Chinese Character

Bigger than Huawei

Meet China’s richest woman – she’s from the petrochemicals industry

Hengli-w

One of Hengli’s factories

News flash: Yang Huiyan is no longer Asia’s richest woman.

Yang has held the title for long periods since she inherited the controlling stake in Country Garden from her father 16 years ago. But with the property giant’s share price going down by more than half so far this year as the sector struggles to get out of a debt crisis, the net worth of Yang, now 41, has also taken a hit. (By the way, Asia’s richest woman is India’s Savitri Jindal. According to the Bloomberg Billionaires Index, she is worth $16.2 billion thanks to her metal-to-power conglomerate Jindal Group.)

Indeed, following a $360 million share sale last month that priced Country Garden’s shares at their lowest value since 2016, Yang is not even the richest woman in China.

That title now goes to Fan Hongwei, the founder of chemical-fibre company Hengli Petrochemical. After reporting Rmb732 billion in revenues last year, Hengli has surpassed Huawei as the country’s second-largest non-state-owned enterprise by sales, behind only e-commerce firm JD.com (Rmb952 billion), reports 36Kr. According to Bloomberg, Fan’s personal wealth has reached $11.3 billion.

The ‘crowning’ of Fan is notable as in the past China’s richest women have usually come from the property sector. Longfor Properties chairperson Wu Yajun and Ji Kaiting (also known as Kei Perenna), daughter of Logan Property’s founder Ji Haipeng, are two other real estate billionairesses that often get mention from local media outlets.

The fact that Fan grew her fortune in an ‘old economy’ sector has triggered much more discussion.

“When we talked about labels such as the rich and the richest woman in the past, they usually engaged in popular fields such as real estate, technology, and the internet,” PE Daily mused. “But this time, Fan Hongwei has gathered so much wealth with the Hengli Group, which is mainly engaged in the chemical fibre and petrochemical business, which undoubtedly changes many people’s perception that it is difficult to get rich in that industry.”

And unlike Yang and Ji, who are fuerdai (or rich second-generation offspring) taking over from their entrepreneurial fathers, Fan was seen as key to the success of Hengli along with her husband Chen Jianhua.

Originally an accountant for a textile firm, Fan established Hengli in 1994 with Chen, who left school when he was 13 to become a construction worker. The couple took out a loan to buy a textile knitting factory in Chen’s hometown Wujiang in Suzhou, traditionally a hub for silk production. Many local families were engaged in silkworm breeding or textile processing. At the time, the state-owned factory was on the verge of bankruptcy due to its poor management.

Thanks to Fan’s background in textiles and accounting, the couple quickly trimmed the losses and turned the business around.

The factory’s prospects then looked bleak again after the Asian financial crisis in 1997. Fan and Chen, however, stayed bullish on the textile industry and China’s economy. Using the profits they’d made over the prior few years, they expanded output during the period, acquiring thousands of weaving machines to improve productivity. In three years, the number of machines expanded dramatically from just 88 to over 2,300.

The move helped drive their prices lower than the market average, grabbing share from competitors.

Their bet paid off. As China’s consumer market continued to grow – a situation that soon rendered the country as the world’s largest consumer of textiles – so did Hengli’s business.

Not standing still, they borrowed heavily and invested Rmb2.2 billion in a polyester manufacturing facility. By 2002, the scale of their polyester production business was such that their company was one of the country’s largest textile producers (China is still the world’s biggest maker of polyester).

Fan and Chen had still bigger goals. In 2010, the couple moved further upstream, opening an oil refinery in Changxing, a small island just off the coast of Dalian, and using the crude to make polyester. In March 2016, a unit of Hengli went public through a backdoor listing on the Shanghai Stock Exchange. Two years later, the couple injected their oil refining and PTA business into the listed company, renaming it as Hengli Petrochemical.

“After Hengli Group entered the PTA [purified terephthalic acid, a chemical compound used to make polyester and plastic bottles] industry, its business had completed its coverage of the entire industrial chain from petroleum refining to chemical fibre,” noted PE Daily. “Hengli has also helped Chinese companies to break through the foreign monopoly on upstream raw materials such as ethylene and PTA.”

Still, as Hengli continues to diversify – it now dabbles in everything from tourism to micro-lending – analysts have expressed concerns that Fan’s conglomerate is stretching itself too thin.

There are also concerns about the high leverage. In the first half of this year, Hengli Petrochemical reported a debt-to-asset ratio of 75%, while the company splashed out Rmb15 billion in dividend payments between 2019 and 2021.

Meanwhile, for Fan, it doesn’t look like she’s retiring anytime soon. “Even though it is still very much a family business, from the beginning, Fan Hongwei has always had a strong presence within the company as the female founder. It seems that she has never retreated to the sidelines like others. She is still heavily involved in the listed company Hengli Petrochemical, as the chairperson and the general manager,” says 36Kr, a news website.


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