Text | Xie Zefeng
Edit | Yang Xuran
If you ask who is the most unique businessman in China's business world, Liu Yongxing is definitely among them.
He is not listed, basically does not raise funds, does not rely on banks and capital markets, in his view any capital game is extremely dangerous, he only believes in his own money.
Relying on the rolling development of its own funds, Oriental Hope has reached 125.7 billion yuan in revenue, ranking among the world's top 10 electrolytic aluminum and alumina producers.
In the companies owned by Oriental Hope and even Liu Yongxing, the near-sole shareholder list is surprising enough. What's even more surprising is that the more critical the situation, the more profitable he is — Liu Yongxing topped China's richest man during the 2001 and 2008 financial crises. Given today's high aluminum prices, this pattern will continue.
In the 2022 Hurun Global Rich List, he rose 46 places against the trend, surpassing Huang Zheng, Wang Xing and others, and his personal wealth reached 135 billion yuan, which was on a par with Dalio of Qiaoshui Fund.
Liu Yongxing, 74 years old this year, still sticks to the front line, getting up at 5 or 6 o'clock every day and using iPad to read news and check materials to learn courses.
He is an entrepreneur who controls the scale of 100 billion, but he has asked about daily production and operation to the point of being calculated - the soot powder sprinkled at the door of the worker should be swept up and transported back to burn; the hot water supply in the bathroom should be controlled at the maximum flow under the condition of ensuring comfort; the utilization rate of the plant should be at least one ton per square meter... His industrial investments place great emphasis on the circular economy, while eliminating all forms of waste.
Since the second transformation in 2002, he has stumbled into heavy chemical industries such as alumina and coal chemical industry. For two decades, in the aluminum industry, which is known as the most difficult to make money in the world, it has continued to make a lot of money, turning the red ocean into a blue ocean.
Nowadays, Oriental hopes to open the third entrepreneurship, take Liu Yongxing's words called "cross-life cycle planning", the most interesting of which is the investment in polysilicon, if this plan can be completed, then Oriental hopes to set "coal, electricity, aluminum silicon - chemical - biological" as one.
01 Polysilicon: Extremely low cost
Whether it is electrolytic aluminum or polysilicon, Liu Yongxing has spent nearly 10 years from "starting" to acting.
Liu Yongxing, who has been immersed in the heavy chemical industry for many years, plunged into the field of photovoltaic polysilicon as early as 2013.
By the end of 2021, Oriental Hope polysilicon production capacity of about 70,000 tons, Poly GCL, Tongwei Yongxiang, Xinte Energy, Daqo respectively 110,000 tons, 100,000 tons, 81,000 tons and 80,000 tons, they constitute the photovoltaic silicon material "five giants".
Although it is a photovoltaic latecomer, the East hopes to be fierce. On March 18, the first batch of major projects in Ningxia began construction, including the new energy material project that Dongfang hoped to smash 150 billion yuan.
The first phase of the project plans to produce 125,000 tons of polysilicon, 145,000 tons of industrial silicon, 10GW of monocrystalline, 10GW of chips, 10GW of batteries, 25GW of modules, etc. Finally, it will build a production capacity of up to 400,000 tons of high-purity crystalline silicon and 490,000 tons of industrial silicon per year.
If you add the 120,000 tons of polysilicon project that is expanding production in Xinjiang, after being put into production, Dongfang hopes that it will not only surpass Tongwei, GCL-Poly, etc., and become the new silicon king, but also become another photovoltaic giant in the whole industry chain.
Throughout Liu Yongxing's 40 years of business experience, his industrial investment has always been careful to verify and bold action. Like a cheetah lurking in the jungle, it jumps up when the time is right. Whether it is electrolytic aluminum or polysilicon, Liu Yongxing has spent nearly 10 years from "intention" to action.
Polycrystalline silicon material is an industry that is greatly affected by the downstream boom, and the cycle fluctuations are very sharp. Over the past decade, silicon prices have experienced several bulls and bears.
Capital intervened but returned home, and many silicon companies collapsed. The success of "the leftovers are king" and the lesson of blindly following the trend, Liu Yongxing saw in his eyes.
"Some companies in the high point of 5 million yuan a ton to kill, we have been observing from the side, polysilicon prices fell off a cliff, 3 million fell to 300,000, we do not do, fell to 200,000 when we began to think seriously, 140,000 when we killed, you asked my bottom? It is to prepare for the long-term survival of polysilicon when it falls to 70,000, profitable at 50,000, and maintained when it is 30,000. ”
After a long period of observation and demonstration in the early stage, it was not until 2013 that Oriental Hope decided to enter the field of polysilicon production, but it took 3 years to make a production capacity of 200,000 tons / year, the first phase of 30,000 tons / year of planning, and then after 3 years to really land.
In 2019," "Double Twelve", Dongfang hopes to officially put into operation the 120,000-ton polysilicon project (phase I 30,000 tons) in Jundong, Xinjiang, which is the beginning of Liu Yongxing's formal large-scale layout of polysilicon.
By the end of 2020, the production capacity of Oriental Hope Polysilicon is only 40,000 tons, ranking fifth in China and seventh in the world. And the ambition of the East's hope is not only to be a follower.
Since 2020, Oriental Hope has successively launched photovoltaic projects in Lijiang, Yunnan, Beihai, Henan, Sanmenxia, and Ningxia. It is reported that Liu Yongxing plans to become the first silicon material and the top 10 components during the "14th Five-Year Plan" period.
"Dongfang hopes to follow the principle of 'small data to the extreme', let them go first, we wait and see, and strive to reduce their own costs, do a lot of design and optimization, and finally enter the polysilicon industry with high competitiveness."
In essence, crystalline silicon production still belongs to the chemical industry, and its cost, energy costs exceed 30%, accounting for the largest proportion. Therefore, cost reduction and efficiency improvement must first start from the energy department. Liu Yongxing's bottom line lies in the cost of energy.
In addition, the declining depreciation brought about by the scale effect and the circular advantages of comprehensive chemical enterprises are also the confidence of the East's hope to be the first to come first. For example, two overseas silicon giants, Wacker of Germany and OCI of South Korea, are chemical companies, not photovoltaic companies. Moreover, they all have their own power plants.
AS WACKER Chemie CEO Tuozhi Shi pointed out: "Our competitors in China have electricity prices of less than 2 euro cents per kilowatt-hour, and if our electricity prices are the same as those in China, then WACKER will be the most efficient company in the world for ultrapure polysilicon." ”
It is said that dongfang hopes that the electricity cost of xinjiang's isolated network system is only 0.07 yuan / kWh, generating 50 billion kWh of electricity per year. Moreover, its captive power plant also provides cheap steam to polysilicon projects, and its production cost in 2019 is only 25 yuan / kg.
Only new projects in China are likely to reduce the cost to less than 40 yuan / kg, for example, the average production cost of Tongwei Leshan Phase I and Baotou Phase I projects has dropped to 33.7 yuan / kg.
If there is a company that can achieve a cost of 20 yuan / KG, and then rely on huge production capacity, it will undoubtedly cause a "dimensionality reduction blow" to other competitors. ”
From the current layout of Oriental Hope, Liu Yongxing's "ambition" lies in photovoltaic integration, and relies on various chemical products and power plants to realize the consumption mode of petrochemical energy into a renewable compensation and recovery mode of photovoltaic energy.
Predictably, a "carbon neutral" business empire is on the rise.
02 Aluminum products: continuous profits
Liu Yongxing has achieved "heinous" management of cost reduction. ”
With the international aluminum price hitting a record high, the previously bitter aluminum industry ushered in a moment of violent profit.
The average profit per ton of aluminum in the industry has reached about 6,000 yuan, while from 2011 to 2019, the average profit per ton of aluminum has only exceeded 2,000 yuan for four months.
China's aluminum industry, the world's first alumina and the second primary aluminum, in 2021, the net profit attributable to the mother reached 5.080 billion yuan, a year-on-year increase of 5.6 times, and the A-share loss king became a large profitable.
Source: London Metal Exchange (LME) benchmark aluminium price, Oriental Wealth
In 2021, China's aluminum industry will produce 16.23 million tons of alumina and 3.86 million tons of electrolytic aluminum; By the end of 2020, the alumina production capacity will exceed 5 million tons, and the processing capacity of electrolytic aluminum and aluminum will exceed 2 million tons, ranking among the top ten in the world.
Oriental Hope is not listed, so it is impossible to glimpse its specific performance. However, with reference to the financial statements of other aluminum companies, it is conceivable that in 2021, the Oriental Hope Aluminum sector will also be quite profitable, not to mention that it has the envy of its peers.
In the production process of electrolytic aluminum, electricity costs account for 40% of the cost. If the price of electricity rises by a penny, the profit of 1 million tons of electrolytic aluminum will be reduced by 150 million yuan. It can be said that the cost of electricity determines the life and death of electrolytic aluminum companies.
In 2021, China Aluminum spent 24.3 billion yuan on the purchase of electricity. In order to save electricity bills, Liu Yongxing put the aluminum project in the Gobi Desert in Xinjiang, only because there are huge coal reserves here, and the coal price in 2000 was only 20 yuan / ton.
Dongfang hopes to support its own power plant in Xinjiang, and the extremely low coal price allows it to survive the cyclical fluctuations of the aluminum industry. It is reported that the electricity bill alone can save hundreds of millions of yuan every year.
Circular economy is another magic weapon for Liu Yongxing's industrial operation. The steam produced by the power plant is used to produce lysine; the main raw material for the production of PVC is calcium carbide, and the exhaust gas of the calcium carbide can produce anode carbon blocks, and the anode carbon blocks are the main raw materials for the production of electrolytic aluminum... In this way, upstream waste becomes downstream raw material, which greatly reduces production costs.
Even in 2012, during the cold winter of the industry, the profit of the Oriental Hope Aluminum sector was still as high as 1 billion yuan, while The Chinese aluminum industry lost 8.2 billion yuan that year.
After entering the production of electrolytic aluminum, Liu Yongxing also personally formulated the "Cost Management Daily Report", which included more than 100 data such as mineral consumption, aluminum-silicon ratio, alkali consumption, electricity consumption, steam consumption, and coal consumption, requiring the factory to check and improve each data every day. With the detailed management of "Gong Baht must be compared", the production efficiency of Oriental Hope is far beyond that of domestic counterparts.
It is said that after visiting the electrolytic aluminum projects in Wucai Bay in Xinjiang and Baotou in Inner Mongolia, Liu Yongxing said that Liu Yongxing had achieved "heinous points" in the management of cost reduction. ”
The extremely low debt ratio and harsh detail management not only make Dongfang hope to survive the industry trough, but also continue to make money in excess capacity.
In addition to the aluminum industry, Oriental hopes to continue the story of low cost and high profitability in chemical products such as methanol, dimethyl ether, polyvinyl chloride, and PTA. As the prices of these chemicals rise to record highs, Oriental hopes that the profitability of the chemical sector will continue to soar.
It can be said that the East in 2021 hopes to usher in another golden period of harvest.
03 "Cross-Lifecycle Planning"
Eastern hope seems to be a "utopian" existence in modern commercial civilization.
The Zhuandong Development Zone, 200 kilometers from Urumqi in Xinjiang, is a key area for Liu Yongxing's nearly 20 investments; this Gobi Desert in the northern foothills of the Tianshan Mountains is also the "next 39-year undertaking" of Oriental Hope.
Liu Yongxing calls this carbon-neutral "cross-life cycle planning."
There are 390 billion tons of coal buried underground in Zhuandong Wucai Bay, equivalent to 74 times the mainland's total energy consumption in 2021, and coal here is sold for more than 60 yuan a ton.
On the one hand, energy reserves are abundant but the value content is low; on the other hand, the land is vast, but the land is sparsely populated and the traffic is blocked. How can low value-added coal be converted into industrial clusters with high gold content?
Liu Yongxing has a bold plan - to spend 100 billion yuan in 10 years, build 50 factories, and achieve "six grains and abundance".
The so-called "Liugu Fengdeng" refers to the creation of "Electric Valley" and the development of "Aluminum Valley" based on the "Coal Valley" of Zhuandong, the derivation of "Silicon Valley", the "Chemical Valley" of coal chemical industry is being planned, and the "Biological Valley" of desert ecological agriculture and breeding.
Now, Liu Yongxing's plan has reached the middle of the game. Dongfang Hope Zhuandongban is also the best testing field for him to practice "circular economy", "full life cycle cleaning", "high efficiency and low cost".
According to Liu Yongxing's vision, after coal mining, it is directly transported to the Kengkou power plant with a 26-kilometer-long belt, and 10 supercritical air-cooled units will transmit electricity to the various power units in the park.
The world's longest coal corridor carries 4,000 tonnes of coal per hour, reducing construction vehicles by more than 425,800 times a year and reducing carbon emissions by nearly 7.5 million tonnes.
It generates 50 billion kWh of electricity per year and supplies aluminum, aluminum alloys, carbon, building materials, industrial silicon, polysilicon, monocrystalline silicon, methionine and other products.
In this way, the coal of Zhuandong Wucai Bay can be converted on the spot, and the high value-added products produced can be transported to developed areas such as East China and South China.
Waste from the production process must not be wasted, coal is used to generate electricity, and raw material silicon is processed as industrial silicon, and the by-products of silicon can also be used for aluminum processing, and another part of industrial silicon extends to polysilicon.
At present, the Zhuandong Industrial Park has realized the "four valleys" in the "six valleys", that is, the coal, electricity, aluminum, silicon industry chain, and the investment plan of 100 billion yuan has been completed by 60%, achieving good economic benefits and showing a strong ability to resist risks. In the future, Liu Yongxing will continue to open up the remaining "two valleys" - coal chemical industry and ecological agriculture.
In the next 5 years, Liu Yongxing also plans to invest another 100 billion yuan, mainly in photovoltaics, to achieve his dream of "quasi-zero emissions". In the 20 years of developing the heavy chemical industry, The East hopes to consume a large number of non-renewable fossil raw materials. "You consume so much coal and so much electricity in a year, how do you get it back?"
Liu Yongxing believes that "from the perspective of the entire life cycle, photovoltaics can take back 20 times the energy consumed by the East's hope to produce, and what we have to do is not even 'quasi-zero emissions', not carbon neutrality, or even large-scale negative carbon emissions." ”
04 Write at the end
Liu Yongxing and the Oriental Hope he leads are like rare cases in the operation of today's complex and sophisticated business society.
The East hopes to create economic benefits in a virtuous circle of virtually debt-free, profits and its own funds; the industries it invests in are models of circular economy and are even moving towards zero carbon emissions.
To some extent, Oriental Hope seems to be a "utopian" existence in modern commercial civilization, which uses careful management and control and effective use of resources to transform dying industries into high-profit industries.
Liu Yongxing has done "stupid things" thoroughly on the "narrow road" that others have not taken well, which is a unique book in the entire Chinese economy and society.