Longteng, formerly known as management dep. of sanitary industrial company under the Health Bureau of Zhangjiagang City, is categorized as a collective enterprise founded in 1988. The management dep., firstly was not inclined against by related preferential policies, which is favorable to obtain monopoly profits; secondly, without industry influences, it can get the associated profits; thirdly, non-bulk funding is needed, it can obtain returns on investment. Under the entrust of leaders from the city and all circles, 13 entrepreneurs including Zhang Nianci, Yu-Fen Zhang, Qiu Yuchun, Ji Yuncai, and others, targeting Products of Shanghai Baosteel as a breakthrough, by virtue of 10 million Yuan of self-raised funds, committed to cold-rolled steel business by fully utilizing limited funds with cash flow up for one time per day. By means of bringing out the full potentiality of one variety, it has gradually opened up the market. Longteng has ranked the first among Zhangjiagang health industries on year basis, enabling itself to step out for a first step with steadiness, thus making as a good starting point.
Opportunities are fleeting! Only by grasping opportunities properly, can the company achieve a leap-forward development and shooting-up growth.
In March 1992, in Deng Xiaoping's speech for his southward tour, he proposed the scientific concept that "Development is of overriding importance ". The rapid development of domestic economy and steep rise in commodities have brought forward a rare opportunity for Longteng. Baosteel is highly reliable both in price and quality, with a high-taste end-user customer base mainly located in coastal areas. Longteng, by virtue of geographical advantages, through its good faith to win customers, on basis of a reliable and thorough understanding of Baosteel credit, has strengthened its cooperative relationships with Baosteel, thus seizing business opportunities prior to companies in the mainland and other subordinate companies.Therefore, by using the 50 million capitals accumulated within 4 years and 52 million financed, Longteng, in the national steel ordering meetings held in May and Nov., had sourced nearly ten thousand tons of futures supply on basis of acquisition by collection from the inland provinces and subordinate companies. In December the same year, under the circumstance of overdue delivery of steel on the whole, Longteng directly transferred the rights and obligations of the contract to relevant units, and meanwhile tried its best to get contact with steel mills so as to fulfill these contracts as soon as possible. Implementation of these two strategies has enabled Longteng to achieve an extraordinary, leaps and bounds development. From June 1992 to May 1993 only, with futures and client resources it possessed, Longteng had accomplished the completion of legal primitive accumulation of capital with the rapid economic development. Longteng staff had also expanded from several people to more than 100, realizing the first brilliant era in its history.
From the market economy perspective, short-term irregular market competition and dazzling bubble economy will not last too long; whereas disappearance of opportunities and chances actually started brewing at the economic peak. In 1989, steel business was brought down with the central government’s suppression of overheated market economy. However, due to its sound operation and small scale, Longteng had lost least among the peers. In the sales of May 1993, with the awareness that the profit margins of end-users were becoming extremely small, an alert occurred to Longteng to respond promptly to the adjustment impact of central government in 1989, i.e. "getting rid of stocks at the lowest price in the market. Subsequently, all the sales staff was occupied in dealing with end-users with a real-time feedback for the lowest market price, according to which the company adjusted the sales price immediately. These decisions and actions enabled company's inventories to decline rapidly. In June 1993, a sudden introduction of tightening credit policy in order to prevent overheated economy caused a dramatic fall for steel prices in August of that year, consequently a number of companies were situated in a stuck state. Longteng, however, had got out of the crisis with intact and accumulated experiences to grasp market trends handle crisis situation.
Longteng has always insisted on honesty and sound development. In terms of procurement sources, finance, sales marketing, and management, it has accumulated considerable resources, winning a good reputation among the peers as well as the comment of "in an unpredictable market with no certainty about truth or false, Longteng knows the truth; with cycles of life, at peaks and valleys, Longteng knows the outcome ", thus a sensation of " Longteng effect” has come into being. This sound credit standing has won a lot of risk-free cooperation with plenty of steel companies, such as the cooperation with Panzhihua Iron and Steel Company in 1998 and Wuhan Iron and Steel Company in 2001. These steel companies took the advantages of Longteng distribution network and full advance payment; while in return, Longteng could make risk-free margins at the market price with shared cost, thus ensuring Longteng to achieve sustainable development even in a downturn market. Starting in 1997, worked in Kunming, Wuhan and other places to establish branch in 1999, Longteng had already had more than 20 affiliates, exiting from the mature mechanism, thus achieve a second glorious era in Longteng history.
In the meantime of rapid development, Longteng has accumulated a relatively abundant capital foundation. However, the steel trading industry has matured into a public competition situation. Therefore, Longteng, with the heightening of the awareness in independent marketing, decided to adjust the development directions.In 1999, in light of the situation that more and more manufacturers had set up offices in Wuxi which was to become the second largest logistics center in northeast China, Longteng cooperated with Wuxi metal material companies to construct a 4000-square-meter production exchange building. In this building, there stationed Baosteel Trading Co., Ltd., Wuxi Changjiang Sheet Plant, Huaxia Bank and other enterprises. This was the start to adjust its direction of development for Longteng which would then gradually fade out of the steel trade, but to involv in real estate investment, bank loans commissioning and other areas.