When 27-year-old Li Lixin bought his first injection press with money borrowed from friends, he didn't know the 538-square-foot molding shop was going to become a 1 billion-yuan (US$144 million) business.
He had even less of a clue that four American businessmen were to play vital roles along the way to success.
Today, Lisi Group Co. Ltd. is one of the largest plastic housewares manufacturers in China, with more than half its sales generated from the United States - at stores including Wal-Mart, Target, the Container Store and Big Lots.
But when Li founded Lisi in Ningbo, China, back in 1993, he was looking at local markets. As the Chinese started to raise living standards and demanded more modern consumer goods, Li easily hit pay dirt.
Thanks to consumers eager to upgrade their lifestyles from willow baskets and wood basins, Li made 1 million yuan (US$144,000) in profit in the first year. That route could have made him a domestic tycoon in the plastics industry, but a deeply rooted flaw with selling in China hit him early and hard.
``The company was trapped in a triangle debt dispute [a common phrase used in China to refer to debt-collection problems that involve three or more companies]. Li simply couldn't get any payments,'' said Allen Luo, vice president of Lisi, at a recent gathering in Shanghai. He shared his company's story with attendees at the China-U.S. Plastics Industry Summit, held April 16 in Shanghai.
Discouraged by the lack of regulation and protection in the Chinese market, Li naturally thought of the alternative: export.
He got on a train to Guangzhou with some product samples and showed up at the China Import and Export Fair (also known as the Canton Fair) without a booth reservation. He displayed the products at a corner of the exhibition hall, and attracted an American man who was going to change Li's life.
Luo said the man's name was Kohl (transliterated from Chinese). He declined to disclose the full names of the four Americans involved in Lisi's evolution.
Kohl was an international dealer for plastic housewares products. A China veteran, he ordered six containers of products from Li for 1.5 million yuan (US$216,000).
It took Li and his team three months of hard work and overtime to finish the orders. Finally, products were shipped to America and payment was wired to Li.
``This first time to make money in U.S. dollars is unforgettable,'' Luo said, describing Li's excitement about the first export order.
However, a few months passed, and Kohl never called again. Li found out that Mexico had been hit by the economic crisis of 1994 and Kohl wasn't able to sell the products at planned prices. Li asked Kohl to discount the prices by 20 percent and shipped another container of the same products to Kohl for free, just to make up for Kohl's loss.
The extra container of products was worth 250,000 yuan (US$36,000) - roughly Lisi's one-month output. But the return was millions of dollars' worth of orders afterward.
The cooperation went smoothly. Kohl sent sample products from the U.S. to China every week, Lisi reverse-engineered products, ran production and shipped them to the U.S.
``Kohl was the first American that changed Lisi. He helped the company redirect the business model from domestic to export. We stepped outside China,'' Luo said.
But Kohl's focus on lower and middle end markets in Central and South America didn't satisfy Lisi's appetite. In 1996, Li set two New Year's resolutions: to enter the U.S. mainstream market, and to brush up on his English. He went on his maiden voyage to America to investigate the market.
With virtually no resources and connections, he started by visiting stores and supermarkets. He discovered that Alco Industries Inc. in Cranbury, N.J., was one of the larger distributors. Li called the company in hopes of scheduling a meeting with a manager, but his poor English kept him from getting any farther than the secretary.
Having failed on the phone line, Li flew to New Jersey and visited the company in person. But again, he didn't get past the receptionist. Li didn't want to give up. He sat in Alco's lobby all day for five days in a row. On the sixth day, a manager showed up and led Li into the office.
``They were very straightforward. They showed Li some products and asked if Lisi could make them.'' According to Luo, Li simply said ``OK'' and quoted an unreasonably low price on a calculator. Li's language barrier didn't stop Alco from happily accepting the low quote.
Li lost money on the first order of $500,000. But the mission was to get Lisi products on the store shelves in America. After Li secured his foothold in the new market, his margin improved. The U.S. standards also forced Lisi to upgrade technology and improve quality. ``A bonus,'' Luo said.
The Alco manager was the second American man that changed Lisi's path, but again, he and Alco were outgrown by Lisi.
Lisi's sales exceeded $10 million in 1998 with Alco's strong distribution network. But what's the future for a large manufacturer that doesn't have its own sales and distribution in its primary market? Li concluded that, the longer Lisi relied on Alco for U.S. business, the less likely Lisi was to open its own U.S. branch and build its own brand.
Li needed help. He had someone in mind. It was in the wake of the Southeast Asia financial crisis. Li had intelligence that one of his strongest competitors - a public plastics firm in Hong Kong - had some internal instability. The Hong Kong firm's American sales executive - Luo called him ``Bobby'' in the China speech - was looking to jump ship.
On New Year's Day of 2000, Li called Bobby. The latter politely declined the offer, saying his contract was not up. After a few rounds, however, Li's perseverance won. The two met in Chicago. Li agreed on the compensation package Bobby asked for.
``That's one-third of the company's annual profits,'' Luo stressed. But Li believed that the American man across the table from him was the one to take Lisi to the next level.
Bobby officially joined Lisi in 2004, in charge of overseas sales and marketing. The company's sales leaped to 800 million yuan (US$115 million) in 2007 and are expected to top 1 billion yuan (US$144 million) in 2008. Both parties are happy with the growth, Luo said. In late 2007, Bobby asked to extend his contract for five years.
``Bobby has not only increased sales tremendously, but also brought the management and sales network to a new level,'' Luo pointed out.
Luo referred to the fourth American that's helping to shape Lisi's future as ``Johnny.'' He joined Lisi in the beginning of 2008 to lead the company's research and development. Li's offer must have been generous , because not only did Johnny relocate from Shenzhen, China, to Ningbo, he also brought a team of 10 people.
``R&D isn't a personal project,'' Luo said.
Lisi gave Johnny 40 million yuan (US$5.8 million) to start a project on stainless-steel housewares. But his influence is beyond the technology part.
``He changed the atmosphere. He never leaves work until things are done. People are following suite,'' Luo said.
``Johnny is ensuring Lisi's healthy development in the future.''
Just like Kohl, the Alco manager and Bobby, he's yet another American essential to a China company's global path.