Journey 1995:Non-Stop

Chapter 255 Construction Site
After chatting with President Zhou for a while and having dinner, Yan Hui and Wang Zongbo took a stroll around the neighborhood.

Most of the ceramic factories in this area are small-scale, some of which are seriously polluting. It's unclear what they're using for firing, and they'll all be phased out sooner or later.

"Old Yan, do you think environmental protection is important?" Wang Zongbo coughed twice and asked.

"Of course it's important. The workers are suffering too much, sigh," Yan Hui sighed.

"You used to be a factory worker?" Wang Zongbo asked curiously.

"You've never done it before?"

"No, I've always been in business, though it's small, I've never been a factory worker."

“I’ve done it. I used to clean sawdust at my uncle’s processing plant. The sawdust was flying everywhere, and it was really painful for the workers in their eyes, ears, ear canals, and all over their bodies. What can these workers do in those kilns that are belching black smoke?” Yan Hui sighed. “When I open my own factory someday, the first thing I will consider is environmental protection. I can’t say it will be completely environmentally friendly, but I will do my best!”

"Ears? Ear canals? Why are you going into such detail?"

"One is the noise, and the other is the sawdust getting into your ears. Sigh, you haven't experienced it, you wouldn't understand." Yan Hui shook his head. "What's it like working in the aluminum products business?"

"Aluminum? Do you understand that aluminum needs to be electrolyzed?" Wang Zongbo asked.

"Does aluminum oxide become aluminum when it is electrified?" Yan Hui asked rhetorically.

"What? You know this? Didn't you only graduate from junior high school?" Wang Zongbo was extremely shocked.

He originally thought he and Yan Hui were similar, both having started from small businesses. He never expected that Yan Hui's experience was so much richer than his!
"I've studied it on my own, but I only understand the concept. I don't know the specifics of electrolysis," Yan Hui said helplessly.

"I don't know either. I only know that it takes 15 kilowatt-hours of electricity to produce one kilogram of aluminum. As more and more aluminum products are produced in China, the electricity consumption will also increase. Is this a business opportunity?" Wang Zongbo asked.

"I don't think so. Is generating electricity something we can even imagine?" Yan Hui shook his head. He had seen large steel plants and knew what a large power plant was.

“Yeah, let’s go. The smell here is too strong. Let’s go back to Ping’s place, sit and have some tea. We’re going back to Quancheng this afternoon!” Wang Zongbo waved his hand.

"Okay, let's go back." Yan Hui also felt a little uncomfortable.

When they got back, Yan Hui found that four or five jars of crispy pots had been moved into the room where they were resting. Zhou Ping came over and said that they were prepared for the two of them.

In the afternoon, after finishing his work, Zhou Ping took Yan Hui and the other person back to Jinan.

Yan Hui delivered a jar of crispy stew to his brother-in-law, kept one jar for himself, and sent the remaining jar to Liu Jianlei.

In the evening, after returning to the warehouse and cleaning up, Yan Hui began working on business planning again.

Yan Hui is observant and polite to everyone, so during this time he learned a lot about the construction site.

In China, all major businesses are inevitably linked to the government, and real estate is no exception. The government raises substantial funds through taxation, land sales, and other means, which it then spends to ensure the smooth functioning of the economy.

The Jian'an Group, where General Manager Han works, undertook the renovation of a large area of ​​the old city in the city center. The main source of this funding was the government. Throughout this process, countless businessmen like Yan Hui made a living from this.

People like Yan Hui can be divided into several categories.

The first category is subcontractors, whose main contributions are manpower and machinery. These companies often have large construction machinery and construction teams, enabling them to undertake projects. These subcontractors are the main force in all projects, and they employ a large number of migrant workers.

For these subcontractors, machinery is basically fixed assets; their biggest expense is labor costs. If they don't receive timely payment for their work, it leads to unpaid wages for their workers. This was quite common in those days.

In May 2011, the Eighth Amendment to the Criminal Law included the crime of refusing to pay labor remuneration in the scope of criminal law, which slightly restricted this type of behavior, but the problem remains serious. It should be noted that this crime punishes those who have the ability to pay but choose not to. Some foremen have not received their wages and have no ability to pay at all, so the problem is not there.

Yan Hui had worked on construction sites before, and he had seen some situations where people couldn't get paid. He also knew the passive position of subcontractors.

Subcontracting is one of the most basic and profitable projects in the entire construction process, but it is also very risky. Once a large amount of wages are owed, it is questionable whether the company can even survive, let alone recover.

Therefore, in Yan Hui's business plan, he will not do subcontracting in the later stages.

If we succeed one day, we can directly become general contractors.

The second type is suppliers like Yan Hui. Suppliers are less risky than subcontractors because ordering goods from a construction site is a continuous process. Even if inventory is held onto, it's usually not too much. If a loan fails, the worst-case scenario is bankruptcy. Mr. Teng is a prime example. Of course, if Mr. Teng can accept losses and start from scratch, he can still succeed.

The biggest challenge for suppliers is obtaining supply qualifications. Generally speaking, either your goods or products are difficult to replace locally (whether in terms of quality or price), or you need to have excellent resource channels.

Yan Hui now possesses both advantages: he has both good products and good distribution channels.

The third category consists of leasing merchants.

During construction, some large or unused equipment may be unavailable to subcontractors, suppliers, or the construction site itself, so they need to be leased.

Leasing is the most profitable and reliable method. For example, if a construction site temporarily needs a large crane for hoisting, you need to find a reputable hoisting company. In this case, the payment is usually settled on-site without delay.

Conversely, even without on-site payment, the worst outcome would be simply not receiving rent, which wouldn't pose a significant risk to the company.

Becoming an equipment lessor is even harder than becoming a supplier. You either need to be incredibly powerful, for example, having the only crane in the area with a capacity of 300 tons or more; or you need enormous resources and connections.

This is also the path Yan Hui wants to take, but it's not feasible in the short term.

The country's development is changing rapidly. Since the beginning of the new century, engineering construction and infrastructure construction have been the most prosperous. Yan Hui felt that he still had to follow this path.

Although the logging ban in Northeast China has not officially taken effect, many measures are already restricting logging, and the quality is declining. A notable characteristic is the decreasing diameter of timber in the Northeast. Yan Hui and Lao Guo have been in contact several times recently and have noticed this deeply. Since 1999, my country's timber imports have increased in stages each year. Yan Hui also planned to import timber last year, but now it has become much more difficult to enter the market.

(End of this chapter)