Sail across the sea

Chapter 571 Are you all interested in accepting it?

Gao Fan stood at the podium, watching the crowd's commotion with schadenfreude. After a while, he tapped the microphone to signal everyone to be quiet, as he had something to say.

After a round of shouting, everyone was getting tired. They'd repeated the same things over and over again, so they stopped talking and waited to hear what Gao Fan had to say next.

"I completely understand everyone's feelings, even though I'm just a newcomer to this industry. However, we can't change the country's policies. If any of you senior members here have the channels to convey our opinions and get the government to change its original intention, I would be very happy to see that. I think everyone would also be very happy to see that, wouldn't you?"

His words left everyone speechless.

Everyone here is a member of society; they could easily hear the sarcasm in Gao Fan's words. Gao Fan was clearly saying that no matter how much they protested, it was all in vain. Once the nation's will was set, how could they, with their small bodies, possibly stand against the nation?
The fluorocarbon industry, though called an industry, is actually pitifully small. The average price of one ton of CFCs is less than 6000 yuan, and the total production capacity of more than 40 companies nationwide is less than 3 tons, with a combined output value of less than 2 million yuan. Does the government really care whether these people are happy or not?

As for saying they're quitting and letting the employees go to sleep, the government doesn't even need to intervene. Believe me, the county head could just tear you to pieces and feed you to the dogs.
In contrast, Gao Fan's talk about international commitments and negotiations for the resumption of GATT relations were all lofty concepts, and no one felt they could withstand such pressure.

Hearing no response from below, Gao Fan was quite satisfied. Chatting with smart people was much more comfortable; if there were one or two idiot factory managers in the audience who wouldn't let it go, he would really be at a loss.

"What I mean is that since things are already beyond repair, we have to actively save ourselves. The workshop you see here is the production equipment that we invested 200 million yuan to upgrade. It can produce F22, and in the future we also plan to produce a series of CFCs alternatives recommended by the state, such as HFC-134a and HCFC-141b."

“We have already conducted tests, and the cost of producing F22 using this production equipment will not exceed 5000 yuan per ton. Currently, the price of imported F22 in the domestic market has reached 10000 yuan, which means that we can make a net profit of 5000 yuan for every ton of F22 we sell.”

"What?! The production cost of the F-22 is less than 5000 yuan? How is that possible?!"

The audience erupted in uproar once again.

Some factories also produce F22 themselves, with costs exceeding 10000 yuan per ton, higher than the market price of imported F22. Other factories, while not producing it themselves, have inquired about their competitors and know that their production costs are at least 8000 yuan per ton, making them uncompetitive.

If, as Gao Fan says, the modified equipment can reduce the production cost of F22 to 5000 yuan per ton, then the product will be competitive. Currently, the domestic market price for F22 is over 10000 yuan, so selling it for 8000 yuan per ton should be no problem, resulting in a profit of 3000 yuan per ton.

If a 1000-ton unit were built and operated at full capacity, the annual profit would be 300 million, enough to offset the 200 million investment in upgrading and renovation that Gao Fan mentioned. What a wonderful thing that would be!

However, there is another problem that everyone must solve first: if everyone goes all out to produce F22s, can the market absorb them?
There is a very contradictory phenomenon here.

Because F22 is more than twice as expensive as CFCs, domestic refrigerator manufacturers, as well as companies that need to use fluorocarbons as plastic foaming agents, sprayers, and cleaning agents in their production processes, tend to choose CFCs rather than F22. This makes the demand for F22 far less than that for CFCs.

However, at the same time, due to the unwillingness of domestic fluorocarbon companies to produce F22, a supply shortage has emerged in the market, forcing reliance on imports. The country's tight foreign exchange reserves mean that the quantity of imported F22 is very limited, which has prevented the supply shortage from being alleviated.

Some companies also produce small quantities of F-22s to supply local businesses, and they can usually sell them at a relatively high price. However, the quantity that local businesses can absorb is limited, so this product simply cannot be mass-produced. Everyone present was a senior executive, someone who had pondered this matter extensively. Hearing Gao Fan's explanation and analyzing the market situation, they immediately spotted the flaws in his analysis.

"Mr. Gao, the domestic refrigerant market, including foaming agents and the like, is only about 60,000 tons in total. Of that, 80% is CFCs, and less than 20% is other alternatives. If we switch to producing F22, what will we do if refrigerator manufacturers don't want us?"

Someone stood up and asked Gao Fan a question, their attitude quite polite, which showed they were keeping a way out for themselves.

"Regarding the market issue, I can only tell everyone that there is no need to worry. The government will soon introduce policies requiring refrigerator and polyurethane manufacturers to change their refrigerants and foaming agents within a specified period. Director Wu from the Ministry of Chemical Industry is sitting right here, and he can testify for me."

Wu Zhefu then nodded and smiled, looking like a kind uncle. As for whether that smile could be interpreted as him testifying for Gao Fan, that's a matter of opinion.

No one was interested in Wu Zhefu being able to testify on this matter. Even if Wu Zhefu were to stand up now and sign and put his fingerprint on it, no one would feel very reassured.

If the government says it's going to take you down, you'd better believe it's true, because you can't afford to gamble.

Conversely, if the government offers you any benefits, you'd better be happy but also make other preparations, for the same reason that you can't afford to gamble.

A mature entrepreneur never dares to gamble on things that are unrealistic or uncertain, because policies and markets have changed too quickly in recent years, and everyone's back has been hurt too many times.

“We can discuss the market issue later. Now, I’d like to ask everyone here: if Canghai Fluorochemical Company were willing to transfer our advanced technology to help you upgrade your equipment, would you be interested in accepting the offer?” Gao Fan asked.

"Do you charge money?"

Someone in the audience asked a question loudly, which caused a burst of laughter.

This question is a bit like trying to sabotage the event.

The company developed a new technology, paid people to come and see it, and then claimed it could be transferred. How could they not charge money? Anyone with a brain wouldn't ask such a brainless question.

But this guy asked the question like that, which was clearly a challenge, implying that he was just trying to make money off us.

You keep calling yourself "Big Brother" and then referring to yourself as "Little Brother," so why don't you show some brotherly spirit and give everyone a free trial?
(End of this chapter)