I am a master in India

Chapter 278 You don’t want to either
The color TVs produced by the joint venture use original imported color picture tubes and circuit boards.

The initial price agreed with NEC was $180 per unit, and the Mumbai factory ordered a total of 10,000 units, worth $1.8 million.

However, Ron certainly didn't have that much money to give him, especially not the scarce US dollars.

So, under his persuasive tongue, NEC agreed to the joint venture's request for credit.

Who would have thought this batch of goods would sell so quickly? Now that joint venture production line has been shut down.

Oda was getting anxious. With the product being so popular, he naturally wanted to capitalize on the momentum. NEC also had a 40% stake in the joint venture.

Each color TV, priced at 18000 rupees, costs only $300 to produce. After deducting various costs and channel commissions, the net profit is 6000 rupees.

This is a very good figure; NEC can get 2400 rupees in profit per unit, which is equivalent to 78 US dollars.

Also, don't forget that they make another profit from the color picture tubes and circuit boards, bringing their total profit to nearly $140.

The Indian market is vast, which translates to hundreds of millions of dollars in profit annually for high-volume models.

NEC had to take this seriously. Oda received orders from his superiors to continue expanding production capacity and seize as much market share as possible.

From the perspective of market principles, this is certainly correct.

However, since the establishment of the joint venture, Suer Electric has never settled accounts for either the production lines or the raw materials.

Not only did they refuse to pay, but the Indians also demanded that they continue shipping the goods.

Xiaotian was furious. He called Ron and complained and threatened him.

Finally, after much difficulty, we managed to get a deposit of $60 for the first batch of goods. Oh no, not in US dollars, it was 1800 million rupees.

India is currently short of US dollars, only has rupees, take it or leave it.

Oda reluctantly agreed, but if he wanted NEC to continue supplying core components, he absolutely had to pay upfront!

“Mr. Oda, it’s only been a month, and we haven’t received any payment for the TVs we sold. The joint venture company doesn’t have any money either,” Ron said, spreading his hands.

"When will we receive the payment?" Xiao Tian pressed on relentlessly.

"In India, it usually takes six months."

"Six months!" Xiaotian exclaimed.

"That's normal, isn't it? India is a huge country with terrible roads, making it difficult to contact every distributor in a short period of time."

"That's too long! Six months of unsold inventory will bankrupt the entire company."

"If you want to win in the market, you have to offer a more flexible payment period than others. But don't worry, Indians are loyal and will never default on their debts."

Ron confidently assured everyone that he wasn't afraid of Oda investigating, as he had already colluded with the distributors and would simply give the same answer whenever the Japanese asked.

Suer Electric's actual payment cycle is only one month. In a place like India, if money is out of sight for too long, it's no longer yours.

Apart from some large trading companies and supermarkets, other small distributors even pay on the spot.

The 60 million yuan profit from those 10,000 color TVs had already been pocketed by Ron.

There's no way I'll vomit it up; that's his money!
"In that case, we still need to pay the deposit for the next batch of goods," Xiaotian said, settling for second best.

“The company is out of money,” Ron said with difficulty. “The initial capital was only $200 million. We paid $60 in equipment deposits and $60 in deposits for core components. All the money is with NEC, and most of the rest is used to pay employee salaries.”

"This...this..." Xiaotian was dumbfounded. After careful calculation, it really made sense.

"Mr. Xiaotian, don't worry! As long as we persevere for six months, we'll definitely have money after six months!"

Xiao Tian hesitated. He was reluctant to give up the booming market for the joint venture products, but he also had doubts about the credibility of the Indians.

"You don't want your newly established product to fail, do you? Ten thousand units a month! No, if we add two more production lines, that's thirty thousand units!"

"Impossible! You haven't settled the payment for the first production line yet!"

“Then let’s add another one, just one more, and our income will be double!” Ron gestured with his fingers. “Within five years, we won’t have to worry about sales at all.”

"An agreement must be signed, and the remaining balance will be settled six months later." Xiao Tian reluctantly agreed.

The situation in Japan is very bad right now, and NEC headquarters is looking for every possible way to make the financial statements look better.

The post-bubble freeze has arrived.

Furthermore, monthly sales of 10,000 units are quite substantial. And judging from the current situation, demand still exceeds supply.

He couldn't remain indifferent to the huge profits; the Indian market was indeed larger than he had imagined.

“Okay!” Ron agreed.

He's signed too many agreements, and the threshold for such behavior has been raised.

The young people don't really understand India yet; they'll gradually adapt over time.

The joint venture's development was somewhat beyond his expectations; a net profit of 6000 rupees per unit was quite substantial.

Even after deducting NEC's 40% cut, it is still the most profitable product in Suer Electric's current lineup.

The money earned from joint venture products is still money, and there's no reason for Ron to give it up.

The right thing to do is to get the production lines back up as soon as possible; every day of delay is a loss.

Not only that, but they also want to continue expanding production capacity. Xiaotian wants to make a big splash, and so does he.

It just benefits NEC, who can then profit from the deposits later.

Unfortunately, the Japanese did not agree to move the color picture tube production line to India ahead of schedule, insisting on waiting until the two-year period expired.

Because they are held hostage by key components, they take away most of the profits.

Damn, $140, which is 4340 rupees. I made more money than Suer Electric Appliances.

Ultimately, it's about having the technology in your own hands that gives you peace of mind. That's why Ron couldn't wait to import a color TV production line from Dongda University.

It doesn't matter if we can't sell at high-end prices, but the profit margin will definitely be the highest to date, even higher than joint venture products. It won't be long before Suer Electric's color TVs are launched in March, and they will still be the lowest priced on the market.

For the next two weeks, Ron spent most of his time at the Sue Park.

Compared to a year ago, this place has completely changed.

The headquarters building has been topped out, and the more than 20-story building is now a prominent landmark in Mumbai.

The silver-gray exterior facade has been painted, and workers are now carrying out plumbing and electrical work inside.

Next, the interior decoration will be done, and it is expected to be completed and put into use in six months.

There are even more factory buildings to the east of the building, like mushrooms sprouting up, with one popping up every month.

With 12 final assembly lines and 20 parts production lines, totaling 15 factory buildings, it's quite impressive.

Ron spent $12 million on hardware alone.

If you also factor in imported raw materials, engineering expenses, and labor costs, it would easily exceed 20 million.

In 90s India, this was an absolute big deal.

However, the investment was worthwhile. In just one year, Suer Electric not only broke even but also made a profit of more than one billion rupees.

From then on, every month, excluding the color TVs that were not yet taken off the shelves, Ron would net 2 million rupees.

Of course, this number will continue to increase as several other branch factories come online.

Now the Mumbai factory is launching rice cookers and juicers, again thanks to Dongda University.

Rice cookers, needless to say, have long been dominated by a host of domestic brands such as Midea, Galanz, Banqiu Electric Appliances, and Triangle.

This product has little technological content, and Dongda University has long since achieved full localization of the entire industry chain.

However, for India, these are still high-tech products.

Thanks to a $20 million deal the previous year, Suer Electric quickly found a partner brand.

Triangle brand focuses on the low-to-mid-end market in India, which is extremely suitable for India's cost-effectiveness concept.

This thing isn't expensive; you can take it home for around a hundred yuan.

The main components are the inner tank, heating element, and thermostat. The inner tank can be manufactured by Suer Electric itself, while the heating coil and thermostat can be purchased directly from existing production lines.

Ron took a one-step approach this time, achieving 100% localization of its rice cookers from the very beginning of production.

At Triangle Brand, a complete production line with an annual output of 20 units was priced at $50, and Ron bought four sets in one go, behaving like a complete big spender.

Rice cookers in India generally cost around $45, which is roughly 1400 rupees.

It's too expensive; it's impossible for it to become widespread.

Suer Electric has calculated that if local production is achieved, the total cost per unit would be only $9.

He plans to price it at $30 and make a killing in rupees.

Juicers are simpler, and Suer Electric could easily acquire them, but unfortunately, the cost of processing the blades is too high.

Perhaps due to different dietary habits, Dongda University does not yet have its own brand of juicers.

In the end, Ron could only find a blade manufacturer at Tokyo University, while Suer Electric handled the other parts and designs themselves.

Despite the extremely low processing costs, these small appliances are still profitable.

Rice cookers and juicers will likely be available around July or August. They are relatively low-tech and can be developed quickly.

After a busy period until early March, Ron set off again for Gujarat.

Based on past traditions, the results of the Gujarat state elections are expected to be announced around mid-March.

This is the most intense part of the campaign, and Ron is going to send money to the BJP.

Ten million rupees is no small sum; he has to make the trip himself and, as agreed, also support them.

When Ron arrived at the BJP headquarters in Gandhinagar, the state capital, there were crowds of people waving flags and cheering.

Outside the headquarters building, hundreds of supporters wearing orange shirts gathered in the courtyard to dance and celebrate.

Another constituency has fallen into the arms of the BJP, and everyone couldn't help but pop the champagne early, with confetti flying everywhere in the air.

Mordy, also wearing an orange Takul shirt, hurried out to greet Ron. He walked quickly, as if he had many more important things to do.

"Is this how you got here?" The immortal looked at the bags in their hands with surprise.

“You know, this money can’t be accounted for.” Ron shrugged.

"Forget it, come in first."

"This took me a lot of effort," Ron said, patting the bags in Anil's and the others' hands.

It was full of cash, not deposited into accounts, not processed through banks, and had no records. To put it bluntly, it was all illicit money.

However, for Indians, money has no distinction between black and white, and they don't care about such things.

Whether it's buying a house, a car, or other purchases, they have absolutely no awareness of the importance of paying taxes.

They would think, "This is my own money, my hard-earned money."

How can you tax the poor when they don't have much money to begin with?

Anti-corruption? How do you fight it? Everyone's using dirty money, including in elections.

Modi despises this hidden black money system, yet he now has to rely on it to help the BJP win the election, which makes him extremely uncomfortable.

Ron, however, acted as if nothing had happened, walked up to him, put his arm around his shoulder, and discussed the upcoming election.

(End of this chapter)