Tough childhood gives Zhu resolve to succeed

PUBLISHED : Monday, 04 February, 2008, 12:00am
UPDATED : Monday, 04 February, 2008, 12:00am

Huiyuan boss chooses entrepreneurship to serve society

Zhu Xinli could have continued leading a very comfortable and easy life if he had not quit his government job 16 years ago.

But the son of a poor farming family from Shandong province decided he wanted more than a guaranteed 'iron rice bowl' for life and needed to prove his ability as an entrepreneur.

Starting with a near-bankrupt canned fruit plant, the 56-year-old has become chairman of the mainland's biggest fruit juice maker, China Huiyuan Juice Group, and is seeking to further expand his national brand to mainland consumers.

The company, which raised HK$2.76 billion in an initial public offering in Hong Kong last February, is benefiting as consumers in the world's most populous nation increasingly switch to fruit juice from carbonated drinks.

Mr Zhu is married with one son and one daughter.

Before setting up your company in 1992, you were a government official. What prompted you to drop the 'iron rice bowl' and become a businessman?

I was a deputy director of Shandong's Yiyuan county in charge of foreign investment and trade policy and had a comfortable life. But I think the ultimate goal for a person is to make a contribution and get recognition from society.

That can be achieved in two ways - being a responsible politician or a businessman. I am not good at spending a lot of time on interpersonal relationships, so being an entrepreneur is more suitable for me.

I was already 40 years old at the time and if I didn't take action, I might have lost the opportunity of a lifetime. So despite strong opposition from my family, I became the first government official who dropped the iron-rice bowl to become an entrepreneur in Yiyuan county.

To be a government official is the dream of many Chinese because it means a stable life. But I don't like this lifestyle - you don't have enough to do everyday. I am not scared of poverty or hardship because I have experienced them during my childhood, but this helped strengthen my will.

How poor was your family when you were young?

I was born in a small village in the Yimeng Mountain area in Shandong, a well-known poor backwater in China. My father was a farmer, the only breadwinner in a family of eight. I am the second to the eldest of six brothers. We were so poor that to have normal meals was a big problem for us.

Was the decision to found your own business a difficult one?

My life would be quite different if I didn't make that decision. But at the time, I didn't think too much about success or failure. I just wanted to challenge myself. To be honest, I didn't expect to be so successful.

Now that Huiyuan Juice has become the biggest pure juice maker on the mainland, what are your plans?

We have nearly half of the mainland pure juice market, so the priority is not market share any more but sales. We aim to increase sales volume and turnover sharply this year.

The biggest event this year is shaping up to be the Beijing Olympic Games. What will Huiyuan do to take advantage of this prospect?

The Beijing Olympics is a good opportunity because it can further Chinese people's appetite for fruit juice. A key reason for Huiyuan's success has been the country's reform and opening up.

Reform has made the Chinese rich and opening up has pushed them to change many habits. The Games will definitely be another trigger to make the Chinese thirst for fruit juice, which means a healthy lifestyle. I believe that after [this year], the fruit juice market on the mainland will be bigger.

Will you spend more on advertising this year?

We just spent around 100 million yuan bidding for commercials to be aired on China Central Television (CCTV) during the Lunar New Year holiday, August and other traditional Chinese festivals. But our advertising expenses will be kept between 7 per cent and 8 per cent of total sales.

How have you promoted fruit juice consumption on the mainland?

We were initially engaged in the export business and sold juice concentrate to Europe and the United States. When I visited countries there I was surprised to find that fruit juice was appealing to so many consumers. Then I asked myself, we have a population of 1.3 billion, would our consumers love fruit juice, too?

In 1994, I moved Huiyuan's headquarters from Shandong to Beijing, a step signalling our entry into the domestic market. It was a big challenge because it's easy to make a product, or export a product, but it's difficult to build a brand.

Talking about brand-building, I heard you complained about Air China neglecting the Huiyuan brand?

It happened three years ago on my way to France in the first-class section of Air China. I asked for our juice, but the hostess said Huiyuan fruit juice was supplied only in the economy-class cabin.

This made me 'lose face' and after landing, I called the then Air China chairman Li Jiaxiang about it. Now I am satisfied because Huiyuan fruit juice is supplied in all classes of domestic flights and some international flights.

For your latest product - kiwi juice - you hired Wang Baoqiang, the hero of popular mainland TV drama Soldiers' Sortie. Why him? (Soldiers' Sortie revolves around the lives of a group of People's Liberation Army soldiers and portrays their struggles, faith and devotions.)

Kiwi and Soldiers' Sortie hero Xu Sanduo, played by Wang Baoqiang, bear some parallels.

In the TV series, Xu is a simple and honest young soldier who struggles to become the king of soldiers after experiencing various challenges. The kiwi, which is called the king of fruits, is similar. It has plenty of vitamin C despite its unappealing looks.

Do you think you have a resemblance to Xu Sanduo in terms of character?

Xu Sanduo is never a hypocrite. He is honest, persistent and works hard to succeed. So am I. I am devoted to my enterprise.

What has been the market feedback for kiwi juice?

It is a new product and launched only two months ago, but I am confident it will be a hit on the mainland this year.

Huiyuan has just opened its first fruit juice-themed supermarket in Beijing's Chaoyang district. Does this mark Huiyuan's first foray into retailing?

It is hard to say. The opening of the supermarket is a bit of a coincidence as a friend of mine, who happened to be the party chief of the village in Chaoyang, told me there was not enough variety of fruit juices being sold in the Beijing market.

To help boost local employment, the friend proposed opening a fruit juice-themed supermarket selling as many types of juice as possible.

We will have to wait and see how it goes over the next two to three months. If the sales performance is good, we will consider opening similar supermarkets.

With rising raw material costs, many drinks makers are raising their prices. Do you think this will trigger consolidation in the industry?

Since the second half of last year, food and beverage companies have been increasing their prices. Huiyuan will try to ease the pressure through cost controls, or raw material diversification.

But my view on the price rises of agricultural products is positive and the government should not intervene in the market too much. Subsidies won't resolve all the problems.

After all, price increases are a market approach and farmers' earnings have been suppressed for such a long time. If it can help them to increase their revenue and lift living standards, it is a good thing.

France's Groupe Danone, which encountered legal difficulties with its mainland joint-venture partner last year, owns a 24 per cent stake in Huiyuan. How is your relationship with the company?

Danone is like Huiyuan's wife, so the husband can't say bad things about the wife, right? Anyway, both of us got what we wanted - Danone got Huiyuan's stake and Huiyuan was successfully listed in Hong Kong. Danone is Huiyuan's family member, so we should cherish family members.

Does expansion create problems for you?

Huiyuan expanded rapidly in 2002 when we still co-operated with D'Long [a bankrupt conglomerate]. I called for a slowdown because I detected cash flow pressure. Last year, Huiyuan built 10 plants, the fastest expansion in our company's history, but this time it is different. The market is growing fast and we have enough funds, so if we don't expand rapidly, we will lose out, which will be irresponsible to shareholders.

Do you think 2008 will be another fast-growing year for Huiyuan?

Our focus [this year] will be marketing and sales.

Have you got any hobbies?

I love singing and playing [musical] instruments. I like sports too but the biggest problem for me is that I don't have enough time.

What will you do during the opening ceremony of the Olympic Games?

If possible, I would like to find a quiet place and watch it on TV.