What Song Hongxuan could think of, Qin Hai could naturally think of. The method he proposed to break through the obstacles in the international market was very simple and crude, that is, price reduction.
In the international market, the price of one ton of wire rod is 280 US dollars, equivalent to 1,500 yuan; in the domestic market, the price of one ton of wire rod is more than 2,000 yuan, which is much higher than the international market price. Obviously, if the domestic price
If the price is sold to foreign countries, no one will care about it.
Qin Hai's plan is to sell it at a lower price than in 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 dare not
Ask yourself, what can't you do with ordinary wires and rods? As long as the price is low for this kind of popular commodity, international buyers will definitely flock to it. In the future, Chinese manufacturing will wreak havoc around the world. Isn't the biggest trick is cheapness?
As for selling at a price lower than the country of origin, what is dumping? The premise is that someone files an anti-dumping investigation. The world's annual steel production is 700 million tons, and China only accounts for one-tenth, which is not enough to threaten Western manufacturers.
Who is too lazy to sue you for dumping? At that time, Western countries were eager for dumping in 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 a profit."
After listening to Qin Hai's plan, Song Hongxuan thought about it in his mind and said this. The raw materials of Beixi Second Steel Plant and Cenzhou Second Steel Plant come from overseas. The cost of raw materials, freight, working hours, energy consumption, etc. are all added up.
Together, 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, the cost is controlled well and can barely break even. If the control is not good, it is an absolute loss-making business.
"This should be regarded as losing money to maintain production capacity." Qin Hai said, "If we calculate carefully, we may not lose too much money. Compared with occupying working capital to build reserves, this method should be more economical."
Production capacity cannot be left idle after it is formed. Many things 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
The raw materials come from Australia. To ensure a stable supply of raw materials, we need to continue production. Otherwise, we will temporarily find mines to buy raw materials. Others may not be able to provide them. In addition, we need to provide the skilled workers needed to produce 5 million tons of steel.
, also need to be cultivated and maintained through the production process. We cannot just let these workers rest at home and only recruit them when needed.
Ning Zhongying and Song Hongxuan are both business managers. Qin Hai simply mentioned it and they understood the reason. Ning Zhongying turned to look at Song Hongxuan and asked: "Xiao Song, do what Xiao Qin does. Let's do this."
Can the steel company ensure breakeven, or even make a slight profit?"
Song Hongxuan was doing calculations nervously on his notebook. After calculating for a while, he nodded and said: "If we work hard, it will not be a problem to ensure breakeven. If there is a slight savings... it depends on the situation of the domestic market.
."
These steel plants under Daqin Group have always been the group's "cash cows". Although their profit margins are not high enough, their output is large and their output value is very high. In this way, they can create a profit of one to two hundred million a year. Of course.
These profits are all generated in the domestic market. According to Qin Hai's plan, the group immediately launched the steel company's capacity expansion plan, and then took the excess production capacity to the international market to absorb it, seize the market with low prices, and maintain
Daily production is basically a loss-making business. There are domestic profits and foreign losses. After careful calculation, Song Hongxuan feels that he can basically reach a break-even balance.
Use domestic profits to subsidize losses abroad and maintain existing production capacity as the strategic reserve Wang Hongsheng needs. This is the plan Qin Hai revealed to Wang Hongsheng. When talking to Wang Hongsheng, he did not calculate the loss figures in detail
, but he believes that even if he loses money, the amount is within what he can bear.
"This is worth doing." Ning Zhongying nodded decisively and said, "After all, we are a Chinese enterprise. Whether it is a private enterprise or a state-owned enterprise, when the country is in need, we should do our part. Don't say
Xiao Song can still maintain a profit and loss balance. Even if it is a slight loss, as long as we can afford it, it is worth doing. This is something that will pay off in the future."
"The consciousness of the old factory director is very high." Qin Hai said with a smile, "My starting point is not as noble as the old factory director. I just think that if I do a favor to the Planning Committee at this time, I can get the approval of the Planning Committee for whatever I do in the future.
The reward was high. No matter how much I calculated, I would not lose money on this business, so I boldly agreed."
"Of course I know this is the case." Ning Zhongying said with eyes wide open, "But when we tell the Planning Commission, can we say this? We must follow what I just said and say that we would rather lose our own interests.
, we must also take into account the overall interests of the country, understand?"
"Understood." Qin Hai responded quickly. In fact, how could he not understand the importance of singing a high profile? However, when Ning Zhongying taught him, he still had to pretend to be frightened and accept it humbly. This is respect for the old man.
Song Hongxuan asked: "Xiao Qin, when will this matter start?"
Qin Haidao: "We have to start soon. We will go to Chen Hongcheng together in a while and tell him to go to Europe to purchase second-hand steel equipment immediately. I estimate that this negotiation, disassembly, transportation, and final installation in Cenzhou will take one year.
It has passed. We are still very tight on time to build 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 will we do with our surplus production capacity?"
"Haha, don't worry about that." Qin Hai said optimistically, "After the country liberalizes the unified allocation of production means, the economy will definitely grow greatly, and the demand for steel in the market will then double.
, a mere 5 million tons of production capacity is just a drop in the bucket for the market."
"Are you sure?" Song Hongxuan looked at Qin Hai with eyes shining and asked. 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 confidence of a time traveler. He knows that when the real estate industry develops rapidly across the country, the country's annual steel demand will reach 600 million tons or 5 million tons.
What does it count as?
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, but 10 million tons, what do you think?"
"You are really greedy. How much iron ore will be consumed in a year with a production capacity of 10 million tons? 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 reached directly by sea, which is more cost-effective than shipping to Cenzhou.
It is much lower, which also helps us control the ex-factory price of steel. In fact, I have always wanted to move the steel industry to these provinces, but I can’t find the opportunity. Now we are helping the State Planning Commission to do things and let the planning
It’s not too much to ask the commission to help us coordinate a few pieces of industrial land, right?”
"You are too dark!" Qin Hai said jokingly, "Is this considered taking advantage of others' misfortune?"
Ning Zhongying interjected from the side: "Even if it is to take advantage of the situation, I think Director Wang is also happy, right? For the State Planning Commission, a piece of land is just a matter of issuing a document. But in exchange, we set aside some land for the Planning Commission.
With a production capacity of several million tons of steel, Director Wang can definitely calculate this clearly."
"This matter is all on me." Qin Hai said in an all-round way, "Old Song, you should make a plan immediately to see what equipment needs to be purchased, how large it is, and your ideal location for building the factory.
Somewhere, list a few alternative plans, and then we start to implement them. At the Planning Commission, I will go to Director Wang. If he dares not to give me land, I will not accept the account for these 10 million tons of steel."
Hearing the sound of Qin Hai gnashing his teeth, Ning Zhongying and Song Hongxuan both laughed. They knew that Wang Hongsheng would definitely not embarrass Qin Hai on this matter. Qin Hai's act of being desperate was a bit unnecessary. However, this
In addition to his long-term vision and mysterious skills, the young chairman has no specific strengths in business management. Let him be responsible for coordinating high-level relations, which can be regarded as making the best use of his talents. As for purchasing equipment,
It is more reassuring to leave the construction of the factory and the maintenance of daily production 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 company in the future and negotiate cooperation between different companies. Matters regarding the steel company's capacity expansion were also arranged at the meeting
.
Among them, the one with the heaviest task is Red Sea Company, which is responsible for 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 promote Chinese steel to them. Chen Hongcheng received these tasks. Instead of complaining, he was very happy. Because the more tasks, it means the greater the importance of Red Sea Company in the group, which is what he is happy to see.
.
Many people have also questioned the group's large-scale expansion of steel production capacity since its establishment, fearing that the excessive production capacity could not be absorbed, resulting in idle equipment. In this regard, Qin Hai, Ning Zhongying and others did not explain too much.
It is said that it is an important collaboration between the group and national ministries and commissions, but the specific content is not disclosed. Matters related to price reform are still state secrets, and it is inappropriate to disclose them prematurely. (To be continued)