Choosing to Be Great
The Edison of Petrochemicals
Suhon Lin, the founder of Taiwan's most profitable privately held company has always scorned such corporate status symbols as a personal assistant, chauffeur or bodyguards, but refuses to scrimp when it comes to R&D.
The Edison of PetrochemicalsBy Jimmy Hsiung
From CommonWealth Magazine (vol. 524 )
It is a mildly hot day in May as we enter a rundown office building on Taipei's Songjiang Road right next door to Hsing Tien Temple. The purpose of this visit is to interview Chang Chun Group chairman Suhon Lin, known as "the Edison of petrochemicals."
The octogenarian is a legendary figure in Taiwan's petrochemical industry. The 85-year-old still tirelessly travels the globe, investing here and there, building new factories and inspecting existing plants.
Lin founded the company with business partners Tseng Shin-yi and M.K. Liao in 1949. On the Forbes magazine list of Taiwan's 50 richest people, published in May, Lin, Tseng and the late Liao's son Liao Long-shing are all ranked in the Top 20, each with an individual net worth of US$1.6 billion.
However, in comparison to the other billionaires on the list, Lin is a rather unknown, secretive person. The obscurity surrounding Lin is not surprising given that the Chang Chun Group is still a private company. In more than six decades of successful business, Lin has steadfastly refused to list his company on the stock exchange. He has also maintained a high level of privacy by keeping a low public profile. Throughout his life Lin has not given more interviews than can be counted on two hands.
After pressing a yellowed button, the rickety old-style elevator moves up to the seventh floor, shaking and swaying. Although the office's plywood partitions have been refurbished with new wood veneer, the distinctly old-fashioned feeling and frugal simplicity of the place come as a surprise.
King of the Non-Listed Companies
After all, these are the headquarters of Taiwan's most profitable privately held enterprise.
The Chang Chun Group last year posted revenue worth NT$180 billion for profits in excess of NT$10 billion. In terms of revenue, it ranks second in the petrochemical industry, right behind industry leader Formosa Plastics Group, a listed company. It is not uncommon for each of the group's 31 subsidiaries to earn back its invested capital for the year.
At a height of 182 cm, Lin stands tall for a man of his generation. His upright posture makes him all the more imposing. While Lin's hair has turned white, his thick eyebrows are still pitch black, underlining his natural authority.
In response to the reporter's surprise at the office's thrifty interior, Lin bursts into laughter saying, "When you see our factories, you'll really be startled."
The Chang Chun Group's factories have always enjoyed the reputation of being on the cutting edge of technology. The laboratories are equipped with the most expensive instruments and equipment. Lin, who highly values occupational safety, is also fastidious about plant facilities from equipment to pipelines and holding tanks. Different types of stainless steel are employed depending on their purpose. During construction all materials are covered up to prevent an adverse impact on the safety of operations from scorching sunshine, rain and dust pollution.
Pinching pennies when furnishing offices but spending lavishly on new factories is what qualifies as Lin's version of "discipline."
Most likely Lin is the only Taiwanese business tycoon without a secretary, chauffeur or bodyguards. In Lin's office, a rather small space of roughly 30 square meters, two simple wooden desks without drawers stand side by side. Lin's desk is the one with piles of documents waiting for approval sitting on top. The other one, which used to belong to the late M.K. Liao, is completely empty. Lin insists on keeping Liao's desk in its original position.
"We all jokingly call our chairman the poorest rich person," says a Chang Chun senior manager, who reveals that Lin has not revamped his office in several decades, but has never shied away from investing huge amounts in research and innovation.
A Sense of Urgency
Chang Chun spends 4.5 percent of its annual revenue on research and development. That is a pretty tall order not just for the chemical industry, but even for Taiwan's high-tech industry. The driving force behind Lin's tireless investment and innovation is a sense of urgency and a constant fear that the situation may change.
"The market keeps changing all the time. Don't be complacent because business is good now, since the good times won't last long," Lin says in a hurried voice. "You have no idea. It's like fighting a war."
The best example of Lin's drive to innovate is the development of water-resistant urea formaldehyde for use as an adhesive in pressed wood products such as plywood, particle boards and fiberboards. Lin recalls that at the time pressed wood boards disintegrated when coming into contact with water. But the glues developed by Chang Chun made sure that the boards stayed intact even after being boiled in water for three hours.
Subsequently, pressed wood products from Taiwan that were produced with Chang Chun glues became a hot-seller in the United States, generating foreign currency income for Taiwan worth hundreds of millions of U.S. dollars. At the time, Chang Chun was the only supplier of such glues to the island's then some 60 manufacturers of pressed wood products, a position that it held unchallenged for 13 years.
Inspired by the uses of urea formaldehyde, Lin went to develop polyvinyl alcohol (PVA), a water-soluble polymer with film-forming, emulsifying and adhesive properties, which later became the company's flagship product. With an annual output of more than 200,000 tons of PVA, Chang Chun has a 90 percent market share in Taiwan and is the largest single producer of PVA worldwide, with a 12.5 percent share of the global market.
Lin is not only hungry for innovation, but has always been personally involved in experimental research to develop new products. From the first day after the company was founded, Lin has made it a habit to spend time in the laboratory doing R&D.
Lin's oldest son Albert Lin, vice president at Chang Chun Petrochemical Co. Ltd., vividly remembers childhood family dinners. His father would return home to quickly eat dinner with the family every evening, but would soon rush back to the factory in Shipai in Taipei's Beitou District, always taking the local train.
The younger Lin produces a yellowed photograph from his pocket. The picture shows him as a boy with his young father looking out of a train window. Suhon Lin, hair slicked back neatly, has his arm wrapped around his son's shoulder.
Somewhat emotional, the younger Lin remarks that although he has had many photos taken together with his father, the train picture means the most to him. When the picture was taken, he was a third grader in elementary school, accompanying his father on the train to the factory.
Today, Albert Lin is a grown man of 57. He acknowledges that although the senior Lin never spent a lot of time with the family, his devotion to his work and innovative spirit have profoundly influenced all the people around him.
"When a leader is like that, he can have an astounding impact," the younger Lin says. The Chang Chun Group has a distinct corporate culture that values innovation. Employees do not pride themselves on who helps the company to make more money, but on who can come up with more innovations.
Key Supplier for Electronics Industry
Few people know that many products developed by Lin are components of items found in every Taiwanese household. Lin personally concocted the core plastic materials for the shells of Taiwan's black residential phones of days gone by, the black handles of the ubiquitous Tatung rice cooker, super glue, the lids for the glass bottles of Zheng Lu Wan (a popular drug for gastrointestinal problems), and Crocs rubber shoes.
He also represents a section of the history of Taiwan's industrial development. Having founded his company in the wake of World War II, Lin was not only a pioneer in Taiwan's petrochemical industry, but also played an indispensable role in the rise of the island's electronics industry. Chang Chun is the world's largest single supplier of several electronic device chemicals such as high-purity hydrogen peroxide, used to clean semiconductor wafers from organic and metal residues, epoxy resin for the encapsulation of integrated circuits, as well as copper-clad laminates, which are key materials for making printed circuit boards.
"When Chang Chun halts production for one day, the normal operation of Taiwan's electronics industry is thrown in jeopardy," reveals the former Taiwan-area president of an international petrochemicals company.
Today Chang Chun firmly holds a dominating market position in various fields, but when it comes to innovation, Lin does not dare to rest on his laurels.
Aware that success creates envy, Lin is careful not to flaunt his achievements. But at one point in the interview he can't help but proudly speak about Chang Chun's most cutting-edge development in recent years: technology and equipment for the recycling of greenhouse gases.
He points out that Chang Chun is the only manufacturer in the world who is able to transform recycled carbon dioxide into a starting material for the production of acetic acid, a useful chemical.
"We can recycle about 150,000 tons of carbon dioxide per year and turn it into a starting material," notes Lin, his excitement over the new technology clearly reflected in his voice. After 60 years of innovation, Lin's enthusiastic spirit remains as strong as on his first day at work.
Translated from the Chinese by Susanne Ganz