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Onwards and upwards

By Geng Wenxin  (Global Times)

08:44, September 05, 2011

Yang Jianzhong is the founder and chairman of China Juli Group, one of the biggest and most successful private companies to emerge since China's reform and opening-up policy began in 1978. Its roadmap reflects the development of private companies in China.

Juli was started by Yang Jianzhong and his brother in 1985 with funds of only 2,000 yuan ($313.6). They chose to produce construction slings. After 26 years, their company has become a leader in the field in China, and its operating revenue hit 4.02 billion yuan in 2010.

Now China is facing a new economic situation. What strategy should Chinese private companies adopt? Yang shared his opinions with the Global Times.

Three stages
"We were only farmers then and had no knowledge about modern corporations or the market. Many private companies emerged at that time. Quite a lot of them have disappeared. But Juli survived and grows stronger. The reasons are complicated, but I concluded there have been three phases of private companies' development in China. Only those who can adjust their strategy can survive," said Yang.

The first stage, in Yang's opinion, was an exploratory stage from 1978 to 1984. Private business was a new thing in China, and uncertainties in policy and the market remained. But there was an obvious need and demand, so those who had the courage to start a business were able to develop.

The second phase was from 1985 to 1990, when private companies relied on relationships and connections to get orders and business opportunities.

The third phase was from 1900 until now, in which intelligence has become more important. Private companies must now use their wisdom and experience to compete in the market.

"Many operators of private companies were originally farmers with little educational background. They didn't know the changes in different phases, and didn't know how to adjust business strategies. In order to survive, private entrepreneurs should learn a lot and grow with their business," said Yang.

Created in China
Sling production is a relatively narrow sector in the construction equipment business. Slings are used with lifting, carrying and towing machines. But Juli has been able to build solid success even in this narrow field. Creation and innovation is the key, said Yang.

"At first, there was no clear definition or translation of 'sling' in China. Some people called it 'steel cable loop' and some called it 'lifting knot.' And there was no standard for slings. Companies and factories made their own slings when needed, varying in specifications and lacking in technology and safety guarantees," said Yang.

But Juli changed the situation. The company created around 20 national standards for slings, combining foreign standards with China's market needs.

"There are more than 3,000 sling production companies in China. But Juli is the leader. We are the initiator in the sling industry in China. And we keep on researching and developing technologies and products. Now we have more than 400 categories of sling products. Our products occupy the high-end of the market," said Yang.

The group has established more than 90 branches in China and has more than 10,000 top-level customers. More than half of the high-end sling market in China is occupied by Juli. Around 80 percent of companies in the steel, power, petrochemical and military industries are Juli customers. The group is also involved in national projects such as the Shenzhou VII spacecraft, the Chang'e-2 Lunar Probe Program, the Three Gorges Dam, the excavation of sunken vessel Nanhai No. 1, and many others.

The group has a slogan of "Building up a global Juli in China, creating a national Juli in the world," which reflects the group's vision of exploring international markets and building a widely recognized brand, according to Yang.

"In the era of globalization, Chinese companies, especially private companies, should try hard to turn 'made in China' to 'created in China.' Based on the domestic market, private companies should go out to see the international market," said Yang.

Future visions
Juli is the world's biggest sling producer in terms of production capacity. But Yang admits that the group is still a little behind the world's leading technologies.

"The sling industry relies a lot on science and industries like engineering. In other words, we rely on the overall development of China's technologies and engineering industries," Yang explained.

"We aim to catch up with the world leading technologies in three to five years. And we are considering setting up manufacturing bases outside China," Yang noted.

China has a new economic situation to face and cannot rely on investment and exports to develop the economy. In the 12th Five-Year Plan period, boosting domestic consumption is one of the priorities. Private companies must also have their own strategies accordingly, said Yang.

"The most important thing is to do more research on market needs and technologies. That way you can always find opportunities," he said.

Taking the sling industry for example, Juli's high-end sling products are used mainly in industrial sectors, and are not usually seen in people's daily lives. But as Chinese people have come to care more about safety due to disasters like earthquakes, real estate can also be a potential market for slings, which help to reduce the weight of houses and improve their safety. Juli is currently working on the idea, said Yang.

The group is also looking at the new-energy, liquor production and entertainment industries.

"We have government support on new energy. The location and hometown of Juli, Xushui County in Baoding city of Hebei Province, is far from being fully developed. So we feel it is our mission to provide better living conditions for the people," said Yang.

"Juli has already made a 30 billion yuan investment plan for the next five years. We are fully aware that making slings is our core business. But when you find opportunities in other fields, you should take them, though there are definitely risks in industries you don't know well," said Yang.


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