Chapter 86 – Premium Oil
After the food processing factory was built, Feng Xingtai went to collect money. Many people in the village realized that he was not a cheat and wanted to invest.
However, Feng Xingtai followed what Feng Yu had said. Other than those seven people and Wen Dongjun’s family, the rest can only invest 1,000 RMB and nothing more. Also, they will have to undertake the risk themselves. If they are unhappy, they can choose not to invest. This was a private company, and the major shareholder call the shots!
The 3 production lines were on its way to Bing City. There were also 3 engineers who had agreed to accept Feng Yu’s offer coming along. They will be working for Feng Yu for 1 year. These engineers had worked in China 30 years ago, and that time, they were not experts yet.
Brother Ki had told Feng Yu that there were more than ten people who were interested but were worried. These three engineers that came was because they were poor. If these three engineers were willing to stay on after one year, then next year there might be more people who are eager to come over and work.
These three engineers were experts in mechanical engineering. They were skilled in setting up machines for production lines, calibrate machines and even able to modified old machines from old factories.
The machines ordered by the Machinery Factory was very cheap and more advanced than the present machines by 10 years. Li Mingde was anxious when he heard that the machines had been ordered by will only arrive in Bing City next month.
The earlier the machines arrived, the earlier the Machinery Factory can replace the existing machines. The old machines can then be sold to smaller factories, and he will be able to reap some benefits from these sales. He had reported to his higher-ups in the city government and was the budget was approved. Why were these Soviets so slow?
Of course, it was because of Feng Yu. He had asked Kirilenko to send the machines and the three engineers to his factory first. Also, the three engineers had to set up and calibrate the machines for his factory.
The food processing factory had started to raise fund and stock up soybeans and beets. They had also bought the formula for making animal feeds with the residues from the soybeans and beets, from the Provincial Government Agricultural Department and the formula was compatible with their Soviet machines.
Many trucks entered the factory and the three experts supervised the unloading of the machines. Each expert was accompanied by a professional translator who was paid 10 RMB a day.
Feng Yu also came back to the factory from Bing City. He was afraid that the villagers would mistreat those engineers. These engineers were precious to Feng Yu as he needed them. Also, he needed these engineers to bring in more experts from the Soviet Union. They cannot be offended.
“Ready, 3, 2, 1, start!”
Growl ~ ~ ~
The machines started to move. Clean soybeans were dropped into a round cylinder, and after a while, yellow soybean oil began to flow out from the oil outlet.
“Success!”
Everyone cheered. The installation of the machines took a long time, and the first test was successful.
But the Soviet engineers looked at the soybean oil and frowned. There was something wrong with the filters as there were some impurities in the oil. Other than this problem, the machine was operating well.
The director of the district’s Good Oil Factory was present as well. He said he was there to watch and learn from them. He was there to find out what these Soviet Union machines were capable of. He stood there and waited for a while. Then he discussed something with the man beside him and sneeringly laughed before leaving Tai Hua Food Processing Factory.
If their Good Oil Factory were still using the same oil extraction method as last year, their production would not be as effective as these Soviet machines. But now, they were using the leaching process, and the amount of oil production was not lesser than these machines. In fact, they might even produce more oil compared to these machines in future. Also, the Good Oil Factory had the support of the Grain Depot, and they had access to the raw ingredients. This Tai Hua Factory was not a threat to them. The director wondered what the Farm Department Officer was thinking. The Officer was helping Tai Hua Factory with all the application paperwork and even gave priority for them to use electricity.
Electricity was suggested by Feng Yu. The total investment for the factory amounted to 2 million RMB and hired a lot more workers. When Feng Yu indicated about the electricity supply, the Officer agreed immediately. Even if there were a blackout at his office, the electricity supply to Tai Hua Factory would not stop!
There was a widespread shortage of electricity in China at that time. It was the same for their district. A few factories in the cities had only limited electricity supply. Power was supplied to them for a few hours every day and night.
This would be fine at the farmlands if they were only doing farming works. But this was critical for a factory. If there were no stable electricity supply, the production would be intermittent and how can they make money?
The oil press and the sugar production machines were tested, and the calibration was completed. The efficiency of these machines was much higher than domestic machines and was using lesser electricity.
Feng Yu intent to return to Bing City after the testing of the animal feed machines the next day. At night, Feng Xingtai suddenly told Feng Yu that this factory might not make any profits.
“Dad, how can this be? The soybeans and beet residues from the oil extraction and sugar production machines can be mixed with corn and wheat to produce animal feeds. This will greatly reduce our cost. The oil extraction and sugar production rate is very high. Especially we are producing fine sugar. The taste is sweeter. I will be taking care of the sales. What else are you worried about?”
“I heard that Good Oil Factory is using a new method of extracting oil. They are using something called the leaching process, and the quantity they produce is not lesser than our machines. How can we make money?”
Feng Yu laughed and shook his head: “Dad, you just wait. Brother Li will bring two people here in the next two days. You just follow what they tell you. I guarantee that we will be making a lot of money.”
“Really?”
“Of course!”
Two days later, Li Shiqiang came to Tai Hua Factory with a big truck. Clear plastic bottles were unloaded from the truck.
“Xiao Li, these are containers for the oil? We not using big bottles?” Now, everyone who bought oil from the shops or factories would bring their own bottles and the oil would be poured into those bottles from a big container. They have never seen oil sold in small plastic bottles.
Those people in the cities were much worse than them. If they want to purchase cooking oil, they need to produce a commodity ticket to enjoy a discount. If not, they would need to pay a higher price.
“Uncle Feng, these are the bottles for our soybean oil. This bottle can hold about 1.6 liters.”
“Isn’t this quantity too little? How long can 1 bottle last? These plastic bottles are also not cheap?” One look and Feng Xingtai knew that this was his good-for-nothing son’s idea. Sell oil and even give out a plastic bottle for free?
“Xiao Yu said that he wanted the bottles to be small. But there will be 5 liters bottles. I will send them over when those bottles are produced in the next two days. The sales of this soybean oil will be handled by our Tai Hua Trading Company. We will be selling these oil at a high price of 0.15 RMB for 0.5 liters.”
“What? 0.15 RMB for 0.5 liters of oil? That’s too expensive. Who will buy this oil?” Feng Xingtai shouted. The Good Oil Factory was selling 0.5 liters at 0.11 RMB.
“Uncle Feng, you did not hear wrongly. 0.15 RMB is what we will be paying to Tai Hua Food Processing Factory. Tai Hua Trading will be selling these oil for at least 0.20 RMB per 0.5 liters!”
“0.20 RMB per 0.5 liters? How can it be so expensive? You know how much does 0.5 kg of pork cost?”
“Uncle Feng, you just trust Feng Yu. He calls this the premium, high-end strategy. He is targeting those staying in the city. Temporally, we will supply to Bing City and then the province. By next year, our oil will be sold in Lin Province.”
“What? Premium oil? Ours are only normal soybean oil.” Feng Xingtai was confused.
“Uncle Feng, our soybeans were carefully selected, right? Our machines were also more advanced, and the extracted oil had to undergo a few rounds of filtering. The quality is much better than the oil sold by the Good Oil Factory. This is called premium! You also noticed that there were more and more rich people in the cities. They will be buying our oil even if our oil is more expensive. Don’t worry. We are not cheating people. Xiao Yu had said that we can surely make a fortune!"