Sail across the sea

Chapter 503 I can't produce it right now.
Xu Ying frowned and said, "Xiao Fan, I'm serious. Do you think there's any possibility that what Feier Chemicals said is true?"

Gao Fan shook his head: "How would I know? I studied chemical engineering, not international finance. I don't even know which way the World Bank's door opens, so how can I judge whether Fair Chemical has the ability to secure a World Bank loan?"

Xu Ying was amused by Gao Fan's laziness. She laughed and scolded, "Didn't you always claim to have special abilities? You can't even figure out something this simple?"

Gao Fan said, "Aunt Xu, I'll just say one thing: when Skelly came to China, he didn't just go to Maolin. I heard from my classmate Zhang Wei that they had already traveled to five provinces before going to Maolin. After leaving Maolin, they will continue to go to other provinces. I reckon that Skelly's promise wasn't just made to Maolin Province."

“That makes sense.” Xu Ying’s eyes lit up; she had overlooked this issue.

The provincial planning commission, blinded by greed, failed to grasp this fundamental principle. Even if Fair Chemicals were able to secure a World Bank loan, it wouldn't be unlimited; at most, they could only secure one or two loans.

China has so many provinces and regions, why would they give you this opportunity? Just because your Mawlin province has the nickname "Akarin Province"?
Even Xu Ying, wearing high heels, could figure it out: Skelly's purpose in spreading this rumor was to lure people in. If you believed his promises, his next step would be to discuss various conditions with you, and then use these conditions to persuade other provinces to agree to even more.

Maolin is a poor province, so it's basically impossible for it to compete with richer provinces for various preferential conditions.

Even if they grit their teeth and sign a bunch of humiliating treaties to finally get a World Bank loan to build a fertilizer plant, the returns would probably not even cover the costs.

“Aunt Xu, this is my opinion.” Seeing that Xu Ying had figured out the key point, Gao Fan continued, “Since the Planning Commission said that there is such a channel, let them make the contact. If they can get the loan without much effort, then we will use the loan to import a large fertilizer plant, provided that they can also apply for the natural gas import permit at the same time.”

"We are proceeding with the construction of the 1830 project step by step, building it one unit at a time. Two 1830 units are equivalent to one large fertilizer plant, so it will not affect the province's fertilizer supply."

“If we build it here and they also get it over there, wouldn’t that be redundant?” Gao Yiping said.

Gao Fan said, "Dad, don't worry. China has a huge fertilizer shortage. Where would we find one or two more 1830 projects? As long as you have the money, just build them. If the domestic market can't handle it all, your son will sell the urea to South Korea for you. I know a friend in South Korea who's rich and naive and can definitely help you process millions of tons of urea."

Gao Yiping was speechless. His son was too capable; the old man was truly helpless. No matter what difficulties you mentioned, his son could easily find a solution, leaving you speechless.

Xu Ying picked up the conversation, saying, "Xiao Fan, you just said that as long as there's money, we should build it. But the province's problem right now is that it doesn't have any money. Precisely because it doesn't have any money, the province was tempted when Fair Chemical said it could get a World Bank loan."

"If we let the Planning Commission handle the World Bank loan, the province will inevitably have to tighten its investment in large-scale fertilizers. We can't just say we don't believe the Planning Commission can get it done and ask the province to allocate funds to us first, can we?"

Gao Fan said, "Speaking of this, I have an idea. When I was chatting with Zhang Wei, he said that overseas markets are purely market-driven, and fixed asset investment is generally not handled by the government, but by private capital."

"At that time, I thought of one thing: if the province wanted to develop large-scale fertilizer production, why couldn't we mobilize private capital to invest?"

"You don't mean that Canghai Chemical is planning to build a fertilizer plant, do you?" Xu Ying asked with a smile.

Gao Fan said, "If I wasn't worried about ruining my dad's job, I would have built it." Gao Yiping said, "What a joke, what job could you ruin for me? It's just that current national policies don't allow private companies to operate fertilizer businesses. Your Canghai Chemical is, after all, a private enterprise. It will probably be very difficult for you to get national approval."

Gao Fan said, "Even if I could get the approval, I still couldn't build it. The investment for one 1830-square-meter unit is 15 billion yuan, which I can't come up with right now."

Xu Ying and Gao Yiping exchanged a glance but remained silent. The extent of Canghai Chemical's assets might be kept secret from outsiders, but not from these two. Not only were they Gao Fan's biological father and his future mother-in-law, but Xu Ying's position alone granted her the right to know this information.

Xu Ying knew that after paying income tax, Canghai Chemical's annual profit exceeded 5 million yuan. Most of this money was used by Gao Fan to expand production, so it was true that they couldn't currently come up with 15 billion yuan.

However, if Gao Fan really wants to expand his fertilizer business, he can certainly do it. Using the profits of Canghai Chemical as collateral, he can easily borrow money from the bank, and repaying it with the company's profits in the future should not be difficult.

Ultimately, Gao Fan really didn't want to take away Gao Yiping's job. This was a tacit understanding between the father and son. Gao Fan could work in all chemical fields, but he would never get involved in agricultural chemicals.

Previously, a significant portion of the funds used by the fertilizer company for ammonium chloride-to-urine conversion was borrowed from Canghai Chemical. Gao Fan's decision to only borrow money and not invest reflects this mindset.

What a filial child!

"Then what did you mean by mobilizing private capital?" Xu Ying snapped out of her thoughts and returned to the original topic.

Gao Fan said, "It's very simple. Fertilizer companies can issue large-scale fertilizer bonds. They stipulate that the principal and interest will be repaid in five years, and the interest rate will be one percentage point higher than that of treasury bonds. By the way, considering the factor of inflation, we can promise to preserve the value of the interest, that is, when the principal and interest are repaid, the interest will be calculated together with the five-year inflation rate and the agreed interest rate."

Don't blame Gao Fan for being paranoid; he simply suddenly remembered that the next three years would be the three years with the most severe inflation since the reform and opening up, with the consumer price index in 1994 reaching as high as 124%, equivalent to a 1/4 increase in prices in one year.

If only a 10% interest rate is promised, investors would lose 14% in a year, which is outrageous. He was really worried that people would say Gao Yiping was born without an anus.

Promising to preserve the value of interest is not a significant burden for fertilizer projects. As prices rise, the price of urea will naturally increase, and profit margins will rise proportionally.

Xu Ying made a note in her notebook, her brow relaxing. Her conversation with Gao Fan today had resolved all her problems; she knew what to do next.

"By the way, Xiaofan, what are your plans with Ruoyi? I heard from Ruoyi that the university allows graduate students to get married..."

The director of the Economic Commission instantly transformed into a mother-in-law urging Gao Fan to get married, asking him with a kind and gentle expression.

(End of this chapter)