On October 26, "Outlook" News Weekly published the article "Why Shenghong - Behind the Rural Enterprise's Advancement into the Fortune Global 500", an in-depth report on Shenghong's 32-year development and transformation path, and a multi-dimensional introduction to the story behind Shenghong's advancement from a village-run enterprise to the Fortune Global 500.
Outlook" News Weekly is a large-scale current political and economic news weekly hosted by Xinhua News Agency. It is the earliest news weekly in New China. It undertakes the task of building the Xinhua News Agency's national high-end think tank Public Policy Research Center and is an important part of the construction of national high-end think tanks.
The following is the full text of the report:
The world's textiles look to China, and China's textiles look to Jiangsu and Zhejiang. Between Jiangsu and Zhejiang, with Suzhou and Shaoxing as the core, over an area of ??more than 10,000 square kilometers once gathered tens of thousands of textile printing and dyeing-related companies. It can be said that "the sun rises, and thousands of silks, clothes and quilts spread to the world."
In 1992, riding the wave of the Southern Tour, Shenghong Holding Group was founded in Shenghong Village, Shengze Town, Wujiang District, Suzhou City, at the junction of Jiangsu and Zhejiang provinces, and began its legendary industrial transformation through continuous technological breakthroughs.
This is a private enterprise's response to the magnificent times and a beautiful epitome of reform and opening up. In the past 32 years, starting from a small village-run factory, Shenghong has moved up the industrial chain, integrating printing and dyeing, chemical fiber, petrochemicals, refining, and new energy and new materials, and has become an international high-tech industrial group with the simultaneous development of "oil, coal, and gas", "aromatics" and "olefins", with an integrated upstream and downstream development.
The Third Plenary Session of the 20th Central Committee of the Communist Party of China proposed to improve the modern enterprise system with Chinese characteristics, promote entrepreneurship, support and guide various enterprises to improve the efficiency of resource utilization and management level, fulfill social responsibilities, and accelerate the construction of more world-class enterprises.
Driven by innovation, Shenghong has risen against the tide. It has continuously broken foreign monopolies and filled domestic gaps in niche markets, striving to make its products the best they can be. It holds 197 invention patents and has led the formulation of 12 international standards.
Behind high-quality development lies efficient governance. Standing at a new starting point of 171st place in the Fortune Global 500, Shenghong closely aligns its industrial layout with national strategic plans, adheres to its original entrepreneurial spirit of hard work and dedication, pools collective wisdom and strength, and strives for breakthroughs to accelerate its transformation into a world-class enterprise with global competitiveness.
Crossing the "Transformation Canyon" Three Times
The wind brings thousands of sounds, but it is easy to lift them together; the clear sky turns thousands of feet of waves, so that you can drink water and think about the source." In Shengze Town, Wujiang District, Suzhou City, 3 kilometers north of the headquarters of Shenghong Holding Group, on the Bailong Ancient Bridge with a history of more than 280 years, a couplet reveals the code of the rise and fall of the former "silk capital".
From a simple melody of "the wind carrying the sound of ten thousand machines" to becoming a leader in the entire industry chain of "a thousand-foot wave in a clear sky," Shenghong has continuously innovated and developed, crossing the "transformation valley" three times.
In 1997, Shenghong was restructured into a private enterprise with a business scale of 2 million yuan. During the Asian financial crisis, Shenghong mortgaged all its assets and acquired six companies, including Dongfang Printing and Dyeing and Tanqiu Printing and Dyeing, allowing Shenghong to rapidly expand in scale. Shenghong reorganized and updated machines and personnel to achieve specialized production of segmented products. "One factory, one product" has enabled all branch factories to turn losses into profits, and their output value has achieved geometric growth.
After becoming a leader in the printing and dyeing industry, Shenghong began to plan the "next step". After research, Miao Hangen, chairman of Shenghong Holding Group, decided to delve deeply into the textile industry and extend development to the upstream chemical fiber industry.
At that time, the core technology and pricing power of chemical fiber were in the hands of several multinational companies. Shenghong has zero foundation in making chemical fibers. How can it be successful? Shenghong has formulated a "three no's" strategy: no duplication of construction, no conventional products, and no use of conventional production techniques.
"Making the world's finest fiber" has become Shenghong's goal.
At that time, Japan's Toray held the world record for ultrafine fiber of 0.55 decitex (0.55 grams per 10,000 meters). Shenghong set its target at 0.5.
"Since we didn't have a machine that could achieve this level of fineness, we used a painstaking, piecemeal approach, disassembling the existing equipment piece by piece and modifying all the parts that didn't meet the precision requirements, and successfully produced 0.5-decibel ultrafine fibers," Miao Hangen explained. "Afterwards, Sheng Hong continued to experiment and innovate, pioneering the ring-blowing technology, which brought the fiber down to 0.15 decibels, breaking the world's limit. Our market share expanded rapidly, and the global fiber industry landscape was rewritten as a result."
Shenghong's second leap not only ends China's dependence on imported high-priced fibers, but also makes Shenghong the leader in global microfiber technology and production capacity. In 2008, with the international financial crisis, many textile companies suspended operations. With its unique advantages in ultra-fine fibers and elastic fibers, Shenghong applied for 366 patents of various types in one year, and its sales exceeded 10 billion yuan for the first time.
Standing at the top of the industry, Shenghong did not stand still, but looked further ahead: Can she take another step upstream in the industry chain?
In 2010, Shenghong went north to Lianyungang and entered the large-scale refining and chemical industry. Recruiting talents, introducing equipment, and exploring markets... Shenghong started from scratch and broke through obstacles all the way. In November 2021, the first shipment of imported crude oil entered the tank area, and the Lianyungang Shenghong Refining and Chemical Project was officially put into operation.
Hundreds of reactors are dotted around, with hundreds of meters high cooling towers standing among them. The port is busy and orderly for unloading... In the 14 years since it settled in Lianyungang, Shenghong has invested more than 200 billion yuan in total and has continued to extend to the high end of the petrochemical industry chain. It has become the only company in the country that has independent production technologies for two mainstream photovoltaic film materials, EVA and POE.
The first leap was to grow from a small village-run factory to a global leader in printing and dyeing, the second leap was to become the world leader in advanced functional fibers, and the third leap was to seize the highland of new energy and new materials... Shenghong was like a never-tiring antelope, jumping higher and farther, becoming an international high-tech industrial group with integrated development of the entire industrial chain.
Going against the chain is like a fish jumping over a dragon's gate, and the risk is extremely high." Mei Feng, chairman of the National Advanced Functional Fiber Innovation Center, said that Shenghong always aims in the right direction, steps on the right nodes, seizes opportunities, and fights hard, so that it can cross the "transformation canyon" again and again and write industry legends.
Don’t make ordinary products
The crystal-clear particles, like pearls, flow and beat between the transmission devices, making people dazzled. The Sierbang Petrochemical EVA workshop, a subsidiary of Shenghong Petrochemical, produces thousands of tonnes of high-quality products every day and transports them to downstream photovoltaic module manufacturers.
A few years ago, China's EVA import dependence ratio was as high as 78%, and it was expensive. Through technical research, Shenghong successfully increased the melting index of the product from 150 grams/10 minutes to 400 grams/10 minutes. All key indicators have reached or exceeded the international level, successfully breaking the foreign monopoly.
"Without innovation, enterprises cannot survive." Zhang Qingyu, deputy general manager of Sierbang Petrochemical, said that oil refining produces a large amount of ethylene, but there is an overcapacity of ethylene worldwide. Shenghong has taken a different approach and used ethylene to manufacture high melt index hot melt adhesive EVA, thus creating a new market.
Innovation and transformation are deeply ingrained in Shenghong's development DNA. From its inception, Shenghong distinguished itself in the dyeing and printing industry and accumulated its first fortune thanks to exclusive new products such as the "palm-shaped flower" and imitation cashmere prints. "We dare not and cannot stop innovating," says Tang Jinkui, Vice Chairman of Shenghong Holdings Group. He believes that good times for a business are short-lived; a new product can become oversupplied within five years, so it's essential to continuously launch competitive new products. Currently, the differentiation rate of Shenghong's chemical fiber products exceeds 90%.
At Shenghong, innovation is not the pursuit of one person or a few people, but the common choice for everyone.
If microfiber cannot be cooled evenly in time, it will easily stick to lumps like noodles. A workshop worker who was once a bricklayer tried to use ceramic sheets to separate fiber strands, and unexpectedly discovered that the cooling effect was amazing. The technical team seized this inspiration and designed a heat insulation ring to increase the cooling uniformity of the fiber filaments by 20%. Today, this ring blowing technology is widely used in the global fiber industry.
In the production workshop of Guowang High-Tech, a subsidiary of Shenghong, the R&D laboratory is located in a corner of the workshop, where researchers are constantly monitoring the production line. "At Shenghong, production and scientific research are closely linked," said Bian Shuchang, deputy chief engineer of Shenghong Chemical Fiber New Materials. He explained that R&D personnel must work in the workshop until they reach the shift leader level, gaining a thorough understanding of the needs of the production line. They are rooted in the workshop laboratory, conducting 200 to 250 batches of experiments annually, working almost every day except for holidays.
Innovation requires trial and error. In the development of high melt index hot melt adhesive EVA, the direct cost of a single trial and error can reach millions of yuan. After burning through hundreds of millions of yuan over two years, the R&D team was still able to continue to improve the production process and operating parameters without interference, and finally overcame this bottleneck technology in four years.
Innovation is not done alone, it requires cooperation across the industry. Shenghong took the lead in establishing the National Advanced Functional Fiber Innovation Center, which is one of the seven national manufacturing innovation centers in the field of new materials and the first national manufacturing innovation center in the country led by a private enterprise.
Traditional fiber silk is white, and after being woven into fabric, printing and dyeing steps are added. Liu Qingbei, the leader of the high-performance fiber project at the innovation center, has always wanted to develop fibers with their own colors. He had tried for more than 10 years in other companies but failed to make substantial progress. The innovation center invested millions of yuan to build a pilot line for product verification, and it took just over a year to achieve mass production of colored fibers.
Today, the innovation center focuses on key common technologies in the industry, brings together a group of academicians, experts, and subject leaders to establish a complete set of technological innovation supply systems, and is brewing more disruptive innovative technologies and products.
Use new ideas to find new ways out, new technologies to find new tracks, new models to find new blue oceans, accelerate the shift from 'seizing the market' to 'creating the market', and win the initiative in development," said Miao Hangen.
Build a business with an entrepreneurial mindset
During multiple interviews with Shenghong, the reporter discovered that this Fortune 500 company is quite different. The group has more than 50,000 employees, but fewer than 100 are at headquarters; meetings are extremely rare, with only one group meeting held monthly, usually lasting only an hour; senior executives do not have assistants, instead they eat lunch in the cafeteria, and discuss matters while eating...
For a company of Shenghong's size, it is normal for a headquarters to have one or two thousand people. But we have been guarding against the 'big business disease' and strove to sink more resources into the front line." Miao Hangen said that companies create value on the front line, and decision-making needs also come from the front line. People who can hear the sound of cannons should direct the battle, rather than letting powerful people make decisions behind closed doors.
The market is changing rapidly, and Shenghong uses speed to control the speed. "We pursue ultimate efficiency. We make a decision today and start tomorrow." Bai Wei, president of Shenghong Petrochemical, said that due to flat management, Shenghong's decision-making process is short and efficient. "Things that have been thoroughly studied by the front line can be reported directly to the chairman, and they can be implemented immediately after being finalized."
Decisions are made quickly and execution is faster. At the Siyang base, the regenerated spinning project took 100 days to sign and 490 days to go into production. The 500,000-tonne monomer production capacity accounts for 40% of the world. In Guanyun, the Shengbang New Materials Aramid Fiber Project with a total investment of approximately 15.8 billion yuan has rapidly advanced in three years. The first phase of 5,000 tonnes of para-aramid fiber will be put into production in the fourth quarter of this year.
Be quick, but not rash. From the headquarters of Shenghong Holdings Group on the banks of the Grand Canal to Shanghai, the world financial center on the banks of the Huangpu River, Shenghong has spread its network widely to collect global information, keep a close eye on market changes, and provide strategic research and professional evaluation for efficient decision-making.
Fast and supported by mechanisms. Sales captures demand, R&D follows up, and production quickly keeps up... The business departments collaborate with all links to share responsibilities and benefits. From sales identifying new demands to producing new products, this cycle usually only takes 15 days.
”Behind efficiency is pragmatism. Wang Shuai, general manager of the administration department, told reporters that Shenghong’s meetings do not have too complicated agendas, and most of them do not require meeting minutes. “Only difficult things need to be recorded in minutes and signed by senior executives.”
”If you know the right person, use it boldly.” Guo Donglai, human resources director of Shenghong Holding Group, said Shenghong emphasized both results and process. Through full authorization, talents can work freely, and work results are used to evaluate and manage talents and optimize work processes, so that people's abilities and working methods can be optimized and improved. "Process control is not about managing every detail, but focusing on risk management and standard management. Shenghong strives to cultivate generals who can take charge of their own affairs."
Behind the pragmatism is Shenghong’s innate entrepreneurial mentality that is still maintained today. Chairman Miao Hangen still drives to work by himself, and he usually attends meetings alone on domestic business trips. Vice Chairman Tang Jinkui set off from Suzhou at 3:30 in the morning and rushed to the Suqian factory in 4 hours. He had a bowl of noodles with the workers before going to the local government for a meeting. Those who can do it themselves will not bother others, and those who can solve problems on the spot will not hold meetings... In the minds of many old employees, they are still "Director Miao" and "Director Tang" who can travel across the country just by picking up a box.
On the bank of Jinji Lake in Suzhou, standing at the Shenghong Global Operations Center on the 57th floor of the International Financial Center, you can have a panoramic view of the prosperity of Suzhou, and the pulse of the times is within your reach. Staff told reporters that Miao Hangen, Tang Jinkui and others usually work at the group headquarters in Shengze, Wujiang, and only come here when important events are held and guests are received.
Don’t talk about ostentation but focus on practical results. Most of the heads of Shenghong's various sectors are recruited from outside, and many of them are industry leaders. During the interview, they expressed emotion, saying Shenghong only looks at actual performance and not a PPT, and they feel particularly solid and stable in their expectations.
Improving corporate governance is always on the way. There is insufficient matching of personnel and positions, there is frequent push and pull, and internal controls are not precise enough... Shenghong spent a lot of money to hire a third-party international consulting agency for systematic diagnosis, and found that there are still some "large enterprise diseases" that need to be resolved.
"Wearing old shoes can't walk a new road, let alone a long road." Miao Hangen said that Shenghong is accelerating the exploration of a modern enterprise system with Chinese characteristics that has systematic governance, orderly governance, well-organized authorization, and moderate use of power, so that talents who want to do things and can do things can be retained and used well.
Become stronger and bigger in serving the overall situation
Upon first entering the Shenghong headquarters building, people's eyes are always drawn to a huge celadon bowl—with a diameter of over 2 meters at the mouth, a diameter of over 1 meter at the base, and a height of 0.86 meters, it is listed as holding a Shanghai Great World Guinness Record for the world's largest porcelain bowl.
If you get closer and take a closer look, the grand scenery of the Silk Road slowly unfolds. The 56 figures symbolize 56 ethnic groups, and the 72 inscriptions imply the 72 lanes of Shengze Town and the 72 holes of Chuihong Bridge.
Why should “bowl” be used as a corporate totem? "With Shenghong's rice bowl, everyone will have food to eat." Miao Hangen said frankly that this was the simple original intention when he founded Shenghong. "On the other hand, the porcelain bowl is fragile, so every employee needs to work hard and work together to protect everyone's rice bowl."
Shenghong has done a lot to ensure that every employee has something to eat. In 2017, Huang Shaopeng joined Shenghong Petrochemical after graduating from his undergraduate degree. Thanks to the one-time house purchase subsidy of 40,000 yuan and the interest-free house purchase loan of 100,000 yuan provided by the company, he bought a house in Lianyungang and settled down after working for two years. At the Lianyungang Petrochemical Industry Base, Shenghong provides nearly 10 million yuan in rental subsidies and more than 2 million yuan in house purchase subsidies to employees every year.
This dual-track approach has greatly enhanced employee satisfaction. In Shenghong's chemical fiber and dyeing divisions, 1975 and 1751 employees respectively have worked for the company for 10 years, representing over 20% of the workforce in both sectors.
Let employees "eat well" and develop together with customers. Once, Shenghong prepared to import a batch of ethylene glycol worth 40 million yuan from the Middle East. While we were negotiating with customers, the price of ethylene glycol in the international market suddenly dropped sharply. Shenghong can completely renegotiate based on the current price. What the customer didn't expect was that the business manager in charge of the transaction said: "Chairman Miao Hangen specifically told us to sign the contract at the price promised verbally."
"Chinese people value a promise of gold. Only when our customers succeed can we succeed." Miao Hangen's decision-making logic is particularly simple. "If everyone has food to eat, many things in the world will be easier to handle."
Successful customers, also successful opponents. Shengze Town has two Fortune 500 companies, Shenghong and Hengli. One started from printing and dyeing, and the other started from weaving. Their development paths and industrial structures are highly similar.
"Our competitors are not only rivals, but also friends who inspire each other and help each other succeed. To some extent, it is because of our rapidly developing competitors that Shenghong has become better and stronger." In Miao Hangen's view, Shenghong is like a big tree, forming a forest together with its employees, customers, and competitors. "Only when the forest is lush can Shenghong grow into a towering tree."
Beyond fostering a small industrial ecosystem, it also aligns with the grand national trend. In 1992, the Southern Tour speeches brought the breath of spring for reform, and Shenghong was born at the right time; in 1997, as China promoted the development of a socialist market economy, Shenghong underwent privatization; in 2010, the "Opinions on Encouraging and Guiding the Healthy Development of Private Investment" were issued, and Shenghong launched the Honggang Petrochemical Project, initiating a full-industry chain development from "a drop of oil" to "a strand of silk"; in 2018, the state promoted mixed ownership reform, and Shenghong successfully restructured with the listed company Oriental Market; in 2020, China proposed the "dual carbon" target, and Shenghong promoted its new energy and new materials strategies…
"Without this great era, there would be no Shenghong today." Miao Hangen said that reviewing Shenghong's 32-year development history, every important development node is inseparable from the guidance and support of national policies.
Looking at the Bailong Bridge from the Shenghong headquarters, the clear Hongtang River flows eastward through the Huangpu River and finally merges into the sea.
"Looking forward to the next ten years, Shenghong will stay true to its original aspirations, work hard, further strengthen and expand while serving the national strategy and meeting the needs of the people, and strive to become a world-class enterprise with global competitiveness," said Miao Hangen.
Source: "Outlook" News Weekly reporters: Ling Junhui, Yang Shaogong, Chen Xiyuan
