"There is no doubt that ST Group is at a critical juncture—"

"Of course, there are actually no uncritical moments for a business. However, for Xinke, the fiscal policy in the next three to five years will determine our strategic course in the next 10 to 15 years. ”

"There is a critical point here, and from my personal estimates, there will be a global financial crisis in Asia between 1995 and 1997. In essence, this financial crisis is similar to the previous London financial crisis, and it is a cyclical harvest of the global economy by US financial groups. But there is a considerable difference between the Asian economy and the European economy, which is firmly in the hands of the United States. ”

Hu Wenhai was whispering gossip with Chen Fa when the door of the large conference room was trampled by the crowd rushing in outside. Heads and key assistants of the major business units of the ST Group, regional branch managers and financial directors, plus the heads of various departments in the group headquarters. The number of these senior managers, who are equivalent to the "senior officials" of the new section, is at least hundreds. Don't look at the huddle now, it seems that a ceiling can fall down and hit three or five, any one of them is put outside, it is a character who can cause an earthquake by stomping his feet.

However, at this moment, this group of business tycoons is no different from the vegetable vendors who bargain with the vegetable market, and the househusbands and housewives.

"Xinke's lithium battery production line has occupied 15% of the global market share, and Motorola simply cannot absorb such a large production capacity, and the problem of continuing to expand is not only the investment in the production line. ”

The first to fire was Wu Di, deputy minister of the Ministry of Communications who was sitting next to Meng Zhengfeng, a young man in his thirties, who was probably the age to be a grassroots leader at most in a foreign company or agency. However, he is the first batch of descendants under Meng Zhengfeng's command since he was in the switch market, and he once single-handedly increased the market of the demon capital from zero to an annual marketing volume of hundreds of millions, and established his position in Meng Zhengfeng's team in one fell swoop.

Although the focus of the communications division has begun to shift to mobile communications, the main products that support its profitability are still the rapidly expanding telecommunications infrastructure industry. From program-controlled switches to digital switches, no matter how the technology is updated, China's domestic market is almost the market of ST technology platforms. Even in the international market, Cisco and Xinke are equally divided, and it can be seen how much resources and voice Wu Di, as the deputy director of the Communications Division, has in his hands.

"Our Xinke is the largest in the lithium battery market, and continuing to increase production capacity is likely to upset the current balance between supply and demand. Once the supply exceeds demand, not only can not guarantee the current level of profit margins, but may even trigger vicious price competition with other manufacturers, which will only damage the profitability of lithium batteries! Therefore, I think that this year is not suitable for the time being to continue to expand the production scale of lithium batteries. ”

"So according to Minister Wu's meaning, when is it appropriate to expand production capacity?"

The-for-tat confrontation with Wu Di is naturally the minister of the battery division, Shen Qianzhe has followed Hu Jiefang's descendants since the days of the 501 factory, although he is not very old, but his qualifications are beyond Meng Zhengfeng's reach. It's just that since Xinke ceded lithium battery technology to Motorola, there has been no major breakthrough in lithium battery technology, resulting in a sharp contrast between the discourse power of the battery series and the strength of Xinke in the early days.

Shen Qianzhe and the battery division have realized that the next big breakthrough in battery technology is likely not to be achieved in a short period of time. In this case, in order to expand the voice of the battery system, the only way to expand production capacity and compete for more market share is to go.

Shen Qianzhe asked rhetorically, but did not wait for Wu Di to answer, but asked himself: "According to the general business theory, capacity expansion should be in the crisis stage of the market, using price advantages to build new or simply acquire competitors' production capacity. From this point of view, the lithium battery market is indeed not the best time to expand production capacity. ”

Speaking of this, her words suddenly changed, and her eyes sharpened: "But we must see the fact that although Xinke is in the first echelon of the lithium battery market, its position is not as stable as the domestic switch market." Not to mention foreign competitors such as Sony, Panasonic and Motorola, it is the Bigger Battery Company, which was established by Wang Chuanfu of the 301 Research Institute last year, and the investment in the first phase of the production line has reached 300 million yuan and 35 million US dollars. Where did Wang Chuanfu get this money? Isn't it a credit guarantee provided by the Fukatogawa City Government?"

"Last year, there was a deep Tuchuan big battery, this year how do you know that there will be no demon capital, with the support of the company to enter the battery market? After several years of technology diffusion, lithium battery technology in China has no insurmountable threshold, it will not be long before it will usher in a lithium battery production capacity explosion. ”

"Since the lithium battery market is so competitive, I don't think there should be any large-scale investment. Wu Di shook his head and retorted unhurriedly: "It is conceivable that with the explosion of production capacity, it will inevitably cause price competition, and now the greater our expansion, once the price falls below the cost, the scale of the loss will be greater." Instead of this, it is better to adopt a sound financial policy and accumulate funds to survive the market downturn. ”

Wu Di's words caused a vague echo in the conference room, which shows that he is not entirely trying to suppress the budget scale of the battery division.

Trying to accumulate as much capital as possible in the profitability stage of the enterprise so that it can be used to survive possible business crises should be in line with the intuitive operation of ordinary people. After all, no one can guarantee that the business will always be smooth sailing, if you don't pay attention to the accumulation, the critical moment is not a little risk-bearing ability?

However, business is a science because it does not fully conform to human intuition.

Shen Qianzhe stretched out his hand to take a document from the assistant next to him, and threw it in front of Wu Di with a snap: "This is the list of pre-sale contracts for the PI project of Xiucheng Petrochemical Plant No. 6 in the next three years. This is the most convincing data among the forecasts for the growth of the domestic lithium battery market. ”

"As can be seen from this document, the output of polyimide film at Petrochemical Plant 6 will increase by at least 200% in the next three years to meet its order demand. That is to say, in the next three years, the scale of domestic lithium battery production will be at least twice as large as we are today - this is not counting the possibility that there may be projects that will import polyimide films from abroad, so at least!"

Wu Di flipped through the documents, skimmed over the ten lines with his eyes, and muttered: "The production line of the PI project of the No. 6 Petrochemical Plant is still provided by us, maybe you can talk to them and limit the scope of supply?"

The only PI project production line in China, the No. 6 Petrochemical Plant, was deceived by Hu Wenhai from Motorola with lithium battery technology. Since he turned around and used polymer lithium batteries to pit Motorola, coupled with the end of the honeymoon period between China and the United States, it is not easy to import from the United States now.

Although there has been a big breakthrough in localization in the petrochemical sector, it is still not easy to increase production capacity.

As soon as Wu Di finished speaking, he heard two knocks on the table from the direction of the head.

Hu Wenhai's fingers tapped on the tabletop, and an irrefutable voice rang out: "Xinke never eats alone, let alone rudely interferes in the business of cooperative enterprises. ”

"Yes. ”

Wu Di hurriedly bowed his head to accept the order, in fact, he already regretted his last sentence. Xinke's business strategy in China has always been to pull everyone to make a fortune together, and it is rare to rely on its market position to do mischief. Hu Wenhai may use his influence to force his peers and partners to upgrade their technology, but that is essentially for these companies to keep up with themselves, not to slow them down.

Shen Qianzhe saw that Wu Di was deflated, and made persistent efforts to say: "There is no doubt that the lithium battery production capacity will usher in a big explosion in the next two or three years. In this case, if we are afraid of competition and are stingy with investment, then let alone reserve funds waiting for the crisis to come, it is unknown whether Xinke's lithium battery business can persist until the crisis stage. ”

She finally said categorically: "The explosion of production capacity will inevitably lead to a qualitative decline in costs, even if it is a loss of money, the new lithium battery industry cannot be absent!"

In the conference room, the senior managers of these new sections couldn't help but whisper.

After listening to Wu Di and Shen Qianzhe's words, everyone actually understood it in their hearts. At this stage of the development of ST Group, with the rapid development of China's economy, in fact, all business divisions and provincial branches are generally facing such a problem.

Although the profitability of the business is good, it is like a mini car that can only be used for urban transportation on the highway.

If a company can't expand as quickly as possible, it won't be competitive in the market. The supplier will give the best price to the big customer, but the small customer can only beg the supplier to buy the high-priced raw materials. Channel providers also prefer manufacturers with sufficient supply, and products with low market share will only appear in the corner of the window. Even if it is the same level of technology and management and production, the cost of large enterprises will inevitably be lower than that of small enterprises, and over time, small enterprises will gradually be eliminated by the mainstream of the market.

But with the explosive growth of the market's production capacity, the oversupply reaches a critical point, and the market will definitely have a serious crisis. If a company does not have sufficient capital reserves, the high debt caused by rapid expansion will also kill the company.

A sound financial policy is dead, but an aggressive financial policy is also dead. The situation facing the ST Group, or most Chinese companies at this time, is a problem that has remained unchanged since the birth of capital.