Chapter 31: Chapter 31: Agricultural Machinery Products
Then, the meeting continued.
Wang Ye turned to the production director, who had been grinning since he heard about the bonus, and said, "Director Lv, how is the progress on our gas cylinder production?"
Upon hearing this, the production director quickly replied, "Don't worry, Chief Wang, I've got everything arranged. I'm keeping a close eye on it every day, there won't be any problems! Rest assured, I won't delay our deliveries. I've got it all under control."
Wang Ye nodded and added, "Although our gas cylinders don't need to be extremely durable, we still need to ensure their quality. This is our first business deal, and we plan to use it as a stepping stone to enter the African market in the future. We absolutely cannot afford any quality issues. I've made it clear to the workers, if our reputation is tarnished..."
Before Wang Ye could finish, the production director immediately stood up, his face flushing, and explained, "Chief Wang, you can rest assured. We all understand the importance of this. I personally inspect every gas cylinder, and if there are any problems later on, if our reputation is damaged, you can hold me accountable!"
Hearing this, Wang Ye was about to say something when the old factory director interjected with a cold snort, saying, "What good does it do to hold someone accountable after the fact? The key is to ensure strict production standards and improve quality control from the outset."
Wang Ye agreed, "Exactly, considering we've only got a thousand gas cylinders for this batch, Director Lv, you can personally oversee them. But what about when we have ten thousand or a hundred thousand in the future?"
"So, we need to find ways to standardize production and quality control processes. And, since we used to be a military factory, I believe everyone here knows the importance of this better than I do."
After all, military-grade quality standards are much higher than those of ordinary factories because any accidents could have catastrophic consequences.
"Wang Ye, I'll take care of this matter," the old factory director asserted. "You just focus on the future direction of our factory!"
Finally, the old factory director, using his lone arm, took on the responsibility and continued, "But Wang Ye, what about our gas cylinders? Once we've delivered this batch, it might be difficult to find more orders in the short term, right?"
"Tractors are all well and good, but we're short on funds, and even if Director Li can find suitable prices, it'll take a long time from installation to production."
"We can't just sit on our laurels, can we?"
Perhaps because Wang Ye had been so generous with distributing funds, the old factory director felt a lot of pressure, hence his inquiry.
Wang Ye nodded and extinguished his cigarette, saying, "You're right. The tractor project has a long cycle, and gas cylinders are not a long-term solution."
"Besides the issue of clients, even though I've instructed Director Li and Director Liang to keep our gas cylinders confidential, there's no such thing as an impenetrable barrier. Other factories will soon find out, and this technology isn't particularly difficult. Copycats will emerge soon."
"Furthermore, the profits from these gas cylinders aren't as high as you might think..."
As soon as these words were uttered, the expressions of the six factory leaders present changed dramatically. After all, the main cost of gas cylinders is steel, costing less than thirty yuan each. When you add in labor, utilities, and losses, the total cost is still less than fifty yuan!
Yet these gas cylinders are sold for five hundred yuan, in US dollars!
The state also subsidizes them at a market exchange rate of thirteen to one, making it 6,500 RMB!
Nearly a hundredfold profit margin, and he says it's not high?
The six factory leaders were shocked by Wang Ye's statement, but quickly realized that Wang Ye was being modest and humble, showing his success.
"I think this profit margin is pretty good, to be honest!"
"Yeah, with profits that high, where else can we find such good business?"
"If we were to share this news, other state-owned factories would envy us!"
"Exactly, Wang Ye, you're being too modest. We couldn't even dream of this in the past."
"If all our future businesses could have such profits, I'd wake up laughing in my sleep!"
With these praises from the six factory leaders, Wang Ye couldn't help but smile wryly. Although what he said just now sounded like boasting, it was the truth.
Because these people didn't know that the biggest part of the profits from gas cylinders actually came not from "trade" but from government subsidies, which were clearly not in line with market rules. In the next few years, this ratio would decrease more and more, and profits would naturally decline.
Secondly, once the secrecy of the gas cylinder matter was compromised, for other state-owned factories, it would be like seeing meat in a wolf's den. They would definitely rush to seize it. After all, in this era of rapid development, as long as there is enough profit, the risk of exporting military products is nothing!
And you can imagine, under the influence of the abundant martial virtue and rich imagination of China, those gas cylinders would definitely be played around with, and price suppression is also an old tradition of Chinese enterprises. In the end, profits would only become more and more meager, leaving only joy for those in Africa and desert areas.
However, Wang Ye had no intention of explaining these issues to them. He just slowly opened his notebook and said, "But regardless."
"Just as the old director said, we can't rest on our laurels, nor can we be complacent. We must continue to move forward."
"So, I've designed another product."
"It's considerably more difficult than gas cylinders. Take a look."
"I believe this product will bring us even greater profits!"
Then, amidst the astonished and delighted gazes of everyone present, they looked at Wang Ye's notebook, and instantly, everyone was stunned. The old factory director stammered, "Is this... a rocket?"
"Is it a 120-millimeter caliber?"
"Wang Ye, are we really doing something this big?"
Hearing the old factory director's voice, under the gaze of the other five leaders, Wang Ye shook his head and said, "No, this is an agricultural machine product, a rain-enhancing rocket."
"Of course, it can also be used as a fire-fighting product, a fire-extinguishing rocket."
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