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Sunday, October 4, 2009

Founder of EV maker BYD now richest person in China

The owner of a Shenzhen car and battery maker BYD has emerged from the growing pack of Chinese millionaires to be named the richest person on the mainland after a boost to his wealth driven by an investment by Warren Buffett.

Wang Chuanfu, the founder and chairman of BYD , jumped from 103rd to first place with a net worth of $5.1bn, according to the annual Chinese rich list compiled by Hurun , a Shanghai-based consultancy.

MidAmerican Energy , a business controlled by Berkshire Hathaway, the flagship company of the closely watched US investor, paid $230m for a 10 per cent stake in BYD a year ago. Shares in BYD have since risen more than sevenfold, propelling Mr Buffett's stake to $1.7bn.

While BYD's main businesses are making batteries for mobile phones and producing passenger cars, much of the increase in its valuation has been based on the prospects for the electric cars it is developing.

Coming in second on the rich list was Zhang Yin, who became the first woman to take the top spot back in 2006, with estimated net wealth of $4.9bn. Her family controls Nine Dragons Paper , a paper recycling and packaging company.

Rupert Hoogewerf, of Hurun, said: "It seems to me pretty significant that the two richest people in China are now from companies that have an important green element."

Not all China's green entrepreneurs have fared so well over the past year. Peng Xiaofeng of LDK Solar and Shi Zhengrong of Suntech, both solar panel manufacturers, have dropped out of the top 10 after their share prices fell sharply on fears of substantial overcapacity in the industry in China.

Huang Guangyu, the founder and largest shareholder in the Gome retail chain, who topped the list in 2008, has been in jail since last October after his arrest for vaguely defined "economic crimes". He remains in the top 20 of this year's list.

Mr Wang set up BYD in 1995, building it into one of the biggest suppliers of lithium-ion batteries for phones, before moving into the car industry in 2003.

Most observers thought Mr Buffett was attracted by BYD's plans to build cars powered by its lithium batteries. However, some believe MidAmerican Energy is more interested in using BYD's batteries to store energy at power plants, especially those powered by wind.

The company is the eighth largest carmaker and its F3 saloon is the bestselling passenger car in China this year.

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