Formosa Plastics

Wang Yung-ching, the legendary founder and chairman of Taiwan's Formosa Plastics Group, has stepped down at the age of 89 along with his brother, the 84-year-old Vice Chairman Wang Yung-tsai.

The two men have been chairing many of the companies that make up the Formosa group. The positions they are vacating will be filled by their children and other senior executives who are not part of the family.

Wang Yung-tsai's son Wang Wen-yuan will head a six-person strategic management committee that will be the Formosa group's top decision-making body. Wang Yung-ching's daughter Wang Jui-hua will be the committee's vice chair. At flagship company Formosa Plastics Corp., 70-year-old C. T. Lee, who was president, is now chairman.

Wang Yung-ching's story is a rags-to-riches fairy tale. He grew up too poor to have shoes and didn't study beyond primary school. His first business, a rice shop, was started up with an investment of $6.00.

Impressed with the properties of polyvinyl chloride, he established what is now the Formosa Plastics Group in 1954 with a plant producing that plastic. Formosa says the PVC plant was the first in Taiwan and the world's smallest at the time. With annual sales now exceeding $40 billion, Formosa has become one of the world's largest producers of PVC, and sister company Nan Ya Plastics is the world's biggest producer of PVC pipes.

Nicknamed "god of management" in Taiwan, Wang Yung-ching is the island's best known and richest business leader. Many books have been written about him, and his management principles are widely quoted. One example is: "If you're going to start up an ice cream business, you're better to do so in winter." The idea is that suppliers are easier to talk to during the low season, and it's better to expose salespeople early on to periods of slack demand.