Journey 1995:Non-Stop

Chapter 292 Renovation and Bidding

In the end, Yan Hui chose a three-bedroom apartment of more than 120 square meters. He had one room, his parents had one room, and his grandmother had one room. The whole family could finally live together.

Grandma is in good health now and doesn't need a caregiver. She can live with us when my parents come to visit.
The thought of being able to eat his family's cooking every day from now on makes Yan Hui a little excited. It has been almost eight years since he left home in early 1995, after many hardships. It doesn't seem like long.

After securing the house, Yan Hui contacted the developer and obtained an insider price. He only paid a down payment of tens of thousands of yuan to buy the house and immediately began renovations.

According to Yan Hui's plan, this house is just a temporary measure. When he has more money in the future, he will build a villa, not only in Jinan, but also in his hometown.

My mother was the happiest. She was happier than anyone else when we bought the house. Her face was full of smiles as she boarded the plane and left.

Yan Hui didn't even look at the house's renovation; he handed it over directly to the salesman, Wang Wei, only instructing him to use environmentally friendly materials. Back in 2002, most people didn't understand the concept of formaldehyde, but Yan Hui was very knowledgeable about it.

For example, in home use, cabinets, tables, and chairs are made using various techniques. Better quality ones use spliced ​​solid wood, more common ones use plywood, and the cheapest ones are simply pressed wood chips. All three techniques involve glue, just in varying amounts.

Why is formaldehyde so prevalent in home renovations? The core issue lies in the adhesives, since wood itself doesn't contain much formaldehyde.

Here, we must once again introduce a chemical product, MDI (diphenylmethane diisocyanate).

In the early days, MDI was a product completely monopolized by foreign companies. In 1984, Wanhua introduced its first imported MDI production line, and by 1996, it had independently developed its own production line, establishing itself as an industry giant. Today, Wanhua accounts for one-third of the world's MDI production capacity, surpassing BASF, Cosmed, and others to become the world's number one in this field.

MDI itself is one of the raw materials for the production of polyurethane. It has excellent water resistance, strong moisture resistance, high heat resistance, and is completely formaldehyde-free. Apart from its high cost and slow curing speed, it has almost all advantages.

In reality, even by 2025, the vast majority of furniture manufacturers will not be able to afford MDI adhesive. Wanhua's official website lists the manufacturers they cooperate with; most of those not listed do not use MDI.

Yan Hui's understanding of chemicals far surpasses that of the average person, let alone adhesives. He has always wanted to build a polyurethane factory. If he does build the factory, he will need to purchase MDI or other polyethers from Wanhua for synthesis. He has been conducting market research for over a year to this end.

Therefore, Yan Hui's home decoration was basically all custom-made. At this stage, there were no furniture processing factories in Jinan that used MDI boards, so Yan Hui had to find a channel to buy MDI glue, and then find Factory Manager Xiang to process a batch of plywood separately, and then send this batch of boards to the furniture factory.

Don't think this is troublesome. This is not an environmental or health issue, but if Yan Hui himself does not respect more advanced chemical processes and chemical products, then what is the point of his future investment in chemical plants?
With the house and renovations basically settled, Yan Hui also took the time to visit the market.

Construction sites don't need timber in winter, and the timber Yan Hui has stockpiled will be practically unsellable then. Therefore, he needs to get to the market early, partly to boost current sales and partly to secure orders for next spring. According to his plan, he intends to start a steel formwork rental company next spring, which means he must sell the timber shortly after then to free up capital. As for loans, he's not in a hurry; he's already starting to appreciate their benefits.

Given Yan Hui's current rate of return, he would want a loan with an interest rate of 10%.

Business people are greedy. Sometimes, the more they're on the rise, the less willing they are to spend money on a car, because all their funds can be used to continue increasing their value, which is a very satisfying process. Yan Hui drives his Hafei Songhuajiang every day, shuttling between various construction sites.

Yan Hui doesn't like solving problems by giving gifts or money. Although he also gives gifts and shares some profits with others, he won't collude to produce counterfeit or substandard products. Good products have transparent prices, and the profit margin is there.

For example, in the plywood business, Yan Hui's personal profit margin is currently less than 10%, which is the result of his extensive calculations. At this profit margin, he can guarantee quality and profit sharing.

However, the profit margin for inferior plywood can reach over 50%. If the construction site still buys it under these circumstances, it's clear that someone is overpaying.

Yan Hui's approach to business is relatively simple; his greatest strength lies in cost accounting. His math skills are among the best of most business owners. In an era before cell phones, calculators, and where most calculations rely on pen and paper, Yan Hui can easily calculate a project's profit margin.

Many people have seen the "bid" or "winning bid" documents online, which are often very thick. What exactly is inside these bid documents?

The main content includes the bid price, construction period, and quality targets. To break it down further, firstly, a lengthy list of commitment letters and liabilities for breach of contract is required, followed by details such as advance payments, quality assurance deposits, and penalties for delays; secondly, a large number of identity documents, authorization letters, and qualifications of the legal representative and legal representative are needed; thirdly, details of the bid bond, such as bank guarantees and copies of wire transfer receipts, must be provided; fourthly, the core economic issues, including detailed quotations for each project, engineering costs, provisional costs, project fees, regulatory fees, and taxes, clearly listing unit prices, total prices, and final prices; and fifthly, the construction and technical plans, outlining all necessary arrangements.
This is extremely complex, so you often see tender documents that require tens of thousands of pages or even a ton to print. It's fair to say that companies without the necessary capabilities can't even print such a tender document.

What Yan Hui did was essentially the same as bidding, but individual business owners in this era couldn't reach Yan Hui's level.

He has a good understanding of the entire project, and his knowledge of timber is particularly professional. Every price he quotes is sure to satisfy the project owner. Coupled with his background and quality, it is difficult for him to win a deal. And attracting new clients is not difficult for Yan Hui either.

Back then, in order to win the waterproofing project for the Beijing municipal government, the founder of Oriental Yuhong did waterproofing for the Memorial Hall for free. After that, the municipal government trusted him and gave him a lot of projects, and eventually the company went public in 2008.

Yan Hui's reputation in Jinan is growing, and he is now starting to get involved in some government projects.

(The missing chapter will be added tonight)
(End of this chapter)