Sail across the sea

Chapter 572 Making Wedding Dresses for Them All for Nothing
Gao Fan smiled and glanced at the man who had asked the question, then said with a smile:

"Whether you accept it or not is up to you, Big Brother."

"What do you mean?"

The other party was taken aback by Gao Fan's response and instinctively asked a question in return, unaware that he had become Gao Fan's free straight man.

Gao Fan said, "According to the assessment of our group's research institute, our improved F22 production equipment has reached the international technical level of the late 90s. Some people may say that the late 90s are not yet here, so how can we make an assessment?"

"The reason is simple: we compared our production efficiency and raw material consumption with those of foreign companies, and found that our production equipment is superior to that of DuPont in the United States. It is estimated that DuPont will not be able to reach our current standards within 10 years. Therefore, we are still holding back when we say that our technology has reached the international level of the late 90s."

There was a slight commotion in the audience, but no one raised any questions. Everyone in the industry knows the domestic and international standards. If Cangfu were to exaggerate on such a matter, it would be easily seen through, and Cangfu has no reason to lie.

Gao Fan continued, "Our group's research institute spent more than three years and invested tens of millions of yuan to develop this process. This investment will definitely be compensated through technology transfer fees. In addition, process upgrades require equipment updates. Some existing equipment, such as pipes, valves, and instruments, also need to be replaced. This investment will naturally be borne by the modification party."

"Therefore, companies that want our Cangfu to help them upgrade their processes should pay us some fees. Is that too much to ask?"

"But why did you just say it was optional?" someone started bringing up old grievances.

When Gao Fan said he would charge money, no one was surprised. On the contrary, Gao Fan's earlier statement, "It's optional," had a hint of conspiracy, and everyone felt they had to get to the bottom of it.

Gao Fan said, "We invested 200 million yuan to upgrade the F22 production facility. This amount is insignificant compared to the future revenue that the facility can generate."

"However, we also know that some of our sister companies are in dire financial straits, and the county and city governments cannot possibly provide 200 million yuan to help them upgrade their equipment."

"In this situation, we plan to introduce a policy that will help companies with sufficient funds to cover all the costs of upgrading and renovation at once to complete the equipment upgrade, provided that the technology transfer fee and equipment cost are fully charged."

"For companies that are temporarily short of funds and cannot come up with the funds for renovation, or can only come up with a portion of the funds, we can use the method of credit sales or joint ventures to obtain our share of the profits from future product sales. This means that everyone can avoid paying money."

"What do you mean by 'joint venture'? You don't mean you want our shares, do you?" Another obligatory straight man jumped in.

There was no other way; it concerned their own interests, and everyone was extremely anxious. Even knowing they were being led by the nose by Gao Fan, they still had to get to the bottom of it.

"That's right, we're a state-owned enterprise, how could we let others take a stake?"

"Shareholding? How much? The original value of our factory's assets is less than 300 million. A technological upgrade, including the equipment and technology transfer fees, should easily cost at least 300 million. Does Mr. Gao perhaps want to take a controlling stake in us?"

"Take it away, take it away. It would be better if it were fully acquired by Canghai Chemical, just like the original Yanxiu Refrigerant Factory."

Everyone made sarcastic remarks, but their expressions betrayed their insincerity. There were more than just one or two people hoping to be fully acquired by Canghai Chemical. The common thought was that if they could be associated with a large company with an annual output value of several hundred million, wouldn't their lives be much better?

Gao Fan raised his hand and made a downward pressing motion, signaling everyone to calm down, and then said:

"I won't go into detail about the credit sales method, as I believe everyone understands it. Since many of you have been asking what joint venture means, I'll explain it to you."

"As I just said, after our modification, the cost of each ton of F22 will not exceed 5000 yuan. We sell it at the market price of 10000 yuan, and the gross profit per ton is 5000 yuan. Our equipment has a production capacity of 5000 tons per year. If we discount it and produce 2000 tons per year, the gross profit will be 1000 million yuan."

"Our plan is that we will not charge any fees for the equipment upgrades, including the technology transfer fees. In other words, we will upgrade the equipment for each company for free. Within three years after the equipment is put into production, 500 million yuan of the gross profit from the production of F22 or other HCFC or HFCs products will be used to cover the equipment upgrade and technology transfer fees. The remaining gross profit will be split equally between us and the companies that have undergone the upgrades."

"Three years later, Cangfu completely withdrew, and all the profits thereafter went to the restructuring of the company, and had nothing to do with us."

As soon as Gao Fan finished speaking, some people in the audience started doing calculations, their minds working faster than computers:
"What? They're going to put up 500 million upfront as equipment upgrade and technology transfer fees? This guy surnamed Gao just said they only spent 200 million to upgrade this equipment, so does that mean they'll charge 300 million for the technology transfer fee?"

“He said they spent tens of millions developing this technology, so it makes sense for them to charge 300 million in technology transfer fees,” someone explained on Gao Fan’s behalf.

"Bullshit, don't listen to his bragging! Developing the space shuttle didn't even cost tens of millions, how could a small technological improvement cost tens of millions?"

"You're focusing on the wrong thing. Didn't you hear him say that after the renovation, they can earn 1000 million in gross profit a year, and they'll take half of that for three years, which is 1500 million. Goodness, even loan sharks wouldn't dare charge such high interest rates."

"That's outrageous! This pretty boy is a black-hearted man."

"Wait a minute, are you two crazy? Do you really believe that you can make 1000 million in gross profit a year?" The person next to them interrupted their grumbling, trying to pull them out of their daze.

The other party immediately realized what he meant: "Yes, what kind of equipment can earn 1000 million a year? Our factory works hard all year producing 800 tons of R11, and the profit and tax is only a little over 100 million. If he modifies it, he can earn 1000 million?"

"Yeah, they might not even make the original profit anymore. If they only make a little over a million a year, and then have to use that money to pay off the renovation and upgrade costs, wouldn't that just be doing all the work for them for nothing?"

"Black! So black!"

At this point, someone jumped out again and loudly addressed the stage:

"Mr. Gao, your plan was based on the premise that we could actually earn 1000 million a year. If we can't earn 1000 million, or even less than what we're earning now, then wouldn't we be working for you for nothing?"

(End of this chapter)