In terms of grain and oil companies, Xinyuan Grain and Oil has registered three brands: Red Dragonfly, Fulinmen and Luhua, and the only thing lacking in finished grain and oil is warehousing and channel construction. As for the factories, Liu Sizhen, a state-owned grain and oil company with outdated equipment and outdated factories, can't look down on them, and the factories are going to be rebuilt anyway. Therefore, the main purpose of this acquisition is channel construction, and even channel construction is done in cooperation with those companies.

Of course, those state-owned grain and oil companies are not unworthy of acquisition, after all, it is still very profitable to use the land of grain and oil companies for real estate.

Now Liu Si wants most for grain and oil, what he wants most is to set up his own seed company. The most important reason why the four major grain and oil groups of ABCD can control world food prices is that they themselves control the entire industrial chain from the top to the bottom, whether it is seeds, fertilizers, land, or sales.

The traditional view is that in the field of commodities, whoever controls the raw material resources has the greatest right to speak. However, in the field of bulk grain, the previous conclusion may be wrong, referring to the four major grain merchants who control 80% of the world's grain trade, we can find that in fact, in the field of grain, who controls the supply chain, who has the pricing power! In fact, regardless of the ups and downs of the market, most of the international giants can make a profit on their capital, and some even make a lot of money. The reason is simple, these giants have more than just raw material resources, the supply chain is their real invincible magic weapon.

Former U.S. Secretary of State Henry Kissinger once said: If you control food, you control human beings!

In the global grain trade, there are four major families, low-key and little-known, but they firmly control 80% of the world's grain trade. On the one hand, they are attacking cities everywhere, acquiring, integrating, and reorganizing, and entering and controlling various food categories in the way of cannibalization; On the other hand, they are competing with each other, not only in their own countries, but also in the commercial arena that extends to the rest of the world. We are used to calling them the ABCD Big Four. They are: ADM in the United States, Bunge in the United States, Cargill in the United States, Louis Dreyfus Company in France.

Although they are four different companies, their development paths are very similar: through vertical integration, master the end-to-end system from source to table, and obtain profits by controlling resources, obtaining information, and mastering prices; Then copy this profit model to different categories, expand horizontally, and build a monopoly position in various food categories step by step.

In short, in the commodity space, whoever controls the supply chain has pricing power!

This is very different from our traditional view. The traditional view is that in the field of commodities, whoever controls the raw material resources has the greatest right to speak. For example, the oil industry has a monopoly OPEC organization, which can jointly set international oil prices; Another example is the iron ore industry, where China accounts for 50% of the world's annual imports, but is still hampered by the big three (BHP Billiton, Rio Tinto and Vale). There are countless examples like this, and in the commodity market, "resources are king" is all the rage!

"Corn prices plummeted" and "high sugar prices are unsustainable"...... In '97, there was a lot of news like this. As a result, we began to find out that the giants also had a hard time.

If we really think like this, it only shows that we are naïve! In fact, regardless of the ups and downs of the market, most of the international giants can make a profit on their capital, and some even make a lot of money. The reason is simple, these giants have more than just raw material resources, the supply chain is their real invincible magic weapon.

Taking Bunge as an example, Bunge can become one of the world's four major grain merchants, thanks to its integrated supply chain of "agricultural materials + farm + terminal". The chain focuses on every link from "farm to table", is market-oriented, and the main business and logistics services are developed in tandem. Specifically: (1) Agricultural materials: Bunge develops fertilizer business centered in Brazil, producing various fertilizers, feeds, nutrients, additives, and providing fertilizers, seeds, pesticides, and agricultural equipment to farmers. In addition, it promotes modern agricultural science and technology methods to farmers and provides technical support for agricultural production; (2) Farms: Based on its development advantages in South America, Bunge operates large-scale farms, grows primary agricultural products such as grain and wheat, controls raw materials for agricultural products, and seeks sustainable development; (3) Terminal link: Bunge actively builds a logistics network and builds ports in major cities; At the same time, the establishment of a global marketing department, so that agricultural products, oil products, sugar products, brand food can be sold to all over the world at a lower cost, successfully realize the development vision of "from farm to terminal".

The international commodity market is changing, and the oligarchs do not have absolute pricing power just because they have the raw material resources in hand. If you peel back the cocoon, the reasons for this are not complicated:

On the one hand, users are not fools. When the price of a product is too high, in order to break the monopoly pattern of the market, there must be people who actively look for possible alternatives. For example, the shortage of oil has forced all of humanity to look for alternatives to it, such as natural gas, plant fuels, and other clean energy sources. It is conceivable that with the development of new energy, the supply and demand pattern of oil will be gradually broken.

On the other hand, when commodity prices are already well above what the economy can bear, market demand will inevitably weaken, and it will force commodity prices to adjust. The invisible hand of the market will always appear when necessary. Although sometimes its appearance will bring violent shocks and damage to the economy.

Therefore, if you just want to sit on the raw material resources of commodities, you can sit back and relax, which is the same as a fool's dream.

So, what is the secret of the real money made by the international commodity oligarchs?

The secret lies in the fact that they have created a "futures and spot integrated supply chain model" for bulk commodities! No matter how the market goes up or down, you can get high profits. What is the "futures and spot integrated supply chain model"? Its core lies in the "spot-futures mutual transfer":

1. On the spot side, through acquisitions, mergers, reorganizations and other modes, the production, warehousing, ports, logistics and other physical supply chains are in hand, reducing the operating costs of the supply chain, and grasping the first-hand information of market demand;

2. On the futures side, make full use of leveraged financing, hedging, arbitrage and other trading methods to avoid risks and earn reasonable price differences;

3. Compare and analyze the data mastered on the spot side and the futures side, explore their respective opportunities, and convert or adjust the spot and futures at any time.

Futures and spot are interconnected, just like two faucets in a shower, one hot and one cold, no matter how they change, you can get the final required temperature by adjusting the hot and cold valves.

Having said that, how do you do it?

The integrated supply chain model of futures and spot combines the three streams of the supply chain - physical logistics, information flow and capital flow. By controlling the third-rate, the four major grain merchants of ABCD have firmly controlled the pricing power in their own hands. On this basis, they continue to expand their territory and copy the "term integrated supply chain" model to new food categories; Even jumped out of the food industry and switched to the energy industry. As long as they have a good grasp of the supply chain of bulk commodities, they can turn the clouds and rain like this and be invincible.

Xinyuan Grains and Oils aims at the four major grain merchants, so the development direction should be more in accordance with the successful development path of the four grains. Moreover, the end of the 90s is also the best opportunity for development, you must know that Asia and South America, as the world's major food producing countries, both had economic crises at the end of the 90s. Taking advantage of the economic crisis, it is definitely a better time to go to these countries to buy farmland, farms, and develop grain and oil companies. And not only food, but also fruits and other cash crops.

It will also be matched by minerals, which will also be heavily acquired by the end of the century, making it the world's fourth largest mining company.

Judging from the development path of the above-mentioned four major grain merchants, in order to expand the grain enterprises, we can learn from their beneficial experience and master the grain industry chain, and the business scope should be expanded to include agricultural technology research and development, planting, grain purchase, storage and transportation, grain deep processing, product storage, transportation and sales.

Therefore, at present, the headache of Xinyuan grain and oil is the problem of talent reserve. This is also the reason why Liu Si wants to vigorously acquire domestic grain and oil companies, that is, to explore talents. Of course, Liu Si did not forget to poach people, such as the Chinese senior management of the four major companies of ADM, Bunge, Cargill, and Louis Dreyfus.