Chapter 165: Expansion

Building a production raw material base for the Master Kong Food and Beverage Group was not something that could be accomplished overnight.

First and foremost, the initial hurdle was persuading the Anhui Provincial Government to step up and endorse the Master Kong Food and Beverage Group. Without this official backing, no matter how eloquently the group's staff might try to convince the villagers, the locals would never feel secure enough to transfer their farmland use rights or engage in large-scale cultivation of the raw material crops required by the company.

Of course, Lu Kun had never entertained the idea of contracting the farmers' land directly from the very beginning.

For one thing, the upfront investment required for such an approach was simply too massive; the Master Kong Food and Beverage Group could not possibly come up with that kind of capital in the short term, making it economically unviable. For another, the farmers would most likely refuse to agree.

Land was the lifeblood of the peasantry, and whenever land issues were involved, a mountain of endless entanglements inevitably followed.

In this regard, unless the government was willing to step in and work on persuading the farmers, no one else stood a chance of negotiating with them successfully.

...

After chatting with Huang Mingbo inside the factory for over an hour and discovering that the young man had managed all the factory affairs in perfect order, Lu Kun finally felt a weight lift from his heart.

There was no helping it, considering that Lu Kun himself was only a half-baked amateur when it came to factory management.

In his past life, when he ran a hardware factory, he had merely caught a favorable economic wind to make a decent profit during the first two years. Later on, as competition in the industry grew increasingly fierce, the factory was left struggling on life support.

Fortunately, he had pulled out in time. Had he stubbornly persisted, he might well have lost his shirt entirely in the end.

...

Seeing that it was still early, Lu Kun had his driver take him to the headquarters of the Huakun Group.

"What is it? Why are you in such a frantic rush?" Lu Kun joked as he looked at Sun Bowen's flustered expression.

"Boss, our expansion plans for the Huakun Group need to be put on the agenda immediately; we can't delay any longer! Just take a look at this!" Sun Bowen said, handing a freshly printed performance report directly to Lu Kun.

Lu Kun took the report and carefully reviewed every single item of data. The look of delight in his eyes grew increasingly pronounced, and he smiled, saying, "Old Sun, our Huakun Group's performance this month is explosive! It's more than twenty percent higher than last month."

"Boss, although we anticipated earlier that as the Huakun Group's network integrated seamlessly across the entire province of Anhui, our performance might see a substantial surge, we honestly didn't expect the jump to be this massive!" Sun Bowen said with excitement.

"Then what on earth are you worrying about?" Lu Kun raised an eyebrow and asked.

"Boss, we simply have too much money," Sun Bowen said, pressing a hand against his cheek with a grimace, as if suffering from a toothache.

Lu Kun: "..."

Are you trying to show off? Keep showing off then!

"No, Boss, we have so much idle capital sitting in our accounts, just letting it lie there doing nothing—that simply won't do," Sun Bowen clapped his hands together and said anxiously.

Lu Kun remained silent, lowering his head to give the matter serious thought.

The Huakun Group was an enterprise with exceptionally abundant cash flow, seeing massive amounts of capital pouring in every single day.

Although Lu Kun had recently restructured the business by creating Huakun Holdings and spinning off the real estate sector, the Huakun Group still accumulated far too much cash.

Looking over the figures, Lu Kun noted that mere month later, nearly eight million more had materialized in the accounts.

If this money were left untouched, by next month, the idle cash in the company's accounts might well break the twenty-million mark.

"If we deduct the funds we need to disburse this month, how much will we still have left in the accounts?" Lu Kun pursed his lips and inquired.

"Boss, our company doesn't actually owe much of anything. The biggest chunk usually goes toward procurement payments, but... those procurement payments were already cleared at the end of last month, settling all previously deferred balances. After subtracting all payable expenses and emergency funds, we still have at least five million in available capital," Sun Bowen said with an embarrassed smile.

Upon hearing this, Lu Kun's face immediately darkened.

These guys!

...

Having too much money in the accounts was also a headache; he had to figure out a way to spend it.

As for giving employees raises or handing out extra bonuses? Stop joking.

The salaries and bonuses of the Huakun Group's employees were already slightly higher than those of their industry peers. If they were raised any further, it would likely invite a host of troubles.

As for dividends or similar payouts, that was completely out of the question.

For the time being, the Huakun Group was entirely a sole proprietorship belonging personally to Lu Kun. No one else held any shares in the company, and even the previously established Tianxing Investment Foundation was merely a smoke screen for appearance's sake.

Although Lu Kun was no longer as adamantly opposed to outside capital acquiring stakes in the Huakun Group as he once was, truly worthy suitors were virtually nonexistent.

There were certainly plenty of people expressing a desire to invest and buy in, but very few of them could actually contribute anything meaningful to the development of the Huakun Group.

Many of them lacked the strength and influence that Lu Kun possessed; why bother letting these small fry into the fold? He certainly wasn't feeling charitable enough to bring them along to enjoy wealth and luxury.

Expansion had indisputably become the most pressing priority for the Huakun Group.

"Which direction are you planning to expand into?" Lu Kun leaned back in his seat and asked.

"Hehe, to be honest, I'm just here to test the waters with you," Sun Bowen smiled sheepishly. "The direction of expansion is entirely your call, Boss!"

Lu Kun furrowed his brows, thought deeply for a moment, and said, "Guizhou!"

Sun Bowen raised an eyebrow in utter surprise and asked, "Guizhou... you mean over there?"

Lu Kun waved a hand and said, "After all, it's a major province, and the market is definitely there. However, our development strategy for the Huakun Group in Guizhou needs to undergo a significant shift."

"Go ahead, Boss, I'm listening," Sun Bowen said, preparing himself to take mental notes.

Only by making the Huakun Group larger and stronger could the factories and workshops under Huakun Holdings secure a steady, endless stream of orders. Only then would the profits of Huakun Holdings continue to soar, and only then would the shares held by their management team truly become valuable.

"When our Huakun Group enters Guizhou, we will no longer be the local overlords; instead, we'll be foreign dragons crossing the river. We can't afford to run things the way we did here in Anhui," Lu Kun told Sun Bowen.

Sun Bowen was slightly taken aback, but then he bit his lip and nodded, saying, "Please rest assured, Boss. I will instruct our people down the line to change their mindset."

Lu Kun patted him on the shoulder and said, "Guizhou is different from our home base in Anhui; the situation over there is rather complicated. When our people go over, they must cultivate good relationships with the locals. Harmony brings wealth, after all."

"Understood," Sun Bowen nodded, a trace of lingering regret visible in his expression.

"There's no need to look like that," Lu Kun smiled to reassure him. "Our Huakun Group only needs to capture the retail markets in a few key cities over in Guizhou. We don't need to act as aggressively as we did in Anhui."

Sun Bowen furrowed his brows deeply, and only after a long moment did he nod heavily. "I will make sure to thoroughly implement your instructions, Boss."

"That settles it then. Guizhou is a small temple with howling winds; we don't need to meddle too deeply in local affairs. We're going there to make money, not to conquer and reign supreme. Our mindset needs to remain easygoing." Lu Kun said with a smile.