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Elaine Chan

Ex-popsicle hawker pursues dream with a sprawling factory and a stock listing

At the Canton Fair in October last year, air-conditioner maker Guangdong Chigo  took an eight-booth  prime spot alongside China's biggest brand names.

The set-up was a far cry from four years earlier,  when the company did not even qualify as an exhibitor in the country's largest trade fair and had to make do with an ad hoc street-side stand near the  exhibition hall, in the heart of Guangzhou.

Today, Chigo, which means 'high aspiration' in Chinese,  is one of the mainland's leading makers of air-conditioners, according to president and chairman Li Xinghao, a  popsicle-hawker-turned-entrepreneur from Guangdong.

'Our dream is to become the world's biggest,' Mr Li said in an interview in his Foshan office. 'We are building the biggest air-conditioning manufacturing base in the world.'

He was referring to a sprawling three million square metre site  in the dusty district of Nanhai in Foshan that will  house production lines, spare parts factories and offices.

Chigo is one of China's  burgeoning private enterprises - a growing economic force in the country's freewheeling south - but ironically, it still  has the flavour of a state-owned enterprise. For starters, the company provides  more than 2,000 flats  as staff quarters at its huge production base.

It also publishes an in-house newspaper - Chigo People - that reports on the company's activities and to which   Mr Li contributes the front-page editorials.

Mr Li professes he is a supporter of corporate 'transparency', even though he would not disclose the company's earnings.

He said Chigo's  total assets had surged by 1,000 times in the past decade while it was  aiming  for a turnover of four billion yuan  this year - a 40 per cent increase over  last year.

This  meant profit growth of between 30 per cent  and 50 per cent in a 'rapidly growing industry', said Mr Li.

Chigo's ambition  is also reflected in  a plan to list in Hong Kong before the end of the year. While Mr Li is tight-lipped about the  initial public offering, sources say raising more than US$200 million should not be a problem.

'To be an entrepreneur, you need loans, but to become  big, one has to go public,' Mr Li said.

'I'm not too particular about how much  can be raised but [I want] the company to come under examination [by the public].'

While Mr Li continues to spin a rosy outlook for Chigo, the company is up against   stiff competition from other mainland home-appliance makers  diversifying  into  air-conditioning. Microwave oven maker Galanz of Zhuhai has begun producing air-conditioners   on its two million sqmetre site in Zhongshan.

Changhong Air-conditioner is also vying for a slice of the market.

Then there are the  traditional, better-known brands, such as Chunlan, Kelon, Haier and Midea.

China produced  64.46 million air-conditioners in the first 11 months  last year, up 44.4 per cent year on year, the National Bureau of Statistics said.

Chigo says it aims to raise its output to 3.5 million units  this year  from 2.8 million  last year.



Air-conditioner maker Chigo dreams of becoming world's biggest