Chapter 111 Seller's Credit

(Thanks to Liao Ziyu for his support and support, the platinum alliance has been upgraded - add a new chapter)

In the evening, Yang Deshan, Wang Wen and Abacha also rushed over, plus Liang Siqian, the old chief and others, everyone roasted fragrant mutton chops, mutton, chicken, and spicy tofu that the cook had just learned a few days ago in the empty space in front of the wooden building.

Abacha took Yang Deshan and Wang Wen to meet the chairman of the Longta Municipal Committee, which went smoothly.

Previously, Cao Mo, Xie Sipeng, and Yang Deshan invested in private names, and there were still some local concerns.

Now that Dongsheng Group, which has strong finances and has invested tens of millions of dollars in the acquisition of oil palm sites in Longta, is leading the construction of the industrial park, how can there be doubts at the local level?

Dongsheng made a large-scale purchase of oil palm fields in Longta, but the powerful family called Longta made a fortune.

The contract period is 99 years, and the price per mu of land is 800 US dollars, which is definitely not high in China, but a considerable number of families in Longta have a long history of planting oil palm trees, and more than 200 tribal leaders in Longta, large and small, have hundreds of acres and tens of thousands of acres of oil palm land in their hands.

And they can sell mature oil palm land, and they can also open up new oil palm plantations at a low cost to make up for it.

Dongsheng's large-scale acquisition is also equivalent to directly injecting tens of millions of dollars of capital into Longta.

Unfortunately, there is a poor sense of investment among the locals, and few people are thinking about investing in manufacturing or infrastructure, except for the reclamation of more new oil palm sites.

Of course, there are many people like Kenhardt, who took the large amount of cash from the sale of oil palm fields and went to Draculamo to buy a house and enjoy the world of flowers.

Cao Mo had thought of asking Abacha to come forward and negotiate a loan agreement with these families who had sold oil palm land and had a large amount of cash in their hands, but after a month of contact, only three funds of less than $2 million agreed to open a trust account with the United Bank of Oman, and then lend it to Felician Power Company at a fixed annual interest rate for the development and construction of upstream hydropower stations and supporting facilities.

The core of the construction of the industrial park is the power guarantee.

In the car that came to Longta in the morning, Cao Mo communicated with Yang Deshan to find the Zhongtu Zhuka Branch to undertake the construction of the advance.

Yang Deshan and the others did not know the indefinite discretionary management agreement signed by Cao Mo with the Felician family and Abacha, nor did they know how beneficial the whole thing would be to Cao Mo personally.

In the future, the construction of the upstream hydropower station will always be negotiated in the name of the Felician family power company.

At this time, there is no problem in letting Yang Deshan and Wang Wen participate in the discussion, and even let them know the current operation of the Felician family power company and the Felician family building materials company.

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The cement storm over Kanem has not stopped, but no matter when it stops, Cao Mo no longer worries about anything.

With a total investment of US$1.5 million, the first stepped hydropower plant is calculated at a cost of about three cents per kilowatt-hour (kWh) of depreciation of facilities and equipment, water charges paid to the water conservancy departments of the Lonta region and the state government, a 3% profit tax, river management in the reservoir area, the replacement of materials and spare parts, and employee salaries.

This cost is higher than that of China, but there is also a lot of profit margin.

When the five-year depreciation period of facilities and equipment ends, the cost of water and electricity will be diluted to the same level as in China, and the profit margin will be greater.

In the upstream limestone, silicate and volcanic ash and other raw materials for cement production, three Chinese businessmen have entered, and millions of dollars have been invested to transform and upgrade the mining and transportation equipment processes of these raw materials.

On the one hand, the upstream raw materials of cement have been sufficiently supplied, and there is no need for Cao Mo to worry about it, on the other hand, the upstream mining and transportation costs have dropped significantly, and the scale of mining is quite large, and the supply price to the Yibogu cement plant has also fallen.

Thanks to the decline in electricity and raw material prices alone, the production cost of the Ebogu cement plant has actually dropped by nearly $60 per ton of finished cement.

This is unimaginable in China, after all, a ton of ordinary cement in China can't be sold for sixty dollars, where can the cost be so large to compress space?

Locally, there is only a nominal 3% profit tax.

At present, the price of finished cement in Kanem is still at a high level of 380 US dollars a ton, and the profit margin in this is so large that it will probably make those cement producers laugh crazy when they think about it.

Unfortunately, from the end of October to the beginning of next year, nearly 1.8 million tons of new cement production capacity will be released in Kanem, and even if the cement import ban is not lifted, cement prices will fall step by step.

By the middle of next year, 1.2 million tons of new cement production capacity will be released one after another, and cement prices will inevitably fall further.

Cao Mo would not be surprised if we consider that cement smuggling, which is repeatedly banned and even lured by huge profits, will see the price of cement in Kanem slip to a low point in recent years next spring or sometime later.

Of course, even at that time, the profit margin that the Felician family building materials company could have could still be called windfall profits.

To be honest, if we don't want to transfer some of the profits back home, the profits generated by the Fellicien family building materials company alone will be able to support the construction of a new hydropower plant and a new cement plant in the next two years.

The main dam of the three terraced hydropower stations in the Gray Crow River began irrigation operations at the end of September and is expected to be completed at the same time as the transmission grid by the end of the year.

At this time, as long as there are funds, continuing to invest in the construction of hydropower stations in the upper reaches of the Lujiaochuan River is already a safe investment with quite controllable risks.

The so-called stability, whether Cao Mo continues to raise money to invest in construction, or China Soil Group advances funds for construction, it is applicable.

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The second stepped hydropower station in the upper reaches of the Ibogu River, the mouth of the gorge with a small mouth and a deep valley is called Yeyang Gorge.

Although Cao Mo entrusted a professional organization under the Oyo Prefecture Water Conservancy Department in order to comply with regulations, hydropower station planning and geological survey, Liang Siqian did not know how many times he had been to the site, and he had been dragged by Cao Mo to participate in several seminars.

He is very clear about the planning and site selection of the Yeyang Gorge Ladder Hydropower Station.

After dinner, sitting on the terrace of the small building by the lake, blowing the lake breeze, listening to Cao Mo mention the advance of the construction, he bluntly raised his doubts:

"The amount of concrete pouring in Yeyangxia Hydropower Station is not small, the current cement price in Kanem is too high, and it is difficult to estimate and prepare the project money, not to mention BOT\BT, it is difficult to talk about ordinary advances......

Liang Siqian was in contact with Cao Mo at the beginning of the year, and he was in charge of the first small hydropower station after the signing of the contract agreement for the first small hydropower station before March, and now he is responsible for the construction of three hydropower stations along the Gray Crow River at the same time.

Cao Mo is about to start the Yeyang Gorge Hydropower Station, and he is basically sure to be in charge.

The specifications of the Yeyangxia Hydropower Station will be higher in all aspects, and Liang Siqian can be in charge of this project, which is extremely beneficial to his development within the China Earth Group.

Of course, he wanted to make it happen.

The problem is that the price of cement in Kanem fluctuates too much, and there will inevitably be serious disagreements on the accounting of the scale of investment in the entire project, and the negotiation will be too easy to reach an impasse.

"This is easy to do," Cao Mo said after thinking about this problem for a long time, "Abacha is here, I have talked to the old chief and Ojosan, and the finished cement used in the construction of the dam is directly supplied by the Ibogu Cement Factory, and the fixed accounting fee of two hundred and fifty dollars a ton should be able to avoid entanglement in this issue......

Abacha sat aside and rolled his eyes.

Fortunately, Cao Mo said in advance that the final distribution of the rights and interests of the Yeyangxia Hydropower Station will be carried out according to the equity ratio of the Felician family building materials company.

Thinking that the completion of the Yeyang Gorge Hydropower Station ultimately had 15% of his rights and interests, even if he was thrown out by Cao Mo as a gun at this time, Abacha had to endure it.

The domestic cement price in Kanem has fallen at present, and it is very likely to decline in the future, but during the construction of the project, the trend of the price of finished cement is not good for anyone.

Cao Mo has now decided to have the Ibogu Cement Plant supply sufficient cement directly at a fixed price, so as to avoid the two sides getting entangled in this issue.

"There is a large amount of low-interest aid loans for Kanem every year. In fact, these aid loans are mainly divided into two categories, one is buyer's credit, which is mainly used to support the government and commercial companies in Kanem to purchase Chinese mechanical and electrical products, large complete sets of equipment, ships and other goods. This requires a certain credit rating to apply to the Export-Import Bank of China. The Felician family power company has only been developed for a short time, and it is not too formal in all aspects, so it should not be qualified to apply for buyer's credit for the time being."

Liang Siqian, as the grassroots supervisor of the China and Turkey Card Branch, still has a very detailed understanding of the relevant policies.

"There is also a kind of seller's credit, that is, theoretically, if our branch in Ka wants to undertake the Yeyang Gorge Hydropower Station in the upper reaches of the Ibogu River, it can directly apply for a loan from the Export-Import Bank for the construction of the ......."

"Manager Liang said this, I understand, and I have the confidence to contact Mr. Bian directly...... Cao Mo said.

Listening to Liang Siqian's explanation, Cao Mo understood.

As a pure engineering contracting enterprise, the working capital in hand is very limited, and it will be very troublesome to apply for the advance construction funds from the group headquarters, but it can apply to the Export-Import Bank for the seller's credit lease.

In fact, the funds used by Dongsheng to acquire oil palm plantations in Longta came from the buyer's letter lease from the Export-Import Bank to support the company's overseas expansion.

In China, the general contractor advances funds for construction, which has long been the norm for project construction.

Overseas, this model is also not new.

Especially in Africa, the buyer, that is, the project contractor, has very limited capital at its disposal, and Chinese enterprises need the seller's credit as a tool to compete with mature European and American companies in the engineering market.

Liang Siqian will not forget that he is only a grassroots supervisor, and he is not too full of words, but he still thinks that there is room for this plan to be discussed......