Extraordinary Genius - Chapter 400 – How do we cooperate?
“Director Li, how is the research on the batteries going? We have paid quite a lot for this.” Feng Yu suddenly asked.
“It is progressing quite well according to your requirements. The batteries should be ready next year. The nickel batteries and Zinc batteries cost are higher than those traditional lead-acid batteries. Are you going to install those batteries in your motorcycles?”
“Not only it will be installed in the motorcycles. The saloon cars and trucks produced by the Machinery Company will also need batteries. I can sign an agreement with the Motor Factory. If you can fulfill our demands, we will purchase the batteries from you. That means the Motor Factory will make quite a hefty sum every year.”
“How many motorcycles and saloon cars are you going to produce each year?”
“This year, we will produce at least 300,000 motorcycles and 20,000 saloon cars. This was mainly due to the factories are still under construction. The factories will be in operation at the end of this year. But from next year, I guaranteed that the production of motorcycles will exceed 600,000 units, and saloon cars will exceed 100,000 units. All these vehicles will be using your batteries!”
“Really? All your branch factories will be using our batteries?” Li Shiyou was overjoyed.
If that’s the case, then just batteries alone will create over 100 million RMB of sales for the Motor Factory. At the production of the Machinery Company increases, their sales and profits will also increase. Maybe there will be over 100 million RMB of profits. But were those batteries really suitable to be used in vehicles?
“That’s right. But I will suggest you set up branch factories to manufacture these batteries. It would be best if you could set up multiple factories like what the Machinery Company did……”
“Wait, you want us to set up branch factories?”
“You are wealthy, and you can set up 10 branch factories at one go. But our Motor Factory does not have so many funds. We cannot even afford to set up one branch factory.” Li Shiyou replied sourly.
“Then we can work together. I had said that the rights for this battery technologies belonged to me when I asked your factory to research on it. So, I will not use this technology to invest. How about I will provide you with the factories, funds, and equipment, and you will supply the factories with manpower, like engineers and workers. We can set up a joint partnership company.”
Feng Yu had said his real motive. The future battery industry will be huge due to the developments of electric scooters and the automobile industry. How could Feng Yu miss out this opportunity to make money?
Even if he could not monopolize the market, but it should not be a problem for him to be the market leader. Just the batteries for the electric scooters will bring at least a few billions of sales each year. The profits from this will not be a small amount.
“Cooperate?” Li Shiyou was wary when he heard of this word. He knew that every time he cooperates with Feng Yu, the Motor Factory will not suffer any losses. But most of the money will be earned by Feng Yu.
“We can talk about this later. Chief Wen, why are you keeping quiet?” Li Shiyou decided to go back and consider about this cooperation carefully. He needs to think over this before he could choose whether to work with Feng Yu and the details of this cooperation.
Wen Deguang raises his wine glass: “Director Li, let‘s have a toast first. Let me thank you for helping our district.”
Wen Deguang was thinking in his heart. What can he say? The both of them had not given him the chance to open his mouth. He does not even have the opportunity to speak when they were talking about the power station, let alone when they were discussing business.
Feng Yu suddenly remembered that Uncle Wen was sitting beside him.
“I will not drink any alcohol. I am driving.” Damn, these two people could drink Baijiu like fishes. Feng Yu does not want to drink with them.
Wen Deguang starts to drink and talk to Li Shiyou about the power station. Feng Yu added some of his views occasionally. He wanted the most for his district.
In the end, Feng Yu represented Tai Hua Food processing factory to invest 1 million RMB in the power station. In the future, the factory will have a 30% discount on the electricity charges and could still get a share of the profits from the power station.
This type of investment was common in some areas. Since there were already precedents, it was not a problem if the district and the Motor Factory pushes for it.
The State Power will also not reject as they would be able to get 10% profits if they allow the power station to use their power lines.
After the meal, Wen Deguang went to the City’s Farm department to report on this matter. The issue of the farmers returning their cultivated lands had been settled. But Wen Deguang does not want to just return those lands to the wilderness. Since the instructions from the top had not been finalized, he intends to lease those land to other farmers. The rents collected will go into the District’s finances, and when the instructions came down from the top, he would then return the land!
Li Shiyou returned to the Motor Factory and immediately called the person-in-charge of the batteries development, and the other sales team chiefs to his office. He needs to ask if this battery project can be used to cooperate with Feng Yu. If they were to collaborate with Feng Yu, what would be the details? How many shares should they request?
“Directory, I shall be honest with you. I do not think that this battery project will do well. The cost for this nickel batteries is too high. Who would want to buy it? Lead-acid batteries are more than enough for cars. Anyway, it is only used to start the engines and on the lights. Lead-acid batteries are much cheaper. Other than some equipment that requires special requirements for electricity, I cannot think of other uses for Nickel batteries.” The Deputy Chief Engineer said.
“I think we can cooperate with Feng Yu. Didn’t he say that he will provide the location, funds and also the equipment? We only need to provide the manpower and engineers. We do not need to invest much. If this succeeded, the profits would not be low. Also, Feng Yu promised that the Machinery Company’s cars will use our batteries in the future? But some of their factories are located in the South. Could they ship the batteries from Bing City there? When he said to purchase the batteries from us, I think he meant purchasing the batteries from the joint venture factories. If we do not cooperate with him, then this deal will be gone. Even if we are producing lead-acid batteries, there will still be profits.” The sales chief said.
“The technicians and workers will have to leave their homes to work in another province. We have to give them additional allowances. Their salaries will be higher. Can Feng Yu accept this?”
“This should not be a problem. The Machinery Company’s workers are getting more salaries than us. I heard that this was suggested by Feng Yu. Also, Tai Hua Trading’s staffs were getting increments every year. I heard that their salaries are more than 170 RMB a month. This Feng Yu was generous to his staffs.” The Motor Factory’s Finance Chief said.
Li Shiyou shook his head: “I think all of you had misunderstood me. I am telling all of you about this is not to ask if we should work with Feng Yu. I can confirm that we must work with him. I just want to ask if we should invest a sum of money to increase our stake in the company.”
“What? Director, if we are able to receive the order from the Three Gorges project, then we must focus on it. Where will we get the money to invest in new factories? Furthermore, we might not have enough engineers and technicians for those new factories. From what I understand, Feng Yu does not intend to set up one branch factory.”
Li Shiyou was hesitating. From what he knew, Feng Yu had never made any losses from his investments. But where will he sell these batteries? Use those Nickel batteries in the cars? This would increase the cost of the vehicle.
He had so many people with him, but there were no conclusions. Li Shiyou decided to look for Feng Yu tomorrow again to find out more. He must not miss this opportunity!