Born in 1951, Zhou Furen started out as the production captain of his hometown, Xiyang Village in Liaoning province. He was an early success: local income doubled within a year as new prosperity came from Zhou’s decision to focus less on farming, and more on exploiting the local abundance of magnesite ore.
More quantity, more quality
In 1988, Zhou set up a company that would evolve into the firm that he is most closely associated with today, the Xiyang Group. And in its first year, it exported $7.2 million worth of magnesia (a key ingredient in cement). Zhou then decided that high-quality magnesia was the way forward. The first batch of 98%-pure magnesia sold poorly, and the remaining stock was put aside in a warehouse. But Zhou still believed in the product – so much so that by 1994, the Xiyang Group’s production capacity of high-quality magnesia was half of the world total. Around the same time, foreign smelters started using high-quality magnesia. Zhou’s ability to provide supply meant that he was in the perfect position to exploit this new trend. In 1995, the group’s sales hit Rmb500 million ($75 million) for the first time.
In 1997, the Xiyang Group was sold into Zhou’s personal ownership. With the magnesia market cornered, the next step was to find new industries in which to invest. The Xiyang Group’s rural origins made fertiliser an obvious choice. In 2000, Zhou established China’s largest compound fertiliser production base; and in 2003, the subsidiary made Rmb300 million worth of profit.
Breaking into the steel industry became another of Zhou’s interests. In 2002, he started his own steel company in Xiyang and began buying up local mills. But in 2005, the government started restricting the creation of new large steel plants, scuppering his plans to become a domestic powerhouse. Zhou changed tack and looked overseas, including iron ore businesses now under development in Russia and North Korea. In 2008, he accompanied Wen Jiabao on a visit to Russia, and he has also met personally with Kim Jong-il.
Despite being Liaoning province’s richest man, Zhou maintains close ties with his birthplace – he still has the role of Xiyang Village’s Party secretary. Under Zhou’s leadership Xiyang has transformed itself into one of China’s wealthiest villages. Some of the locals will be hoping to share in his success: an IPO is planned for 2012, set to raise Rmb10 billion.
He’s worth Rmb16 billion, ranking 48th on the 2010 Hurun Rich List.
© ChinTell Ltd. All rights reserved.
Sponsored by HSBC.
The Week in China website and the weekly magazine publications are owned and maintained by ChinTell Limited, Hong Kong. Neither HSBC nor any member of the HSBC group of companies ("HSBC") endorses the contents and/or is involved in selecting, creating or editing the contents of the Week in China website or the Week in China magazine. The views expressed in these publications are solely the views of ChinTell Limited and do not necessarily reflect the views or investment ideas of HSBC. No responsibility will therefore be assumed by HSBC for the contents of these publications or for the errors or omissions therein.