Reborn in 08, a heretical cultivator starting a business

Chapter 163 The Evil Cultivator's Operation: Pure Freebies!
Their steel procurement practices are exactly the same illegitimate as those of the top ten international warehouses.

Wang Junshan directly placed a super-large order, triggering a bidding frenzy among major steel mills!

However, the calculation is not based on orders with a warehouse area of ​​250 million square meters, but on orders with a warehouse area of ​​300 million square meters.

Wang Junshan originally planned that 10 international warehouses would be enough, averaging 250 square meters each, for a total of 25 million square meters of storage space.

There was nothing they could do; local governments were too enthusiastic, offering 500 or even 600 mu of land each.

Normally, a logistics park of 450 acres can achieve a storage area of ​​25 to 30 square meters.

A 500-acre logistics park typically has 30 to 35 square meters of space.

Even if Wang Junshan reserves some space for future upgrades, it can still reach 300 million square meters.

Moreover, the number has exceeded the limit. With the emergence of the coastal warehouse, the number of international warehouses has reached 11.

Even if each plot of land is left vacant, the warehouse area will still reach 300 million square meters with subsequent expansion.

Wang Junshan simply loosened the restrictions, taking advantage of the current favorable policies, low steel prices, and high subsidies to build several logistics parks at once.

Even 12 or 13 international warehouses would be acceptable.

This has led to an increase in the demand for steel.

An international warehouse with a storage area of ​​30 square meters requires approximately 1 tons of steel.

Future Technology directly placed a massive order for 10 tons of steel!
This caused a nationwide sensation, and all the steel mills that were on the verge of starvation went crazy!
Since the outbreak of the economic crisis, steel mills have experienced a sharp decline in orders and revenue, resulting in an ever-increasing backlog of steel in their warehouses that they simply cannot sell.

However, the steel mill's furnaces cannot be shut down; otherwise, restarting them would result in even greater losses.

This has led to an extremely alarming level of inventory buildup at major steel mills.

Steel prices have also dropped from over 5000 to over 4000, then to 3800, 3600, and in November, they even reached 3200 per ton!
Very cheap.

There's no other way; all the major steel mills have such severe inventory problems that they simply can't sell them, and they can't stop production.

They were constantly running a deficit and couldn't even pay salaries.

Forget about year-end bonuses, we don't even have money to pay for rice, flour, and cooking oil for the Lunar New Year. We have no choice but to sell them off at a loss!

The fact that Future Technology has placed a massive order for 10 tons is like a timely rain after a long drought!
All the steel mills were thrilled!

Emergency meetings were convened to discuss prices.

They didn't even bother with the bidding process; they decisively contacted Future Technology and submitted a quote directly.

Moreover, each price was lower than the last.

You pay 3180 per ton, I pay 3150!

Another one flipped the table: 3100 per ton!
There's nothing we can do; the warehouse is overflowing, and there are very few orders.

The four trillion yuan stimulus package has just been introduced, and infrastructure investment is starting to boom, but that won't happen until next year.

But the steel mill needs to celebrate the Chinese New Year, and they need to pay wages for the next few months.

It's one thing to be late on regular days, but surely you don't have to not pay wages during the Chinese New Year?
As for future technologies, they remain calm and unhurried, waiting for the competition from a dozen or so steel mills.

Shen Huaijin was somewhat puzzled by this scene:
"Chairman, 3100 yuan per ton is already incredibly cheap. If we don't sign the contract now, aren't you worried that prices will skyrocket after the four trillion yuan stimulus package is implemented?"

Wang Junshan smiled faintly: "No. Everything takes time to develop, but the steel mill's inventory backlog and wage arrears mean there's no time to waste!"

Even with the introduction of a four trillion yuan stimulus package, steel prices are unlikely to rise in the short term.

Unfortunately, policies have a time lag!

Even companies with ideas will wait and see, making sure the four trillion yuan policy is clear, the subsidies are transparent, and that it won't be halted at any time, before they will approve a project.

By then, it's almost the end of the year!

Project approval, going through procedures, planning, land acquisition, financing, loans, and bank disbursement all take several months, no matter how fast.

By the time we officially launch and place orders, it will be the second quarter of next year!
It would take at least three or four months from start to finish.

There's no way around it; the project isn't even finalized yet, who would dare place an order in advance?

Once the order is placed and the goods are shipped, where should the steel be stored?

The interest alone would amount to a huge sum of money tied up in tens of millions of dollars.

This is why steel prices, housing prices, and stock prices will only see slight increases by the end of this year and the first quarter of next year.

In the second quarter, numerous projects commenced construction, leading to a surge in consumption and the start of a V-shaped economic rebound.

Stock prices and housing prices experienced a comprehensive V-shaped surge!
However, steel is different; it will actually be at its lowest point next April!
By March or April of next year, although the policies have been implemented and infrastructure construction has begun, orders will gradually appear.

But by then, the stockpiled steel inventory had reached its most alarming level!
The major steel mills were at their poorest.

Everyone started scrambling for orders, shipping out large quantities of goods, clearing inventory, and undercutting each other's prices.

As a result, steel prices not only failed to rise, but instead began to plummet.

Wang Junshan recalls that the prices in March and April of next year will be similar to, or even lower than, the current prices.

By May, some of the inventory had been cleared, the steel mills had more money, and orders were increasing, which led to a rebound from the bottom!
Future warehousing needs to secure various subsidies in advance, and construction cannot wait until the second quarter of next year. We can only proceed cautiously and cut the lowest possible price now.

Prices even lower than next April!
As the only super-large order in the past six months, a bulk purchase, even a 10% price reduction would not be a problem.

After several rounds of negotiation and maneuvering.

Ultimately, the massive 10-ton order was distributed among four major steel mills according to their respective regions.

Various types of steel, with an average price of 2800 yuan per ton.

This price is incredibly low.

However, the delivery time is flexible.

After all, the project hasn't even started yet.

If it's a small order, it naturally can't be pushed down this low.

But with the economic crisis, overflowing inventory, and the only super-large order, the only option is to lower the price.

More importantly, the entire country is watching the future international warehouse project closely, with both the government and local authorities eager to facilitate its implementation.

Such a massive, unstoppable project carries very little risk.

The purchasing department quickly signed orders with the four major steel mills.

In the following days, the entire Future Technology team was extremely busy.

In particular, everyone in the future logistics department was sent out to conduct research and negotiations.

Major cities have pulled out all the stops to secure these international warehouses.

Cities that offer ample policy support and demonstrate genuine commitment, or regions with less competition, will naturally be prioritized for finalizing deals.

For example, the Jeju International Warehouse and the Binhai International Warehouse were quickly finalized.

However, the Tianjin International Warehouse and the Beijing International Warehouse present some challenges.

As a result, another high-level meeting was held, and disagreements arose among the logistics department employees regarding the future:

"Tianjin has the best location, close to the capital, and has a port. It is the best choice, and the cost is much lower than that of the capital."

"The costs in Tianjin are indeed lower, but land in the capital is extremely valuable!"

“If we were to buy land and build our own logistics park, it would definitely be in Tianjin. But if the capital city were to give us 400 acres of logistics park for free, it would be a waste of resources if we hesitated.”

"So what if it's a 400-acre logistics park? Tianjin has increased it to 600 acres!" "Most importantly, the land in the capital is given away for free, but the operating costs are high, employee salaries are high, and all kinds of expenses are high, several times higher than in Tianjin!"

"The cost is high, but the future added value of the Beijing Logistics Park is even greater. Being located in Beijing also makes it convenient for delivery within the city, which receives the most orders. Although labor costs are high, transportation is convenient and delivery distances are short, so the overall cost won't be much higher!"

"Convenient transportation? Are you kidding me? Large trucks are restricted within the Fifth Ring Road of Beijing!"

"We can place it outside the Fifth Ring Road, such as Shunyi or Daxing. We can still guarantee same-day delivery to Beijing!"

"Placing it in Tianjin is far from the capital, and with the restrictions on large trucks, even if we switch to smaller trucks, there are still license plate restrictions, making delivery to the capital very problematic, and next-day delivery is difficult!"

……

Listening to the two sides arguing back and forth, Wang Junshan sighed:

“What you’re saying makes sense. Large trucks are prohibited from driving within the Fifth Ring Road of Beijing. If we put the North China warehouse in Beijing, it will be convenient for delivery within Beijing, but it will be slower to deliver to other provinces and cities. We will have to go around the restricted areas.”

"But if we put it in Tianjin, it's convenient to deliver to other places, but the delivery time in Beijing will be low. In addition, there are a lot of orders in Beijing, which is comparable to a province, so the requirements for timeliness are also high. There are also competitors like Amazon and JD.com."

"Thus, the North China International Warehouse will be located in Tianjin, covering 600 acres, with 20 square meters of general storage space plus 10 square meters of bonded warehouse space. It will supply North China and import/export."

"Another large international warehouse will be built outside the Fifth Ring Road of Beijing, preferably in the Shunyi Airport Economic Zone, covering 400 acres with 15 square meters of bonded warehouse space plus 5 square meters of bonded warehouse space, to supply Beijing and surrounding areas. It will mainly focus on high-value products such as 3C products, fresh produce, and cross-border e-commerce."

"As for general goods such as large appliances, we can ship them from the Tianjin warehouse. We'll try our best to get long-term ownership rights, so that they can be transferred and sold after five or ten years!"

Since we can't choose one, we'll have to have both.

That's how JD.com was in its previous life.

Tianjin has Asia No. 1 warehouse, and to facilitate delivery to Beijing, Asia No. 1 was also built in Langfang, which is close to Beijing. There is also a forward warehouse in Daxing to ensure timely delivery to Beijing.

The capital city has strong purchasing power; its order volume and profits are comparable to those of an entire province.

If Wang Junshan doesn't set up an international warehouse in Beijing, the delivery time will be greatly reduced due to restrictions on large trucks and license plate numbers, making it impossible for him to compete with JD.com and Amazon.

Amazon has a large warehouse in Beijing.

But if another international warehouse is set up in the capital, then same-day delivery can be achieved in the capital!
Even JD.com can't compare.

No matter how close Langfang is, it's still in Hebei Province, and it's still dozens of kilometers away from the capital.

In Shunyi, the airport economic zone, and the bonded warehouse, that would be very convenient.

Same-day delivery could have been achieved as early as 2009.

Of course, the costs are definitely high, but being close to the capital city means shorter delivery distances.

Overall, it's a bit more expensive than in Hebei Province, but the future value-added potential of the Dijing Logistics Park is amazing!
However, the future of logistics will start with semi-automated sorting systems, requiring less manual labor.

In a few years, just like JD.com in 2015, unmanned warehouses will be launched, with all sorting done by robots and robotic arms. Then the cost in Beijing will be several times that of other cities, which is understandable.

The 400-acre logistics park in Shunyi, Beijing, will have a much higher future value.

Wang Junshan doesn't care about short-term gains or losses; he only focuses on long-term development.

Following Wang Junshan's instructions, Future Logistics contacted the Shunyi Management Committee and Tianjin respectively to negotiate the details.

We learned that Future Logistics made an exception and added a large international warehouse in Beijing to improve delivery speed in the capital.

The Shunyi Management Committee was delighted and reciprocated by providing its full support.

A 400-acre logistics park has been designated near the Tianzhu Comprehensive Bonded Zone.

Of these, 200 mu (approximately 33 acres) are located within the comprehensive bonded zone.

Because land prices in Beijing are much higher than in other cities, and every inch of land is extremely valuable, the density of logistics parks is also higher than in other cities. These can be built into multi-story warehouses, with bonded warehouses reaching up to 15 square meters of storage area.

The remaining 200 acres outside the bonded zone, due to their high density, can be used to build multi-story warehouses, creating a general warehouse with a storage area of ​​up to 25 square meters.

Land is cheap in other cities, and logistics parks are less dense, mostly consisting of single-story warehouses.

However, land in the capital is expensive and logistics parks are densely packed, making multi-story warehouses the best option.

With a storage area of ​​40 square meters, it has become the largest international warehouse!

It is worth mentioning that the Tianzhu Comprehensive Bonded Zone was only approved for planning a few months ago and construction has just begun; it has not yet been put into operation.

Therefore, Future Logistics has really benefited greatly.

If it is completed and put into use next year, the threshold will be higher and the cost will be higher.

Let alone giving away a piece of bonded warehouse land for free, Wang Junshan couldn't even buy it for less money!
I can only say I was lucky; the plan was just approved, so there are more opportunities now.

It later became a hub for cross-border e-commerce pilot cities, supporting overseas shopping business.

Later, it was directly incorporated into the Beijing Free Trade Zone, further opening up the market.

It is precisely for this reason that after its completion, the former site attracted companies such as JD.com International, Tmall Global, Amazon, Kaola.com, Xiaohongshu, and Douyin Cross-border to set up cross-border bonded warehouses, becoming the core of bonded logistics in North China.

The value of this land will skyrocket!
Compared to this year, land prices have increased tenfold in ten years and twentyfold in fifteen years—no problem at all!

Wang Junshan has made a huge profit by giving it away for free!

Without any hesitation, we decisively signed a contract with the management committee.

Back in 2008, the price was dirt cheap, so people could afford to give it away. But later, if you offered less money, it was impossible to get it.

Policy advantages and location advantages are both extremely rare.

After the signing, the capital city was very efficient, and the Economic and Technological Development Zone immediately started the procedures.

Not only was a 400-acre logistics park given away for free, but all tax incentives were also arranged.

They also provided a loan of 4 million yuan, a 2% local interest subsidy, and a 10% local fixed asset subsidy!
Furthermore, they have applied for a four trillion yuan key logistics project!

This is very important.

Once the application is successful, you can also receive central government interest subsidies and central government fixed asset subsidies!
The four trillion yuan stimulus package includes interest subsidies of 2%-3% for key logistics projects!
For a future international mega-warehouse of this size, the central government will directly provide a 3% interest subsidy!

Beijing is offering an additional 2% interest rate!

That adds up to 5%!

The five-year loan interest rate for the 4 million loan dropped from 5.94% to 0.94%!

The loan interest rate is less than 1%, which is incredibly cheap.

Furthermore, once it becomes a key logistics project.

You can also receive a 10%-15% fixed asset subsidy from the central government, and a 5%-10% fixed asset subsidy from the local government!
This way, it can subsidize another 15%-25% of the cost.

For example, a 400-acre logistics park in Beijing costs more money than a 500-600-acre logistics park in a second-tier city because workers' wages are much higher than in other places.

It will cost 5 million to build it in its entirety.

However, Wang Junshan's unorthodox methods and increased influence allowed him to attract bids from raw material suppliers and subsequent construction companies, thus reducing actual expenditures to around 4 million yuan.

The 4 million yuan loan provided by the capital city is more than enough to cover the costs, so Future Technology won't have to pay a single penny out of pocket.

Furthermore, the central and local governments can reimburse 25% of the fixed asset subsidies, so the actual cost is only 3 million.

The logistics park will generate profits over five years, far exceeding this expenditure, with the investment to be paid in installments over five years.

The loan interest rate of 0.94% after the interest subsidy is negligible.

It can be said that Wang Junshan didn't contribute a single penny to the entire logistics park; he essentially got it for free.

All I can say is that the unorthodox methods are both fast and stable.

(End of this chapter)