Running a Business Is About Giving Back to Society

——Charitable Acts of Zhu Xiaokun, Chairman of the Board of Tiangong International Company Limited

On the vast land of China lies a magical place – Danyang, Jiangsu Province, the hometown of the Qi and Liang dynasties. Throughout Danyang’s long history, a great spirit has been passed down: patriotism, care for the people, love for the hometown, and dedication to benefiting the country, the people, and the hometown. The land of Qu’e (an ancient name for Danyang) nurtures virtues of loyalty, sincerity, compassion, and kindness, which are passed down from generation to generation and spread across Danyang along the waves of the Jiuqu River.

In Danyang, Jiangsu, Tiangong International Company Limited has thrived under the favorable policies of China’s reform and opening-up. Led by Zhu Xiaokun, Chairman of the Board of Directors, all Tiangong employees have embarked on a path of prosperity. Tiangong is an inspiring enterprise, and Zhu Xiaokun is a respected name that commands admiration. Zhu Xiaokun has not only led Tiangong International to make outstanding contributions to China’s tool and special steel industries – becoming a leader in China’s special steel and tool sectors and making Tiangong a renowned brand both nationwide and globally – but also dedicated a great spirit and universal love to society and his beloved charity cause. While developing and expanding Tiangong International with the pragmatic style of a doer, he also contributes to charity with the benevolence of a philanthropist. As an old saying goes, “Poverty honors ambition; wealth honors benevolence.” Zhu Xiaokun helps those in distress and delivers social care to those in need. As an outstanding Communist Party member and a charity ambassador, he has let countless recipients feel the warmth and sincerity of society. His numerous charitable acts, like timely rain in a long drought or torches in freezing weather, convey deep affection and sincere love to society.

Gratitude for the Source of Blessings – Prospering Without Forgetting the People

Zhu Xiaokun has vivid memories of his poor childhood: “Poverty spurs the desire for change,” and he was determined to lead the villagers to a prosperous and peaceful life.

Deeply influenced by traditional culture, he integrates virtues such as respecting the elderly, caring for children, and helping the poor and weak into his daily life.

Zhu Xiaokun, Chairman of the Board of Tiangong International Company Limited and Chairman & General Manager of Jiangsu Tiangong Group Co., Ltd., is affectionately called “Xiaokun” by the villagers of Qianxiang Village. He is leading the villagers to stride forward on the road of building a new socialist countryside.

“Life would never be this good without Zhu Xiaokun!”

A famous person once said, “Hardships in childhood are a treasure.” Zhu Xiaokun strongly agrees with this, and his life has proven its truth.

At the age of 13, Zhu Xiaokun began pushing a wheelbarrow and carrying manure. He went to work in the fields at 5 a.m. every day and earned 6-7 work points a day. He still clearly remembers that at that time, he could not eat rice – he would drink a large bowl of porridge in the morning, feel hungry as soon as he reached the river embankment, and then spend the entire day carrying earth to build the embankment. Living in such difficult conditions, the strong-willed young man made up his mind: if given the chance, he would earn more money and live a better life.

In those poor years, people often quarreled over trivial things like a brick, a tile, or small items. Later, when Zhu Xiaokun became the village public security director, he realized that poverty was the root of such conflicts. He vowed that if possible, he would lead the villagers out of poverty – so that people would no longer bicker over trivial matters.

It was perhaps this desire for a happy life and the determination to lift the villagers out of poverty that kept Zhu Xiaokun from giving up on life. Since founding Tiangong Group (a village-run enterprise) in 1981, he has tried various businesses: from hardware manufacturing to copper handles, from plastic bottle caps to long-distance high-power antennas – until finally deciding to focus on twist drills as the core product. Since then, Tiangong has created industry miracles and scaled new heights in the sector.

Under Zhu Xiaokun’s leadership, Tiangong Group has developed significant advantages in the industry over more than 20 years: It has world-leading production equipment, technology, and large-scale production facilities for its two core products (special steel and tools), as well as a vertically integrated business model, solidifying its leading position in the industry at home and abroad. It has obtained nearly 40 national patents for scientific research achievements, and boasts a R&D team of hundreds of technical talents (active in fields such as smelting, steel rolling, heat treatment, and precision alloy new materials) and many industry experts. It has also established alliances with multiple universities and the Central Iron & Steel Research Institute, gathering top scientific and technological elites in China’s high-speed steel, mould steel, and cutting tool industries.

The secret to Tiangong Group’s healthy and harmonious development over nearly 30 years lies in four key factors: hard work, market-oriented strategies, integrity in operation, and the indomitable entrepreneurial spirit of Zhu Xiaokun. These factors not only laid the foundation for Tiangong’s initial success but also drove the dramatic transformation of Qianxiang Village, Danyang (where Tiangong Group is located).

At the end of 2002 and the beginning of 2003, Tiangong Group followed the trend of historical development, responded positively to the government’s call, and restructured in strict accordance with laws and regulations. This restructuring clarified property rights, strengthened the sense of responsibility and centripetal force of the group’s management team, and enabled the enterprise to develop rapidly in the market economy. This restructuring became the “second bucket of gold” for Tiangong Group to achieve leapfrog development and better repay the villagers.

Since the outbreak of the global financial crisis last year, Tiangong Group has adopted proactive response measures: strengthening internal management, accelerating technological innovation, optimizing product structure, and improving employee quality. These efforts helped Tiangong overcome obstacles, demonstrate the demeanor of a leader, and achieve another leap forward – marking its “third bucket of gold.”

In 2008, Tiangong International was China’s largest exporter of high-speed steel cutting tools in terms of revenue, accounting for over 15% of China’s total export revenue of twist drills that year.

Despite these achievements, Zhu Xiaokun is not satisfied. He told reporters that Tiangong International’s (TG) business philosophy is “Precision” and “Detail.” With industry-leading competitive advantages, Tiangong will continue to expand the Chinese market, but its ultimate goal is to promote Tiangong International to the world stage and build it into a globally renowned brand.

Creating a Myth of Dominating the Industry for Years

Zhu Xiaokun has stated on multiple occasions that Tiangong’s development goals and philosophy for the future (based on a global perspective) are to continuously strengthen, refine, optimize, and specialize its core business. In the short term, Tiangong aims to achieve annual sales of over RMB 10 billion in the next 2-3 years; in the long term, it plans to build a new, powerful world-class brand company within approximately 10 years.

To gain competitive advantages in high-speed steel and mould steel, Tiangong International has made large investments in advanced production equipment since before and after the outbreak of the financial crisis last year. Some of these imported devices are even not available in large domestic steel plants, demonstrating Tiangong’s extraordinary courage.

In recent years, Tiangong has invested over RMB 2 billion in purchasing a series of advanced mould steel production equipment with leading technical indicators, including a 910 reversing mill, an 850 flat steel production line, and 2,000-ton and 1,250-ton high-speed forging machines. This has quickly made Tiangong one of the domestic companies with the most complete process equipment for specialized production of tool and mould steel. The investments in 2008 were fully utilized, laying a solid foundation for Tiangong’s performance growth in 2009. For example, in terms of die flat steel, Tiangong’s new 850 flat steel production line enables it to produce China’s widest die flat steel – with the width increased from the previous domestic maximum of 600mm to 800mm. Tiangong also invested RMB 300 million in importing a 1,300-ton precision forging machine production line from Germany (only the second high-end precision forging machine in China). Currently under installation, it is expected to be put into operation by the end of August. This machine can forge steel ingots up to 16 meters long – far exceeding the previous record of 12 meters set by some large domestic steel plants. Its one-time forming rate exceeds 80% (an increase of 10% compared to the past), and economic benefits are expected to rise by 5%. The products produced by this machine will replace imported ones, marking a leap forward in China’s special steel industry. It is reported that the 1,300-ton precision forging machine will significantly increase Tiangong’s annual revenue, providing a powerful engine for Tiangong to achieve its sales target of RMB 10 billion in the next 2-3 years.

From annual sales of RMB 80,000 in 1981 to nearly RMB 2 billion in 2008, Tiangong International’s achievements are the envy of many peers, and the “Tiangong Model” has been widely recognized and learned from. However, Zhu Xiaokun (as the leader of Tiangong) is not satisfied with the traditional development model. Tiangong International is increasingly taking the path of “acquiring advantageous brands to achieve scale expansion.” Leveraging its advantages in self-produced tools and high-speed steel materials, Tiangong acquires domestic and foreign cutting tool enterprises with established brands to expand the scale of its cutting tool business.

Facing the continuous growth of the enterprise, Zhu Xiaokun said, “To develop, we must refine special cutting tools and fill the gaps in domestic production.” He noted that the global market consumption of metal cutting tools is approximately USD 13 billion, with a compound annual growth rate of 7.5%. China’s annual consumption of cutting tools accounts for about 30% of the global total, with a compound annual growth rate of approximately 13.7%. With the rapid growth of China’s economy and the relocation of global manufacturing to China, China’s annual consumption of cutting tools is expected to increase by another 20%-30%. Therefore, the prospect of vigorously developing high-speed steel cutting tool production is very broad.

Currently, Tiangong is committed to expanding the production of high-quality automotive tools, aerospace tools, and other products. In recent years, it will also import advanced tool manufacturing equipment worth nearly USD 20 million from the United States to meet the demand for tools in domestic precision machine tools, laying a foundation for Tiangong to seize a broader domestic market.

Creating the Myth of “One Enterprise Nourishing One Village”

Zhu Xiaokun said, “Leading the villagers to become prosperous together is a kind of happiness. For me and Tiangong, only by benefiting the hometown and repaying society can we live up to our conscience.”

According to data, Qianxiang Village (where Tiangong International is located) spends over RMB 3 million annually on infrastructure construction such as roads, greening, and rivers. Over the years, Tiangong has provided substantial support to the villagers, benefited all employees and local people, and taken a development path of “repaying society generously and accumulating merits through charity.” The great love of Zhu Xiaokun and Tiangong has become a highlight of the “Tiangong Spirit.”

With investments of tens of millions of yuan, Qianxiang Village has uniformly planned, designed, and constructed a new villa community and nearly 20 high-rise residential buildings for employees. Villagers who relocate receive a subsidy of RMB 80,000 to 100,000. Today, Qianxiang Village is filled with well-arranged villas, high-rise residential buildings, and staff apartments – becoming a “happy scenery” in southern Jiangsu’s rural areas and a model of the new socialist countryside.

Qianxiang Village has also invested nearly RMB 5 million to build the first enterprise-run elderly apartment in Zhenjiang. With a construction area of 4,700 square meters, the apartment has 53 standard rooms. The three-story building is equipped with elevators for convenient access, as well as a medical room, an activity room, a library, a reading room, a chess room, a fitness room, a large dining hall, a small canteen, and a bathroom. There is also a swimming pool and a basketball court outdoors... Elderly villagers can live there for free.

The traditional concept of “saving grain for famine and raising children for old-age security” has become a thing of the past for Qianxiang villagers. According to Tiangong’s regulations, female villagers aged 55 and above and male villagers aged 60 and above are entitled to pensions. For villagers who live to 100 years old, each of their immediate family members receives a RMB 5,000 reward. Having experienced hardships, the villagers often say, “We are full of gratitude. Grain, liquefied gas, newspapers, magazines, and cable TV are all free. We also receive gifts during festivals, and the village organizes trips for us every year. More than 300 elderly people in the village – doesn’t everyone have some savings? We really don’t have a place to spend this monthly pension!”

Qianxiang Village has implemented free nine-year compulsory education for more than a decade. For students from Qianxiang Village: Those admitted to key senior high schools receive a RMB 5,000 reward; Those admitted to key classes of ordinary senior high schools receive RMB 3,000; Those admitted to junior colleges receive RMB 1,000; Those admitted to 4-year technical secondary schools receive RMB 1,000; Those admitted to 5-year junior colleges receive RMB 2,000; Those admitted to first-tier undergraduate universities receive RMB 10,000; Those admitted to second-tier undergraduate universities receive RMB 5,000; Those admitted to private undergraduate universities receive RMB 2,000; Those admitted to postgraduate programs receive RMB 20,000. Zhu Xiaokun said, “Encouraging education and helping more Qianxiang people improve their academic qualifications is the fundamental guarantee for the sustainable prosperity of Qianxiang.”

In Qianxiang, every villager is covered by cooperative medical insurance, with the insurance premium fully paid by the village. The village allocates hundreds of thousands of yuan annually for medical subsidies. For minor illnesses, villagers can go to the village health center; for serious illnesses, they can go to the town hospital, and all medical expenses are reimbursed.

Zhu Xiaokun already has a clear plan for Tiangong International’s future. He said, "In the future, Tiangong’s annual output of high-speed steel will reach 200,000 tons, and its mould steel output will account for 10% of the global annual output, with annual sales exceeding RMB 100 billion. Tiangong will become the world’s leading manufacturer of special steel and tools, solidifying its position as the global leader in both industries. The Tiangong “TG” brand will become an internationally renowned brand, ranking among the top five in terms of brand reputation in the global special steel industry. Leveraging China’s advantage of accounting for 70% of global resources in production, Tiangong will make its precision alloy new materials renowned worldwide."

Tiangong International Milestones:

1987: Launched high-speed steel cutting tool production business.

1992: Began high-speed steel production.

2002: Became one of China’s “Top 10 Enterprises in Export Earnings for Machine Tool Tools” and “Top 10 Enterprises in Sales Revenue” (and retained these honors for 6 consecutive years thereafter).

2004: Awarded the title of “National Key High-Tech Enterprise.”

2005: Started mould steel production.

2006: - AIG became a shareholder of the Group.

- Awarded “China Well-Known Trademark” and “China Famous Brand Product”.

2007: Completed listing restructuring and was listed on the Main Board of the Hong Kong Stock Exchange on July 26, 2007 (Stock Code: 826).