Chen Yilong, chairman of Kaidi Power Holdings: from the "cheater" to "hero" gorgeous turn

When it comes to the use of biomass energy, most people will think of Cadillac and Chen Yilong who is persistent. This company, which has already become the desulfurization industry leader in China, suddenly sold its desulphurization business in 2006 and entered the biomass energy industry that nobody could understand at the time.

Five years later, in the continuous questioning of the market, Kaidi Holdings has secured the leading position in domestic biomass power generation. Chen Yilong has also turned from a “liar” in many populations to a “hero” that brings benefits to investors and farmers. ". A few days ago, at the headquarters of Kaidi Holding, Chairman Chen Yilong accepted an exclusive interview with our reporter and made extensive exchanges on the prospects for the development of biomass energy and the future operation of the company.

"As long as the peasants have the money to make, I am not afraid of not having wood."

Reporter: According to the "12th Five-Year" draft of the development goals for biomass energy, China's biomass power generation capacity will increase by 7.5 million kilowatts over the next five years. How do you view this policy?

Chen Yilong: The situation may be even better, and the number may increase. First of all, the country strongly supports biomass power generation, and the current biomass power generation technology is mature; secondly, after several years of operation, companies have accumulated management experience and can make money; the third and most important is that it benefits both children and grandchildren. An industry that can actually increase the income of peasants is of great significance to a country with nearly one billion peasants.

Reporter: According to the current policy, the price for biomass power generation is a uniform 0.75 yuan. How much is the state's subsidies for this block?

Chen Yilong: The on-grid tariff of 0.75 yuan seems relatively high, but most of them are for farmers. The annual raw material fee for a power plant to farmers is 60 to 70 million yuan. If this one is deducted, the cost of biomass power generation will be Only 3 hairs more.

Reporter: We have looked at the Jingshan Power Plant and its earnings have been relatively stable. What is the profitability of the entire industry in China?

Chen Yilong: There are profits, of course, there are losses. One is technical issues, the other is management issues. Some domestic power plants suffer losses, mainly because there are more intermediate links in management. Some raw material middlemen make money. Farmers do not get benefits and naturally have no enthusiasm. The source of raw materials also becomes a problem. Currently, Katie’s power plants are basically profitable, and some of the newly-run power plants have slight losses, but if they add tax rebates and CDM (Clean Development Mechanism) gains, they will certainly be able to make money.

Reporter: The biggest problem with biomass power generation is the accumulation of raw materials. What experience has Kaidi accumulated in this area? Has it formed a reproducible business model?

Chen Yilong: Raw material collection was once a problem that we were worried about, but we are not worried about it at the moment. From the 13 operational power plants, there has been no case of farmers asking for prices.

The pattern of Kaidi is actually very simple. It is trying to mobilize the enthusiasm of the peasants. Our slogan is very simple, that is, "Keddy collects dried firewood, how much is a pound"; as long as there is money, farmers will collect agricultural and forestry waste to send it. After the operation of the second-generation unit, we still want to increase the purchase price of raw materials by about 130 yuan. By then, the average person can earn two or three hundred yuan, which is a win-win situation.

"Kaidi has been very cautious about the operation of funds"

Reporter: You had previously proposed that it is expected that 250 biomass power plants will be invested in the next 5-10 years. Has this goal changed? In the future biomass power generation industry, how much market share does Kaidi occupy?

Chen Yilong: We plan to build 250 to 300 power plants in the two “five-year plans” and build 100 in the past three years, striving to make up 30% of the country. Last week, we had just signed a major agreement with Jilin Province. At present, there are 280 counties across the country that have signed formal contracts with us.

Reporter: According to this plan, the amount of money that Katie needs is very large. How to solve this problem? With such a large-scale investment, will the capital chain not have problems?

Chen Yilong: Katie has been very cautious in the operation of funds. In the previous period, we obtained a batch of funds through the issuance of long-term bonds, the introduction of strategic investors, and the realization of equity. Now the financing conditions are much better. At present, Kaidi Holdings is about to implement its own funds of about 80 to 10 billion yuan, which can fully agitate. these projects. The bank’s credit to us also exceeded 60 billion yuan.

Reporter: I heard that Kaidi has registered a batch of patents. At present, what is the level of Kaidi's biomass energy technology?

Chen Yilong: Cadillac's technology is certainly a global leader. Jingshan Power Plant is our first-generation technology boiler. The overall energy conversion rate is about 28%. The Laifeng Power Plant to be put into production is the second-generation technology boiler. The overall energy conversion rate can be increased to 34%. The third-generation technology The overall energy conversion rate may be as high as 54%. In the use of biomass energy, Cadilla has registered more than 100 patents. Now some large multinational corporations also want to cooperate with us.

"Striving for the World's Top 500 in 2020"

Reporter: With the rapid expansion, how to resolve the talent problem?

Chen Yilong: The reserve of domestic talents is sufficient. The state has shut down many small thermal power plants. During the “Twelfth Five-Year Plan” period, it will continue to promote large-scale and small-scale projects. As a result, a large number of people are spared. These people are very familiar with thermal power. After a while, it will be usable. In the first half of the year, we recruited more than 400 backbones. For equity incentives for senior and key personnel, the company is also considering.

Reporter: Regardless of whether it is selling desulfurization or biomass energy, these years have been questioned continuously. Why didn't you stand up and respond to this question? Did Katie have any problems in developing biomass power generation?

Chen Yilong: It is useless to question. If you didn't say anything, who would believe it?

The current challenge and the greatest difficulty for Katie should be the construction and integration of culture. Most of our power plants are in rural areas, and our employees are mostly university students. It is necessary for them to go to the countryside to deal with farmers and respect the farmers. It is not good to have no love. Therefore, Kaidi must establish a culture of “big love” and must This "save the cause of the earth" also requires long-term practice.

Reporter: At what stage is the development of "Chai Biao oil change" now?

Chen Yilong: The pilot test has been successful and it will be commercially available in the first half of next year.

Reporter: In the past, Kaidi Holdings had promised to fully support listed companies to expand the biomass power generation industry. Now that there are a lot of power plants owned by Kaidi Holdings, is there any solution for this block? What is your outlook for the future of the company?

Chen Yilong: Everyone is very concerned about this issue. We are currently working hard to find a solution.

As for the long-term outlook, I think that the rise of a new industry must be led by a big leading company. Now the responsibility falls on Cadilla. The goal of the Kaidi Biomass Energy series industry is to strive for revenue of more than RMB 50 billion in 2016 and to enter the Fortune 500 in 2020.