Rebirth of the Industrial Tycoon - Vol 2 Chapter 647
Chapter 647 Foreign monks recite sutras
Zhao Jinshan thought that Li Weidong didn’t know Huiyuan Industrial Group, so he introduced: “This Huiyuan Industrial started out as an import and export trade of machinery. Back then, their business was very big. In the early 1990s, You can get a foreign exchange quota of 70 to 80 million US dollars.”
When mentioned doing import and export trade, Li Weidong couldn’t help thinking of Xiao Yuanzheng back then. Those who could do this business at that time were not ordinary people.
In the early 1990s, when the country’s foreign exchange was still relatively tight, it was possible to obtain a foreign exchange quota of 70 to 80 million US dollars, which was an unusual background.
So Li Weidong said subconsciously: “The background of this Huiyuan Industrial Group is very deep!”
“That’s right. This company has a lot of connections in the oil system.” Zhao Jinshan didn’t explain much, and went on to introduce: “Later the country partially opened up coal prices, and Huiyuan Industry also began to enter the coal field at that time.
At that time, the price of coal was soaring, and Huiyuan Industrial made a lot of money. During this period, it also merged many state-owned or collective enterprises, and began to develop into the field of liquefied natural gas and coal chemical industry.
In 1998, the price of coal fell sharply, and Huiyuan Industrial, like us, bought a lot of coal mines at the bottom, but they were not as calm as we were. In 2000, when coal prices fell to a trough, they couldn’t help but sell a group of relatively small coal mines, some of which were taken away by us.
However, Huiyuan Industry still kept a few large mines. It turns out that those technical teams are still there. After all, they have been in the coal business for ten years, and they have merged some state-owned enterprises during the period. With the old foundation of state-owned enterprises, they are capable Provide technical support.
Recently, I have been looking for technicians, and I don’t know where Huiyuan Industrial got the news, so I came to the door and said that I would like to provide comprehensive technical support, but we need to sell 30% of the shares to them. ”
“Is this because the coal mine was sold at a loss and came here to make up for it?” Li Weidong said with a smile.
“Looking at the current coal price, those coal mines must have sold at a loss, and it is normal for Huiyuan Industry to make up for it from other places.” Zhao Jinshan replied.
“But with 30% of the shares, some lions have opened their mouths.” Li Weidong continued.
“I calculated that most of the mines in our hands have a recovery rate of between 20% and 30%. If we have the technology provided by Huiyuan Industry, we can at least increase the recovery rate to more than 60%. We have lost 30% of our share dividends, but in total, our profits are obviously more than we are now.”
Zhao Jinshan continued; “What’s more, this 30% stake is not a free gift. Why should Huiyuan Industry have to pay more than ten or two billion yuan! We both made a lot of money by taking a penny of this money!”
Li Weidong shook his head: “Brother Zhao, you can’t do that, what if the price of coal continues to rise? After two or three years, one ton of coal may be mined for a profit of one hundred and twenty dollars. You can earn a dozen or two billion a month!”
“You don’t want to sell your shares?” Zhao Jinshan asked.
“At least 30% is impossible.” Li Weidong continued decisively: “If Huiyuan Industry is willing to provide technical support, I will accept selling him a maximum of 10% of the shares.”
“Okay, then I’ll listen to you!” Zhao Jinshan did not hesitate. At the strategic level, Zhao Jinshan still unconditionally believed in Li Weidong’s judgment.
So Zhao Jinshan continued: “Then I’ll go to Huiyuan Industry to discuss and try to reduce the shares to less than 10%!”
…
In the fitness club of a star-rated hotel, Zhao Jinshan was standing in front of a table with a ping-pong racket. Opposite him was a short, lean man, but he looked smart.
This person is Sun Chongxin, chairman of Huiyuan Industrial Group.
In terms of table tennis skills, Zhao Jinshan is obviously not Sun Chongxin’s opponent, and he was defeated after a few shots.
“No way, I can’t beat you!” Zhao Jinshan waved his hand and said he wanted to rest.
Sun Chongxin also put down his racket, and said with a smile: “Mr. Zhao, you usually exercise a lot. Look at your belly, it’s protruding a lot!”
The two walked to the seat next to them and sat down, picked up the towel to wipe off the sweat, and each opened a bottle of mineral water, and chatted while drinking.
“Mr. Sun, I really can’t promise you that 30% of the shares. This Dongshan Mining is not my company alone. There is another shareholder. You must know him, Li Weidong of Puppy Electric. We discussed it. For a moment, I think 30% of the shares are too high.” Zhao Jinshan said.
“It’s not that I don’t give money. I will buy according to Dongshan Mining’s valuation and market price. You will definitely not lose money, and maybe you will make a lot of money. And after you get technical support, the coal output will be greatly increased. Increase, the final profit will be more than now.” Sun Chongxin said with a smile.
“We are more optimistic about the price of coal in the future. If we sell more shares of the company now, we will lose money in the long run.” Zhao Jinshan said bluntly.
“I’m also optimistic about the price of coal, otherwise I wouldn’t come to you!” Sun Chongxin put down the mineral water bottle in his hand and continued: “Since you can’t accept 30% of the shares, how much can you accept.”
“5%!” Zhao Jinshan did not directly report the bottom line of 10%, which is also convenient for the next negotiation.
“This is too little!” Sun Chongxin shook his head, and then said, “I can reduce it by 5% and buy 25% of your shares.”
The two sides started a series of bargaining, and finally talked about 20%, Sun Chongxin refused to lower it.
Seeing that the negotiation seemed to be at a deadlock, Sun Chongxin reached out to the assistant next to him. The assistant hurried over and handed a thick document to Sun Chongxin’s hand.
“Mr. Zhao, this is a photocopy of the recent meeting minutes. You can read it first and return it to me after reading it!” Sun Chongxin handed the document to Zhao Jinshan.
Zhao Jinshan took the minutes of the meeting, first looked at the unit where the meeting was held, and his expression suddenly became serious.
This turned out to be a meeting on coal mine safety production held by the National Work Safety Committee.
“This Sun Chongxin is really well-connected, and he was able to get this kind of meeting minutes.” Zhao Jinshan secretly thought, he also understood at this time, why Sun Chongxin asked him to return it after reading it.
Zhao Jinshan immediately began to read the meeting minutes carefully, and his expression gradually became frozen.
“Is the country going to close down and rectify small coal mines?” Zhao Jinshan asked with a serious expression.
Sun Chongxin nodded: “At the end of last year, the State Council issued the “Notice on Further Closing and Rectifying Small Coal Mines and Coal Mine Safety Production”, which is last year’s No. 68 document.
However, the demand for coal began to increase rapidly this year, and the price of coal also rose sharply. Instead, there were more small coal mines in the local area.
The country is also aware that under the current circumstances, if all small coal mines are shut down directly, it will lead to insufficient coal supply, and the price of coal will rise even higher, which will affect industrial development and people’s livelihood needs. .
Therefore, this meeting is discussing, while ensuring that the national economy is not affected, phased out small coal mines, other coal mines should be rectified, and coal mine safety production work should be gradually strengthened. ”
Zhao Jinshan pondered for a moment, then said: “This is also good news for Dongshan Mining. We know that the coal mines of the mining industry are not small coal mines, and we will update a batch of new equipment recently, and also increase the number of coal mines. Capital investment in safety production. If we rectify small coal mines, wouldn’t our coal sell better!”
“Mr. Zhao, haven’t you noticed? In addition to discussing small coal mines, this meeting also discussed coal mines with low mining efficiency, which are also within the scope of closure.”
Sun Chongxin smiled slightly and continued: “Although the scale of some coal mines is not small and the output is not low, the collection efficiency is very low and the recovery rate is very low.
The continued existence of such coal mines will not only produce a lot of waste of resources, but also seriously damage the ecological environment, and even cause serious irreversible consequences. Therefore, this type of coal mine also needs to be gradually shut down.
As far as I know, the coal mines of Dongshan Mining, except for the two large mines of Taifeng and Taisheng, and a few coal mines, do not have high recovery rates, right?
I can guarantee that if you don’t increase the recovery rate, in the next two to five years, when the country starts to step up rectification efforts, most of your coal mines will definitely be listed as being shut down for rectification.
Moreover, increasing the recovery rate is not something that can be done in one or two days. This itself requires a process. With so many coal mines, I am afraid it will take about two years to increase the recovery rate, right?
Mr. Zhao, even if you start to increase the recovery rate now, it is just enough time to deal with the gradual remediation of the coal mine by the national team. If you count it like this, there is not much time left for Dongshan Mining! ”
After hearing what Sun Chongxin said, Zhao Jinshan suddenly became nervous.
Zhao Jinshan knew that Sun Chongxin would definitely not fool himself with the fake meeting minutes, which means that the country has planned to gradually rectify the coal mines.
The kind of small coal mines run by black-hearted coal bosses may ignore national policies and secretly carry out production, which is the so-called black coal mine without formalities.
However, a serious coal production enterprise like Dongshan Mining must seriously implement the national policy. If the state demands that coal mines be shut down, they must be shut down, and it is impossible to secretly produce.
That is to say, the coal mines under Dongshan Mining must increase the recovery rate of coal mines as soon as possible, so as to meet the production standards set by the state in the future.
…
“Weidong, we are in trouble.” Zhao Jinshan called Li Weidong and told Li Weidong of the minutes of the meeting.
Li Weidong patted his forehead subconsciously and said, “I only thought about the scale of the coal mine, but I forgot about the production efficiency of the coal mine!”
This was indeed a mistake by Li Weidong. He only remembered that the country had rectified the small coal mines with low output, so when buying bottom coal mines, he chose medium and large coal mines with decent output and avoided all the small coal mines.
However, in the coal industry consolidation process in later generations, in addition to the consolidation of small coal mines, coal mines with low production efficiency were also included in the ranks of consolidation.
This type of coal mine with low production efficiency is part of the so-called “de-capacity” of the coal industry.
As early as 1994, the state designated the cross policy of “support, transformation, rectification, integration, and improvement” for the coal mining industry. These ten words all refer to improving the production efficiency of coal enterprises.
Later, we simply eliminated those “backward production capacity”. In the two years when the policy was the most stringent, nearly 700 million tons of production capacity were directly eliminated!
In 2021, China’s coal consumption will be 5.2 billion tons. Cutting down 700 million tons of production capacity that year also shows the country’s determination to rectify the coal industry.
In Li Weidong’s impression, the next wave of coal mine remediation work will start at the end of 2004.
At that time, the Office of the Safety Production Committee of the State Council issued the “Emergency Notice on Strengthening the Supervision and Administration of Coal Mine Safety and Further Doing a Good Job in the Closure and Rectification of Small Coal Mine”.
This emergency notice has fundamentally changed the management system of the domestic coal industry.
In the era of planned economy, coal mines were all state-owned or collectively owned. At that time, the main emphasis was on production norms. “Industry management, labor union supervision, and labor department inspection” were the production policies of the coal industry at that time.
After the reform and opening up, enterprises have more autonomy, so the production policy of the coal industry has also become the policy of “enterprise management, state supervision, and trade union supervision”.
However, apart from large state-owned coal mines, there is no such thing as a union in other coal mines! There are countless small and medium-sized coal mines, and the state has no way to supervise them all.
Since this emergency notification in 2004, the production policy of the coal industry has also become “national supervision, local supervision, and corporate responsibility”.
This also means that the responsibilities related to coal production are downgraded to localities and enterprises. If there is a problem in the coal mine, the local government should take responsibility for the poor supervision.
After this emergency notification was issued, various localities began to act quickly, shutting down a large number of small coal mines that did not comply with the regulations. It was in that era that the major coal-producing provinces closed three or four thousand coal mines a year.
However, those small coal mines are easy to revive. When the supervisors come, they will close the mines. Once the supervisors leave, the mines will be reopened for production. If there are no production procedures, it will become an unlicensed black coal mine and secretly start work.
Regular coal enterprises must not be like this, they must still produce in accordance with state regulations.
“It seems that it is imperative to improve production efficiency and recovery rate!” Li Weidong sighed.
Zhao Jinshan continued: “Brother Li, we are now the wood show and the forest wind will destroy it. We have bought too many coal mines in the past two years. At that time, these coal mines were not loved by grandma and uncle, but now they have become Fragrant buns.
Nowadays, all major coal companies are staring at us! They wish we had a problem. If the country really starts to rectify the coal industry on a large scale, we will definitely be the first wave of inspections by relevant departments.
If our coal mines really fail to meet the national production requirements, those big coal companies will definitely come and take a bite, and in the end it is us who will suffer. Therefore, our coal mines must improve production efficiency as soon as possible. ”
Dongshan Mining’s bottom-hunting a few years ago was indeed too ruthless. For this reason, Li Weidong and Zhao Jinshan not only spent their savings, but also owed a lot of bank loans.
Li Weidong reckoned that he might be able to copy out a top 20 domestic coal company with this round of bargain hunting. Shanxi coal bosses will also lose one or two hundred people because of this dip.
Nowadays, coal prices are rising, and those coal mines that no one cared about back then have become money printing machines.
Therefore, Dongshan Mining will inevitably become the target of the coal industry.
If the coal mines under Dongshan Mining fail to meet the national production standards, then these coal mines will not be closed, but will be “joined” or “rectified” by other coal companies, which means they will be annexed.
And those big coal companies have technology, and they can quickly improve their production efficiency by taking out their own technology. The coal mines of Dongshan Mining have instead become their money printing machines.
Therefore, Dongshan Mining maintains low production efficiency and ultimately fails to meet national standards, which is something other coal companies are very happy to see.
Huiyuan Industrial also agreed on this point, so it insisted that 20% of the shares would not be let go. Huiyuan Industry believes that if Dongshan Mining does not compromise, it will be divided up by other coal companies in the future.
To put it bluntly, the expansion of Jinshan Mining was too savage and too fast, and the foundation was not firm, so it quickly expanded its territory. It is good that this business model does not have problems. Once there is a problem, it is likely to collapse directly.
It is not uncommon for Chinese companies to collapse directly because of blind expansion.
Zhao Jinshan asked, “Brother Li, as far as I know, improving production efficiency and recovery rate is not something that can be accomplished in a short period of time. We have so many coal mines, I am afraid it will really take about two years. , which means that we must start this work as soon as possible.
Otherwise, let’s agree to the conditions of Huiyuan Industry! In any case, we will not lose money on this transaction. We can also get back some funds by selling 20% of the shares to repay the loan. This is far better than substandard production in the future and being swallowed up by other coal companies! ”
“But we could have made more money. Unless it is a last resort, I don’t want to agree to Huiyuan Industry’s conditions. After all, for coal mining, if you can’t make it, it will be a loss!”
Li Weidong frowned and continued, “Apart from Huiyuan Industry, is there no one else to help us improve our technology?”
“Those big coal companies are like a mirror in their hearts! If you ask them to help, I’m afraid they will charge a higher price than Huiyuan Industry!” Zhao Jinshan replied.
Li Weidong pondered for a moment and said, “Actually, I thought of a backup plan, I don’t know if it can be done!”
“What backup plan?” Zhao Jinshan asked immediately.
“Since we can’t find suitable talents in China, why don’t we go abroad to find them?” Li Weidong smiled and then said, “There is a saying that foreign monks can recite sutras!”
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(end of this chapter)