---
title: "Wugu Daochang Makes a Comeback in Beijing! Who Is the Savior: Wang Zhongwang, Ning Gaoning, or Chen Keming?"
description: "Wugu Daochang, after years away from the Beijing market, plans to re-enter next month. Once a star with annual sales near 2 billion yuan, it declined, was sold to COFCO, and later acquired by Keming Noodles in June for 106 million yuan. Now under new ownership, it aims to revive and expand."
author: "New Distribution"
publisher: "New Distribution"
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published: "2017-11-14"
language: "en"
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# Wugu Daochang Makes a Comeback in Beijing! Who Is the Savior: Wang Zhongwang, Ning Gaoning, or Chen Keming?

> Wugu Daochang, after years away from the Beijing market, plans to re-enter next month. Once a star with annual sales near 2 billion yuan, it declined, was sold to COFCO, and later acquired by Keming Noodles in June for 106 million yuan. Now under new ownership, it aims to revive and expand.

Recently, media reports say that Wugu Daochang, absent from the Beijing market for years, plans to make a comeback next month, aiming for a larger market share.

In 2006, Wugu Daochang's sales quickly exceeded 1 billion yuan, peaking at nearly 2 billion yuan annually. After production halts and a transfer to COFCO, its market performance remained lackluster, with 2015 revenue of only 100 million yuan, eventually becoming a "discarded pawn" of COFCO. In June this year, Keming Noodles acquired 100% equity and debt of Wugu Daochang for a total of 106 million yuan.

**1**
**Not Giving Up on the Beijing Market**
**Wugu Daochang Regroups for a New Campaign**
**▼**
Wugu Daochang instant noodles once soared with the image of "non-fried, healthier," with annual sales reportedly reaching as high as 2 billion yuan. However, since its bankruptcy restructuring in 2008, Wugu Daochang has been quiet for years. Even as Ning Gaoning's "favorite," it failed to regain its former glory and gradually withdrew from some loss-making channels.

In October 2017, the groundbreaking ceremony for Keming Noodles' Wugu Daochang and Phase III construction project was held grandly in Yanjin. Yanjin County is rich in wheat production; Keming Noodles has established production bases for dried noodles, flour, and udon noodles there, and now has also chosen this site for the Wugu Daochang production base. By relocating the production base, Wugu Daochang's related costs will drop by 7%-8%. The new base's operation paves the way for Wugu Daochang to conquer the Beijing market and even the entire northern market.

Keming Noodles revealed that it is currently adjusting production capacity, and Wugu Daochang-related products will gradually resume in December. According to Keming Group's strategic development plan, Wugu Daochang's sales are expected to exceed 500 million yuan in three years and 1 billion yuan in five years, contributing to Keming Noodles' further development.

From peak to failure, Wugu Daochang's journey took just over a decade. Founder Wang Zhongwang made it glorious but also brought it down; Ning Gaoning favored it but was disappointed; can Chen Keming, with his craftsmanship in noodles, reverse the decline?

**2**
**Wang Zhongwang: From Underdog to Big Brother**
**▼**
Wang Zhongwang is the founder of Wugu Daochang. With only a primary school education, his early entrepreneurial years were tough. In 1996, he joined fellow villager Fan Xianguo, the head of Hualong, as the general distributor for Northwest China. Rumors say the partnership ended badly.

Later, Wang Zhongwang partnered with Master Kong to establish San Taizi Food Co., Ltd. The packaging of San Taizi instant noodles featured "Nezha holding a spear and stirring a dragon," which was highly provocative. The enemy of my enemy is my friend, but shortly after cooperation began, Wang Zhongwang revealed greater ambitions, targeting Master Kong's high-end instant noodle segment, and the partnership soured. Master Kong later described the cooperation: "We entered because we didn't understand Zhongwang, and exited because we understood."

In April 2005, the Ministry of Health issued a document questioning whether fried foods like French fries contain carcinogens. Wang Zhongwang, with a keen market sense, seized the opportunity to launch "Wugu Daochang" instant noodles, with the advertising slogan "Refuse frying, keep health," aired on CCTV.

By heavily promoting health, Wugu Daochang carved out a new category in the instant noodle market, making competitors like Master Kong and Uni-President tremble. This propelled Wugu Daochang from nothing to a major player in the domestic instant noodle industry, with peak annual sales reaching about 2 billion yuan.

At this point, dissenting voices emerged within Wugu Daochang. Many senior executives believed that Wugu Daochang should not continue to confront the entire instant noodle industry but should focus on channel construction and product development. After all, the product itself had significant room for improvement, and Wang Zhongwang's main channel construction was not well-developed. In other words, once competitors intercepted channels and distributors refused to stock, the more Wugu Daochang produced, the more it lost.

However, Wang Zhongwang went his own way, dismissing the executive vice president and planning director who disagreed, and eventually invested 1.8 billion yuan to expand 38 production lines nationwide to increase capacity.

By 2008, Wugu Daochang's total debt reached 600 million yuan. The company had long been in arrears on wages, workers went on strike, the Beijing Fangshan production base was sealed by the court, and distributors and suppliers from all over the country flocked to demand payment...

Under such heavy pressure, Wang Zhongwang finally lowered his proud head and realized he needed to find a wealthy father to acquire Wugu Daochang. After many twists and turns, COFCO became the new owner.

**3**
**Ning Gaoning: The Embarrassment of Wugu Daochang**
**▼**
In a situation where it could no longer sustain itself, in 2009, Wugu Daochang was officially "sold" to COFCO for 109 million yuan. At that time, Wugu Daochang hoped to be reborn under COFCO's protection. Although it had the solid backing of COFCO, Wugu Daochang failed to enjoy the shade of a big tree.

COFCO never gave up on the brand, providing financial support, extensive brand promotion, and product taste adjustments, but none of these measures worked, and Wugu Daochang's market share continued to shrink.

A person deeply involved in COFCO's takeover of Wugu Daochang revealed that Ning Gaoning, then chairman of COFCO, had a special "preference" for Wugu Daochang.

In marketing, COFCO invested heavily in advertising and marketing, and also brought in Song Guoliang, one of the founders of Master Kong and former marketing director of Huafeng Instant Noodles and president of Baixiang Noodles, as general manager. Even though losses persisted and sales targets were never met, Ning Gaoning still allocated an additional 200 million yuan two years after the acquisition, continuing to support it.

But Wugu Daochang ultimately failed to "save face" for the old COFCO chairman. Public data shows that until Ning Gaoning left COFCO, Wugu Daochang never achieved profitability. Instead, sales and market share continued to shrink, products became hard to find, and the brand was marginalized.

It is clear that even with COFCO's help for rebirth and repeated assistance, Wugu Daochang could not recover. In short, COFCO's rescue attempt was a failure.

**4**
**Chen Keming: Crafting Noodles with Artisan Spirit**
**▼**
Chen Keming, founder of Keming Noodles, started by peddling from a cart and has focused on noodles for over 30 years.

When asked why Keming Noodles developed so smoothly, he replied: "In over 30 years, I have never been cheated because I have no greed." The word "greed" also well explains why Chen Keming has only made noodles for over 30 years. While others pay lip service to "focus," he truly focuses solely on making noodles.

Like the nickname "noodle fanatic" given to him, even when society entered an era of nationwide real estate speculation, he remained indifferent, devoting himself entirely to his noodles.

"Many people came to me to get into real estate, but I didn't do it. Real estate is very profitable, but that money is not for me. Honestly, I don't have that ability. Real estate is about connections—getting land, doing projects—that's not my strength. To go and give gifts or do such things, I can't do it," Chen Keming said with a smile. "And I don't want to."

■ New Wugu Daochang products

Dried noodles are indeed not as lucrative as real estate, with an average gross margin of less than 20%, but Chen Keming is satisfied: in a fully competitive market, it's already good. Only the money I earn through hard work is truly mine; money earned by others should not be mine.

A carpenter from a remote county in Hunan, through a thin strand of dried noodles, has focused on this one thing for 30 years and become the number one in the country!

Keming Noodles' flagship product, "Chen Keming" dried noodles, ranks first in market share by comprehensive supermarket weight. "Chen Keming" and "Wugu Daochang" have slightly different product forms, but their channels are very similar. Keming Noodles has inherent advantages in retail and supermarket channels, which is one of the foundations for its acquisition of Wugu Daochang.

**5**
**Second Change of Ownership: Wugu Daochang**
**▼**
Keming Noodles is China's largest dried noodle producer, with 2016 revenue of 2.164 billion yuan and net profit of 137 million yuan. In recent years, the dried noodle industry has entered a harsh consolidation period. Against this backdrop, Keming Noodles, aiming to become a "10-billion-yuan enterprise," has not stopped its external expansion drive. In 2016, Chen Hong, son of founder Chen Keming, officially took over as general manager. Food companies that match Keming Noodles' R&D, production, and channels are the acquisition targets it seeks.

The first move is to move the Wugu Daochang factory from Beijing to Henan to cut costs. The second move is team integration. Wang Yong said that Keming Noodles will retain the original core team of Wugu Daochang, who will invest in the new Wugu Daochang and become partners.

Keming Noodles values Wugu Daochang's brand and channels. In terms of brand, Wugu Daochang still has high brand awareness and a large fan base; in terms of channels, the instant noodle sales channels accumulated over the years can complement Keming Noodles' shortcomings; in terms of technology, Wugu Daochang's sauce packet technology will also help its next steps.

From Wang Zhongwang to Ning Gaoning to Chen Keming, with different leadership styles, what vitality will Wugu Daochang show under the craftsman Chen Keming? In 2017, Wugu Daochang did not bring profits to Keming Noodles. After more than half a year of integration and development, we look forward to Wugu Daochang delivering a satisfactory answer in 2018.

Source: Food Industry Entrepreneur
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