BRIDGING THE GLOBAL IMAGING CONSUMABLES INDUSTRY

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Conversation with Hubei Dinglong’s CEO, Mr. Shuan Quan Zhu

China’s unprecedented growth China’s fast-growing economy has produced many outstanding entreprises over the past 20 years, and one of these success stories is Hubei Dinglong Chemcial Co.Ltd. 15 years ago, the owner of Hubei Dinglong, Mr.Zhu was working as an office clerk in a government agency. But under the booming economy, Mr. Zhu couldn’t sit still at his secure but uneventful bureaucratic job. So he threw away his security blanket and, together with his younger brother, entered the business world (see “下海” ), taking the risk of starting a business of their own—Hubei Dinglong in 2000. The social and political environment was very different at that time when a centrally-controlled economy dominated the country in its daily economic activities. Bureaucracy and red tape were the norm to get business done. Theirs was a small start-up, remotely situated in the suburb of Wuhan. According to Mr. Zhu, the sites of the current high-rise factory buildings used to be farm land. Like many places in China, the pace of the modernization of Wuhan has been so fast that the entire landscape of the city has transformed. Many of the local people, entrepreneurs like Mr. Zhu, have transformed too, from office clerks to accomplished businessmen. To many people, Hubei Dinglong is a familiar name, but few know the person who has been the driving force for this enterprise and how this once little-known chemical company has within a few years become a top player in the printing industry. I recently had the opportunity to visit with Mr. Zhu shared with me details about his fascinating journey as a Chinese entrepreneur.

After many years of exploration and hard work, Hubei Dinglong successfully went public in 2012 and currently has a market value of 62 billion RMB. Dinglong is one of the many success stories in China that propelled the country’s fast GDP growth and helped make the country one of the biggest powerhouses in the global economy. Willing to take risks Many people jumped on the bandwagon to make a fortune, but only a few have had the vision to move ahead of their time and ride the big waves, becoming a leading force in the industry. Mr. Zhu is certainly one of them. Believing that the sky is the limit, he had enough space for his adventure and he has become one of the big influential forces in the imaging industry. To have gotten this far, I believe, took guts and a willingness to challenge what has been so far considered impossible. In this way, Dinglong became the first company to challenge what was until then a monopoly of Japanese companies producing toning agents for the printing industry. With its technological know-how, the Chinese company literally changed the face of this market as well as the perceptions of foreign companies about their Chinese competitors. Dinglong offers its customers a unique match between quality and price. This has put them in the spotlight and has helped dispel the popular notion that cheap Chinese products are necessarily of poor quality. Forward-looking strategy and looking at the big picture Hubei Dinglong has a strategic vision for its products. They are aiming to supply the high-end niche of the market, turning into an undisputed leader in the domestic market.

The brothers are always willing to try and do something no one has done before, taking calculated risks. I would say they have big shoulders that carry tremendous pressure and weight, and indeed Mr. Zhu told me he hopes that his kids will not have to live with this kind of pressure. I remember reading a book, The Hard Thing About the Hard Things, that I thought about when I spoke to Mr. Zhu. I think only those CEOs who have experienced the ups and downs of their company in the constantly changing, dynamic market can understand the daunting tasks that inevitably arise. Wisdom and accumulated experience Mr. Zhu is wise enough to take advantage of China’s liberalization of the capital markets at its inception and develop highend products using the more available capital to support the company’s growing momentum. For the past five years, Dinglong has produced billions worth of chemical color toners for the printing market. In the next stage of the company’s growth, it has added another high-end new product line to its product portfolio–Chemail Mechanical Polishing Pad by using the core technologies of Dinglong. Additionally, Mr. Zhu always keeps this strategic map for the company’s future in his mind. What will be the next step towards growth?

After all, it’s not only the internal forces that drive a company leader. There are also external market forces as well as shareholders to accommodate. Dinglong aims to become a cauldron of innovations in raw materials for the printing industry, as well as the industries beyond printing. In general, innovations happen in stages. First comes the innovation thought up by the researchers. Then comes the realization of this innovation, led by engineers. The third stage involves the entrepreneur who figures out how to place the product in the market. Dinglong plays a key role in finding the talents to develop a concept, manufacture it and take it to market. How is Dinglong’s stock performing, then, is it worth buying? China’s stock market has recently experienced a series of shocks and a lot of companies have endured some significant losses in their stock price. Yet Dinglong’s growth over the past year has been impressive, driven both by organic growth and acquisitions. China is living in dynamic times, offering both opportunities and challenges. Dinglong faces continued pressure to grow and grow. That is the reason why they have started building a conductive materials plant, which should be launched in May 2016. This new material production will open up its path to a much wider market across many industries. Mr. Zhu prefers to lead a quiet life, outside the spotlight. You won’t see him at trade shows or other public events. I think maybe this kind of temperament allows him to be laser-focused on his company’s growth strategy, and the success he has accomplished. This formula surely seems to be working.

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