In life, a person should always be looking to progress,” says Sun Guangxin, the chairman of Xinjiang Guanghui Enterprise Group.
Sun certainly practises what he preaches. One of five children of a cobbler from Shandong who settled in Xinjiang, Sun has reinvented himself in at least five industries over two decades. He was the 46th richest man in China last year with total wealth valued at Rmb14.5 billion.
Sun was born in Urumqi in 1962, the year of the Sino-Indian War. He joined the military himself in 1980, and vowed to become a division commander.
Sun ended up serving in the army for only nine years but regards it as the most memorable period of his life (like many of China’s CEOs, military service was a key formative influence).
He peppers his business insights with military terminology, too.
“For a soldier, there isn’t a battle against any faction that can’t be won. The key to victory is to the attack the enemy’s weakest link, and that applies to both the battlefield and the business world,” the West Times quotes Sun as saying.
Sun was in charge of a truck repair station and often led a convoy of vehicles travelling between Urumqi and Lanzhou carrying resources such as aluminium. It was a profitable enterprise. Soon after, the young Sun applied to leave the military. His wish was granted in 1989.
With a small decommissioning allowance and Rmb40,000 in loans, Sun set up his own business.
He first went into a dealership of earth-moving machinery and did well, earning enough to buy a Cantonese restaurant later that year.
The restaurant, which offered fresh seafood from Guangdong, was the first of its kind in Urumqi. It became the fashionable venue for dealmakers in the local oil industry. Sun hobnobbed with the oilmen, who helped him make introductions into the business. He did very well in the early 1990s selling drilling machinery to state-owned oil firms.
Sun began travelling around China, studying other successful private enterprises.
But at 31, he returned to Urumqi to develop his own company. He started out by building a 100-metre office tower, the tallest building in the city. He continued to expand into property development, which also led him to invest in sources of good-quality granite from the province.
His timing was good again, as real estate boomed, and Sun’s stone material company Guanghui Stone grew to become the largest stone business in China.
Sun’s empire continues to grow. His property business is now the biggest in Xinjiang. By 2008, three out of five residential property sales in the province were for developments built by Guanghui.
Meanwhile, his firm won various awards, including ‘Top 100 Listed Private Enterprises,’ ‘Top 50 Property Brands,’ ‘Special Tax Contribution Firm,’ (not many other entrants, no doubt) to name but a few.
Sun himself picked up accolades too including ‘China’s Top Ten Distinguished Youths,’ ‘China’s Top Ten Private Businessmen,’ and ‘China’s Operating Master’.
In 2002 he decided to try his luck in the energy sector again. This time he chose liquefied natural gas.
“Ten years ago, energy security was already set as a priority for the government, because energy is expected to be the only bottleneck that would impede China’s future economic development,” he tells the 21CN Business Herald.
At the same time, Sun realised that, once China’s GDP passed $3,000 (per capita) demand for cars was likely to pick up quickly too.
Guanghui Group then signed a 15-year natural gas supply agreement with a China National Petroleum Corp subsidiary, and built an LNG base with an annual output of 500 million cubic metres.
Two years later, it invested heavily in trucks that could deliver LNG to the coastal cities by road, but that operating model didn’t work too well because of the distances involved.
So Guanghui Group changed its strategy in late 2007 and decided that it would focus on energy and the automotive service industry, with its property business serving as a capital cushion for the group’s activities.
The group worked on strengthening its upstream energy supply. Guanghui Industry – the listed subsidiary – set aside Rmb6.45 billion to invest in a coal-chemical project in Lake Hami Naomao, from which Guanghui will convert synthetic natural gas into LNG.
In addition, his Guanghui Industry also acquired a 49% stake in Kazakhstan’s Zaysanskaya oil and gas reserves in 2009.
This was the first time a Chinese private enterprise acquired stakes in overseas oil and gasfields. The company is expecting crude output of 100,000 tonnes and 500 million cubic metres of natural gas this year, and will ramp up production to reach 500,000 tonnes of crude in three years.
At the other end of the supply chain, Guanghui is betting that local vehicles will soon run on LNG rather than petrol. The company is gradually building up a network of LNG filling stations. It forecasts that its LNG supply chain will support prices 40% lower than petrol within five years.
In addition, Guanghui is also aggressively establishing itself in the car services market, focusing on the Xinjiang, Guangxi, Henan, Hebei, Chongqing, Gansu and Anhui areas. Sun believes that after-sales services will outperform car sales in terms of profitability in the near future. Guanghui intends to grow its number of “4S” centres (sales, service, systems and spare parts) to at least 800 by 2017 from the current 230, generating profits of Rmb8.5 billion.
“In two to three years, our car servicing company will be the world’s largest car servicing firm; in five years, we’ll definitely rank among the world’s top 500 companies,” Sun declares.
Sun stays fit by playing basketball. He is the sponsor of the Xinjiang basketball club Flying Tigers and is the richest backer of a homegrown team (see last week’s issue for more on the local league).
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