Chapter 304 Big Pancake
"Mr. Soul, congratulations!"
"Congratulations, congratulations!"
The two of them had the same smile, as if they were old friends who had known each other for a long time.
"With this headquarters, Soul Electric will be the most recognized brand in India."
"Mr. Oda, you can come here often when you are free. You also have an office here."
The joint venture does not have a separate office location in the park and is temporarily using the sixth floor of the headquarters building.
The place here is big enough and can’t be filled with employees of Sur Electric Appliances, so there is no problem in giving some to the joint venture.
"I'm honored. Your company's financial strength is amazing."
"Thank you."
"The joint venture is performing very well. We sold 80,000 televisions in half a year, which exceeds the sales in Japan." Oda looked at him.
"As I said, the Indian market is huge."
"That's right. Your performance in the past six months is proof of that." Oda continued to look at him.
"Well, it will get better in the future."
"Half a year." Oda emphasized.
"We need to take a long-term view."
"Mr. Soul," Oda said, no longer pretending, "The six-month period has come to an end. Where's the promised payment?"
This Indian guy has no clue what he's doing, Xiaotian complained in his heart. He hinted at it several times, but the other party seemed not to understand.
It's so rude that he had to ask for the debt so bluntly.
"Payback?" Ron was stunned.
"Yes, we sold 10,000 units in the first month of release, but apart from the deposit, NEC hasn't received a single cent to this day."
"Well," Ron said, organizing his words in his head. He had really forgotten about it.
In his concept, there is only a deposit, and there is no such thing as a final payment.
"NEC didn't even get the deposit for the later goods; everything was sold on credit!"
Ah this, Ron took a sip of wine unnaturally.
You haven't even paid the deposit? That seems a bit excessive.
Oda stared at him closely, as if he would not give up until Ron gave him an explanation.
"How about this, I'll have someone squeeze out some funds to pay the down payment for some parts first."
"Only a deposit? According to the contract, the $1.8 million payment for the first shipment should be paid in full."
"Listen to me," Ron leaned over and clinked glasses with him enthusiastically, "I plan to continue expanding the production scale of the joint venture."
"What do you mean?" Oda raised his eyebrows.
"Don't you think a single production line greatly limits our production capacity? We've never had a shortage of SUR-NEC TVs; they're all shipped out the same day."
"So." Oda's eyes flickered.
"We'll add two more 18-inch production lines, and ideally one for 21 inches. Some customers have asked us why we don't offer higher-end TVs."
"What?" Oda was surprised. "Three? Are you sure the Indian market can absorb so many TVs?"
"Then let me ask you, what are NEC's sales in Japan in the past six months?"
“No more than 10,000.”
"So little?" Ron himself was stunned for a moment.
"Neon's economy is in a downturn, but NEC's main sales are overseas," Oda explained.
Oh, Ron almost forgot, these past two years were the cold period when the Japanese bubble burst.
The country was broken-backed, the economy was in depression, and the previously prevalent consumerism was replaced by low-desire values.
There's no way a TV or something like that would sell well. Many people even take their household items to used stores to sell them secondhand because they're short of money!
"Look, the Indian market is more than eight times the size of Japan's. Is adding three more production lines excessive?"
"This is a deal worth nearly 10 million US dollars. I can't make a decision, and you are only willing to pay a deposit." Oda's face was uncertain.
"It's not that I don't have money. I just received the first month's payment, and in the end I have to give it all to you." Ron complained.
The first batch of 10,000 televisions brought in a profit of more than 100 million rupees, which included the cost of imported parts and the profit sharing between the two companies.
Ron only planned to give a deposit of $600,000 for another 10,000 sets of parts, and use the rest of the money to order equipment.
Two 18-inch lines and one 21-inch line, the total deposit is almost exactly 100 million rupees, not a penny left.
"If you hadn't reminded me, I would have almost forgotten that the final payment for the first two production lines has not been settled yet. Now you want to increase the amount?" Oda's eyes became clear.
"Next month! We'll definitely have money next month! That's when the payment for the other shipment will arrive."
"How can you make such a guarantee? No contract!"
"It's a fact that all the money the joint venture earns now is taken away by NEC." Ron spread his hands.
"That's because you want to order more equipment!" Oda emphasized.
"Isn't that money? There will be payments every month from now on, and we will slowly settle the balance, provided the core parts imported from NEC don't break!"
Oda was a little conflicted. He thought what Ron said made some sense.
At least he did not rush to pocket the first month's profits of the joint venture, but instead gave them to NEC in exchange for more equipment.
If this trend continues, next month's payment will be enough to settle a considerable portion of the parts purchase bills.
The purchase price of 80,000 sets of parts far exceeds the value of the equipment itself.
The most important thing is that the domestic economic situation in Japan is really not optimistic. The bubble burst in 1991, but its powerful destructive power only began to appear in 1994.
People's consumption desire is sluggish, and NEC's financial reports are becoming increasingly ugly.
What’s worse is that Japanese chips are also being besieged by the United States, and 1995 was a hurdle.
The two sides signed the Semiconductor Agreement in 1991, and four years later, Japan's chip shipments fell below those of American companies for the first time.
They have lost a large share of the international market, and Toshiba has been reducing production capacity and closing branch factories.
The situation of Hitachi, Fujitsu and Mitsubishi is not optimistic either, and they will sooner or later follow in Toshiba's footsteps.
Companies laid off employees, factories closed, and many equipment were sold at low prices.
That was a real bargain, not even enough to sell for the $600,000 deposit.
Why didn't Oda reject Ron's outrageous conditions outright?
This is because compared to selling at a low price, if India only pays a deposit, it is actually not bad.
Once the Indian factories have the equipment, they will start production and will continue to import parts from Japan.
NEC's factories in Japan would not have closed and would even have been profitable.
Some Japanese companies would rather make losses than not run their production lines in order to survive the downturn.
They know that once it is shut down, it will be difficult to reopen it later.
Without sustainable R&D investment, the technological gap will only widen.
Compared with its peers, NEC's situation is already very good. It can be said that the Indian factory is feeding back to the Japanese headquarters.
How could the joint venture's production line be stopped at this time? Absolutely not!
It's nothing to just pay a deposit for the equipment. If you are pushed to a certain extent, it's not impossible to give it away for free.
The money earned from core components will make up for these losses.
Oda said he couldn't make a decision, but he knew the headquarters would definitely agree.
The performance of the Indian market gave them hope, and the six-month collection period was no longer a problem.
"Mr. Suer, I will contact the country about this matter, but you must pay some more deposit no matter what."
"no problem!"
"$600,000?"
"Rs24 million."
"What?" Oda was stunned.
"I only have rupees. You can exchange them with the Indian government." Ron shrugged innocently.
"Rupees are fine, cash!"
"make a deal!"
NEC can also go to the international market to convert rupees into US dollars, but it will suffer some losses.
As for the Indian government, Oda didn't count on it because their own foreign exchange reserves were pitifully small.
After spending some time dealing with Xiaotian, Ron quietly breathed a sigh of relief.
Being a deadbeat isn’t that easy. Every time you meet someone, you have to battle wits and courage with them.
However, the arrears have indeed been delayed for a long time. The joint venture has been established for more than a year, and none of the bills for purchased equipment and parts have been settled.
Ron even forgot which ones had paid deposits and which ones hadn't. There were too many to remember.
But there was one thing he did not lie to Oda: the joint venture's revenue of more than 100 million rupees in the first month was indeed handed over to NEC.
Of course, he would rather use the money to order equipment than purchase parts.
What we buy are fixed assets, and we can develop our own products based on them in the future.
The matching parts are consumables and are of little significance.
The real bulk of the joint venture's repayments were in Ron's hands, amounting to 10 billion rupees.
He used all this money to expand the scale of Sol Electric, and distributing it to NEC early on would have been a sin.
From now on, just promise Xiaotian some deposit every month, so that he won’t get upset and won’t make a lot of money either.
Well, how to grasp this degree is a science.
NEC is still somewhat useful now. With this reputation, the quality of Sur electrical appliances can be raised a bit.
There is no way, for Indians, the moon abroad is always rounder.
In addition, the cathode ray tube equipment that was originally agreed upon has not yet been implemented.
Ron couldn't go too far, and he had to give Xiaoshi some sweet rewards in the end.
The party lasted until the evening, and people were busy socializing, including politicians, businessmen, and slightly famous stars, all mixed together.
Ron was no exception. He was able to get along with both major parties and not neglect anyone.
Because Daxian was abstaining from alcohol, he left the scene after attending the celebration.
The BJP was represented at the party by Dhirubhai Shah, whom Ron had met in Gujarat.
Not only does he have extensive experience in the party, he is also one of the BJP's money bags, mainly engaged in the videotape business.
After a detailed conversation, Ron learned that Shah had also begun to enter the cable TV field, even earlier than Sun TV.
He does not run a TV station, but only provides operational services, yet he holds the copyrights to more than 5,000 Bollywood films.
Of course Ron would not miss such a good opportunity, as Sun TV's video channel was short of resources.
As an operator, Shah also needed Sun TV to enrich the channel content, and the two parties agreed to discuss the details at another day.
As Soul Electric expands rapidly, Sun TV cannot fall behind.
Ron will focus on the TV station next. Today is the first day of the comprehensive channel's premiere.
Well, it’s just to cooperate with the publicity of Sur Electric Appliances headquarters.
He was planning to enjoy the first news broadcast on Sun TV that evening, but unfortunately the party was over and someone came to find him before he could leave Soul Electric.
It was Johnny, waiting outside the gate.
He should have come earlier but was delayed because of Sanjay's matter.
Sanjay died. He stayed in the hospital for a day and a night, but eventually he didn't make it.
Johnny was very sad as he lost another old brother.
"You don't look well." Ron motioned him to get in the car.
(End of this chapter)
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