Big Loss Bureau - Successful Business Cases of China's Top 10 Famous Enterprises

Author: Yu Fan
Publisher:
Publish Date: 2006-07-01
Features: Those who are not familiar with the situation would never imagine that in July 1999, the newly established Mengniu Dairy was a "three-no enterprise": no milk source, no factory, and no market. Faced with the, the company's board of directors adopted the development strategy of "building the market first, then building the factory." They established an "hourglass-shaped" organizational structure with R&D and sales inside and production processing outside, starting to "hatch eggs with a borrowed chicken." Through cooperation with 8 dairy enterprises within and outside the region, Mengniu's brand, management, technology, and formulas shone brightly, achieving sales of 34.65 million yuan in that year. From the end of 1999 to the end of 2002, Mengniu's first, second, and third-phase projects, which were positioned as "domestically leading, internationally advanced," were successively completed and put into operation. The emergence of Mengniu solved the employment issues for over 5,000 employees. More importantly, Mengniu developed over 100,000 cattle farmers, increasing the number of dairy cows by nearly 200,000. By the end of 2002, it collected over 1,000 tons of milk daily, and in 2002, it distributed 520 million yuan in milk payments, significantly advancing the industrialization process of agriculture in Inner Mongolia. The farmers in the area where Mengniu built its factories passed down a saying: "One family, one cow, wife and children by the warm kang; one family, two cows, no worries about food and clothing; one family, three cows, build a small modern house in two years." Indirectly, Mengniu created over 200,000 jobs, becoming the largest "job-creating enterprise" in Inner Mongolia since the Western Development Strategy. In 1999, Mengniu's sales reached 34.65 million yuan, with tax payments of 1.06 million yuan; in 2000, its sales were 294 million yuan, with profits and taxes of 40 million yuan; in 2001, its sales were 850 million yuan, with profits and taxes of 104.1994 million yuan; and in 2002, its sales were expected to reach over 2 billion yuan. Based on sales figures, the average annual growth rate reached 265%. The company was listed as one of the "20 key large enterprises" by the autonomous region, a "100-million-yuan project enterprise," and a "key protected unit." The company was awarded the title of "Tax Payment Champion Unit" by the municipal party committee and government; it also received the "Outstanding Contribution Award for Rapid Economic Development." Mengniu's largest individual shareholder (holding 2.99%)—Chairman and CEO Niu Gensheng—has recently been honored as the "Hero of Rural Enterprise Development," the "Outstanding Entrepreneur of the 8th Inner Mongolia Province," the "Outstanding Township and Village Enterprise Entrepreneur of the 4th National Level," the "Outstanding Dairy Industry Worker of the Nation," and the "Hero of Private Enterprise in Hohhot." Mengniu has now become a nationally renowned brand.