Cao Dewang, chairman of Fuyao Glass; Herding oxen as a boy gave the tycoon the drive to succeed


May 25, 2014 2:05 pm

Cao Dewang, chairman of Fuyao Glass

By Demetri Sevastopulo in Hong Kong


Reflective: Cao Dewang’s company supplies glass to carmakers from Toyota and VW to BMW and Bentley

Cao Dewang became the biggest Chinese investor in Ohio this year when Fuyao Glass, the car glass manufacturer that he founded in 1987, spent $200m buying an old General Motors factory in Dayton.

Few people outside China have heard of Mr Cao even though Fuyao supplies everyone from Toyota, VW and Ford to BMW, Daimler and Bentley. Its founder has been catapulted into the ranks of the wealthiest Chinese, with assets of $1.14bn, according to the 2013 Hurun China rich list.

Mr Cao would be richer still were he not one of his country’s most generous philanthropists, having donated about $1.3bn across 2011 and 2012, including to the Heren Foundation, a charity he created.

“The more I donate, the more I realise how little use I have for money,” he says. “It should be shared with others or used to educate children.”

While he may be at the vanguard of philanthropy in China, he started parting with his cash for unusual reasons that underscored the challenges of running a private business in China in the early years of the national economic reforms launched by Deng Xiaoping in 1979. “In the beginning, I was punished during a local party campaign, which really scared me,” says Mr Cao, explaining that he thought he might lose his assets. “So I donated all the money that was in my name.”

Mr Cao, who is also known by his Cantonese name, Cho Tak-wong, boasts the kind of rags-to-riches tale that is becoming increasingly common in China as it emerges as an economic powerhouse. He was born in Shanghai in 1946 to a wealthy business family from Fujian province. The next year his family fled back to Fujian as the communists moved closer to Shanghai in the final years of the Chinese civil war. Mr Cao says they became poor almost overnight after being swindled along the way. “My father bought a boat and loaded up all our possessions. But we returned to Fujian on a cruise ship because the other boat was too small and we were worried about getting seasick,” he explains. But when his family arrived in Fujian, the boat carrying their possessions failed to join them. “We had hired someone to bring it back, but it never arrived. He said it sank.”

After losing everything, his family was forced to farm for a living. Mr Cao says he started school aged nine, but had to quit at 14 because his family could no longer afford to send him. He ended up herding oxen. “Back then, farming was really hard, nothing like today. We didn’t even have enough to eat,” Mr Cao says in an interview in the comfort of the Shangri-La hotel in Hong Kong. “My dream was just to leave that place, I just had to escape”.

He began to educate himself, using a dictionary to learn the thousands of Chinese characters needed to read the language. But he also started his first business, buying and selling tobacco leaves to escape poverty.

“I made two or three renminbi a day,” says Mr Cao, adding that he had to find ways to avoid the police as private enterprises were banned. “I was caught many times, but I had no choice as my father was not able to farm. This was our only way out.”

During the cultural revolution – the violent, tumultuous decade unleashed by Mao Zedong on China from 1966 – Mr Cao started selling fruit at a time when people denounced as “capitalist roaders” were being killed.

“I had little trouble doing business during the cultural revolution,” says Mr Cao. “It was actually much easier as there was no government. There were rules and regulations but there was no government to enforce them.”

The CV

Born: Shanghai, 1946

Education: Drops out of school in 1960 after five years of education, and starts herding oxen

1960-76 Trades tobacco, fruit and vegetables
1976 Hired as merchandiser at Fuqing Gaoshan Special Glass Factory
1983 Buys the factory from the local Communist party with his savings from trading
1987 Establishes Fuyao Group
1993 Fuyao Group lists on Shanghai Stock Exchange

Interests: Reading, playing golf (by himself), philanthropy

After the cultural revolution he found a job at a factory that made glass for water meters. Then, in 1983, he got a break when the local government agreed to sell him the enterprise because it was losing money. He bought it with his savings from trading tobacco, fruit and other goods, and managed to turn a profit of Rmb200,000 within a year.

“No one dared to take over the factory, as it was run by the Communist party,” says Mr Cao, adding that he owed his rise to Deng’s economic overhaul – with new reforms being rolled out during the early 1980s. “At the time, no one believed the party was serious about reform. I was lucky the government introduced them after I took over the factory, as otherwise I would have spent Chinese new year in prison.”

He continued making water meter glass but in 1985 changed tack after learning that Japanese companies were making glass for cars in China. They were selling glass for several thousand renminbi, which he thought was “shameless”. He was able to produce panels for Rmb50, which he sold for Rmb1,500, generating a far higher profit margin than he had earned previously.

In 1993, he listed Fuyao, which is based in Fujian province, on the Shanghai stock exchange. It started trading at about Rmb1.3, soared as high as Rmb19.19 before the global financial crisis, and today fetches about Rmb8. Last year it had revenues of $11.4bn, while earnings before interest, taxes, depreciation, and amortisation were $3.4bn.

Within a few years of listing, Mr Cao had persuaded Honda and Volkswagen to become customers, helped by a Chinese rule that 40 per cent of the components in cars produced in China had to be made by local companies.

Chinese companies have enjoyed variable reputations for quality but Mr Cao is adamant that he dealt with that challenge early on. “In order to supply Honda and Volkswagen, your quality absolutely had to be as good as them,” he says. “Now we are the biggest producer of car glass in the world.”

Mr Cao puts his success down to the penchant for hard work he developed when he was poor, saying he worked 16 hours a day, every day of the year for more than two decades.

But one more goal remains, says Mr Cao. While Fuyao employs more than 10,000 people around the globe, he wants to turn his hand to expanding in the US, and will start by creating 800 jobs in Dayton.

“I want to build a Fuyao for the American people, as the country’s car glass industry is in decline,” he says.

Mr Cao now enjoys some leisure time having handed the chief executive reins to his son, and likes reading. He is carrying several Chinese business magazines, but says he enjoys a Buddhist tome called the Diamond Sutra. He also plays golf, and smiles when asked if his competitive spirit has carried over on to the golf course. “I never count the strokes, but I am always the champion as I play by myself.”


About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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