Toothpaste firm squeezes out new products

In January 2013, LMZ got a new board chairman, Zhong Chunbin, the former vice-president of Guangxi Liugong Machinery Co Ltd.

Though some analysts wonder whether he can revitalize LMZ's toothpaste business, they believe Zhong, with his 20 years of management experience in Liugong, can develop LMZ into a much bigger company.

Zhong is credited with turning a lackluster road roller producer in Jiangsu province into a success, increasing its production value by five times in three years.

'National treasure'

After he took his new post, Zhong has focused on LMZ's toothpaste business.

"LMZ has been synonymous with herbal toothpaste for 30 years in China and honored as a 'national treasure' by former president Hu Jintao. We should cherish our historical legacy and promote LMZ at home and abroad," said Zhong, a down-to-earth industrial engineer.

LMZ has actually never stopped going global since China's reform and opening up some 30 years ago.

In 1982, LMZ products were sold in stores run by Chinese migrants in California. In the 1990s, Africa became its largest overseas market. A Liuzhou city mayor was even recognized as "the mayor of LMZ" by Ugandans on his visit to a sister city.

After 2001, when China entered the World Trade Organization, the Latin America and Southeast Asia markets gained more importance than ever for LMZ.

It then began importing toothpaste production equipment from Germany, Italy, Switzerland and the United States.

According to the marketing department of LMZ, it still relies on local retailers as its main marketing channel. The brand attracts a certain group of overseas Chinese customers, and the low prices attract customers in many developing countries. About 10 percent of LMZ toothpaste is sold abroad.

Yet herbal toothpaste makers from Wuzhou of Guangxi, Chongqing, Tianjin, Yunnan, Heilongjiang and Guangdong, which are all strong in the pharmaceutical, herbal medicine and daily products categories, also are eyeing a domestic market share of 30 percent as estimated, after foreign brands Unilever, Procter & Gamble and LG are factored out.