I See through Everything

The reason was very simple: they had discovered that Hailufeng Company’s profitability was astonishing. In the first half of the year, it had already paid over 200 million yuan in various taxes. Judging from its current operations, its profits were estimated to be even higher in the second half.

Haida Group’s revenue last year was 110.3 billion yuan, with a total net profit of less than 2.5 billion yuan for the entire year.

Hailufeng Company’s net profit for just half a year had already exceeded 500 million yuan.

Haida Group might look enormous, but what was the use of that?

The fact that their annual net profits were not far apart spoke volumes.

One was a giant with feet of clay.

The other was lean and mean.

Moreover, Hailufeng Company’s "lean and mean" status was only temporary. It was like an adolescent who hadn’t fully developed. In a few years, it would likely transform into a national, or even global, behemoth.

As for the idea of "borrowing" their formulas...

After investigating the 163 patented eel feed formulas and 67 patented Egyptian Catfish feed formulas registered by Hailufeng Company, everyone at Haida Group dismissed this unrealistic notion.

This clear patent family demonstrated that Hailufeng Company placed great importance on protecting its intellectual property. Since the feed was a product sold externally, all it would take was a simple check—testing a sample of the feed—to figure out its general composition.

For Haida Group, which was already walking on thin ice, and compounded by its status as a publicly listed company, blatantly infringing on another company’s patents was a lawsuit they could not win.

At that point, they would not only fail to get the prize, but they’d also lose their initial investment.

Therefore, after careful consideration, Xue Hua decided to cooperate with Hailufeng Company after all.

The cooperation proposal in Jiang Miao’s hands right now detailed their hope to license the No. 4 feed formula for raising Egyptian Catfish for their own fish meal and fish oil production.

Jiang Miao could guess what Haida Group was thinking. Most likely, Xue Hua wanted to mass-produce his own fish meal and fish oil to drive down the high production costs of his feed.

The other part of the proposed cooperation was a promise that their company would not enter the niche market of taste-improving feed, hoping instead that Hailufeng Company would develop a complementary taste-improving feed for them.

In other words, Haida Group planned to use Egyptian Catfish Meal and oil to lower the cost of some of its regular feeds, thereby reducing costs and increasing profits.

However, using feed made from Egyptian Catfish Meal and oil would increase the muddy, fishy taste in aquatic products to varying degrees, severely affecting their quality.

And that’s where Hailufeng Company’s taste-improving feed would be needed.

Jiang Miao thought for a moment, then looked up and instructed, "Deming, notify Haida Group that I can see them at noon tomorrow."

"Understood." Liu Deming nodded. He didn’t find anything wrong with his boss’s tone.

After all, they were the ones who had come knocking, not the other way around. Hailufeng Company wasn’t begging them for this partnership. Jiang Miao naturally wasn’t going to waste time traveling to Yangcheng. If they were sincere, they could come here to negotiate in person.

Less than half an hour after Liu Deming replied to their email, he received a response.

Haida Group knew perfectly well who held all the cards. They stated that their chairman would personally come to discuss the collaboration at noon the next day.

「The next day at noon.」

Jiang Miao, Jiang Haibo, Qin Hanming from the Price Research Office, and his business secretary Liu Deming received Xue Hua and his delegation from Yangcheng in the research area’s dining hall.

"General Manager Xue, please have a seat."

"General Manager Jiang, I’ve heard so much about you." The square-faced Xue Hua looked to be in his forties, but he was actually fifty-five years old this year.

Jiang Miao poured him a cup of tea. "General Manager Xue, please have some tea."

"You’re too kind, General Manager Jiang. We’ve come today mainly to reach a cooperation agreement with your company. What are your conditions, General Manager Jiang?" Coming from a technical background, Xue Hua wasn’t one to beat around the bush.

"Your company wants to ease the pressure on its raw material supply by farming Egyptian Catfish. That is indeed a good idea. I also have my own thoughts on the planning of the Egyptian Catfish industry," Jiang Miao said slowly.

"If your company farms them yourselves, the comprehensive cost can be reduced to 1.5 yuan per kilogram of Egyptian Catfish. The ones raised on our company’s special formula have a crude protein content of around 25%. One ton of Egyptian Catfish can produce 373 kilograms of fish meal. Including other costs, the cost per ton of fish meal is about 4,400 yuan."

Xue Hua nodded. "Indeed, that’s something we can achieve."

"And that’s where the conflict lies. Our company’s current standardized purchase price for Egyptian Catfish is 3 yuan per kilogram. Of course, starting next month, we’ll be lowering the purchase price to 2.5 yuan per kilogram. This means our cost per ton of fish meal is around 7,000 yuan."

Hearing this, Xue Hua already understood the conflict.

There was a 2,600 yuan difference in costs between the two parties.

This money was clearly the profit margin that Hailufeng Company passed on to its farmers.

But Haida Group would most likely be producing the Egyptian Catfish itself, so this money would definitely become part of its profit margin.

Jiang Miao had no intention of letting them have it that easily.

After all, Egyptian Catfish also produced fish oil as a byproduct, which was also very valuable.

After thinking for a moment, Xue Hua proposed his solution. "How about this! For every ton of Egyptian Catfish Meal we produce, we can pay your company a 1,000 yuan patent fee. What do you think?"

"Too low. Don’t forget about the fish oil."

"1,500. That’s basically our limit."

"1,600. That way, your cost can be capped right at 6,000."

Xue Hua discussed it quietly with a few of his managers for a moment, then nodded. "Alright."

"A pleasure doing business with you."

Xue Hua smiled wryly to himself. ’This is the power that comes with having a technological advantage.’