Small potatoes, big profits
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01/07/2002
Ling Baoheng, vice-president of Shanghai Light Industry (Group), plans to develop small enterprises instead of conglomerates, but they must be the best of their kind. They must each have about 100 employees, but be able to generate annual sales of US$12 million. Ling's conglomerate now has more than 500 subsidiaries, some of them stronger than others. Its combined sales for this year are expected to exceed US$3.8 billion. "Our purpose is to make all of them strong and profitable," he said. "The group company is targeted at competing with multinationals, and is not afraid of this competition. Its real threat comes from domestic private enterprises because of their flexible systems," he said. The light industry conglomerate is joining hands with Yiwu City of Zhejiang Province, where China's largest small commodities market is located. The market now has 100,000 salesmen doing business nationwide. its sales are only US$48.4 million now, tiny compared with the market's annual sales of more than US$3.63 billion. After one or two years of toil, a number of enterprises with annual sales of US$1.2 million will be able to get a foothold in the market, Ling said. Its blueprint requires 20 per cent of its firms to develop high-tech products, and 20 per cent for pillar industries such as automobiles and home appliances. China Daily news
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