Chapter 724 – Conditions
Although Xu Changyou (Secretary Xu) promised Feng Yu that he will settle those small companies, Feng Yu still shook his head. “It’s not worth it. The purpose of investing is to make more money. Mayor Zhang, if I do not own any Bing City Machinery Company shares and it is still a state-owned enterprise, will you agree to let those small factories merge with the company?”
Zhang Ruiqiang looked embarrassed. He will definitely not agree to it. It was just like Feng Yu said. If Bing City Machinery Company wants to expand, it should be expanding towards the southern regions. Furthermore, Bing City Machinery Company had already set up multiple branch factories in different cities. It was not wise to diversify their resources in the same province.
But as a Provincial Government official, he had to support this proposal. These small factories would be part of Bing City Machinery Company, and all their products will be sold under Songjiang brand or Bing City (Agriculture Machinery) brand. The profits would be much more than before.
The local governments would be able to increase their tax income, and all the workers’ salaries will be increased. But it will be harder for Bing City Machinery Company to manage those factories.
Feng Yu could also help in the agriculture and pharmaceutical industries. But from Feng Yu’s attitude, he will not agree unless he stands to gain something from this.
“Feng Yu, if you let Bing City Machinery Company acquire or merge with the machinery factories or metal works factories, we can let you have some tax subsidies this year. Also, if you need to expand your factories, I will help you get the land parcels. Are you willing to accept this proposal?”
Zhang Ruiqiang felt that Feng Yu was waiting for him to offer some benefits. If not, Feng Yu would not mention this. This was Feng Yu’s usual habit. Leading people into his trap.
But at this moment, Zhang Ruiqiang got to choose a stance. Furthermore, this would help Xu Changyou, and it would be a good thing for the whole province.
Feng Yu looked at the provincial and Bing City map on the wall. He walked over and used his finger to draw two circles. “These two plots of land will be auctioned next month? I think we should save the trouble and just sell it to Tai Hua Supermarket Corporation.”
Zhang Ruiqiang frowned. Feng Yu had wanted these two plots of land last year. But due to a delay in the demolition and relocation of the residents, the auction of the land parcels was delayed to next month. Was Feng Yu eyeing these plots of land from the start?
Xu Changyou looked at Zhang Ruiqiang. The land was in Bing City, and Zhang Ruiqiang was more familiar with that area.
“These two plots of land are the prime location in Bing City. We are going to turn it into a commercial zone.”
Feng Yu shrugged his shoulders: “Can’t you see how successful our Tai Hua Supermarkets are? With our supermarkets there, the traffic will increase. We are also making huge contributions to the city. Many cities had invited us to set up our supermarkets in their area. Moreover, our hypermarkets are not considered commercial buildings?”
“Those two plots of land cost 40 million RMB!” Zhang Ruiqiang raised the price. The area of those two plots of land was not big, and last year’s valuation was around 30 million RMB. If the land was put up for auction, it should fetch slightly more than 30 million. Zhang Ruiqiang does not think it will fetch 40 million RMB at the auction. He knew Feng Yu was a tycoon and purposely raise the price.
Feng Yu suddenly slapped his forehead. “Ah…… I almost forget that Tai Hua Supermarket Corporation does not want to set up any more supermarkets in Bing City and the surrounding cities. I think the city should continue to put those land parcels up for auctions. I still have a flight to catch. I will make a move first.”
Zhang Ruiqiang was dumbstruck. If it weren’t for Xu Changyou, he would have shouted at Feng Yu. What flight? If you think the price is too high, just say so!
“How much do you think is suitable?” Zhang Ruiqiang asked with a long face.
“The market rate is more suitable. My men had evaluated those areas. The land area of those parcels are not a lot, and we are willing to offer 32 million RMB to buy them.” Feng Yu looked at Zhang Ruiqiang and said.
“35 million RMB! This should be the price at the auctions!” Zhang Ruiqiang gritted his teeth and replied.
“Fine, fine…… I can accept even if it is slightly more expensive. My hometown is also Bing City, after all.” Feng Yu said with an “I am letting you take advantage of me” tone.
Actually, when Zhang Ruiqiang said 40 million, Feng Yu almost agreed. Tai Hua Supermarket had intended to bid for these two land parcels at the auctions, and they knew two other companies were also interested. The final price of those two land parcels will surely be much more than the valuation.
Furthermore, 40 million RMB was cheap, according to Feng Yu’s standards. The location of the land parcels was among the best in Bing City. In his previous life, it as Carrefour and Walmart that owns them. Their businesses were terrific. The surrounding areas already have other shopping malls and many residential estates.
“I have agreed to your terms. Shouldn’t you say something about our conditions?” Zhang Ruiqiang asked.
“You said Bing City Machinery Company will be exempted from taxes earlier.”
“It’s tax subsidies!” Zhang Ruiqiang corrected Feng Yu. There was a great difference between tax exemption and tax subsidy.
“Both are the same.” Feng Yu replied. “How much subsidies are you giving us?”
Zhang Ruiqiang looked at Xu Changyou, and then said: “This year, there will be a 10% tax subsidy from all the factories.”
“I suddenly realized that we cannot afford to buy so many factories. But since you all mentioned this, I will discuss with the other shareholders and buy two factories.”
“20%! That’s the max! You are also not investing in a new factory. Those factories can start work immediately after you take over. We can’t deduct too much tax for you!” Zhang Ruiqiang furiously replied.
“Feng Yu nodded: “Ok. Deal. If there is nothing else, I will leave now.”
“We have not finished yet. Why are you leaving? Bing City Pharmaceutical Enterprise must also acquire those small pharmaceutical factories. Are you ok with this?” Zhang Ruiqiang grabbed onto Feng Yu. We had sold two land parcels to you, and you just agree to one condition?
“Bing City State-owned Assets Supervision and Administration Commission of the State Council is the biggest shareholder of Bing City Pharmaceutical Enterprise. I am fine with it.” There were only 3 to 4 small pharmaceutical factories in the province, and it was not a problem for Bing City Pharmaceutical Enterprise to buy them out. These small factories could manufacture some simple drugs. As long as those drugs were sold under Bing City Pharmaceutical, their sales will not be bad.
“Then what about Tai Hua Food Processing company? Can they acquire some pig farms and smaller food processing factories?” Zhang Ruiqiang continued asking.
“We will not acquire any more pig farms. We have already started cooperation with those smaller pig farms, and it was working well. As for those smaller food processing factories, we can still discuss. But what’s the use of us acquiring them? Our Longjiang province already has our milk powder brand. My suggestion is to merge all those factories and sell milk powder under this brand?”
“You all can also restructure and organize those food processing plants. For instance, flour mills, alcohol, etc. These factories can be merged together to become a bigger enterprise and increase their competitiveness. I am sure you all have your own plans on how to do this. I can help if you all encounter any problems in building your brands.”
Feng Yu mentioned some successful products from his previous life. He does not have any experience in these areas, and it is better to let the provincial government handle it. There are still some capable people in government service.