INTERNATIONAL HERALD TRIBUTE: Business
China
by David Barboza15 Jan 2007
HONG KONG: Just five years ago, Zhang Yin and her husband were driving around the
She and her husband, who was trained as a dentist, had formed a company in the 1990s to collect paper for recycling and ship it to
"I remember what a man in the business told me back then," Zhang Yin said. "He said, 'Waste paper is like a forest. Paper recycles itself, generation after generation.'"
Zhang took that memory all the way to the bank. As a result of her entrepreneurship, she is now richer than virtually any other woman anywhere in the world, including Oprah Winfrey, Martha Stewart, and the chief executive of eBay, Meg Whitman. Her personal wealth is estimated at $1.5 billion or more.
Her companies take heaps of waste paper from the United States and Europe, ship it to China and recycle it into corrugated cardboard, which is then used for boxes that are packed with toys, electronics and furniture that are stamped "Made in China" and then often shipped right back across the ocean to Western consumers.
After the boxes are thrown away, the cycle starts all over again.
Late last year, Forbes magazine named Zhang the wealthiest woman in
Most of the world's richest women inherited their wealth: from the Walton sisters of Wal-Mart fame to the daughters of the men who created Mars candy bars, L'Oréal cosmetics and BMW.
But not Zhang. She started out from a modest background, the daughter of a military officer. Now she dominates the world's paper trade through her giant companies, one centered in Dongguan, just outside Hong Kong, and the other based in
"She's a visionary," said Herman Woo, an analyst at BNP Paribas, which helped her large paper company list shares in
That company, Nine Dragons Paper, is now the biggest paper maker in
Since then, shares of Nine Dragons have quadrupled, giving the company a market value of more than $5 billion. The Zhang family controls 72 percent of the company, which makes it one of the richest families in
Zhang's smaller venture, America Chung Nam, which is based in Los Angeles, is one of the world's biggest paper trading companies, with ties to recycling yards in New York, Chicago and California.
No other
Now, with the paper industry shifting to China, where labor and land are cheaper, Zhang and Nine Dragons are vowing to take on the world's global paper giants, like International Paper, Weyerhauser and Smurfit Stone.
"My goal is to make Nine Dragons, in three to five years, the leader in containerboards," Zhang said emphatically during a short interview in her
Zhang rarely grants interviews, and when she does, they are brief and controlled by an army of handlers.
Zhang does not go into detail about how she made her fortune. In a society known for close ties and hidden deals between government officials and business leaders, she says simply, "I'm an honest businesswoman."
Zhang was the oldest of eight children born into a military family from northern
When the Cultural Revolution came to a close in 1976, her father was released from prison and "rehabilitated." She went to work as an accountant.
After economic change got under way in
In 1985, she ventured to Hong Kong, which was then still a British colony. Ng Weiting, who was her partner in
"When her employees asked for a pay raise, she would grant it if it was reasonable," he recalled. "But when her employees made mistakes, she would criticize them severely. She made it clear when to reward and when to punish."
Analysts say Zhang's ebullient personality made her a great saleswoman and a savvy deal maker.
There were occasional threats from competitors, but being a woman was not a problem, Zhang said.
"Actually, I didn't find it difficult," she said. "I found men respected me."
After Hong Kong's paper market proved too small for her ambitions, she moved to Los Angeles in 1990 and married for the second time, to Liu Ming Chung, who was born in
Together, they formed
A decade later, the company has 11 giant paper making machines, 5,300 employees, $1 billion in annual revenue and a huge new facility under construction in the country's other booming export hub, the Yangtze River Delta area near Shanghai. Reported profit last year rose 349 percent to $175 million.
Nine Dragons is now one of the fastest growing paper companies, and yet it says it cannot keep up with demand for container board, the material used to make boxes, because of the booming growth in the Chinese economy and exports.
Foreign paper companies have been slow to build a sizable manufacturing base in
"It's very difficult for
"Right now," Woo added, "the largest globally is Smurfit Stone. Weyerhauser is No. 2. By 2008, Nine Dragons could be No. 1."
Analysts have been nearly unanimous in their praise of Zhang, though she came under some criticism for appointing her 25-year-old son as a nonexecutive member of the Nine Dragons board of directors.
But Zhang vigorously defends the appointment, saying her son is qualified and Nine Dragons is, after all, a family company. She has a second son in high school. And her younger brother, Zhang Chang Fei, is the company's deputy chief executive.
Zhang jumped to No. 5 this year in the Forbes ranking of the wealthiest people in
She has not lost her ambition, though. Sometimes called the Queen of Trash, she doesn't disown the title. But, she said, "Some day, I'd like to be known as the queen of containerboards."
Client 2: Carlos Slim
Carlos Slim is the richest man you've never heard of
An interview with Mexico
by Chris Hawley
May. 30, 2007 12:00 AM
He would buy the adhesive-backed paper cards at a candy stand in downtown
By age 12, he had moved on to trading stocks and bonds. Before turning 30, he owned a soft-drink company and a stock brokerage. Now, at 67, Slim is the world's second-richest man and is closing quickly on Bill Gates, according to Forbes magazine's most recent rankings. Slim's business empire stretches from Mexico to the United States - it includes major stakes in companies such as CompUSA and Saks Fifth Avenue - yet most Americans have never heard of him.
Slim accumulated his $53.1 billion fortune by collecting companies in much the same way he did baseball cards. He searches for businesses that are undervalued, infuses them with cash and uses the size of his holdings to overwhelm the competition. He now owns stakes in more than 220 businesses but says he has never forgotten the lessons of his youth.
"Buying well is a discipline," he told The Arizona Republic in a rare interview, noting that trading cards was "the first type of business negotiation you do as a child."
"There were always doubles, so you traded them with the other boys, the difficult ones to get and the easy ones. Some boys had a few and some had a lot."
These days, Slim has a lot. His wealth has caused some resentment in a country where 40 percent live in poverty and thousands emigrate each year to seek opportunity in the
From the minute many Mexicans are born - perhaps in one of Slim's Star Médica Hospitals - they begin putting money in his pocket. They use electricity carried by Condumex brand cables, drive on roads paved by the CILSA construction company firm and burn fuels pumped from Swecomex drilling platforms. They communicate through Telmex phone lines, smoke Slim's tobacco, which is sold under the Marlboro brand, and shop at Sears Roebuck of
"It's hard to live a day without buying one of his products," Sandra Morales, 31, said as she ate lunch in the Plaza Insurgentes shopping center - a property owned by Slim - in Mexico City. "He's so rich and powerful and in a country where there are so many poor."
Slim says that he is held to a double standard because he is Mexican and that many
A love for numbers
A widower, Slim spends most of his time in a relatively modest, second-story office above a branch of his Inbursa Bank. He keeps a buzzer on his desk to summon assistants, who cater to his numerous and varied whims.
Slim's many obsessions still include baseball. His favorite team is the New York Yankees. Sitting at his desk, he pulls out a notebook with a treatise he is writing, purely for pleasure, on Barry Bonds' statistics.
"I like numbers," he said. "Words speak to some people; to others of us it's numbers."
Slim says he inherited his drive from his father. Julian Slim Haddad was a Maronite Christian whose family left
It was the elder Slim who forced Carlos and his siblings to keep ledgers of their allowances and expenses.
"Carlos: remember that all assignments given to you must be done on time, quickly, in much clearer letters and without erasures. If not, I'm going to deduct from your allowance," says a note in one of the ledgers, which Slim still keeps on his office bookshelf.
Slim also adopted his father's penchant for profiting during crisis. During the 1980s, when
Soon after, in 1990, Slim made one of his most controversial purchases.
The Mexican government was auctioning off several state-owned enterprises, including Teléfonos de México, the state-run telephone company, also known as Telmex. Slim and his partners,
Since then, the market value of Telmex stock has rocketed from $7.39 billion to $41.2 billion. The company owns about 90 percent of
Members of the opposition Democratic Revolutionary Party alleged that Slim underpaid for Telmex and demanded that then-President Carlos
Slim says he won Telmex because his offer was better - about 8 cents more per share than the next bidder, according to the government.
"A lie repeated many times begins to be believed," Slim said. "We won because we paid more."
Integrating an empire
After acquiring Telmex, Slim's net worth increased dramatically. He integrated his companies so they did as much business as possible with each other. At the Carso Group, the holding company for many of Slim's investments, Rule No. 6 on the list of 10 corporate principles is: "Money that leaves the company evaporates."
The domination of large Mexican conglomerates such as Slim's chokes off growth of smaller companies, says Celso Garrido, an economist at
The resulting shortage of good jobs drives many Mexicans to seek better lives in the
Even Slim compares his business model with that of another company often accused of monopolistic practices: Wal-Mart.
"If Wal-Mart invests a billion dollars and others invest $100 million, Wal-Mart is going to grow more. So if we invest $2 billion a year over many years and others invest $500 (million) or $100 million, it's illogical for them to have the same size as us," Slim said.
Along with Telmex, Slim controls América Móvil, the world's fifth-largest cellphone company with 124 million customers in 15 countries. In the
Slim's holdings, in business and beyond, are now so vast that he sometimes loses track of what he owns. Yet, the small boy with the ledger notebook still surfaces from time to time. While speaking in his office, Slim impulsively decides he needs to know the value of his necktie, which was lying on a chair nearby.
He stabs a button on his intercom, reaching his assistant, Silvia Esparragoza.
"Silvia, how much do these ties cost there in Sanborn's?"
"Those ties cost, on average, 481 pesos," she replied.
"About 43 dollars," Slim said, figuring the exchange rate in his head. "Is that with tax?"
"Yes, with tax," she said.
"On sale or not on sale?"
There was silence from the intercom. "Um, I don't remember," Esparragoza said.
Looking disappointed, Slim flips the intercom off. "The tie is from Sanborn's, but the shoes I buy from Saks, which isn't my store," he said.
Then he corrects himself.
"Well, we're partners, but it's not my store," he said, smiling.
In fact, the Slim family is Saks' biggest shareholder, with 17.4 percent of the
Riding Mexico
Slim's fortune has surged in recent months - by at least $23 billion since February 2006, Forbes says - primarily because of his holdings in Mexico's booming stock market. The market is up 58 percent in the past year as large corporations have posted robust earnings.
As Slim's wealth has grown, so has the criticism.
Business groups regularly complain about Telmex's business phone rates, which are more than twice as high as in the
Slim came under fire again last June, when Bill Gates announced he would retire from Microsoft in 2008 to devote his time to his Bill and Melinda Gates Foundation. Days later, Warren Buffett - whom Slim recently passed in the Forbes wealth rankings - announced he would donate most of his $52.4 billion fortune to Gates' foundation.
"The fact that Bill Gates and Warren Buffett are channeling the majority of their fortunes to philanthropy exposes Slim's passivity," wrote Jorge Zepeda Patterson, a respected Mexican columnist.
"Instead, we Mexicans continue donating 'philanthropically' to Telmex's finances, thanks to its extraordinary rates and profit margins."
In March, Slim pledged to inject $6 billion into his three charitable foundations - the Carso Foundation, the Telmex Foundation and the Condumex Foundation for History Studies - over the next four years, for a total endowment of $10 billion. He also plans a new building for his
But he says his most important pursuit is a new, for-profit venture called the Latin American Development and Employment Generator, or IDEAL for its acronym in Spanish. The company will build infrastructure projects - dams, hospitals, universities and toll roads - and, in many cases, operate them at a profit. Slim says such projects would create more jobs than charity projects undertaken by Gates and Buffett.
Slim says overall, he's optimistic about
What
Meanwhile, Slim has begun passing day-to-day control of his companies to others, including his three adult sons. He rolls his eyes when asked how he would like to be remembered.
"I think they must teach that question in school, because they always ask me that," he said.
Slim's own companies employ 218,000 people. Ensuring that those companies are strong may be his most important contribution to Mexico, he says.
"When I die, I'm taking nothing with me," Slim said. He taps a balance sheet that shows the increasing value of his companies. "Everything I'm leaving is right here."
Reach the reporter at chris.hawley@arizonarepublic.com.
India not thinking big enough: Ratan Tata
Friday 25 May 2007
05:43 IST
Speaking at the concluding session of the CII National Conference and Annual Session, Tata was categoric. “India is not thinking big enough, not taking bold steps,” he said when asked about the possibility of touching the 10% mark.
And, as if this was not indication enough of where our policy makers are lagging, Tata said that compared to the targets
“Take the example of tourism. Why don’t we, as a country, set our sights on a target of 10 million tourists by 2010? We think 4-5 million is good enough but if we push ahead we can certainly achieve the 10 million mark…We shouldn’t worry too much about infrastructure, airports etc, these will come up as business increases. Similarly, we need to be bold in other areas for growth to accelerate,” Tata added.
Tata’s comments came in the wake of Planning Commission deputy chairman Montek Singh Ahluwalia sounding a positive note, with his assertion that India was “very close” to achieving the 10% GDP growth number.
But Tata was not merely talking big. Take the example of the ambitious Rs 1-lakh car project, which attracted many nay-sayers when the idea was first mooted. But a bold approach by the chairman of the largest Indian business house pushed Tata’s men into creating something that was almost unimaginable some years back.
And his dream appears pretty close to realisation, with the launch of this car slated for early next year.
Not only did Tata exhort the industry as well as the government to take a bold approach to decision making, he also surprised many by revealing that the various companies under the Tata Group spent a whopping Rs 600 crore last year on Corporate Social Responsibility (CSR) initiatives, up from Rs 450 crore spent the year before. And this was done even when there has been no specific charter, no mandate within the group for engaging in CSR activities.
Asserting that he himself has made “very little personal gain from the growth and prosperity of the Tata Group,” Ratan Tata said. “It is important for some of us (the industry leaders) to become role models, be moderate in the way we live and conduct ourselves”. This would help dispel the notion that big business is selfish, bad, he added for good measure.
Tata’s comments assume significance in wake of Prime Minister Manmohan Singh warning companies against forming cartels in the conference.
Singh stressed that price stability is necessary to spread the benefits of economic growth.
“The operation of cartels by groups of companies to keep prices high must end,” he said.
Clients selected: Zhang Yin & Carlos Slim
Similarities:
- both are successful businessman/woman
- dare to risk: invest more to gain control (power) in their business, and willing to collect things or businesses that are undervalued to make their business strong
- rich: this shows their status & how powerful they are in the business world
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