Li Changrong Group, a Taiwan-funded enterprise that has invested and set up factories in Zhenjiang, Jiangsu Province and Huizhou, Guangdong, is a century-old enterprise and the world's largest supplier of thermoplastic rubber.
In the long course of 109 years, how has LCY Group achieved long-term success, and how has it responded to the changes and challenges of the times? Let's learn about the inheritance of LCY Chemical!
Transformation will take 30 years, and innovation without management will be a burden on enterprises
Li Mouwei, President of Li Changrong Group.
Recently, LCY Chemical signed a cooperation agreement with Japan Electrolysis through "LCY International" to provide US$9.5 million in financing for "Denkai America Inc" (Denkai America), a subsidiary of Japan Electrolysis, and "LCY Technology", a subsidiary of LCY Group, has also obtained the authorization of Japanese electrolysis technology.
LCY said that this cooperation will enable both parties to have more flexibility in the production of high-end PCB copper foil, which is expected to be used in packaging substrates, 5G, and driver assistance systems (ADAS) applications in Chinese mainland, Taiwan and around the world.
LCY Group, founded in 1915, has a history of 109 years. After Li Mouwei, the second generation of his family and the son of founder Li Kunzhi, was dismissed as general manager in 1990, through continuous transformation and innovation, he not only developed the most complete series of C1-C5 chemical products, but also expanded his business territory through successful mergers and acquisitions. Today's LCY Group has three core enterprises: LCY Chemical, LCY Technology, and Global Plastics; It has a total of 15 production bases and 42 production lines on both sides of the Taiwan Strait and overseas, spanning chemicals, plastics, rubber, electronic chemicals, copper foil, solar energy and other fields.
It is worth mentioning that LCY Chemical has beenThe world's largest supplier of thermoplastic rubber, the company produces electronic grade isopropanol(EIPA) is an important wafer detergent in the semiconductor process; Especially inAt present, only two chemical factories in the world can provide advanced processes below 7 nanometers, and LCY is one of them, which shows LCY Chemical's position in the global chemical industry.
Founded in 1915, Li Changrong started from the wood industry and turned from wood plywood to chemical raw materials after the company was founded 50 years later, and then entered the field of copper foil and solar energy 30 years later, which is also the way it can become a century-old and evergreen success.
The second generation of the Li Changrong family is well aware that in order for a company to move towards sustainability, it must have flexible means to respond to the changes and challenges of the times and the environment, he said: "The company will need to transform in about 30 years."
The headquarters of the LCY Group on Bade Road in Taipei City.
LCY Group, formerly known as LCY Wood Company, founded in 1915, was founded by Li Kunzhi, the father of Li Mouwei, president of LCY Group. Today, the headquarters of the LCY Group, located on Bade Road in Taipei City, used to be the factory of LCY to export wood plywood.
In 1965, 50 years after the establishment of Li Changrong, Li Changrong Chemical was established, and then from the 60s to the 70s of the last century, the Li Changrong family took the road of "plywood + chemistry" two legs, in addition to opening wood factories in Keelung and Pingtung, it also successively opened formaldehyde and urea formaldehyde resin factories in Xizhi, and set up chemical companies in Hsinchu and Kaohsiung; In 1975, LCY Chemical's ** was listed on the Taiwan Stock Exchange.
In 1982, LCY Wood changed its name to LCY Industrial, and from 1983, LCY Chemical began to produce chemical products such as isopropanol.
In 1997, it was a key year for Li Changrong to enter the mainland market, and in this year, Zhenjiang Li Changrong Chemical, Zhenjiang Li Changrong Petrochemical Warehousing, and Li Changrong Technology in Zhenjiang were established. After entering the new millennium, LCY began to expand overseas, acquiring Polimeri Europa S. in 2003p.Company A's Thermoplastic Rubber Plant (TPE) in Baytown, Texas, USA, has since made LCY Group the world's largest supplier of thermoplastic rubber.
In 2005, Li Changrong Plastics, located in Huizhou, Guangdong Province, was established, and in this year, Li Changrong signed a supply agreement with CSPC Petrochemical Co., Ltd. for the supply of monomer raw materials such as butadiene and styrene with CSPC Petrochemical Co., Ltd. Before and after, Zhenjiang Li Changrong's formaldehyde and paraformaldehyde production capacity continued to expand.
In 2006, Li Changrong acquired Fuju and later established Fuju Solar to produce polysilicon. In 2018, Zhenjiang Li Changrong Comprehensive Petrochemical Industry changed its name to Zhenjiang Li Changrong High Performance Materials
Li Mouwei. From the founder of the first generation Li Kunzhi, to the second generation of the first generation of Li Mouwei, Li Changrong started from the wood industry, and then transferred to the fields of material chemistry, copper foil, solar energy, etc., as Li Changrong Group President Li Mouwei said, to adapt to the changes and challenges of the times, "about 30 years to transform", another problem arises, Li Changrong is a cross-border transformation, the enterprise is sustainable and evergreen, talent must be the first, the most critical is to rely on management, how do they do it?
Born in 1957, Li Mouwei was sent to the United States by his father to study at the age of 11, until he returned to Taiwan from the United States in 1982 at the order of his father to join Li Changrong, and took over as general manager 8 years later, becoming the second generation of the family. With more than 30 years of experience in leading the transformation of the company and investing in materials chemistry, Li Mouwei has always regarded talent cultivation as the first priority of his work, he once said: "Talent cultivation is not only related to the survival of the industry, but also the cornerstone of Taiwan's economic and sustainable development. Since 2008, he has been organising scholarships and research assistantships for young professors through the LCY Education Association.
In 2017, Li Mouwei hired Liu Wenlong, who was the vice president of BASF in Germany, to serve as the general manager of Li Changrong, and he began to retreat into the background and wanted to study for a doctorate. Li Mouwei, who found out that he had apnea, bought an anti-snoring device on the Internet, and began to study blood sugar-lowering devices, which ignited his dream of being a scientist.
As we all know, the research and development of materials chemistry is sometimes a long road, and it may take more than 10 years or more from investment to market.
There is an additive with flame retardant function, which has been completely banned by the European Union and gradually banned by the United States due to its adverse effects on infants and young children; In fact, 20 years ago, a well-known chemical plant developed a new type of additive, but it was not prohibited by the law at that time, and decided to license the patent to others. Not long ago, Li Changrong, who was authorized, considered that the time was ripe, and then launched it to the market in one fell swoop, and soon entered the industrial chain. Li Mouwei said: "R&D needs to be managed, and it cannot be all-encompassing. ”
Li Mouwei revealed that Li Changrong has introduced a research and development mechanism in recent years, and when research and development enters the next stage, it needs to be reviewed and evaluated, "out of 10 to 20 projects, only one may enter the market in the end." He believes that "innovation is never a burden for enterprises, but a burden for enterprises without focus and management." ”
Strictly endure hardships and lay the foundation for corporate sustainability
Li Mouwei. This year is the sixth year that LCY Chemical has been acquired and privatized by KKR, the world's largest private equity company. On September 10, 2018, after the merger and acquisition case was approved by the extraordinary shareholders' meeting of Li Changrong Chemical, the former major shareholder and president Li Mouwei issued an "Li Mouwei Open Letter" with 2 pieces of A4 paper, the industry was shocked, and many people couldn't figure out why Li Mouwei did this at that time?
In this letter, in addition to explaining to shareholders and his family members that the world's largest private equity **KKR merger and acquisition is the highest stock price in more than five years, so that everyone can make a profit, he also indicated that he uses ** equity to make up for the family's previous investment losses of billions of NT$, and also plans to repay the billions of NT$ borrowed from the bank for investing in solar energy and other innovative businesses.
At that time, Li Mouwei mentioned in the letter that Li Changrong Group has been in operation for more than 100 years, and he returned to Taiwan from the United States in 1982 to step down as chairman in August 2017, and his wish for 35 years is to make Li Changrong Chemical a world-class chemical company. However, he said that the Kaohsiung gas explosion on July 31, 2014 disrupted his original life plan, and after reconciling with the victims, he chose to resign as chairman three years after the gas explosion incident, realizing the concept of "separation of management rights and ownership" for many years.
On May 11, 2018, the Kaohsiung District Court sentenced him and five colleagues to 4 years in prison for the Kaohsiung gas explosion, which is undoubtedly worse for Li Mouwei and Li Changrong Chemical, especially when Li Mouwei was 63 years old and had reached retirement age, and his first granddaughter was born. Li Mouwei said in the letter that if the criminal responsibility is determined, what is the use of money and fame for him?
On July 31, 2014, the Kaohsiung gas explosion incident.
Li Mouwei may not have imagined that after Li Changrong was acquired and privatized and delisted by the global private equity **KKR, his life fate also ushered in a big reversal in April 2020, and the previous fear of imprisonment also disappeared.
On July 31, 2014, a serious gas explosion occurred in the propylene pipeline of Li Changrong Chemical's Kaohsiung plant, resulting in 32 deaths and 321 minor and serious injuries. The accident situation is roughly that on the evening of the same day, the propylene pipeline in Kaohsiung City was damaged due to 21 years of rust, resulting in more than 80 tons of propylene gas directly leaking into the box culvert and spreading to Kaohsiung Kaixuan, Yixin, Sanduo and other road sections, and was ignited by an unknown heat source in the middle of the night, resulting in 32 deaths and 321 minor and serious injuries, including rescue police, firefighters, and passers-by.
After that, the Kaohsiung District Court found Li Mouwei, the former chairman of Li Changrong Chemical, and nine people, including the company and Huayun Warehousing, guilty in the first instance, of which Li Mouwei was sentenced to 4 years in prison, but in the second instance in April 2020, the court found that the manufacturer was not responsible and ruled not guilty. Since then, the prosecution has appealed, and in September 2021, the Supreme People's Court ruled that the prosecution's appeal was dismissed, and so far, the criminal lawsuit for this major gas explosion death and injury tragedy has been determined.
The second instance held that the main cause of the Kaohsiung gas explosion incident was caused by the civil servants' improper control of the quality of public works, and should be attributed to the fact that Li Changrong Chemical of Kaohsiung City first buried a 4-inch propylene pipeline in 1991, and then contracted by the Sewer Engineering Department of the Kaohsiung Public Works Bureau to directly cover the propylene pipeline when entrusting Ruicheng Company to carry out the construction of the underground drainage box culvert. The court of second instance pointed out that at that time, Qiu Bingwen, the supervisor of the project, should have coordinated with CNPC and related operators to relocate and change the flammable and explosive pipeline, but allowed the construction personnel to directly carry out the construction, and in addition, the project design and acceptance were not only not checked in person, but finally approved the acceptance.
In September 2021, the Supreme People's Court found in the third instance that Zhao Jianqiao, then secretary general of Kaohsiung City, Yang Zongren, deputy engineer, and Qiu Bingwen, supervisor, were sentenced to 2 and a half to 3 and a half years for negligence death for participating in the pipeline burial and acceptance checks, and must be imprisoned. Incidentally, the mayor of Kaohsiung at the time was Ms. Chen Ju.
In April 2020, after learning that the Kaohsiung gas explosion case was reversed and the verdict was acquitted, Li Mouwei personally issued a statement in response, saying that the Kaohsiung gas explosion is an indelible tragedy, and he will make every effort to introduce international advanced technology and experience, find out the hidden loopholes in industrial safety management and improve them, so as to avoid the tragedy from happening again. Objectively speaking, for Li Mouwei personally, it is not easy for him to get out of the Kaohsiung gas explosion incident, but the incident has also caused a great blow to Li Changrong Chemical, and being acquired and privatized by private equity **KKR is only one of the impacts.
Li Mouwei. After KKR's acquisition of LCY Chemical and its privatization, Li Mouwei and his family were invited by private equity ** to take a stake in Carlton's upper holding company, with a shareholding limit of no more than 45%, and were able to maintain the right to participate in the sustainable operation of LCY Chemical.
Li Mouwei has a set of philosophy in his work and management, that is, "strictly endure hardships and lay the cornerstone of success". When he was 11 years old, he was sent to the United States to study by his father, Li Kunzhi, the founder of Li Changrong Chemical. This "rich second generation" who grew up with a golden key, at the beginning of his elementary school students in the United States, in an environment where he could only rely on himself in an environment where he did not understand the language and could only rely on himself, he began to work part-time when he was in middle school, riding a bicycle to deliver newspapers to people, and also working as a cleaner in a movie theater. This kind of experience also made him know that only by being willing to endure hardships can he achieve something.
Because of his interest in mathematics and chemistry, Li Mouwei entered the Massachusetts Institute of Technology to major in chemistry, when he decided not to have financial support from his family, he was helped to help professors change exam papers to earn money in his sophomore year, and won a school scholarship in his junior year, and then became a teaching assistant until he graduated from college, and completed his bachelor's and master's degrees in MIT in four years. After graduating, he worked in R&D at Chevron Research in the Bay Area, California, where he developed six patents in one year. Although his father asked him to come back**, he decided to continue his education and pursue a master's degree in business administration at Stanford University.
While a master's student at Stanford University, he helped his father with the company's affairs in the United States while studying. In 1982, at the age of 25, at the repeated request of his father, Li Mouwei returned to Taiwan from the United States to join Li Changrong Chemical, and ten years later, in 1992, he began to take over as CEO, and was adept at using acquisitions to turn Li Changrong into a world-class chemical company.
Regarding the success of Li Changrong Chemical, Li Mouwei said that his personal achievements are because he stands on the shoulders of giants. He said: Although he thinks that studying is the most tiring period of his life, the strictest teacher is his father Li Kunzhi. Only with the support of his father can he let his adventure and innovation be implemented, and then promote the transformation and upgrading of LCY Chemical. He said:Each of us can achieve something because we stand on the shoulders of giants! We are to be grateful and humble to others.
The golden dragon is auspicious, and the spring is full of blessings in the world. "Yibo Said" wishes you a happy New Year, all the best, and a happy family!