Whenever anybody wants to talk about a Chinese entrepreneur, the first ‘go to’, for those who want to appear informed is always Jack Ma. Others might possibly mention Ren Zhengfei of Huawei, or perhaps Ken Xie who moved to the U.S. as a child and later built the first first ASIC based firewall/VPN appliance in 1996; sold his company ‘Netscreen’ to Juniper Networks for $4 billion in 2004, and also founded ‘Fortinet’.
I would like to mention a less visible Chinese business magnate, whose name has not gained such populist notoriety, at least, not so much outside China, but has profound accomplishments all the same, and this is Ren Jianxin.
Ren Jianxin was born in 1958 and had an interest in mechanical things from early childhood. He excelled in school and did work at a research institute which worked hand in glove with China Central Radio and TV University (now called The Open University of China). The problem was he had social commitments which the paltry allowance from the institute would not cover.
Noodles were popular across East Asia generally and most of the Asia Pacific. Indeed it was Saleem Group of Indonesia and Toloram Group of Singapore, which in a JV called ‘Dufil Prima’ created the legendary Nigerian Street Food – ‘Indomie’
China was no exception, so Ren started his own roadside street business selling affordable hot noodles to passersby on a busy street. He had his own foldable flat panel structure that opened out to form what Nigerians will be familiar with as a ‘kiosk’
Similar structures are also called a ‘parlour’ in Trinidad. Though should a Trini tell you – ‘Ah goin by dat parlour dong d road’ when asked ‘Wey you goin dey?’, it is an indirect answer that says ‘Mind your own business’ without being rude.
Ren concentrated totally on hot noodles to keep stock and equipment volume down, and when he was not around he stored them in a lockbox and chained the collapsed ‘kiosk’ to it. He kept specific hours so his customers would know which times they could depend on him being around. He had to operate around his University time.
‘Ren Jianxin was effectively an ‘Indomie Mallam’ in China long before Indomie even existed.
Naspire (In Nigeria) says this of Mallams – ‘Every now and then new shops are opened, but for every new shop that opens, many are closing down. In my street alone I have seen four shops close their business due to poor sales. However, one thing you will notice is that the “mallam operated kiosks” rarely go out of business. What then is their secret? This is nothing but HARD WORK. Mallams work harder than the average shop owner.
He is the first to open for business and the last to close business (most times they don’t close for the day). When you wake up hungry very late in the night and need to quickly buy some Indomie, you can rest assured that the mallam will be available. These extended working hours have helped drive increased revenue for the mallam operated kiosks.’
An artist illustration of a (general goods) Mallam Kiosk by Naspire.
Certainly if Ren Jianxin had been born in Africa, he would have been made in this mould. News of his noodle stand spread. Then, one day an errand boy carried him a message. The owners of a ‘noodle house’ up the street wanted a meeting with him. An elderly couple, with grown up children living in other cities were finding it difficult to keep going. They had heard of the diligence of Ren and they wanted to take him in as a partner.
Ren was very fashion and trend conscious. He reorganised the way the business presented itself to customers. It worked. Business started booming and he was able to open noodle houses at other locations. He continually evolved the feel and ambiance of the businesses with changing times.
One of the business dynamics of a regime like China is that everyone knows where to go if they want to make it big – and that’s the state.
While in many ways it is seen as stifling opportunity and promoting nepotism, on the other hand, it does make the route to success for those that are diligent, applied and relentless… extremely simplified.
In a completely free market economy, there are so many potential routes to progress the choice can be bewildering. Which enabling actors and mechanisms for progress give the best chance of success?
The entrepreneur is swimming, and starting to drown in a ‘sea’ of wooden ladders. Nobody knows which ones have rotten rungs, vision to the upper parts of the ladder are obscured so it is not clear where they lead. It is so easy to slide back into the quagmire, more tired and broke than before.
A lifetime of indecision can be spent on research, so that there is insufficient proportion of that lifetime remaining, to get adequate return from execution.
Before climbing a mountain, what is most needed is a time efficient and robust process that determines which mountain to climb!
The ‘Chinese Entrepreneur Express’ is a notional rail track that just leads direct to the gates of Chinese Government. Decision Made! Next Decision Please? – It is that simple… or is it?
Politburo celebrating 70 Years in power in 2019
Global impression of The Chinese Communist Party is of an aggressive autocratic nation. The New York Times towards the end of 2019 quote:
‘In an era when China plays a dominant role on the global stage, foreign officials, whether in Washington or Moscow or Hanoi… (democratic countries have) criticized the party’s positions on Hong Kong, Xinjiang and Tibet. (and seek to) determine whether the economic juggernaut of China is a political and military threat…
‘Freedom House’ this year (on China) made reference to military force to resolve political disputes,” citing conflicts in Libya, Yemen, Ethiopia, and the Nagorno-Karabakh region. In each case, Freedom House pointed out that a powerful authoritarian government with little fear of pushback from the free nations of the world was involved in starting or escalating the conflicts.
‘… China’s leaders, to a degree, see the contours of the fraught historical moment in which they find themselves. Around the world, their top diplomats are trying to defuse tensions and persuade counterparts that China is not an aggressor.’ – NY times.
Under an authoritarian regime where rule is perceived to happen primarily by force, as human beings, deep down, what many of the Politburo yearn for the most, is ‘unforced’ acceptance.
In an open democracy, whether a public representative carries the title of ‘House of Representative Member’ or ‘Member of Parliament’ or some similar title, it is very easy to gauge public opinion – pollsters and pundits abound, content creators wander around city streets happy to pounce on any unsuspecting member of the public and stick a microphone in front of them, and most of the time, the public are content to comply.
If the public are not happy with a specific political office holder, the politician will definitely know about it.
In China however, a Politburo member has very little means of determining their ‘relative value’ to the public in comparison to any random one of their peers.
Ren Jianxin fully understood this dynamic.
In 1984, after he graduated, Ren started the Bluestar Company and started to manufacture industrial solvents. By the 1990’s his noodle business became known as the ‘Malan Noodle restaurant chain.
He approached the Chinese Government in respect of over one hundred government owned chemical factories with massive endemic problems that were losing the state huge amounts of money and on the brink of collapse.
The Leopard 2 A7+ Main Battle Tank, by the divested Military Division of Krauss-Maffei, merged with Wegmann ( called KMW), is the most formidable battle tank in the world. This is not owned by ChemChina, nevertheless, it illustrates the diverse capabilities of KM which ChemChina have acquired.
He promised the government that not only could he find ways of streamlining and merging the companies to create a smaller number of leaner more efficient and profitable companies, but that he would also guarantee an offer of a comparable position by level of seniority and income to any displaced employees of the companies. This he would do by migrating them to his ever expanding noodle chain.
From there, Ren wen’t on to change the company name to China National Chemical Corporation (ChemChina). Since then, the group has gone on to acquire the Italian Pirelli Tyres, and the German Machinery and Engineering Conglomerate Krauss Maffei. Last year, it did a deal to take the Agriculture related assets of Syngenta Group.
A Krauss Maffei machinery manufacturing floor with plastics machinery at various stages of preparation.
In 2016 Bloomberg said: ‘He doesn’t have the name recognition of billionaires Wang Jianlin of Dalian Wanda Group or Jack Ma of Alibaba Group, yet the China National Chemical Corporation chairman may be the most important dealmaker you’ve never heard of’
Legacy Krauss Maffei 9010 Locomotive in Australia in the 1970’s
Today ChemChina sits at 164 on the Fortune Global 500.
What are the lessons that the Tekedia Community can take from the life of Ren Jianxin thus far?
Firstly, be willing to sustain hard work consistently being of single focus, as the ‘Mallam’.
Secondly, always be aware of the human aspect of the environment you need to operate in. You cannot allow your desperation to cloud your vision to the extent you become immune and detached from the other desperation all around you..
Desperation in others points the way to frictions that need fixing.
Finally, be willing to look for that ‘extra’ thing to bring to the table, that sits outside the direct transactional value proposition.
Ren saw the opportunity to gift the government a huge promotional campaign of ‘Governance Seen To Be Working’. This is politically intoxicating and seductive to the extent of addicting any government, communist or not.
Further strongly recommended reading: ‘The Dangote System’ – Techniques for Building Conglomerates – Ndubuisi Ekekwe.
Insights for the backdrop to Ren Jianxin’s early life was gleaned from discussions with a Chinese national operating an ingredients and chemicals sourcing and reselling business based in UAE. He is a trusted source but wishes to remain unnamed.