I See through Everything

Chapter 267: Chapter 143: For the Greater Good

Fortunately, Hailufeng Company had the technology in reserve. If foreign fish meal producers refused to lower their prices, the Feed Association could use Hailufeng Company’s technology as a threat.

Evidently, this wasn’t just the will of the Feed Association, but also the official stance of Cyrus.

They only wanted to drive down the price, not to completely push Peruvian fish meal out of the domestic market.

Of course, a significant portion of the bargaining power in the fish meal market had already shifted into the hands of Cyrus. The international market currently had producers not just from Peru, but also from North America, Western Europe, East Japan, Southeast Asia, and Lucia.

Previously, Cyrus’s core imports were dominated by Peruvian fish meal (which includes Chilean fish meal). In the last two years, however, imports have diversified. Peru remains the largest source of imported fish meal, followed by An Nan, Chile, Lucia, Siam, and Tianzhu.

Other production areas supplied less to Cyrus, mainly because fish meal from Hokkaido, the North Sea, and Newfoundland each had their own traditional sales regions.

This increase in bargaining power meant they now held a very strong card.

Whether it was An Nan, Siam, Peru, Chile, Tianzhu, or Lucia, as long as Cyrus wished, it could strike a blow to their related industries.

Academician Li explained some of the association’s suggestions. "General Manager Jiang, the association’s recommendation is that Hailufeng Company maintain a certain production capacity of high-end Egyptian Catfish Meal. This would keep your production lines running, but it would be best not to mass-produce it. After all, the cost of Peruvian fish meal is only about 5,000 yuan per ton. If they decide to go for broke, Hailufeng Company might not be able to withstand the pressure."

"I understand." Jiang Miao was well aware of the disadvantage of using earthy-taste-free Egyptian Catfish to produce high-end fish meal: it was vulnerable to being suppressed by sudden price drops from international fish meal producers.

This was one of the reasons he had previously advised the Haida Group against using earthy-tasting Egyptian Catfish as a raw material.

Therefore, Hailufeng Company could maintain its production lines with small batches, serving as a technological reserve and a trump card for the country, but it couldn’t casually expand its scale.

This amounted to a system of mutual checks and balances.

As long as international fish meal producers didn’t raise prices, and deep-sea fish meal didn’t cross the 8,000 yuan per ton warning line, the Feed Association wouldn’t activate the domestic substitution plan. That way, everyone could still make a living.

For the sake of the bigger picture, this was the only arrangement possible.

Otherwise, if they suddenly stopped importing 1.6 million tons of fish meal, the international market would collapse even further, and the impact would be too severe.

This would be detrimental to the development of international trade and would also further widen the trade deficit.

Academician Li then continued, "The association has another suggestion. We hope Hailufeng Company can open up licensing for the production of Egyptian Catfish Meal to other domestic feed producers. At the same time, we’d like you to reduce the licensing fee. The current fee of 1,600 yuan per ton is too high. It’s not conducive to lowering domestic aquaculture costs, nor does it help with international competition."

On this point, Jiang Miao understood that this was where Hailufeng Company had to make a concession.

After all, the domestic production capacity for Egyptian Catfish Meal could reach 4 to 5 million tons in the future. If the licensing fee remained at 1,600 yuan per ton, Hailufeng Company would be raking in 6.4 to 8 billion yuan annually without lifting a finger.

Jiang Miao inquired, "Then what is the association’s suggested price?"

Academician Li said with a smile, "Our suggested price is 800 yuan per ton. This won’t put you at too much of a disadvantage, General Manager Jiang, and it will also allow the cost of domestically produced, ordinary Egyptian Catfish Meal to reach a balance with the landed cost of Peruvian fish meal."

Hearing this price, Jiang Miao nodded slightly.

With a licensing fee of 800 yuan per ton, the cost of ordinary domestic Egyptian Catfish Meal would be around 5,200 yuan per ton. Meanwhile, the landed cost of Peruvian fish meal was also between 5,200 and 5,300 yuan per ton. The two would be balanced.

Although this meant Hailufeng Company would earn 3.2 to 4 billion yuan less per year, the silver lining was that it would be a long and steady stream of income. They could collect technology licensing fees for 20 years, for the duration of the patent’s validity.

If Hailufeng Company were to disagree, they would likely face an antitrust investigation. An accusation of abusing a dominant market position would be unavoidable.

Academician Li was very gratified by Jiang Miao’s ability to see the big picture. He had been worried that Jiang Miao, being young and proud, would think his technology was number one in the world. In that case, he might face compulsory licensing, which would make the situation awkward for everyone involved.

At this point, he added, "General Manager Jiang, the association won’t let your company take a loss, either. We will provide you with subsidies. If a price war with foreign competitors becomes necessary in the future, 5,200 yuan per ton will be the baseline. Any amount below that price will be given directly to Hailufeng Company as a subsidy. What do you think?"

Dr. Wang chimed in, "In addition to that, your company can receive nationwide tax relief for a period of three years. We can discuss the details later."

Of course, there were also many other hidden benefits and forms of assistance. For example, applying for national science and technology progress awards, various patents, and government policies would become much easier.

At the same time, this also meant Hailufeng Company was now on the radar of the top leadership.

Its security within the country would be greatly enhanced.

Jiang Miao smiled and nodded. "Thank you for the association’s support."

"Haha, it’s a win-win for everyone!" Academician Li had very high hopes for this young man, Jiang Miao.

Xue Hua, who was at the side, also breathed a sigh of relief internally.

Chen Dan, on the other hand, was secretly pleased. After all, a reduction in the licensing fee was a great thing for his company.

However, Chen Dan also knew that he was benefiting from Hailufeng Company’s concession this time. He quickly said, "General Manager Jiang, I truly admire your big-picture perspective. In the future, if there’s ever anything you need, I and the Hengxing Group will certainly do our utmost to help."

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