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September 14, 2009

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Home » District » Nanhui

IT grad now rules the roost as Shanghai's 'King of Eggs'

AN IT grad returns to his humble village to raise chickens. Today he's crowing about it. Tan Weiyun unscrambles the tale.

Squawking chickens, crowing roosters, smelly droppings and tons of feed - that's what IT grad Gu Chengyong deals with every single day. But he's not squawking.

Gu, a Fudan University graduate majoring in information technology, could have had an easy, prestigious white-collar job and kept his hands clean in the big city. There were jobs aplenty seven years ago when he got out of school.

Instead, the Nanhui farmer's son decided to return to his remote birthplace in Liuzao Town to raise chickens and sell eggs, just like his father. His parents were appalled. That's not why they sent their bright boy to university.

Gu was determined, however, and today he rules the roost in the Shanghai egg market. He's the "King of Eggs" and the city's largest local egg supplier. A Qiang eggs have a 19-percent market share (the rest from other provinces).

He built up his dad's egg company - and injected his IT expertise - to improve efficiency and quality. And he has raised local farmers' income.

His clients include high-end hotels like Hilton and Shangri-La; bakery chain stores like Ganso and Christine; fast-food restaurants like McDonald's; supermarkets and convenient stores like Hualian and Kedi. He also exports to Hong Kong and Macau.

Every day Gu's company transports and sells around 1 million eggs in the city. His farm has 150,000 chickens that lay 100,000 eggs daily. He purchases another 850,000 eggs at a higher price from villages who are supervised by Gu's team of poultry managers. They ensure the quality of eggs, feed, chicken health and sanitary conditions.

"I always believed that farming would be a good place to start because I'm a farmer's son and have a special feeling for the village," Gu says.

Everyone was astonished by his decision to return to the village.

"My mother was strongly against my idea of returning. It was understandable because they had invested so much to send me into university so I could get a good job in the city - anything but a farmer with a meager income," Gu says.

Four years of study in the big city heightened his awareness of the wealth gap between urban and rural residents.

Young and ambitious

"I wanted to return to the village and see if I could make a difference with everything I had learned in university," he says.

Gu set a three-year plan for himself: If he failed in the countryside, he would follow his parents' advice and find a boring office job.

"I didn't think too much. I was young, energetic and ambitious," he recalls.

He started in the hen house, learning from the ground up. He learned how to raise chickens, feed them, vaccinate them, collect eggs and sort them by type, size and weight. He drove his father's old truck around Shanghai to develop the market and find partners.

But as an IT major, Gu wanted to do more with what he had learned in university.

In 2003, he developed the "online egg quality research system," the first in Shanghai's agricultural produce market. Customers can check packaging and find out when and where eggs were laid, what kind of feed and water the chickens got and even the ID number of the poultry breeder.

This gave a great boost to sales volume and revenue. Sales jumped by 250 percent in the second half of 2003, compared with the same period the year before. The quality checking system meant Gu's company avoided the financial disaster to poultry breeders caused by bird flu that year.

He also devised a quality-checking system for vegetables, such as eggplant, cabbage and cucumber, which was raised in the vegetable-growing bases in Minhang and Jinshan districts in the annual agricultural fairs.

This greatly encouraged Gu. From the market research, he realized the importance of branding.

"It's a big deal to properly sell one small egg," he says. He carefully designed the packaging and ensured that the brand A Qiang was printed on each carton, box and shipment.

He sorted eggs by size, weight and quality, from ordinary eggs sold in bulk to the white-shell eggs (with more nutrition) and the "first nest" eggs. Prices range from 0.4-1.0 yuan (6-15 US cents) per egg, so customers have a lot of choice.

A "first nest" egg is the first egg a hen lays each day and it contains the most and best nutrition. These are recommended for children, pregnant women and the elderly. Each is sold for 1 yuan, 50 percent more than ordinary eggs. Thus, Gu makes an additional 350,000 yuan a year on these special eggs.

The local government gave a lot of support to Gu and gave his company 10 million yuan to introduce a production line of automatic egg sorting from Europe, which greatly improved efficiency.

His company has 110 employees and is a back-up producer of eggs for World Expo 2010 Shanghai.

But Gu is hatching more plans. He aims to become a leading egg products manufacturer, producing whole egg powder, egg yolk powder, egg white powder and heat-stable egg yolk powder. Most Chinese biscuit makers such as Master Kong and Nissin Foods import the powder from Europe and Japan. Only three Chinese enterprises produce them.

"It has lots of potential and the market is huge," Gu says.

Though he is a successful farmer and businessman, Gu still feels a little lonely and a bit left behind by his fellows in the big city.

"I'm old fashioned and uninformed now," he says. "But I'm doing the right thing. I've achieved my three-year plan and raised farmers' income.

"You have to lose something to gain something more important. And you can't make an omelette without breaking eggs."


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