The former chairman of the central enterprise was dismissed, and he spent 300 billion yuan to acquire foreign companies, and also created an 8-year loss record

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2024-05-13 07:58Published in Guangdong

Is it a hero, or a moth? China's "M&A king" Ren Jianxin suddenly fell off.

The latest news, Ren Jianxin, the former chairman of China National Chemical Corporation, who has been retired for 6 years, is suspected of serious violations of discipline and law and is under review and investigation. Before his fall, Ren Jianxin was a legendary figure, a legendary entrepreneur, and was praised by the media.

"The Chinese entrepreneur who is most feared by the United States gives 100% of the company's equity to the country, not to make money all his life, but to "serve the country with prosperity", a real national entrepreneur. ”

It sounds like Ren Zhengfei is on the same level, and he has made great contributions to the nation and the country. What are Ren Jianxin's achievements? What contributions have you made?

First of all, we must clarify the fact that many articles say that Ren Jianxin gave the company to the state, which is a complete exaggeration. Ren Jianxin entered the Lanzhou Chemical Machinery Research Institute of the Ministry of Chemical Industry in 1975, and in 1984, he borrowed 10,000 yuan from the unit to go to the sea to establish Bluestar Cleaning Company.

This company belongs to Lanzhou Chemical Machinery Research Institute, not Ren Jianxin. Although it has become bigger later, China Bluestar is still a state-owned enterprise, and Ren Jianxin is just the head.

However, China Bluestar is indeed made big by Ren Jianxin and has made a lot of achievements. Bluestar started with industrial cleaning and became bigger all the way, not only breaking the monopoly of German and Japanese companies, but also occupying 90% of the domestic industrial cleaning market, firmly grasping this industry in our own hands.

After Blue Star made a name for himself, Ren Jianxin became the "firefighting captain", and the Ministry of Chemical Industry handed over many troubled enterprises to him. For example, the Xinghuo Chemical Plant in Yongxiu County, Jiangxi Province, has a debt of 200% and a loss of hundreds of millions of yuan, and has long been in the ICU.

But this plant is important because it produces silicones. This product is an indispensable special material for aerospace and military cutting-edge technology, and once it is monopolized by foreign countries, we will inevitably be "stuck".

Ren Jianxin lived up to expectations and saved the factory, and the products were mass-produced, breaking the technological monopoly of the West.

Later, through a series of expansions, China Bluestar developed into a full-industry group in the chemical field. In 2002, it became one of the 186 large and medium-sized state-owned enterprises managed by the State-owned Assets Supervision and Administration Commission.

In 2004, China Bluestar merged with China Haohua Group, a subsidiary of the Ministry of Chemical Industry, and Ren Jianxin served first as general manager and later as chairman, at the helm of the state-owned enterprise for 14 years.

After standing on a new level, Ren Jianxin was out of control and carried out crazy mergers and acquisitions around the world. In 2006 alone, it acquired three of the world's top companies in one go, creating the highest frequency of overseas acquisitions by Chinese companies.

The largest acquisition occurred in 2017, when ChemChina spent about US$43 billion, or 310 billion yuan, to acquire Syngenta, the world's third-largest Swiss agrochemical and seed giant, setting a record for the largest overseas acquisition by a Chinese company.

In terms of credit, Ren Jianxin has built ChemChina into one of the world's largest and most leading chemical manufacturing enterprises, breaking the Western technological monopoly in seeds, pesticides, fertilizers and other fields, and ensuring national food security.

However, most of them are made by money, rather than by their own technology research and development. Although through mergers and acquisitions, ChemChina has continued to expand in scale, and its revenue has become higher and higher, reaching 144 in the ranking of the world's top 500.

But this price is very high, from 2012 to 2020, except for 2016, the other 8 years are all losses. And it is heavily indebted, and when Ren Jianxin retired in 2018, ChemChina's debt reached 605.9 billion yuan, with a debt ratio of 75%.

The money for the acquisition of so many companies is borrowed, and the acquisition of Syngenta alone has cost more than $40 billion, with only $5 billion in principal, and the rest is all borrowed from major financial institutions, and the amount of principal and interest that needs to be repaid so far is very large. Syngenta's failure to hit the Shanghai Stock Exchange's science and technology innovation board in March this year undoubtedly cast a shadow over its debt problems.

At present, Ren Jianxin is only officially announced to be investigated, and it is not known what illegal acts he is suspected of. However, the previous crazy overseas mergers and acquisitions are indeed a bit puzzling. For example, the acquisition of Syngenta for more than $40 billion was less than $20 billion at a fair value of the company's net assets. The purchase price has more than doubled, what is this operation? There is also a 3 billion yuan illegal guarantee for Lanzhou businessmen.

As China Chemical Corporation gets bigger and bigger, Ren Jianxin may have long lost the original intention of "not making money, serving the country wholeheartedly".

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