Despite a lack of a formal education, Xu Lianjie has managed to become “South Fujian’s business godfather”. Born in 1953 to a poor rural family in Jinjiang County, Fujian Province, Xu was not able to complete primary school. Luckily, his money-making skills manifested themselves at an early age. By selling eggs and vegetables, he raised enough capital to set up a clothes factory in 1979, which was followed a few years later by a zipper factory.
Throwing in the towel
In 1984, Xu and his partners invested $200,000 to acquire a production line from overseas that could produce sanitary towels, then a rarity in China. When Xu established Hengan Industrial in 1985, and started making sanitary towels under the Anle brand, he was helping to create a completely new market. Hengan quickly became the dominant player – by 1992, it had a 40% share of the market.
Into new markets
As competition intensified, Xu invested heavily to maintain his market share. In 1993, he brought in a production line from Italy that allowed him to produce higher-grade towels with butterfly wing technology, allowing him to bring the newest innovations to China.
After this, Hengan expanded into making nappies and also became one of the country’s biggest sellers of paper tissues. Just after the financial crisis, a time when few companies were thinking about expanding, Xu doubled his annual output of paper tissues to 600,000 tonnes.
Need to Know
Hengan listed in Hong Kong in 1998. It now has a headcount of 20,000 staff working in 14 provinces and cities. In 2010, company profits reached Rmb2.4 billion ($367 million), a 15% increase on the previous year.
As one of China’s earliest entrepreneurs, 58 year-old Xu is now thinking of slowing down. He recently announced a successor – Xu Shuishen, the current chief operating officer (they are related via a mutual great-grandfather). This means that the management of Hengan will not be passed down to any of Xu’s children. Instead, his three sons will be in charge of investing the cash that their father has earned.
Xu has a fortune worth Rmb15 billion, ranking him 51 on the 2010 Hurun Rich List.
© ChinTell Ltd. All rights reserved.
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.