When I have some down time I usually hang out at my home in the Rocky Mountains of northwest Montana, USA. This is a wonderful place of very few people and lots of big mountains and beautiful scenery. It’s a special region of rivers and streams and lakes … and billions of trees. As opposed to the eastern part of this huge state, where agriculture and cattle reign, northwest Montana has long depended on its biggest industry – timber and wood products. But this industry, faced with steadily increasing restrictions on logging in our national forests and steadily rising competition from cheaper products from overseas, has been in slow decline for the past forty years. It seems like another small lumber mill that had been around for a century or more is closed down every few months.
In 2009 even big corporate mills started closing. One of these was the Smerfit-Stone Container mill in Frenchtown near Missoula. A second Smerfit-Stone container mill also filed for bankruptcy in Canada at the same time, and Smerfit-Stone mills in Arizona and Quebec had closed earlier. The company naturally cited “the unprecedented global economic recession [which] has weakened demand for packaging”, but a major portion of the truth has been left out of the Smerfit-Stone rationalizing, including the fact that it had failed to upgrade its equipment to meet modern advanced capabilities and had retained its dependence on expensive freshly logged timber to manufacture its cardboard containers. This is another American industry that has long been locked in the past while taking profits for today and failing to improve its competitiveness in the arena for tomorrow.
Like so many American industries that were forged by great visionaries of the past, the American wood products industry is a microcosm of the nation as a whole over the past forty years. It all seems like an ingrained resistance by today’s Americans to learn the lessons of generations that went before. If perhaps not for Americans, however, the Greatest Generation definitely did set an indelible example for others.
One of those who read America’s history of the first half of the twentieth century was a young woman born in 1957 in northeast China – at the same time the tidal wave of post-war Baby Boomers was arriving on the scene in America.
In the early 1980s China was trying to pick up the pieces after the decade-long near-apocalyptic Cultural Revolution had nearly destroyed the country and left China far worse off than the Great Depression had left America during the 1930s. Like millions of others who were branded “counterrevolutionaries”, a young army lieutenant with eight kids had spent that decade in prison. When the Cultural Revolution came to a close in 1976, he was finally released, “rehabilitated” and impoverished.
Amid the slowly recovering devastation five years later, at the age of 26, the man’s eldest daughter, Zhang Yin (Cantonese – Cheung Yan) left home and journeyed to Shenzhen, a center of China’s early 1980s economic reforms. There she took a finance accounting job at a foreign paper-products trading company and began learning the paper business and building ties with paper producers.
By 1985 she had a business idea of her own: importing waste paper into China. Zhang Yin, then all of 28, thought perhaps she could make a career out of paper. She ended up single-handedly creating two whole industries out of thin air, and in very short order.
First she set up a waste paper trading company – Nine Dragons Paper – in Hong Kong using $4,000 in savings from her clerical work in Shenzhen. “At that time people in China didn’t have name cards, so I carried around an introduction letter,” she recalls. Growth was limited, though, by Hong Kong’s relatively small size and overcrowded competition. One of the things that makes tiny Hong Kong such an important global financial center is the intense competition among a great many hard-working people in a quite small space. They have a saying there that may sound familiar to Americans: “If you can make it in Hong Kong, you can make it anywhere.” But the city does have practical limitations, so with greater China opening wider every day, Zhang Yin decided to go directly to the world’s behemoth to secure the raw material she needed for Nine Dragons Paper.
With limited education at the age of 33, Zhang in 1990 packed her bags and headed for Los Angeles – straight into that “evil world renowned as the ruthless male-dominated culture hell-bent on screwing everyone forever.” Still, as she said later, “The US had rich resources, and if I stayed in Hong Kong, I couldn’t satisfy demand in China. At that time most of China’s paper was imported, and the market potential there was vast.”
Looking back, she says getting started in the US wasn’t easy because of her limited language skills. But the style of doing business in the US, which emphasizes discipline, professional standards and solid reputation, matched her own. “The US left me with a wonderful impression,” she says. In America she very quickly learned the rules, mastered the process, and beat the jerks at their own game. Analysts say Zhang’s zest, enthusiastic personality and unbridled energy made her a great saleswoman and a savvy deal maker, and her high standards made her a worthy partner. There were occasional threats from competitors, but being a woman was not a problem. “Actually, I didn’t find it difficult,” she says. “I found men respected me.” In the early 1990s she went to work in America while struggling to overcome her poor English skills, and succeeded even beyond her own wildest dreams.
How did she do it?
By astutely sticking with what she knew best and by exploiting what spoiled Americans didn’t want – trash. In 1990 she set up America Chung Nam, Inc. (ACN), a Los Angeles company devoted to acquiring and exporting high quality waste paper. On behalf of her Los Angeles export company, she quickly closed deals with American scrap yards all over the country and began shipping huge containers of discarded paper back to her Nine Dragons Paper company in Hong Kong.
And, of course, no one can produce high quality waste faster than Americans. Most American paper is made from trees or timber by-product, the wood fibers made into pulp and reengineered with chemicals into paper. Within just ten years, before the end of the 1990s, Zhang had built ACN into a powerhouse in the American waste paper business. Even so, as late as 2002 she and her husband were still driving around the US in a rented Dodge Caravan minivan trying to get garbage dumps to sell her their scrap paper on contract. ACN, a Chinese company operating in the US, has ranked as the largest US exporter of raw materials for paper-making and the biggest container exporter among all US industries for the past seven years in a row. It is also the largest overall US exporter to China, by volume shipped. Its waste paper exports are one-quarter the amount of Wal-Mart’s huge merchandise imports. China imported 14 million tons of waste paper in 2008, nearly half of the world’s waste paper available for export.
With ACN, Zhang Yin waded into the America caldron and showed Americans how they once led the world in such entrepreneurial endeavors. With no support network, with poor language skills, with limited education, with no minority status help, and with no previous experience with America, she went to work and out-did Americans at their own game.
After all those ships bringing Chinese toys to Americans are off-loaded in Los Angeles, Zhang fills them up with waste paper going back to China, which is then turned into packaging for more Chinese toys – to further multiply Chinese wealth.
Without leveling a single stand of trees, she turned American trash into Chinese gold.
Most of that waste paper now goes to her own Chinese manufacturing company, Nine Dragons Paper, which quickly proved too small to handle the volume of raw materials coming in or to handle the rising demand in China. Zhang Yin returned to Hong Kong in 1995, two years before the British Crown colony was transferred back to China, and reorganized Nine Dragons Paper with her husband and her younger brother. The company, now headquartered in Dongguan near Hong Kong, raised almost $500 million in an initial public offering in March 2006 at the Hong Kong Stock Exchange; by the end of 2006 the stock had nearly tripled in value. With plans to invest $800 million to more than double production capacity, the company could soon become Asia’s and even the world’s largest maker of packaging paper. In 2005 she had vowed to take on the world’s global paper giants, like International Paper (#3), Weyerhauser (#2) and Smurfit Stone (#1). In 2009 her company already had 11 ultra-modern giant paper making machines, 5,500 employees, $1 billion in annual revenue and another huge new facility under construction.
This woman thinks Big. “The key to the success of Nine Dragons Paper is ensuring the long-term and steady purchase of high-quality waste paper in large quantities,” said Zhang. She certainly tapped into the right source of high-quality waste paper. ACN has ranked as the number one US exporter of waste paper since 2001 and contributes roughly 10% to Zhang’s fortune. ACN now provides nearly 80 percent of the raw materials for Nine Dragons Paper – which imports all that waste paper and dramatically increases its value for export. Through very hard work and excellent business acumen, she managed to single-handedly corner both the resource end and the production end of her global paper container conglomerate.
Now past 50, Zhang Yin runs a network of modern, highly respected, environmentally-conscious plants throughout China that makes packaging for some of the world’s major global corporations, such as Coca Cola, Nike, Sony, Haier and TCL. The flagship for what is now her major holding company is still Nine Dragons Paper – the company she founded and for which she still serves as chairman and chief executive. The company is now China’s biggest paper maker.
In 2006, just twenty years after beginning her quest, Zhang Yin became China’s richest Billionaire. In 2010 Zhang’s personal fortune was valued at approximately US $5.6 billion. She is now the wealthiest self-made woman in the world, ahead of Oprah Winfrey and J.K. Rowling. Zhang Yin, however, ensures productive livelihoods for many thousands of others on two continents. This for a women with a long list of disadvantages who started out with nothing but her own capabilities and $4,000 of her own savings – and dared to seek her fortune in “oppressive” America.
In China, Nine Dragons Paper puts an average of 2-3% of each project’s investment into preventing pollution and carefully monitors its waste water discharges 24 hours a day. Her huge company employs thousands of people in good-paying jobs in actually productive endeavors – endeavors that are also actually good for Earth. Even a major portion of her company’s recycled product finds its way back to Nine Dragons for repeat recycling.
“Continuous effort, not strength or intelligence, is the key to unlocking our potential.” – Winston Churchill
The 53-year-old Zhang Yin would have been right at home in America in, say, 1945. She probably would have, even then, defied conventional wisdom and named her Chinese company “Nine Dragons Paper” and her American company “American Chung Nam”, and in twenty years turned it into a global corporation. But now America only interests her for what it chooses to throw away – for how much money she can make and how many Chinese jobs she can create from spoiled American laziness.
Zhang Yin is also the mother of two sons and holds a US “green card”, but has no plans for US citizenship. Her husband, Ming Chung Liu, was born in Taiwan, grew up in Brazil and was trained as a dentist.
Are there new openings for women in China? Zhang Yin believes that, just as in America, they’ve been there all along. “The issue of men and women as equals in China has been solved for a very long time,” and this is increasingly evident amid the country’s great economic boom, she says. How far a woman goes depends on the role that she herself wants to play in life and if she is willing to stick with that role — and, she adds, on her communicating well and her willingness to work hard.
Zhang Yin didn’t do anything that any American could not also have done, easier. Perhaps she was just hungrier. She never took a hand-out, never got a low cost government “minority” small business loan, never used her gender for some advantage, never took any corporate or government welfare, never demanded her “fair quota”, never took the easy “affirmative action” path, never even threatened a law suit. She never paused for one second to wallow in her “eternal victimhood”, never demanded that “someone else” ensure her millions of “rights” all devoid of responsibilities. In interviews she has never mentioned women being at any disadvantage vis-à-vis men in America, and has never been heard to whine about anything. The notion of being a social “victim” in America is totally beyond her comprehension. Perhaps this is why almost no Americans have ever heard of her or her companies. Zhang Yin doesn’t waste time talking things to death. She doesn’t spend a lifetime studying her glorious navel on someone else’s dime. She just goes out and gets the job done. So, quite obviously, she just doesn’t fit the American Baby Boomer mold. And she, her family, her country and the world are the better for it.
So what does it say about Americans that our largest export is now our trash? And is it lost on anyone that Nine Dragons Paper makes the same product that Smerfit-Stone makes? It just uses better equipment, different raw materials, and has one hell of a can-do dynamo in Zhang Yin.
According to Forbes in 2016: 56 (64%) of the world’s 88 self-made female billionaires were Chinese.
P.S. By contrast, one of the youngest female billionaires on Earth is Lynsi Torres, 30, an American blond currently working her way through her third husband. She, too, has no college degree or business training, but does have half-ownership of the In-N-Out Burger chain and stands to gain full ownership in five years. It’s all due to the very high risk and hard work of her grandfather and father, a trust they set up for heirs, plus a series of unexpected family deaths that conveniently dumped half of the California-based company’s value of $2 Billion right in her lap (with the second half to follow a little later). Having accomplished nothing productive herself, she did recently use a portion of her fortune to buy a house – for an incredible $17.4 million – that even has a golf course and an outdoor movie theater. It’s the “American Way”, for our “special” people.
Footnote: Another Great Success Story You Never Heard
Dogged determination and sticking to what you know best was also the key to success for an American company that has been the best performing stock traded on US exchanges over the past 25 years: Fastenal Company. The value of this company’s stock has increased 38,565% since 1987. Almost anyone could have invested $100 in Fastenal stock twenty-five years ago in 1987; today that $100 investment would be worth an incredible $4,000,000. And this is in 2012 – after five years of the Great Recession.
Fastenal Co (NASDAQ: FAST) is an American company based in Winona, Minnesota, with its main distribution center located in Indianapolis, Indiana. It was founded in 1967 by Silent Generation member Bob Kierlin (now 72), who later became a Minnesota State Senator. Since 1967 Fastenal has grown from a small-town fastener store into a Fortune 1000 company and a member of the S&P 500.
The company’s founder was smart enough to find his niche – fasteners, nuts and bolts, screws – and stick with it. Stuff, all kinds of stuff, always needs to be fastened to other stuff, all kinds of other stuff. You can’t build anything without fasteners – from a desk lamp to the World Trade Center. This company focuses on precisely what that singular marriage of stuff to other stuff requires. The trick is to offer such a critical product better than anyone else does.
Its stock in trade is nuts and bolts, plus outstanding service. Fastenal sells industrial and construction supplies and offers services including inventory management, manufacturing and tool repair. The company refers to itself as an industrial supply company. Most of its offerings are purchased, not made, but as of 2009, the company has at least one cold heading manufacturing line. Half of its product by weight is processed steel, so machining is a better term for many of Fastenal “manufacturing” operations. Fastenal’s main inventory is fasteners such as screws, threaded rods and nuts which can be used in construction and manufacturing. The company had a total of 690,000 individual products as of 2010. It employs 500+ people at six manufacturing locations, including one manufacturing bolts by using the newer method, cold heading, in Rockford, Illinois, plus operations in West Hartford (Connecticut), Indianapolis (Indiana) and Modesto (California), and another in Malaysia.
Fastenal, a frequent sponsor of NASCAR drivers and events, can be found at 2,566 locations. The company has retail stores in every US state, every province of Canada, 14 Mexican states, and Puerto Rico and Panama. It operates 16 distribution centers in California, Georgia, Indiana, Kansas, Minnesota, North Carolina, Ohio, Pennsylvania, Utah, and Washington, in the cities of Denton, Texas, and Houston, Texas; in the Canadian provinces of Alberta and Ontario; in the state of Nuevo León, Mexico; and in the Malaysian city of Nusajaya. Fastenal also has sites in China, Dominican Republic, Hungary, Malaysia, the Netherlands, Germany, Singapore, and the United Kingdom. In 2006, the company also had two offices in Taiwan, one of which included a product-testing laboratory.
Bob Kierlin got started in the nuts-and-bolts business at age 7, sweeping floors at his father’s auto parts supply store. By age 11 he was a counter boy, dreaming of running a factory. “I remember asking the parts people in my father’s shop which of their parts were selling best,” recalls Kierlin with a smile. “They didn’t know.” After graduating from Winona’s Cotter High School, he went to the University of Minnesota, earning an undergraduate degree in mechanical and industrial engineering and then an MBA. He then served in the newly created Peace Corps in Venezuela for two years in the 1960s before joining IBM in Rochester, Minnesota. The IBM job, he says, was a bad experience, a lesson in how not to treat employees. “Nobody got to make any decisions,” recalls Kierlin. (This is a very familiar complaint of younger people with prior credible experience in either the Peace Corps or the Regular US armed forces.)
When Kierlin opened the very first Fastenal store in Winona in 1967, the front desk was a salvaged wood door, the decor was “early Salvation Army,” and the first month’s sales totaled $157. But Kierlin had a clear strategy for Fastenal’s success: provide the kind of service that keeps customers coming back, to grow through excellent service at all levels. “When we started out, we were about the smallest of the 10,000 or so companies that sell fasteners, and by 1996 we were the largest in the country,” he observes. Gradual but steady growth over thirty years is always a sign of very good management and business sense; if nothing else, it shows constant attention to plotting and building the company’s future, investing a healthy portion of profits in the company rather than just paying out profits to investors (adult long-range planning over childish instant gratification). Company employees had long enjoyed a profit-sharing program, and in 1999 Fastenal initiated a stock option in which employees with more than three years of service at the company are eligible to participate; about half of Fastenal’s workforce has taken advantage of the plan. As founder and executive chairman of Fastenal, Kierlin now makes $75,000 a year; in his 45 years with the company he never earned more than $120,000. In recent years he has systematically cashed in his own company shares to make more available to company employees. This, of course, buys loyalty and dedication to company success.
This is not rocket science. It’s mostly just common sense. There’s nothing glamorous here, no overnight explosion in wealth, no magical next-best-thing, no fancy talking toys, no hyper-inflated bubbles waiting to burst. Bob Kierlin just proves that with a good education, hard work, dogged determination, civic responsibility and sticking to what your know best, America still offers great opportunities for real success. It naturally takes a little time, as all things worth the effort do. Kierlin didn’t do anything that anyone else in America, man or woman, could not also have done, on their own, and with no help from Big Daddy Government for “very special me”. He seems to have been driven not by quick fixes, easy answers or short cuts, but rather by a determination to build a good solid company that stands on firm footing providing needed products and services to a very wide range of customers and offering good employment to many thousands of others who have a vested interest in the company’s success. Personal riches obviously seem to have been secondary in his motivations. Unfortunately, there are not too many Americans anymore who are willing to invest so much of themselves into achieving such success, especially across such a wide range of worthwhile inter-related areas, preferring to wait for government or “someone else” to take the blame, pay the bills and do the hard stuff for “me”. Bob Kierlin also seems to have learned his most valuable lessons even before he graduated from high school – while working “hands-on” for minimum wages in the real world of his dad’s store.
Have you ever gone into a good hardware store looking for the exact bolt and nut you need to replace those that worked loose on, say, your lawn mower and got lost in the grass? If you take the time, there’s an excellent chance you will find precisely what you need in the store’s nuts and bolts section with its hundred little labeled drawers. Chances are also excellent that the nuts and bolts section is organized, stocked and inventoried by Fastenal.
(Note that Kierlin, a slightly younger Silent Generation sibling of America’s Greatest Generation, got his college education in engineering and business. During the 1960s American high schools placed emphasis on physical sciences favored by boys equal to that on liberal arts favored by girls. Of course, that was also before such endeavors as text messaging, video games, cell phones and Facebook became far more “productive” “learning” pastimes for our arrested development girly children well into their thirties and forties.)
Chobani is a popular American brand of Greek-style strained yogurt made in New Berlin in upstate New York at a plant formerly owned by Kraft Foods — that made yogurt. The giant conglomerate Kraft Foods, after deciding that the yogurt business was unprofitable, had closed the plant and put it on the market. In 2005 a guy named Hamdi Ulukaya secured a Small Business Administration bank loan to buy the 84-year old plant. He hired several of the plant’s former employees to help repair the facility and, with no prior experience in the yogurt business, created a yogurt empire with facilities in several states employing over 2,000 people. His company was valued at over $1 billion in annual sales less than five years after launch, becoming the leading yogurt brand in the US by 2011. The next year Chobani opened the world’s largest yogurt factory in Idaho, a $450 million investment employing 1,000 people. Just four years after that, the company put another $100 million into the Idaho plant for additional expansion. Ulukaya, a Kurd born into a modest semi-nomadic dairy-farming family in a small village in Turkey, came to America at age 22 in 1994 with no money and speaking no English. Twenty years later Ulukaya is a billionaire who speaks perfectly fluent English and guides a global business that continues to grow rapidly. The immigrant Hamdi Ulukaya did not do anything that any American, man or women, could not have also done, easier. In 2016 Chobani announced it was giving 10 percent of its ownership stake to its employees based on tenure. This would be on average $150,000 per employee, some of whom, starting with the old Kraft plant back in 2005, became instant millionaires. That’s a pretty good return on just one decade of investment in Ulukaya and his company. (Of course, there must be around 50,000,000 American women who could have done the same thing, easier, if they weren’t too busy whining about their entitled “right” to numerical quotas, generation after generation.)
I especially enjoyed this entry in your blog. The ingenuity of this lady was remarkable but I think we Americans seldom have enough respect for the abilities, intelligence and skills of people from other lands. Unfortunately we have an attitude that nothing is as good as America. I am proud to be an American but through travel I have learned that people everywhere are more alike than different and try to live their life the best they can.
Several years ago I was fortunate enough to travel to China for a couple of weeks. What impressed me the most – and believe me there is plenty to see and impress in China – was the infrastructure preparing for future business. In particular, the highway we took between Shanghai and Souzhou had many factories and apartment complexes along the roads. They were sitting empty, just waiting for the next foreign business to move in, set up their shop and get started. The workforce would be available and the housing for the workers was all ready for them to move in. I know that China as a communistic country can dictate how their land is used and what infrastructure they want to put in, direct workers to report to the new company and just take over whatever is necessary to accomplish these things.
I certainly don’t want that type of government but we Americans could prepare for our future better at times. For example, our trains, highways and bus systems in many areas have been neglected in part because we all feel we need our cars.
Thank you, Jeannie.
China is essentially following the “American Playbook” from the 20th century, just with more central control. I, too, am familiar with China, and I can assure you that the Chinese intend to fill most of those empty office buildings with Chinese employees and managers quite capable of competing with anyone on the planet, in any arena.
They do have some major stumbling blocks to overcome, most unknown to most Americans. For example, China currently has a really huge bubble of men gradually working its way up the population scheme – 70,000,000 men in excess of available women. This is due to the “one-child” policy of the past (in an effort to slow the country’s population growth before it got beyond the country’s ability to feed and support). Most couples chose to have a son – who in Chinese history was usually the one to earn the greatest income and be more likely able to support the family in hard times. China has not yet figured out how to deal with all those men destined to remain single for their entire lives. Sometimes a country’s efforts to get things under control can have unintended consequences, so a very light hand on the central control within a fixed set of guidelines is usually the best approach.
You might find “Greatest versus Boomer” and “The Most Important Import” to be of interest in this regard. The Greatest Generation, with a powerful sense of responsibility, built a pretty good superstructure. Unfortunately, we didn’t manage and maintain it very well later.
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Very inspiring story.