Sail across the sea

Chapter 432 Decouple it from Canghai Fertilizer Plant
After thinking it over, Gao Yiping decided to tell the truth:
"In terms of funding, things are definitely tight. However, Canghua Science and Trade has some funds, and we're considering borrowing from them first. The rare earth smelting project is very profitable, and we can recover the entire investment within one or two years, so the pressure of borrowing funds isn't too great."

Xu Ying shook her head and said, "Old Gao, isn't this just redundant? The rare earth project was initiated by Xiao Fan, and the funding is also his. Why do you insist on having the fertilizer company do it?"

"What do you mean?" Gao Yiping was taken aback, feeling that Xu Ying's words seemed to have a hidden meaning.

Xu Ying said, "The Economic Commission's intention is to hope that the fertilizer company will focus on doing a good job in agricultural chemicals and not get involved in other fields. The work of converting ammonium to urine is enough for the fertilizer company to do for another three years. At this time, it is inappropriate to make a big fuss about investing in rare earths, which will inevitably take away too much of the company's energy and affect the company's main business."

"You mean, Canghua Science and Trade will handle the rare earth business directly?"

Is there anything wrong with that?

"I've discussed this matter with Xiao Fan, and he feels that doing it under the name of Canghua Science and Trade might not be appropriate given our status."

"Canghua Science and Trade has a vitamin factory with an investment of more than 2000 million US dollars, which earns 4000 million US dollars in foreign exchange from exports every year. Its performance is much more impressive than that of your fertilizer company."

"No matter how dazzling it is, it is still just a labor service company of Canghai Fertilizer Plant. It is hard to believe that it is a legitimate company."

"That's easy, just decouple it from Canghai Fertilizer Plant."

"Decoupling?"

Looking at Xu Ying's expression, Gao Yiping realized that Xu Ying was not just talking nonsense, but had come prepared.

Canghua Science and Trade's vitamin factory earned $4000 million in foreign exchange annually from exports, while the former labor service company's chemical cleaning agent exports also reached nearly $1000 million annually. Such a major exporter was well-known to both the Provincial Economic Commission and the Provincial Foreign Trade Department. How could Xu Ying possibly make a decision on the disposal of such a company so casually?
“Canghua Science and Trade is now a joint-stock company. Canghai Fertilizer Plant owns 60% of the shares, the plant’s employees and unemployed youth from the former labor service company hold 20% of the shares, and the remaining 20% ​​is held by Xiao Fan under the guise of management and technology investment. Director Xu said to separate it from the fertilizer plant. What should be done with these shares?” Gao Yiping asked.

Xu Ying said, "Old Gao, actually everyone understands very well that with the current asset scale of Canghua Science and Trade, it is possible to turn around and acquire Canghai Fertilizer Plant. Why should Canghai Fertilizer Plant own 60% of its shares?"
"The main assets of Canghua Science and Trade are all borrowed by Xiao Fan from Hachi Group and have nothing to do with Canghai Fertilizer Plant. In my opinion, Canghai Fertilizer Plant can put a price on its shares and let Xiao Fan buy them."

"As for the 20% of shares belonging to the employees, that's up to Xiao Fan himself."

"You mean, let Xiao Fan own at least 80% of Canghua Science and Trade? Then...then wouldn't that make it a private company?" Gao Yiping was so nervous that he almost stammered.

In fact, the Gao family already owned a private company, Xinglong Coatings Company, in which they held a 50% stake. However, Xinglong Coatings Company was originally a township enterprise, operating outside the formal government system, and the Gao family's shareholding was relatively concealed, so Gao Yiping felt the risk was minimal.

Now, Xu Ying directly suggested that Gao Fan invest in acquiring the equity of Canghua Science and Trade held by Canghai Fertilizer Plant, transforming Canghua Science and Trade into a private company in which Gao Fan holds more than 80% of the shares. This was somewhat beyond Gao Yiping's expectations, and he subconsciously thought of some indescribable things.

Xu Ying said, "To be honest, this idea was proposed by Director Qiu of the Economic Commission."

"Director Qiu knows Xiao Fan too?" Gao Yiping asked in surprise. "How many cadres in Maolin Province in charge of the economy don't know your Xiao Fan?" Xu Ying retorted irritably.

“But…” Gao Yiping was at a loss.

Director Qiu is the head of the Provincial Economic Commission, practically a provincial leader. For such a high-ranking leader to personally oversee the affairs of Canghua Science and Trade, and even propose that Gao Fan acquire a controlling stake in Canghua Science and Trade—what does this all mean?

"The central government has proposed to encourage the coexistence of various economic forms, and private enterprises are one such economic form. Some influential private enterprises have already emerged in other provinces and regions, but Maolin Province is relatively lagging behind in this regard."

"Director Qiu suggested that to encourage the development of private enterprises in Maolin, it is necessary to establish several role models. Canghua Science and Trade has developed through science and technology and is also an important foreign exchange earning enterprise, which has a very good positive demonstration effect."

"Therefore, Director Qiu suggested that Canghua Science and Trade and Canghai Fertilizer Plant be completely separated, making it a completely independent private enterprise, which would also be acceptable to have a portion of the shares held by the working people."

Xu Ying explained the whole story.

To be honest, if Gao Yiping hadn't taken the initiative to invite Xu Ying to dinner today, Xu Ying would probably have found an excuse to invite Gao Yiping to dinner in a few days. One reason would be to inform him of the arrangements for the fertilizer company, and the other would be to discuss the Canghua Science and Trade matter with him.

Canghua Science and Trade has grown to a considerable size, but its official status is that of a labor service company affiliated with a county-level fertilizer plant. When officials from Maolin Province go to meetings and introduce Canghua Science and Trade's achievements, this discrepancy in its official status always creates a sense of awkwardness.

The Provincial Economic Commission had initially planned to take over Canghua Science and Trade directly, turning it into an independent provincial enterprise. However, after learning about its shareholding structure, the Commission had a different idea: to strengthen its private nature and establish it as a benchmark for the development of the private economy in Maolin Province.

The country is currently vigorously promoting the development of the private economy, and each province needs to have a few benchmark enterprises. Maolin Province does have a few relatively large private enterprises, but they are all engaged in low-end processing industries, which are not very prestigious. If Canghua Science and Trade were promoted, its technological and export-oriented attributes would be very fashionable, and there would be a lot of potential for development.

"But wouldn't that make Xiao Fan a capitalist?" Gao Yiping asked with some concern.

Xu Ying said, "Old Gao, isn't your thinking too rigid? The country is now encouraging the development of the private economy. Xiao Fan is not called a capitalist, but an entrepreneur, which is very honorable. Don't worry, the country's policies will not go back on track."

"This change... is just too big, I really don't dare to make the decision."

Gao Yiping said anxiously.

Xu Ying smiled and said, "That's easy. Go back and discuss it with your precious son, and listen to his opinion. I believe that with his vision and courage, he will definitely accept this plan."

(End of this chapter)