Chapter 423: System

He chatted with Shuya for over an hour.

He learned about Shuya’s progress on microbial fuel cells and bio-mining technology, and also took the opportunity to gauge her grasp of the relevant knowledge.

Finding no major issues, Jiang Miao decided to have Shuya apply for patents related to the bio-mining technology by the end of the year. As for the microbial fuel cell technology patents, those could be filed gradually. After all, it involved a vast number of techniques; if they wanted to churn out publications, they could easily produce over a hundred papers for top-tier journals.

In the afternoon, Jiang Miao met with Jiang Haibo, his brother-in-law, and others.

The main topics of discussion were finances and some adjustments to various departments.

In October, Hailufeng Company’s revenue rose again, reaching nearly 4.2 billion yuan. The biggest expenses were still purchasing property, opening factories, and acquiring various equipment, totaling 2.6 billion yuan.

Gross profit was nearly 1.6 billion yuan.

After reviewing the financial report, Jiang Miao looked to Lü Weibin. “Old Lü, I asked you to research potential partner farmers. How is that coming along?”

Jiang Haibo, at his side, spoke up first. “Boss, I think we need to establish a new, separate department to handle this.”

“Oh? Go on,” Jiang Miao said, looking down to take notes.

Jiang Haibo explained his reasoning. “The Agricultural Division is specialized in cultivation and production. If we add such a complex operation to its purview, not only will the division become bloated, but it might also negatively impact its core responsibilities.”

“Hmm. In that case, let’s establish an Agricultural Partnerships Division specifically for this. The department will need someone reliable and steady to run it…” Jiang Miao mentally reviewed the company’s senior executives and immediately thought of someone.

“Promote Kong Keji, the manager of the Gannan Branch, to head the new Agricultural Partnerships Division. Liu Changqing, the current deputy manager of the Gannan Branch, will succeed him as manager. Transfer Du Liheng, deputy manager of the Agricultural Division, to the Gannan Branch to serve as the new deputy manager.”

“Understood.” Jiang Haibo quickly jotted down the personnel changes.

Seeing the boss finalize the personnel changes, Lü Weibin said nothing about it and instead began to report on his research into agricultural partnerships.

“Boss, we’re currently moving forward with this in two locations simultaneously: Gannan and here at headquarters. Over at the Gannan Branch, they’ve signed a contract with one mid-sized egg producer and fifty Gannan Navel Orange growers.”

“Here at headquarters, we’ve also signed a mid-sized egg producer, plus fifty lotus root growers, fifty amla growers, fifty sweet potato growers, and fifty vegetable growers.”

Jiang Miao paused his writing. “What are the specific oversight measures?”

Lü Weibin had his assistant bring up a PowerPoint presentation. He stood up and said:

“We’re currently using a three-tiered oversight system. The first tier is contractual. We’ve established strict penalties for breaches and rigorous standards for compliance. The second tier is random inspections. We conduct spot checks on their fields, orchards, and farms, and we also provide some technical guidance. The third tier is mandatory testing upon delivery. Every batch of produce must be sampled and sent to our own lab for analysis. We’re also setting up a cold storage facility to preserve batch samples.”

“What’s the feedback from the contracted farmers?”

“We haven’t found any major problems so far. During spot checks on the vegetable farms, we did find a few growers using excessive amounts of pesticides. However, since they were all short-term, biodegradable types, we haven’t yet detected any issues with residue levels exceeding the standards.”

Jiang Miao added a suggestion. “We have to be diligent with the spot checks and scheduled testing. Our company has its own lab, so large-scale testing is more cost-effective for us. Also, we need to establish a system of regular cross-inspections. Sometimes inspectors get too familiar with the growers and producers, and it’s easy for them to start turning a blind eye. We need to prevent that from happening.”

“Understood.” Lü Weibin nodded, while his assistant had already made a note of it.

“What about pricing?”

“According to our company’s standards, our purchase price is 60% of the retail price.”

The slide on the projection screen showed the current purchase prices, retail prices, and estimated production costs for the various contracted agricultural products.

For example, for the green-shelled egg producer in Gannan, the production cost was 5 yuan per kilogram, the purchase price was 7.2 yuan, and the retail price was 12 yuan.

This retail price was on the higher side compared to other egg brands on the market.

For instance, in Yu Province, the cheapest retail price for eggs recently dropped to 7.6 yuan per kilogram. Meanwhile, in major cities like Beijing, Shanghai, Guangzhou, and Shenzhen, regular eggs generally cost around 10 to 12 yuan per kilogram.

In reality, regular chicken farms are still quite profitable. The producer price for eggs is typically the cost plus about 2 yuan per kilogram. For large clients, they might lower that price by a bit more.

The quality of the eggs, however, was another question.

The reason Hailufeng Company’s eggs had a higher retail price was precisely that their contracted farms had higher production costs.

A typical chicken farm could get its production cost down to around 4 yuan per kilogram. In contrast, the egg producer they had signed a contract with had a production cost of 5 yuan per kilogram—a full yuan higher.

But there was no way around it. Costs would inevitably rise in order to guarantee quality, nutritional value, and the minimal use of antibiotics.

This particular farm had previously used antibiotics like enrofloxacin and oxytetracycline. In truth, as long as the withdrawal periods for these antibiotics were properly managed, there were generally no issues.

The pass rate for domestically spot-checked eggs was over 99.9%, so there weren’t major problems with most eggs on the market.

As long as one avoided feed from small mills, feed from major manufacturers wouldn’t have unlisted antibiotics added. The real worry was the small, unregulated factories that didn’t play by the rules.