Sail across the sea

Chapter 431 Is there that much funding?

Gao Yiping and Xu Ying were of the same mind, and they immediately understood that the key point of Xu Ying's words was "even if nothing else is done".

No official wants little power; no businessperson wants little money.

As the deputy director of the Economic Commission in charge of industry, how could Xu Ying tolerate a powerful subordinate enterprise doing nothing?
Xu Ying's words were clearly a direct message to Gao Yiping, telling him not to think that his position was secure and that he could rest on his laurels, but that he still needed to make new contributions to the revolution.

Gao Yiping quickly stated, "Director Xu, oh no, shouldn't I address you as Director Xu in advance? Actually, the main reason I invited Director Xu to dinner today is to ask him about the next steps for the fertilizer company."

"To be honest, ever since the news broke that the Chemical Industry Bureau was going to be abolished, I've been feeling very anxious. Now that I have a definite answer, I feel at ease and can wholeheartedly arrange the work ahead."

"So, what are your thoughts on the work ahead?" Xu Ying asked.

"The conversion of ammonium to urine from four nitrogen fertilizer plants is the original intention of the province in establishing the fertilizer company. It is definitely the focus of all work and this cannot be changed."

"Yes, this work must be given top priority."

"Secondly, we need to plan the second batch of ammonium chloride conversion projects. In accordance with the previous arrangements of the Ministry of Chemical Industry and the Department, we are currently communicating with the four companies in the second batch. Compared with the first batch, the cooperation attitude of the second batch of companies is significantly more positive."

"That's natural. Once the first batch of enterprises are fully operational and local farmers are using urea, other places will start to get anxious. Now that the rural areas are implementing a contract responsibility system, farmers' demand for urea is very strong, and many local governments have come to the province to request an increase in urea quotas. I told them, it's better to rely on yourself than others. If they want urea, they should hurry up and convert ammonium to urea. Once they can produce urea themselves, they won't have to depend on others."

"This principle is actually understood everywhere. In the past, they tried to manipulate the Chemical Industry Bureau to get more money from it. Now that they see that the first batch of four companies have started operations, they have accepted reality."

"It's really not easy to get the local government to accept reality. Old Gao, you have a good son," Xu Ying said with a smile.

Xu Ying was very clear about the inside story of persuading the first four nitrogen fertilizer plants to accept the ammonium-to-urine conversion. Although if the Chemical Industry Bureau intervened and contacted some powerful departments to put pressure on the county, it might eventually force the county to give in, but the price to pay would be considerable, and it might even require offering some policies as a bargaining chip.

Although Gao Fan's tricks were not exactly respectable, they were very effective and gave Xu Ying a refreshing feeling.

Xu Ying strongly advocated for Gao Yiping to the Provincial Economic Commission, partly because of the exceptional talent of Gao Fan. Appointing Gao Yiping as the general manager of the fertilizer company was essentially hiring Gao Fan to work for the company for free—a very worthwhile deal.

Gao Yiping chuckled. Xu Ying was praising his son, and he, as the father, simply accepted it with a smile. Although Xu Ying's words inevitably contained an element of belittling Gao Yiping's abilities, it didn't matter much. A son being better than his father wasn't shameful.

"Besides the ammonium-to-urine conversion project, what other plans does the fertilizer company have in the near future?" Xu Ying continued to ask.

Gao Yiping said, "There is a business opportunity that I was just about to ask Director Xu about."

"What do you think."

"The Metallurgical Research Institute in Zeshan is planning to launch a rare earth refining facility to produce high-purity rare earths. They can provide the technology, but they're facing a funding shortfall. The project's expected returns are excellent, and I'm considering whether the fertilizer company should invest in it," Gao Yiping said casually. Xu Ying understood immediately. She was the one who took Gao Fan to the Geological and Mineral Resources Bureau to discuss the rare earth refining project in Zeshan. Now that the Zeshan Research Institute had launched a rare earth refining project, Xu Ying knew without a doubt that Gao Fan was behind it.

Gao Fan introduced this project to Gao Yiping again, clearly because he was optimistic about its profitability and wanted to add more achievements to Gao Yiping's political record.

Other people's children are still sponging off their parents at this age, while Gao Fan has been able to repeatedly seek benefits for his father. It's true that one should have a son like Gao Xiaofan!

If I had a son like that, even just half a son, I'd be proud of myself.

Huh, what are you thinking about!
Xu Ying banished the strange thought that suddenly popped into her head and asked Gao Yiping, "Old Gao, has Xiao Fan mentioned how much investment this project requires and what the future returns will be?"

Gao Yiping was taken aback for a moment, then chuckled and said, "As expected, nothing can be hidden from a wise and insightful leader. That's right, it was Xiao Fan who told me about this."

"According to him, the investment in this project is around 5000 million yuan. Once completed, if it operates at full capacity, the annual output value can reach 3 million yuan, with a profit of around 1.5 million yuan. It wouldn't be an exaggeration to say that it's extremely profitable."

"The fertilizer company invested about 15 million yuan, taking a 30% stake. After paying 50% income tax on the company's profits, the remaining amount is about 75 million yuan a year. 30% is 25 million yuan, which is much better than producing urea."

"How could there be such a high profit?" Xu Ying was somewhat surprised.

Gao Yiping said, "I've also discussed this issue with Xiao Fan. He said the main reason is that our country prices rare earth raw materials too low, and these profits are actually the value of mineral resources."

"That's right." Xu Ying nodded, while calculating in her mind.

If Gao Yiping's data is accurate, it means that the current price of rare earth raw materials in the province is severely underestimated. The Provincial Economic Commission should reassess the pricing of rare earths, and doubling the current price would not be unreasonable.

However, even if the price of rare earths doubles, according to Gao Yiping's calculations, the refinery's annual profit would still reach at least 8000 million, while the capital investment would only be 5000 million. Such an investment is really worthwhile.

"Does the fertilizer company have that much capital?" Xu Ying asked.

Gao Yiping was stumped by that question. The fertilizer company was, in reality, just an empty shell. The only profitable part was the Canghai Fertilizer Plant, which, after deducting income tax, only left the company with a profit of two to three million yuan a year.

The previous investment in ammonium chloride conversion came partly from matching funds allocated by the Ministry of Chemical Industry and additional funds from the Department of Chemical Industry, and partly from loans from Canghua Science and Trade Bureau.

Now, if he were to invest another 1500 million yuan in rare earth smelting, he would probably have to ask his son for money again.

His son had readily agreed to lend him the money, but how could he possibly tell Xu Ying about it?

(End of this chapter)