Reborn in 08, a heretical cultivator starting a business

Chapter 184 An irresistible offer: Two bases, one in the north and one in the south!
Mayor Zhao was furious: "Serves you right for all your fussing! Now look what you've done!"

"Chairman Wang invested in Ningbo and directly acquired Xinle Electric Appliances, a 200-acre industrial park with a production capacity of 200 million twin-tub washing machines!"

"The mayor of NB City personally attended the signing ceremony, which is clearly a ploy to attract investment."

"Once smart home technology is established in Ningbo, Jeju Island will be completely safe!"

"This..." Secretary Song fell silent.

He didn't expect Wang Junshan to be so tough.

Jeju had already decided to give Future Smart Home 1500 acres no matter what, but Wang Junshan immediately changed his mind and went to invest in Ningbo.

This adds even more uncertainty to the future of smart home solutions settling in Jeju.

Other leaders were also somewhat worried:
"That's great. We're still in the evaluation stage, and Future Smart Home has already gone directly to Ningbo."

"The current situation has turned into a choice between Jeju and Ningbo for their future smart home."

"A choice between two options? You're overthinking it."

"What does this mean? Binhai City has also made a move?"

"Yes, Binhai City already has an advantage over us in the home appliance industry. Chairman Wang is also studying at Binhai University, and YouTuan Technology settled in Binhai University. It is very likely that Smart Home will also settle in Binhai City in the future."

"This is troublesome. It's a three-way choice, and Jeju might be eliminated."

"It's not just a choice of three. The latest information is that Feicheng City has also made its move, offering a series of preferential policies to invite Future Technology to invest!"

"A choice of four?! Good heavens, what are we doing?!"

"Such a promising future of smart homes forced people to develop in other cities. Now look what's happened!"

Mayor Zhao grew angrier the more he thought about it: "They really don't know how to cherish the opportunity they're given!"

"If Lotus cars are fine, that's good; but if they are, well..."

"Of all those present, how many will die a peaceful death?"

Upon hearing this, everyone's faces turned ashen, and they broke out in a cold sweat.

Those who supported the introduction of Lotus cars were especially panicked.

"Old Zhao, is there really a problem with the Lotus Cars project?" Secretary Song couldn't sit still any longer.

Mayor Zhao sighed: "The investigation is still ongoing, but we can make a judgment by looking at the reactions of other cities."

Secretary Song's expression changed drastically: "That's true. Jeju, Ningbo, Feishi, and Binhai are all scrambling to acquire Future Technology. But these cities aren't really interested in the Lotus Cars project."

"The other cities, such as Suzhou, Wucheng, and Chongqing, are also interested in Lotus cars, but they all have high requirements."

"For example, in Wucheng, Dongfeng Motor demanded a 51% controlling stake!"

“Land prices in Suzhou are high, even after subsidies, it costs 30 yuan per mu, while we can offer 10 yuan per mu after subsidies.”

“Although land prices in Chongqing are cheap, Lotus Cars feels the location is not good and not conducive to their high-end development. On the other hand, our Jeju is close to Beijing and Tianjin, which is suitable for Lotus Cars’ high-end positioning and sales!”

"Of course, there's also the government's commitment to large-scale procurement, and the generous policy support."

"But why aren't other cities interested?"

"Could there really be a trap?"

Mayor Zhao sighed: "It's hard to say whether there are any pitfalls, but we've treated Lotus Cars too well and haven't placed enough restrictions on them. If there's a problem, it'll be the second Sweet, or even worse!"

"The consequences would be unimaginable!"

Everyone nodded repeatedly, their expressions solemn.

Mayor Zhao continued, "Lotus cars, to be precise, are the domestically produced Youngman Lotus brand. They claim to use the chassis tuning technology of the international brand Lotus, giving them a distinctly international feel, but in reality, they have little direct connection with Lotus."

"They registered the name of the international brand Lotus, forcing Lotus to change its name to Lotus in China!"

"If it succeeds, that would be great, and Jeju Island could take another step forward."

"But if we lose, then it's all over, utterly ruined!"

"We must consider the risks as well as the benefits."

"The Future Smart Home project is very mature and has little risk. The fact that even the duckling can be revitalized and sold out demonstrates the strength of Vipshop and Future Technology."

"With Vipshop backing us, the subsequent 500-acre washing machine industrial park, 500-acre water purifier industrial park, and 500-acre dishwasher industrial park will all grow into large and strong enterprises. Chairman Wang even dared to sign a performance-based agreement. In the third year of production, revenue will reach 80 billion!"

"It can be said that this is a 100% successful project with a promising future. It is certain that the output value will reach 8 billion yuan in three years and then exceed 10 billion yuan."

"But what about the Lotus car project?"

"High-end sedans, SUVs, and new energy vehicles sound sophisticated, but they are also very impractical."

"The financial crisis isn't over yet, so how many of Lotus's luxury cars can they sell?"

"How many people would forgo buying a BBA (BMW, Mercedes-Benz, Audi) and instead buy a newly released Lotus car? Just because it shares the same name as Lotus in other countries?"

"This..." Secretary Song was speechless after being rebuked.

Yes, if it were him, with the same 350,000 yuan, would he buy a BMW 3 Series or a Youngman Lotus?
"Young Lotus's annual revenue of 10 billion yuan sounds impressive and grand, but how likely is it to actually materialize?"

"Compared to the future smart home, how much lower is the chance of success?"

"Have you ever thought about it?"

"To put it simply, Chairman Wang dared to sign a performance-based agreement, promising to allocate 1500 acres of industrial land to Future Technology next year, and in 2011-2012, Chairman Wang dared to promise to achieve 80 billion yuan in revenue."

"But if 1500 mu of industrial land is allocated to Youngman Lotus Automobile next year, does Youngman Lotus Automobile dare to sign a performance-based agreement? Does it dare to promise revenue of 8 billion yuan for 2011-2012?"

"Do you dare to do what Chairman Wang did, promising to buy back the land at the price three years from now if we don't reach an output value of 80 billion? Or should we directly reclaim the land and auction off the factory buildings?"

Everyone shook their heads, knowing that the young Lotus dared not!
Secretary Song took a deep breath: "You're right, Chairman Wang dares, but Lotus Motors doesn't."

"The Future Smart Home project may not sound as high-end as Lotus sports cars, but it's more practical and has a higher chance of being completed!"

“That’s right, so I suggest changing our strategy. Give Future Smart Home the 1500 mu of industrial land in the High-tech Zone directly, as a gesture of utmost sincerity, and retain Chairman Wang,” Mayor Zhao said.

"As for Lotus Cars, we'll squeeze out 700 acres of industrial land from other places and give it to them. We'll also require them to sign a performance-based agreement; if they fail to meet the targets, the land will be taken back without compensation, and the factory will be auctioned off!"

"That's right, Lotus Cars is riskier and less reliable. Given the betting agreement, some support is acceptable."

"However, Smart Home must show enough sincerity in the future, otherwise if it really settles in Ningbo, Feicheng, or Binhai, we will have nowhere to cry."

"Okay, give me the full amount, Lao Zhao, you'll have to go again."

"Fine, I'll swallow my pride and accept it, but the treatment must be generous."

"After all this trouble, our previous sincerity wasn't enough. We need to go even higher to keep Future Smart Home in Jeju!"

"This... sigh!" Secretary Song sighed, feeling like he had shot himself in the foot.

But that's the truth.

If the Lotus Cars incident hadn't happened, the 1500 acres of land would have been given directly to Future Smart Home, with ample tax incentives and a performance-based agreement, and the deal would have been settled.

But now that things have escalated like this, Wang Junshan won't agree if Jeju doesn't increase its incentives.

Secretary Song felt some regret, but also helplessness:

"Land prices of 30 yuan per mu are already the lowest in provincial capital cities. We'll add subsidies to bring the price down to 5 yuan per mu—that's a reasonable offer. Corporate income tax and value-added tax will be completely exempted for the first five years and halved for the following five years!"

Mayor Zhao shook his head: "It's not enough. Jeju can afford this treatment, and so can Fei City and Binhai."

"Then provide Future Technology with another 15 billion yuan in loan interest subsidies. Is that enough? No other city can offer such a price!"

Mayor Zhao nodded: "That's enough. The land is practically given away for free, and the 15 billion yuan interest-subsidized loan is enough for Future Smart Home to build the first phase of the industrial park. The infrastructure and equipment are all sufficient, and the tax incentives are the most favorable. You won't find another like it in the whole country."

"Alright, go talk to them. This time, we've really suffered a huge loss; this is a policy we've never seen before, sigh!" Secretary Song said helplessly. He regretted not giving them the 1500 mu he had decided to allocate to Future Smart Home no matter what; he should have just given them to them directly.

This hesitation has now cost even more...

The five-year interest subsidy for the 15 billion loan is a huge sum of money.

"Wait for my good news."

Mayor Zhao acted swiftly and decisively, heading straight to the duck factory.

When Mayor Zhao arrived, Wang Junshan was preparing to head to the airport to visit Ningbo.

The mayor of another city took the initiative to attend the signing ceremony and extended an olive branch. It would be unreasonable for Wang Junshan not to make any gesture.

Unexpectedly, Mayor Zhao arrived.

"Chairman Wang, good news. Although Lotus Cars has not yet been found to have any problems, the Jeju leadership team has unanimously decided to allocate all 1500 acres of industrial land to Future Smart Home."

"A land price subsidy of 5 yuan per mu is just a token gesture."

"Value-added tax and corporate income tax will all be given the highest rates, with five years of exemption and five years of 50% reduction!"

Wang Junshan remained calm in response.

This treatment would have been considered excellent before, much better than in Ningbo.

With land prices in Ningbo reaching 50 yuan per mu, it's impossible for taxes to be completely exempted for five years or reduced by half for five years!
However, the Lotus car incident disgusted Wang Junshan, so without additional money, there was no room for negotiation.

"In addition, Jeju will provide a loan of 15 billion won for the Future Smart Home project, with full interest subsidies."

"This is our greatest sincerity. We only hope that smart homes can be established in Jeju and flourish in the future!"

Upon hearing this, Wang Junshan was stunned.

The 1500 mu of land was practically given away for free.

The most favorable tax rates were offered for ten years.

There's also a 15 billion yuan loan interest subsidy!
What else do you need a bicycle for?

The words Wang Junshan wanted to say in refusal stuck in his throat.

In the simplest case, with this 15 billion loan, Wang Junshan can complete the first phase of Future Smart Home without spending a single penny!

Once the first phase is operational and profitable, starting construction on the second and third phases will not be a problem.

To put it bluntly, Jeju provides the land, the money, the preferential policies, and even subsidizes the interest for the 1500-acre Future Smart Home Industrial Park. Wang Junshan doesn't have to contribute anything; it's a complete get-rich-quick scheme!
To refuse such a great opportunity is to refuse billions in profits!

Although the secretary's previous attempt to introduce lotus flowers had angered Wang Junshan.

But Mayor Zhao has always been a firm supporter of smart homes in the future.

More importantly, Jeju Island gave them so much!

Offering money, land, and preferential policies is something other cities can't do.

Whether it's Binhai City, Ningbo, or Feicheng City, they all need Wang Junshan to invest.

It's impossible to give money and land at the same time!

Moreover, the strategy of having two industrial parks, one in the south and one in the north, is clearly more in line with the future development of smart homes.

After careful consideration, Wang Junshan decided there was no need to jeopardize 10 billion yuan.

With Jeju's support, Ningbo and Hefei will be forced to offer even more incentives!
Even if it doesn't reach the level of support in Jeju, it should at least reach 70% or 80%, right?

"Mayor Zhao, since Jeju is so sincere, I cannot refuse!" Wang Junshan said with a smile.

Originally, the Future Smart Home project was planned to allocate 1.5 billion won to start, but now Jeju Island has provided it.

The 15 billion budget for Future Technology can be invested in the mobile phone project!
That's a bottomless pit!

With the general direction aligned, and after detailed discussions, both parties formally signed the contract a week later.
[1500 mu of industrial land in Jeju, 50,000 yuan per mu, 15 billion yuan in guaranteed loans, local interest subsidies, five years of tax exemption and five years of tax reduction, fixed asset subsidies, and 20% of R&D subsidies from the province, up to a maximum of 50 million yuan...]

Future Technology promised that Future Smart Home would be located in Jeju, with the first phase of the industrial park covering 500 acres, and would be completed and put into operation in 2009!
In 2011, the output value of the Future Smart Home Industrial Park exceeded 8 billion yuan, and in 2013 it exceeded 10 billion yuan.

If the land price is not met, the land price discount will be fully compensated based on the land price in 2011.

Furthermore, the industrial park cannot be relocated within ten years, nor can it be sold.

If the assets are insufficient to cover the liabilities, Jeju Island can seize the Future Smart Home Industrial Park and auction it off...

Wang Junshan was very confident and signed the contract immediately.

With the completion of the first phase's eight connections and one leveling work, construction can begin immediately.

The first phase covers 500 acres and will be completed by the middle of next year.

Production will begin in the second half of the year.

The output value of 80 billion yuan was achieved in 2010, not 2011.

As for Ningbo and Feicheng, Wang Junshan will not give up on them because of this; the dual-base strategy in the north and south is indispensable.

The key is what price the other party is willing to offer.

However, Tang Zhi was full of worries about the future: "Chairman, the market for twin-tub washing machines is shrinking."

"In 2007, 950 million twin-tub washing machines were sold nationwide. This year, it is estimated that only 750 million will be sold, and next year it may only be 650 million. In 2010, it may only be 550 million, and even fewer in the years to come!"

"We acquired Xinle, which has an annual production capacity of 200 million twin-cylinder engines. Adding Xiaoya's annual production capacity of 90 twin-cylinder engines, the total production capacity reaches 290 million, which is also very critical!"

"Next year, the total sales of twin-cylinder engines in China are estimated at only 650 million units. It's impossible for our company to account for 290 million of them!"

Wang Junshan nodded: "Your concerns are valid, but it's alright. The Little Duck twin-cylinder is currently selling extremely well, and there will be another surge with the rural appliance subsidy program. Selling 190 million Little Duck twin-cylinders next year shouldn't be a problem."

"Xinle's 200 million production line, with half of its capacity added, was directly upgraded to a fully automated pulsator production line."

Tang Zhi nodded: "That's fine, the configuration for the north and south is complete. The northern Little Duck has a production capacity of 90 twin-cylinder engines and a newly introduced production capacity of 120 million fully automatic impeller engines."

"Nanfang Xinle has a production capacity of 100 million dual-cylinder machines. The remaining half of the production line has been upgraded to a fully automated impeller. Upgrading automation can reduce manpower and increase production capacity by 30%, reaching 130 million!"

The higher the level of intelligence, the higher the production capacity; that's natural.

"However, the year after next is still a problem. 190 million twin-cylinders, we can sell them next year, but we can't sell them the year after."

Wang Junshan had already considered this: "If we can't sell them domestically, we'll go overseas. Ningbo is close to Southeast Asia and has a port. The year after next, and the year after that, when domestic twin-cylinder engines are not selling well, we'll export them all to Southeast Asia!"

Wang Junshan had already made all the arrangements.

Next year, the rural appliance subsidy program will see a surge in demand, with the domestic market capable of consuming 190 million twin-cylinder appliances.

In 2010, the domestic sales volume was only 140 million units, with the remaining 50 units of production capacity allocated to Southeast Asia.

In 2013, the subsidy program for home appliances in rural areas ended, and domestic sales shrank to 500,000 units, while sales in Southeast Asia were 500,000 units, still leaving a production capacity of 1 million units.

That doesn't matter.

At that time, the first phase of the Little Duck Factory will be demolished.

Little Duck's 90-unit twin-cylinder production line was sold directly as scrap metal.

At that time, only Xinle's annual production capacity of 100 million twin-cylinder engines will remain. Selling some domestically and supplying some to Southeast Asia will not be a problem at all.

"In that case, the combined production capacity of Little Duck and Xinle will be 190 million twin-tub washing machines and 250 million fully automatic pulsator washing machines. If our future smart home industrial park phase one is planned to have a total of 500 million washing machines, then the production capacity will be off the charts."

Wang Junshan smiled: "Future Smart Home Phase I covers 500 acres, half for washing machines and half for water purifiers! The water purifiers will be launched directly by the middle of next year!"

(End of this chapter)