Chapter 365: Wool Comes from the Pig

"Before Torch Group was established, I said that this is an industry that competes with developed countries on costs and with countries with low labor costs on technology. This is also Torch Group's advantage in the lighter industry globally in the future!"

Several people were sitting in the pavilion at the Yuhe Leisure Resort. The tea was boiling on a small stove, and the scenery of the entire Yuhe Leisure Resort was in full view.

Looking around, one can see the scale of the Yuhe Leisure Resort. Compared to the summer, the scale has expanded again, and a few kilometers away, a large construction site is also proceeding in full swing amidst the roar of machinery. That is the Pingyang Animal Park project.

And besides these two places, a new highway running through the Yuhe Leisure Resort and Pingyang Animal Park is also under construction. This new asphalt highway connects the provincial capital, Shangzhong, and other places, preparing to attract users from several cities in the future.

Of course, the money for building the road is definitely paid by Pingyang. After all, in Hanxi now, those who can take out money and invest heavily in infrastructure, besides the provincial capital, is Pingyang.

In addition, the surrounding areas of the Yuhe Leisure Resort and Pingyang Animal Park also reserved expansion space, leaving territory for introducing other projects later.

Inside, there is the reason for Li Dongling's suggestion. In fact, it is also the decision made by Yao Zhengru. He has read a large number of books on urban planning and changes in cities in America, Japan, Europe, etc., in the past few years.

The big projects he burned a few fires in Pingyang to engage in were not completely engaged in for the sake of achievements. He wanted Pingyang to become a bright pearl in his official career, so he spent a lot of thought and energy. Not only building roads, but also underground drainage systems and other pipelines were reserved.

Withdrawing his gaze, Li Dongling said to Yao Zhengru, Wu Yaoguo, and Zhang Xiaocheng, "We all know the purpose of Torch Group's establishment!"

When Torch Group was established, it was at that time that Li Dongling was preparing to form Dongling High-Tech's overseas sales channel and acquire an electrical appliance mall in France, which would cost more than 200 million US dollars in foreign exchange!

This sum of foreign exchange might not be much in later generations, but placed now, it is a huge sum. Previously, there had never been such a large-scale overseas acquisition case in the country.

Launching Torch Group was to get foreign exchange support for Dongling High-Tech from departments such as the Foreign Exchange Department and the Ministry of Commerce. This big cake was much larger than that 200 million US dollar foreign exchange.

If it can really reach the expectation, then this project is a big project that can provide tens of thousands of jobs and export 1.5 billion lighters annually within three years. Compared to 200 million US dollars of foreign exchange, it earns much more!

"There are not many opportunities left for Torch Group. If it fails to occupy an absolute advantage in the early stage and grab enough market share, then for Torch Group, it is a failure!"

Li Dongling turned the teacup in his hand. "Torch Group enters the mass-market lighter consumer market in the early stage and needs to win by quantity. Only with sufficient sales volume can Torch Group reduce production costs and get more profit!

Then give more profit to sales merchants, grab more market, and then increase more sales volume, repeating the cycle until it occupies an absolute lighter market in various places around the world!

With the basic plate of the mass-market lighter consumer market, in the future, Torch Group can transform and upgrade, enter the mid-to-high-end lighter market with higher profit, or launch other products according to the plan!"

In the final analysis, the plan Li Dongling made for Torch Group is the same as the original Dongling High-Tech, both are to find a basic plate first.

Just like the heroes competing for the world in ancient times, I haven't heard of any wandering bandits who can sit on the emperor's throne. Those who can compete for the world definitely have their own territory, men and horses, money and food, otherwise they can never succeed.

Placed on Dongling High-Tech, digital cordless phones are Dongling High-Tech's basic plate. Now in the global digital cordless phone industry, the Shenzhou brand occupies half the country, especially in the high-end digital cordless phone market, most of the profits are taken by Shenzhou.

Now Shenzhou digital cordless phones bring more than 100 million US dollars in revenue to Dongling High-Tech stably from overseas markets such as Europe and America every month. This income will continue for many years, and even ten or twenty years are possible.

When there is this basic plate of digital cordless phones, Dongling High-Tech has the confidence. It can attack everywhere with this basic plate. No matter how many times it fails, with the basic plate, it can make a comeback!

And the mass-market lighter market looks like a low-end lighter market, but as long as it is done, it is basically a stable basic plate. It is too difficult for latecomers to want to replace Torch Group!

Then use this market as a springboard to enter the mid-to-high-end lighter market with the highest profit, or launch other products such as electronic cigarettes, gas stoves, bathroom products, etc. After all, developing and promoting these products also requires funds.

The lighter industry, the annual output value of the entire industry, is only within 10 billion US dollars, which is the result of decades of development. Electronic cigarettes only took a few years to sweep the tobacco markets in America and Europe, with annual revenue exceeding 20 billion US dollars.

In the future, when Torch Group mechanizes and automates the production of lighters, it won't need so many production line personnel. Products such as electronic cigarettes, gas stoves, and bathroom products can undertake the staff who have retired from Torch Group's lighter production lines, so they won't be "graduated" in middle age.

Yao Zhengru, Wu Yaoguo, and Zhang Xiaocheng looked at each other. They had no doubts about Li Dongling's vision and decision. Dongling High-Tech being able to reach today has already proven everything.

"Just do as you say, Dongling!"

Yao Zhengru said. He represents one of the three major shareholders of Torch Group, Pingyang City Investment. Among the three major shareholders of Torch Group, Pingyang City Investment, Hanxi State Investment, and Dongling High-Tech, with two of the three major shareholders standing together, they can basically make decisions for Torch Group.

Wu Yaoguo also agreed, which basically represents that the three major shareholders of Torch Group all agreed to do it according to Li Dongling's decision.

"I understand!"

Zhang Xiaocheng also agreed, but he still had a worried look on his face. Coming from a military background, he is decisive in his actions. Even now, he is still upright and doesn't have so many twists and turns. "It's just that in this way, Torch Group's profit is really a bit low!"

As the General Manager of Torch Group, Zhang Xiaocheng needs to consider too much. He needs to give returns to several major shareholders, needs to let the host of lighter industrial chain manufacturers gathered in the Torch Industrial Park earn revenue, and also needs to consider the staff of Torch Group who are expanding rapidly. These all need money!

Li Dongling heard this and glanced at Zhang Xiaocheng. In the past few years, Zhang Xiaocheng really hasn't changed at all.

Back then, when Li Dongling was transferred from Pingyang Xicheng Wireless Factory No. 1 to the predecessor of Torch Group, Shangguan Town Component Factory, at that time the entire component factory had basically closed down. Zhang Xiaocheng was still desperately pulling orders, even if he carried a large pile of debt himself, he was still thinking about issuing salaries to the staff of the component factory. Until now, Zhang Xiaocheng clearly hasn't changed.

However, it is indeed only a person like Zhang Xiaocheng who can have the prestige and influence to let the staff of the component factory who were owed wages return to work in the component factory that had already gone bankrupt, and can get Torch Group up in such a short time and put it into production again.

"In the early stage, Torch Group can not only earn revenue by selling lighters, but also earn revenue by publishing advertisements on the lighter body!"

Li Dongling said to Zhang Xiaocheng, which made Zhang Xiaocheng perk up. "Dongling High-Tech's market department and Focus Media can help Torch Group find advertisers and distributors in various places in the country, letting tobacco factories, wineries, restaurants, hotels, taxi companies, etc., publish customized advertisements on Torch Group's lighters!

In addition, they can also reach cooperation with tobacco factories, restaurants, etc., to supply lighters to them at a cooperative price, launching activities such as buying cigarettes and giving lighters, eating and giving lighters, etc. If sales volume can be increased, then these manufacturers will become Torch Group's largest customers!"

The profit of selling lighters might not necessarily be higher than the profit of advertising on lighters. Selling a lighter, excluding costs, what is left in Torch Group's hands might not be more than one or two cents. But printing an advertisement on a lighter is an exposure, and charging two or three cents of advertising fee is not too much, right?

Quantitative change causes qualitative change. The advertising fee of a lighter doesn't look high, but what if the shipment volume reaches 10 million, 100 million, or even 1 billion?

And lighters are sold to various places in the country. Advertising on lighters is equivalent to advertising across the country, and it can even cover the advertising to villages, towns, and mountainous areas that television stations and newspapers might not be able to reach. These areas also need lighters. For a long time, these areas also need to make fire and cook, and also need to use lighters.

In addition, there is no ban on tobacco advertising now. Tobacco companies advertising on lighters is not against the rules. Even a few years later, there are tobacco companies that openly place advertisements on television stations because they are not short of money. The advertisements are quite atmospheric, making countless people have a deep impression...

Torch Group's lighters, if they can get orders from tobacco companies and launch activities such as buying cigarettes and giving lighters, as long as they can increase the sales of the tobacco faction, then it is estimated that various tobacco companies can scramble for Torch Group's lighters to do activities. At that time, the revenue obtained from the tobacco companies is estimated to be more than their own lighters!

Tobacco companies are not short of money. If they print advertisements on lighters, or buy cigarettes and give lighters, if they can increase sales, it is much more cost-effective than advertising on television stations and newspapers!

Zhang Xiaocheng's eyes lit up. Wu Yaoguo looked at Li Dongling in front of him and couldn't help but applaud. This trick of Li Er inviting Zhang Laosan to dinner, but Wang Laowu paying the money, is indeed beyond his expectation. If it can be done, then Torch Group's revenue is expected to increase by a large chunk, and Hanxi State Investment's hope of recovering its investment has also increased by a chunk!

(End of chapter) ===== CHAPTER 366 =====