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Tianjin is decidedly the place to be. A multitude of Western companies have chosen the city to establish a business foothold in China, including Airbus, Gurit, and Hexcel. It is true that the setting appears to favour entrepreneurs, as Tianjin Jinmao Group’s superlative success would indicate.
(Published on January - February 2008 – JEC Magazine #38)
The Jinmao Company specializes in handheld tools for professionals and individuals. It is one of the world’s leading producers in that sector, currently exporting about 90% of its production.
A major player
Tianjin Jinmao Group Co., Ltd. was established in 1984. The company integrates product development, design, production, sales, and service activities; it has an import & export subsidiary, six business departments, 1,600 employees and 56,000m2 of facilities.
The company offers 300 main types of products in eight different ranges, which are caulking guns, painting tools, cleaning tools, gardening tools, extension poles, air registers, cut nails, and ladders. Over 90% of the products are exported worldwide. Jinmao’s leading product range (caulking guns) garners more than 25% of the market share in the United States. The company is China’s number-one exporter of caulking guns.
Another area where Jinmao stands out is in ladders, both aluminium and composite. The company appears to be
the world’s top manufacturer in that niche, with more than 30% of its ladders being made in composite materials. Jinmao invested heavily for that, and has a dozen production lines that work steadily. At least 250,000 ladders leave the Tianjin plant each year.
In 2007, sales in that segment amounted to US$30 million, or about half of Tianjin Jinmao Group turnover.
A singular history
It all began in 1984, when former farmer Li Jie created the company, becoming chairman of the board. In the beginning, the company’s business focused on repairing trucks. Only in 1987 did Li Jie start manufacturing caulking guns for the decoration and do-it-yourself (DIY) sector. By 1993, six years later, the company had 200 employees and was exporting more than a million dollars’ worth of merchandise.
In those days, exports had to go through Chinese government, and Jinmao did not obtain its own export licence before 1996. That change did much to increase the company’s business and development. In 1997, it built a new plant outside Li Jie’s home village, and added new products to its DIY range. Sales shot up to $4.7 million, 95% going for export. The United States alone accounted for 60% of sales. For that market and others, Jinmao went through importers, rather than working directly with names.
The company has achieved excellent performance over the years. In 2000, it was named “best supplier in the world” by the Home Depot Company, one of the biggest retailers in the United States. In 2001, company sales climbed to RMB 130 million, including US$ 13 million in self-operation exports; that same year, Jinmao became ISO:9002 certified for quality, and also earned the German GS and CE product safety certifications. Its sales have continued to grow by about 30% per year since 1999. By 2006, sales had climbed to $50 million, and the company was shooting for $60 million in 2007.
Jinmao constantly develops new products and new markets, striving to seize opportunities for greater development. It needs to put its efforts into managing this growth and development, and that is the company’s main concern at the moment. Up to now, its growth has been almost natural, if not effortless, due to the favourable context and Jinmao’s highly competitive production costs.
The situation has now changed, and the competition – especially from within China – has become fiercer. The company needs to reinforce its marketing, production management and overall management, profitability and quality. You can be sure that Li Jie and Vice-General Manager Sunny Yen have all the determination it needs to pursue this extraordinary adventure at the head of the pack!