Volume 3 Chapter 21 Building another Banta City
The next morning, Xu Yi brought Agnes, Princess Caroline, as well as the group of people from the Drake Duchy led by Anduin to the Falling Rain Valley.
In the morning, Xu Yi led them around the various factories the Frestech Chamber of Commerce currently had, bringing out praise from Princess Caroline and Anduin without any surprise.
After they finished their lunch, Princess Caroline and Anduin said they wanted to look around alone, so naturally Xu Yi didn’t reject their request. He had two people go around with them before going off to find Kennard to hold a small meeting.
“Sir chairman, this is our company’s last month’s financial report. Please take a look.” Kennard gave him a document.
Xu Yi carefully looked over it and he found that compared to the previous months of this year, the Frestech Chamber of Commerce’s profit had dropped slightly.
This was clearly the effect from moving out of Banta City.
But this effect wasn’t big and even if there was a drop, their profit each month was still over five hundred thousand gold coins.
“Very good. According to this trend, we might be able to reach a million gold coins a month within three years.” Xu Yi praised with a nod, “If we’re able to achieve this standard, our company could be considered a true large company.”
“Sir chairman, you are being too modest.” Kennard said with a smile, “Even our Lampuri Kingdom’s strongest Falcao Chamber of Commerce only barely makes more than a million gold coins a month. Our Frestech Chamber of Commerce has only been established for two years and we have a monthly profit of over five hundred thousand, that is already a miracle. Lord father’s letters to me are always filled with praise, saying that you are the most talented merchant in the history of the Sines Continent.”
Xu Yi revealed a faint smile, “This result is not because of my abilities as a merchant, rather it’s all because of our technology. Our company can maintain this rapid growth in profits because our company has the advantage when it comes to technology. So we must keep investing more money into technology and maintaining this lead.”
“Un, I understand.” Kennard nodded, “So I’ve already increased the budgets of the magic machine workshop and the magic research facility by 40%, reaching five hundred thousand and four hundred thousand gold coins respectively.”
“It’s still not enough.” Xu Yi shook his head, “According to my ideas, half of the net profit of the company should be invested in development. This would guarantee that we would hold the lead when it comes to technology.”
Kennard said with an awkward look, “This perhaps isn’t good. Sir chairman, first we don’t have that many researchers. Even if we gave them that many gold coins, they wouldn’t spend it all on research. Moreover, it is impossible for us to put half of our profits into development because although we earn quite a bit, there are many places where we are spending money.”
“Un, I know, so I came looking for you to determine a plan for spending our capital.” Xu Yi stood up and walked over the map on Kennard’s office wall, pointing at the map as he explained his ideas to Kennard, “First, we must guarantee the stability and the development of the Falling Rain Valley because that is our core.”
“Of course.” Kennard nodded in agreement, “Currently we are investing a minimum of a hundred thousand gold coins to maintain and develop the Falling Rain Valley each month. Other than that, every single factory in the Falling Rain Valley is profiting, so there isn’t much pressure there.”
“Let me see…..” Xu Yi looked down at last month’s financial report again.
According to the data, of the four hundred and eighty thousand net profit of the Frestech Chamber of Commerce last month, the two steel mills had over half of that, providing a total of two hundred and fifty thousand gold coins in profit.
As for the magic machine and household magic machine departments, because the market had stabilized and adding in the effect of moving last month, their product numbers had dropped, which decreased their profits. They only reached one hundred and seventy thousand last month.
As for the remaining sixty thousand gold coins in net profit, that came from the tire factory and the bicycle factory.
These two factories currently had the fastest growing profits, especially the explosive growth of the bicycle factory in the past two months.
Once the new method of transportation of riding bicycles was promoted, it was immediately welcomed by the people of Banta City and the surrounding cities.
Because for an average person, a private horse carriage was too expensive, they couldn’t gain back what they spent at all. Moreover, the horse carriages had various limitations, making them not convenient at all.
So when the bicycle that wasn’t much slower than the horse carriage and was more convenient than horse carriages came out, it became the most welcome choice of most people.
Not mentioning normal people switching over to bicycles, even the rich nobles or merchants bought one or several bicycles, riding in the wind for leisure.
Because of the appearance of bicycles, the Fersen Carriage Company’s business had been affected, so chairman Pompeii had complained to Xu Yi several times.
“Alright, the Falling Rain Valley investment can’t be reduced. Then other than this hundred thousand gold coins, the place we need to invest the most in after this is the Black Rice Wasteland?” Xu Yi looked at the financial report as he asked this.
“Right. The Black Rice Wasteland is in the early investment stage, so currently we can only see investment without any return. This is equal to spending around one hundred and fifty thousand gold coins each month.” Kennard said, “But now that the initial investment has come to an end, I think that not long from now, the mine and the non-ferrous metal smelting factory on the Black Rice Wasteland should be giving our company rich returns.”
Xu Yi laughed, “Very good, it really was the right choice having you become the CEO Kennard. If it was Heiunz, he would only be worried seeing the large investments each month without any return.”
Kennard revealed a faint smile, “The vice chairman has experience, that is something that I can’t compare with.”
“This kid knows how to talk.” Xu Yi shook his head with a smile, “But it’s a real pity that although there are rich returns from the Black Rice Wasteland, we can’t turn them into gold coins. That is because whether it is the products of the mine or the non-ferrous metal smelting factory, our company will be digesting it internally and won’t be able to sell them.”
Kennard hesitated a bit before asking Xu Yi, “Sir chairman, since you’ve stressed that we need to control our resources, why do you still purchase iron from the Falcao Chamber of Commerce? According to our current data, our company consumes two hundred and eighty tons of iron each month. Just this alone costs us two and half million gold coins, which is a very large burden. Our company already has an iron mine, so why don’t we gradually decrease our cost that way?”
“It’s very simple, it’s because the current iron ore is cheap and the iron ore we have is limited. If we don’t buy the iron ore from the Falcao Chamber of Commerce when it’s cheap, do we have to wait to buy it when it becomes expensive?” Xu Yi replied with a smile, “As for the iron mine, we’ll open it later, but that must wait until the price of iron increases. According to my estimates, it should take at least another five years.”
“Sir chairman, you’re this certain?” Kennard asked in a doubtful tone.
“Of course. I believe that the magic machine industry will quickly spread across the Lampuri Kingdom and the Sines Continent. When the time comes, everyone will snatch the iron needed to make magic machines and it would be strange if the price didn’t increase.” Xu Yi said in a certain voice.
Kennard had been with Xu Yi for over half a year, so of course he knew that Xu Yi wasn’t a person who spoke casually. Since Xu Yi was certain, he must have his reasons.
“Since it’s like this, then we should grab several iron mines while we can, or simply the more the better.” Kennard said in a thoughtful voice, “Most of the iron mines in the Lampuri Kingdom are controlled by the Falcao Chamber of commerce, so it’s difficult to snatch them from their hands.”
“So that means we need to aim at other places.” Xu Yi tapped the Black Rice Wasteland, the Stantine Duchy, and finally the Drake Duchy on the map, “Since we could find such rich non-ferrous metal veins on the Black Rice Wasteland, I dare guarantee that it also has rich iron veins. So we need to further invest into the Black Rice Wasteland. As for the Stantine Duchy, we’ll leave those three iron mines there for now because I’m waiting for a certain person’s response. What we need to discuss now is the Drake Duchy.”
“Sir chairman, according to your words, the two guests from the Drake Duchy have already reached an agreement with you?” Kennard asked.
“Pretty much, but it’ll take a bit of time to really take the resources we need from the Drake Duchy.” Xu Yi said with a nod, “Princess Caroline gave me a very good proposition and I think that it is feasible. Look, Count Sean holds the post of Sowell City’s City Lord right now. Our current goals should be achieving the support of Count Sean and developing the magic machine industry in Sowell City, creating another Banta City there.”
Kennard looked at Sowell City’s position on the map and slightly knit his brows.
“Sir chairman, this Sowell City’s position…..it’s not too good. Although it is rather close to the Drake Duchy, it is even closer to the Sack Kingdom. If the Sack Kingdom has some ideas, it will be dangerous.”
“That is very simple, we’ll just think of a way for the Sack Kingdom to not think about us.” Xu Yi said with a faint smile.