The "counterattack" code of Kailong Hi-Tech, a practitioner of Chinese craftsmanship -- transferre

At the beginning of 2022, the International Finance Journal, hosted by the head of the People's Daily, reported an article titled "Counterattack" Code of Kailong Hi-Tech, a Chinese craftsman practitioner "in a full-page column, which carried out in-depth exploration and exploration of the success of Kailong Hi-Tech. Next, let's read deeply and explore the "counterattack" password of Kailong Hi-Tech from a start-up company to a leading enterprise.

We are all using smart phones and tablets, but few people pay attention to the fact that 95% of their chips come from ARM. What is less known is that this small enterprise, which has been sneered at by Motorola and Intel, will become a model of "counterattack".

This successful "counterattack" has given us a story about a small company that started as a licensed computer, but could not get Intel chip authorization, and was forced to do independent research and development, and then grew into a powerful competitor of Intel. When I think of telling this story, I want to tell another story that is happening. It is not only because of the similarities between these two stories, but also because of the high expectations placed on this enterprise. This company, which has been developing continuously since 2001, has constantly surpassed the multinational giants and has become the leader of the Chinese market, but still continues to climb. It is a worthy opponent. What is more valuable is that the head of this enterprise has a very clear understanding of himself and a strong sense of crisis. He firmly upholds the "craftsman spirit", continues to increase investment in research and development, and is determined to accomplish this in his life and become a real entrepreneur and industrialist. The following story is about Kailong Hi-Tech in Wuxi and its leader Zang Zhicheng.

Password 1: commit to accomplish one thing throughout the year

The year 2021 just passed is another bumper year for Kailong Hi-Tech. In October, the "key technology and application of exhaust after-treatment system for automotive diesel engine" of Kailong Hi-Tech won the first prize of China's automobile industry science and technology progress; In November, the project of "Key technologies and applications of low emission tail gas after-treatment system for commercial vehicles" won the first prize of "China Machinery Industry Science and Technology Award", the highest level award of China's machinery industry.

Speaking of these two awards, Zang Zhicheng, the chairman and general manager of Kailong Hi-Tech, can feel the excitement over the phone: "This shows the recognition of Kailong in the industry. We are not a sunset industry. Our project can not only meet the requirements of diesel engines at the 6th and near zero emission level, but also meet the needs of the national" 14th Five-Year Plan "and" double carbon "strategic objectives."

The jury of the two awards also noted this. The appraisal opinion given by the evaluation expert group of the China Society of Automotive Engineering is "the research results of the project are highly innovative and the overall technology is at the international advanced level, among which the urea metering injection system and its control technology are at the international advanced level". As for the key breakthrough of the low emission tail gas after-treatment system of commercial vehicles, the evaluation expert group of the China Machinery Industry Federation believes that "the achievement is highly innovative and the overall technology is at the international advanced level, among which the integrated control system based on the model control strategy and the urea metering injection system are at the international leading level". The China Internal Combustion Engine Industry Association believes that "the project supports the implementation of China's commercial vehicle diesel engine emission regulations from the fourth to the sixth, solves the" neck "key technology and parts of the aftertreatment system, breaks the foreign monopoly, and ensures industrial safety".

It has broken foreign monopoly and ensured industrial security. These two words of commendation point out the contribution of Kailong Hi-Tech to the country and the industry, and also point out the significance that Zang Zhicheng and his Kailong Hi-Tech have adhered to for 21 years. "I just want to really do something and do a good job as an industrialist. We have the courage to invest and innovate in these years, to break through from scratch, and to break foreign monopolies, all of which require us to continue to do well. I want to do a good job in the spirit of craftsman, and do a good job in an industry conscientiously, which is the most meaningful thing." Zang Zhicheng said.

Kailong Hi-Tech was developed step by step in practice by Zang Zhi at the cost of "craftsmanship spirit". In the first interview with Zang Zhicheng, after sitting down and talking for a while, he sent out a feeling of "what is an entrepreneur": when his money is invested, he will encounter obstacles and setbacks, and will not give up until he succeeds. Only those who make the enterprise successful in this way are called entrepreneurs.

Zang Zhicheng's words are very popular, but the truth is straightforward, easy to understand and full of common sense. To sum up his words, it seems that the only criterion for testing entrepreneurs is practice. He used 21 years of entrepreneurial experience to realize the truth that "real entrepreneurs are tested in practice". When he expressed the emotion of "what is an entrepreneur", he was recalling to the reporter the dilemma that he almost stopped when he started his business 21 years ago. It was also his insistence that Zang Zhicheng finally succeeded in Kailong.

"Our entrepreneurship is a battle against the back." Recalling this experience many years later, Zang Zhicheng felt that he had put his fortune on it. He graduated from Wuxi Institute of Light Industry with a bachelor's degree, and grew into an expert entrepreneur with continuous research. Over the years, he and his Kailong Hi-Tech have obtained 234 authorized patents, including 50 inventions, led or participated in the formulation of 19 national industrial standards, and won 9 provincial and ministerial science and technology awards. As the project leader, he also undertook 6 national projects and 11 key projects in Jiangsu Province.

The achievement of these achievements is related to Zang Zhicheng's logic of starting his business by relying on products to market - being "forced" to engage in independent research and development, and then getting the benefits from independent research and development, and then putting more funds into independent research and development.

Password 2: Only products can win the market

In order to maintain a firm foothold in the market, it is ultimately the product that counts. This is Zang Zhicheng's experience over the years. From the beginning of the establishment of Kailong Hi-Tech Company, he has broken the monopoly of multinational giants in the market step by step by relying on products, and has become a domestic leading enterprise that has occupied 20% of the market share for six consecutive years. At present, he has become a veritable industry leader. He understands the logic of getting through the market by products.

He attaches great importance to product research and development, and the market will certainly live up to him. "In the Chinese market, as long as you develop results, the main engine factory is willing to give it to you. In our industry, this is the market." According to him, Sany Heavy Industry is willing to cooperate with them, and what it is interested in is Kailong's products and continuous research and development capabilities. It is understood that at the beginning of 2021, Hunan Deutz Power Co., Ltd., a subsidiary of Sany Heavy Industry, signed a long-term strategic cooperation agreement with Kailong, handing over no less than 70% of the market share to Kailong. Kailong Hi-Tech is also one of the two core suppliers planned in Sany Heavy Industry Park.

Zang Zhicheng and Kailong Hi-Tech developed the market step by step. In 2001, after successfully testing the product with only six remaining employees, he took the product and two other friends to raise 1 million yuan to establish Kailong Hi-Tech. At the beginning of the company's establishment, it was very difficult. He clearly remembered the scene of the failure of products in the Shanghai market before, and then paid more attention to the research and development and quality of products. Choosing the automobile after-treatment system as the direction of entrepreneurship can not be said to have vision at that time, but there are still great market risks.

The opportunity was Beijing's successful bid for the Olympic Games on July 13, 2001. The Olympic Games need a comprehensive upgrade of the city. The boycott of individual foreign athletes due to environmental problems also made Beijing realize the importance of environmental protection, and then made the decision to implement the fourth national standard in 2008. At this time, Kailong has just started. The first order is not from Beijing, but from Qingdao. Qingdao bus has been equipped with 50 cars experimentally. Kailong Technology has finally completed the first 300000 yuan sales. Although the amount of money is small, it brings hope to Zang Zhicheng and his team. At that time, Zang Zhicheng drove a golden cup minivan across the country. He successfully won the bid in Beijing by taking advantage of the east wind of the Beijing Olympic Games.

"It was a new product at that time, and it was not easy to persuade others to use it. Even in foreign countries, there was no product, only patents. Later, after I succeeded in Beijing, Shanghai began to use this product." Zang Zhicheng said, after his product was successful in the country, an old master of technology in Zhengzhou Public Transport said, "There are many people who do this in the country, but you are the only one who turn this into a product, and you turn it into a commodity, which is not used abroad, You let China use it first. Another important reason for enabling the product to be used throughout the country, and continue to be used and become a market is that Kelon attaches great importance to the product quality.

"Without quality, there is no dignity." Zang Zhicheng said that he launched the first generation of products at the beginning of the Fourth National Day. At that time, the enterprise was still small. He spent all his accumulation on research and development, and was respected because of the good quality of products and the low failure rate. "I personally manage the quality. I deeply realize that 'no quality, no dignity'. People have great respect for you. Once there is a product problem, they will call you to scold, which means no dignity." He said that Kailong invested tens of millions in the detection equipment only, and needs to test every data. Kailong has ranked first in the market for four consecutive years, which has a great relationship with the quality of the product.

Password 3: late-developing enterprises should also seize the first-mover advantage

"If we were listed for the purpose of listing at that time, there would be no us in the Sixth National Day." When saying this, Zang Zhicheng deeply realized the price that Kailong paid to ensure the product quality and the leading research and development. He explained that Kailong spent a lot of money on research and development every year, but these funds were not enough. He also considered going to the capital market for financing, but was hindered by the debt ratio of up to 70% at that time.

At that time, Kailong focused on the diesel engine after-treatment system. In addition to investing tens of millions of yuan in research and development every year, it also borrowed 450 million yuan from banks for research and development and product industrialization. Since Kailong was obviously a heavy asset, the country postponed the implementation of the fourth national standard at that time, which made Kailong face difficulties for a time. "The Kyoto Protocol was signed in 2010, and China only implemented the fourth emission in 2015. In the past five years, we have cultivated more than 20 competitors." He said that at that time, the representative of the investor quarreled with him and asked him to dismiss the high-wage R&D personnel, so that we can go public.

However, the final result was that Zang Zhicheng and Kailong Hi-Tech did not listen to the opinions of the investors, but chose to continue to maintain R&D investment and postpone listing. Facts have proved that his choice is correct. Since the Fourth National Day, he has been concentrating on research and development. Zang Zhi Chengdu has personally mastered the research and development of all parts and components. By July 1, 2017, when the national implementation of the fifth national emission standard began, there were only five or six competitors of Kailong, while after the official implementation of the sixth national emission standard on July 1, 2021, there were few competitors that could compete with Kailong. "We started to study the sixth national standard in 2015, so we can stay ahead in the industry. There are only one or two complete systems that can be found in the catalog, including us at most," Zang Zhicheng said.

Zang Zhicheng's experience is that he always looks forward to the future direction. "At that time, no one knew the word SCR (selective catalytic reduction technology, a treatment process of diesel vehicle exhaust emissions), and I thought this product had a future. Kelon has today come from my forward-looking layout 20 years ago." Zang Zhicheng said that the internal combustion engine still has a long life, and how to continue to achieve growth is still the direction of Kelon in the future. But we should also consider the second venture, "you can't just stay in the market of the past 10 billion or 20 billion".

He said that the second entrepreneurship refers to the direction of new energy. "This year's two sessions put forward carbon peak and carbon neutral, which I think is a direction." Zang Zhicheng said that at the Second World Internal Combustion Engine Conference, they will sign a contract with Shandong University to establish a joint research center for green and low-carbon energy utilization technology, which will focus on the key core technologies of zero emission and hydrogen fuel.

Password 4: Only by increasing research and development can we continue to innovate

"Enterprise development must invest in research and development. Kailong has been willing to invest in research and development since the beginning. In 2002 and 2003, when the company just started, it invested 10 to 20 million yuan in research and development every year. Later, it invested more than 71 million yuan in 2018, 80 million yuan in 2019, and 90 million yuan in 2020," he said.

Zang Zhicheng believes that increasing investment in research and development is a contribution to the country. He explained that, first of all, they are breaking the monopoly of foreign countries. The after-treatment equipment under the fourth, fifth and sixth emission standards are all born in Kailong. In addition, the price of imported systems has been greatly reduced due to the introduction of Kailong products.

"In the fourth stage of the country, (at first) a set of after-treatment costs 84000 yuan, and a set of engine costs only 90000 yuan. Why is a set of after-treatment so expensive? Because you don't have it, the price of foreign products is extremely high. After the product of Kailong comes out, the price of foreign products immediately drops to 36000 yuan, then 25000 yuan, and finally 15800 yuan. At this time, the product of Kailong is only 78000 yuan." Zang Zhicheng said, there is a huge difference in price. "The same is true for the sixth year of the year, when foreign enterprises bid 40000 yuan, in fact, more than 30000 yuan is reasonable".

On this point, Kailong estimated in a promotional material that due to the launch of Kailong's products, the price of similar foreign products "dropped from 77000 yuan/set to 8000 yuan/set, saving nearly 50 billion dollars in foreign exchange for the country", and Kailong relied on its complete industrial chain of internal combustion engine emission control to "break the monopoly of international giants Bosch, Cummins, BASF, Johnson, Grundfos and other multinational giants".

Zang Zhicheng told a story: one year, Gu Shengzhi, then vice chairman of the National Committee of the Chinese People's Political Consultative Conference, said that enterprises should have positive energy when he visited Kailong for research. Zang Zhicheng told him about the feelings of an entrepreneur, that is, he should not take money too seriously, but be willing to invest in scientific research. "If you pay too much attention to money, you can't do great things. If you drop 80 million or 100 million yuan, you feel distressed, and the pattern will be small. If you are willing to spend money on equipment, scientific research, and talent, you dare not spend money on these three places. The enterprise will certainly fail, and you will have no vitality. Besides, if the enterprise goes public, you must make more contributions." Zang Zhicheng said.

It is not easy to make some contributions. Even in the automotive after-treatment system market, it is still the world of foreign enterprises and the main competitor of Kailong. Zang Zhicheng told reporters for example that the whole industrial chain of Kailong is the only one in the world, but each segment is monopolized by foreign enterprises. "For example, the foreign giants are Johnson and BASF; the catalyst carrier is NGK of Japan and Corning of the United States; the injection system is Tenak and Bosch of the United States; the nozzle is the mainland and Bosch of the United States; the packaging is Tenak and Faurecia; the sensor is Taiwan-funded Zhengyang and the United States Tek, as well as the system integration, so we are heavy assets and we need to be refined. The core components of these post-processing systems are in the mainland All are blank ".

Zang Zhicheng said that a post-processing system consists of about 15 components, involving more than 10 disciplines such as chemistry, machinery, electronic control, industrial design, etc. "Our industry is multi-disciplinary, which can be said to cover all industries. For example, catalyst carrier is material chemistry technology; injection system is fluid mechanics, mechanical and electrical control, and electrical control is also divided into hardware and software, and then system integration; sensor category involves ultrasound, so it basically covers all disciplines". To carry out research and development for these disciplines, Kailong has built 9 research institutes, including packaging structure, electric control, technology, machinery, materials, and structure. There are 300 design and research engineers with various professional backgrounds, including 11 doctors and 46 masters. However, talents are still insufficient. Kailong will recruit 60 technicians every year. At the same time, it also has long-term cooperation with Huazhong University of Science and Technology, East China University of Technology, and FAW Group Wuxi Oil Pump and Nozzle Research Institute.

It is understood that the experimental center of Kailong Technology Research Institute has built more than 20 experiments, including engine laboratory and three-degree-of-freedom vibration laboratory