Read Novel Full Chapter 130 – Now We Just Need a Factory
Chapter 130 – Now We Just Need a Factory
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Xia Mian and Mao Huimei left Charles’s booth together with Fang Yongpeng, all three wearing thoughtful expressions. They had gone in just to gather some basic information after He Min had pushed them into it, thinking it wouldn’t hurt to learn a thing or two. Unexpectedly, as the discussion progressed, a firm idea started to take root.
“Compensation trade,” Mao Huimei muttered. “It’s the first time I’ve heard of that kind of business model.”
In simple terms, compensation trade is similar to paying in installments. Domestic buyers purchase foreign machinery or technology, and then repay the cost over the years through product returns or regular payments, typically over five or ten years.
“I only asked about it because I heard him mention it to the last customer,” Xia Mian said, lowering her head to study the data she had recorded. “I didn’t expect there to be such detailed policies behind it.”
“So it means we can basically use their machines and technology for free at the start, then repay them with the products we make?” Fang Yongpeng asked.
“And whatever extra we produce, we sell ourselves, and the income is fully ours. Is that right?”
Xia Mian nodded.
Fang Yongpeng frowned. “But what do they get out of this?”
“Interest.”
You couldn’t blame Fang Yongpeng for not getting it. In this era, most Chinese people still weren’t familiar with the concept of spending ahead of income. Even mortgages wouldn’t become common until a few years later.
Xia Mian showed him the numbers she had just calculated. “For example, if a machine costs 500,000 yuan, and we repay it over five years, the total repayment would be around 700,000. If we stretch it over ten years, it’s about 1.2 million.”
Fang Yongpeng was stunned. Those numbers were astronomical to him.
But Mao Huimei thought it was entirely doable. When Xinsheng Foods first launched, Mao Zhishan had been away filming long-term, so the only person helping Xia Wenyue was Mao Huimei. She had essentially helped build Xinsheng from the ground up and was pursuing a degree in accounting herself, so she quickly ran the cost-return analysis in her head.
“Under compensation trade, the longer the repayment period, the better for us. Whether a juice factory makes money depends on a few key points: the fruit supply, the juice quality, the factory’s capacity, and the sales volume.”
“As for the fruit supply, Jingyi Mountain can cover that. Juice quality—Charles just tried your apples, and since he trusts his own machines, he immediately said he could take orders, meaning the juice meets the standard. As for sales, the quantity Charles wants to buyback should be enough to keep the factory running.”
Xia Mian added, “Not just enough.”
“First, foreign diets are different from ours. Juice is a daily staple for them, something they drink almost every day. So Charles’s company will likely order even more than promised.”
“Second, once our juice is sold abroad, it becomes exported juice. We can then sell it domestically as ‘export quality.’ With just a bit of marketing, the domestic market will open up. Don’t you think it’ll sell well?”
The other two nodded without hesitation. It was obvious it would.
In the ’90s, the Chinese public had an almost blind admiration and preference for foreign goods. Anything imported, anything used by foreigners, was automatically assumed to be high quality. So once the juice was exported and then reintroduced domestically, it would practically sell itself.
“So with compensation trade, as long as we have a factory, we could basically start production right away?” Fang Yongpeng murmured. “Why does that sound… too easy?”
“Starting a factory isn’t that easy, is it? Otherwise, why do so many factories go bankrupt?”
“Of course, it’s not that easy,” Mao Huimei glanced at him. “Opening a factory is just the first step. The hard part is management, production flow, discipline, and the workers themselves. The gap between skilled workers and untrained ones is huge. State-owned factories failed because they were overstaffed, the workers weren’t up to standards, and there were tons of benefits, which only added to overhead costs. There are a lot of reasons.”
“But running our own factory as a private business, that’s a whole different story.”
Seeing how thoroughly she’d thought things through, Fang Yongpeng hesitated, then asked tentatively, “So… you two are really planning to open that juice factory?”
Mao Huimei replied, “I’ll need to go back and run the numbers carefully, and also discuss it with my family.”
“If we really do decide to open the factory, I can start purchasing your apples, but I might need to delay payment for the first batch by a few months.”
“You should talk it over with the villagers.”
Fang Yongpeng nodded. “We can’t let those black-hearted crooks squeeze us like that.”
“It’s already hard enough for kids in rural areas to get an education. If we sign the kind of contract they’re pushing, our village won’t have more than basic subsistence for the next five or ten years. And the kids definitely won’t be able to afford to stay in school.”
Noticing Mao Huimei looking at him, Fang Yongpeng scratched his head. “What is it?”
“I heard you’re a teacher,” Mao Huimei said. “So you’re doing all this because the kids can’t afford school?”
Fang Yongpeng rubbed his forehead. “That’s part of it… but also, my eldest brother’s daughter is about to enter high school, and my uncle’s illness can’t be delayed anymore… all of it needs money.”
Mao Huimei couldn’t help but burst into laughter, making Fang Yongpeng even more embarrassed.
She smiled. “So how did you come up with the idea to sell apples over here?”
Now that he’d calmed down, Fang Yongpeng realized how ridiculous the whole thing sounded. “Wasn’t much of a choice. They joined all the local buyers to force prices down. With no way to sell locally, I figured—if I sell to foreigners, they can’t interfere, right?”
“It was a long shot, sure,” he chuckled, flashing a row of bright white teeth at her. “But hey, it brought me to you two. I’d say my luck’s not bad.”
Mao Huimei couldn’t help laughing too. “You really are lucky. Good thing we have a grudge against He Wei.”
The three of them burst out laughing.
After exchanging contact info with Fang Yongpeng and going their separate ways, Mao Huimei couldn’t hold back and turned to Xia Mian for her opinion. “Do you think this might actually work?”
“Was I being too impulsive?”
“I really think it’s doable,” Xia Mian said. “Besides, with so many factories shut down these days, buying one is way easier than when Second Aunt did it.”
In her previous life, Xia Mian had heard her father say that many people who seized the opportunity to buy up factories during the mass layoffs ended up rich within a few years. She grinned, “Sis, if you’re short on funds, count me in—I’ll invest!”
Hearing that, Mao Huimei suddenly felt more grounded. “Alright. I’ll definitely come to you.”
“So now all we’re missing is a factory, right?”
They hadn’t expected that, not long after Mao Huimei said those very words, a factory would come knocking on their door.
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