The development course of the Wentong Group is a history of breaking through and constant innovation, a history of making and pursuing enterprise's goal continuously. It deals with the whole market with creative thinking. It dares to surmounts itself, do what others cannot do, find the value that others have not found and create the achievement that others can not create out.
I. Started from Wenshui --Find the breach accurately, establish development foundation
The predecessor of Wentong Group, Wenshui chemical factory, is a small collective-owned enterprise at county level. The production technology lagged behind and the output were low with high costs, standing at the edge of bankruptcy. Li Gang realized deeply that if they wanted to extricate themselves from the predicament, they should put the transformation of the production technology of potassium nitrate to ion exchange as the breach at first. There is not a chemical enterprise to grasp and use the technology yet in the whole country at that time. They did a lot of experiment work day and night and carried on a large number of hard transformations. The whole of factory had a wish only at that time, but must change the old craft and let the Wenshui chemical factory reach a new stage. In 1985, the first ion exchange technology to produce potassium nitrate in the whole country was tested successfully in Wenshui chemical factory by consulting a large amount of materials, testing and putting into a large amount of energy and times. It wrote down the first chapter of developing and soaring for the factory. Each ton of production cost of potassium nitrate was reduced by 400 yuan; monthly output has been improved by 15 times; product quality changes greatly too; a input and output accepted product percentage is more than 95%. The enterprises came back to life and left the first step steadily.
In 1986, the company began to seek to develop the new products large in market demand. Through a large number of investigation and research in the second half year, the leading group of the enterprise inferred that the market demand of the potassium carbonate should increase. The enterprise leaders made the craft reform decision of producing potassium carbonate by the technology of ion exchange through the research repeatedly. In October of 1987, the craft reform of potassium carbonate succeeded by doing several hundred times of the tests.
The success of ion exchange technology is the first step for Wentong to go further. But with the increase of market demand, the market competition became fiercer and fiercer. How to establish an unbeatable position in the market competition became the extremely urgent problem. Li Gang, President of the group and factory director of Wenshui chemical factory, went to Australia and Southeast Asia in 1989 for investigation that was lasted one month. Through communicating with customers and counterparts, Li Gang caught sharply the great transformation trend of manufacturing industry of the whole world. Through careful consideration after coming back home, he put forward to develop the products more fine, produce and manage at large scale, establish a shareholding system for the group, operate in different regions and industries, aim at the overseas market and domestic advanced market with potassium carbonate and potassium nitrate as two main products. At the same time, he carried on the technological innovation, advanced the technological progress unremittingly to produce color TV glass grade potassium carbonate and granular potassium nitrate with world level. Thus, the company realized the upgrading of the products and settled solid foundation for enterprise's enlarged reproduction and jumping development.
The batch process of color TV glass grade potassium carbonate is exactly the organic integration of market and technology. In 1995, the company succeeded in producing color TV glass grade potassium carbonate with ion exchange technology at last and put into batch process, turned this national-level Torch Program project products into realistic productivity more directly and rapidly. In the following several years, the company carried on extensive technological reform to affiliated enterprises and fully exploited the potentialities of the original equipments, which made become the biggest producer of potassium carbonate in the world with annual production capacity of 120 thousand tons.
Succeeding in developing of prilled potassium nitrate that became a competitive product of the group filled the domestic gaps and reached the international leading level. In 1998, Wentong Group, already been the domestic biggest producer of potassium nitrate, begun to develop the new product of granular potassium nitrate, and achieved success. At the same time the group sized up the situation, analyzed and grasped the market demand of the product and general trend of market development in an all-round way. The production capacity reached 100 thousand tons and formed the large-scale production by implementing the technological transformation of the original production line actively and reliably, expanding the production scale of granular potassium nitrate and carrying on improvement to its craft perfectly.
II. Settled in Taiyuan --Set up modernized enterprise system, march towards scale
In 1988, the company already had its comparatively rich fund and economic strength, possessed the capability of expanding production scale and investment. It strengthened itself by merging and acquisition with its brand, talent and technological advantage but not by increasing investment, building new factory and new production line.
In 1988, Wenshui chemical factory merged Wenshui l state-owned chemical factory that was losing seriously and on the verge of bankrupt. Three month after merging, the factory came back to life and created a profit of 70 thousand yuan in that year; then the company merged the debt-ridden Wenshui chemistry factory and Wenshui fertilizer factory and utilized their already existing equipments and the advanced management and technology of its own to produce the hard-to-get products of market and made a profit instead of suffering a loss in that year.
For seeking larger development space, while merging loss-generating enterprises, Wenshui chemical factory went out of Lvliangshan and aimed at the whole Shanxi where it looked for resource within the range of the whole province. At that time, it pooled with several companies in Yang Jiayu country to build up Dongxin Chemical Factory by giving full play to its technology, management, brand and personality advantage of intangible assets. It also establish Wentai chemical factory with Taigu 753 factory. In 1993, Wenshui chemical factory was renamed as Shanxi Potassium Salt Factory under the approval of Shanxi provincial government. At that year the supply and marketing company was also founded. In 1995, Shanxi Wentong Potassium Salt Group Co. Ltd. (abbr. Wentong Group) was set up in Taiyuan composed by 5 close-layer of enterprises and 12 half close-layer enterprises. So far, a small countryside level factory had developed to be a enterprise group with 9 manufacturing enterprise and two trading companies, producing 7 major kinds of products.
With constant promotion of market economy in China, enterprises' old system cannot meet the requests of market environment changes.
The group took the lead in setting up the potassium carbonate workshop of the shareholding system in Wenshui chemical factory in 1992. Thus Shanxi Wentong Potassium Salt Group Co., Ltd. was set up. The leading operation system brought group's hyper normal development. In 1997, Wentong group was regarded as " the national large-scale secondary enterprise " by national relevant ministries and committees and became the largest scale, the lowest cost enterprise and a leader enterprise of expert team of Chinese potassium salt enterprise.
"To be the biggest, to do the best " is the strategic adjustment of development after the enterprise came to be big. The main competitors of Wentong are not domestic counterparts but the leading enterprises of in international market, such as HAIF, SQM, UNID etc.. Wentong must not only be big but be strong in order to compete in international market. It is a must to adjust product structure in order to be strong. So the group put forward to shrink small-scale enterprises progressively at the beginning of 2000 and made great efforts to reach the sales amount of 500 million yuan in 2001; Afterwards the group closed, stopped, combined or transferred its six sub companies such as Wentai, Wenxing, Xingnong, Dongxing, Wenyuan and the plastic woven bag factory. At the same time, the group invested 150 million yuan to carry out technology reform in its seven sub companies.
III. Moved to Shanghai--Focus on resources, promote industry upgrading
In May of 2001, according to President Li Gang's strategic idea about " Establish an internationalized group, dominate the domestic and international market ", Wentong Group moved its headquarter and marketing centre to Shanghai Pudong New Area to make the marketing tap faced both at home and abroad by utilizing geo- economy and preferential policy of Shanghai, which promoted the construction in Shanxi production base effectively and made enterprise's production-supply-marketing form the favorable situation between Shanghai and Shanxi.
The group has formed the enterprise pattern with headquarter located in Shanghai and production base in Shanxi since it settled in Shanghai over the past two years. These two years, it was also the period when Wentong continued its fast development. In two years, enterprise's economic gross was promoted by a wide margin and the structure was optimized further and the key position of the staple was shown obviously. The enterprise's foreign exchange earning increased by 2.6 times after moving to Shanghai. The chemical products are sold well all over the world more than 40 countries and regions. Compared with the domestic counterparts, Wentong ranks top in the output and sales volume. In the international market, the output, quality and sales volume of the leading product potassium nitrate has exceeded the like product of the country of " first of old brand " and became global competitive rivals of the same trade.
The group is built up from Wenshui, Shanxi, has realized " triple jump " from county town, provincial capital to the international metropolis. Leap-type development orbit is the embodiment of enterprise's strength and also is the localization of enterprise's long-term development goal. It is an effective combination of " soft resource " of Shanghai and " hard resource " of Shanxi under the strategic idea of geographical economy. So the group did not " connect with an end and walk ", " uproot " in moving to Shanghai, but pondered over the topography, geography, favorable terrain accurately.
After the basic framework of the group takes shape, in order to optimize the structure of industry, promote industry upgrading and seek the way of sustainable development, the group has begun the second phase of development taking new project implementation of cogeneration of heat and power as new starting point again. In order to realize this industry chain in the group as soon as possible, the group leaders decide to jump out of Shanxi province resolutely, integrate resources in the whole country and seek and choose cooperative partners extensively nationwide. Wentong locked the domestic biggest potassium chloride producer finally --Qinghai Salt Lake Industrial Group. The two parties invested 800 million at the first stage of the project together in " Lv Liang Bai Jin Bao Chemical Garden " in Shanxi to produce 100 thousand potassium nitrate, 50 thousand potassium carbonate and 600 thousand coke.
The project implemented by cooperating with Qinghai Salt Lake Industrial Group is the real combination. Both sides regard resource as breakthrough point and combine the coal resource of Shanxi and potassium chloride of Qinghai together. The industry chain is of a tightly knit structure from raw materials to finished products.
The first stage of the project has already been put into operation at present and will begin to go into operation at the end of 2003. After the project going into operation, the newly- increased income from sales will reach CNY 1 billion and contribute tax CNY 200 million. The new project will make Wentong Group the leading status in the Chinese potassium nitrate market and global potassium carbonate market. At the same time responding the call of the national development of western regions, utilizing the policy of development of western regions, both sides signed the letter of intent to invest CNY 1.8 billion in Qinghai for the second stage of the project. The project will produce 120 thousand of potassium hydroxide, 80 thousand of heavy density potassium carbonate, 100 thousand ton of PVC and a 90000kw generating set. It is estimated that the sales revenue of the group will increase by CNY 1.5-2.0 billion.
Making a general survey of the domestic and international successful enterprise, there is not one that does not have correct development strategy and deep corporate culture. We can say strategy is a direction, and a goal of enterprise's sustainable and stable development and culture is guaranteeing and the foundation that enterprises carry out strategic thought to the letter. It only strategy leads the culture and culture to assist strategy that enterprises can fly over again and again. The orbit of Wentong's changes and development is just a result of President Li Gang's lead. The general steersman of group regards establishing an internationalized group, dominate the domestic and international market as a goal, regards pioneering and innovating, making progress, painstaking and struggling, Good faith and solidarity as ideology, promotes the strategic shift of enterprises, solves the technological difficulty constantly, upgrades and puts out the new products in good time. Thus the workshop-based factory from Lvliang area of 20 years ago developed into a Shanghai-based large-scale enterprise group today.
Not satisfied with great achievements made at present, Wentong of today pushes the group to the new starting point again by diversified and profound cooperation with the Qinghai Salt Lake Industrial Group. The sales revenue will increase CNY 2.4-2.9 billion after the first and second stage of the project going into operation. The group also plans to invest CNY 600-800 million to build a large-scale colliery of 2 million tons in annual output. At that time, Wentong's products will involve the most products of the chemical industry and its sales revenue will reach CNY 4-5 billion. The goal of "Establish an internationalized group and dominate the domestic and international market" will be realized primarily. And also it will lay a solid foundation for the goal of the annual sales revenue of CNY 8 billion of the next step.