Innovation: key to finding new fortune in old corn
A partial view of Dacheng Group, a leading Chinese corn deep-processing company, headquartered in Changchun |
Vehicles were waiting in line for about 500 meters in front of the company warehouse. Like Wang, the drivers of those vehicles had all come to sell their corn to the company.
However, Wang was not worried. Sitting in his vehicle and pointing at a workshop of the company, he said: "The company needs corn; they make corn into starch, protein powder, starch sugar and lysine"
Though he was not clear on how corn was made into protein powder or lysine, the farmer with about 30 years of experience in growing corn did know that "these things are profitable."
The company that produces these "profitable things" is the Dacheng Group, a leading corn processing company with a 10-year history.
Established in 1996, Dacheng Group had a registered capital of $22.39 million. When it began operations two years later, the company was mainly involved in producing corn fodder, corn starch and corn oil.
With an annual processing capacity of 600,000 tons of corn, the young company grew into a leading industrial player by 2000. Its market performance was not bad either.
However, being "not bad" is not a goal of the Dacheng Group; the company pursues better, said Xu Zhouwen, chairman of the Dacheng Group board of directors.
Xu said his market research in 1999 showed that his company still lagged behind in making high value-added products.
Since then, improving the added value of products through innovation has been a great concern of Xu and his team.
There was a great demand for lysine in China in 1999, when 95 percent of lysine supply came from abroad and the rest from joint ventures.
As a result, the price of lysine once surged to more than 40,000 yuan per ton while its raw material, corn, was sold at just around 800 yuan per ton.
Dacheng Group targeted the high value-added product, lysine. After hundreds of experiments, the company developed lysine production technologies on its own strength.
With proprietary technologies, Dacheng Group has an annual output capacity of 300,000 tons of lysine, accounting for more than 40 percent of total world production.
Another strong evidence of the company's innovative spirit lies in that it has extracted industrial alcohol out of corn after research and development and, more importantly, made mass production possible.
A 1-billion-yuan production line with an annual output of 200,000 tons of industrial alcohol began a test run at the end of last year. The proprietary project is expected to earn the company 3 billion yuan in revenues.
"The innovative spirit permeates everywhere in Dacheng," Xu said. "We encourage innovation both in technologies and in management, marketing and ideas."
"Dacheng Group never says goodbye to innovation," he asserted.
Through continued innovation, the company has made a new story about finding a fortune in old corn.
The company currently has an annual capacity of processing more than 3 million tons of corn. Its annual output of lysine has reached 360,000 tons, the highest in the world, and it has the first production line that produces industrial alcohol from corn.
(China Daily 03/08/2007 page20)
