A decade ago, China's Himin Group rose to prominence as the world's largest solar water heater company, raising $100m in an investment round in which Goldman Sachs participated.
But this year, as shifting consumer preferences sent sales plummeting, Himin founder Huang Ming took the road to a rare confrontation with government officials.
Himin's plight vividly illustrates how difficult it is for China's largest conglomerates to adapt to a rapidly changing domestic market.Himin founder Huang Ming joins a burgeoning group of Chinese entrepreneurs who are challenging local officials over debt as financial pressure mounts.
In February, Huang Ming took the rare step of writing an open letter accusing officials in Shandong province, where the company is based, of failing to repay the 3 billion yuan ($440 million) owed him eight years ago to build facilities for the World Solar City Congress).
At its peak in 2008, Himin launched a bold $740 million plan to build Sun Valley.The project is located in Dezhou City, Shandong Province: solar lampposts illuminate a wide boulevard leading to a low-carbon hotel with a slogan for the world's largest solar production base.
Himin built the Sun-Moon Mansion as its corporate headquarters, a huge fan-shaped building covered in photovoltaic cells and vacuum tubes.But the company has struggled as Chinese consumers have shifted from using rooftop solar water heaters to electric and gas-fired water heaters.
Huang Ming, dubbed the king of solar energy by the Chinese media, said that the Sun Valley project lost money.He told the Financial Times: "At the time, I was hotheaded and thought I could do anything and make a lot of money.
Himin used to occupy the largest share of China's current 20 billion yuan solar water heater market.But changes in the market exacerbated investment losses.Huang Ming said that Goldman Sachs is still a shareholder of Himin.
Hong Shibin, executive chairman of the Marketing Committee of the China Household Electrical Appliances Business Association, said: The industry began to decline after 2013.Now everyone is satisfied with the convenience of electric water heaters and the practicality of gas water heaters.
Information released ahead of the now-shelved initial public offering (IPO) showed Himin's annual net profit fell from Rmb197m in 2008 to Rmb28m in 2011.Huang blames this on Chinese property developers cutting costs and opting for cheap brands of solar water heaters.
In China, where private entrepreneurs try to keep a low profile, it is unusual for Huang Ming to directly name the party secretary of Dezhou city in an open letter published in February.Local authorities responded that the issue would be resolved, but gave no details.
It follows similar moves this year by wealthy entrepreneurs in the real estate and construction industries.Analysts say tighter liquidity in China is forcing companies to recoup their debts -- even from local governments.
Huang Ming said he was looking forward to a good outcome, but declined to comment further.
Himin has cut the number of stores in China from 9,000 to 3,000 and is betting on the future on new product lines and plans to turn Sun Valley into a tourist attraction.
We can do everything related to solar energy: solar toys, solar barbecues, solar mobile phone chargers, solar cooling, solar heating, solar lights, solar fountains, Huang Ming said, we can't wait to die here.
