Chapter 19 Dahua: Weak water is three thousand, just take a scoop to drink

This is a hidden champion company that is closest to my residence, and I got the news one month ago at the end of 2006. In November 2006, a friend from the State-owned Assets Supervision and Administration Commission of Guangdong Province told me that you have been researching invisible champions. Why do you not know that there is a champion company that has been in business for 20 years less than 5 kilometers away from you?I smiled and said: This is more in line with the characteristics of an invisible champion.Indeed, among the champion companies I have contacted, more than 60% of the companies have never been heard of by locals.

Dahua Machinery Manufacturing Co., Ltd. has always been located in a corner of Nancun Town, Panyu, Guangzhou since 1984. It has been committed to research and development and manufacturing of complete sets of automatic noodle production equipment for 20 years.Few people may know about this company, but the vast majority of Chinese people must have eaten instant noodles made by Dahua Noodle Machine: the top instant noodle manufacturers in China-Master Kong, Uni-President, Simite, Baixiang, and Nissin Most of the advanced noodle making equipment is provided by Dahua. Since the end of the last century, my country's instant noodle industry has been advancing all the way. The annual demand at the peak reached 150 production lines, the minimum demand was no more than 50 (2006), and the average was no less than 100. Except for about 5% of imports , and the rest are domestically produced.But no matter how the market changes, Dahua's annual output is always about 40.Lin Yanming, general manager of Dahua, said: "I only want 1/3 of the market share, and I won't do anything more."

Are there not enough orders?Lin Yanming said: "We have never stopped production, and orders have been placed until May 2007." Is the production capacity unable to keep up?Lin Yanming said: "We can increase production by another 20." What's the reason, you don't make money? "There is no reason. This is my own bottom line. Because it is easy for my business and myself." Lin Yanming said, "The most important thing is that none of the customers I need are left behind." Like many champion companies, he focuses on the market positioning principle, and only takes the established target customers.Lin Yanming said: "Market share is just a general concept. What we focus on is who we serve and who our products are sold to. The benefits of our users must be the highest in the industry."

His logic is simple: first of all, for the so-called market share, he worked hard to sell, and the people are very tired, and the gain may not be worth the loss; in addition, this also leaves room for his peers; the most important thing is that he has long known: a Noodle companies have large orders, but they have no position in the market. Half of the risk lies with equipment suppliers, and payment collection and other issues are very difficult. Therefore, Dahua has been choosing high-quality customers as its service objects for more than 20 years. Its customers can be counted with 10 fingers, but this has not hindered its steady growth.

As for the remaining 2/3, according to Lin Yanming, there is a space left for the peers. In my opinion, it is actually a piece of chicken ribs left for the peers.With the daily decline of the most important domestic competitor, Guangzhou People's Machinery Factory, Dahua has no competitors at all. In the noodle machinery industry under the low-profit industry of instant noodles, what Dahua left behind It is conceivable that some of these low-end profits are low, so Dahua has no regrets and even consciously leaves it to its peers. This is also a fish raised by Dahua in the water.Speaking of which.Lin Yanming naturally used a metaphor: If a person only has 100,000 yuan, he will only buy a 100,000 yuan car. When he has 1 million yuan, he will buy a Mercedes-Benz BMW.The same is true for businesses.We will come to Dahua after he has purchasing power.

In this way, he calmly serves the customers at the top of the pyramid, and at the same time holds the appetite of the middle-end noodle companies that are on the rise.So he dared to say: as long as this 1/3, do not do more. Dahua has entered this industry since 1984, and it has been more than 20 years. During this period, countless original enterprises of the same kind have been eliminated, and the rest are struggling; countless non-enterprises have tried to enter, but none Exceptionally failed.With an annual production capacity of about 40 pieces, Dahua walks steadily like a clock. To paraphrase the lyrics of Shuimunianhua, "Countless people have come and gone in the noodle industry, only Dahua has been with us all the time. around."

Why did Dahua come to the present?Why is there a steady stream of orders without a single marketer? Lin Yanming summed it up like this: "Dig a hole if there is nothing to do, and it will happen when it will happen." It means setting aside time, starting with craftsmanship, technology, and quality, laying a solid foundation at ordinary times, working slowly and meticulously, and maintaining a leading position in the industry; with good cost performance and high quality service and establish industry reputation. "The bigger the hole, the more perfect our work is, so the water (customers) will come naturally."

Of course, the pit cannot be leaky, and it must be managed as leak-tight as possible.Lin Yanming thinks: 3 points for technology, 7 points for management.Details are the key to decision management.He said: "Scientists experiment 100 times, as long as they succeed once, they will become famous. But entrepreneurs do 100 times and fail once, and they will give up all their previous efforts and lead to complete failure. So proceed with caution." After clarifying the target customers, everything Lin Yanming does is for the customer's two words: satisfaction. When it comes to technology, Dahua does have an unsurpassed position in the industry: in the 1980s, when the general shift (eight hours per shift) was 30,000-50,000 packs of instant noodles, Dahua's equipment could produce 8.8 In the future, Dahua will continue to refresh the shift production records of domestic noodle making equipment: from 88,000 to 120,000 bags, from 120,000 to 150,000 bags, from 150,000 to 200,000 bags, and up to the current 5 million pack/min.It can be said that the improvement of noodle making technology in the whole of China is promoted by Dahua.From another data point of view, Dahua’s stability and accuracy are unmatched in the domestic industry: on the 500 packs/minute assembly line, Dahua’s equipment can control the weight error of each pack of noodles to about 2%.The remaining manufacturers' equipment is about 3%, and it is unstable.

"I have what others don't have, and I have something new if others have it," Lin Yanming said.He believes that human relations are the most unreliable in commercial communication.Reputation first, price second.Credibility is not what you say, but how you do it.What he is most proud of is: In decades of business, there is no complaint from a customer, and no one day's wages are owed to employees. Lin Yanming said: "Our industry is a very small industry. The brand is not on paper or in words, but in the minds of customers." Now all of Dahua's customers come to us.

A market that is too segmented is often easily saturated in a certain area.Many hidden champion companies are often forced to go global.Of course, only the company itself knows the hardships during the period. In the past two years, the domestic noodle industry has been in a downturn. The low-end noodle industry has no purchasing power. Although there are high-end noodle products, orders have been reduced. The national annual demand has dropped to about 50, and Dahua has obtained 25 The domestic market share jumped to an astonishing 50%. "With the crazy growth of steel and other raw materials, Dahua paid for domestic orders. The purpose is very clear. It is to maintain customers and the vitality of the enterprise, not to maintain profits." Lin Yanming said.

Dahua has long set its sights on the global market.In the past few years in Russia and Canada, in recent years in Vietnam, Indonesia, and Guatemala, Dahua has competed globally with its Japanese counterparts who are currently the most advanced in the world's noodle making equipment industry. After several rounds, mutual benefits win or lose.With the demand from emerging markets such as Vietnam and Indonesia, Dahua's main profit in the past two years still comes from exports. His plan is to achieve a 1:1 ratio of domestic and foreign sales next year. "There is no doubt that Japanese equipment is ahead in technology, but the cost performance is not as good as ours." Lin Yanming said, "Each has its own advantages, and Dahua will have the last laugh." In this year's sluggish market, Lin Yanming, who has always been cautious, unexpectedly made a big move that surprised his peers: he invested 100 million yuan to open a new factory, and the first phase of 70 million yuan has already been invested. Many people have raised doubts, should it be so big?Lin's answer was full of pride: "I'm not saying it's big. There is a global market of more than 5 billion in the front, and a domestic market of 1.3 billion people in the back. Is this still big?" The ambition is evident from this.