Chapter 67: Professor Xu Yushan’s Terms
By the time dinner was over and everyone returned to the office, it was already nine at night.
Xiao Liang had Xu Lihuan stay behind to discuss work handovers with Wu Qiyan, Zhang Ming, Zhang Feili, and Liu Weiwei, while he took his brother and Gu Peijun back to their lodging first.
Now that funds were a little less tight, Xiao Liang had rented several short-term apartments near the office as dormitories, both to improve living conditions and make work more convenient. They no longer had to crowd into shabby guesthouses.
“Xu Lihuan and Wu Qiyan will stay with the new company, but Feili and Weiwei are going back to the juice factory with me. They might not object personally, but I really can’t offer them much higher salaries. That’s a headache,” Gu Peijun said with a troubled expression.
“Think about it. How much do members of the village committee make? How much do the ordinary factory workers earn each month? The township says we should appropriately widen the income gap between ordinary workers and management staff, but before restructuring, I really can’t withstand that kind of pressure.”
Gu Peijun had successfully become Party secretary and village committee director of Nanting Village, but he knew very well that others still viewed him with suspicion.
Wang Xingmin currently had too few capable people available, so he was letting Gu Peijun try for now.
If the backlash became too loud, Gu Peijun himself didn’t care much about the title of Nanting Village Party secretary—but if the juice factory, which was meant to serve as the new company’s production base, slipped out of their control, what then?
Before Nanting Lake Juice Factory was restructured, whether they controlled it or not was, in reality, just a matter of an appointment notice. The initiative was not in their hands.
Gu Peijun felt they couldn’t take too big a risk.
“Then pay them two thousand,” Xiao Liang said. “But no lower than that.”
“That’s the number I had in mind. Poaching people from the municipal pharmaceutical factory will probably require about the same. But I’m afraid you’ve spoiled their appetite, and even that amount won’t satisfy them,” Gu Peijun said with a bitter smile.
A monthly salary of two thousand yuan in Dongzhou in 1994 was already an astonishing figure. But then again, without paying four or five times the going rate, what right did a township village-run enterprise have to lure technical and managerial talent away from the municipal pharmaceutical factory?
The problem was that the new company could offer Wu Qiyan and Xu Lihuan annual salaries of sixty to one hundred thousand yuan. If Zhang Feili and Liu Weiwei returned to the juice factory, even if Gu Peijun managed to get them two thousand a month, he worried it still wouldn’t be enough.
Xiao Liang laughed without a shred of conscience. “If Feili and Weiwei really feel resentful, then let them stew for a while. If they still choose to follow us later, I’ll make it up to them. You’re the factory director, and I can’t pay you extra right now either, can I?”
Xiao Liang wasn’t worried about resentment from Zhang Feili or Liu Weiwei.
Liu Weiwei was young and easily satisfied. Zhang Feili was simple-minded and didn’t have a particularly strong desire for profit.
Of course, once income gaps widened in the future, Xiao Liang knew some people would inevitably feel dissatisfied—or greedy. But he had no intention of caring too much.
Even though Xu Lihuan and the others had high school educations, which was rare in the early nineties, the juice factory was still only a remote township village-run enterprise.
Xiao Liang didn’t believe all nine people he had selected in the first batch would become truly useful. If even one or two among them proved capable of great responsibility, he would already thank the heavens.
As for the others, he didn’t feel obligated to carry them forever.
So he didn’t care much about future conflicts and problems that might emerge. He had no interest in playing the delicate game of “treating everyone equally.”
He didn’t have that much energy.
At this stage, he was the one dragging everyone forward. He wasn’t afraid of them rebelling.
Future problems could be dealt with in the future.
His ship wasn’t one just anyone could board. And if anyone wanted to jump off halfway, they would be the ones regretting it later.
Xiao Liang turned to his brother. “What materials did Professor Xu Yushan bring?”
Although Xiao Liang hadn’t left Xijiang for over a month, he had been closely following his brother Xiao Xiao’s contact with Professor Xu Yushan of Dongzhou Institute of Technology’s Department of Nutritional Engineering.
Once the juice factory’s inventory clearance had shown results, Xiao Xiao finally had enough confidence to begin discussing concrete cooperation terms with Professor Xu.
Xiao Xiao pulled a stack of documents from his briefcase and handed them over.
“Xu Yushan is still very cautious. He didn’t give me too much. These are the research results he patented in March this year, along with some certification materials. There are also several related papers Professor Xu has published over the past two years. I visited his lab a few times and specifically brought Chen Zhu from the municipal pharmaceutical factory with me twice to take a look. Our preliminary judgment is that the process can be connected to the juice factory’s production line, though further research will still be needed.”
Dongzhou Pharmaceutical Factory had plenty of workers with technical-school, junior-college, and undergraduate backgrounds, but those with master’s degrees or above were still extremely rare.
Chen Zhu was deputy head of the process department at the municipal pharmaceutical factory and counted as a real technical expert.
Since he had completed both his undergraduate and master’s studies at Dongzhou Institute of Technology, he and Xiao Xiao could be considered fellow alumni and had a decent personal relationship.
Xiao Xiao wasn’t from a technical background. After graduation, his work at the Municipal Economic and Trade Commission had mostly been administrative. Since he wasn’t sure about many technical matters, he had used his personal connection with Chen Zhu and asked him to help take a look twice.
Xiao Liang turned on the electric fan, took the stack of materials, and sat down in a rattan chair to read.
From these documents, he could tell that Xu Yushan’s research over the past two years in health supplements mainly focused on comparing the effects of various oligosaccharide polymers. To be honest, there was nothing particularly original or eye-catching about it.
However, one thing did surprise Xiao Liang.
Aside from applying for a national patent for his research results, Xu Yushan had also found a way earlier this year to pass expert review by the provincial drug administration.
This meant that Xu Yushan had very early on recognized the commercial value of his research from the increasingly heated domestic health supplement market—or perhaps he had pursued this research precisely for its commercial value.
This also meant Xu Yushan would have high expectations for his work and would likely ask for a considerable price.
But if they could bring his research directly under the new company’s name, it would save them a great deal of trouble later.
Xiao Liang roughly remembered that the chaos in the health supplement market was already on the verge of erupting this year, and next year it would become even worse. If history didn’t change too much, the state would decide to crack down on the industry by the end of next year.
When that happened, any supplement manufacturer hoping to survive the first round of cleanup would need key review and certification documents.
By acquiring Xu Yushan’s research through technology transfer, the new company would gain enormous convenience in terms of compliance.
“Has Xu Yushan raised any new conditions?” Xiao Liang asked his brother.
Previously, Professor Xu had proposed a package: part cash buyout, plus a commission on future supplement sales.
The cash buyout wasn’t expensive—Xu Yushan had only asked for twenty thousand yuan.
Xiao Liang didn’t mind paying more upfront, but there was no way he would agree to give Xu Yushan a sales commission.
Health supplements seemed to have huge profit margins. Raw material and labor costs were low, and the initial production equipment wasn’t particularly complex. But marketing costs were enormous.
The most typical example was Golden Bead Oral Liquid, which had only begun pushing its product last year.
If history stayed on track, Golden Bead’s sales would reach 1.5 billion yuan this year. Next year, 1995, at its peak, annual sales would soar to an astonishing 8 billion yuan.
Eight billion yuan in the mid-1990s—an almost unimaginable figure even by later standards.
That was why, after Golden Bead Group collapsed, countless financial analysts practically wanted to examine every strand of its hair under a microscope.
Xiao Liang also had a deep impression of Golden Bead Group’s meteoric rise and sudden collapse.
The main reason Golden Bead Oral Liquid could reach such staggering sales within just two or three years was its sales team, which had ballooned to 160,000 people in a very short time.
Most of Golden Bead’s profits were eventually swallowed whole by the cost of maintaining that vast sales force and by chaotic market spending.
After Golden Bead Group collapsed, it left nothing behind for its founder but wreckage.
Even with the experience of twenty or thirty years from his previous life, Xiao Liang did not believe he could build, let alone control, a sales force of more than one hundred thousand people within two or three years.
His current plan had only just begun. In fact, he was still gradually exploring how to build a sales team and what marketing and promotional methods were truly feasible in this era.
He didn’t even know yet what level he could keep marketing costs under, nor could he estimate the final profit margin of the product. How could he possibly agree to give Xu Yushan a percentage of product sales?
Xiao Liang would rather pay a high upfront buyout price.
At the same time, he also hoped Xu Yushan would participate in future research and development of new supplement functions.
He didn’t regard health supplements as miracle medicine, but he also didn’t deny that properly regulated supplements could have certain health-maintenance benefits.
Nor did he intend to rely on unlimited exaggeration for marketing. That path would inevitably bring market backlash—and might not even survive the major crackdown at the end of 1995 and the beginning of 1996.
Appropriate marketing, precise market positioning, and steady product production, quality control, and development—that was the path Xiao Liang intended the new company to follow in the health supplement field.
