Who’s Hu

Laoganma

Tao Huabi

Tao Huabi, 65, was born in Tanmei, a small town in Guizhou province. She never attended school, was widowed at 20 and became a rickshaw driver, before saving enough from various jobs to open a restaurant selling homemade rice noodles in 1989.

Getting started

Tao’s ‘restaurant’ was in reality only a stall, located next to a vocational college. But her low prices and homemade cooking attracted plenty of students. She made the noodle sauce herself, mixing sesame, chilli and oil. In 1994 she expanded her business to a nearby highway, giving truck drivers a jar of her chilli sauce for free if they ate in her restaurant. The word got out through the trucking network. Soon people were coming to the restaurant just to buy bottles of Tao’s sauce.

In 1996 Tao moved into the chilli oil processing industry and Guiyang Nanming Laoganma Special Flavour Foodstuffs plant was set up. Initially, there was no mechanical production line. All the sauces were hand-made, even though employees complained that slicing the peppers was damaging their eyes. Tao worked alongside them. “Imagine they are just apples,” she told them. “Then your eyes won’t sting.”

Growth

At first Laoganma chilli oil was sold only to noodle restaurants nearby. Although production volumes were small, there was still surplus supply. To find new clients, Tao carried baskets of chilli sauce to supermarkets and eateries across the city of Guiyang. Demand began to grow. Orders came in from other cities too. In 1997 the plant’s staff grew from 40 to 200.

Today, Laoganma is a leading chilli oil brand in the food industry. Besides chilli oil, Tao has developed around 10 new product lines such as tofu in chilli oil and hotpot condiment. Machine-based production lines have also replaced manual operations, increasing her scale of production. Her factories turn out 430,000 jars a day and her products sell in more than 30 countries.

Recently, as a delegate to the National People’s Congress (China’s parliament), Tao spoke to the media and claimed that Laoganma’s sales had “exceeded Rmb3.1 billion ($490.8 million) over the last three years, and that the company had paid Rmb800 million in tax”. Through her substantial purchases of the local pepper crop she also reckoned she had helped lift two million farmers out of poverty.

The local government is now pushing Tao to consider an IPO, but she has declined so far: “I don’t know about IPOs at all. I only do the things I know how, like making better sauces.”

Need to know

Tao says her management philosophy is to treat company staff as family. The firm provides free food. On their birthdays employees gets a bowl of noodles – made by Tao herself.

Due to her lack of schooling, the self-made lady had to be taught how to sign documents. When she was finally able to write her own name, she invited all her staff for dinner to celebrate.


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