Chu Shijian: from Tobacco King to Orange King, at 85

Chu Shijian: from Tobacco King to Orange King, at 85

Staff Reporter

2013-12-04

Chu Shijian. (Internet photo)

Chu Shijian, China’s 85-year-old “Tobacco King” and former owner of the Yunnan Hongta Group, decided in 2011 to ease his way into retirement by starting a fruit company. Chu Oranges has since become an in-demand option for Chinese buyers worried about food security and taste, according to the Guangzhou-based 21st Century Business Herald.The founder of PC giant Lenovo Group, Liu Chuanzhi, is also no stranger to the back-to-the-land story, having himself set up Liu Peaches earlier this year.

Their careers are all inspirational stories, said Dalian Chong Investment Management Limited investment director Yue Yang. “Consumers buy their fruit, and taste their spirit.”

For consumer products such as cars, garments and handsets, there are quite a few well-known tycoons to admire as role models, but fruit industry heroes are only just beginning to rise. Renowned entrepreneurs such as Chu and Liu have turned to agriculture and with their shift has come a swift upgrade in quality and product price.

According to statistics from Benlai.com, a five-kilogram package of Chu Oranges is priced at 128 yuan (US$21), while a 3-kg package of Liu Peaches is sold at 168 yuan (US$28), about 100%-200% more expensive than similar produce. Even so, demand still far exceeds supply.

During the Single’s Day shopping spree on Nov. 11, Chu Orange sales reached 200 tons, surpassing sales for the whole of 2012. Benlai.com CEO Yu Huafeng said his firm is expecting to sell 2,000 tons of Chu’s oranges this year, but if the company can its hands on more, it would have no problem selling 8,000 tons.

In 2006, Chu’s orange garden had a total production of 1,000 tons of oranges, and in 2011 reached 8,600 tons. This year, total production of Chu Orange is expected to reach 10,000 tons.

The market for quality food and fruit has followed rising living standards in China, and that should be the direction of the nation’s fruit industry, Yu said.

According to Yue, China’s fruit farms had a production scale of over 500 billion yuan (US$82 billion), with an average growth rate of higher than 13.6% over the past 10 years, and the expected growth rate to be around 8%-10% in the next few years.

In 2013, Chu’s garden is expected to produce 10,000 tons of oranges with a total production value of 80 million yuan (US$13 million) and achieve profits of more than 40 million yuan (US$6.6 million), according to Chu’s inheritor Li Yaxin.

In 1998, Chu was sentenced to life in prison for corruption at the Hongta Group, where he presided for 17 years. Chu, who turned Hongta (Red Pagoda) into the most popular cigarette brand in China, was approved for medical parole in 2002 and began to produce oranges at the age of 75.