Chapter 702 - 295: Materials Allocation (Part 2)
There are two production rooms like this.
When Li Yang brought Jiang Banxia here, he specifically put a mask on her.
As they walked, he said, "Although the mask is a very simple product, it has many characteristics that make it highly profitable."
"Mm-hmm-mm."
Jiang Banxia only nodded, without commenting.
As for the profits Li Yang mentioned, she just listened.
Li Yang continued, "After my research over the past two years, I think wearing a mask is a very good habit that can prevent many respiratory diseases. Currently, aside from some specific people, almost no one in the world has the habit of wearing masks. But what about the future?
You know, I’m focused on industrial scale, so I must get ahead in a simple yet promising industry like this. Anyway, even if it loses money, it won’t be much."
This explanation made Jiang Banxia find it much more reasonable.
The profit margin on mask products is indeed high, and she trusts Li Yang’s market instincts.
Li Yang further explained, "Dear, have you ever felt the downsides of rapid technological development?"
"Ah? What downsides?"
"Economics! Population! In ancient times, after a change of dynasty, regardless of management, there would be a period of prosperity. Even a minor favorable factor could extend this prosperity for decades or even centuries. For example, increased grain production or progress in certain crafts... but ultimately it leads to downfall, because the prosperity phase means increasing population, eventually leading to uneven resource distribution, necessitating wars to reduce millions, tens of millions, or even hundreds of millions of people... This acts as an ecological balance."
Jiang Banxia: "..."
"But now, it’s different. Technology has developed to a point where it can influence cycles. There are only small places engaging in wars. Powerful entities dare not act rashly, as it would destroy the whole ecological system. Yet, the global population continues to grow, and sooner or later, it will burst this ecological bubble..."
Jiang Banxia: "..."
Now she understood why Li Yang considered this a promising industry.
Currently, the price of melt-blown fabric is only twenty thousand per ton, and one ton can produce a million masks.
Li Yang hasn’t dared to start a protective clothing production line yet, even though he’s ready.
There’s a rationale for mask production now, but not for protective clothing.
As for raw materials, he has already ordered them from abroad. After all, the melt-blown fabric has multiple application scenarios and is a byproduct of petroleum refining, with a significant global quantity.
Around 1.5 million tons of capacity annually worldwide.
It’s not a strictly controlled material, and importing a few tens of thousands of tons from abroad is no big deal.
Even with this, Li Yang felt it wasn’t enough and planned to bring back another dozen tons once this batch arrived.
Anyway, Green Water Group now has credentials...
After leaving the factory, Jiang Banxia removed her mask and said, "Green Water Group’s current output value is quite high. Unfortunately, this year’s real estate market is not doing well; otherwise, it might have been able to rid the loss label."
Since Jiang Banxia herself is a shareholder of Green Water Group, Wanliu Capital has never held a stake.
She didn’t even get the chance to speculate on Green Water Group’s shares.
"Green Water Heaven and Earth is doing well now. The one in Jiang City has turned a profit."
"Ah? Really?"
Jiang Banxia couldn’t believe that with such high costs and low profits, it could make money.
"Haha, it’s not as bad as you think. For example, the proportion of our self-operated products is increasing, from less than 0.5% previously to now about 1%. Among over 20,000 items in the mall, more than 200 are our own, and many have become popular internet items."
Li Yang had always focused on creating popular internet items, which share a common characteristic of simplicity.
For instance, boneless chicken feet save customers the trouble of gnawing on bones. A pound of white-feathered chicken feet on the market costs only four yuan, with bulk prices dropping to over two yuan.
Excluding labor costs, the material cost for a pound of boneless chicken feet is at most ten yuan.
Li Yang pays his employees relatively high wages, so labor costs are higher, around four yuan per pound.
This includes production and transportation.
Additionally, those production centers, although part of Green Water Group, are not in the same department as Green Water Heaven and Earth, so there’s a required markup between them.
Combining these two stages, the profit is quite significant.
Even so, a pound of Green Water Group’s boneless chicken feet, without any water content, is priced at only eighteen yuan.
The quality is reliable, without any inferior products, surpassing any popular boneless chicken feet on the market.
However, the brand strength of Green Water Heaven and Earth is still limited to nearby counties and has not expanded nationwide; otherwise, it could outcompete all similar products on the market.
"Master Li is truly amazing!"
Jiang Banxia often vacillated between calling Li Yang "Master Li" and "husband."
As for the difference between the two, Li Yang still hasn’t figured out the issue.
Perhaps calling him "Master Li" was more out of admiration, while "husband" signified a desire for equal communication?
"Haha... I’ve been into wellness recently; there’s more impressive stuff."
"Yay... Let’s try it tonight?"
"Definitely, losers will be puppies!"
"No problem!"
Biting, how hard could that be!
Today, Jiang Banxia realized the Green Water Group had reached such a scale.
She usually didn’t have time to pay attention to Green Water Group, even though she herself is a shareholder.
After returning, she looked at Green Water Group’s annual report and was dumbfounded.
Revenue was 26 billion?
Expenditure was 27 billion?
On the surface, it’s a loss of 1 billion, with overall company debt nearing 10 billion.
But just from the over 20 billion revenue, the potential of this company is immense.
It’s not a state-owned monopoly but a normal food processing and retail company.
This is a terrifying presence, especially with self-operated products bringing in over 16 billion annually in revenue.
Most of this money goes to nearby counties and Fuguang Group in Jiangbei.
Incredible, truly incredible!
How many years has the food processing retail industry existed, and yet Li Yang could seize so much market share?
"Husband, is Green Water Group issuing more shares this year?"
"Yes, August probably, sticking to our usual plan — issuing more shares, likely to raise 1.8 billion."
Jiang Banxia immediately raised her hand and said, "I’ll do it! All mine!"
"No problem!"
This money, Li Yang intended to stockpile grain and oil, although the grain and oil sector has hardly any profits, especially Green Water Group’s self-produced edible oil brand, which, despite cleaner production and more hygienic materials, lacks market competitiveness and currently only operates at a loss.
He doesn’t know when the money for equipment and production lines will be recovered.
For the same price, big enterprises have a gross profit margin of 40%, highlighting the difference in scale and process.
As for pork, Li Yang didn’t stockpile it, because at the end of last year, Green Water Group purchased 180 tons to make pre-cooked dishes.
Including canned meat, braised pork belly with preserved vegetables, and braised pork.
That was when pork prices hit their lowest, and bulk purchase was only eleven yuan per jin.
Now pork prices have skyrocketed, bulk purchase costs 24 yuan per jin, and it will continue rising next year.
Those pre-cooked dishes are all stored in the cold storage now, and in surrounding counties, Li Yang arranged for Green Water Group to build large cold storages.
He doesn’t expect to make money; he just wants some people to afford a taste of meat when prices soar so high some can’t afford it.
Although the real scenario might not be that exaggerated, any money saved is good.
Last year, when the price of pigs hit rock bottom, selling was impossible.
He never needed to make money this way. As long as he can utilize foresight to balance material distribution, it’s fine.
Anyway, when pork was 40-50 yuan per jin, many families couldn’t afford to buy meat even once a week.