Chapter 439: Settled in Nanshan
The leaders of Nanshan Science and Technology Park were somewhat surprised when they heard that Baichuan Electric wanted one thousand acres of land.
After all, for the newly developing Pengcheng, a factory of one hundred acres is considered a large enterprise.
Who would have thought that this Japanese electrical appliance brand would ask for thousands of acres right away? How could that not surprise everyone?
But the shock is not over yet. The CEO of Shirakawa Electric plans to invest 30 million US dollars to build a factory in the science and technology park.
Thirty million US dollars, not thirty million RMB.
When Nanshan Science and Technology Park was first established last year, the total investment was RMB 20 million.
This is because the government and Zhongke Institute jointly put up so much money, otherwise Pengcheng would not dare to make such a big fuss.
But now this young man can get 30 million US dollars with just his mouth, which is about 103.5 million RMB according to the current exchange rate.
This investment is more than five times the founding capital of Nanshan Science and Technology Park, and it is only the first phase of the project.
Liang Xiang's lips trembled twice. He was extremely eager for this investment, but he didn't dare to make the decision.
With his eyes slightly turned back, a leader standing beside him thought calmly for two seconds before slowly speaking.
"Mr. Shirakawa, we welcome Shirakawa Electric's series of investment activities in the Science Park.
But due to policy reasons, and considering that the laws and regulations in China are different from those in Japan.
We suggest that both parties jointly invest to establish a joint venture to give full play to each other's advantages and deepen the domestic and overseas markets."
30 million US dollars, who wouldn’t be tempted?
The whole of China is now running out of foreign exchange. According to internal information leaked out, some confidential items are said to be being considered for sale.
So faced with the temptation of 30 million US dollars, it is impossible not to be tempted.
However, some things need to be made clear in advance. This is a matter of principle and also concerns whether we can continue to cooperate smoothly in the future.
After listening to what the leader surnamed Xie said, Bai Chuanfeng sighed slightly in his heart.
As expected, this is also a Chinese characteristic.
In order to protect the local market and the development of local enterprises, and also to learn technology, foreign investment in China at this time was basically carried out in the form of joint ventures.
This type of cooperation applies to most areas, from automobiles to raw materials.
The electronic products sold by Shirakawa Electric are naturally also within this range.
As for purely foreign-owned enterprises, they were extremely rare in China at that time. If you want to see large-scale wholly foreign-owned enterprises, you may have to wait until after the 1990s.
However, although it can only invest in the form of a joint venture now, Shirakawa Electric cannot give up this market.
As the old saying goes, get in early and eat meat early.
If you wait for a few years until China has changed drastically and then come in to share the market, it will be too late.
Moreover, with the appreciation of the Japanese yen, the outflow of Japan's domestic manufacturing industry is inevitable.
If you want to protect your profits, you can only try every possible way to reduce costs.
Otherwise, it is hard to say whether Shirakawa Electric can still maintain its position as a first-tier brand ten years later.
Baichuan Feng thought about it for two seconds, then turned around to confirm.
"Mr. Xie, if we adopt a joint venture, how will the shares be allocated?"
"According to the convention, in Sino-foreign joint ventures, the Chinese side holds at least 51% of the shares, and foreign capital holds at most 49% of the shares."
This is a very typical joint venture ratio, and was even written into textbooks later.
Since then, most automobile companies in China have also followed this joint venture ratio. However, due to special historical reasons, the newly established Shanghai Volkswagen in 1984 has a shareholding ratio of 50% each.
If the distribution is based on this method, then Shirakawa Electric will hold 49%?
Bai Chuanfeng frowned slightly, which made him a little hesitant. After all, it was about the right to speak in the future, so he had to be cautious.
Whether in terms of technology or business strategy, Shirakawa Electric has its own system.
To be honest, between the two, China may have to rely more on Shirakawa Electric.
But the shares were reversed, which made him a little worried. If there were disagreements in the future, how would they be resolved?
As if noticing his hesitation, the leader surnamed Xie added one more sentence.
“Of course, considering that Shirakawa Electric’s products are mainly consumer entertainment electronic products for the general public.
The joint venture ratio has been specially approved by the superiors. You can retain 55% of the total share capital, and the local institution will invest the remaining 45%. "
Shirakawa Electric's products are not as sensitive as automobiles and will not involve the technological layout of the entire industrial chain.
In addition, careful internal screening confirmed that the founder of Shirakawa Electric was a person friendly to China.
Therefore, the joint venture ratio was deliberately relaxed and the strategy of local enterprises dominating was no longer maintained.
This is already a big policy concession, which is not easy to achieve in today's era.
Baichuan Feng also understood this, so he nodded to express his gratitude for the conditions offered by the leader named Xie.
"In principle, Shirakawa Electric agrees to this cooperation, but the details still need to be discussed internally before a specific ."
"Of course, we look forward to the success of this cooperation with the utmost sincerity." Leader Xie nodded in approval.
Shirakawa Electric needs to have internal discussions, and Huaxia also needs to report the relevant situation to its superiors.
After all, we are still in the stage of crossing the river by feeling the stones, and all decisions need to be discussed repeatedly.
However, the leaders present knew that if nothing unexpected happened, the joint venture would definitely be approved.
Not to mention that the other party paid out US dollars, which were in short supply in China at the time. In addition, the "Regulations on Encouraging Foreign Investment" would be promulgated in half a year.
The cooperation that Shirakawa Electric brought to our doorstep this time is a perfect example.
Therefore, it is reasonable and logical for both parties to have Shirakawa Electric settle in Pengcheng.
"By the way, if the cooperation is reached, Shirakawa Electric hopes to start production before the end of the year. Can this goal be achieved?"
The continued appreciation of the yen has also put great pressure on Shirakawa Electric, so the transfer of production capacity should be done as soon as possible.
Hearing Bai Chuanfeng's request, Liang Xiang patted his chest. "Don't even mention the end of the year, half a year! In October! The factory must be ready!"
In terms of technology, Pengcheng may be a little behind at this time, but in terms of speed, Liang Xiang is definitely not inferior to anyone.
There is strength in numbers, and the Chinese people are the most hardworking people in the world. The slogan of Pengcheng Speed is not shouted in vain.
"Okay! Mr. Liang said so. I am more confident about this cooperation."
Tsk, Baichuan Feng was also deeply infected by this enthusiasm for doing things.
“The total investment of US$30 million remains unchanged, but due to the progress of the project, this investment will be gradually implemented over the next three years.
In addition, considering that some equipment needs to be shipped from overseas, Shirakawa Electric will initially invest US$10 million for the purchase of special equipment.
Your investment can be deducted from the labor and material costs of the factory construction."
What Baichuan Feng lacks the least now is US dollars, so he speaks with confidence.
He knew that his hometown was short of foreign exchange at the time, so Baichuan Electric was responsible for external procurement.
The investors here in China only need to be responsible for the construction of the factory and the purchase of domestic alternative equipment.
Although they spent a lot of money, it was already a big help to them.
Moreover, after the joint venture between the two parties, China can also learn the advanced technology of Shirakawa Electric.
This includes management experience, the establishment of a quality system, and the training of qualified workers, etc., which are all intangible assets for China.
As for the procurement of raw materials and some parts after the factory is established, it is of course natural to use local products instead.
This will be a huge driving force for boosting the economy of the entire Shenzhen and even improving some industrial chains.
At this time, China was hungry for all technologies and advanced management experience.
Leader Xie held Bai Chuanfeng's hand tightly and shook it vigorously, "Bai Chuan Electric is a good friend of the Chinese people!"
The news from above was indeed correct. This Japanese friend did have a special liking for China.
Both sides exchanged pleasantries again, and Baichuan Feng's inspection trip to China was considered to have completed the first leg of his work.
In the next few days he will continue to head north, passing through Shanghai, Suzhou, Tianjin, and finally arriving in Yanjing.
This time, in cooperation with Pengcheng, Shirakawa Electric mainly wants to carry out the design and development of products such as radios and walkmans here.
Cultivating the local market is part of the reason, but it can also be used as a springboard to expand into the Southeast Asian market.
In addition, Baichuan Electric's investment in China is not limited to Pengcheng. More factories will be built here in the future.
Possible locations include CD factories, optical drive factories, LCD TV factories, and even the notebook factory that Shirakawa Electric is developing.
They will be split up into different companies and spread across the country.
Making full use of China's resources is one reason, and sharing risks is another factor.
After all, unlike in Japan, Shirakawa Electric is still very immature here, and its connections, resources, and network are no longer comparable.
Building in steps and building in different areas are necessary measures.
However, it may take some time until government agencies support the establishment of wholly foreign-owned enterprises before Baichuan Feng will consider entering the Chinese market on a large scale.
Even though it was his first hometown, he still had his concerns during this period.
The joint venture factory now settled in Yupengcheng is at most a first test.
He hoped that one day, the headquarters of Baichuan (Huaxia) could be established on this land.
In fact, before coming to China, Shirakawa Kaede had already been to Izu once.
Relatively speaking, the atmosphere there is more open, so Shirakawa Electric also established its own branch there.
The main purpose is to establish a contract manufacturing factory dedicated to producing Walkmans, CD players, game consoles and other products that are popular overseas.
Of course, its scale will not be too large, it can only be regarded as a transition.
When the Japanese bubble is over and China becomes more open, that will be the best time for Shirakawa Electric to relocate its production capacity.
Therefore, Shirakawa Kaede’s main task this year is to conduct inspections overseas and make preliminary plans for the future internationalization of Shirakawa Electric.
He will probably spend the next two months in China.
And unlike the leisurely state of vacation, constantly on the road may be the norm.
Tsk, but could you please ask the senior to come over and keep me company?
It seems a bit lonely to be alone.
