I'm a Master in India

Chapter 278: You Also Don't Want

The color TVs produced by the joint venture used imported picture tubes and circuit boards.

The price agreed upon with NEC was $180 per set. The Mumbai factory ordered a total of 10,000 sets, valued at $1.8 million.

However, Ron certainly didn't have that much money to give him, especially scarce US dollars.

So, under his silver tongue's persuasion, NEC agreed to the joint venture's request for credit.

Who would have thought these goods would sell so quickly? Now, that joint production line has stopped operation.

Xiao Tian was anxious. Since the product was so popular, they naturally had to pursue the victory. NEC also held a 40% stake in the joint venture.

Each color TV, priced at 18,000 rupee, had a cost of only $300. After deducting various costs and channel commissions, the net profit was 6,000 rupee.

This was a very good number; NEC could receive 2,400 rupee per unit in profit, equivalent to $78.

Also, don't forget, they would profit again from the picture tubes and circuit boards, bringing the total profit to nearly $140.

The Indian market is vast, and for high-volume models, that means hundreds of millions of dollars in profit annually.

NEC had to take it seriously. Xiao Tian received orders from his superior to continue expanding production capacity and seize as much market share as possible.

From a market perspective, this is, of course, correct.

However, since the establishment of the joint venture, Sur Electric has never settled its accounts, whether for production lines or raw materials.

Not only did they not pay, but the Indian even demanded that they continue to ship goods.

Xiao Tian was furious. He called Ron, complaining and threatening him.

Finally, he managed to get the deposit for the previous batch of goods, $600,000. Oh no, not US dollars, but 18 million rupee.

India is currently very short on US dollars, only rupee. Take it or leave it.

Xiao Tian gritted his teeth and accepted, but if NEC was to continue supplying core components, money had to be paid first!

“Mr. Xiao Tian, it’s only been a month. The payments for the sold TVs haven’t been collected yet, and the joint venture has no money,” Ron said, spreading his hands.

“When will the payments be collected?” Xiao Tian pressed on.

“Here in India, it’s usually six months.”

“Six months!” Xiao Tian exclaimed.

“This is normal, isn’t it? India is vast, the roads are bad, and it’s difficult to contact every distributor in a short time.”

“That’s too long! Holding inventory for half a year will drag the entire company down.”

“If you want to win the competition in the market, you have to offer more lenient payment terms than others. But don’t worry, Indians are loyal and will never default on payments.”

Ron guaranteed it confidently. He wasn’t afraid of Xiao Tian checking; he had already colluded with the distributors to give the same answer if the Japanese asked.

The actual collection period for Sur Electric was only one month. In a place like India, money out of sight for too long is no longer yours.

Except for some large trading companies and supermarkets, other small distributors even paid on the spot.

The 60 million in profit from those 10,000 color TVs had long been pocketed by Ron.

It's impossible to spit it out; that's his money!

“In that case, the deposit for the next batch of goods must be paid,” Xiao Tian conceded.

“The company’s account is already out of money,” Ron said with difficulty. “The initial capital was only $2 million. We paid a $600,000 deposit for equipment and another $600,000 for core components. All the money is with NEC, and most of the rest was used to pay employee salaries.”

“This… this…” Xiao Tian was stunned. Upon closer calculation, it was indeed true.

“Mr. Xiao Tian, don’t worry! As long as we hold on for six months, we will definitely have money after six months!”

Xiao Tian hesitated. He was reluctant to give up the booming market for the joint venture products, yet he had doubts about the Indians' credibility.

“You also don’t want a product that has just made a name for itself to die prematurely, do you? 10,000 units per month! No, if we add two more production lines, that would be 30,000 units!”

“Impossible! You haven’t settled the payment for the first production line yet!”

“Then add one more, and one more, and in the future, it will be double the income!” Ron gestured with his fingers, “Within five years, there will be no worries about sales at all.”

“An agreement must be signed that all outstanding payments will be settled after six months.” Xiao Tian reluctantly agreed, clearly conflicted.

The situation in Japan is currently very bad, and NEC headquarters is seeking every possible way to make its financial report look better.

The ice age after the bubble has arrived.

Besides, a monthly sales volume of 10,000 units is indeed a lot. And judging by the situation, supply still can't meet demand.

He couldn't remain indifferent to the enormous profits; the Indian market was indeed larger than imagined.

“Alright!” Ron agreed decisively.

He had signed too many agreements, and his threshold had already been raised.

The Japanese still don't understand India; they will slowly adapt in the future.

The development of the joint venture, however, somewhat exceeded his expectations. A net profit of 6,000 rupee per unit is truly considerable.

Even after deducting NEC's 40% share, it is still the most profitable product among Sur Electric's current offerings.

The money earned from joint venture products is still money, and there's no reason for Ron to let go of it.

Getting the halted production line running again as soon as possible is the right thing to do; every day of delay is a loss.

Not only that, but production capacity must also be expanded. Xiao Tian wants to make a big move, and so does he.

It's just that NEC will benefit, and they can continue to earn some deposits and so on in the future.

Unfortunately, the Japanese refused to move the picture tube production line to India ahead of schedule, insisting on waiting until the two-year term expired.

With core components bottlenecked, they took away most of the profit.

Damn it, $140, which is 4,340 rupee, earning more than Sur Electric.

Ultimately, it's reassuring to have technology in one's own hands, which is why Ron couldn't wait to import color TV production lines from Dongda.

It doesn't matter if it can't sell at a high price, but the profit is definitely the highest to date, even higher than that of joint venture products.

It won't be long; Sur Electric's color TVs will be on the market in March, still at the lowest price.

Over the next two weeks, Ron primarily focused his energy on Sur Industrial Park.

Compared to a year ago, it has completely transformed.

The headquarters building has been topped out, and the twenty-plus story building is very prominent in Mumbai today.

The silver-gray exterior facade has been painted, and workers are currently doing plumbing and electrical work inside.

Next, fine decoration will be done, and it is expected to be completed and put into use in six months.

There are even more factory buildings to the east of the main building, sprouting up like mushrooms, with a new one appearing every month.

12 assembly lines and 20 parts production lines, totaling 15 factory buildings, are very impressive.

Ron invested a total of $12 million in hardware alone.

If imported raw materials, engineering expenses, and labor costs are added, it would exceed $20 million.

In India in the 1990s, this was definitely a big undertaking.

However, the investment was worth it. In just one year, Sur Electric not only recouped its capital but also earned over a billion rupee in profit.

From now on, every month, not counting the color TVs yet to be launched, Ron's net income will be 200 million rupee.

Of course, as several other branch factories come into operation, this figure will continue to increase.

Now, the Mumbai factory is also launching two products: rice cookers and juicers, still thanks to Dongda.

Rice cookers, needless to say, domestic brands like Midea, Galanz, Banqiu Electric, and Triangle have long emerged.

These products have little technical content, and Dongda has long achieved full industrial chain localization.

However, for India, they are still high-tech products.

Thanks to the $20 million big business last year, Sur Electric quickly found a cooperative brand.

Triangle brand, focusing on Dongda's mid-to-low-end market, is extremely suitable for India's cost-effectiveness concept.

This thing isn't expensive; you can take it home for a hundred yuan.

The main parts are the inner pot, heating element, and thermostat. Sur Electric can process the inner pot itself, and directly buy ready-made production lines for heating coils and thermostats.

Ron went all out this time, achieving 100% localization of rice cookers at the start of production.

From Triangle, a complete production line with an annual output of 200,000 units was quoted at $500,000. Ron bought four sets in one go, acting like a complete big spender.

The average price of rice cookers in India is around $45, which converts to about 1,400 rupee.

Too expensive, completely impossible to popularize.

Sur Electric calculated internally that if localized production were achieved, the total cost per unit would only be $9.

He plans to price it at $30, and then make a huge profit in rupee.

Juicers are even simpler; Sur Electric can fully own the assets, but unfortunately, the cost of processing blades is too high.

Perhaps due to different dietary habits, there are no independent brand juicers in Dongda yet.

Finally, Ron could only find blade foundries in Dongda, while Sur Electric handled other parts and design itself.

With extremely low processing costs, these small home appliances still have profit potential.

Around July or August, rice cookers and juicers will be launched. They have lower technical content and can be completed quickly.

After being busy until early March, Ron set off again for Gujarat.

According to traditional estimates, the results of the Gujarat state election are expected to be announced around mid-March.

Now is the most intense period of campaigning, and Ron is going to deliver money to the Indian People's Party.

Ten million rupee is not a small sum, so he has to go personally and also show his support as agreed.

When Ron arrived at the Indian People's Party headquarters in Gandhinagar, the state capital, the place was filled with cheering crowds.

In the courtyard outside the headquarters building, hundreds of supporters dressed in orange shirts gathered, dancing and celebrating.

Another constituency had fallen into the Indian People's Party's embrace, and everyone couldn't help but pop champagne early, with colorful confetti flying everywhere in the air.

Modi, also wearing an orange kurta, hurried out to greet Ron. He moved quickly, as if he had many more urgent matters.

“Is this how you came?” The great immortal looked at the bags in their hands with surprise.

“You know, this money can’t go on the books,” Ron shrugged.

“Never mind, come in first.”

“This took me a lot of effort,” Ron patted the bags in Anil’s hands.

Inside were all cash, not recorded, not through the bank, no records—in short, all black money.

However, for Indians, there is no distinction between black and white money, and they don’t care about such things.

Whether buying a house or a car, or other consumption, they have no awareness of paying taxes whatsoever.

They would feel, “This is my own money, my hard-earned money.”

How can you collect taxes from the poor? They don't have much money to begin with.

Anti-corruption? How to fight it? Everyone uses black money, including in elections.

Modi hated this invisible black money system, yet now he had to rely on it to help the Indian People's Party win the election, feeling extremely awkward.

Ron, however, acted as if nothing was wrong, going up to him, putting an arm around his shoulder, and discussing the upcoming election.