Charlie nodded and asked him, “What is your name?”
The young man replied, “My name is Francis Wade.”
Charlie nodded slightly and said, “Okay, let me ask you, what business is your family currently operating overseas?”
Francis Wade hurriedly said, “We produce and sell Chinese-style furniture throughout Europe, mainly for Chinese customers, and our production place is Romania.”
Charlie frowned and asked, “Why do you want to produce Chinese-style furniture in Romania?”
Francis Wade replied, “The main reason is that Romania’s timber production is very high, and their labor costs are relatively cheap.”
Charlie asked again, “Then how many workers do you have in Romania? What is the annual output value?”
Francis Wade thought for a while and said, “We have approximately 10,000 employees in Romania, with an annual output value of approximately 2 billion euros and a net profit of approximately 20%.”
Charlie nodded and said, “In this way, you have a net profit of 400 million euros a year for this business alone.”
“Yes.” Francis Wade said, “A few years ago, our production base was still in China. I suggested that my family move the production base to Romania.”
Charlie asked him, “Why did you suggest moving to Romania?”
Francis Wade explained with some pride, “Originally, we produced in China and sold in Europe. Although the logistics cost was much higher, because the domestic labor was relatively cheap, the overall profit rate was even higher than it is now. I have a hunch that Europe will continue to increase tariffs and other taxes on foreign products in the future. In that case, our products will lose all advantages in the European market, and profit margins will also drop sharply. Years ago, Europe has been increasing tariffs on imported furniture, and so far it has increased by at least 40%!”
Charlie nodded and said, “After you move your business to Romania, can you avoid this European tariff policy?”
“Wrong!” Francis Wade explained, “When we moved our production base to Romania, we also re-registered a company in Romania, which is equivalent to turning our products into local products produced in Romania, and because Romania has also joined the European Union, the entire European market has given great preferential policies to Romanian products. As a result, we have actually enjoyed this preferential treatment. Tax costs are lower, our prices can be lowered, which also allows us to have more sales, so the overall profit margin is also very impressive. In contrast, other people who have been producing Chinese-style furniture, every company that sells to Europe has suffered heavy losses.”
Charlie smiled and said, “It seems that you are quite good at business.”
Francis Wade said confidently, “Of course, I completed my bachelor’s degree at Yale University when I was 20, and I completed my MBA in two years. I have been involved in the management of a family business since I was 18. A genius in business, but definitely better than most entrepreneurs on paper.”
Charlie nodded slightly and smiled, and said, “If this is the case, then you don’t have to go back this time. Stay in China and help me out. By the way, I will also check if you really have two brushes!”
Visit VIRTUAL NOVEL for more available chapters of this title!
