Traveling back to 1977

Chapter 852 Success Experience
Office of the Lujiawan Brigade Headquarters.

It had been a long time since I'd been here, and nothing had changed. Even the enamel mugs that Secretary Yang and the others used were still covered in tea stains, making them unappetizing.

Chen Fan skillfully rummaged through the cabinet and pulled out his used enamel mug, wiping it with his hand. "Hey, there's not a speck of dust. Who was the kind person who cleaned it for me?"

Captain Zhang struck a match, lit his pipe, and stared at the flame without looking away. He said casually, "Who else could it be but that kind-hearted person? It's that girl Cui'e. The day she returned from the capital, she came over and cleaned your teacup."

She came over to wash them every two days after that, saying she was worried you might come over suddenly and there wouldn't be any cups to use. She's really gone to great lengths for you, her teacher.

Chen Fan seemed not to understand the meaning behind Captain Zhang's words. He casually took some tea leaves, threw them in, filled the pot with boiling water, placed it on the table, and then looked up and smiled, "My eldest apprentice is still the best. He's so thoughtful."

Captain Zhang extinguished the match and threw it away, unable to resist rolling his eyes.

I wonder where he learned this skill of feigning ignorance, or is he genuinely stupid in this regard?
Zhou Yali looked around and found there were no extra cups, so she decisively picked up her younger brother's cup, blew on it while drinking the tea, and didn't care about etiquette at all.

Chen Fan's eyes twitched slightly. He really wanted to say that there were ceramic cups for guests in the kitchen in the middle courtyard, but in the end, he just moved his lips and decided to do it himself.

He brewed another cup of tea, lit a cigarette, and then looked at the four leaders in the team, saying softly, "Just now at the industrial park, I heard Captain Ye say that the factories are doing very well, so the team has the idea of ​​expanding production and developing more industry?"

At this moment, Ye Shubao coughed lightly, drawing everyone's attention to himself. With a cigarette between his fingers and a teacup in the other, he smiled and said, "Let me explain. Here's what happened."

Teacher Chen just went to the industrial park, and I gave him a brief overview of the park. To make a long story short, as everyone knows, the team's industries are divided into two parts: one is the breeding farms directly under the brigade headquarters and distributed in various teams and members' homes, and the other is the industrial park that involves processing.

Everyone knows the situation. Although Teacher Chen hasn't been here for a year, he is aware of the matter, so I won't say more.

The livestock breeding sector is basically stable, while the industrial park, including cooked food factories, food processing plants, wool washing plants, ceramic factories, garment factories, and so on, is growing larger and larger because it has taken in material supplies from several other production teams in Nanhu Commune and some production teams from the two neighboring communes.

It is estimated that by the end of next year, the Lujiawan Industrial Park will be able to extend northward from the commune's east ferry terminal, connecting with the land of Lujiawan to form a true Lujiawan Industrial Park. It is anticipated that the output value will double by then.

At this point, he took a drag of his cigarette, glanced at Secretary Yang and the others who were nodding along, then turned to Chen Fan and said with a smile, "We had a meeting a while ago about the development of this production team's factory. The result of the meeting was that, on the one hand, we need to consolidate the existing development achievements, and on the other hand, we need to respond to the commune's request to cooperate, or rather, partner with some units in the town at an appropriate time, to take over small factories such as hardware factories, packaging factories, and cement factories, and see if we can expand them."

As he spoke, he turned to look at the others, "Then Teacher Chen listened to what I said and had some different opinions, thinking that we shouldn't do it this way."

So, I called the team and asked you all to come over. Teacher Chen and I also came over to discuss this matter further. That's the situation. Today, we mainly wanted to hear Teacher Chen's opinion.

After Ye Shubao finished speaking, Xiao Liewen immediately looked at Chen Fan and asked, puzzled, "Is there a problem with doing this?"

Secretary Yang and Captain Zhang nodded slightly, their eyes fixed on Chen Fan.

Based on what they heard and saw, as well as the analysis by Secretary Qian and others in the commune, they all believed that this was a good path for development.

Why doesn't it work with Teacher Chen?
Chen Fan grunted twice, then said seriously, "This is a big problem."

He glanced at everyone, ignoring Zhou Yali who was watching the show from the sidelines with her teacup, and continued, "Lujiawan is a production team, which is essentially a rural area. Agriculture, forestry, animal husbandry, sideline production, and fishery are the scope of operations of the production team and the foundation of its business."

Previously, setting up cooked food factories and cooked food shops was dependent on the breeding industry, which in turn belonged to animal husbandry.

Similarly, the purpose of setting up a down washing plant was to address the problem of the ever-increasing volume of down produced by livestock farming and the low market price. Since a down washing plant was established, the idea was to go all out and produce down jackets directly; this entire business line ultimately revolves around animal husbandry.

As he spoke, he looked at Ye Shubao and said, "Today I heard Captain Ye say that the Lujiawan Industrial Park will expand its scale and industries in the future. I have no objection to expanding the scale, but expanding the industries, such as setting up hardware factories, cement factories, packaging factories, and even steel factories in the future."
Tsk tsk…

He turned his head, looked at the group, and asked with a smile, "Weren't the lessons learned from building the small blast furnace back then profound enough? Or are you unwilling to accept your failure back then and insist on learning from your mistakes to build a steel plant?"

"What do steelmaking and hardware manufacturing have to do with us rural folks?"

After he finished speaking, Secretary Yang waited for several seconds, biting his pipe, and when he saw that he didn't continue, he frowned and asked, "You mean, you're not going to do those things?"

Chen Fan nodded. "If it is in my opinion, the industries in Lujiawan should not only not expand to steel, hardware, or cement, but the current ceramics factory should also be shut down or sold off. In any case, it should not remain in the production team's industries."

Strictly speaking, the ceramics factory had little to no connection with the overall industry of Lujiawan.

In the future, the industries in Lujiawan will definitely revolve around the five major categories of 'agriculture, forestry, animal husbandry, sideline production and fishery', and the related companies that will emerge from them.

First and foremost, food is of paramount importance and the most crucial element. Even if it's not profitable, we cannot allow other industries to encroach on farmland that produces food.

When I started my breeding farm, I set a strict rule for all the members of the brigade: the distribution of feed had to be linked to work points, and work points were directly linked to grain production. That's the significance of that.

Secondly, wanting to get rich is fine, and the country is also advocating for economic development. However, development cannot be done haphazardly, nor can it be done just because something is profitable or prestigious.

The steel mill was powerful, but as I said before, what did the steel mill have to do with the production team? Why make that thing?
If you're going to do something, do something related to agriculture, forestry, animal husbandry, sideline production, and fisheries. Expanding from fish and chicken farming to food processing plants, from rapeseed cultivation to oil pressing plants, from cotton cultivation to textile and garment factories—there's no problem with any of these.

He took out a cigarette, lit it, exhaled a puff of smoke, and said seriously, "But we absolutely cannot do other industries. Otherwise, once the door is opened, we'll start doing whatever others are doing to make money, and the business will only get bigger and bigger, turning into a giant general store."

There are no generalists in this world. With so many diverse industries, who can manage them all? Is it that Lujiawan can produce so many talents, or that the higher authorities can allocate so many talents to Lujiawan?

For technical support, you can collaborate with agricultural technology stations, relevant organizations, and university professors. But what about management?
"There's not even a single knowledgeable person here, and it has no vital connection to the production team. What's the point of developing these industries?"

After he finished speaking, the room fell silent, except for the billowing smoke.

Zhou Yali was ostensibly just watching the show, but after hearing Chen Fan's words, she couldn't help but fall into deep thought.

After a while, seeing that no one had spoken, she asked in a low voice, "But, brother, I have a question." As soon as she said this, everyone turned to look at her.

She grinned, then her face filled with doubt. "I've been back to China frequently these past few years and have seen a lot of the world. As far as I know, many companies in China, especially large state-owned enterprises, set up upstream and downstream companies related to their main business. For example, a steel mill might have a metallurgical plant, a steel rolling mill, or even a machinery plant. They supply themselves with their own goods. As long as they have iron ore and coal, they can produce products that can be put on the shelves."

In addition, they have established many service companies, and even hospitals and schools. I think they are doing quite well.

Why can they do it, but Lujiawan can't?

Upon hearing this, Secretary Yang, Captain Zhang, Xiao Liewen, and Ye Shubao all nodded in agreement, then looked at Chen Fan expectantly.

They had wanted to ask why earlier, but they were clueless and didn't know where to begin until Zhou Yali asked.

Yes, that's what everyone does. Why can they do it, but Lujiawan can't?
When Chen Fan spoke to Secretary Yang and the others earlier, he tried to make his words easy to understand. Now that Zhou Yali asked, he was more direct: "Yes, everyone does it this way, but does that necessarily mean it's the right way?"
Others may not know, but you should be very clear about the difference between market competition and the group's industrial chain.

While the former faces greater competition, they also directly embrace a broader market. They will innovate technology and reform management based on market feedback. But what about companies that serve within the group?
These companies within the group are essentially companies that the group headquarters arranges for themselves to handle both upstream and downstream links in order to reduce their dependence on external companies and obtain more profits from the industrial chain.

To put it another way, it means feeding yourself.

If a group's core business consistently maintains high profitability, such a company is certainly fine. But what happens if its core business encounters difficulties? Do I need to elaborate?

Zhou Yali blinked. "One falls and a whole bunch of them fall?"

Chen Fan nodded. "Not only will a large number of businesses collapse, but they will also severely drag down the main business. Originally, there was hope of getting out of the crisis, but because of the drag, they can only collapse in the end."

He turned to look at Secretary Yang and the others, and said seriously, "I know that you must have read the reports about Huaxi Village and listened to some people's suggestions before you had these ideas."

Ye Shubao immediately nodded repeatedly, "Yes, yes, Huaxi Village started by making small hardware factories, and then we listened to the suggestions from the commune before we came up with this development plan."

Chen Fan smiled and said, "From the current point of view, Huaxi Village's development strategy is definitely correct. Moreover, with their successful example, many production teams will definitely learn from them. They will arrange for hardware factories, textile factories, and other things that can be done, and they will find ways to do things that cannot be done."

In a short period of time,..."

He suddenly smiled and shook his head, "It might take a long time, maybe three to five years, or maybe eight to ten years. Everyone can make money. Just like Lujiawan now, whether you're making cooked food, selling clothes, or firing ceramics, as long as the products are produced, you don't have to worry about not being able to sell them."

But have you ever thought about what would happen if things stopped selling one day?

He turned to look at Zhou Yali and said, "The current domestic market is experiencing a supply shortage. Once the higher authorities loosen regulations, everyone will start their own businesses. You should be aware of the consequences."

Zhou Yali raised an eyebrow slightly, "Oversupply leads to vicious competition, price wars, and the closure of a large number of small factories with insufficient competitiveness."

Secretary Yang and the others didn't fully understand what they were saying, but they understood one thing: good days don't last forever!

At this point, Chen Fan continued, "According to your original development plan, you should focus on whichever industry is profitable. However, the most terrible thing is that you will encounter difficulties when you can't sell your goods."

Secretary Yang suddenly felt a chill and looked at him, asking, "What's the most terrifying thing?"

Chen Fan looked at him and said seriously, "The most terrifying thing is setting an example for future generations. When you have money, you invest recklessly, doing this and that, without considering the future at all. In professional terms, you have no risk management awareness."

In this situation, once they encounter difficulties, they will not focus their energy on their main business, but will try to find solutions from other aspects. To put it bluntly, they are trying to avoid difficulties and look for other opportunities to make money.

That's not the attitude you should have towards running a business or a career. Not to mention, that approach might not even work.

As I just said, there's no need to worry about losing money in the short term; in fact, the money will only keep increasing. If you're doing this now, diversifying your investments, won't others follow suit later, taking their money and investing everywhere, doing this and that?

He suddenly chuckled as he spoke, "After all, from a certain perspective, this can also be considered a 'successful experience'."

That's right, he's talking about the future Huaxi Village.

Many people don't know that Huaxi Village's core industry is not agriculture, which is closely related to rural areas, but heavy industries such as steel and chemicals.

When Huaxi Village later encountered a debt crisis, experts diagnosed them with problems such as blind diversification, a single industrial structure, and over-reliance on heavy industry.

In fact, Huaxi Village is not the only one facing this problem; almost all village collective enterprises that were once prosperous have the same issue.

Those villages followed suit because they had "successful experiences" before them.

On the contrary, some places have focused on a particular industry, quietly cultivating their rural strengths and achieving remarkable success, developing into distinctive villages known throughout the country.

It's not difficult to develop industries in Lujiawan, but if it's allowed to develop unchecked, even if it becomes a "billion-dollar village" in the future, the outcome will be nothing more than another Huaxi Village.

Although it is said that "even a broken ship has three thousand nails", if it can be done better, why let it break?

If his plan is followed and the focus remains on agriculture, firstly, this will always align with higher-level development policies and will absolutely not be affected by external factors such as environmental policies or changes in the mineral market. Secondly, the industrial structure will not become overly reliant on a single industry; the industry won't collapse simply because one industry fails. If fish production fails, there's still meat; if cotton production fails, there's still grain. At most, management problems might arise.

Of course, Chen Fan also did his best and left the rest to fate. Just as he told Zhou Zhengdong, he was at most a strategist, only responsible for offering his own opinions and suggestions.

Whether or not they listen or act depends on the leaders of the production team and their own choices.

(End of this chapter)