Reborn since 1993

Chapter 359 The wool comes from the pig

“Before the establishment of Torch Group, I have said that this is an industry that competes with developed countries in terms of cost and with countries with low labor costs in terms of technology. This is also Torch Group’s future advantage in the global lighter industry!”

Several people sat in the pavilion of Yuhe Leisure Resort, tea was boiling on a small stove, and the scenery of the entire Yuhe Leisure Resort was in full view.

Looking around, you can see that the scale of the Yuhe Leisure Resort has expanded compared to the summer. A few kilometers away, a large construction site is also working intensively amid the roar of machinery. That is the Pingyang Animal Park project.

In addition to these two places, a new highway that runs through Yuhe Leisure Resort and Pingyang Animal Park is also under construction. This new asphalt highway connects the provincial capital, Shangzhong and many other places, preparing to attract users from several cities in the future.

Of course, the money for road construction must have been paid by Pingyang. After all, in Hanxi, the only city that could come up with money to invest heavily in infrastructure is Pingyang, apart from the provincial capital.

In addition, expansion space has been reserved around Yuhe Leisure Resort and Pingyang Animal Park, leaving land for the introduction of other projects in the future.

This was due to Li Dongling's suggestion, but it was actually also a decision made by Yao Zhengru. In the past few years, he has read a large number of books on urban planning and changes in America, Japan, Europe and other places.

The big projects that Yao Zhengru started in Pingyang were not done purely for the sake of achievement. He wanted to make Pingyang a pearl in his official career, so he put a lot of thought and energy into it, not only building roads, but also making underground drainage systems and reserving other pipelines.

Retracting his gaze, Li Dongling said to Yao Zhengru, Wu Yaoguo, and Zhang Xiaocheng, "We all know the purpose of establishing Torch Group!"

When Torch Group was first established, Li Dongling was planning to set up overseas sales channels for Dongling Hi-Tech and acquire an electrical appliance mall in France in order to establish Wanjia Electrical Appliance City, which would cost more than 200 million US dollars in foreign exchange!
This amount of foreign exchange may not be considered much in the future, but it is a huge sum of money now. There has never been an overseas acquisition case of this scale in China before.

The Torch Group was launched in order to obtain foreign exchange support from the Department of Foreign Exchange, the Economic and Trade Commission and other departments and units for Dongling Hi-Tech. This pie is much bigger in scale than the $200 million in foreign exchange.

If it can really achieve the expected results, then this project will be a major project that can provide tens of thousands of jobs and export 1.5 billion lighters annually within three years, earning much more than the US$200 million in foreign exchange!
"There are not many opportunities left for Torch Group. If it fails to gain an absolute advantage and grab enough market share in the early stage, it will be a failure for Torch Group!"

Li Dongling turned the teacup in his hand, "In the early stage, Torch Group entered the mass-market lighter consumer market, and it needs to win by volume. Only with sufficient sales can Torch Group reduce production costs and get more profits!

Then they will give more profits to dealers, grab more market share, and increase sales, and repeat the cycle over and over again until they occupy the absolute lighter market all over the world!
With the basic foundation of the mass-market lighter consumer market, Torch Group will be able to transform and upgrade in the future and enter the more profitable mid-end and high-end lighter markets, or launch other products as planned!"

After all, the plan that Li Dongling made for Torch Group, like that of Dongling Hi-Tech at the beginning, was to find a basic base first.

Just like the heroes in ancient times who fought for supremacy in the world, I have never heard of any bandit who could sit on the throne of the emperor or dominate the world. They must have their own territory, men, horses, money and food, otherwise they would never be able to succeed.

For Dongling Hi-Tech, digital cordless phones are its basic business. Now, in the global digital cordless phone industry, the Shenzhou brand occupies half of the market, especially in the high-end digital cordless phone market. Most of the profits are taken away by Shenzhou.

Now, Shenzhou digital cordless phones bring in hundreds of millions of dollars in stable revenue to Dongling Hi-Tech every month from overseas markets such as Europe and America. This revenue will continue for many years, possibly even for ten or twenty years.

With the foundation of digital cordless phones, Dongling Hi-Tech has the confidence to attack everywhere with this foundation. No matter how many times it fails, it can make a comeback with this foundation!

The mass-level lighter market may seem to be a low-end lighter market, but once it is established, it will basically be a stable base. It will be very difficult for latecomers to replace the Torch Group!

Then, using this market as a springboard, they entered the mid-range and high-end lighter market with the highest profits, and even launched electronic cigarettes, gas stoves, bathroom products, etc. After all, the development and promotion of these products also require funds. The annual output value of the lighter industry is only within 10 billion US dollars at most, and this is the result of decades of development. In just a few years, electronic cigarettes have swept the American and European tobacco markets, with annual revenue exceeding 20 billion US dollars.

In the future, when Torch Group adopts mechanized and automated production of lighters, it will not need so many production line personnel. Electronic cigarettes, gas stoves, sanitary ware and other products can take over the retired employees of Torch Group’s lighter production line, so that they will not be "graduated" in middle age.

Yao Zhengru, Wu Yaoguo and Zhang Xiaocheng looked at each other. They had no doubts about Li Dongling's vision and decision-making. The fact that Dongling Hi-Tech had come this far had already proved everything.

"Just do as you say, Dong Ling!"

Yao Zhengru spoke up, he represented Pingyang Urban Investment, one of the three major shareholders of Torch Group. The three major shareholders of Torch Group are Pingyang Urban Investment, Hanxi State Investment and Dongling Hi-Tech. Among the three major shareholders, if two of them stand together, they can basically make decisions for the Torch Group.

Wu Yaoguo also nodded in agreement, which basically represented that the three major shareholders of Torch Group all agreed to follow Li Dongling's decision.

"I see!"

Zhang Xiaocheng also nodded in agreement, but there was still a worry on his face. Coming from a military background, he acted decisively. Even now, he acted openly and honestly without any twists and turns. "But in this way, Torch Group's profits are really low!"

As the general manager of Torch Group, Zhang Xiaocheng has a lot to consider. He needs to get returns for several major shareholders, make profits for a number of lighter industry chain manufacturers gathered in Torch Industrial Park, and also consider the rapidly expanding staff of Torch Group. All of these require money!

Upon hearing this, Li Dongling glanced at Zhang Xiaocheng. Over the past few years, Zhang Xiaocheng really hasn't changed at all.

When Li Dongling was transferred from Pingyang Xicheng Wireless Factory No. 1 to the Shangguan Town Component Factory, the predecessor of Torch Group, the entire component factory had basically closed down. However, Zhang Xiaocheng was still desperately trying to get orders. Even though he had to shoulder a huge debt, he still wanted to pay salaries to the employees of the component factory. Until now, Zhang Xiaocheng has obviously not changed.

However, only someone like Zhang Xiaocheng has the prestige and influence to allow the employees of the component factory who were owed wages to return to work in the bankrupt component factory, and to revive the Torch Group and resume production in such a short period of time.

"In the early stage, Torch Group not only made profits by selling lighters, but also by placing advertisements on the lighter bodies!"

Li Dongling said to Zhang Xiaocheng, which made Zhang Xiaocheng come to his senses, "Dongling Hi-Tech Marketing Department and Focus Media can help Torch Group to attract advertisers from all over the country, allowing tobacco factories, wineries, restaurants, hotels, taxi companies, etc. to place customized advertisements on Torch Group's lighters!

We can also reach cooperation with cigarette factories, restaurants, etc., supply them with lighters at cooperative prices, and launch activities such as buying cigarettes and giving away lighters, and giving away lighters when eating. If we can increase sales, these manufacturers will become the largest customers of Torch Group!"

The profit from selling lighters may not be as high as that from advertising lighters. After deducting the cost from the sale of a lighter, the Torch Group may not be left with a dime or two. But if an advertisement is printed on a lighter, it means exposure. So charging two or three dime for advertising is not excessive, right?
Quantitative change leads to qualitative change. The advertising cost of a lighter may not seem high, but what if the shipment volume reaches tens of millions, one hundred million or even one billion?
Moreover, lighters are sold all over the country. Advertising on lighters is equivalent to advertising nationwide. The advertisements can even be covered in villages, towns and mountainous areas that television stations and newspapers may not be able to reach. These areas also need lighters. For a long time, these areas also need to make fires and cook, and they also need to use lighters.

In addition, there is no ban on tobacco advertising yet, and it is not considered illegal for tobacco companies to advertise on lighters. Even a few years later, there was a tobacco company, Gongming Zhengda, that placed advertisements on TV stations. Because they were not short of money, the advertisements were quite grand and impressive, leaving a deep impression on countless people...

If Torch Group’s lighters can get orders from tobacco companies and launch an activity of buying cigarettes and giving away lighters, as long as it can increase the sales of the tobacco faction, it is estimated that all tobacco companies will scramble to get Torch Group’s lighters for the activity. By then, the revenue obtained from the tobacco companies will probably be more than that earned from their own lighters!

Tobacco companies are not short of money. If printing advertisements on lighters or offering a free lighter with purchase of cigarettes can increase sales, it will be much more cost-effective than advertising on TV or in newspapers!

Zhang Xiaocheng's eyes lit up, and Wu Yaoguo couldn't help but applaud as he looked at Li Dongling in front of him. The plot of Li Er inviting Zhang Laosan to dinner and Wang Laowu paying the bill was indeed beyond his expectations. If it could be done, the revenue of Torch Group would be expected to increase significantly, and the hope of Hanxi Guotou to recover its investment would also increase!
(End of this chapter)