Hao Guo

Background

Guo was born in 1955 in China’s Fujian Province.

Education

His education was limited to graduating from junior high school, as he went to work in a military factory at age 14.

Career

Guo served in the military until 1980, when he was discharged and started a business importing electronics for the defense industry. When the yuan was devalued, making importing unprofitable, Guo invested in agriculture. This led him away from his military background to a field in which he had no previous experience, but it proved to be extremely successful later in his career. Guo’s entry into the agriculture industry came at a time when food safety was a national issue. During the mid-1990s, there was growing concern in China over the health risks associated with the widespread use of pesticides by produce farmers. Consumers eagerly received Guo’s produce, which was grown without the heavy use of pesticides.

Guo started Chaoda Modern Agricultural Holdings in Fuzhou, the capital of Fujian Province, which is where the company is still headquartered. Today Chaoda employs almost 15 000 people, and in 2006 the company reported net profits of US$168 million from revenues of US$347 million. According to the 2005/2006 annual report, Chaoda currently lists total assets of over US$1 billion. Guo’s success was based on the practice of consolidating the output from dozens of small farms. This approach to farming has drastically changed the Chinese agricultural industry. This process has been made pos- sible by the village heads’ ability to negotiate for all the farms under their authority. If Chaoda were required to negotiate with each individual farmer, the process would take years. The farmers have the option to continue farming their land or to rent it out to Chaoda. After Chaoda acquires the rights to a given area, farming operations are con- ducted according to Chaoda’s standards, which includes drastically reduced use of pesti- cides. The low labor and rent costs, together with higher quality produce, give Chaoda an advantage in the produce export market, which accounts for 30 percent of Chaoda’s total output. This model is far more efficient than the previous method by which produce reached consumers. In the past, farmers would typically sell their produce to traders that in turn sold them to retailers. By providing retailers with a single dependable source for their produce, Chaoda has streamlined the process.

Achievements

• Today Chaoda is expanding into the livestock market, importing select breeds of goats and dairy cattle for sale to farmers. The company is also continuing to consolidate farms and expand its market share. Its success has attracted a number of competitors, but Chaoda remains the most successful player in the produce industry under the leadership of Guo Hao.