Sibling split

The four brothers of the Liu family are proud of the time when they managed their company together, but even brothers have different ideas. So they decided to spilt up their business, but did it in an amicable way.

Yongxing, the second brother, remembers the evening he and Yonghao decided to divide up their animal feed business. He took out a map, drew a line, then asked Yonghao to pick up the sections he wanted. The younger sibling chose south and west, and Yongxing took the rest.

When the four brothers decided to separate in the 1990s, 10 years after they started together, there was widespread speculation in the media about conflicts among them. Even local government officials were worried. The head of Sichuan province invited the four brothers for a meal on a weekend, afraid that the split may cause problems to a pivotal enterprise in the province.

The brothers said they simply wanted to clear a management obstacle.

"To work together at the very beginning is very efficient, but we had to move ahead and study modern management systems as the enterprise got larger," says the third brother, Chen Yuxin, whose birth name was Liu Yongmei and later changed when he was adopted because the Liu family was too poor to raise him.

He was the first to quit from his official, government-assigned job to start the private effort. To reduce the risk, the four brothers did not leave their jobs at the same time. "If I failed, they would continue to have work," he says.

They did divide their responsibilities well in the beginning. In the pig feed business, Yonghao, the youngest and most outgoing, was in charge of marketing. The second brother Yongxing was responsible for management, and the other two spent most of their time developing new products.

As the business expanded, the four bosses started to have differing visions reflecting their own personalities. The eldest, Yongyan, a fan of technology, advocated building a hi-tech business. The third brother wanted to stay with the existing trade, while the more-ambitious second and youngest brothers wanted to expand to a larger market.

In 1997 they divided up New Hope Group and founded four companies to pursue their dreams separately. "We made the ownership clear and have developed smoothly ever since," says Chen.

Their measured and cautious split reflected their approach since the family business was first started. After their first feed company was up and running, the four brothers asked their wives, who had helped them start, to stay home and away from involvement in the business.

Yonghao's wife, Li Wei, a medical technician who first helped him raise quail on their balcony, did not work until eight years later when their daughter left to study overseas. She borrowed 20 million yuan from Yonghao and began her own firms, including a printing plant and later a flower business.

"She returned the money to me quickly, and manages on her own - although I give her advice sometimes," said Yonghao in a TV interview.

(China Daily 01/28/2008 page12)