Cooperation Reached

Meanwhile.

Lin Baijie, who was in charge of the company's operations, had obtained the advanced recycling process and was thinking about how to turn it into a profit.

After reviewing a series of technologies, Jiang Hailin, head of the technology transfer group, was astonished. The technologies held by Suiren Company were enough to create an entire industry.

"Mr. Lin, I think we could approach some factories that need to treat their waste and work with them."

Lin Baijie adjusted his glasses. "Tell me how that would work."

"Large factories produce a lot of waste, and they're a major focus for environmental protection agencies. Just the wastewater treatment equipment costs several million to start with. Then there are the substantial yearly expenses for electricity, settling and decomposition materials, management, and so on. It all adds up."

Lin Baijie knew that well enough. The Xinfa Aluminum and Electricity plant and the Toyota joint venture where he'd worked before had similar needs.

"As far as I know, Xinli Electronics Factory in Shanmei is a major producer of industrial wastewater. They spend over seven million a year on basic wastewater treatment. A classmate of mine works there, and I heard Xinli Electronics Factory is considering importing a professional wastewater treatment system from overseas this year. The asking price is 34 million US dollars."

"34 million US dollars? Those foreigners really know how to fleece people." Lin Baijie couldn't help grumbling.

Jiang Hailin continued, "We could look into it. The equipment alone costs 34 million US dollars, and I doubt the future costs for materials and electricity would be low."

Lin Baijie nodded, seeing that there was potential. "You're right. Let's talk to Xinli Electronics Factory. I'm sure they won't turn us down."

Xinli Electronics Factory.

The general manager's office.

There was a knock at the door.

"Come in," said general manager Lin Bin without looking up.

His assistant opened the door, came in, and handed him a document. "Mr. Lin, Suiren Company just sent us an email asking about a possible partnership. Here are the details."

"Suiren Company? The one that collects garbage?"

"Yes, that's the one."

After glancing over the email, Lin Bin looked surprised. Suiren Company wanted to take over the treatment of Xinli Electronics Factory's wastewater and industrial waste.

"Mr. Lin, we could consider it. Korte's quote is too high, and their other yearly expenses aren't cheap either," the assistant suggested cautiously.

"Do they have the technology? I don't want the wastewater to fail inspection and leave us paying fines."

The assistant quickly replied, "Their company was on the national news a few days ago. Their chairman even drank the treated water himself. Their technology should be decent."

Lin Bin hesitated for a while. "Then set up an appointment with them so we can see what they're asking."

"No problem."

Xinli Electronics Factory was open to negotiations, and the two sides soon agreed on a meeting time.

August 15.

The summer heat was stifling, and even the air carried an oppressive warmth.

Lin Baijie and Jiang Hailin represented Suiren Company as they headed to the agreed meeting place at the intersection of Shanmei Avenue and Xiangcheng Road: the Paris Peninsula Hotel, owned by Xinli Group.

Inside a private business room on the second floor.

Lin Bin had taken some time over the past few days to learn about Suiren Company. Although it was in the waste recycling business, it had substantial capital.

The five-hundred-million donation made by Suiren Company's chairman alone was proof that the company was not short of money.

After a few minutes of pleasantries, Lin Bin asked tentatively, "Does your company really have the technology to treat electronic wastewater and waste?"

"Of course. If we sign a contract and then fail to deliver, we'll have to pay your company compensation for breach of contract," Lin Baijie replied confidently.

Lin Bin thought that made sense. If Suiren Company breached the contract after they signed it, Xinli Group could demand compensation. He continued, "Then how much do your company's systems cost?"

"Our equipment isn't for sale. Instead, we'd take over the waste treatment for Xinli Electronics Factory, including wastewater and solid waste, but not exhaust gas."

Lin Bin looked puzzled. It was unusual for a company to take on the work that way. "Then how much would it cost? How would you charge us?"

"Based on the current size of Xinli Electronics Factory, the treatment fee would be 30 million a year. If the factory expands in the future, we'd need to discuss an increase in the fee."

"Thirty million a year? That's too much." Lin Bin shook his head.

Lin Baijie brought up another point. "Your company hasn't considered the fact that treated wastewater can be reused, reducing the factory's water bills."

"That wouldn't amount to much! Industrial water only costs two yuan per ton these days," another Xinli Electronics Factory deputy general manager argued.

Lin Baijie smiled. "Ha, can your company use the water straight from the tap? As far as I know, some of the water used in electronic manufacturing needs to be purified. That purification must cost quite a bit, doesn't it?"

"Are you saying the water treated by Suiren Company is purified water?" the deputy general manager challenged.

Lin Baijie took a test report from his briefcase and handed it over. "This is the report from three independent testing agencies on water treated by our company. I guarantee that if it fails to meet purified-water standards, we'll be in breach of contract."

"But the price..."

Both sides argued their cases and haggled for a while. In the end, they settled on an annual treatment fee of 24 million, with a five-year contract.

Xinli Electronics Factory would need to build its own wastewater and purified-water reservoirs, as well as install pipes and pumping equipment according to Suiren Company's designs.

As for the other solid waste, it would all be stored in a warehouse. Xinli Electronics Factory would simply notify Suiren Company periodically to come and haul it away.

Under the terms of the contract, unless force majeure intervened, Suiren Company could not suspend pollution treatment without cause and had to ensure that the water met the required standards.

Xinli Group, for its part, had to pay the pollution treatment fees in advance each month. If it failed to pay on time, Suiren Company had the right to terminate the contract unilaterally and demand compensation for breach of contract.

Once the contract was signed, Xinli Electronics Factory received a set of designs and began preparing its wastewater and purified-water reservoirs, pipes, and pumping equipment.

Meanwhile.

Lin Baijie led his people on to two more factories without wasting a moment.

One was Dechang Company, a competitor of Xinli Electronics Factory; the other was Lingfeng Paper Industry.

Dechang Company's electronics factory and Lingfeng Paper Industry's paper mill were both in Pubian Town, not far from Suiren Company's headquarters.

After some negotiations, they signed a pollution treatment contract with Dechang Company for 12 million a year, and one with Lingfeng Paper Industry for 7.2 million a year.

These three contracts would bring Suiren Company an annual income of 43.2 million.

Huang Xiuyuan glanced over the contracts and didn't think much of them. These companies had no idea yet. Once the new Environmental Protection Law came into effect in 2014, along with the government's push to eliminate outdated production capacity, they would understand how important Suiren Company was.

Factories that relied heavily on Suiren Company to handle their pollution would have no choice but to take its position into account. Their only alternative would be to steel themselves and build their own independent pollution treatment systems.

But that would clearly cost them more than it was worth.

First, the upfront equipment costs would be enormous. Second, the operating costs might be even higher than Suiren Company's fees. Third, they might not be able to treat the waste as effectively as Suiren Company.

Controlling a factory's pollution treatment was like having it by the kidneys. Without Suiren Company, those factories might be done for.