Sail across the sea

Chapter 393 Doing business isn't so easy
There was no need for Gao Fan to ask any further questions; Zhu Jian realized on his own how naive his original idea had been.

Not all mines will accept wetting agents; they prefer to continue using traditional water for dust suppression. Those mines that are willing to accept wetting agents don't just consider price and quality when purchasing them; they also take care of their networks of connections.

To open up the market, you need to send people to promote it. Given the current social climate, wining and dining are unavoidable, and there might even be kickbacks given behind the scenes, which adds up to a significant cost.

Finally, you have to consider the issue of competition. Once there is competition, you will have to lower your prices, and your profits will be squeezed.

Indeed, doing business is not so easy.

Thinking this, Zhu Jian's face grew increasingly pale, and he visibly weakened.

Seeing this, Gao Fan quickly comforted him: "Director Zhu, this matter isn't as bad as I'm making it out to be. Good wine needs no bush, and our Zeyan Institute's wetting agent is leading in China, so there's still hope for us to open up the market."

"However, I suggest Director Zhu lower the target a bit. It doesn't have to be 500,000 yuan in profit a year. 50,000 yuan would be pretty good. A research lab doesn't just have one product. If we can develop ten or eight similar products, and each product earns 50,000 yuan a year, that would add up to four or five hundred thousand yuan. That's an average profit of 10,000 yuan per person. Which company can compare?"

"However, for a profit of 50,000 yuan a year, which is uncertain, the institute has to invest over 100,000 yuan in advance to build production facilities, which is a bit of a dilemma," Xiao Ping sighed.

Gao Fan laughed and said, "That's easy. As I just mentioned, the wetting agent and the cleaning agent we make are actually based on the same principle. It's just a combination of several surfactants and some additives. If Director Zhu doesn't mind, we can do contract manufacturing for you, on a production-to-order basis."

"Director Zhu will arrange for people to go to the mines to promote the products. Once we get orders, we'll handle the production. The majority of the profits will go to the Zeyan Institute, and a small portion will be given to us as a service fee. This way, the Zeyan Institute doesn't need to invest upfront, which reduces the pressure, right?"

"This is a good idea!"

Everyone in the conference room felt their eyes light up.

No investment from Zeyan Institute is needed; just send a few people out to promote the products. After securing orders, the production is outsourced to Canghua Science and Trade. In this way, whether the profit is 5 yuan a year or only 5000 yuan, it's all free money, with absolutely no pressure.

Zhu Jian was the most excited. Of course, there was also a little disappointment, because he had just dreamed of earning 300 million yuan, and had even planned out whether to braise or stew a fish after making the money, but the dream had ended. He said to Gao Fan:
"Manager Gao, I completely agree with your approach. In fact, our lab already has existing orders. The mines where we conducted experiments have long expressed their desire for us to mass-produce, and they are willing to purchase from us."

"The purchase volume of each of these mines is not large, only two or three tons per mine, which adds up to about forty or fifty thousand yuan. In terms of profit, it's about ten or twenty thousand yuan."

“A profit of ten or twenty thousand is quite good!” Xiao Ping said. “These are just the mines you’ve been in contact with. You should hurry up and send a few more engineers out to contact mines in our province, as well as in Gaolu, Chibei, and Muyang.”

"I estimate that contacting a dozen or so more mines shouldn't be a problem. If that's the case, a profit of 10 yuan a year should be guaranteed."

"Whether there's any guarantee or not, it's alright to send someone to make contact first. How much are the travel expenses worth?" Deputy Director Xu Guoying added with a smile. Pei Hengxue sighed, "Sigh, I was really moved when I heard Manager Gao and Lao Zhu talking about business just now. In terms of business management, Manager Gao can really be a teacher to all the cadres in our institute."

Zhu Jian wholeheartedly agreed: "That's right, that's right. Manager Gao has solid professional skills and is also good at business management. He can indeed be a teacher to all of us. Sigh, seeing Manager Gao, I really feel like I've wasted my life."

Xiao Ping said, "The matter of the Environmental Protection Office has given me a great inspiration. The reform we are going to carry out must indeed be done step by step, and we cannot be too hasty."

"I think we should keep the original plan unchanged and use the Rare Earth Institute as a pilot to set up an entity for operation. Other departments, like the Environmental Protection Department, should first take out one or two products, send people to user units to understand the situation, and ideally, get orders directly."

"Once we have orders, we'll consider production. Ideally, we should find companies like Manager Gao's to help with contract manufacturing. If the institute really needs to invest, we must be extremely cautious and not throw all of the institute's assets into it."

"That would be best," Gao Fan nodded in approval.

And so the matter was settled.

Everyone left the meeting room with excitement, and soon the news that Zeyan Institute was going to start operating independently spread throughout the institute.

The staff at the institute generally welcomed the idea of ​​independent operation, and countless people went to their department heads to offer suggestions. Some even proactively suggested that they had relatives with some influence in certain units, and they could try to contact them to try and bring in a few business deals for the institute.

Nowadays, state-owned enterprises have generally started to operate independently. On the one hand, they enjoy the benefits of the planned economy, and on the other hand, they can also make some extra money from the market. As a result, the lives of employees have generally improved.

Zeyan Institute is a public institution that previously had little business activity, and everyone lived a very frugal life. In casual conversations, people inevitably expressed some envy for enterprises and discussed whether Zeyan Institute could be restructured.

Now, the leadership has finally decided to carry out reforms, still adopting a trial-and-error approach, which has given everyone hope.

In Xiao Ping's office, Gao Fan made separate phone calls to Gao Yiping, Xu Ying, Gu Kunquan, and others, confirming that Canghua Science and Trade would provide 100 million yuan in venture capital to Zeyan Institute for conducting in-situ leaching process experiments.

At the same time, Xiao Ping also submitted an application report to the Provincial Nonferrous Metals Corporation to carry out a pilot enterprise reform, which was quickly approved.

The establishment ceremony of "Maolin Province Zeyan Technology Company", the operating entity of Zeyan Institute, and the signing ceremony of cooperation agreement for Canghua Science and Trade to provide scientific research venture capital to Zeyan Company were held at the same time in the auditorium of Zeyan Institute. Leaders from the Provincial Economic Commission, the Department of Chemical Industry and the Provincial Nonferrous Metals Company attended the ceremony.

Sun Shanshan, a popular reporter for Maolin Daily, used her eloquent pen to describe this grand event as another milestone in Maolin Province's reform and opening up.

(End of this chapter)