Chapter 1010 New Cooperation
As Song Yuanchao listened to Zhang Yong's explanation, he couldn't help but start to think about it.
Although Song Chaoyuan had never been involved in this business, he had to admire Zhang Yong's vision and judgment.
From the late 1990s to the early 21st century, the domestic steel industry experienced tremendous development. Even though Song Chaoyuan had no involvement in this industry, he still knew something about the situation in the era of information explosion in later generations.
From the 1980s to the early 1990s, the proportion of iron ore in China's imported ore resources was not high, and it was just a supplement to the production of domestic ore. This is similar to what Zhang Yong told Song Chaoyuan, and the overall market price is also very low. The international market price of high-grade iron ore is only around 20 US dollars.
However, after domestic steel production began to surge in the mid-1990s, the amount of imported iron ore began to increase year by year. Currently, the annual import of iron ore has suddenly increased from the initial hundreds of thousands to millions of tons in previous years to tens of millions of tons, and this growth rate can be said to be very amazing.
Zhang Yong operates mineral resources abroad, and the mining company he owns is currently the largest private mining company in Bolivia.
That’s not all. Zhang Yong has been making plans over the years. Through multiple mergers and acquisitions, he has extended his tentacles to other countries, especially neighboring countries such as Brazil. Moreover, through cooperation with a British mining company, Zhang Yong not only reached a strategic partnership with the other party, but also became one of the other party’s directors by acquiring shares, thus gaining a certain voice in the company.
It can be said that Zhang Yong's mining empire has grown to a considerable scale. Although it cannot be compared with the world's top giant groups, it is still considered to be of considerable importance in the industry.
In addition, Zhang Yong had a unique vision and predicted the development of China's steel industry in advance, and was the first to obtain a share of ore exports to China. Although the current profit is not much, Zhang Yong is convinced that this move is very necessary.
Zhang Yong had a good vision. When Hong Kong returned to China the next year, the development of domestic steel companies accelerated further. By 1998, the amount of imported iron ore exceeded 28 million tons. By 2003, this figure had been refreshed to 148 million tons, making it the world's largest steel producer.
As the amount of iron ore imports soared, the price in the international market also began to rise gradually. In just a few years, the price of iron ore rose from less than $20 to about $45. After 2000, the price soared to the $60 range. Although there were some downward fluctuations, the overall upward trend remained unchanged. In 2003, the price of iron ore broke through $80 and reached a high of $82. After that, the price was stable for a period of time after regulation, but after 2005, the price of iron ore rose again, this time directly breaking through the $100 range, just like a wild horse running wildly.
There are certainly some other reasons for the future surge in international iron ore prices, but one thing is real, and that is the surge in domestic demand for iron ore raw materials, including other mineral raw materials.
"Brother Yong, what do you mean...?"
"We are old friends, so I will just speak frankly." Zhang Yong smiled and said to Song Chaoyuan and the others, "I can guarantee the mineral resources. The current sales channels in China mainly rely on companies in Hong Kong. Yuan Chao, I know your abilities and your strong connections in China. Shenghua's strength is also no problem. If this business is to really grow, we must cooperate directly with relevant domestic departments. I think you agree with this, right?"
"You mean you supply the goods and I'll be responsible for channel sales?" Song Chaoyuan asked.
"Almost, but not limited to this simple." Zhang Yong said seriously: "There are many specific ways of cooperation. For example, we can jointly establish a company, and my mining company will authorize this company to sell in China, and then distribute future profits according to the proportion of our respective shares. Or as you said just now, I supply the goods and you are responsible for sales, and the price can be operated according to the market price. It is a normal business cooperation. In addition, we can sign a long-term price range. Of course, this time will not be too long, generally one year at most two years. During this period, my supply price will remain unchanged, and the profits and losses caused by price fluctuations in the international market will be borne by each party."
"In addition, there are other cooperation models. I just gave a few examples. Of course, if you have any good ideas, you can also put them forward and we can discuss them with each other."
Song Chaoyuan and Qin Zhengguo exchanged glances. They didn't expect Zhang Yong to propose cooperation on this project today.
"I need to think about this matter carefully. You know that we at Shenghua have never run such a business before. Also, I need to finalize the channels before I can give you an answer." As a friend, Song Chaoyuan did not beat around the bush and answered directly.
Zhang Yong smiled when he heard it. "There's no rush for this. I just mentioned it. It would be great if we could cooperate. After all, we know each other well. I prefer to cooperate with you rather than others. How about this? I won't stay in Hong Kong for long. Xiao Fan will stay for the time being. He will go to Shanghai to finish the things at hand and then open an office in Shanghai. If you have thought it through, tell me. How about letting Xiao Fan handle the subsequent specific matters?"
"Of course no problem!" Song Chaoyuan agreed with a smile.
After talking about this, Zhang Yong stopped talking about it, and then everyone talked about other things. At noon, they had lunch together at Zhang Yong's place. In the afternoon, Song Chaoyuan and Qin Zhengguo left first. Zhang Yong didn't try to keep them because he had to meet other guests later. He personally saw them off. Before leaving, he asked Song Chaoyuan and the others to get together again before leaving. Song Chaoyuan agreed and shook hands to say goodbye.
On the way back, Song Chaoyuan was thinking about something, and Qin Zhengguo was sitting beside him, also thinking. When the car arrived at Qin Zhengguo's home first, Qin Zhengguo was about to get off the car and turned around to ask Song Chaoyuan if he wanted to go to his house for a cup of tea and a cigarette. Song Chaoyuan was not polite and got off the car with him immediately.
"What do you think of Zhang Yong's suggestion today?" When he got into the room, Qin Zhengguo was too lazy to make tea. He closed the door of the study, took out a cigarette and lit it, then asked Song Chaoyuan directly.
"What? Are you interested?" Song Yuanchao asked with a smile.
"A little bit." Qin Zhengguo nodded. "Big Brother has closed his business, but we can't just disband the existing team, right? If this project is feasible, it would be a good alternative."
Song Chaoyuan had not considered this point. He had been thinking about other issues. Qin Zhengguo's mention of this matter made him agree.
"Tell me first what you think specifically." Song Chaoyuan sat down and lit a cigarette, asking seriously.
Qin Zhengguo said: "Although I don't understand this business, I think Zhang Yong's judgment is correct. The most important thing is that Zhang Yong has direct mineral resources. In this business, resources are the first priority, and having resource channels is secondary. What do you think?"
Song Chaoyuan nodded slightly, motioning him to continue.
Qin Zhengguo continued, "As for how to cooperate with domestic companies, we can decide later, but whether to do the project is the most important choice. In addition, don't forget about Lao Sun and Lao Lu. Their current companies are also engaged in raw material resources. Although the products are slightly different, the operations are the same. In addition, they have cooperation with some steel companies on scrap steel projects. From this point of view, they are not short of basic channels."
"Also, to put it bluntly, Zhang Yong is looking for us to cooperate because he values Shenghua's strength, or he values your..." As he spoke, Qin Zhengguo stretched out his hand and made a gesture. Although he did not say it explicitly, Song Chaoyuan understood what he meant and nodded without comment.
Song Chaoyuan also thought of this about Sun Yaoliang and Lu Hairong’s company.
Although Sun Yaoliang and Lu Hairong started their own company, Shenghua also owns some shares in the company, even though Shenghua is only the third largest shareholder. Shenghua's participation is what Sun Yaoliang and Lu Hairong wanted. Not to mention their friendship with Song Chaoyuan, just relying on the channels and resources that Shenghua brings to the company after becoming a shareholder will allow them to achieve twice the result with half the effort in the development of the company.
This is indeed the case. After Shenghua acquired shares and the company was established, Song Chaoyuan provided them with a lot of help, which is one of the reasons why their company was able to grow rapidly.
Moreover, Shenghua owns shares in this company, which also means that their company is also a member of the Shenghua Group. The current Shenghua Group is not very well-known in China, because the members within the Shenghua Group are different from other business alliances. Many members and companies have gradually developed , thus forming a relatively closed circle that is difficult for outsiders to enter. Therefore, compared with the powerful certain associations or certain groups, not many people know about it.
However, in the business world, some entrepreneurs or businessmen who know Shenghua Group are very clear about how powerful Shenghua Group is. In addition to the companies under Shenghua Group or some brother companies in which Shenghua Group has equity, Shenghua Group's tentacles also extend overseas. However, Song Chaoyuan, as the helmsman, has always been low-key and rarely shows up in public, so those who don't know him naturally don't know much.
"I have no objection to this." Song Chaoyuan originally had the idea of cooperating with Zhang Yong. Since Qin Zhengguo also thought so, Song Chaoyuan went with the flow.
Moreover, the presence of Sun Yaoliang and Lu Hairong's company and the fact that the team at Big Brother took over also happened to avoid the embarrassment of Li Daqi and Luo Yang facing Zhang Yong directly, so there was nothing to worry about. As for other aspects, Song Chaoyuan was not worried at all. According to what he knew, this business would be a sure win in the next few decades. Zhang Yong proposed to cooperate with him not only because he valued Shenghua's strength, but also because he wanted to repay Song Chaoyuan's help in the past. Although Zhang Yong was a businessman, he was a very loyal person. Song Chaoyuan knew this because he had known him for many years.
A few days later, before Zhang Yong was about to leave Hong Kong, they got together again. This time the gathering lasted longer. Not only did everyone have a good meal, but they also discussed in depth the specific matters of cooperation. After the general plan was agreed upon, Zhang Yong happily picked up the wine in front of him and suggested that everyone drink a toast to celebrate. Song Yuanchao and Qin Zhengguo stood up with a smile, and together with Fan Baoguo, the four of them clinked their glasses together, then drank them all in one gulp. After putting down their glasses, they all laughed at the same time.
