While Sun Xu and a group of mechanics were busy installing and debugging the equipment of the second branch every day, Wang Liqing, the boss of Anhua Textile Company, was also busy with his feet on the ground.
For several days in a row, I was meeting or visiting many business partners or potential partners, most of whom were distributors and customers in the sales channel.
With the continuous expansion of Anhua Textile Company, especially after the acquisition of Longdong Textile Company and its transformation into the second branch, the output of Anhua Textile Company's new cotton yarn continued to rise, and when the production capacity increased to a certain level, sales naturally declined. encountered corresponding challenges.
That’s not to say that new cotton yarns can’t be sold. Now, new cotton yarns have only been available for more than two years, and they have quickly become the market benchmark due to their excellent quality and super cost-effectiveness. The downstream weaving factories are also following the direction and purchasing large quantities of new cotton yarns. Weave cloth with a higher cost performance.
Therefore, at present, new cotton yarn is still in short supply.
For the entire cotton yarn market, it is currently in a period of alternation between old and new, and the market share of new cotton yarns is still rising at a high speed.
Therefore, even if Anhua Textile Company's output increases significantly after setting up a second branch factory, there is still no need to worry about sales of this new type of cotton yarn.
The problem is that cotton yarn is also divided into mid-to-high-end and low-end. The most profitable among them is naturally not high-end cotton yarn. Although the cost is high, the selling price is higher, and the per capita output value is higher when produced.
But the high-end market is also limited. After all, the mainstream of the cotton spinning market is still a large number of mid- to low-end markets, and the high-end market is actually only a small market share.
In the past two years, almost all manufacturers that have started producing new cotton yarns have been producing high-end new cotton yarns in pursuit of profits. So many large integrated textile companies, plus a group of independent cotton yarn manufacturers, have all rushed to the high-end market.
Naturally, this high-end market quickly became saturated.
Therefore, starting from this winter, new cotton yarn manufacturers have begun to enter the mid-range market.
Anhua Textile Company is also facing the same situation. Relying on the sales channels created by Wang Liqing, especially the more than ten long-term strategic customers who have worked hard to finalize their cooperation, their high-end cloth production capacity is basically saturated... Even if They are expanding production, and it is estimated that high-end fabrics will not be sold... After all, the sales channels for high-end fabrics to these customers are also limited.
When facing competition, you can't just sell if you want to.
The high-end fabrics of downstream weaving manufacturers cannot continue to expand the market, and Anhua Textile Company, as a midstream supplier, naturally cannot sell more high-end cotton yarns.
The high-end market is saturated!
Under such circumstances, Wang Liqing also began to transform. He acquired the bankrupt Longdong Textile Company and built it as a second branch mainly producing mid-range cotton yarn. He continued to seize market share with new mid-range cotton yarn and maintained a certain high profit. It was a decision made by Wang Liqing and several senior executives.
This decision had actually been made in the summer. Although there was still room in the high-end market at that time, Wang Liqing and the others had seen signs that the high-end market was about to be saturated, so they started preparations in advance.
The acquisition of Longdong Textile Company resulted in the expansion of land and factories and hundreds of skilled workers. At the same time, the technical department also researched mid-end cotton yarn early to ensure a certain quality of cotton yarn while reducing production costs as much as possible to gain market competitiveness.
Only now has the second branch been established!
As the boss of the entire company, Wang Liqing also started to develop the market for mid-range cotton yarn in the early autumn. Although many potential partners were identified during this process, they were not put into large-scale production. Branch factories There is no mass production of mid-range cotton yarn, only some samples from the main factory for trial production, which are not very convincing.
On the one hand, many partners signed purchase contracts in advance because of the strength of Anhua Textile Company and Wang Liqing's reputation. However, there are also some partners who hope to see the products, especially after seeing that the production line has been stably put into production, before entering into business with Anhua. Textile companies sign long-term strategic cooperation contracts.
As for scattered sales, just finding some buyers... you can actually make more money in a short period of time, but this is not Wang Liqing's style.
The output of Anhua Textile Company is huge. When the second branch factory is put into operation in the future, its new cotton yarn production capacity can be regarded as the first among independent cotton yarn manufacturers in Songjiang City, even if it is placed in the entire Songjiang Prefecture area. In the industry, that is, including those comprehensive textile companies that produce and sell their own products, their production capacity of new cotton yarns can be considered among the top three.
Such a huge output of new cotton yarn does not mean that it can be sold casually in the market... without a long-term strategic partner, the business risk is too great. If there is any fluctuation, then there will be problems in the sales channel. If there is a sales problem, Then it will affect the operation of the entire company.
Once there is a problem in operations and production and sales fall, it is very likely that Anhua Textile Company's cash flow will be interrupted, and then it will be in big trouble.
You must know that in order to continue to expand and seize market share, Wang Liqing not only invested the factory's own profits in expanding the scale in the past two years, but also sought large amounts of loans from banks.
After all, Wang Liqing's ambitions are quite big. He wants to expand not only the factory itself, but also start to get involved in the upstream cotton supply industry. In addition to acquiring a company specializing in overseas cotton yarn import trade, he also acquired three cotton yarn companies in different regions. The cooperative planting company has five cotton yarn production bases in China. In addition to a small part of the cotton companies growing themselves, most of these production bases have signed long-term underwriting contracts with local cotton farmers to obtain a stable source of cotton. .
This kind of cotton underwriting contract is actually a very heavy operating burden for the enterprise. It is fine if nothing happens at ordinary times, but once there is a sales problem, it cannot be sold here, and the other side has to continue to spend money to purchase cotton from cotton farmers. This The cash flow squeezed out is very huge, and even a small amount will lead to bankruptcy.
Even though the Cotton Cooperative Planting Company seems to be engaged in a very low-end agricultural industry, in fact it is a serious capital-intensive industry, and it cannot continue without a lot of capital.
This situation is very similar to the raw silk industry. In the domestic raw silk industry, the nest silk factories purchase a large number of silkworm cocoons every year. However, currently, few silkworm cocoons can be grown and produced on a large scale. Family silkworm farmers generally do this. host.
In order to ensure the supply of their own silkworm cocoons, those nest silk factories often set up corresponding subsidiaries or cooperate with corresponding companies. These companies will reach exclusive underwriting agreements with the majority of silkworm farmers for several years. The silkworm cocoons raised by the silkworm farmers can only be sold. For them, the price is relatively fixed and will only fluctuate slightly.
And silkworm cocoons are expensive... Many large-scale nest silk factory companies spend hundreds of thousands or even millions on acquiring silkworm cocoons every year.
At the same time, silkworm cocoons are not produced stably all year round, but are matured and produced during a certain period of time. This means that at a certain period of every year, the Nest Silk Factory or related cocoon trading companies need to produce large quantities of cocoons. funds to purchase cocoons.
Then slowly process the cocoons into raw silk within a year, and finally sell them to slowly recover the funds... This means that the funds occupied by raw materials will be very large.
If you don't have enough funds, whether it's your own or loans... you can't play without a lot of cash.
Although the capital intensity of the cotton spinning industry is not as extreme as the raw silk industry, it is similar in the field of cotton yarn... When cotton farmers buy cotton in the autumn and sell it to you, they need to get money, and you want to sell the cotton. Or it can be produced into cotton yarn and then sold. This is a very long-lasting thing and puts a lot of pressure on funds.
Why was Wang Liqing able to acquire three domestic cotton yarn cooperative planting companies? It was because these three cotton yarn companies boasted too much, but their sales failed to keep up, which eventually led to a rupture of cash flow, operational difficulties, and finally had to be sold. .
On the other hand, the trading company engaged in cotton import trade is not a poorly managed company. On the contrary, it is running very well. It has a very stable source of cotton in the Americas. It makes money by transporting cotton back to the country. It is just profit. It's not that high.
After all, the prices of bulk materials such as cotton yarn are actually very transparent. It is almost impossible to make a lot of money just by being a second-hand dealer... After all, everyone is not stupid.
But these problems are not a problem for Wang Liqing, because Wang Liqing's Anhua Textile Company itself is a major consumer of cotton and consumes a large amount of cotton every year.
Wang Liqing acquired these three cotton planting companies and a cotton import trading company not to make much money in the cotton business, but to ensure that there would be no problems with his own cotton supply and at the same time reduce the cost of raw material procurement.
To put it bluntly, the subsidiaries that supply these raw materials are not expected to make money; it is the spinning factories that make money.
However, this series of acquisitions, especially the three capital-intensive cotton cooperative planting companies, required a lot of funds, and a lot of money was borrowed from banks for this purpose.
The establishment of a raw material supply system, coupled with the continued expansion of cotton yarn factories, requires a large amount of capital. Because of this, Anhua Textile Company actually has a lot of debt and attaches more importance to the stability of cash flow.
Therefore, there is an even greater need for some strategic partners who can make long-term purchases. Even if they make certain concessions in profits, Wang Liqing is willing to sign a long-term cooperation contract with these long-term purchase strategic partners.
But long-term strategic partners are not so easy to find.
The downstream weaving manufacturers are also afraid that Anhua Textile Company will have some problems one day, which will cause problems in their cotton yarn supply.
This kind of thing requires mutual trust between both parties, and it is not something you can just have if you want it unilaterally.
To this end, Wang Liqing has been running around in the past month or two. Relying on Anhua Textile Company and the stable goodwill he has established over the past twenty years, he has finalized some cooperative manufacturers, but the purchase amount of the contract is not. Much, even less than half of the expected total output of the second branch factory.
So he has to continue working hard and find as many strategic partners as possible!
Before that, these new mid-end cotton yarn production capacities that have not found long-term strategic partners still need other channels to sell them.
At this time, the original sales channels of Longdong Textile Company showed their value. Although the original sales channels of Longdong Textile Company were not on the market to some extent, the downstream channels were all small weaving factories. , even some family workshops, and some simply retail channels for cotton yarn... that is, cotton yarn is sold directly to wholesalers, wholesalers sell to retailers, and retailers sell to farmers in rural areas.
In modern times, in many places, especially in some remote rural areas where the economy is not very developed, there still exists a typical small-scale peasant economy, that is, self-cultivation and self-weaving. Many farmers even grow their own cotton... and then directly Spinning and weaving.
Anyway, the hand-spinning machines that appeared during the Unification War and were widely spread across the country are actually quite efficient (Jenny looms), and the hand-looms in some family workshops are also very efficient.
In some remote areas where transportation is inconvenient, the cost of importing external goods is high, and industrial development is lagging behind, this type of family-run textile industry still exists widely.
So don’t think that the Great Chu Empire even produced a new generation of new cotton yarn, and then instantly eliminated all other cotton spinning production models. In fact, that is not the case... Even now in the winter of the 37th year of Chengshun, Industrial high-pressure steam engines have been in the cotton spinning industry for more than ten years, but there are still many water-powered textile factories, and there are also a large number of family workshops that use manual spinning machines and manual looms.
The three generations of cotton spinning production technology, which seem to have vastly different production efficiencies, actually existed at the same time in the Chu Empire.
After all, the Chu Empire was too big...it had too many people. Although trains and ships had appeared for more than ten years, and large-scale industrialized cities had even appeared in cities along the eastern coast, there were still many places without trains. There were no ships, and the mode of transportation still relied on primitive land carriages and even shoulder-carrying.
Not everywhere can hear the roar of machines, and many remote rural areas still maintain a relatively backward situation.
In these remote and backward rural areas, the small-scale farmer economic model is still the mainstream economic model. There is actually no market for external industrial goods in these places... For example, cloth, regardless of the price of your cloth, local farmers just don't Sell...because it's useless no matter how low the price of your cloth is.
They would rather just grow cotton in the corners of the fields and mountains, and then spin, weave, and sew by hand... Even the spinning machines and looms are basically made by local craftsmen. Living space for foreign machinery factories.
The only products that can have a relatively good sales volume are various iron products, such as farm tools, kitchen utensils, daily hardware and the like.
This is not to say that these farmers do not know the benefits of industrial commodities. They actually also want to wear those brightly colored, non-fading, soft and comfortable cloths... The problem is that they cannot afford them or are reluctant to buy them.
For farmers in remote and backward areas who lack other sources of economic income and have no job opportunities, their sources of income are actually very limited, and the money at their disposal is even more limited, so they can save money in many aspects... even if they have to pay for it More labor time seems like a bad bargain to many city dwellers.
Many city people think that if they work in a factory, they can earn two or three yuan a month. These two or three yuan are enough for food and clothing.
But for people in remote rural areas, a cash income of two or three yuan a month is a luxury... Many remote rural families cannot even afford the tuition and books for their children to attend primary school, which is only more than one yuan a year.
The development of the contemporary Da Chu Empire is unbalanced... On the one hand, there are super big cities like Songjiang City, with big bosses with assets worth millions or even tens of millions, and there are also high-ranking officials like Sun Xu who earn thousands or even thousands. income group.
But on the other hand, there are still a large number of lower-class workers in Songjiang City who can only earn three or four yuan a month and barely have enough food and clothing. There are also farmers in remote and backward rural areas whose economic conditions are even more backward.
The existence of these situations has also led to the coexistence of handmade textile industry, water-powered textile industry, and steam textile industry in the cotton spinning industry.
There are pros and cons. This situation has actually given many cotton yarn manufacturers a new sales channel, that is, in addition to supplying to medium and large weaving factories in cities, they can also supply small weaving factories in rural areas. Family workshops supply high quality and cheap cotton yarn.
You can even buy cotton yarn directly in rural areas. Many farmers in rural areas do not grow cotton and spin yarn themselves. Instead, they buy high-quality and cheap cotton yarn produced by large factories from retailers in towns and cities, and then weave it themselves. Some people buy cotton yarn and weave it into cloth, and then sell it to those cloth purchasers, making a small amount of hard-earned money.
The original sales channels of Longdong Textile Company were aimed at the township market.
In fact, Wang Liqing didn't have much contact with this area before. After all, although his Anhua Textile Company didn't make much money before, its operations were relatively stable. They basically supplied to weaving manufacturers or small and medium-sized enterprises in surrounding cities. Integrated textile companies basically do not sell in bulk.
But now, Wang Liqing feels that in addition to supplying large quantities to large manufacturers, it is also a very feasible way to use Longdong Textile Company's original sales channels to expand sales channels in county and town markets.
After all, the cotton spinning industry is too big. The cotton spinning industry in big cities seems to be prosperous and lively, and there are many large companies.
But in fact, when it comes to overall output... In fact, the vast number of small textile companies and family workshops in counties and towns are the real giants.
In fact, most of the market for a giant like Su Qin Textile Company is limited to medium and large cities with convenient transportation, and even its market share in these cities is very small... The reason why Su Qin Textile Company became a giant , the reason is that although the share of their products in various places is not very good, they are sold all over the country... A little market share here, a little market share there... The total market sales in all parts of the country are huge. of the numbers.
Although Su Qin Textile Company is a giant, there are only a few such large textile companies in the country.
However, the number of small cotton spinning factories and even family workshops rooted in counties and towns is overwhelming... Even the imperial officials are not sure how many cotton spinning factories there are in counties and towns... because many micro-cotton spinning factories are based on The family workshop model exists, but it is too complicated and messy.
Even the tax department, which has always been extremely powerful, has difficulty figuring out the number and scale of these family workshops and successfully collecting taxes.
Family workshops are actually common in all walks of life, and they are difficult to manage and even more difficult to collect taxes.
But it is undeniable that family workshops played a certain role in the economic system of the Chu Empire, providing employment in counties and towns, and activating the economy.
This is also the reason why the empire's top officials still turn a blind eye to the existing family workshop economic model, although there are many problems, and it is even difficult to collect taxes.
This is just like sweet potatoes. Everyone knows that sweet potatoes cannot be eaten every day, as it will lead to malnutrition... but it is better than starving.
So even now, small and micro factories and family workshops are still an important part of the county and town economy in the Great Chu Empire.
Based on this situation, Wang Liqing believes that the county and town markets have great potential!
(End of chapter)
