Siheyuan: Cooking journey

Chapter 226 Banggeng Jumped Off the Building

"..."

Guo Yingzhong was slightly stunned, thought about it, couldn't help but smile, shook his head, and stopped talking about it, and said:

"Very Cola is now available in the inland areas. Glass bottles are sold for one yuan, and plastic bottles are sold for two yuan.

"This price is indeed too high for the wages of most people in the inland areas. Do we need to lower the price?"

"Jianlibao will also enter the inland market. Their price is set at four yuan per bottle, which seems too expensive. We need to consider re-pricing. "

"There is also the matter of the joint venture to build a factory;"

"We provide financial and technical support, while the inland side is responsible for the specific operation of the factory. Although we are investors, we only have the right to supervise, not the right to directly manage;"

"This is obviously not good news for us. If the other party is not well managed and the final product is not up to standard, then our investment will be wasted..."

He Yuzhu was a little surprised, frowned, and said worriedly:

"I have heard about this as well. This is how instant noodle factories cooperate;"

"At first, I also had doubts about this model, especially the ability of the management. But the actual situation shows that as long as they are willing to work hard to learn the technology and truly master the craft;

"The quality of the product can actually be guaranteed..."

"...."

Guo Yingzhong looked at him, feeling an indescribable feeling in his heart.

I think this is quite wrong.

After all, if I remember correctly, he was the one who was in charge of the instant noodle factory.

The statement that my wife provides the funds and I manage it myself obviously lacks credibility.

It's really easy to talk without any back pain.

There was a hint of doubt in Brother Guo's eyes.

He Yuzhu noticed this, so he said more seriously:

"The inland market has just started to open up, so it is understandable that they are conservative in the form of joint ventures and let the local area take the leading role;"

"Although as an investor we do not participate in the actual management work, it is a good thing for us to be able to ensure the quality of the products;"

"I don't have to worry about factory recruitment and other things, which reduces a lot of trouble and allows me to focus more on product sales;"

“Even if we don’t have the power to control the factory, at least we can gain some control in the sales process:”

“The advantages of such a partnership are obvious, especially that it allows production costs to be greatly reduced;”

“Even if the price of goods is high in China, the profits can still be considerable if we do overseas export business;”

"Another point is that with the continuous development of the market and the improvement of people's consumption capacity, not only will the inland become a huge market in the future, but setting up a wholly-owned factory will also become a dream that cannot be realized."

He Yuzhu didn't expect that this form of cooperation to attract foreign investment would be so powerful.

If we stick to this approach, we will not only attract a large amount of foreign exchange investment, but also earn a lot of foreign exchange income through exporting products.

Foreign markets are opened up directly by investors, so we hardly have to worry about anything.

In this way, not only will investors make money, but the mainland will also make even more.

The "earning" here is not just as simple as foreign exchange, what is more important is that it can drive the entire regional economy forward.

A well-profitable factory can significantly improve the living standards of local residents.

For example, if taxes increase and workers' incomes rise, consumption will naturally increase. Whether it is food, clothing, or housing, demand in all areas will rise accordingly, and all walks of life will benefit.

In other words, every successful joint venture will bring huge benefits to the local area. If these industries can be connected in series to form a complete chain, it will be like forging a small but powerful iron fist.

This model is much better than simply foreign-funded enterprises opening OEM factories in the mainland.

Earlier, Ouyang Yuan had proposed to set up Longkou Industrial Zone to attract foreign investment and make it a foundry center. In comparison, this plan has many shortcomings.

If that happens, it will only strengthen the power of foreign companies and may disrupt the existing market order.

This kind of cooperation method now is more like borrowing a boat to go out to sea, and developing together under the premise of protecting the local market, which brings many benefits.

We can flexibly adjust market policies and gradually relax restrictions.

"After listening to your analysis, it does make sense."

Guo Yingzhong nodded in agreement and said, "The cost of living in Hong Kong is high, and labor costs are not low either. Putting the production line there will cause the cost of the product to rise sharply."

"Regarding the pricing issue mentioned earlier, if it is something produced in Hong Kong, there is not much room for negotiation even if we want to lower the price. After all, the production cost is there, and we can't do business at a loss;"

"But if the factory is moved to the mainland, the cost will drop significantly, not only can it sell at a lower price in the mainland, but it can also make a lot of money in exports;"

“So, as long as the product quality is reliable, this is really a good way to kill two birds with one stone.”

After a brief pause, Guo Yingzhong sighed and said, "I'm just worried about quality problems. That would be troublesome."

"That's not going to happen."

He Yuzhu blinked and said: "If we really encounter substandard products, the first ones to feel anxious will definitely not be the investors;"

"It's the people who directly manage the factory. After all, the foreign party has the right to supervise every link in the production process. If they find any problems, they can report them directly and even replace the management staff."

"I understand a little bit about this aspect."

Guo Yingzhong frowned and said, "But what I fear most is formalism. There is a supervision mechanism in name but it is actually useless. Also, in the case of a sole proprietorship, they will definitely want to save money and use fewer people. They will never hire two people to do a job that can be done by one person."

"I have visited several domestic factories, and the actual operation conditions I saw are really hard for me to describe: sometimes it takes three people to install a nail - one person actually does the work, one person passes the tools, and one person gives instructions. The efficiency is really not satisfactory;"

“Although the joint venture projects are ostensibly led by local teams, if this approach is followed, any factory will have many functional departments alone, which will not only create a lot of idle people, but also increase unnecessary expenses that are unacceptable.”

Guo Yingzhong's speech hit the nail on the head.

He Yuzhu also believes that these concerns are very real.

Like the instant noodle factory before, it was only under its own strict control that it cleaned up all the cumbersome and unnecessary organizations.

It is hard to say what will happen if someone else takes charge of other joint venture projects.

After thinking about it,

He Yuzhu suggested: "You can put these suggestions directly into the specific details of future discussions on the joint factory construction;"

"Take one tentative step at a time, just like crossing a river by feeling the stones. In this process, any valuable suggestions can serve as our guiding light;"

“How many departments to set up in the factory, how many employees to hire, and even how to set their wages can all be decided through negotiation;”

"We can also discuss how to effectively implement the supervision mechanism. I believe there will always be a way to solve it..."

The concept of a joint venture was initially just a vague idea, and no specific implementation plan existed.

Obviously, problems can only be discovered in practice. During the cooperation, many challenges and difficulties were encountered, which made He Yuzhu begin to reflect on himself.

Although he was the one who proposed setting up a joint venture, he actually did not pay enough attention in the subsequent operations.

Under this situation, the joint venture makes decisions almost unilaterally, and the product sales channels are not clearly divided.

As the representative of the investor, Lou Xiao'e is more like a pretty vase. She is not actually involved in too many specific affairs and has no intention of staying for a long time.

Considering that changes in the management team may cause disputes in the future, it is necessary to establish a reasonable management system and power distribution rules, and all matters must be carried out in accordance with the system.

At the same time, this is also to provide a reference sample when setting up a joint venture to produce milk powder in the future, so that we can operate according to this model afterwards.

After some consideration, He Yuzhu had another in-depth exchange with Guo Yingzhong, and came up with some new ideas on the division of sales channels.

They plan to be responsible for operations management within the joint venture to ensure product quality meets standards; if the company performs poorly for three consecutive quarters, the investor has the right to apply for a replacement of management.

As for product sales, they will be handled by the investor. Once sales are lower than 60% of the estimated total output for three consecutive quarters, the manufacturer can take over the sales rights.

This puts pressure on both parties: management is afraid of being replaced due to poor performance; investors will lose their voice if they fail to achieve sales targets.

After a long discussion with Guo Yingzhong, many detailed issues were gradually resolved. Just as He Yuzhu was about to leave, Zhang Hui rushed over to report: "Mr. He, there is a problem..."

"Did Banggeng jump off the building?" Upon hearing the news, He Yuzhu couldn't help but frown and looked a little surprised.

Guo Yingzhong was unaware of this and asked curiously, "What is the background of this person called Bang Geng? Why did he choose to jump off the building?"

"Mr. Guo, this is what happened..." Zhang Hui then briefly introduced He Yuzhu's previous explanation of Bang Geng's situation to the two, and added, "It's not clear why he jumped off the building. Yesterday, we sent him to the hospital for a checkup and visited him once. He seemed to be in a stable mood at the time. I didn't expect this to happen this afternoon."

There was a pause.

Zhang Hui continued, "Speaking of Bang Geng's case, I contacted the organization in charge of that street and asked around. About seven or eight years ago, Bang Geng joined the organization to work."

"Because he stole money, his arm was broken, and then he was forced to beg for food and sell things at a stall. In the end, he still didn't repent, and later betrayed the organization. He was poisoned and mute and disabled..."

I talked about it briefly.

Zhang Hui analyzed: "According to the doctor, those injuries were not treated in time, so now there are many problems left. It seems that Banggeng will have to live an abnormal life for the rest of his life."

"He may not be able to accept it for a while, and the ward is more than ten floors high..."