ZHANG YIN – CHINA’S ‘QUEEN OF TRASH’ WHO FOUND ABSOLUTE WEALTH IN WASTE PAPER

Zhang Yin is the founder and Director of the family company, Nine Dragons Paper Holdings Limited, a recycling company that buys scrap paper from the United States, imports it into China and mainly turns it into cardboard for use in boxes to export Chinese goods. The company is China’s biggest paper maker.

Zhang (born 1957) is a Chinese entrepreneur and one of the richest persons in greater China. She currently ranks as the fourth richest woman in Mainland China and 66th richest overall with US 3.6 billion wealth, according to China Rich List 2018. She was born as the eldest of eight children.

Zhang’s father was a lieutenant in the Red Army but was jailed for three years during the Cultural Revolution for rightist activity. Because of her father’s imprisonment, Zhang never went to a university and began working at a young age to support her family. Her father’s contacts and connections with the Communist Party would help along her business career.

After working as a bookkeeper in a Guangdong textile factory and attending trade school for accounting, Yin moved to Shenzhen to manage the accounting and trading departments of a paper trading company. At that time, the city was becoming the special economic zone and export hub.

There she learned of opportunities in Hong Kong’s waste paper trade with China from a paper-mill contact in Liaoning. Zhang was determined to enter the sector and in 1985, at age 28, she successfully opened the paper trading company ‘Ying Gang Shen in Hong Kong’, (a convenient source of raw materials in the form of waste paper) using her savings of US $ 3,800.

China’s growing volume of exports needed paperboard – a thick but light and relatively cheap paper-based product used for packaging. China was short of timber. So, there was a growing market for waste paper, from which paperboard could be recycled.

Zhang’s company did well but she soon realised that she needed a bigger source of waste paper. In 1990, she moved to Los Angeles, USA in search of better resources. According to the New York Times, she and her husband drove around the garbage dumps of California in a Dodge minivan, setting up deals to acquire waste paper (which California had too much of) to ship to China.

Zhang founded the company America Chung Nam with her husband. This company has been the number one American paper exporter since 2001 and the largest overall exporter of freight to China from the United States, by volume shipped.

Zhang Yin returned to Hong Kong in 1995 to expand her business into the packaging sector and cofounded Nine Dragons Paper Holdings Limited with her husband and her younger brother Zhang Cheng Fei.

The China operation soon dwarfed its US sister company. The first paper machine went into production in 1998. In the early 2000s, two more machines were added, bringing production capacity to one million tonnes.

In 2003, a new plant was opened at Taicang, in the Jiangsu Province, on the Yangtze River delta. Today, Nine Dragons has the biggest production capacity in the world for manufacturing paperboard products from recovered paper and has diversified into the production of printing and writing papers.

In 2006, Zhang became the first woman to top the list of China’s richest people, with her wealth estimated at US $ 3.4 billion. Nine Dragon Papers is a family-owned business but Zhang believes that management should be free of interference from the owners.

“We’re not a company where the family boss manages every detail,” she told Forbes.

“I don’t approve of this kind of system at all. I approve of how multinational companies are run. Although my company is small, I use that kind of management ideal.”

In 2009, her company already had 11 ultra-modern giant paper making machines, 5,500 employees, US $ 1 billion in annual revenue and another huge new facility under construction.

Zhang Yin makes most of the strategic decisions; her husband is CEO; her brother handles general management. Her son Lau Chun is a Nonexecutive Director. The company has three general managers, who are responsible for all aspects of the business; none are family members.

On June 2014, Zhang was named Asian CEO of the Year for 2014, at the 15th annual Asian Pulp and Paper Conference.

Now past 50, Zhang Yin runs a network of modern, highly respected, environmentallyconscious 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.

What lessons can we learned from Zhang Yin?

Several factors contributed to Zhang’s rise and her success in business. Commenting on her success, Zhang said, “Forecasting the market ahead of our competitors is what made us into the market leader.”

She was always ahead of the competition. She said, “While most domestic producers were using machines with a production capacity of less than 50,000 tonnes, our first machine had a capacity of 200,000 tonnes. We have higher goals.”

Zhang isn’t interested in celebrity, fame, fashion or boasting of her wealth. The trappings of her wealth and status seem not to interest her. She is a private person who rarely gives interviews. She just gets on with the job of running her paper empire.

‘Where there’s muck, there’s brass.’ This is a saying from the north of England. Zhang spotted a shortage of good quality waste paper to supply the Chinese paper making industry and filled that gap. At that point, she realised that the fragmented and smallscale manufacturing industry in China offered a gap she could fill with one large consolidated paper packaging manufacturer. She proved right.

Zhang is patient and measured. Her investments grew her business rapidly but incrementally. Now it firmly trades on its green credentials. And, whilst far from the epitome of sustainability, Zhang’s paper making business at least eats its own tail: consuming the waste paper from the packaging it makes.

“People ask me how I did it. My answer is by astutely sticking with what I knew best and by exploiting what spoiled Americans didn’t want – trash. I, in fact, out-did Americans at their own game. After all those ships bringing Chinese toys to Americans are offloaded in Los Angeles, my company fills up the ship with waste paper going back to China, which is then turned into packaging for more Chinese toys – to further multiply Chinese wealth. Without levelling a single Chinese tree, I turned American trash into Chinese gold.”

“I remember what a man in the business told me back then. He said, ‘Waste paper is like a forest. Paper recycles itself, generation after generation.’ I took that memory all the way to the bank. I managed to convince the bank and get my bank facility.”

Another distinctive feature in the management style of Zhang Yin is that she is an innovative entrepreneur. She developed her business through innovation and also she was an expert in applying state-of-the-art tools to successfully develop her business and she understood how to create value through innovation. She knew as an entrepreneur, she needed an edge to survive and stand out. Innovation provided that edge—boosting her productivity, growth and profitability.

(Lionel Wijesiri is a retired company director with over 30 years’ experience in senior business management. Presently he is a freelance journalist and could be

contacted on lawije@gmail.com)