Liang Wengen was born in 1956 in rural Hunan. In 1983 he graduated with an engineering degree and founded Lianyuan Welding Material Factory. After several years of modest returns he decided to look for a more profitable industry.
But how to pump up profits?
In 1991 he was advised that concrete pumps (they pump liquid cement) were selling well. These devices were mostly made by German company Putzmeister and some local state-owned firms. Xiang saw that the pump industry was labour-intensive and thus perfectly suited to China’s low-cost manpower context. In 1993, he changed his firm’s name to Sany Heavy Industry and incorporated in Changsha.
Big Break 1
Struggling with the costs of licensing the requisite foreign technology, Sany was facing financial collapse by 1995.
From ruin came inspiration. A Beijing engineer, Yi Xiaogang, came up with a new valve design for Sany’s pumps that promised more efficient operation.
But the company’s factory workers opposed the new pump as it flew in the face of conventional tube-based techniques. In a mass meeting, Xiao asked Yi if it was workable. Yi replied: “Definitely: we cannot blindly imitate foreign counterparts, or otherwise there will be no breakthrough.” Xiang assented and Sany had its first patent. By 1998 it was a leading player in trailer pumps.
Big Break 2
Keen to break into the higher-value segment of the business, Xiang approached Sun Hung Kai ten years ago for the contract for the International Financial Centre in Hong Kong, where cement would need to be pumped as high as 406 metres. Putzmeister dominated this area, so Xiang offered a pump for free. He told the Hong Kong firm that he was supremely confident in his own products: if they failed they could destroy Sany equipment in front of the media and humiliate him.
The pumps did the job and Sany later got the contract for the (492 metre high) Shanghai World Financial Centre.
Attack and defence
Xiang has since moved into other areas of heavy industry machinery, such as excavators, crawler cranes and mining equipment, where he competes mostly with German and Japanese firms.
He was famously opposed to Carlyle’s attempted acquisition of Xugong Group, citing national security concerns. The deal was never approved. His goal is to earn revenues of Rmb100 billion by 2012, with international expansion planned in the US, Germany, India and Brazil.
Forbes reckons his net worth at $1.5 billion. During the financial crisis he reduced his annual salary to Rmb1.
© ChinTell Ltd. All rights reserved.
Exclusively sponsored by HSBC.
The Week in China website and the weekly magazine publications are owned and maintained by ChinTell Limited, Hong Kong. Neither HSBC nor any member of the HSBC group of companies ("HSBC") endorses the contents and/or is involved in selecting, creating or editing the contents of the Week in China website or the Week in China magazine. The views expressed in these publications are solely the views of ChinTell Limited and do not necessarily reflect the views or investment ideas of HSBC. No responsibility will therefore be assumed by HSBC for the contents of these publications or for the errors or omissions therein.