After graduating from high school in 1985, Chen Qingyuan returned to his rural hometown in Fujian. As the most educated person in Matang, Chen was soon elected to take on the role of village Party secretary.
Chen decided to exploit the abundance of local produce to start a canned fruit business, bringing together a group of farmers to pool Rmb18,000 ($2,770) to launch the company that would eventually become the Yinlu Group.
With little commercial experience, the early days were tough. The group had to build the canned fruit factory itself, as well as arrange for water to be piped in from a reservoir 12 kilometres away.
But the end result was a working facility. By 1990, the company was able to tap export markets through a joint venture with a Singaporean company.
As the demand for canned fruit declined, Yinlu started to focus on a new product – a cheap “Eight Treasure” porridge aimed at rural and low-end urban markets. Low prices allowed Yinlu’s porridge to capture market share,but the plan was also to go more upmarket, which was achieved through the launch of a soft drinks line. In 1998, Yinlu built three new beverage plants. And in 2003, it brought in a world-class aseptic packaging line for beverages from Europe for Rmb300 million.
Over the last decade, Yinlu has also diversified away from its core business of food into heavy industry. In 2004, it acquired a boiler works and in 2008 it bought a state-owned hoisting and conveyance company.
Need to know
In 2010, Yinlu’s sales reached Rmb5.4 billion and this April Nestlé announced that it would take a 60% stake in the company. As the Chinese manufacturer of Nescafe instant coffee, Yinlu has a longstanding relationship with the Swiss-food giant. Chen will run the new partnership in China (see WiC110).
Part of Chen’s achievement has been to bring much higher incomes for the residents of Matang, now one of the province’s wealthier villages. “I remember speaking at a village meeting about a blueprint for a future Matang that would have street lights. But people started laughing – they thought it incredible,” he recalls.
Chen still feels his village roots keenly. “I am still a farmer and on many occasions I still speak from a farmer’s perspective,” he told Xiamen Daily.
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