Wu Kegang is proud that his winery has created jobs for more than 10,000 farmers in Mile county. Provided to China Daily

No one thought a vineyard in Yunnan would be successful, but Wu Kegang thought otherwise

While many people are extolling his business acumen, Wu Kegang, the founder and chief executive officer of the Yunnan Red Wine Company, believes his business is a blooming willow growing in a garden that was never sown.

Fifteen years ago, almost on a whim, Wu bought an old State-run winery that had been closed for 10 years and turned it into the largest winery south of the Yangtze River. Following the unexpected returns on his investment, the entrepreneur is now trying to shape Yunnan Red into a customer-friendly national brand at a time when China's wine market is flooded with products from traditional winemaking nations such as France and Italy.

He believes the huge potential of the Chinese market helps winemakers target consumers at different regions and levels - but as consumers are getting wiser, more will avoid the blind consumption of purportedly high-end foreign wines.

"As the biggest private Chinese winemaker, Yunnan Red has long been providing high-end wines to mid-level consumers," Wu says.

Despite the rising inflation rate in recent years, he has not raised the price of Yunnan Red for the past decade and does not intend to do so for the next five years, a rare decision in the Chinese market.

The Yunnan Red Wine Company's revenue reached 400 million yuan ($62.9 million, 50.3 million euros) in 2011, up 10 percent year-on-year, but Wu is not resting on his vines.

As more farmers in the county have begun growing grapes for profit, there have been thousands of tons of grapes overstocked in recent years. "Our capacity is limited and we certainly can't buy all grapes, but I still feel sorry for those farmers. Grapes are where their hopes are," Wu says.

That's why he has created a new product, which he has dubbed grape spirit. This drink needs more grapes as raw material due to multiple distillations, and has an alcohol content of between 38 percent and 52 percent. Two types of Yunnan Red grape spirit, Plateau Goblet and Plateau Spirit, hit the market in 2010.

"Chinese liquor is now more internationally recognized, so Yunnan Red is also putting more effort into grape spirit," Wu says.

"This is what I can do for farmers. For any enterprise which wants their companies to last, honesty must come first and a sense of social responsibility second."

Grape-spirit revenue came to about 40 million yuan in 2011, accounting for 10 percent of the company's total revenue. Yunnan Red currently has a 30 percent share of the Yunnan province's wine market and has made forays abroad.

"Since the domestic market is huge enough, we are taking our time for overseas expansion. But if someone goes to the pubs or clubs in countries in Southeast Asia such as Malaysia or Vietnam, he would already find many people drinking Yunnan Red," Wu says.

This export market was triggered by the 1999 World Horticultural Expo in Kunming. As the local specialty, Yunnan Red wine was tasted and praised by many visitors from all over the world.

Cambodia's former king, Norodom Sihanouk, was one of the guests impressed by the wine from the Yunnan plateau. The Yunnan Red Wine Company later became a beverage provider for the royal family of Cambodia and many of the country's state banquets.

Wu used to be a deputy district head of Shekou, Shenzhen, forefront of China's reform and opening-up. He later gave up his official position and in 1987 went to the University of Michigan to further his study of economics.

After obtaining his PhD, Wu moved to Hong Kong to establish the Hong Kong Crosston International Investment Group in 1992, which had investments in public transportation and beverages.

During China's initial opening-up period, around 1978-91, the country went through a food shortage during which grains were not allowed to be made into wine. So the Chinese used fruits such as grapes or plums as winemaking substitutes.

At this point, the government invested in a winery in Yunnan's Mile county, where grapevines had been growing since French missionaries brought seeds to the region in the 19th century. But the winery closed down three years after it was established.

Wu first heard the story of the winery when he visited his father-in-law in Yunnan during 1997's Spring Festival.

"My father-in-law wanted me to invest in Yunnan so that he could see his grandchildren more. And I love drinking, so I bought it!" he says.

The 6 million yuan winery may have been an impulse purchase, but Wu says he put 120 percent into the business. He started his own wine empire in June 1997. The revived winery produced 400 tons of wine in the first year, and the bottles sold with amazing speed at a time before foreign brands entered the Yunnan market.

"People today can hardly imagine how popular the wine once was - more bottles of Yunnan Red than Coca-Cola were sold in one day," he says, describing a scene at a supermarket in Kunming, the capital of Yunnan.

The wine's overnight success was a big encouragement for Wu, so he increased the winery's capacity to 1,600 tons in the second year, and again to nearly 10,000 tons within five years.

Just when Yunnan Red was making a name for itself, frustration and shock overwhelmed Wu and his team.

Many people were uncertain if good wine could come out of Yunnan, because there were no historical records suggesting that low-latitude regions like the province - which is around 25 north latitude - can successfully produce wine. Some pointed out that Yunnan was too far from the "golden belt" (between 35 to 45 north latitude) where traditional wine-producing areas such as Bordeaux, Burgundy and Yantai (in China) are located.

These critical comments aroused a debate on materialism versus idealism among the province's government officials. "They didn't believe wine could be produced here and decided it was idealistic even without visits to my vineyards!" Wu says.

The irritated vintner was determined to prove that wine could be produced at low latitudes under certain conditions. He has introduced more than 200 grape varieties from all over the world to Yunnan to use in his experiments.

Wu spent much time collecting data and evidence, and studied agriculture for several years. At the end of 1999, Wu's scientific paper Why Grapes Grow Well in Yunnan Close To The Tropic of Cancer won an award for excellence at the sixth Chinese National Symposium on Viticulture.

Wu's paper not only uncovers why Yunnan is a good wine-producing region, but also figures out why it is a good location for growing flowers and tobacco.

"Many people think I majored in agronomy, but I did not. My major at college was radio communication," Wu says.

The name of Yunnan Red is also a legend. It is the only Chinese brand involving a province's name because a law prevents a city or a province's name from being trademarked.

"But I want that name. Champagne or Bordeaux are also geographic names, and they also refer to certain types of wine. I insisted on the name to let more people learn there is a type of Chinese wine called Yunnan Red," Wu says.

It took 10 years of applications and bargaining for the company to obtain the trademark. Wu, however, remained confident throughout.

"I am stubborn but not stupid. I knew the secret pulse of time. The central government made an exception for Yunnan Red because my company was a highlight of the country's go-west campaign," he says.

What Wu is proudest of is that his winery has created jobs for more than 10,000 farmers in Mile county. The Yunnan Red Wine Company has contracts with these farmers, and every year it collects grapes from a 5,000-hectare area in the county.

"I am not afraid of competition or even being copied. I'd love to see a cluster of chateaus forming here in Mile. The only thing I am afraid of is food-safety incidents. Any tiny scandal can destroy the whole industry," he says.

Contact the writers at xiaoxiangyi@chinadaily.com.cn and liyinqing@chinadaily.com.cn