Sail across the sea

Chapter 381 presents such an opportunity

The two clinked glasses and each took a sip of wine. Gao Fan then asked, "You're in the scrap metal recycling business, so how did you end up in Zeshan? Have you already taken over all of Luping?"

Yin Xiaobiao shook his head: "I've already negotiated business with Cangtang and Yanxiu counties. The scrap metal recycling stations have agreed to let me choose from the industrial products they receive, on the condition that the price I offer must be higher than the price they sell to the factories."

"In Luping City, I haven't found any connections yet, so I went there directly to discuss it. They said there's a national policy that scrap metal can't be sold to private individuals. When I was buying scrap metal in Guangzhou, I met a friend who does business in Zeshan. He said he could introduce me to a scrap metal company in Zeshan, so I came here."

"How's it going?" Gao Fan asked.

"We're still negotiating," Yin Xiaobiao said with a hint of helplessness. "I've been here for seven or eight days, and I've been treating people to meals every day. I've already given away almost half a case of cigarettes."

"To cooperate with an organization, there are essentially two requirements: one is that the person involved receives some benefits, and the other is that the organization receives some benefits. Generally speaking, both of these are very important," Gao Fan said.

Yin Xiaobiao wholeheartedly agreed: "That's exactly right. I invited several heads of units to dinner and offered them some kickbacks. However, they said that to get approval from higher authorities, we need to have a respectable reason, which I understand to mean what you're saying—that the unit needs to receive some benefits."

"The officials these days are still rather timid," Gao Fan said casually, only realizing afterward that his words had revealed his transmigration identity. However, he wasn't in a hurry to cover it up, since Yin Xiaobiao wasn't a transmigrator and wouldn't understand the hidden meaning in his words.

He continued, "Now the country encourages all units to carry out reforms. As long as the unit leaders can find reasons to prove that this matter is beneficial to the country and can increase the unit's revenue, the superiors will not investigate. On the contrary, they will praise them for their pioneering spirit."

"In this way, even if they gained some personal benefits from this matter, they can cover it up."

Yin Xiaobiao said, "I plan to give these companies some concessions. The profit from recycling and refurbishing scrap metal is huge, so it doesn't matter if one more person shares it. Recently, many mines have opened in Zeshan, and many of the miners are locals who don't understand the technology, so their equipment breaks down very quickly. If we can buy all the scrapped equipment from these mines and refurbish it, we can easily make hundreds of thousands or even millions of yuan in profit."

Gao Fan laughed, recalling the joke about selling shovels during the American Gold Rush. Whether those mining rare earth in Zeshan would make money was uncertain, but Yin Xiaobiao, the scrap collector, saw a huge business opportunity.

Thinking of this, a thought suddenly flashed through Gao Fan's mind. He looked at Yin Xiaobiao and said, "Old Yin, there is such an opportunity. There is a factory, probably like our old fertilizer plant, which is also a fertilizer plant. Now it needs to dismantle some of the equipment and carry out renovations."

"The part being dismantled is about half of the original equipment, weighing about seven or eight hundred tons. It contains equipment, pipes, containers, and the like."

"If I sell all these things to you, you'd better also be responsible for the demolition work. How much are you willing to pay?"

Gao Fan was referring to the fertilizer companies that were about to switch from ammonium bicarbonate to urea production. This conversion involved modifying their equipment to produce urea. Since it was a conversion, some equipment would be retained for continued use, while others would be replaced. Companies like Cangyuan Nitrogen Fertilizer Plant, built in the late 60s and early 70s, had equipment that had been in use for over a decade, exhibiting signs of rust and aging, and thus requiring replacement.

During the renovation of Canghai Fertilizer Plant, Gao Fan introduced Professor Hai Qingwen from Peking University to the plant. Hai Qingwen hoped to use the old equipment at Canghai Plant to conduct experiments related to coal chemical engineering. Therefore, the equipment that Canghai Plant had phased out was not scrapped directly, but was instead converted into a simple coal chemical plant.

Plants like Cangyuan Nitrogen Fertilizer Plant don't need to keep their old equipment; the dismantled equipment can only be sold as scrap metal to recycling stations for remelting.

Gao Fan had considered that some of the dismantled equipment was still usable. For example, some valves, pumps, motors, fans, and instruments—some were simply outdated, others were just not up to standard. It seemed a waste to simply melt these things down as scrap metal. But when asked how to recycle and reuse them, he couldn't really say.

Now, after hearing Yin Xiaobiao talk about the methods of material recycling, he had an idea. These old equipment were undesirable to regular companies, but the township enterprises along the coast would certainly not refuse them.

He had visited Xinglong Paint Factory. Many of the equipment there was rudimentary and made do; as long as it worked, no one cared whether the specifications matched. Valves that would only be thrown into the scrap heap at Canghai Factory were highly sought-after commodities that money couldn't buy at the small chemical plant in Shuainan.

Upon hearing about the business, Yin Xiaobiao immediately perked up. After thinking for a moment, he said, "You said there are seven or eight hundred tons of old equipment that need to be dismantled. According to the current scrap steel purchase price, each ton is 220 yuan. Based on eight hundred tons, that's 176,000 yuan."

"If we were to hire someone to dismantle and transport it away, it would probably cost around ten or twenty thousand yuan. So, the price of this scrap steel would be around 15 yuan."

Gao Fan nodded slightly. He wasn't familiar with this area, but he felt that Yin Xiaobiao's calculations made some sense. As for the specific value of the scrap steel, he would need to discuss it in person with company leaders like Tan Rongjiang and Luo Jiazhen.

“If that’s the case, I’ll add another 5 yuan. At 20 yuan, including unpacking and shipping, do you think the other party can accept that?” Yin Xiaobiao asked.

Gao Fan thought for a moment, then shook his head and said, "I don't think we'll accept it. The other party isn't short of 5 yuan. According to regulations, this scrap steel needs to be sold to legitimate scrap recycling companies, or even directly transported to steel mills. If a company sells scrap steel to you, it's violating regulations. They wouldn't do that without a sufficiently large profit."

"Furthermore, these scrap materials still have residual value, which is something not only you can see. If they were to be disposed of, the factory itself would likely sort out the usable parts first, which would amount to more than just a 5 yuan difference."

"Finally, if there isn't a sufficiently attractive price difference, then even if you secure the business through connections, that's it. In the coming decades, there will be countless demolition projects across China. Are you going to use connections to get every single one?"

(End of this chapter)