On the night of the opening of the 19th World Cup, the whole of South Africa was on fire. In the beautiful lighting of the scene, there is the light from China NVC; in the 2008 Beijing Olympic Games, the 2010 Shanghai World Expo and the 2010 Guangzhou Asian Games, NVC has never been absent. Most of the lighting fixtures and product solutions for major venues in the 13th Guangdong Games, which ended this month, are from NVC Lighting.
On May 20, NVC Lighting successfully landed on the Hong Kong main board listing transaction. NVC Lighting (02222.HK) became the first domestic lighting stock listed in Hong Kong. NVC Lighting President Wu Changjiang was worth 2 billion.
Since 1998, it has invested 1 million in the suburbs of Huizhou City. In just 12 years, Wu Changjiang led the development of “NVC†into a leading brand in China's lighting industry. It is also recognized as the fastest growing domestic lighting company in the industry. According to the latest report of China Lighting Association, NVC Lighting has become the largest manufacturer of energy-saving lamps, T4T5, electronic ballasts and downlights.
Recently, the reporter and his party interviewed Wu Changjiang at the headquarters of NVC in Huizhou. The interview topic began with NVC's lighting project for the World Cup in South Africa.
Illuminating the World Cup will also illuminate the Asian Games
Reporter: Is there any pressure to undertake the lighting project of the World Cup in South Africa?
Wu Changjiang: There is no pressure because we have experience. Providing lighting products and solutions for the World Cup in South Africa and actively participating in the construction of the World Cup venues is a special way for NVC lighting to integrate into the South African Passion World Cup like fans around the world. How to make South Africa's night more attractive to match the festive atmosphere of the World Cup, those with functional and ornamental lighting will become the key, and the system engineering for providing light environment for very large event venues is extremely complicated. Fortunately, NVC is here. With sufficient strength and experience, we have provided lighting solutions for many similar events, including the 2008 Beijing Olympic Games, the 2010 Shanghai World Expo and the 2010 Guangzhou Asian Games.
Reporter: When did NVC enter the South African market?
Wu Changjiang: NVC Lighting established an overseas marketing center in 2006 to develop an international strategy. So far, overseas operating agencies have spread over more than 50 countries and regions. In the second half of 2008, NVC Lighting began to enter the South African market and basically completed its layout in 2009. At present, NVC NVC Lighting is growing very fast in South Africa, with an increase of nearly 500% in the first half of this year compared with the same period last year.
In South Africa, the business model of NVC dealers is mainly mature channels, professional channels, and modern supermarket channels. The Football City Stadium, Durban Airport, Durban Football Stadium and other projects are the key lighting projects that NVC has already completed in South Africa. In the subsequent business cooperation, NVC will also participate in more and larger projects. In August 2010, NVC NVC Lighting will participate in the first lighting exhibition in Johannesburg, and the NVC booth will be the largest lighting booth.
Reporter: Guangzhou Asian Games is coming soon, how does NVC take the Asian Games lighting project?
Wu Changjiang: The lighting project of the Guangzhou Asian Games and the Beijing Olympic Games is the same. It was because of the outstanding performance in the Beijing Olympics that it laid a solid foundation for NVC to become a supplier to the Guangzhou Asian Games.
This NVC lighting will provide high-quality lighting products and services for the Guangzhou Asian Games, covering most of the newly built and renovated venues of the Guangzhou Asian Games, with a total project value of over 100 million yuan.
The boss is the biggest salesman
Reporter: When NVC is still a small business, it sets the goal of “creating a world brand and striving for the industry firstâ€. Why is it so emboldened?
Wu Changjiang: When NVC was founded, it was the time when foreign-funded enterprises entered the Chinese market in a big way. Many local companies are eliminated by foreign companies in the invisible, or occupy the low-end market with little profit. The most important reason is that there is no brand of its own. Now NVC can occupy a certain dominant position in the domestic lighting industry, and it is not to use low price expansion. The key is that we always pay attention to quality and brand. At the beginning of the venture, I set the goal of “creating a world brand and striving for the industry first†instead of becoming a “world's top 500â€, just to make NVC a brand that respects the world. Now we have been the first in China in less than ten years, and the next goal is to create a world brand.
Reporter: One of the secrets of NVC's success is to rely on sales channels, but will more than 2,000 stores be difficult to manage?
Wu Changjiang: In April 2005, we conducted “surgery†on sales channels: we selected dozens of large-scale dealers from across the country and integrated them into more than 30 operation centers. Their role is no longer simple. The sales function is the local logistics, capital and shipping platform. The core content of the "Operation Center Model" is to "make the channel merchants make money." NVC gave a large share of profits to the channel providers, such as 100 yuan of profits, dealers took 60, I took 40.
Reporter: What are the hurries that NVC has experienced in the past ten years? How did you come over?
Wu Changjiang: In 2000, we had a quality accident, and a batch of 2 million yuan of foundry products had problems. At that time, we recalled the products, saved the brand, and established a reputation. However, NVC was particularly short of money at that time. I didn’t have any money for the New Year. I want to thank so many employees for suffering with me. In 2003, among the shareholders, I asked a shareholder to manage the team. As a result, five executives walked three, and the team felt that they were not confident. When I was eating at noon, I played chess with my employees, and they felt that the sky was falling and I was still standing. In fact, my heart was panicked. At the end of 2005, the equity turmoil almost ruined NVC. Fortunately, everyone believed in my credibility and finally got assistance from all parties. NVC finally escaped the catastrophe. "If you have a hard time, you need to be bold, and you will still be calm when you are in the opposite direction." This is a calligraphy and painting hanging in my office, which is a true portrayal of my personal character. I can't say a horse now, but I have the confidence to overcome all difficulties. I have always been grateful to the team that worked together, and I respect the efforts of each of them for NVC today.
Reporter: You said, now you only manage 4 things?
Wu Changjiang: Yes. 4 things are strategic rules
Planning, integrating resources, major customer maintenance, and management teams. I am now the largest salesman of NVC. Sometimes for the 10 million yuan project, I personally went to talk. Is the price falling? The key is to love and have a sense of accomplishment in the cause. On the other hand, I am fully authorized. I usually go to the workshop very rarely. I also have opinions on some industries, but I never intervene. The vice president has a tens of millions of signatures in the company.
The disorderly competition integration of the lighting industry is inevitable
Reporter: What is the current situation of the lighting industry? What are the characteristics of the competition?
Wu Changjiang: The lighting industry started late, the technical information content is not high, and the threshold is low. Strictly speaking, the industry is still in a disorderly state. According to authoritative statistics, the industry has grown by an average of more than 20% in the past few years, with tens of thousands of companies. Regardless of the market law or the current changes in the competitive landscape, I think the next step is inevitable.
Reporter: Now the rise in raw material prices has an impact on many industries, especially processing enterprises. Does this have a big impact on the lighting industry?
Wu Changjiang: I really appreciate the view that mediocrity people encounter difficult bypasses, and smart people encounter difficulties and find ways to overcome them. A few years ago, the gross profit of our industry was above 40%. It can be said that it is a profiteering industry. The impact you mentioned is actually a return to value for a large-scale, branded company. The market choice is to lead our leading companies to lead the industry to maturity in advance.
Reporter: NVC is a leading company in the industry. What kind of mentality is this merger or opportunity? What measures?
Wu Changjiang: Enterprises are facing the world, and the industry is facing differentiation. It is the trend. For example, we have to take the road of internationalization now. We hope that there will be a model in China, and the model will be refined and then piloted overseas. We have started playing our own brand in Southeast Asia. There is also the need to help foreign large enterprises do the processing. You need to know where your price/performance ratio is and have core competitiveness to generate a price/performance ratio. Now NVC has set up a research and development center in Shanghai, investing tens of millions of yuan every year. R&D allows us to know where we are, and this is a shift. In addition, we acquired sales companies abroad and tried to use foreign ready-made networks to find breakthroughs in the international market. I feel that internationalization is not for the label, but it should be real.
What is missing and what is not lacking?
Reporter: How will NVC use the funds raised?
Wu Changjiang: On May 20, NVC Lighting successfully listed on the Hong Kong Main Board at an issue price of 2.1 yuan per share. A total of 728 million shares were issued, 90% of which were international placements and 10% of which were public offerings. 1,000 shares and 15% of the over-allotment option. The HK$490 million of the raised funds are used for market expansion at home and abroad, including mergers and acquisitions and other strategic investments. In addition, it will invest HK$410 million in brand strategy and sales network. It plans to reach 3,000 NVC stores by December 31, 2010 and expand its business scope to Europe, North America and South America; capital expenditures will account for HK$410 million. To build a new production line, to increase the annual production capacity of NVC lighting products by about 25%; R & D accounted for 160 million Hong Kong dollars, to focus on strengthening NVC's strength in LED, HID and other fields.
Reporter: Has the listing solved the funding problem of NVC?
Wu Changjiang: The biggest change of NVC in recent years is the entry of Goldman Sachs and Softbank. First of all, the link of the capital chain has been opened. Now that there is no shortage of funds, we are not listing money, but we are focusing on the globalization platform behind Hong Kong's listing. Our products are also the most abundant, and the Chinese market is not lacking. Going out, talent is the key, and recognition in the international market is critical.
Reporter: The prospectus clearly stated that in the future, it may continue to look for the target of mergers and acquisitions. Is there a target now?
Wu Changjiang: Regarding mergers, my philosophy is "whatever is lacking, there is no need for mergers." I don't appreciate mergers and acquisitions in order to get rid of competitors. You take it over and destroy it, the third is second, and it may affect efficiency. The direction of our mergers and acquisitions, one in the product, two in the channel, and three in the core technology, we will find targets in these areas.
Reporter: NVC sales are growing at a rate of more than 50% per year. Do you think this is risky?
Wu Changjiang: If the competition is not fast, it will be eliminated if it is slow, but like a race, one foot must fall. Now that billions of companies with output value are all over the street, the key is risk controllable. I often talk to the team, we always have risk awareness.
Reporter: What bottlenecks does NVC face now?
Wu Changjiang: First of all, it must be management. For example, if a company needs to make 20 billion yuan, then it is like a landmark building with 100 floors. Is the supply of funds, professional teams, tools and raw materials in place? NVC now has the money to achieve higher and larger goals. The key is management. Not all in place. Management cannot be copied, and all processes need to be designed by themselves. In the future, NVC Lighting will make greater improvements in core technology research and development and design. Now we have set up R&D centers in Shanghai and Huizhou.
Reporter: Do you think that NVC needs to strengthen after listing?
Wu Changjiang: Our strategy is to run fast and compete at speed. However, after growing more than 50% every year and becoming a veritable high-growth company, my biggest concern is the talent link. I think that people will restrict the future development. My shortcoming is talent. How to introduce senior talents and retain talents is the next issue we should focus on.
Wu Changjiang is this person:
In 1965, he was born in the rural area of ​​Tongliang, Chongqing. In 1985, he entered Northwestern Polytechnical University and came to Shenzhen in 1992. First of all, he is a security guard at a Taiwan-funded enterprise. A few months later, he came to Panyu to work in a Hong Kong-owned lighting company. Ten months later, Wu Changjiang resigned and started to set up a factory. In 1994, he founded Huizhou Minghui Electric Co., Ltd. as chairman. At the end of 1998, Wu Changjiang and two high school students joined in 1 million yuan to establish Huizhou NVC Lighting Co., Ltd. In 2003, the sales of “NVC†reached 320 million yuan. In the following years, “NVC†quickly became popular in the country, ranking 25th in the “Top 100 Chinese Growth Enterprises†list. In May 2010, NVC Lighting (02222.HK) successfully listed on the Hong Kong Main Board for 2.1 yuan. Wu Changjiang is the chairman, chief executive officer and executive director of NVC Lighting.
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