The Red Era: Living in Seclusion in a Siheyuan as a Boss

Chapter 655: Rising from the crisis!!!
In the context of the Asian financial crisis in 1998, every company faced a huge test, and Pingdingshan "Aihua Group" was no exception.

What is different is that "Aihua Group" not only did not go bankrupt, but bravely broke through the difficulties, achieved a complete victory, and greatly enhanced the company's strength.

In March this year, Western shock funds led by Soros, which held a large amount of Southeast Asian currencies, jointly sold the Thai baht, leading to domestic inflation in Siam.

In order to protect itself, Siam abandoned the fixed exchange rate system and implemented a floating exchange rate system. On the same day, the exchange rate of the Thai baht against the US dollar fell by 17%, causing chaos.

Under the influence of the fluctuations of the Thai baht, Luzon, Borneo and Malaysia became the targets of attack by international speculators one after another. The financial crisis quickly swept through Southeast Asian countries such as Singapore, Malaysia and Thailand, and then moved north to Luzon, the Three Kingdoms of Korea and Japan, and countries all lowered their exchange rates one after another.

In April, the financial crisis threatened Hong Kong, and "Rabbit" urgently injected capital into Hong Kong to help resolve the crisis.

At the same time, "Rabbit" announced to the world: We "Rabbit" will never change the current exchange rate system.

However, the reduction of exchange rates by other countries has severely hit the "Rabbit"'s exports this year, resulting in a large number of goods being unable to be sold. Many companies have been severely affected and the unemployment rate has soared.

Pingdingshan County Iron and Steel Plant was built in 1995 and officially put into operation as a local key industrial project.

In May of the following year, the "Aihua Group" was born on the basis of the iron smelting plant, and Mr. Liu Aihua, a direct descendant of the Liu family in western Beijing, was appointed as the chairman of the group.

This young entrepreneur, who is only 28 years old, has been deeply influenced by the family's industrial atmosphere since he was a child and has shown extraordinary passion and talent for the metallurgical industry.

With his excellent academic performance, Liu Aihua was successfully admitted to Yenching University of Science and Technology, a top domestic university, to major in metallurgical engineering, which laid a solid professional foundation for him to manage a large industrial group in the future.

After graduating from Yenching University of Science and Technology, Liu Aihua did not accept the step-by-step training of his family, but chose to make his own way.

After graduating from Yenching University of Science and Technology, Liu Aihua resolutely gave up the family's step-by-step training plan and chose a challenging entrepreneurial path.

Thanks to his outstanding performance in school, he successfully entered the Hankou Iron and Steel Group in Beihu Province as a technician.

Amazingly, this young man was promoted to engineer in less than a year, and two years later he became the person in charge of the group's key projects.

In the field of metallurgy, Liu Aihua's fame quickly became synonymous with a rising star in the industry, and industry experts were optimistic that he would soon usher in a period of rapid career growth.

However, just when his career was at its peak, Liu Aihua made a decision that shocked everyone - he resigned from his enviable position as a senior executive in a state-owned enterprise and plunged into business.

This unexpected decision caused an uproar among colleagues at the company at the time and became a hot topic in the industry.

However, in the face of criticism, Liu Aihua always sticks to his beliefs.

This persistence stems from the fact that he was deeply influenced by the entrepreneurial spirit of his family elders since he was a child.

Those entrepreneurial stories told after dinner and those yellowed photos hanging on the walls of the old house all tell the story of the Liu family's hard struggle.

It is the hard-working spirit of the older generation of the Liu family who blazed new trails in the mountains and forests that has created the prosperous scene of the Liujiazhuang area in western Beijing today.

Whenever Liu Aihua thinks of the past generations who started from scratch, the flame of fighting spirit always burns in his eyes.

"If they can do it, why can't I?" Looking at his brothers and sisters who have made their mark in various industries, Liu Aihua felt a surge of unwillingness to admit defeat.

He knew very well that he had the same blood flowing in his body and inherited the same tenacity.

With this belief in mind, Liu Aihua carefully prepared a detailed business plan.

After going through layers of review, he finally obtained 3000 million yuan in start-up funds from the Liu Family Foundation.

This heavy start-up capital not only carried the family's expectations, but also opened up his magnificent entrepreneurial journey.

At the beginning, Liu Aihua's entrepreneurship went quite smoothly. In less than two years, he established the "Aihua Group" named after him.

Just when Liu Aihua was ready to show off his skills, the Asian financial crisis began...

Aiwa Group is a newly established enterprise that was only a few years old and was still in its infancy when it was hit by the sudden financial crisis.

For a time, no one wanted the goods, and the main products of "Aiwa Group" were in large backlog, and the prices of pig iron and salicylic acid continued to fall.

At its lowest point, salicylic acid was 8800 yuan per ton, and pig iron was less than 1000 yuan per ton. In addition, it was difficult to recover funds, and production and operations could not be sustained. For a time, people were in a panic, as if doomsday was approaching.

At this time, the "Aiwa Group" was like a fledgling bird that was about to learn to fly, but was hit by a violent storm.

If we fail to respond intelligently, this crisis will bring about a devastating disaster.

No one is mentally prepared for a sudden crisis.

Liu Aihua, chairman of "Aihua Group", was also unprepared.

However, Liu Aihua was not afraid and did not panic.

At the Huaqing Pool Sanatorium, which was recently opened by the Aihua Group, Liu Aihua locked himself in his office.

He calmly analyzed the formation and impact of the financial crisis, and laid out the current market situation and the status quo of Jingye Group, struggling to find a way out of the predicament.

A few days later, Liu Aihua's calm analysis and diligent thinking finally brought him inspiration: the financial crisis resulted in low prices and low loan interest rates, and the bankruptcy and suspension of production of some companies led to sufficient labor.

These conditions have created rare opportunities for enterprise development.

If we can seize this development opportunity and fight back, we will not only be able to smoothly overcome the financial crisis, but also enable the company to reach a higher level.

After considering all the conditions carefully, Liu Aihua summarized the idea of ​​seeking development in the crisis in a few sentences: "Work hard in 1998 and double the output value", "Work hard in 1998, one year is equal to the previous ten years!", "There are opportunities in crisis. The current economic crisis is a good opportunity for our development."

From then on, these three loud slogans resounded in every corner of the "Aiwa Group", in everyone's heart, and swept away the haze in people's hearts.

At that time, the Aiwa Group had an annual production of 2000 tons of salicylic acid and one blast furnace that produced 9 tons of iron per year.

Liu Aihua's anti-crisis strategy is to take advantage of the opportunity of low prices and abundant labor to build two more salicylic acid production lines and a blast furnace, increasing the salicylic acid production capacity to 4000 tons and the ironmaking capacity to 18 tons, thereby "doubling the output value."

In addition, in order to digest the blast furnace coke oven gas and the coal gangue of the coking plant, a 3000-kilowatt thermal power plant will be built, which will save nearly million yuan in electricity costs each year after completion.

The steam generated by power generation can also be used by chemical plants, giving full play to the complementary advantages of chemical industry and metallurgy.

In addition to these three major projects, there are other supporting projects such as the No. 2 coke oven, carbon dioxide plant, sewage treatment plant, guesthouse, gas station, comprehensive retail department, etc., a total of ten projects.

Ten projects were started within one year. This was an all-out battle, a life-and-death struggle against the crisis.

The three slogans highlight the confidence of Aihua people in winning.

For a time, the "Aiwa Group" was in a state of excitement.

The total investment for the three projects, namely, two salicylic acid production lines, the No. 3500 iron-making blast furnace and the thermal power plant, is RMB million.

For the Aiwa Group, which had just started and was hit by the financial crisis, this was a huge sum of money.

At this time, Liu Aihua didn't want to seek help from his family anymore. He was a bit stubborn and felt that it was embarrassing enough to take money from his family when he started his business. Now that he was in trouble, he didn't want to go home to ask for money.

After struggling for a long time, Liu Aihua finally chose to be self-reliant.

However, raising 3800 million in the financial crisis was extremely difficult.

After Liu Aihua concentrated all available funds, there was still a gap of more than 1800 million yuan.

One day in April, the Aihua Group held a mobilization meeting with the theme of "Seize the opportunity, work hard in 4, and double the revenue of our group."

At the meeting, the young chairman Liu Aihua gave a wonderful mobilization speech:
"Aihua family, our group company is going to launch a major economic campaign.

Since the group company was founded in 93, all employees have worked hard, strived hard, forged ahead with determination, climbed to new heights, and reached a new level every year.

After just over five years of hard work, our group achieved sales revenue of 1.8 million yuan last year. By tapping potential, this year's revenue will exceed 2 million yuan.

On this basis, if we work hard in 1998 and launch several projects, it is very likely that we will double our sales revenue.

The market is like a battlefield. We must accomplish in one year what would take ten years to accomplish.

That’s why we say this is a big economic battle.”

“Based on the situation of our group, this campaign plans to include the following projects:
In the chemical industry, two salicylic acid plants were built, and the second pharmaceutical plant was put into production on May 1st;
The construction of the third pharmaceutical factory has now started and is expected to be completed by the end of December 98.

This project has an investment of RMB 1500 million, and will increase the annual production of salicylic acid by 3500 tons and the annual sales revenue by RMB 5000 million. Taking full advantage of the complementary advantages of metallurgy and chemical industry, a new 3000-kilowatt power plant will be built, which is expected to be completed by the end of November 98.

The project has an investment of 1300 million yuan, including the existing 1000-kilowatt generator set, which can generate 3360 million kilowatts of electricity annually and generate an annual income of 1500 million yuan based on the electricity price.

By making full use of the existing surplus equipment in the ironworks, a new 150 cubic meter blast furnace will be built, which is expected to be completed by the end of December 98.

This project has an investment of 1000 million yuan, which will increase pig iron production by 7.5 tons and sales revenue by 9000 million yuan.

The total investment of these three projects is 3800 million yuan, which will increase revenue by 1.4 million yuan. Through internal potential tapping, sales revenue can reach 2.5 million yuan. By the end of next year, our group's revenue will exceed 3 million yuan."

Then, at this mobilization meeting for all employees, Chairman Liu Aihua explained to everyone why this "battle" was launched.

Liu Aihua felt that "crisis, crisis, where there is danger there must be opportunity, and at this time "Aihua Group" has a godsend opportunity.

At present, there are two special factors in the economic field of Xiaguo: one is the domestic factor, that is, the reform and opening up of enterprises, which has caused temporary difficulties for many enterprises and no new vitality has emerged;

The second is foreign factors, namely the impact of the Southeast Asian economic crisis on our economy, which has made product exports difficult and caused product oversupply.

There are two manifestations: first, there is a backlog of products and a drop in prices, with the prices of some means of production falling to the lowest level in a decade;

Second, many enterprises stopped production and closed down, causing many workers to be laid off and unemployed, resulting in surplus and cheap labor.

What can be accomplished with 3800 million yuan now cannot be accomplished with 6000 million yuan under normal circumstances.

The opportunity is right in front of you. Don’t miss it. Once missed, it will never come back.

Therefore, it is very necessary to seize the opportunity, take advantage of the opportunity and launch a major economic campaign.

The second reason why Liu Aihua believes that "Aihua Group" can be successful is that they have good projects.

If the salicylic acid project of "Aiwa Group" is successfully expanded, its total output will reach 5500 tons, accounting for 10000% of the national salicylic acid commodity volume of 55 tons. In the future, it will be able to gradually monopolize the national salicylic acid market.

Another thing is, if the invested thermal power plant project is put into operation;
It will make full use of the complementary advantages of metallurgy and chemical industry, burn blast furnace, coke oven gas and coking plant gangue, and utilize waste gas and waste;
The electricity generated can be used by the entire company, saving nearly 10 million yuan in electricity bills annually. At the same time, it can also provide heat for the entire company.

This project is a waste-recycling and energy-saving project that achieves multiple goals at one stroke.

Third, the ironworks has complete ancillary equipment and covers a vast area;
If a new 150 cubic meter blast furnace is built, the surplus capacity of the original equipment can be fully utilized and the cost per ton of pig iron can be reduced by 130 yuan. Low cost and low selling price will lead to smooth sales.

After the power plant is put into operation, the costs of the other two projects can be further reduced.

These advantages are unique to Aiwa Group and not possessed by other companies.

In this case, why not "Aiwa Group" do it?

In addition, Liu Aihua also talked to employees about the strong soft power of "Aihua Group".

“Our group company has a “think tank” and “staff department” composed of masters from various industries;
We have professional and technical personnel in infrastructure and equipment manufacturing. Once a decision is made, there is nothing we cannot accomplish.

We have a large family and a strong financial position, so it is easy to allocate funds...

We at Aihua will have a bright future.

After the thermal power plant, salicylic acid and blast furnace projects are completed, our company will be bigger, more resilient to risks, we will have more employment opportunities, and our contribution to society will be greater.

By then, our group company will be like a huge aircraft carrier, braving the wind and waves, marching forward courageously in the ocean of market economy, and always invincible. "

Mr. Liu Aihua seems to be born with outstanding leadership charm, and his every move and gesture shows the demeanor of a general.

His powerful and passionate speeches always accurately touch the hearts of every audience and show extraordinary appeal.

After Chairman Liu Aihua delivered his inspiring speech, all the employees in the audience were excited and their blood boiled.

It is like a shot in the arm, making everyone full of firm confidence and unlimited expectations for the group's development prospects.

Liu Aihua took advantage of the situation and immediately convened a meeting of the group's leaders.

At the meeting, he made the following arrangements.

"First, consolidate the rear. Production units must strengthen management, increase output, and reduce consumption;
The supply department should bargain with cash to reduce procurement costs and ensure supply;
The sales department needs to study the market, expand sales channels, reduce inventory and mobilize funds.

In short, production, supply and marketing must cooperate closely and work together to lay a solid foundation for this campaign.

Second, the three projects should be carried out simultaneously.

According to market conditions, we are carrying out three projects simultaneously. The salicylic acid project is under the charge of Liu Genggeng, the blast furnace project is under the charge of Manager Zhang, Manager Zhang, and Manager Jiao, and the power plant project is under the charge of Manager Wang.

All three projects must be completed by the end of this year, with the power plant project being completed first.

If industry is to develop, electricity must come first!

Another thing is that our publicity and promotion department should adapt to the situation and promote it vigorously.

Participants should publicize this campaign to everyone, repeatedly, and widely, so that not only every employee in the group knows about this campaign;
We also need to let the locals know about it, give them a surprise, and win their support.”

So far, in order to win this battle, "Aihua Group" has overcome unfavorable factors such as shortage of funds, many projects and tight time, and has exerted its intelligence and professionalism to the utmost in every "battlefield" of the fierce battle.

Although interest rates were continuously lowered during the financial crisis, banks were very cautious in issuing loans. Manager Zhou, who was in charge of financing, tried every possible way to find loans.

In this context, Liu Aihua proposed the "two no" business model of no inventory and no arrears. Even if the price is lower than others, he insists on shipping after payment is received to speed up the return of funds.

These days, from the commissioning of the chemical plant to the commissioning of the iron smelting plant, product sales were mostly on a payment-after-delivery basis, resulting in a large amount of arrears and even bad debts.

It was quite difficult for Aihua to suddenly switch to "two-no business" because customers found it difficult to accept the fact that it no longer sold on credit.

However, everything depends on human efforts. After a lot of work by the sales staff, coupled with the guarantee of product quality and price concessions, the "two-no operation" was finally implemented, providing strong guarantees for project construction and production operations.

When it comes to equipment purchases, the group's purchasing department spends every penny wisely.

After the furnace top hydraulic parts were delivered, in order to save costs, the engineering department and others installed them in place using a winch and fall chain without using a crane.

The majority of employees deeply understood the difficulties faced by the Group and had not received any salary for several months, especially the sintering plant, which had not paid any salary for seven consecutive months.

Deputy General Manager Gao Minghai had a heart stent surgery due to a serious heart disease. After being discharged from the hospital, he rested at home for only three days before joining the fight against the financial crisis with his newly recovered body.

In order to unify the thinking of all employees and stabilize everyone's emotions, Gao Minghai held several meetings of cadres above the team leader level to study countermeasures to solve the difficulties and boost everyone's morale.

For a time, the slogan of "putting the collective above the individual, overcoming difficulties and getting through the tough times" resounded throughout the factory. The workers were in high spirits and full of fighting spirit. They were condensed into an indestructible steel plate and worked together to declare war on the crisis.

By mid-May this year, Aihua Group's daily output of pig iron had reached more than 5 tons;
In late May, the output reached more than 300 tons, setting a new record since the ironworks was put into operation.

Liu Aihua, Chairman of the Group Office, personally sent a text message to congratulate.

With the full cooperation of financing, sales, procurement and other aspects, and the strong support of all employees, the ten projects of "Big 98" are progressing smoothly.

The construction of the pharmaceutical chemical plant and the sewage treatment plant started at the beginning of the year, marking the beginning of the "Battle of 1998".

On the first day of June, construction of the No. 6 blast furnace began.

Four days later, the construction of the third pharmaceutical and chemical plant began.

In late July, construction of the guesthouse and gas station started respectively.

In mid-August, construction of the chemical plant's carbon dioxide branch began.

In late August, construction of the thermal power plant began.

In September, construction of the No. 2 coke oven began, and in October, the general services department broke ground.

Among all the projects, except the No. 2 blast furnace, No. 2 coke oven and thermal power plant, the other seven projects were completed within the year.

(End of this chapter)