, Zhongnan became the company with the largest volume of container exports in the United States. Today, Zhongnan is the largest supplier of paper raw materials in Europe and the United States, with annual shipments exceeding 5 million tons. These goods are transported in 200,000 12-foot standard containers! According to a report from the American Forest and Paper Association, the United States consumes 47 million tons of paper every year, and nearly 75% of this waste paper will be recycled. According to Chinese customs statistics, waste paper imports increased by 33.6% in 2005 compared with 2004, reaching 17.04 million tons (the substantial increase in my country's import volume also directly led to an increase in international waste paper prices). Calculated in this way, 1/7 of the renewable waste paper in the United States is exported by China and South Africa every year, while more than 1/4 of China's recycled papermaking raw materials are imported by China and South Africa.

In this way, Zhang Yin and his wife used their unique business model to create a business that makes a lot of money every day, and also planted a vast "forest" for China's paper industry.

Since you have the raw materials, why not make paper yourself? In 1987, after working in Hong Kong for less than two years, Zhang Yin began to look for paper mills in mainland China as partners, and the joint venture with the Liaoning Yingkou Paper Mill was quickly successful. Later, she accumulated a lot of experience in joint ventures with Wuhan Dongfeng Paper Mill and Hebei Tangshan Paper Mill. In 1988, Zhang Yin established a wholly-owned paper mill in Dongguan, Dongguan Zhongnan Paper, to produce household paper.

In 1996, Zhang Yin decisively invested US$110 million in Dongguan to establish Nine Dragons Paper. In July 1998, the first production line was completed and put into operation, with an annual production capacity of 200,000 tons of high-grade kraft cardboard. In June 2000 and May 2002, Zhang Yin spent huge sums of money to install two production lines at the Dongguan base. So far, Nine Dragons Paper has established its position as China's leading packaging paperboard enterprise with three production lines and a production capacity of one million tons. Since then, Nine Dragons has not slowed down at all, with new production lines at the Dongguan base still coming up one after another. At the same time, it has moved north to Taicang, Jiangsu Province, quickly forming a production capacity of 950,000 tons, almost creating another Nine Dragons. At the beginning of 2005, the production capacity reached 2.35 million tons. At the end of the year, the production capacity increased by nearly one million tons to 3.3 million tons, accounting for 17% of the Chinese market. Nine Dragons Paper has surpassed Chenming Paper (5.06, -0.04, -0.78%) to become the largest papermaking giant in the country, second in Asia, and eighth in the world. The booming economy of China, especially the products produced as the "world's factory", require high-quality packaging. Nine Dragons Paper's products are in short supply and are used by well-known companies such as Coca-Cola, Nike, Sony, Haier, and TCL.

Nine Dragons Paper built a 350,000-square-meter factory on 1,353 acres of land in Mayong Town, Dongguan City. The land cost was only 20,000 per mu; the purchase price of the 3,839 acres of land acquired in Taicang, Jiangsu The unit price of 739 acres of land in Zhalantun, Inner Mongolia, is 67,000 yuan... At the end of 2005, the valuation of the properties (factories, land, buildings, etc.) held by the Nine Dragons Group in the mainland reached 2.461 billion yuan.

Zhongnan purchases waste paper in the United States at low prices, transports it to China at low freight costs, and then uses the mainland's advantages in land, energy, and manpower to produce in-demand high-end paper products at low costs. The industrial chain built by Zhang Yin and his wife is under their control from the front end to every link. They all have cost advantages and are profitable. The end of the industrial chain outputs high-end products that are in short supply... Successful vertical integration and Optimizing the industrial chain is the secret behind the birth of China’s “richest man”.

About Nine Dragons Paper

Industry Background

In 1985, Porter proposed the concept of "value chain", subverting the traditional "barrel theory" ". The "barrel theory" says that companies should make up for their shortcomings in order to be "watertight" and gain maximum value. The value chain theory guides companies to abandon "short boards", break the barrel, and lengthen "long boards" to form a competitive weapon. According to Porter's theory, companies should strengthen the links in their business processes that truly create value and have comparative advantages. The so-called "centralization" means to strictly control the links that generate core capabilities in business activities within the enterprise, while outsourcing some non-core strategic activities, making full use of domestic and international markets to reduce costs and improve competitiveness and profitability. In recent years, the strategy of Nine Dragons Paper has demonstrated for us a typical core strategy.

The first is to expand production capacity and improve the quantity and quality of products. In October 2003, the No. 4 production line with an annual output of 450,000 tons of coated white cardboard was put into operation in Dongguan, setting the world's highest single-machine output of similar products, and taking the first step in Nine Dragons Paper's transformation from a single kraft cardboard to a diversified variety. step. One year later, Lines 6 and 7 for producing high-strength corrugated paper cores were successfully put into operation in Dongguan, further enriching Nine Dragons Paper's product line. In December 2005, the completion of nine and eleven high-strength corrugated core production lines brought the group's total production capacity to 3.3 million tons. In 2007, Dongguan's Line 11 with an annual output of 500,000 tons of coated white cardboard, Line 12 with an annual output of 400,000 tons of kraft cardboard, and Taicang's 400,000 tons of high-strength corrugated paper production line will be put into operation one after another. According to the plan, the total production capacity of Nine Dragons Paper will further increase to 9 million tons! In order to enrich the raw material supply channels, Nine Dragons also went north to Inner Mongolia and established "Nine Dragons Xing'an" in 2004 with an annual output of 100,000 tons of high-quality wood pulp.

According to the 2005 forecast of the Paper Industry Association, the gaps in my country's high-strength corrugated paper, kraft paperboard and coated white paperboard are 1.6 million tons, 1.2 million tons and 600,000 tons respectively. With thousands of acres of land, tens of billions of investments, advanced production lines and product layout targeted at market gaps, Nine Dragons Paper has taken the lead and formed "ultra-long" boards that its competitors can't match.

The second is self-built infrastructure. Paper mills are large consumers of electricity, water and transportation, which not only puts huge pressure on local public infrastructure but also directly restricts the expansion of production capacity. The more economically developed regions in our country are, the more power is in short supply, and power outages occur on a large scale every year. With the 210 MW thermal power unit connected to the grid for power generation in May 2005, the total installed capacity of Nine Dragons Paper's Dongguan base reached 351 MW, equivalent to a medium-sized power plant. The installed capacity of Nine Dragons' thermal power plant in Taicang base also reaches 240 MW. It not only ensures sufficient power supply for the enterprise, but also alleviates the local power shortage. Paper mills are also large users of water. Nine Dragons Paper currently has two 250,000-ton upstream reservoirs, a desalination plant with a daily processing capacity of 100,000 tons, and complete sewage recycling facilities to ensure production water. Nine Dragons Paper also has a 500,000-ton raw material warehouse, an 80,000-ton finished product warehouse and a 10,000-ton semi-finished product warehouse. In addition, it also has a fleet of 350 heavy-duty trucks and a cargo terminal in Taicang Port that can connect to 50,000-ton cargo ships...

In a sense, Nine Dragons Paper, with an asset scale of tens of billions, The industry is diversified, but all the resources it invests and the production capacity formed by these investments are completely centered on the core business of papermaking.

Listed in Hong Kong

On March 3, 2006, Nine Dragons Paper (2689.HK) was listed on the Hong Kong Main Board. The initial public offering plans to sell 1 billion shares at an issue price of HK$3.4 and raise HK$3.4 billion. This is a unique "large-cap stock" among private enterprise IPO cases. The closing price on the day of listing was HK$4.75, an increase of 39.7% from the offer price, and the transaction volume was HK$2.425 billion. It was one of the top 20 most active stocks in Hong Kong stocks that day. The original plan was to sell only 100 million of the 1 billion new shares in Hong Kong, but the market response was extremely enthusiastic. In Hong Kong alone, 52 billion share purchase applications were received, and approximately 177 billion Hong Kong dollars in frozen funds were received. In order to satisfy the Hong Kong stock market's enthusiastic demand for Nine Dragons Paper, the number of shares offered in Hong Kong was increased to 500 million shares. At the same time, the underwriters exercised the over-allotment option to issue an additional 150 million shares as agreed in advance, bringing the total funds raised by Nine Dragons Paper's IPO to HK$3.91 billion. It is also worth mentioning that three wealthy business partners, Henderson Lee Shau Kee, New World (9.16, -0.11, -1.19%) Cheng Yutung and Kerry Properties Robert Kuok, invested a huge sum of HK$468 million in private names to subscribe for 137 million new shares. Accounting for 3.3% of the total share capital. Over the past few months, the stock price has been rising steadily, especially after the disclosure of fiscal year 2006 profits that surged 350% to HK$1.375 billion. The stock price exceeded HK$9, and the company's market value reached HK$37.4 billion. Based on this calculation, the value of 75% of the listed shares held by the Zhang Yin family is more than HK$28 billion.

The rapid development in recent years has put great pressure on Nine Dragons Paper's capital chain. The asset-liability ratio in fiscal years 2004 and 2005 was both as high as 79.5%. At the end of fiscal year 2005, net current assets were actually negative 2 billion yuan, which means that if it does not obtain equity financing before June 30, 2006, the company will have to sell off fixed assets, otherwise it will face the crisis of being liquidated! The successful IPO raised nearly 4 billion yuan, which reduced the asset-liability ratio to 48.7%. It has fully restored its ability to obtain loan financing from banks, and according to the current momentum, Nine Dragons' performance will continue to grow rapidly in the next few years, creating excellent conditions for continued financing from the capital market. The steady stream of funds from banks and the stock market will strongly promote Nine Dragons to achieve its goal of annual output of 9 million tons and become the world's paper king as soon as possible. Successfully landed in the overseas capital market, opened up large-scale equity financing channels, revitalized the entire asset structure of Nine Dragons Paper, and added an important link to its value chain.

Prospects

Although Nine Dragons Paper is shrouded in halo, there are still some problems - mainly related-party transactions. Papermaking raw materials account for about 80% of the production cost, various chemicals account for about 8%, and the two items together account for 90% of the cost. Four-fifths of the purchase amount of these two types of materials by Nine Dragons Paper occurs between related companies.

Judging from the disclosed information, from 2003 to 2006, the transaction amounts of waste paper purchased through American Mid-South, which is wholly owned by the Zhangs, were 1 billion, 1.21 billion, 1.89 billion and 2.59 billion yuan respectively (excluding tax). According to the plan, the purchase amount from Central and South America in 2007 and 2008 will reach 4 billion yuan and 5.1 billion yuan respectively.

According to relevant data, due to strong demand from China, the price of waste paper in the United States has increased considerably. According to common sense, rising raw material prices will inevitably compress the gross profit margin of manufacturing companies, but the trend of Nine Dragons Paper's gross profit margin is completely different. Obtaining cheap papermaking raw materials through Zhongnan is the cornerstone of Nine Dragons' success, but mature investments may not necessarily recognize this related-party transaction arrangement. Today, affiliated companies can offer benefits to listed companies at low prices. Who knows if prices will be raised tomorrow? The concept of supervision of listed companies in mature capital markets is to use strict institutional arrangements to prevent "man-made disasters" rather than relying on the "conscience discovery" of major shareholders. If Nine Dragons Paper acquires Mid-South America and Dongguan Longteng, which are controlled by related parties, at the appropriate time, related transactions can be significantly reduced.

At present, there are about 3,500 paper and cardboard manufacturers in China. The production volume of 50 million tons is second only to the United States, but there is still a big gap compared with the consumption of 55 million tons. As the economy continues to grow and people's living standards improve, paper consumption will continue to grow. According to preliminary forecasts, my country's paper market demand will reach 70-80 million tons in 2010, and China's paper production is expected to reach 100 million tons by 2020. The production of paper and cardboard in my country cannot meet the market demand for a long time, and the development space of China's paper industry is extremely broad. However, the supply of U.S. waste paper that Nine Dragons relies on is not inexhaustible, but we are pleased to see that the focus of its core competitiveness has been transformed from a single supply of cheap raw materials to comprehensive advantages: scale-leading domestically; technology and equipment - world-class; own infrastructure - power plants, terminals, etc.