By RAYMOND ZHOU (China Daily)
Updated: 2007-09-03 07:15

Dawa Dondop has two wardrobes: At home he often appears in traditional Tibetan garb, sitting in his spacious living room of authentic Tibetan dcor, sipping butter tea, or looking from his balcony onto Potala Palace just a few streets to the south.

In his office just around the corner, he prefers a white shirt with a warm-colored tie, talking with vendors or clients with the eloquence, cosmopolitan flair and sophistication to match any big-league businessman in a major city.

Whatever his exterior, Dawa has the imposing physique of a Khams man from eastern Tibet and the self-confidence to go with it. That may have helped make him as an emerging star of the Tibetan business world.

Dawa is the founder, president and chairman of Tibet Dashi Group, with businesses in water resources, road construction and tourism, among others.

But his most outstanding product is a premium cooking oil, which he markets under the brand Tibet Nature.

"The walnut oil we produce comes from wild walnuts grown on trees 3,700 meters above sea level, and some are 100 years of age or older. It is truly one of a kind. Our standard rapeseed oil also contains 46 percent walnut oil and the Tibetan variety has 51 percent, compared to 37 percent for the top brands produced in the rest of the country. Only a few Canadian brands can match our quality," the 45-year-old entrepreneur says.

Oil from snowy regions

When the Qinghai-Tibet Railroad opened a year ago, the very first freight train carried 4.14 million yuan worth of Tibet Nature cooking oil to Shanghai. Dawa has since relied on the rail line for shipping. "It saves us 70 percent of transport costs compared with trucks, which is crucial for a low-value-added agricultural product," he explains.

Shipping by train takes 18 days to reach major destinations like Beijing, Shanghai and Guangzhou, a bit slower than by truck. But it is more reliable and each shipment has at most two or three cartons damaged, many fewer than when shipped by truck, which often travel over rough roads, or even roll over, causing much higher financial losses.

Dawa has two very different strategies for rapeseed oil and walnut oil. Tibet Nature Agriculture Co, the arm of the group in charge of producing and marketing cooking oil, has one-seventh of the 70 million yuan Tibetan market for rapeseed oil, with a 5 to 10 percent profit margin.

"I'm not going to take it nationwide because I cannot make much money out of it. But I'm not giving it up either because 200,000 Tibetan farmers benefit from it, directly or indirectly," says Dawa.

For walnut and healing oils, which can reportedly lower cholesterol, the profit margin can be as high as 30 percent. Retail prices doubled from 2004 to 2005, turning the product into a cash cow with even greater potential. "And 300,000 farmers from seven Tibetan counties form our supply chain," he notes.

Dawa would not reveal financial details, but said Tibet Nature broke even in 2006 and revenues have been doubling year by year. Group-wide profit has grown at a 15 to 20 percent annual rate.

Trustworthiness

With so many suppliers, mostly home-based, management is tricky. When Dawa first started, he learned the hard way what it's like to deal with people who do not know what a contract entails.

In 2003, he signed contracts with seven county governments to buy 26 million tons of rapeseed. Soon afterward, market prices rose and farmers sold their yield to higher bidders. Local governments did nothing to deter them. As a consequence, Dawa lost 5 to 6 million yuan.

"You cannot blame anybody. People, including government officials, did not have a sense of abiding by a contract. Creditworthiness is important, but it's only possible when all sides follow the rules," he said.

In 2005, he went a step further and dealt directly with village committees. That year, the rate of contracts fulfilled reached 50 percent. It was also around the time that higher levels of government invested 4 million yuan to develop 45,000 mu (about 3,000 hectares) for high-quality rapeseed production.

Dawa has been the largest buyer, and to set a good standard, he pays a small premium while guaranteeing a floor price and letting it tick upward as dictated by the market.

"Now, rapeseed farmers beg me when harvest season comes, but I shoulder the biggest risk in price fluctuations."

Between doing well and doing good, Dawa never lets one eclipse the other. When he contracted for the job of upgrading the Sichuan-Tibet highway in the late 1990s, he hired an engineer, who twice demanded surcharges after the contract was signed. "In the end, I did not make a penny from the project, but I guaranteed our work was top-notch," he sighs with relief.

In business as in life, there can be blessings in disguise. When Dawa quit his first business in late '80s, he sold his truck to a man in Lanzhou. But instead of paying him the promised 33,000 yuan, the buyer could only pay an initial 12,000. While waiting for him to come up with the remainder, which took six months, he put himself up in a cheap hotel in Lanzhou and there met his future employer-partner, who accepted Dawa's truck resale debt as equity and took him to the Pearl River Delta.

Building a business, brick by brick

Dawa's resume as an entrepreneur is so full of adventures that any part of it can be sketched out in colorful detail. After returning from southern China, he ran a "mobile business" involved in border trade. He also spent 1992 in Hong Kong selling a Tibetan herbal medicine. While there, he noticed that many of the business empires are family based.

"Someday, I'll have a big company named after me," he thought. Hence was born "Dashi", a Romanization of the first syllable of his name (shi is Chinese for family).

Dawa believes in investing in the future. In 2003, he spent 75 million yuan on state-of-the-art equipment from Sweden that ensures the best quality of processing.

He also credits government aid that tided him over several difficult transitions. But according to Wei Sanxing, an official with the Tibet Enterprise Union, a trade organization, some central government subsidies for the distribution of agricultural products do not reach the grassroots level. "You see the money is there, but there is a glass partition stopping you from obtaining it," he explains.

"The government has a lot of preferential policies for us. But getting handouts is like catching fish. The most important thing for us to learn is fishing," adds Dawa.

He is now concentrating his efforts on building a distribution network in the coastal region.

"We have won quality certificates from Germany and Japan as well as from our own country. We have a big market in quality-conscious metropolises and all we need is a sales channel that best positions our products and reaches our clientele," says Dawa.

In Shanghai, he is talking with a big food company for an equity partnership. In Beijing, he hopes to set up boutiques and rent counters in upscale department stores.

"We are putting in our own money now, but we're open to all possibilities, including joint ventures and foreign investment. Eventually, I'll take our products to the international market. I know I can do it. We have the unique advantage of something produced on the roof of the world. Nobody else has that edge."

Outlook

Dawa is aware that the bigger his business, the more he'll be held up as a model by the government as well as by his compatriots. "Tibet does not have hi-tech," he says. "All we can provide is the value of agricultural products. I'm a farmer's son and I'm also a Buddhist. Being religious means to do good things for others."

Dawa says that the Tibetan history of mixing religion with politics has acted to curb people's business sense. Tibetans who are in business often do not have enough confidence, he says, especially in the face of rapid changes.

"Tibetan Buddhism emphasizes reincarnation. I tell my sales people that when you sell one yuan of goods, you're actually committing 10 cents to the happiness of your afterlife because you have made it possible to raise the living standard for others. But if you make one yuan by evil means, you're adding 10 cents to your record of evil, for which you'll be punished in the next life," he says. "Doing well and doing good overlap here, and you no longer need to burn incense and say prayers every day."

(China Daily 09/03/2007 page12)