Who’s Hu

Defied sceptics

Li Shuirong

Li Shuirong was born in 1956 in Xiaoshan, Zhejiang province. By the late eighties he was running a timber shop. But Li was on the look out for a more lucrative industry. He settled on fabrics, an unusual choice considering that the market was already extremely competitive.

Big break

Where others saw price war, Li saw an opportunity to win business quickly amid industry turbulence. Xiaoshan, in a province famous for its silk heritage, also lacked a significant fabric firm. So in 1990, he sold everything to raise Rmb200,000 ($31,000) to invest in a simple fabric business – the genesis of the Rongsheng group of companies. He started out with 20 employees operating eight looms. The people of Xiaoshan thought Li impulsive but he proved them wrong, making every effort to build relationships with his customers. Suppliers were also impressed, and some were ready to grant him raw materials with lower deposits. By 1995, he had expanded operations to 100 looms.

Growth

Despite his initial success, the textile industry was difficult. Li had a decision to make: whether he should focus on weaving or move upstream into raw material production. By concentrating on weaving, Li knew he would be stuck in a highly competitive, labour-intensive sector. Instead, he opted to go into the production of polyester yarn, despite the greater technological and investment requirements.

Again, his decision was met with a sceptical attitude. But the market for polyester picked up. By 1998, Rongsheng was doing Rmb100 million in sales. Now a significant player in the domestic market, the next step was to go abroad. Li travelled widely, extending his sales to the US, Japan and Europe. He also reinvested heavily in foreign plant and equipment, and tied up with local research facilities to improve yields on the fabric fibres that he was now producing.

Need to know

He may have started in yarn, but Li’s Rongsheng Holding Group is now an investment holding company that has more than 10 subsidiaries, achieving more than Rmb10 billion of sales every year in a wide range of industries, including petrochemicals and real estate. With a Rmb32 billion fortune, Li is the second richest man in Zhejiang, one of China’s most entrepreneurial provinces.


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