Chapter 122 Seeking a Breakthrough

Chapter 122 Seeking a Breakthrough

Chapter 122 Seeking a Breakthrough (Medium Cup)
Jiang Miao took a look at a document that was handed over from the secretary's office.

"Haida Group?"

"Yes, this is the cooperation invitation they sent this morning." Business Secretary Liu Deming nodded.

As Jiang Miao looked at it, he asked, "Is there any information about this company?"

"Yes." As a business secretary, Liu Deming naturally knew that he had to prepare the information in advance, so that when the boss asked questions, he would not show up as incompetent and know nothing.

He opened another document and said, "Haida Group is a well-known agricultural and animal husbandry high-tech enterprise group. It was established in Yangcheng in 1998 with a registered capital of over 15 billion yuan. It currently has more than 600 branches and subsidiaries and nearly 4 employees. It was listed on the A-share market in Pengcheng on November 2009, 11 and ranks among the top five in the global feed industry."

"Its business scope covers the entire modern agriculture and animal husbandry industry chain, including feed, seedlings, animal health vaccines, smart breeding, food processing, etc. Among them, the feed business includes aquatic feed, livestock and poultry feed and aquatic feed premixes, which is the main source of revenue, accounting for more than 85% of revenue."

Jiang Miao raised his eyebrows: "Feed production company?"

Liu Deming added: "This is also an enterprise that our company has cooperated with before. Our farm has been purchasing fish feed from them before."

“They are looking for us to cooperate in developing feed products?”

Liu Deming described what he had learned in a clear and logical manner: "Boss, in fact, their company's R&D strength is not weak. It has a central research institute, three R&D centers, more than ten R&D pilot bases, a scientific research team of more than 1700 masters and doctors, and an R&D investment of more than 46 billion. It has formed a relatively mature technology system. It currently has more than 200 invention patents and is at the leading level in China in the selection and breeding of high-quality aquatic seedlings and the development of microecological preparations."

Jiang Miao smiled and shook his head: "If they were really that strong, they wouldn't have cooperated with us. Have you ever understood the financial situation of this company?"

"Yes, since they are a listed company, their financial statements are relatively easy to find."

"Tell me."

"According to the financial report they disclosed, their net profit in 2024 was 24.36 billion yuan, a year-on-year decline of 11.13%; their net profit in 2023 was 27.41 billion yuan, a year-on-year decline of 7.31%; their net profit in 2022 was 29.57 billion yuan, a year-on-year increase of 80.74%. This year's financial report has not yet been released."

Jiang Miao saw that Haida Group sold a total of 2231 million tons of feed last year, and its feed industry accounted for about 85% of the total revenue, which means that 24.36% of the 85 billion yuan was the net profit generated by the feed industry, or 20.706 billion yuan.

This means that the company only made an average of 92.8 yuan per ton of feed last year.

Seeing this, he understood why Haida Group rushed over to seek cooperation.

Because the price of fish meal and fish oil this year has been affected by a sharp drop in production in Peruvian fisheries, the market price has been rising for five consecutive months.

Currently, the landed price of Peruvian fish meal or Hokkaido fish meal with a crude protein content of 67% has reached about 1.6 yuan per ton.

Similarly, as a bulk commodity among feed raw materials, the price of soybean meal has also shown a significant increase this year. The current market price is 3628 yuan per ton, an increase of about 14% from the beginning of the year.

Under such circumstances, major feed producers will face a serious crisis of rising raw material prices.

However, at present, major feed producers have no way to significantly raise prices, because the global feed industry's production capacity is in a state of relative oversupply, and everyone is caught in a brutal internal competition.

Price increases are not just a matter for your own company. It also depends on whether your competitors are willing to increase prices at the same time. Otherwise, you will only end up hurting yourself.

The wholesale prices of feed from various feed manufacturers are below the cost line, and the profits are very low.

Compared with other feed producers, Hailufeng Company has obvious advantages.

Master the production of core raw materials.

A new feed formula for efficient breeding.

Monopolizes two segments of the fish feed market.

In the first two months after Hailufeng Company started selling feed, Haida Group did not find anything unusual. It was not until early November, when they were counting sales in various regions in the previous month, that they discovered that sales of their own company's eel feed in eastern Guangdong had declined significantly. They then hurriedly sent people to investigate the matter.

During this investigation, they discovered that Hailufeng Company was selling eel feed and Egyptian catfish feed.

After further in-depth investigation, the sales department of Haida Group found that Hailufeng Company was very unusual. Compared with Haida Group, which needed to purchase fish meal, fish oil, soybean meal and corn from outside every year, Hailufeng Company had initially achieved self-sufficiency in some core raw materials.

As one of the giants in the feed industry, Haida Group's feed research and development department is very strong. After preliminary testing based on feed samples and various information collected by the sales department, it was discovered that the feed produced by Hailufeng Company not only has a very fine ratio, but can also effectively reduce the feed-to-meat ratio and shorten the growth cycle of eels.

After more than a week of feeding experiments, they found that the eel fishy-removing feed can indeed effectively reduce the geosin content in eels.

This incident soon alarmed Xue Hua, chairman and president of Haida Group.

The management of Haida Group held meetings for several consecutive days and finally decided to try to contact Hailufeng Company first.

Originally, some of their company's senior executives proposed to acquire Hailufeng Company, while others proposed to directly imitate the other party's feed.

However, after they got a thorough understanding of the details of Hailufeng Company, they stopped talking about the acquisition and "borrowing" of feed formulas.

The reason is very simple. They found that Hailufeng Company's profits were astonishing. It had paid more than 200 million yuan in various taxes in the first half of this year. Judging from its operating conditions, its profits are expected to be even higher in the second half of the year.

Haida Group’s revenue last year was 1103 billion yuan, and its full-year net profit was less than 25 billion yuan.

Hailufeng Company's net profit in half a year exceeded 5 million.

It seems that Haida Group is huge, but what’s the use?

The annual net profits of the two are not much different, which is very telling.

One is a clay-foot giant.

One is short and compact.

Moreover, the smallness and strength of Hailufeng Company is only temporary, similar to the incomplete development of a minor. In a few years, it will probably become a national and even global giant.

As for the idea of ​​borrowing a recipe.

After investigating the 163 patented formulas for eel feed and 67 patented formulas for Egyptian catfish feed registered by Hailufeng Company, everyone in Haida Group gave up this unrealistic idea.

This obvious family of patents shows that Hailufeng Company attaches great importance to the protection of intellectual property rights. As feed is an export product, the other party only needs to check and take the feed for testing to know the general situation of the feed.

As Haida Group is already treading on thin ice, and given its characteristics as a listed company, it will not win a lawsuit for such blatant infringement of other companies' patents.

In that case, you will end up losing the rice instead of the chicken.

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

The cooperation invitation that Jiang Miao had in his hand at the time was that the other party hoped to introduce the No. 4 feed formula for feeding Egyptian catfish in the production of fish meal and fish oil.

Jiang Miao could guess a little about Haida Group's intentions. It was likely that Xue Hua wanted to lower the high production costs of feed by producing fish meal and fish oil on a large scale.

The other party mentioned another cooperation, that is, their company promised not to enter the niche field of deodorizing feed, and hoped that Hailufeng Company could develop matching deodorizing feed.

In other words, Haida Group intends to lower the cost of some of its ordinary feeds through Egyptian catfish fish meal and fish oil, thereby achieving cost reduction and profit increase.

However, because Egyptian catfish fish meal and fish oil are used as feed, the earthy smell in aquatic products will increase to varying degrees, seriously affecting the quality of aquatic products.

At this time, you need to use Hailufeng Company's deodorizing feed.

Jiang Miao thought for a moment, raised his head and ordered: "De Ming, inform Haida Group that I can meet them at noon tomorrow."

"Okay." Liu Deming nodded. At the same time, he didn't think there was anything wrong with his boss's tone.

After all, this cooperation was initiated by the other party, rather than Hailufeng Company begging the other party. Jiang Miao naturally would not go to Yangcheng to waste time. If the other party was really sincere, he would come here in person to negotiate.

Liu Deming had just replied to the other party's email, and in less than half an hour, he received a reply.

Haida Group is also very clear about who is the big and small king, and said that their chairman will come in person tomorrow at noon to discuss cooperation matters.

The next day, noon.

Jiang Miao and Jiang Haibo, as well as Qin Hanming from the Price Research Office and business secretary Liu Deming, received Xue Hua and his group who came from Guangzhou in the restaurant of the experimental area.

"Mr. Xue, please take a seat."

"Mr. Jiang, I've long heard of your name." The square-faced Xue Hua looks like he's in his forties, but he's actually 55 years old this year.

Jiang Miao poured a cup of tea for the other party: "Mr. Xue, have some tea."

"Mr. Jiang, you are too polite. This time we are here mainly to reach a cooperation with your company. I wonder what conditions Mr. Jiang has?" Xue Hua, who has a technical background, did not mean to beat around the bush. "Your company wants to ease the pressure of raw material supply by breeding Egyptian catfish. This is indeed a good idea. I also have my own ideas about the planning of the Egyptian catfish industry." Jiang Miao said slowly:
"If your company raises catfish by itself, the overall cost can be reduced to 1.5 yuan per kilogram. The catfish fed with our company's special formula has a crude protein content of about 25%. Each ton of catfish can produce 373 kilograms of fish meal. With other costs, the cost of each ton of fish meal is about 4400 yuan."

Xue Hua nodded: "Indeed, we can do this."

"This is the contradiction. At present, our company's unified purchase price for Egyptian catfish is 3 yuan per kilogram. Of course, we will lower the purchase price to 2.5 yuan per kilogram starting next month, which means that our cost per ton of fish meal is about 7000 yuan."

After hearing this, Xue Hua already understood the contradiction.

The difference in cost between the two parties is 2600 yuan.

Obviously, this money is the benefit that Hailufeng Company gives to the farmers.

However, Haida Group is likely to produce Egyptian catfish by itself, so this money will definitely become its profit margin.

Jiang Miao didn't want to let the other party get away with it.

After all, Egyptian catfish also has a by-product called fish oil, which is also very valuable.

After thinking for a while, Xue Hua said his solution: "How about this! For every ton of Egyptian catfish meal we produce, we can pay your company 1000 yuan in patent fees?"

"It's low, don't forget the fish oil."

"1500, this is basically our limit."

"1600. Your cost can be kept at 6000."

Xue Hua discussed it quietly with several managers for a while, then nodded: "Okay."

"Pleasant to work with."

Xue Hua smiled bitterly in his heart, this is the power of technological leadership.

If they do not use Hailufeng's patented feed, the cost of breeding Egyptian catfish will increase to 2 yuan per kilogram, and the crude protein content of fish meat will only be around 20-22%.

Although there are some small fish meal factories in China, the cost can be as high as 4000 to 5000 yuan per ton.

how did you do that?
Of course, they use scraps and semi-rotten aquatic products that are not wanted in the market. The quality of this kind of fish meal is very poor. Not only does it deteriorate very quickly, but it can also easily make the aquatic products and livestock and poultry fed sick, or result in an unobvious fattening effect.

In addition, this kind of fish meal is produced by small factories, the production capacity is very unstable, and it is impossible to supply it in large quantities.

Large feed factories like Haida Group will not purchase such inferior fish meal.

As for imported fish meal, even in the cheapest years, the worst type of Peruvian 65% crude protein fish meal has a starting price of RMB 6000 per ton.

In other words, even if Haida Group accepted the unfair contract from Hailufeng Company, its total cost per ton of fish meal would only be 6000 yuan.

The key is to control the supply of some core raw materials, which is the most critical for Haida Group.

Otherwise, once there is any disturbance in the international community and the prices of fish meal, soybean meal and corn soar, they will be caught in a passive position and a large part of the company's profits will be swallowed up.

Without our own raw material supply channels, we sometimes don’t even have the bargaining power.

Of the top 10 fishmeal producers in the world, except for the second-ranked Coca-Cola which was acquired by China Fishery Group, the other nine are foreign companies, and have close ties with the four major grain traders ABCD and Western capital.

In order to break this dilemma, Haida Group must cooperate with Hailufeng Company.

Xue Hua quickly discussed another cooperation project: "We want to cooperate with Hailufeng Company to research better feed. What do you think, Mr. Jiang?"

However, Jiang Miao shook his head. He knew that his research style was different from that of ordinary people. If he cooperated with Haida Group, the researchers sent by the other party would probably find something unusual. Therefore, he rejected the proposal:

"Mr. Xue, this kind of joint research and development is too troublesome. The ownership of patents, the proportion of capital investment, the contribution of researchers on both sides, and the confidentiality of technology are all very likely to go wrong."

"Okay!" Xue Hua also knew that this kind of thing was difficult.

After all, Hailufeng Company has strong technology, while Haida Group is huge in scale. It will easily lead to conflicts as to who has the final say on the R&D projects.

He then made the next best choice: "Mr. Jiang, I admire your R&D capabilities very much. If your company needs to produce feed on a large scale in the future, we at Haida can provide you with OEM services."

"This can be considered." Jiang Miao nodded with a smile.

Sometimes OEM is also an option, especially when you need to increase production capacity in a short period of time. You can choose a large feed production company like Haida Group, which has a large amount of idle production capacity.

If you set up your own factory, the cycle will be extended and the initial cost will soar.

However, Jiang Miao did not completely trust these OEM companies. If something went wrong with them or the cooperation was suddenly terminated, the company's feed supply would be affected.

Therefore, even if it wants to find Haida Group to do OEM, Hailufeng Company still needs to have its own factory to avoid emergencies and supply disruptions.

From the conversation just now, Xue Hua also had a preliminary understanding of Jiang Miao's personality and style of doing things. It was obvious that Jiang Miao was a person with a strong desire for control, otherwise he would not have chosen to register a sole proprietorship. From this point of view, he could basically guess that the other party would not completely hand over the feed outsourcing to Haida Group.

He smiled and changed the subject: "Mr. Jiang, do you have any ideas for developing other fish feeds?"

"Indeed there is, but it takes time." Jiang Miao naturally would not say that he already knew the genes of most aquatic products and could customize feed for them based on their genes.

After all, rice has to be eaten bite by bite.

If too many high-efficiency feeds are launched at once, it will not only impact the market but also attract outside attention, which is not what Jiang Miao wants to see.

"By the way, Mr. Jiang, your company can remove the Egyptian catfish geosmin from the feed formula. Can you authorize it to our company?" Xue Hua did not intend to miss this opportunity.

Jiang Miao glanced at the other party and said, "Boss Xue wants to remove the earthy smell of the Egyptian catfish? To avoid affecting the sales due to the high content of geosin, right?"

"That's right." Xue Hua did not deny it.

"It's not impossible, but your production cost of Egyptian catfish will increase. Even if you have an advantage in feed cost, the comprehensive cost per kilogram will still be around 3.3 yuan. Add to that the licensing fee you pay us, and the comprehensive cost per ton of fish meal will reach 11200 yuan."

After hearing this, Xue Hua realized that he had thought too simply.

If it was possible to do this directly, Jiang Miao would have done it long ago.

The cost of fish meal is 11200 yuan per ton. Considering the current international fish meal price of 17000 yuan per ton, it is naturally profitable and the profits are huge.

The problem is the price of the international fishmeal market. On the one hand, it is affected by the sardine catch in Peruvian fisheries; on the other hand, it is also affected by the purchase volume of feed manufacturers; finally, those large fishmeal producers can also unite to adjust the market price.

Once Haida Group obtains fish meal on a large scale through Egyptian catfish, the price of fish meal in the international market will surely plummet.

In this case, if the fish meal cost of Haida Group is 11200 yuan per ton, as long as the fish meal price in the international market is lower than this price, Haida Group's fish meal and related feed will lose competitiveness.

On the contrary, the version with a cost of 6000 yuan per ton at the beginning is the most competitive version.

After all, the cheapest price for transporting fish meal from Peru to coastal ports in East Asia is only 6000 yuan per ton.

If the other party continues to lower the price, Haida Group can also request Hailufeng Company to reduce the licensing fee, which is also the supplementary clause requested by Xue Hua.

This is mainly to guard against the outbreak of a price war.

The cost of Peruvian fish meal is not low. The transportation cost from the coast of Peru to the coast of East Asia alone is 840 to 1000 yuan per ton. This hard cost is difficult to compress.

Xue Hua knew senior executives of China Fishery Group, who had revealed to him some information about the Cobinc company controlled by China Fishery Group, such as the gross profit of Peruvian fish meal was about RMB 200 to 1000 per ton.

This means that in the years with the lowest prices, even if the Peruvian fish meal producers do not intend to make money, the sales price cannot be lower than 5000 yuan per ton. If the price is lower than this, they will lose money.

The production cost of Haida Group is 4400 yuan per ton, plus 1600 yuan in technology licensing fees to Hailufeng Company.

When necessary, the only way to maintain the price balance between the two parties is to reduce the licensing fees paid to Hailufeng Company.

After lunch.

In the evening, the legal teams of both parties discussed the relevant terms.

Jiang Miao and Xue Hua, representing Hailufeng Company and Haida Group respectively, signed a strategic cooperation agreement.

(End of this chapter)