I See through Everything

To provide a better quality of life, an average of 40 square meters of living space per person would be required.

Considering meals are also provided, a 120-square-meter apartment wouldn’t need a kitchen, only bathrooms and a small living room. After accounting for the common area, it could be divided into six rooms of about 15 square meters each, more than enough to house six employees.

During the initial expansion into the Pearl River Delta Region, we certainly won’t grow too large. The entire Pearl River Delta has about 34 districts, and we’ll set up one specialty store in each. As for warehouses, three will suffice for the whole region: one in Peng City, one in Yangcheng, and one in Foshan.

Thirty-four specialty stores and three warehouses would require about 260 people.

Housing 260 people would require purchasing 50 apartments of 120 square meters each.

Five hundred million in funds would be more than enough.

However, considering the need for future expansion, we will definitely need to build up a reserve of employee housing.

Shuya said with a smile, "Sis, when the time comes, you can buy my apartment in Panyu, too. I’m not living in it anyway."

"Shuya, that’s the apartment your parents left you. Is that really necessary?" Jiang Xia felt this wasn’t quite right.

However, Shuya shook her head. "The apartment my parents lived in is with my older brother. My own place has just been rented out. I don’t plan on going back to Panyu now anyway, so I might as well sell it to the company."

Jiang Xia looked at her younger brother, at a loss.

"Sis, since Shuya said so, just go ahead and buy it when the time comes." Jiang Miao didn’t see any issue with it.

"Alright, then!" his sister nodded.

Her husband ladled out a bowl of soup and suddenly remembered something. "Ah Miao, there’s something I almost forgot to tell you."

"What is it?" Jiang Miao placed a piece of salt-flat mutton onto his mom’s plate.

"A few days ago, Gan Province, through Luling, asked if we were interested in acquiring Hero Dairy."

Jiang Miao’s brow twitched. As a Lingnan native, he was only familiar with the three major dairy corporations, as well as the local Fengxing Milk and Yantang Dairy.

His brother-in-law guessed he wasn’t familiar with the brand and gave a brief introduction. "It’s a relatively well-known brand from Gan Province. It was acquired by Bright before, and now it’s in bankruptcy receivership."

"What’s their angle?"

"Gan Province wants to find a new owner for Hero Dairy. Currently, of Hero Dairy’s shares, Sunshine Holding Group holds 55% and Zhijie Management holds 18%. The two have also signed a consistent management agreement, which means you can basically treat them as a single entity. According to information from Gan Province, Sunshine Investment is interested in selling its shares in Hero Dairy."

Jiang Miao fell into deep thought. Based on this information, if Hailufeng Company were willing to acquire Hero Dairy, it could get 73% of the shares in one go.

Acquiring Hero Dairy wouldn’t put much financial pressure on Hailufeng Company.

But he knew that for Hero Dairy to have reached this state, it most likely had huge internal problems. Furthermore, the current management team couldn’t be kept on.

"What’s their asking price?"

"For the combined shares of Sunshine Holding Group and Zhijie Management, the asking price is 73 million yuan. The other shareholders haven’t made their positions clear yet."

"What about the debt?"

"The debt is 138.27 million yuan."

Jiang Miao thought for a moment, then made a decision. "Brother-in-law, have Liu Changqing handle this. As long as the other shareholders of Hero Dairy are willing to sell all their shares, we can take it and assume all the debt. If they aren’t willing to sell their shares, then forget it."

"I understand."

Jiang Miao wanted to acquire Hero Dairy in its entirety, not have other shareholders sticking around and getting in the way.

If the other shareholders weren’t willing to let go, he would rather give up on the acquisition.

He couldn’t afford any loose ends.

After all, judging from Hero Dairy’s current operating status, it was obvious it had a lot of internal problems. This kind of company needed a drastic overhaul, and leaving other shareholders in place was clearly inappropriate.

As for whether Hailufeng Company could turn Hero Dairy around...

In Jiang Miao’s opinion, dairy companies weren’t that difficult to run. As long as the hard metrics were good, you could put a pig in the CEO seat and it would still run itself.

Especially for a company like Hailufeng, which owned its own feed raw material production bases, the cost of milk production would drop significantly. This would also conveniently create an internal market for the Gannan Branch’s Purple Alfalfa and white clover.

As for packaging costs, domestic packaging companies were on the rise. The era of Tetra Pak Company’s monopoly was long gone. Nowadays, the packaging costs for major domestic dairies were more or less the same.

Transportation costs depended on the distance between the source factory and the consumer market. The area Hero Dairy could cover was the Yangtze River Middle and Lower Reaches Plain; it wouldn’t have a transportation cost advantage in other regions.

Looking at the three core costs combined, if Hailufeng Company acquired Hero Dairy, it would have a strong local advantage in the Yangtze River Middle and Lower Reaches Plain.

Besides, even if it lost tens of millions a year, Hailufeng Company could afford it. Being rich meant you could be willful.

When it was time to act, you had to act.

After dinner, Jiang Miao took some time to investigate Hero Dairy’s situation online.

After some in-depth research, it was just as he’d expected. After being acquired, Hero Dairy was plagued by intense internal struggles. Coupled with intentional and unintentional suppression from its parent company, the company had been on a downward slide ever since the 2002 acquisition, with its performance worsening year after year.

Furthermore, he even found internal discussion documents from Sunshine Holding Group and Zhijie Management, uncovering some fishy details and discovering their psychological bottom line was around 55 million yuan.

As for the other shareholders, they had also more or less shown an interest in selling their shares, but they just couldn’t find a buyer to take them off their hands.

There were two main reasons these minority shareholders wanted to abandon Hero Dairy.

On one hand, it would be difficult for Hero Dairy to make a comeback. They didn’t have enough money to buy out the whole company themselves, and having witnessed years of internal strife, they also understood that without 100% control, there was no way to perform the kind of drastic, painful reforms necessary.

On the other hand, the domestic dairy industry was already a red ocean. Not only was the market’s consumption potential not expanding, it was actually shrinking to varying degrees.

This was due to the broader economic environment and the decline in the number of newborns, which led to an overall drop in demand for milk powder. This forced the dairy industry into a terrifying battle over existing market share.

As industry insiders, these shareholders were clearly not optimistic about the future of the dairy industry.

After all, people in China didn’t have the habit of drinking milk like water, as they do in Europe and America. In China, milk was treated more like a nutritional supplement or health product, not an everyday beverage.

Now that he had a clear picture, Jiang Miao put the matter out of his mind.