Taiwan Mourns Passing of Noted Business Leader Wang Yung-ching

An endless stream of visitors showed up to pay their last respects. Business-world heavyweights, political leaders, and academics alike all spoke in praise of Wang, and as he lay in state it was especially moving to see how many of his mourners were rank and file employees, members of the general public, and indigenous people who had benefitted over the years from Wang's philanthropic contributions in education and other areas.

Huang Dehai, a professor at Tsinghua University in Beijing and author of a book on Wang, notes that he never speculated on stocks or real estate, but instead concentrated on his company's core businesses. The approach worked, as profits climbed steadily over the years. The group last year achieved operating revenues of some NT$2 trillion, and now has ten listed companies, among which the group's "four crown jewels" alone issued cash dividends totaling nearly NT$200 billion, tops among all listed companies in Taiwan. Many investors have such strong faith in Formosa Plastics management that they buy the stock whenever the price dips a bit. Building up their holdings in the high-dividend stocks year after year has paid off handsomely for them.

Wang's work ethic and pragmatism were the core elements of the Formosa Plastics culture. He exhibited his "customer first" philosophy as a teenager in the rice store. He would carefully cull sand from the rice, and recorded the time and amount of each rice purchase made by customers so that he could make deliveries when he knew they were about to run out of rice at home. Before filling up a customer's rice bin, he would take out what remained from before and then put it back in on top to make sure no one's old rice would go bad at the bottom of their bins. This type of painstaking service enabled Wang's business to grow by leaps and bounds.

After the rice store, Wang opened a brick kiln and a lumber yard, where he built up managerial skills and capital. In 1954, he boldly borrowed money under a US foreign aid program to establish a factory for the production of PVC powder. Taiwan's economy at that time was no powerhouse, however, and the PVC powder found no buyers. He nearly went bankrupt, but rather than back off, Wang went for broke. He ramped up production to cut down on unit costs, and branched out into downstream processing of the PVC powder, thus becoming one of his own best customers. The strategy paid off big time.

Wang followed up by setting up Nan Ya Plastics, Formosa Chemicals and Fibre, and Formosa Petrochemical, cementing the group's position as a petrochemicals empire. By the 1980s, Formosa Plastics was the biggest private-sector company in Taiwan, but Wang pushed for more, seeking to expand further into the upstream reaches of the petrochemicals chain. After ten years of hard-fought battles, the group finally succeeded in establishing the Sixth Naphtha Cracker at Mailiao, Yunlin County in 1994. Wang displayed prodigious energy in the project to reclaim coastal land and build roads needed for the facility.

The group invested NT$600 billion in the Sixth Naphtha Cracker complex, which today boasts annual output of over NT$1 trillion, and Wang, still vigorous at 80, continued pushing plans to branch out into electronics, autos, steel making, power plants, and biotech. Not all the plans have succeeded. Formosa Automobile Corporation, for example, went out of business, and Wang was still fighting right up to the end to get started with steel making, but opposition was stiff because the industry requires so much energy and water.

Wang was also well known for his tremendous love of country.

He once wrote: "I am Taiwanese, and I am also Chinese. There is no reason why we Taiwanese, we Chinese, cannot do better than the Japanese or the Americans." He has presented lengthy expositions of his views to the central government many times, calling for "faster progress with cross-strait cooperation, faster integration, and faster moves to show mutual goodwill." The thaw in cross-strait relations under the Ma administration this year was very heartening to Wang.

Wang was generous in support of education and disadvantaged social groups. He donated RMB3 billion in recent years to 10,000 elementary schools in mainland China. He also donated several hundred million RMB after the earthquake in Sichuan, and spent a similar amount to donate hearing aids. In Taiwan, he provided thousands of indigenous students with full tuition, room, and board to study at Ming Chi University of Technology and Chang Gung Institute of Nursing, both of which were founded by Wang.

Charles H.C. Kao, president of Commonwealth Publishing, notes: "A business leader is someone who has made it big in business. A great business leader is someone who is willing to share his or her resources and wealth with society." He rates Wang Yung-ching as one of the very few great business leaders of the past century in either China or Taiwan.

Wang's passing should not have much impact on the Formosa Plastics Group because succession matters were ironed out ahead of time, but will another leader of Wang's stature emerge now that he is gone? We'll just have to keep our eyes peeled.