Ren Jianxin, who borrowed 10,000 yuan to create the world's top 500 companies, bid farewell to the chemical stage of his struggle for half a lifetime.
Text / Hua Shang Tao Li Chen Guang
At 3 p.m. on June 30, the rumors of the merger of ChemChina and Sinochem Group in the past two years finally came to fruition.
The news shows that Ning Gaoning, chairman of Sinochem Group, will take charge of the new company after the merger; Ren Jianxin, former chairman of ChemChina, announced his retirement.
After finalizing the largest merger and acquisition in China's history with 288.1 billion yuan and redefining the global chemical industry pattern, the chemical strongman officially bid farewell to the stage of his half-life struggle.
【1】
ChemChina is China's largest chemical company, with revenues of US$45.1 billion in 2017, ranking 211th in the Fortune Global 500. Compared with some technology and Internet companies of the same size, this company hidden behind the consumer market has a more profound impact on national life.
Chemical industry is a long-standing industry, after learning to use fire, human beings have not left the chemical industry. Chemical industry and people's livelihood are closely related to food, clothing, housing and transportation, without chemical industry, human beings have to return to the Stone Age.
China is a big chemical country, in 2015, the chemical industry accounted for more than 20% of the country's total GDP, far exceeding the real estate industry. But China is not a chemical power, and the world's chemical power is the United States, Germany, Japan and France.
The chemical giants of these countries, hidden behind consumer brands, quietly envelop everything in your life:
You drink water treated by "Dow Chemical", live in green buildings brought by Dow technology, and tear open all kinds of bags offered by Dow;
You eat the grain cultivated by the "Syngenta" agrochemical, the house is planted with the green plants developed by the Seeds of Syngenta, and even the green belt in the city is inextricably linked to this company;
When you are sick, the medical machine of "Bayer" helps you diagnose, the doctor's prescription says Bayer's medicine, and when you have a cold and fever, you may better come to a Bayer aspirin;
You wear clothes made of "DuPont" polyester, look out the window through DuPont plexiglass, the outside of the glass is made of DuPont nylon curtains, in the summer, don't forget to add DuPont's freon to the old-fashioned air conditioner;
You look at all kinds of reports, celebrities argue endlessly about "Monsanto's" genetically modified seeds, but there is no result of arguing;
You go out with a "3M" mask, the dishwashing cloth and mop at home are all 3M advanced products, and the bedroom wall has 3M sound insulation materials;
You drive a car with parts full of Honeywell nylon resin material, and when the plane goes wrong, you have to retrieve Honeywell's black box;
…………
"Above" these chemical giants, there is also a German BASF. With annual revenues of US$75.1 billion in 2017, BASF remains the largest chemical company and has countless downstream industries involved in its six divisions.
It can be said that in addition to breathing air, almost everything else you do is paying the chemical company.
【2】
The level of science and technology in China's chemical industry is relatively backward, and the industry says that it is "staying at the level of the 1980s and 1990s abroad".
"Three barrels of oil" and "nine courtyards" have some mainstream technologies, but they are still inferior to the international, and many domestic processes are bought from abroad for modification and packaging.
As the former chairman of ChemChina, Ren Jianxin has been working hard to change the situation in which the domestic industry is large but not strong for the past 34 years.
Ren Jianxin is the representative of the head of the state-owned enterprise, and most public opinion positions the group first as government officials and secondly as entrepreneurs. Many audiences have a natural resistance to state-owned enterprises, and they believe that state-owned enterprises that rely on the resources of the state and banks take it for granted that they are doing well.
State-owned enterprises have actually gathered a lot of top talents, and Ren Jianxin is one of the representative figures. He is at the helm of 9 A-share listed companies, 9 overseas companies, and more than 100 subsidiaries, but does not hold shares in any of them.
Many leaders of state-owned enterprises rotate between major state-owned enterprises like civil servants, but Ren Jianxin has been in the "ChemChina" system for 34 years. The Financial Times called Ren a true entrepreneur because China's largest chemical company was founded by Ren Jianxin with a "loan of 10,000 yuan".
Ren Jianxin was born in Lanzhou, Gansu Province in 1958 and grew up during the Cultural Revolution. Like many young people of that era, he went to the countryside as a teenager, where he learned to farm and learn about the ideas of farmers.
After the college entrance examination was resumed, Ren Jianxin was admitted to Lanzhou University and entered the Ministry of Chemical Industry after graduation. In 1984, the 26-year-old Ren Jianxin found a strange set of data: China consumes 8 million tons of raw coal every year due to boiler fouling, which is equivalent to half of the coal production at that time, and the fundamental reason is that clean technology is backward.
After understanding this set of data, Ren Jianxin remembered that the institute had previously had a technology called "Lan–5" - nitric acid pickling corrosion inhibitor, an innovation that had won an award and could theoretically solve the problem of boiler scaling.
But after winning the award, the innovation was locked in the safe for 5 years. At that time, in China, the market for this cleaning technology was completely blank, and the external price of the patent of the Chemical Machinery Institute was 250 yuan.
Ren Jianxin wanted to take the technology to start a business, he used the family property as collateral to borrow 10,000 yuan from the unit, for which he signed a military order: if he failed, he would sell the family property as compensation, and voluntarily demote his position by one level and his salary by one level.
In the dilapidated air raid shelter of the Mechanical Research Institute, Ren Jianxin took 7 members of the Communist Youth League to the sea and founded the Chinese Blue Star (BuleStar). He didn't have the concept of a company, he just wanted to increase some income to the chemical machinery institute. Although he signed a military order to get money and was the founder of this business, he still regarded Bluestar as the "property" of Gansu chemical engineering.
The small team has no division of labor, and Ren Jianxin has to be responsible for everything. With technology, he could not find a market, and finally there was no way, Ren Jianxin responded to the call of the times, learned Lei Feng to do good deeds, and started from free.
At a coal mine on the outskirts of Xining, the Bluestar team began cleaning miners' teapots of scale for free. They washed some old teapots as clean as new, and an old lady saw that the boys were hard-working and gave them two cents, which became Blue Star's first income.
At that time, the spirit of Lei Feng was very popular, and the deeds of Ren Jianxin quickly spread around. Not long after, the leaders of the nearby coal mine found Ren Jianxin: there was a heavy scale boiler on the mine that was close to scrapping, you tried to clean it, it became paid, and if it failed, it was scrapped.
After receiving the instructions, the Bluestar team started work overnight to bring the "waste boiler" back to life, and after this single, Ren Jianxin got a reward of 1900 yuan.
Waste boilers are a traditional problem in the coal industry, before, the cleaning of boilers was not thorough, and the scale accumulated quickly, resulting in a short boiler life. The "Lan–5" technology solves this problem and significantly increases the service life of the boiler. It was the first "big deal", and Bluestar's "high technology" was widely spread in the coal industry. Before long, letters and phone calls for inquiries poured in. In the first year, Bluestar achieved a net profit of 240,000 yuan.
In the years since, Bluestar has expanded dramatically, and "Lan–5" technology has been introduced from the coal industry to a wide range of industries. As a typical figure in entrepreneurship in the system, Ren Jianxin was in the limelight for a while. The People's Daily detailed him and Blue Star on a front-page headline about him and Blue Star, "He, Created 361 Lines."
China did not have an industrial cleaning industry before, and all projects involving industrial cleaning were covered by foreign companies. Ren Jianxin is the founder of this industry in China, his service price is lower, the effect is excellent, coupled with his identity within the system, the advantages in all aspects are obvious.
Under the comprehensive factors, China's "Seventh Five-Year Plan" to "Ninth Five-Year Plan" period of imported petrochemical, chemical large-scale equipment before the start of industrial cleaning tasks, all became Bluestar's bag.
From small teapots to large atomic bombs, they are all-encompassing. From the Qinghai-Golmud pipeline to the Shenzhou launch facility, Bluestar has washed out an industry and foreign counterparts out of China.
【3】
In the 1990s, Bluestar had reached an asset size of hundreds of millions of yuan. At that time, at a time when the country was retreating and the people were advancing, and the state-owned enterprises were restructured, a large number of state-owned enterprises were successively restructured into joint-stock systems and private enterprises, and many of the first Chinese rich people were born.
Some people approached Ren Jianxin and persuaded him to carry out a shareholding restructuring and privatize Bluestar. Ren Jianxin thought about it and said: The founding capital is the state, the company should be 100% state-owned, Bluestar's goal is to "revitalize the industry and serve the country", state-owned or private, the impact on this goal is not large.
Therefore, in the eyes of this outsider, the great plan to make money in one step to the heavens was abandoned by him.
The ambition of not having wealth does not mean that Ren Jianxin is a "stable element". The market size of industrial cleaning is limited, and Lanzhou also has a certain degree of regional constraints. After putting aside the shareholding restructuring plan, Ren Jianxin said at a meeting: We want to move the headquarters to Beijing, not only beijing, but also to establish headquarters abroad.
In 1995, Bluestar Purge was successfully listed and the headquarters was relocated to Beijing. Ren Jianxin will solve the problems of housing, spouse work and children's schooling for the 1,800 employees accompanying him.
Ren Jianxin loves to eat Lanzhou's handmade ramen, and in order to solve the employment problem of employees' families, he founded a Lanzhou ramen fast food chain. Because he remembered his mother's last wish to "eat a bowl of beef noodles" when she was dying, Ren Jianxin combined his mother's surnames "Ma" and "Lanzhou" and named it "Malan Ramen".
In this "small sideline business", Ren Jianxin has also made great achievements. Malan Ramen has grown into one of the most successful restaurant chains in China, opening nearly a thousand stores around the world.
Although the scale cannot be compared with the main business, Ren Jianxin cares about this cause very much and often hangs "ramen noodles" on his lips. When he was elected "Economic Person of the Year" in 2007, Ren Jianxin said: "I grew up in Lanzhou, and Lanzhou beef noodles and I have a deep complex. When he said this, a photo of his mother suddenly appeared on the big screen of the scene, and ren Jianxin, who was unprepared, froze and immediately burst into tears.
Ren Jianxin was elected "Economic Person of the Year", of course, not because of Malan ramen. Standing on the central stage of Beijing, Ren Jianxin has brought Blue Star to a new height, and its core means is mergers and acquisitions.
In the past 10 years, Bluestar has acquired more than 100 state-owned enterprises, gradually transforming from Bluestar Purge to Bluestar Chemical.
The merger and acquisition of state-owned enterprises has a very significant feature: the objects of mergers and acquisitions are basically capital debts and should go bankrupt. Taking over such enterprises is actually taking over a "mess". Mergers and acquisitions are simple, but the "rejuvenation of magic hands" after mergers and acquisitions is very difficult.
Ren Jianxin did mergers and acquisitions very early. In 1990, Bluestar acquired a membrane science institute. The state allocates funds to the institute every year, expecting it to make a breakthrough in the research of reverse osmosis membranes and pure water filtration membranes, but it has not improved.
The first merger, Ren Jianxin screwed up. After Lanxing took over, the incompetent cadres were dismissed, which caused an uproar, the relevant parties intervened, some employees gathered to make trouble, and finally Lanxing had to "break up" with the other party.
Ren Jianxin said that the lesson of this failure is unforgettable. He thought about it for a long time and realized that the integration of ideas and company culture was the most important thing in the merger business.
【4】
In 1996, Ren Jianxin, who returned to the road, encountered new opportunities and challenges in the M&A business. In the same year, he approached the Jiangxi Xinghuo Factory, which has the largest 10,000-ton silicone installation in China, but the unit has failed 28 times in the 13 years since its completion.
Xinghuo has a larger asset scale than Bluestar, with a debt ratio of 200%. The enterprise has more than 10,000 family members of employees, and the factory site is located in a ravine, which is very inconvenient for transportation. In all respects, the long-overdue company is a complete mess.
But Ren Jianxin is not willing to give up this opportunity, good chemical companies can not take his turn, he can only find "serious patients" to expand the scale of BlueStar by saving lives and helping the injured.
Ren Jianxin spent a long time in the ravines of Jiangxi, and after some research, he found that although there were many stubborn diseases of Xinghuo, the fundamental problem was that he had not mastered the core technology. After finding the root cause, Ren Jianxin found most of the technical backbone of the factory and hired more than 100 internationally renowned chemical experts to diagnose the entire project.
After 5 months of international and domestic back and forth, Spark's 10,000-ton silicone production line was successfully tested, and half a year later, silicone products rolled off the production line, and the next year the company turned a loss into a profit. Today, the company has become one of the giants in China's new chemical materials field, china's largest producer of silicone, bisphenol A, specialty epoxy resins, and its silicone production ranks third in the world.
The Battle of Xinghuo made Ren Jianxin famous in the Chinese industry, and this merger and acquisition also greatly established his confidence in integrating the industry. In the time that followed, he became a veritable "fire captain." Nantong Synthetic Materials Factory, Chenguang Chemical Research Institute, Wuxi Petrochemical Plant, Beijing Chemical Machinery Factory, Lanzhou Daily Chemical Plant and other "difficult" state-owned enterprises have successively been included in the Bluestar camp.
In more than a hundred "turning crises into opportunities", Bluestar successfully entered the field of new chemical materials and developed into an industry leader, and the company's assets exceeded the 20 billion yuan mark.
Successive iron-blooded battles pushed Ren Jianxin's fame to a new height. In 2004, after the abolition of the Ministry of Chemical Industry, the SASAC established the China National Chemical Group with Bluestar Group and Haohua Group as the main body, and Ren Jianxin became the general manager of the new group.
【5】
The establishment of ChemChina not only has enterprise-level business tasks, but also undertakes "national" tasks to a certain extent, that is, to carry out international competition, master the most advanced technology, and grab business worldwide.
How Chinese companies make international breakthroughs is a clichéd topic. In many industries, it is not realistic to develop and catch up from scratch.
BASF never invests less than $10 billion a year in research and development, which is higher than the revenue of most chemical companies. In such a rule, the stronger the stronger, the latecomers can only go to the low end most of the time, fight the price, fight the channel, and say that the ugly point is the leftovers of the food industry.
For domestic enterprises, the best opportunity is to carry out international cooperation and even mergers and acquisitions, through the "purchase" of key technologies and resources, give play to domestic channels and market effects, based on which to carry out new research and development, take a "shortcut".
Ren Jianxin is the best spokesperson for this method. After the integration of ChemChina, Ren Jianxin immediately promoted the company to the international market and successively launched mergers and acquisitions. Its M&A targets are among the top few in the industry globally or in the country, covering a wide range of fields and with little duplication.
Ren Jianxin's involvement in overseas mergers and acquisitions is also the beginning of Chinese enterprises going global. At that time, the forerunner BenQ suffered a major setback, and the domestic media criticized the new thing of overseas mergers and acquisitions as almost one-sided.
In such a public opinion environment, state-owned enterprises with the goal of "political achievements" should seek stability, but Ren Jianxin chose to swim against the current. In 2006, he completed three consecutive large-scale overseas acquisitions, including Adisseo Group of France, the world's second largest producer of acids, Akenos, the largest polyethylene producer in Australia, and the silicon and sulfide business of The French Rhodia Group.
Since then, ChemChina has acquired the world's seventh-largest pesticide producer, Israel's Maxim Forrest Gump (Adama), Europe's largest producer of photovoltaic panels, and the world's fifth-largest tire producer, Italy's Pirelli.
In January 2016, Ren Jianxin finalized two investments in four days, one was the acquisition of the German rubber and plasticizer manufacturer KlausMaffei Group for 925 million euros, and the other was a strategic investment in Mercury Energy in Switzerland.
Overseas mergers and acquisitions are "tightrope walking", but Ren Jianxin has not made any mistakes. He summed up a set of strategies: buy, manage, do a good job, take in, withdraw, and sell high.
His thinking after the failure of the merger and acquisition of the Membrane Science Research Institute has benefited him so far. Ren Jianxin said: "We go to acquisition, not conquest, and we cannot acquire and manage with an occupying mentality. ”
This is actually the difference between Chinese culture and Western culture. The West believes in Julius Caesar's "I come, I see, I conquer", while China emphasizes "the benevolent man loves others".
At the time of the acquisition of Pirelli, Ren talked endlessly about his love of Italian history and culture, telling the executives of the acquiring company: "I am your boss, but you are my teacher." ”
Ren has promised to protect the jobs and brand integrity of the acquired companies, such as Pirelli's former executives still occupy half of the board. For American companies, it is common for the board of directors to immediately "roll up" after the merger.
China's "culture" has become the secret of Ren Jianxin's acquisition of European companies, and it has also hidden his vigorous style after the merger. By maintaining independent operations and integrating with the Chinese market, these M&A companies have grown rapidly, with sales and profit growth reaching new highs. Taking Australia's Kenos as an example, ChemChina can recover 40% of the original investment every year, and it will declare "return to the capital" in more than 2 years.
Pang Guanglian, deputy secretary-general of the China Petroleum and Chemical Industry Federation, called this one of the differences between Mr. Ren and other state-owned executives: He was more concerned about performance than performance.
Perhaps because of this difference, Ren Jianxin has done "not enough" in some aspects. The acquisition of Adisseo, France, the secretary prepared an impassioned speech for him, Ren Jianxin read it and said: Don't open champagne for a grand celebration, such a large investment is not a small amount for enterprises and countries, our goal is not to come to (Belgium) for the ceremony, but to recover the investment as soon as possible.
【6】
Through a series of mergers and acquisitions, Ren Jianxin has built ChemChina into a "super" central enterprise. Since its international operations began in 2006, ChemChina has acquired 9 industry-leading enterprises in France, Britain, Germany, Italy, Israel and other countries. The Chinese company is also considered to be the most likely force to disrupt the world's existing chemical landscape.
At the same time as China's chemical industry has made great strides, the global chemical industry has also ushered in the largest reshuffle period in recent decades.
In the past three years, there have been three major events in the industry, namely the merger of Dow Chemical and DuPont; Bayer's acquisition of Monsanto; and China's acquisition of Syngenta.
In December 2015, Dow Chemical and DuPont suddenly announced a merger, and the new company was named Dow DuPont Corporation, with each party holding a 50% stake.
In order to complete the largest merger and reorganization case in the history of the global chemical industry, the two companies responded to various policy restrictions.
For example, in order to meet the antitrust needs of the European Commission, DuPont simply chose to sell the pesticide business and research and development results, and Dow Chemical handed over the acid copolymer and parapolymer business.
For the merger of Dow DuPont, the Wall Street Journal believes that China's development ambitions in the global chemical industry, and the overcapacity of chemical products caused by China's economic slowdown, have brought a sharp change to the global chemical industry, prompting large chemical companies to group up for heating or integration.
One of the most critical points is that Chinese chemical companies, once focused on meeting domestic demand, have begun to seek export-driven development, which has led to falling prices of many chemical products around the world. In the past 10 years of strong demand, many small businesses in China have poured into the market and gained some professional skills. Now, large enterprises such as ChemChina hope to upgrade their professional skills to the world's leading level.
Not long after the report came out, ChemChina made a more world-famous move: on February 3, 2016, ChemChina and Switzerland Syngenta issued a joint statement to complete the acquisition of the latter for 43 billion US dollars (about 288.1 billion yuan).
This is China's third huge merger of more than $10 billion, and $43 billion also broke the record of Chinalco's $14 billion acquisition of Rio Tinto and CNOOC's $15.1 billion acquisition of Nixon.
【7】
During the oil price crash, major agricultural companies in the United States and Europe were in a slump, and in early 2015, Dow DuPont's research and development department laid off a lot of people, and Monsanto also reorganized in the middle of the year.
Syngenta also went through a difficult situation. From 2011 to 2013, the company's profit growth rate continued to decline, and in 2014, it laid off 1,000 jobs worldwide. Shareholders were very dissatisfied with the company's development situation, and the old rival took advantage of the opportunity, BASF and Monsanto have successively made huge sums of money to acquire Syngenta.
After Syngenta rejected these takeover offers, it triggered internal management turmoil, and president Mike Mark resigned, which led to the follow-up story of ChemChina's halfway kill and successful bottoming.
Syngenta is not actually "worried about marriage". The company has 107 production and supply bases and 119 R&D bases in 90 countries and regions around the world, employing 28,000 people and more than 5,000 R&D personnel alone. Syngenta invests nearly 10 billion yuan in research and development every year, and has more than 13,000 patents worldwide.
Due to its strong R&D capabilities, Syngenta's agrochemical business is the first in the world, and its seed business is second only to Monsanto and DuPont. In the past few years, the company has invested heavily in smart agriculture and ecological agriculture, and is committed to providing agricultural practitioners with holistic plant protection solutions that other agrochemical seed giants do not have.
Both BASF and Monsanto offered high acquisitions, with the latter offering up to $47 billion, higher than ChemChina, but both were rejected.
Interestingly, Monsanto, the "acquirer" of the incident, became the acquiree shortly after. On September 14, 2016, Bayer announced an all-cash acquisition of Monsanto for $66 billion. Upon completion of the acquisition, Bayer officially became the world's largest agrochemical product and seed company.
Three acquisitions/restructurings have redefined the landscape of the global chemical industry, and ChemChina is also considered to have seized a historic and important opportunity.
The importance of this acquisition to ChemChina and even To China's agriculture is clear. Previously, the pesticides developed by giants such as Syngenta, Bayer and BASF accounted for 80% of the global market. China's demand for pesticides is huge, but there is no basic original drug research and development capabilities, and can only buy the original drug and then configure it. There are thousands of pesticide manufacturers in China, but 99% of them are processing plants.
Such a model is one is low profits, and the other is subject to people. Syngenta's marketing and R&D team have effectively solved the urgent needs of the Chinese industry.
On the other hand, ChemChina has been trying to find opportunities to enter the seed industry for many years. The seed industry has the characteristics of large investment, long cycle and high risk, and the entry threshold is very high. According to statistics, the average research and development of a new species currently takes 8-10 years and costs an average of $130 million. With the acquisition of Syngenta, it can have leading seed technology and rich germplasm resources to make up for the gap in China's chemical seed business.
【8】
In order to acquire Syngenta, ChemChina has experienced a battle between giants and internationals.
After being "interrogated" by 11 national investment review agencies such as CFIUS (Committee on Foreign Investment in the United States) and reviewed by anti-monopoly agencies in 20 countries and regions such as the United States and the European Union, it took nearly 2 years for the largest merger and acquisition in China's history to be completed.
During this period, Ren Jianxin encountered huge public opinion pressure, and the news of the merger of the "two modernizations" also came out during this period.
After the completion of the acquisition, the "3+1" main business pattern of ChemChina's "material science, life science, advanced manufacturing plus basic chemicals" has become clearer, but Ren Jianxin has also reached the moment of farewell.
On June 30, ChemChina and Sinochem Announced the Merger, and Ning Gaoning took office and Ren Jianxin retired.
At the time of the merger of the "two modernizations", China's chemical industry also ushered in a more fierce battle: under the situation of the global chemical industry standing still, many multinational giants regard China as the main battlefield for turning around.
China still relies on importing more complex chemical solutions and polymers, and keeping this money in the country is the mission of the domestic chemical industry, which has a long way to go.
The mission of the industry has come to the shoulders of another state-owned enterprise strongman who is also known for his good at mergers and acquisitions, Ning Gaoning. During his 11 years as chairman of COFCO, Ning Gaoning led 50 mergers and acquisitions, including Mengniu Dairy, Fulinmen Edible Oil, Great Wall Wine, Wugu Dojo and other brands.
Today, he will be on the more international front, challenging BASF, Bayer and DowDuPont directly.
——END——
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