Interviewing Tan Xuguang: Entity Economy Needs Capital
2012-11-16 09:47:00   Source:China Economic Weekly   

Tan Xuguang was entitled of "China Economic Figure of the Year" twice, and a series of successful overseas mergers and acquisitions made him well-known in international capital market.

\
 

Tan Xuguang was entitled of "China Economic Figure of the Year" twice, and a series of successful overseas mergers and acquisitions made him well-known in international capital market.

As the Chairman of Shandong Heavy Industry Group, Tan Xuguang had a secret hidden in his words “Our group is aiming for CNY 300 billion in 2020 and entering Fortune 500”. If adding his words “I will be retired in nine years”, you can infer that “I will lead Shandong Heavy Industry Group to Fortune 500.”

Tan Xuguang Rose to fame with three mergers and acquisitions and he, facing the slowdown of domestic economic growth, always sees opportunities others regard as adverse factors. What Tan Xuguang concerns the most is the internationalization strategy of Shandong Heavy Industry Group and its affiliate Weichai Group. He describes himself as “a dream catcher”.

On the first workday after 2012 National Day Holiday, Chairman Tan Xuguang gave a speech themed by “Staring Our New Journey to Globalization” in the meeting about the internationalization of Weichai Group.

Following the breaking news of the restructuring of Torch Spark Plug Company in domestic market in 2005, Weichai Group purchased over-100-year-old French Baudouin Company in January 2009, world-known luxury yacht manufacturer Italian Ferretti Group in January 2012 and German Kion Group in September 2012.

“Weichai brand value rise over CNY 5 billion and Weichai Group, as well as my name, is famous in Europe.” Tan Xuguang told the reporter proudly when speaking of the mergers and acquisitions of Ferretti and Kion.

Based on in-depth thinking of globalization, Tan Xuguang realized the internationalization was embodied in global resource distribution, “global resource distribution is connected to capital eventually.”

The three mergers and acquisitions occurred at the bottom of the economy in these countries. Tan Xuguang was proud of the choices of the best time. From 2007, He decided to stop all the expansion investment to realize the funds for overseas mergers and acquisitions to come.

Tan Xuguang thought economic crisis was a market tool and a good opportunity for mergers and acquisitions.

As an ever-victorious expert in merger and acquisition, Tan Xuguang has his own secret: the key element is an international-level capital operation team. Besides, he gained some experience when gaming with the top five banks and top five fund companies in the world.

Speaking of overseas mergers and acquisitions, Tan Xuguang thought the biggest difficulty was cultural fusion, including verbal communication, living environment and way of thinking, etc.

Tan Xuguang said overseas merger and acquisition required talents. Therefore, Weichai Group introduced nearly one hundred overseas talents these years, making a real global management team.

According to the strategy, Weichai Group invested CNY 2 billion to build the first-class R&D center and provided key positions for the talents. Tan Xuguang was clear about these investments “Enterprise operation is like a combination blow. Without internationalization of technology, there is no internationalization of marketing.”

Speaking of self-assessment, Tan Xuguang said: “First, you have to make your environment, such as status and honors; second, as an entrepreneur, I have the spirit to fulfill my dream. I don’t work merely for money and I am pursuing my dream. When you achieve the goal, you conquer everyone.”

Some outsiders think of Tan Xuguang as a bold entrepreneur, however, he regards himself as a cautious person. Before each merger and acquisition, some meticulous assessments were indispensible. “As a teenager, I was fascinated in music” Mr.Tan said, “I used to be a band conductor and I believe it is similar in principle to working as the chairman of the enterprise.”