Interview with Mr. Cao Dewang, the president of Fuyao Glass Industry Group

One of the richest Chinese enterpreneurs about Chinese investments in Russia and if the Russians should be apprehensive about them.   Here is a Chinese success story.

Please, get acquainted, Mr. Cao Dewang, who began his career at the age of 10 with only seven years of education. In 1987 he founded Fuyao Glass and made it in 25 years one of the largest automotive glass manufacturers in the world. He is one of the top philanthropists in China, whose donations count, by his own estimates, up to $ 1 billion dollars.  A little Dewang, who was born in a poor family at the post-war time, had to leave school and start his work riding a bike and distributing fruit. Then he worked as a cook trying to start his own tobacco business ... In 1976, already having some experience in commerce, Cao Dewang became a sales manager at a small state factory which produced special glass for hydrometers.


Economic and political reforms initiated by Deng Xiaoping in 1978 allowed enterprising Chinese personalities to express themselves. In 1983 the plant, where Cao worked, underwent material losses and Cao was able to get permission from the local authorities to control this plant. He converted it to the production of automotive glass – at that time a car boom was beginning in China – and the plant quickly returned profits. Being sure of the chosen branch, together with partners Cao created in 1987 the company Fuyao Glass and eventually became its biggest shareholder and a director.


Further growth of Fuyao Glass is really striking - as well as striking is the growth of many other industrial companies in China, created from nothing, without skilled workers and engineering personnel, and yet just in a couple of decades managed to be in the same range with global companies with hundred years’ history. Today Fuyao Glass is the second company in the world in automotive glass production and the fourth in terms of its sales. Cooperation with world leaders allowed Fuyao Glass to get modern technology. In March 1996, Cao sold a 51% of share to the French giant Saint-Gobain. But three years later, making sure that the French are not going to encourage the growth of Fuyao outside China, Cao bought them out - paying the premium of $ 40 million.


In 2002, the largest manufacturer of automotive glass in the United States - the company PPG initiated an anti-dumping investigation against Fuyao. It lasted three years and ended with the victory of the Chinese company. It is interesting that despite these incidents, Cao managed to maintain good relations with Saint-Gobain and PPG - the latter sold Fuyao production license in 2005 which allowed the Chinese to build two ultra-modern production lines. Initial fragmentation and lack of development of Chinese automobile market let Fuyao Glass make a decisive leap to become the leader of the sector. Cao’s company initially worked for a large number of car manufacturers, producing a wide range of glasses for different models in small quantities. When after the 2007-2009 crisis global automakers decided to diversify their lineups, many of the major glass manufacturers focused on the mass production of a small range of products appeared not to be ready to quickly change the business model. And Fuyao Glass initially took this way. The quality of Chinese products had already been on the level: in 2006 the U.S. subsidiary of Volkswagen AG chose Fuyao its supplier, and a year later General Motors named the Chinese company the "Supplier of the Year."


In September 2013 Fuyao Glass opened its first production base of automotive glass in Kaluga, next door to its main client, Volkswagen. The production power of the plant, where 200 million Euros was invested, is 3 000 000 units per year, two thirds of which will be exported to Europe.

Read the interview here.

600450 Interview with Mr. Cao Dewang, the president of Fuyao Glass Industry Group
Date: 4 December 2013

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