Toothpaste firm squeezes out new products

A worker bundles packages at the toothpaste production line of Liuzhou Liangmianzhen Co Ltd in Guangxi Zhuang autonomous region. Huo Yan / China Daily

Daily necessities provide base for rapid growth of Guangxi company

After catching its breath from the first round of battles with foreign brands, Liangmianzhen, or LMZ, the herbal toothpaste that takes its name from a Chinese herbal medicine, is weighing its odds to win the next round through new ideas in its product lines and marketing.

"Our researchers and innovations are the strengths that our foreign rivals do not have, but their management and marketing models are our 'short board,'" said Li Zuanhuang, president of Liuzhou Liangmianzhen Co Ltd.

The predecessor of LMZ was a soap mill built by Japan's invading army in 1941 in Liuzhou, a regional hub in the Guangxi Zhuang autonomous region.

LMZ herbal toothpaste is just one of the company's many products. The company produces 2 billion tubes of toothpaste, 150 million bars of soap, 1.5 billion medical pills and capsules, 170,000 tons of bamboo pulp paper, 500 million sanitary napkins and 1,500 tons of the artificial sweetener sucralose each year.

Sales revenue for LMZ in 2012 was reportedly about 1.3 billion yuan ($213 million) with net profits of 50 million yuan. Half of its sales revenue comes from daily-use products such as toothpaste.

"Because LMZ quickly expanded after 2004, when the enterprise was listed on the Shanghai stock exchange, the statistics do not seem that rosy yet. But I am confident the balance sheet will improve soon," Lin said.

LMZ built its pharmaceutical factory in Rongshui county of Guangxi in 2004 to produce medical treatments for oral diseases and yield herbal medicine as raw materials for its daily products. It merged a hotel supply production factory in Yangzhou of Jiangsu province in the same year, which became the main export hotel toothpaste manufacturer for LMZ.

LMZ purchased the Fangcao toothpaste factory in Hefei of Anhui province in 2005 and built its sucralose factory in Yancheng of Jiangsu in 2007. That plant now contributes up to one-third of its sales revenues.

In 2009, LMZ merged a local paper mill in Liuzhou and turned it into a producer of daily hygiene products. At the same time, it started investing in the real estate sector to make money from the sizzling housing market.

"Although LMZ is known as an herbal toothpaste brand, consumers will find that LMZ actually provides products and services based on our green life concepts," said Mo Ruixian, head of the company's strategic planning department.