Material Empire

What Song Hongxuan can think of, Qin Hai can naturally think of. The method he proposed to break through the barriers of the international market is very simple and crude, that is, to cut prices.

In the international market, the price of a ton of wire rod is 280 US dollars, which is equivalent to 1,500 yuan; while in the domestic market, the price of a ton of wire rod is more than 2,000 yuan, which is much higher than the international market price. Obviously, if it is sold abroad at domestic prices, no one will care.

Qin Hai's plan is to sell at a lower price than the international market. The wire rod in the international market is 280 US dollars. If Daqin Group sells it for 260 US dollars, will it be able to sell it? High-end steel companies in China are afraid to invest in it. What can’t be done with ordinary wire and bars? As long as the price is low for this kind of high-end product, international buyers will definitely flock to it. In later generations, Chinese manufacturing is raging all over the world. Isn't the biggest trick is cheap?

As for dumping at a price lower than the origin, the premise is that someone initiates an anti-dumping investigation. The global annual steel output is 700 million tons, and China only accounts for one-tenth of it, which is not enough to threaten Western manufacturers. Who would have the time to sue you for dumping? At that time, Western countries were eager for dumping from developing countries, because it meant that they could plunder resources from developing countries at a lower cost.

"In this way, we are almost losing money and making money."

After hearing Qin Hai's plan, Song Hongxuan made some calculations in his heart and said this. The raw materials of Beixi No. 2 Iron and Steel Plant and Cenzhou No. 2 Iron and Steel Plant come from overseas. The cost of raw materials, freight, working hours, energy consumption, etc. are added together, and the cost of wire rod per ton is almost more than 200 US dollars. If it is sold abroad at a price of 260 US dollars, if the cost is well controlled, it can barely keep the cost. If the control is not good, it will be an absolute loss-making business.

"This should be regarded as raising production capacity at a loss." Qin Hai said, "If we plan carefully, we may not lose too much money. Compared with using working capital to build reserves, this method should be more economical."

Such a thing as production capacity cannot be left idle after it is formed. There are many things that need to be maintained through stable production, otherwise it will be difficult to form production capacity in a hurry. For example, Daqin Iron and Steel Company's raw materials come from Australia. To ensure a stable supply of raw materials, it needs to continue production. Otherwise, they may not be able to supply them if they temporarily find mines to buy raw materials. In addition, the skilled workers needed to provide the production capacity of 5 million tons of steel also need to be cultivated and maintained through the production process. It is impossible to let these workers rest at home and recruit them when needed.

Both Ning Zhongying and Song Hongxuan were in business management. Qin Hai simply mentioned it, and they understood the reason. Ning Zhongying turned to look at Song Hongxuan, and asked, "Xiao Song, according to Xiao Qin's approach, can our steel company guarantee a balance of profit and loss, or even a slight surplus?"

Song Hongxuan was nervously doing calculations on his notebook, and after a long while, he nodded and said, "If we work hard, we can ensure a balance between profits and losses. If there is a slight surplus... then it depends on the situation in the domestic market. .”

The steel factories under the Daqin Group have always been the "cash cows" of the group. Although the profit margin is not high enough, the output is large and the output value is high. How can they create a profit of 100 to 200 million a year. Of course, these profits are generated in the domestic market. According to Qin Hai's plan, the group will immediately start the steel company's capacity expansion plan, and then take the excess production capacity to the international market to digest, seize the market at a low price, and maintain daily production. This is basically a loss-making business. Domestic profits and foreign losses, after careful calculation, Song Hongxuan felt that he could basically reach a balance of profit and loss.

Use domestic profits to subsidize losses abroad and maintain the existing production capacity as the strategic reserve Wang Hongsheng needs. This is the plan Qin Hai revealed to Wang Hongsheng. When talking with Wang Hongsheng, he did not calculate the loss figure in detail, but he believes that even if the loss is incurred, the amount is within the range he can bear.

"It's worth doing." Ning Zhongying nodded resolutely and said, "After all, we are a Chinese company. Whether it is a private company or a state-owned company, we should do our part when the country needs it. Don't say Xiao Song can still maintain a balance of profit and loss, even if there is a slight loss, as long as we can afford it, it is worth doing, this is a matter of great merit."

"The awareness of the old factory manager is high." Qin Hai said with a smile, "My starting point is not as noble as the old factory manager. I have paid back. This business will not lose money no matter what, so I boldly agreed. "

"Of course I know that's the case." Ning Zhongying said with widened eyes, "but when we tell the planning committee, can we say that? We have to say what I just said, saying that we would rather lose our own interests , but also to take into account the overall situation of the country, understand?"

"Understood." Qin Hai hurriedly replied, in fact, how could he not understand the importance of singing high-profile, but Ning Zhongying taught him, he still has to pretend to be sincere and accepting humbly, this is respect for the old man.

Song Hongxuan asked: "Xiao Qin, when did this matter start?"

Qin Haidao: "We have to start right away. We will go to Chen Hongcheng together in a while, and tell him to go to Europe to purchase second-hand steel equipment. I estimate that the negotiation, disassembly, transportation, and installation in Cenzhou will take about a year." It has passed. We are still very tight in terms of time to form a production capacity of 5 million tons."

"I thought of another question." Song Hongxuan said, "We formed such a large production capacity mainly to cope with the market fluctuations that occurred during the price reform. When the price reform is completed, what should we do with our surplus production capacity?"

"Haha, don't worry about that." Qin Hai said optimistically, "After the country releases the unification of production materials, the economy will definitely experience great growth, and the demand for steel products in the market will double and rise. , the production capacity of a mere 5 million tons is just a drop in the bucket for the market."

"Are you sure?" Song Hongxuan asked Qin Hai with his eyes shining. As the general manager of a steel company, he certainly hopes that the company's production capacity will be as large as possible.

"I'm sure." Qin Hai replied firmly. This is the self-confidence of the traveler. He knows that when the real estate industry develops rapidly across the country, the annual steel demand in the country will reach 600 million tons. What is 5 million tons worth?

Song Hongxuan said: "If that's the case, then why don't we let Chen Hongcheng import more equipment? For example, instead of 5 million tons, it's 10 million tons. What do you think?"

"You are really greedy. With a production capacity of 10 million tons, how much iron ore do you have to consume a year? Can Cenzhou Port afford it?" Qin Hai scolded with a smile.

Song Hongxuan said: "Why must it be limited to Cenzhou Port? We can go to places like Hongyuan and Haidong to build new factories. These places are coastal provinces, and iron ore can be directly transported by sea, and the cost is lower than transporting to Cenzhou This is also conducive to our control of the ex-factory price of steel products. In fact, I have always wanted to move the steel industry to these provinces, but I couldn’t find an opportunity. Now we are helping the State Planning Commission to do things, let the planning It's not too much to help us coordinate a few pieces of industrial land, right?"

"You're too dark!" Qin Hai said jokingly, "Is this considered taking advantage of the fire?"

Ning Zhongying interjected and said, "Even if it's a robbery, I think Director Wang would be happy, right? For the State Planning Commission, a piece of land is just a matter of issuing a document. What we get in exchange is that we set aside a lot for the Planning Commission. The production capacity of several million tons of steel, this account, Director Wang must be able to calculate clearly."

"This matter is on my shoulders." Qin Hai said broadly, "Lao Song, you should immediately make a plan to see what equipment you need to purchase, how large it is, and your ideal location for building the factory. Somewhere, list a few alternatives, and then we start to implement. Over there at the Planning Commission, I will go to Director Wang, and if he dares not give me the land, I will not accept the account of the 10 million tons of steel.”

Hearing Qin Hai's gnashing of teeth, Ning Zhongying and Song Hongxuan couldn't help but laugh. They knew that Wang Hongsheng would definitely not embarrass Qin Hai in this matter, and it was a bit redundant for Qin Hai to put on a desperate look. However, apart from his long-term vision and mysterious technology, this young chairman has no strengths in specific management. Let him do the work of coordinating high-level relations, which can be regarded as the best of his talents. As for purchasing equipment, building factories, and maintaining daily production, it is more reassuring to hand over to Miao Lei than to Qin Hai.

In the next two days, the group held a series of meetings to arrange the work tasks of each branch in the future and negotiate the cooperation between different companies. Things related to the expansion of the steel company's capacity were also arranged at the meeting.

Among them, the one with the heaviest task is Red Sea Company, which is in charge of overseas affairs. The company not only needs to purchase second-hand steel equipment in the European market, but also contacts Australian mining companies to determine how to increase the import of raw materials. In addition, it also needs to find international steel sellers to sell Chinese steel to them. When Chen Hongcheng received these tasks, instead of complaining, he was very happy. Because the more tasks, the greater the importance of Red Sea Company in the group, which he is happy to see.

Many people also questioned the large-scale expansion of steel production capacity at the beginning of the group's establishment, worrying that the excessively high production capacity could not be digested, resulting in idle equipment. For this, Qin Hai, Ning Zhongying and others did not explain too much, they only said that it was an important collaboration between the group and the national ministries and commissions, but did not disclose the specific content. Matters related to price reform are still state secrets, and it is inappropriate to disclose them prematurely.