HANGZHOU, China, Feb. 9 /PRNewswire-Asia/ -- China’s beverage giant, Hangzhou Wahaha Group reported an annual growth rate of 70% for 21 years since its founding, amid the global financial crisis. According to “Top 10 Beverage Companies” announced by China Beverage Industry Association, Wahaha contributed 55.57% to the Association’s Top 10’s overall production, 65.84% to its revenue, and 73.16% to its profit tax.
Zong Qinghou, President of Wahaha, commented, “We concentrate on our core businesses of food and beverage to ensure a solid foundation for the enterprise. Our ‘co-distribution system’ and talent advantages greatly improve our counter-risk capability and enable us to stand firm during the global financial crisis.”
Focusing on Quality Food and Beverage
“As China becomes the world’s largest food and beverage market, we’ll be a major player in the global market as long as we succeed in the Chinese market,” said Zong. Wahaha made a decisive move in 1999 to merge with Hangzhou Canning Factory and thereafter determined to take on food and beverage as its main business. After entering the market with health-care product, Wahaha Oral Liquid for Children, Wahaha launched other new leading products such as AD calcium milk, purified water, mixed congee, etc. Sales revenues of these products ranked first in their respective fields for many consecutive years.
Production-Distribution Network that Awes World-renowned Beverage Companies
Wahaha implements a strategy of “local production and local distribution” and has built a production-distribution network that awes world-renowned beverage companies. Wahaha has 55 production bases across China and factories in all provinces except Tibet and Hainan. It enjoys world-class production capacity with imported production lines and equipment from the U.S., Germany and Italy. Wahaha R&D center is a qualified National Class Enterprise Technology Center, and the underling Analysis Center has been certified by China National Accreditation Board for Laboratories, both providing strong guarantee for its product quality.
Around 4,000 first-grade domestic wholesalers and a larger number of second- and third-grade wholesalers and outlets ensure that Wahaha products get to millions of retailers nationwide in one week after they leave the factory, including rural areas and Xinjiang, Tibet and other backward regions. “Our rapid and sound network serves as human blood vessels which circulate the blood stream to every part of the body once the products are ready,” Zong Qinghou comments as he takes pride in this unique “co-distribution system”.
Wahaha depends on two concepts to establish long-term partnerships with thousands of domestic distributors: credit and profits for distributors. As Zong Qinghou put it, “Some distributors have worked with us for two decades. The appeal of the “co-distribution system” lies in win-win of profits for both the producer and distributors.”
Favorable Geographic Conditions plus United Staff
Since Wahaha was founded, Zong Qinghou has put forward the Company’s concept in “Employees create profits for the Company, the Company provides development for employees”. “We withdraw 1.5% of staff income annually to use as special training fund,” he said. According to incomplete statistics, Wahaha employees received over 19 hours’ training in average in 2007. In Wahaha, a common section head may have been sent abroad to learn equipment repairing knowledge.
Wahaha recruits a large number of graduates from higher education institutes each year. More than half of factory heads, section chief and other managerial and professional talents have grown from college graduates. Currently, more than 4,000 employees have diplomas of junior colleges or higher education at Wahaha, of whom more than 130 are doctors and masters. “Talents are the first resource of Wahaha,” said Zong Qinghou. When Wahaha was transformed into a shareholding company, every employee got equity, which was a rare practice in China.
Corporate Responsibility
Wahaha strives to fulfill its social responsibility by “Moving Westward”. Since 1994, it built plants in former revolutionary areas such as Fuling of Chongqing as well as Yichang and Hong’an in Hubei. Plants established outside Hangzhou all enjoy great success and have contributed towards the local economy, particularly to poverty-stricken areas. Some branch plants have become local leading enterprises after years of development. In recent years, Wahaha won titles such as National Excellent Company Providing Targeted Poverty Reduction and National Excellent Company Providing Targeted Assistance.
Zong Qinghou, who came from a family of educators, is enthusiastic about community programs, and has donated RMB214 million for charity purposes. On December 24, 2008, he donated RMB5 million for the “Spring Campaign” of Hangzhou, breaking his own record of single-sum donation.
Wahaha has strong anticipation for 2009 amid the economic crisis -- a new goal of operating revenue of RMB50 billion, a new high for Wahaha. According to Zong Qinghou, “The operating revenue is expected to reach RMB100 billion in 3-5 years.”
