The technological flood of rebirth

Chapter 370: Coping with rising ore prices (please subscribe!)

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As a living thing, the primary need is survival. If the drugs of Chinese pharmaceutical companies are an important aspect of human survival, then as a human being, another important need is social interaction.

Another industry arranged by Zhao Yi is Yadai Personal Care Company, which is mainly engaged in the personal care industry. Although making people more beautiful and attractive is not the whole of human social interaction, it is the most important part.

There are many motivations for people to interact with each other, and there are many factors to maintain long-term communication relationships. However, it is undeniable that appearance has always been an important part of human interaction.

Although there are many factors that need to be considered if you want people to associate with you for a long time, the first factor is appearance. People with good appearance are more likely to have the first communication with others, and it is easier to gain the favor and favor of others.

The products of Yadai Personal Care Company are designed to solve the problems caused by this aspect for human beings, greatly narrowing the gap in appearance between human beings, and even making them stand out.

If there is a demand, there is a market, and almost everyone in the world has this need, so the market is infinite and can bring huge wealth and income to Zhao Yi.

Although Yadai Personal Care Company has only been established for a few months, Zhao Yi provided a lot of technical information, and at the same time, he also owns Pusi Chemical Company, which provides the company with very outstanding talents.

According to Liu Siqian's monthly report, they have completed the research and development of the company's first batch of products. They are currently building factories, organizing production work, and are also contacting various sales channels and formulating operational plans.

After all these preparations are completed, it will be the moment when they shake the world. By then, more than half of the international personal care products will be eliminated, and these markets will enter the hands of Yadai Personal Care Company.

The most important thing is that the profit margin of personal care products is too high, especially for well-known brands. The profit margin is not more than 10 times, and they are embarrassed to say that they are well-known brands.

What's more important is that most personal care products are actually subject to IQ taxes. Although they have no effect, the effect is not particularly obvious. The money spent is completely out of proportion to the effect of the product.

But there are still countless people paying for this low-cost-effective product, especially women. In order to make themselves beautiful, it can be said that they will do whatever it takes, even lose their minds.

As a newcomer to the entire industry, Yadai Personal Care Company's brand awareness is definitely not worth mentioning. It is impossible to rely on the brand to sell high prices, at least for now, don't think about it.

If Yadai's products are to be immediately recognized by consumers after they are launched on the market and are willing to pay high prices for their products, they must be significantly better than similar products in terms of product effects.

When Zhao Yi enters an industry with his own technical advantages, he must act as a bulldozer for the industry, reset the previous market structure, overthrow all other junk products, and bring the market into his own arms.

Moreover, personal care products, that is, the cosmetics industry is different from the pharmaceutical industry. It is very easy to enter the world market. There is no need for strict drug review procedures, and supervision is not as strict as pharmaceuticals.

In fact, Chinese pharmaceutical companies are also developing many products related to people's appearance, such as hair growth hormones, breast enhancement creams, height-enhancing drugs, weight-loss drugs and other products.

It's just that these products cause too many changes in the physiological structure of the human body. They belong to the pharmaceutical industry. It is more difficult to enter the international market than cosmetics, but it is also easier than other drugs.

If it is really impossible to enter the international market in a short time, then the only choice is to let international sellers enter the country to purchase these products, or even directly receive treatment in foreign-related hospitals of Chinese medical companies.

Moreover, Chinese medical companies will also launch plastic surgery business in the near future. Although many people look down on people who have plastic surgery, as a businessman, if there is a demand, there is a market, and if there is a market, it is completely worth doing.

In particular, the plastic surgery services provided by Chinese medical companies are not those of small street workshops, and their safety cannot be guaranteed at all. From this perspective, Chinese medical companies are even more likely to enter this industry.

In his previous life, people in China had a relatively negative attitude towards plastic surgery. Zhao Yi felt that it was not necessary at all. It is human nature to make oneself more beautiful if one can afford it.

I think no one would refuse this, but the main reason for the bad attitude is that the plastic surgery technology in the previous life caused serious damage to the body, and the sequelae are a problem that cannot be ignored.

Chinese medical companies have full strength in this area and can achieve the effects consumers want to see while ensuring human safety and reducing side effects. It can even be said that there are basically no side effects.

Although Zhao Yiyi is very optimistic about these markets, it is his first time to engage in these industries. How much of the market he can capture remains to be tested by the market.

However, there is no need to tell subordinates about these behind-the-scenes tricks. Although telling them can reassure subordinates, sometimes maintaining a sense of mystery is what a leader must do, so that subordinates can feel more in awe.

Especially when the boss always has a back-up to deal with crises and can always take action when they can't solve the problem, he can leave a deeper impression on them and follow him more wholeheartedly.

So Zhao Yiyi said to Qin Hongqi: "I'm very pleased that you can think about these issues, but I have already fully considered these issues. Your task is to execute them according to the plan and don't delay things."

When Qin Hongqi heard what Zhao Yi said, she was curious about what backup plan he had or how to deal with this problem, because Qin Hongqi knew that he had thought of all the ways he could think of, and the situation was not very optimistic.

The best way is to have sufficient funds and complete the urbanization construction plan entirely with your own funds. In this way, although your own funds are consumed a lot, the benefits will be the largest and the risks from the outside will be the smallest.

The second is to seek domestic bank loan financing. As mentioned before, domestic bank deposits are actually not high, and these deposits will basically be used to support national infrastructure, state-owned enterprise reform, and social production and consumption.

In other words, this method looks good, but actually it doesn’t work.

Moreover, the urbanization construction carried out by Chinese housing companies is mainly based on leasing as the operating model. It is very difficult to quickly recover the capital. However, the loan interest rate of banks is not low. If you borrow more, you will bear a lot of debt pressure.

Residents' deposit interest rates have reached about 8%, so loan interest rates will also be higher. With such a high interest rate, if you build a house and sell it immediately, or speculate on off-the-plan property, you can still get by with the high turnover rate.

But companies like China Housing Corporation, which rely on slowly collecting rents to recover costs, will only accumulate more and more debt, and eventually become insolvent and be dragged down by debt.

Not to mention that Chinese housing companies operate their properties on a rental basis, even if they operate in the same way as real estate companies in previous generations, it is currently unrealistic.

Although the salary level of domestic people has increased a lot, they still need to buy a lot of things, and not many people have enough money to buy real estate.

It is unrealistic in this era to rely on bank loans to buy a house. Our country has not yet reached the stage of excess capital, and the money in the bank needs to be used where it is more needed.

At the same time, people in China are not yet accustomed to using financial means to solve problems. Most people still adhere to the principle of living within their means, doing whatever they can with how much money they have, and are not used to borrowing money to purchase goods.

Of course, more importantly, the country has not yet introduced policies related to real estate reform, and has not put money into the market on a large scale in order to speed up urbanization.

There was no way to do this in the previous life, because if we didn't do this, many domestic industries would face a crisis of oversupply, which would have a huge impact on the domestic economy. The only way is to promote the development of related industrial chains through the real estate industry.

Now the division of labor between the government and Zhao Yi is very clear. The government's capital is mainly invested in infrastructure projects that are closely related to economic development, such as roads, power grids, and communications.

Zhao Yi, on the other hand, is investing in urbanization construction projects, because compared to basic projects invested by the government, urbanization construction projects have a shorter investment recovery period, are less risky, and are relatively suitable for commercial operations.

Of course, the more important thing is that Zhao Yi can now use more capital than the government, and the funds required for comprehensive urbanization nationwide are much larger than the projects invested by the government.

It can be said that both parties have given full play to their own advantages, which can not only solve the crisis of surplus rural labor in our country, but also enable our country to enter the stage of modernization and urbanization. It can be said to kill two birds with one stone.

However, no matter how Qin Hongqi couldn't figure it out, he didn't ask his boss directly. Compared to himself, his boss should be more concerned about this issue, because in the end it was definitely his boss who was unlucky, and he just changed jobs.

So he stopped trying to persuade and said directly: "Don't worry, we will do our best to ensure that the plan goes smoothly."

Hearing Qin Hongqi's words, Zhao nodded and said, "That's good, but according to this process, it is still too slow. I think it would be better to change the idea."

"Oh, what's the idea?" Qin Hongqi asked curiously.

“Aren’t you currently in the final stages of communicating with major cities? There will definitely be some finalized results. We can conduct bidding for these confirmed matters first, so that everything will not be crowded together.

Of course, if possible, we can also propose pre-tendering work for undetermined results. In fact, the intelligent system of the architectural design company will automatically calculate the costs of these building materials.

Adding the labor cost, we can get a relatively accurate overall cost, and then reserve a certain profit margin for each bidding company. We can directly provide this information to the major bidding companies, directly omitting the valuation link.

If it is one or two buildings, it is of course no problem to let the construction company evaluate it by itself, but our construction plan is very large, and even the quotation evaluation process takes a lot of time.

The quotation we calculated is basically relatively accurate. Although it is not conducive to lowering the price, the quality of our construction is the priority, not the lower the price, the better.

And because our construction scale is very large, considering the current number of construction companies, it is not a fully competitive market. Each construction company will get a contract to some extent.

Therefore, apart from taking longer, the competitive bidding model does not bring obvious benefits to both parties. It is better for both parties to negotiate openly and establish a mutually beneficial negotiation mechanism.

We can grade the construction difficulty levels of major buildings based on evaluating the capital strength and technical strength of construction companies, and then directly negotiate with relevant companies.

This will not only allow more construction companies to participate, but also ensure the interests of major construction companies, save time for ourselves, and also add insurance to the quality of these buildings. "

After listening to Zhao Yi's words, Qin Hongqi nodded unconsciously. The production capacity of steel and cement is now being carried out by the national team. With the support of Zhao Yi's capital and technology, the production capacity is expanding very quickly.

As for the iron ore supply problem, when Zhao Yi determined the urbanization construction plan, he notified Sunflower Investment Company and asked them to use their status as major shareholders to recommend that mining companies expand production scale.

But before that, Sunflower Investment Company held a large number of shares in a number of mining companies. After all, these inside information provided rare opportunities to make money.

After this round of large-scale share purchases, Sunflower Investment Company holds close to 40% of the world's major mining companies, and those small-scale mining companies have achieved absolute control.

Therefore, these mining companies are quite concerned about the suggestions of Sunflower Investment Company. Coupled with the so-called inside information provided by the investment company, these mining companies believe it even more and have increased their efforts to expand production.

Moreover, in the past few years, our country's demand for overseas mineral resources has continued to increase, and the growth rate has also become larger and larger. This also provides evidence for the so-called internal information of Sunflower Investment Company.

However, Zhao Yi also heard some bad voices, and some shareholders of mining companies put forward suggestions for price increases.

In other words, while the amount of ore China needs is increasing significantly, they will not expand production capacity for the time being, so that they can find reasons for price increases.

After prices rise, they will announce the expansion of production capacity. To be honest, if they join forces, it will be really difficult to crack this situation.

To this end, Zhao Yi has carried out three aspects of work:

First, Sunflower Investment Company merged the small mining companies it invested in. Although the scale of the individual companies was not large, the number of companies was very large.

After the merger, although it is still unable to compare with the three major mining giants, it still has a certain influence, can have a certain impact on international special ore prices, and has the ability to participate in price negotiations.

This had a certain impact on the three major ore giants, and they had to take into account the attitude of this new mining star. The newly merged United Mining Group immediately announced an expansion of its ore production.

The three giants are also very troubled by this unconventional company. If they don't expand their production capacity, wouldn't it be cheaper for the United Mining Group

They care more about expanding their market share than increasing prices. As for making more money, they will leave it to later. Besides, the ore will only generate value if it is sold. If it is not sold, it will just be a pile of rocks.

The second is to divide the giant alliance. He suggested that the Ministry of Foreign Affairs of the government and the steel consortium under the State-owned Assets Supervision and Administration Commission form a delegation to visit Brazil. During the period, relevant negotiations were conducted on the iron ore procurement of Brazilian Vale Company.

At this time, Brazil's Vale was still a state-owned enterprise, and the Brazilian government had a great say. Diplomacy still had a certain effect.

In the past, our country's diplomatic means were limited, but now our country's economic growth rate is astonishing, and its GDP ranks second in the world, so its weight is much heavier.

In addition to Brazil being rich in mining, their agricultural products are also very competitive, and my country is a very good export market, and the two sides have many areas for cooperation.

This can temporarily prevent the three major international ore giants from joining forces. If one of the three companies is eliminated, the remaining two will be easier to handle.

The independent actions of United Mining Group and Brazil's Vale have provided Sunflower Investment Company with a very good interface for opposition.

If the other two companies desperately expand their production capacity, but Rio Tinto and BHP Billiton do not expand their own production capacity, wouldn't this mean that they are handing over the market to others

In addition, Sunflower Investment Company holds a very large total shareholding in these companies and has a great say. If it were not to hide itself, after the shares in their hands are merged, they can decide on management changes.

Faced with the opposition of so many shareholders, other shareholders who do not know the truth are also following the trend and following the trend. As a result, the current management of the two giants can no longer persist.

Third, domestic steel companies do not conduct individual negotiations. Instead, the State-owned Assets Supervision and Administration Commission forms a negotiating team to conduct unified negotiations on domestic iron ore import prices. This way, they can increase their voice and avoid being defeated individually.

At the same time, the government established a commodity futures exchange in Dalian. Although it does not yet use "index pricing", it still adopts the "long-term agreement price" system.

However, in order to nip it in the bud, "long-term agreement pricing" will not last too long according to the experience of the previous life. It is an inevitable trend to change to "index pricing" in the future, which will operate completely in accordance with marketization.

Establishing our own commodity futures exchange now is to prepare for the future. Although iron ore will not be included in commodity futures trading for the time being, it can accumulate certain commodity futures trading experience for our country.

Moreover, in the future, our country will be a major trading country in international bulk resources, so it must be very familiar with commodity futures trading, especially bulk commodity futures trading. The use of futures financial instruments will become more and more frequent in the future.

If these three measures continue, although it will only ensure that the current price of iron ore will not rise significantly, it will buy a certain amount of time for my country's economic development.

Of course, it also buys time for Zhao Yi himself. Their seabed mining is not ready to be completed yet, and it will take several years to truly realize it. (End of chapter)