Read an article in the WSJ this weekend about Terry Gou, the founder of Hon Hai Precision Industry - also known as Foxconn. The company employs 270,000 employees primarily in a campus in Shenzhen outside Hong Kong. The complex has its own fire department, book store, dormitories, hospital, swimming pool, and athletic complex among other things. The manhole covers on the streets read "Foxconn". An excerpt regarding the company's revenues:
Hon Hai's revenue has grown more than 50% a year in the past decade to $40.6 billion last year. It is expected to add $14 billion in revenue this year. That is roughly the equivalent of Motorola's adding, within a year, the sales of CBS
Corp.
This has got to be the biggest company that most people have never heard of. Apparently Terry Gou hasn't taken an interview since 2003 as he believes the lack of media deprives his competitors of information and protects the privacy of his customers, which include Dell, Apple, and Nokia. The company is valued at around $40B. That puts it in the same category as Dow Chemical ($39B), Motorola ($38B), and Prudential Financial ($40B) just to name a few huge companies. The article includes an interesting story of how he built the company over the years - starting from the modest beginning of manufacturing TV channel knobs for black and white TV's in the 70's. Here's an excerpt:
Mr. Gou started what would become Hon Hai in 1974. He borrowed part of the initial investment of $7,500 from his mother, who with his father had fled to Taiwan in 1949 during China's civil war. In a facility near Taipei, he began making plastic channel-changing knobs for black-and-white television sets.
In the early 1980s, he expanded into the PC industry just as it started to take off. His first products were connectors, the relatively simple but ubiquitous parts that join components in a PC. Though he spoke little English or Japanese, he soon began traveling to the U.S. and Japan, seeking out customers. During the 1980s and 1990s, he says he logged so much time driving from city to city in the U.S. that he memorized the menu at Denny's.
In 1988, with orders surging and costs soaring in Taiwan, Mr. Gou set up his first factory in China, where land and labor were cheaper. Decades-old tensions between Taipei and Beijing were starting to wane, and China was a decade into a massive economic overhaul. Mr. Gou chose Shenzhen, a city next to Hong Kong at the forefront of China's market reforms.
He used his small-but-fast-growing Shenzhen operation in his sales pitch to prospective customers. In 1995, when Michael Dell was visiting southern China, Mr. Gou offered to arrange meetings with local officials he knew in return for the chance to drive the 30-year-old American to the airport, says Max Fang, who was then Dell's head of procurement in Asia. On the way, Mr. Gou made an unscheduled detour to show off his factory.
Dell then wasn't one of the world's top five PC vendors, and Hon Hai didn't yet make parts that Dell bought directly. But Mr. Gou "knew that Michael Dell was a star of tomorrow, so he wanted to meet him," says Mr. Fang, who has known Mr. Gou since 1979. Today, Hon Hai is one of Dell's biggest suppliers, analysts and industry sources say. Mr. Gou keeps a photograph of Dell's founder on a shelf in his Taiwan office.
Amazing. The video excerpt from the article is pretty interesting.
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