In China in days gone by, butchery was a trade of lowly status. Marrying a butcher was seen as an undesirable option. But being the most prolific butcher in modern China is an entirely different game.
Shuanghui Group, China’s biggest meat processor, slaughters 30 million pigs a year and supplies 25% of the country’s domestic market. Following a $7.1 billion buyout proposal (including debt) for giant US counterpart Smithfield last month (see WiC196) Shuanghui’s chairman Wan Long was even hailed by China National Radio as the “Steve Jobs of Chinese butchery”.
Wan was born in 1940 in the city of Luohe in Henan province. Before finishing high school, he joined the railway corps of the People’s Liberation Army. Demobilised five years later, Wan returned to Luohe and worked in a meat processing plant for the next 16 years.
In 1984, when state-owned enterprises were being forced to undergo market reform, Wan became the first “democratically elected” plant manager. It wasn’t particularly good news. He took over a loss-making plant with significant debt. But Wan soldiered on with his fellow workers and began selling pork under the Shuanghui brand.
When Shuanghui began to expand, Wan had trouble getting capital. Company folklore records that he waited for hours in a snow storm at a banker’s doorstep for a Rmb300,000 ($48,872) loan. When the drunken financier finally returned home at midnight, Wan won him over with two cases of dry-cured ham.
The incident stirred Wan’s distaste for local bankers, so Shuanghui began talking to foreign investors. The first such investment, in 1994, was made by property tycoon Nina Wang, the late chairwoman of Hong Kong’s Chinachem and once Asia’s richest woman. Now the situation is reversed as Wan leads a series of other foreign investors, mostly private equity firms, in a bid for Smithfield in the US.
Need to know
Wan is now 73 years-old. But retirement is a banned topic in Shuanghui. He says that his favourite pastime is inspecting hogs waiting to be slaughtered, when he scrutinises such detail as their colour, weight and even how quickly they run. “This is the key for our cost structure,” Wan explains.
He also insists on taking three showers each day. “Showers make me sleep well. It is a must,” he opines.
© 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.