The Grandmother in the Siheyuan

Chapter 495 Dumping
"What's this?" Liu Hua said indifferently, "Whether it's a cornered beast fighting or a desperate struggle, I think it's just a last gasp. We should take it seriously, but don't panic. As long as we can get through this period, it will only have one path left: death."

"So how should we respond to his price reduction?"

Liu Hua laughed and said, "Are you being stubborn? He lowered his price by so much, how much lower is it than ours?"

"Less than ten dollars."

Liu Hua shrugged: "It's less than ten dollars in total. Even if we lower our prices by ten dollars, we'll still have a meager profit. But will Toray Chemical still have a profit? How long can they keep lowering prices? Since the price war has started, let's fight it out. When will it die and when will it end?"

"What if they have to pay us out of pocket?"

Liu Hua shook his head: "What kind of company is Toray Chemical? Its market value is only around 10 billion US dollars. Moreover, its business is diversified. But if this one project loses money, it will abandon the other projects."

Factory Director Zhou said enviously, "A hundred billion US dollars is not a small amount."

"Please note, I'm talking about market capitalization, which also includes his land, equipment, patents, and so on." Liu Hua shook his head: "When I said a scale of tens of billions of dollars, I didn't mean he has tens of billions of dollars in cash. How much does the equipment alone cost for a large chemical plant?"

"That's true. Our factory's carbon fiber production line alone is worth over 100 million US dollars. Moreover, it's made in our own country. If we used a foreign production line, the price would be at least three to five times higher."

Liu Hua nodded: "We can afford to lose. Most importantly, I don't have to explain to the shareholders. If they lose too much, they won't be able to explain it to the shareholders, and the stock market will plummet."

That same day, Taiyi New Materials issued an announcement that the price per kilogram would be reduced by ten US dollars. The next day, as soon as the Tokyo stock market opened, Toray Chemical's stock began to plummet, like diarrhea, and there was no way to stop it.

Toray Chemical's sales staff mobilized en masse, aiming to stabilize their domestic market share first, but their domestic distributors proved to be even more astute than they were.

The distributors had long seen through it all. In the carbon fiber market, Toray Chemical was no match for Taiyi New Materials. Although the price had been lowered, it was only a last-ditch effort. If they abandoned Taiyi New Energy and switched to Toray Chemical, they would only gain temporary benefits, because they could not keep the price so low forever.

Although Taiyi New Energy also lowered its prices this time, even if they rise again afterward, they will still be very cheap. They can tell which is more important.

Toray Chemicals made a last-ditch effort, but still could not salvage the shrinking market and had no choice but to abandon carbon fiber production.

As for the goods stockpiled in the warehouse, they could have sold them to domestic merchants at a reduced price, but Toray Chemical played a trick.

They deeply resented their domestic downstream businesses, because it was their abandonment that forced Toray Chemical to withdraw from this market.

So they contacted American businessmen at extremely low prices, hoping to gain favor with them and secure their support for Toray Chemical's other products.

Unfortunately, they bypassed the middlemen, and when the middlemen couldn't make a profit, a dozen or so trading companies got together, discussed it, and directly filed a lawsuit against Toray Chemical for dumping.

As everyone knows, one is a dog, and the other is a master.

If it's a lawsuit between small Japanese capital and a large American individual, then small Japanese capital will definitely win. If it's a lawsuit between small Japanese capital and large American capital, then large American capital will definitely win the final victory.

In the end, the carbon fiber that Toray Chemical had already delivered was confiscated by the United States and then auctioned off. Most importantly, they also had to pay nearly $100 million in compensation to these dozen or so distributors.

When Liu Hua learned about this, he exclaimed "Awesome!" Toray Chemical was a classic example of losing both its wife and its army. At the same time, this incident served as a wake-up call for Liu Hua, because he was now the only large-scale carbon fiber manufacturer left in the world. This easily led to another typical element in major American business cases: monopoly.

If this continues, the American distributors will sue Liu Hua, and they'll win every time.

Therefore, after much deliberation, Liu Hua decided to license his technology to other companies, thus creating one or two competitors in the market to avoid antitrust lawsuits.

Liu Hua shared his idea with the leaders of the petrochemical sector, and it immediately attracted their attention.

"Are you really willing to license your carbon fiber technology?" the leader asked incredulously. "Are you out of your mind to create a competitor for yourself?"

"Oh. I can't do anything about it. This lawsuit against Toray Chemical reminds us that there can be anti-dumping and anti-monopoly measures. I can't follow in Toray Chemical's footsteps."

"Of course we welcome that! Which company would you like to license it to?"

Liu Hua thought for a moment and said, "I think Sinopec's Nanjing branch is pretty good. It's located in the south and north of China, so our domestic market can be divided in two. But let's make it clear that we want a share of the sales revenue."

The leader made the decision immediately, slamming his hand on the table: "I agree. I'll have someone from Nanhua come over and talk to you right away."

Somehow, people from CNPC heard about it and beat them to it, contacting Liu Hua that very day.

"Mr. Liu, we've always had a good working relationship, why didn't you choose our company?"

"Didn't I say one in the south and one in the north?"

The leaders of CNPC confidently stated, "We can also have one in the south and one in the north. As long as you are willing to authorize us, we will build a plant in the south."

"I've already agreed to authorize it to Nanhua." Liu Hua shook his head: "A person without integrity cannot stand, unless I break up with Nanyou."

The CNPC leader laughed and said, "Alright, since you put it that way, I'll make sure to ruin it for you."

It's just that the leaders of Nanyou aren't in Liu Hua's office right now, otherwise he would definitely take this CNPC leader out for a one-on-one fight.

Nanjing Chemical Industry Co., Ltd. also attached great importance to this matter. The next day, their general manager and secretary flew to Beijing together, bringing with them many Nanjing specialties.

"Engineer Liu, I've heard so much about you."

The general manager of Nanhua said humbly, "I was just sitting at home when good news came from heaven. Yesterday, the leaders of the petrochemical department told me that you have taken a liking to our company and want to authorize us to produce carbon fiber. Our whole company is overjoyed."

“I have my own agenda,” Liu Hua said with a smile. “I’m doing this to avoid facing antitrust investigations when selling to Western markets.”

The secretary of Nanhua immediately understood what was going on and said happily, "So, you're willing to share the overseas market with us?"

(End of this chapter)