Chapter 856: Nandu Reform
After sitting and chatting for a while, Song Chaoyuan got up and continued to help with sweeping the house. After they finished worshiping the kitchen god and all the ceremonies, they had dinner. Lin Daoyuan got up and asked Song Yuanchao to go to the study to chat.
When they arrived at the study, Song Yuanchao took out the good tea leaves he had stored, boiled water and brewed a pot of good tea himself. The father-in-law and son-in-law sat down to drink tea, smoking and talking.
Lin Daoyuan asked Song Yuanchao about his work in the United States. Song Yuanchao did not hide anything from Lin Daoyuan and gave him a general account of his situation and business activities in the United States. He also talked about the acquisition of Liu Cixin's factory in Pengcheng and the VCD project that was about to be launched.
"The technical patent for this project is in the hands of an American company?" Lin Daoyuan asked.
Song Yuanchao nodded: "It is mainly due to some patents and subsequent development reasons. Domestically, production is carried out through patent licensing, and the company that owns the patent is overseas. In addition, this operation is also conducive to the export of products . You also know that home appliances are somewhat different from other commodities. Europe and the United States have their own standards."
Lin Daoyuan thought about it and nodded, although he felt that it would be more appropriate if the patent was in a domestic company. After all, a brand new product was developed by himself, which was a kind of pride and honor. However, Lin Daoyuan was not an old antique who didn't know anything. Whether he was in the Planning Commission in the early years or went to the local area later, Lin Daoyuan still knew the company very well and understood that some things were not as simple as they seemed. Song Yuanchao's consideration and arrangement also had his purpose and ideas.
Furthermore, the final production is still located in China. Whether it is domestic sales or export sales, the profits generated are real. Compared with these economic benefits and market changes brought about by the products, some other issues are not big problems.
It's a pity that this promising product will be put into production in Pengcheng, because Song Yuanchao acquired Liu's factory in Pengcheng. In addition, Lin Daoyuan has retired now, otherwise Lin Daoyuan would have kept this project in Jinling.
"By the way, let me tell you something." Lin Daoyuan put down the teacup in his hand and said.
Song Yuanchao raised his head and looked at Lin Daoyuan, sitting upright with a serious attitude.
"I'm afraid Nandu will have to change its structure."
"Nandu needs to reform its system?" Song Yuanchao was stunned, then he was happy, but also a little confused.
How come he hadn't heard about the restructuring of Nandu? Song Yuanchao had been paying attention to Nandu. He had asked Sun Yaoliang to befriend Xiang Xianrong in order to plant a nail in Nandu and get news about Nandu at any time. But now Lin Daoyuan suddenly told him that Nandu was going to be restructured? But there was no news from Sun Yaoliang.
"This matter is currently just a small-scale discussion, and we haven't sought the opinion of Nandu yet." Seeing the confusion in Song Yuanchao's eyes, Lin Daoyuan explained.
Song Yuanchao suddenly realized that there would be no problem in this case. It seemed that the reform was just the intention of the higher-ups.
"Dad, what do the city or province think about this reform?" Song Yuanchao asked.
Lin Daoyuan smiled and said meaningfully: "Why? You can't hold back after hearing this news?"
"What you said is true. After all, when I went to work in Jinling, I was working in Nandu. After all, this is my old unit..."
"Okay, stop trying to play these tricks on me, kid. How could I not know that you've been keeping an eye on Nandu for so many years?" Lin Daoyuan asked back unhappily.
Song Yuanchao smiled embarrassedly, and then continued to look at Lin Daoyuan with inquiring eyes.
Taking a cigarette from the cigarette box, Song Yuanchao quickly lit it for Lin Daoyuan. Lin Daoyuan took a puff and said slowly: "The situation in Nandu has not been very good in recent years. I think you know the specific reasons better than me..."
Song Yuanchao nodded silently . He was very familiar with the situation of Nandu, even though he had been paying attention to it in the United States for the past six months. As Lin Daoyuan said, Nandu had not been doing well in the past few years, especially after Song Yuanchao left Nandu. As Jiang Dahai and other old Nandu leaders left one after another, new leaders took over Nandu. Although they made certain changes to Nandu, Nandu still inevitably went downhill due to various problems.
In fact, when Song Yuanchao went to Nandu as deputy director, Nandu had already shown signs of this. However, as the largest food company in Jinling, Nandu still had a large market share, and with its strong foundation for many years, it still looked prosperous on the surface, but in fact it was full of hidden dangers.
Lin Daoyuan once asked Song Yuanchao about his opinion on Nandu, and Song Yuanchao also spoke frankly about his views. It was because of this that a branch factory later separated from Nandu to form the Sit joint venture company.
In recent years, Nandu's situation has been getting worse and worse. The company has a large number of retired employees and a heavy burden, its products are stale, internal friction is serious, and the market is shrinking... What is even worse is that with the arrival of the 1990s, for various reasons, many companies in the whole society have serious triangular debt problems. This problem has gradually begun to erupt, and Nandu, as a long-established state-owned enterprise in Jinling, is also deeply involved in it.
According to what Song Yuanchao knows, the amount of triangular debt involved in Nandu is as high as 37 million, which is a staggering amount. You should know that Nandu's product sales last year were less than 30 million. According to Nandu's product gross profit margin of about 12%, the annual gross profit was only about 3.5 million. However, if you remove the normal expenses of the enterprise, such as equipment depreciation, production consumption, employee wages, retirement wages, welfare and other expenses, the enterprise is actually losing money.
But the problem is that the huge triangular debt has dragged down Nandu. The triangular debt of more than 37 million is like a mountain pressing down on Nandu, making it difficult for it to breathe.
Besides products, the main factor that determines the success of a company is its cash flow. Even if your products sell well in the market, once the cash flow is cut off, the company will be in danger. Moreover, Nandu’s products have not changed for many years, and it has relied on its old capital for so many years. With the emergence of new similar companies and new products in the market, Nandu’s situation is getting worse.
Lin Daoyuan shook his head and said, "Nandu's funding has been in trouble since the year before last. In the past two years, the city has allocated several sums of money to Nandu, with the total amount exceeding 30 million. The original plan was to let Nandu use the money to save itself, whether it was internal restructuring or revitalizing the company itself, or at worst to resolve the debt first. Who would have thought that the money would eventually become a waste of money and never come back."
"At the end of last year, Nanfang Daily once again reported its funding and debt problems to the city government, hoping that the city government could allocate another 10 million yuan to help Nanfang Daily. After the report was submitted, several comrades in the city government started arguing. Now, comrades in the city government feel that Nanfang Daily has become a bottomless pit, and that it is asking for more and more each time. If this continues, no amount of capital injection will help."
Taking a puff of cigarette, Lin Daoyuan looked a little annoyed. "Fiscal money doesn't just come from the wind. In the past two years, the debt problems among enterprises have been very serious. Some have even affected the normal operation of enterprises. The provincial and municipal governments have made a lot of efforts to solve this problem, but the results are not very good. Moreover, the funds invested never show actual results. On the contrary, more and more are invested."
"Sometimes, the government's bottom line cannot be unlimited. Take Nanfang Daily as an example. A lot of money has been invested in it. Who can guarantee the final result if more money is invested? So this time Nanfang Daily asked the higher authorities for help again. The city really didn't think Nanfang Daily could solve these problems on its own. Some comrades suggested that and that it could try to reform its system."
Hearing this, Song Yuanchao nodded to show his understanding. Although Nandu is a large food manufacturer and a brand of Jinling, it has now become a hopeless case. The debt problem has not been solved, the business operation has been in trouble, and there have been many management problems. It has survived only by relying on transfusions from higher authorities. This is simply a superficial solution and does not address the root cause.
Moreover, the current triangular debt situation of various enterprises is very serious. Relying on simple capital injection to solve the problem is like adding more water to flour and more flour to water, which will lead to the result that the more you clear, the more you owe, and the more you owe, the more you owe.
By next year, the scale of triangular debts in China will reach 300 billion, which will directly affect the normal operation of the national economy. Nanfang is one of the companies involved in triangular debts, and Nanfang has many problems of its own. Simply relying on the bottom line cannot change Nanfang's situation.
Because of this, Lin Daoyuan told Song Yuanchao that after discussion, the city felt that Nanfang must be restructured, but there were different opinions on how to restructure. Some people thought that Nanfang's management should be adjusted, and Nanfang should be restructured internally starting with the managers. Some comrades also felt that the rigidity of the state-owned enterprise system was the root cause of the problem, and even if a few managements were replaced, it would probably not have a good effect. The previous approach had been tried, but the result was still the same. It would be more efficient to make real changes.
Due to different opinions, there was no consensus within the city, and eventually the ball was kicked directly to the provincial government, which was asked to decide on the reform plan of Nandu.
Due to Lin Daoyuan's original work in Jiangsu Province, the provincial comrade currently in charge of this matter specifically sought Lin Daoyuan's opinion. After all, Lin Daoyuan overcame all objections and separated out a branch of Nandu as a pilot joint venture, thus establishing the current Si Te Company. Today, Si Te Company has become a famous food and beverage company in Jinling, Jiangsu Province and even the whole country. Its scale has long surpassed Nandu, and its annual output value and tax revenue are dozens of times that of Nandu.
The success of the joint venture of the first branch, namely, SITE, can be said to be a highlight of Lin Daoyuan's work in Jiangsu Province. Out of respect for the old leader and taking into account the old leader's foresight in enterprise reform, the comrades in the province made a special call to Lin Daoyuan.
