Chapter 173 As One Falls, Another Rises
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The fish density in Shuijun Lake was actually not very high. According to polyculture yield calculations, a high yield for farmed fish could approach 4 tons per acre, with a standard yield of around two to three tons being common.
Apart from a few shallow areas on the periphery of Shuijun Lake, there was a total of 123 acres available for fish farming. If we were to calculate at 'full capacity,' it would be sufficient to raise 400 tons of fish. However, Shuijun Lake is not a private fish pond after all; it also serves as a recreation spot for visitors. One reason Suming was able to contract it at a low price was precisely this factor. As a result, the density of fish Suming raised at that time was not particularly high. A rough estimate suggested that Shuijun Lake could yield about 200 to 250 tons of fish each year.
Based on market prices, if all could be sold, it would be around three to four million Yuan, not a sensational figure.
But the profit margin was substantial. Labor and feed costs for Shuijun Lake were virtually non-existent, as they had been earned back in other ways, with profits still to be made. As for the fish fry, not a penny was spent. Aside from hiring some workers for netting and incurring some costs, there weren't any other significant expenses. It could be said that it was all pure profit.
Moreover, Shuijun Lake was now capable of producing more than just over 200 tons of fish! The large channel connecting Shuijun Lake and Huating Reservoir had been cleared. As long as there was a market, fish from Huating Reservoir could be brought over for sale. It should be noted that the farming area in Huating Reservoir was more than ten times the size of Shuijun Lake!
However, all of this was predicated on having a market. Without a market, even ten thousand tons of fish would be useless and would just have to wait to die and rot!
The major hotels had placed some orders, but these were not sufficient to fully absorb all the fish from Shuijun Lake. A stall by the zoo next to the lake sold fish as a small gimmick; they sold a couple of hundred pounds a day, an additional revenue stream for the zoo employees, but this did not address the larger issue for Shuijun Lake.
So ultimately, a solution had to be found in the fish market. Yangchuan City's fish market was aimed at the general public and had numerous small fish vendors. This was where the main battlefield for sales lay.
Yet, opening up sales channels in the fish market was not that easy.
The hotels and restaurants went for the high-end or at least mid-range approach, while most small merchants targeted the daily needs of the public. They preferred to play it safe, reluctant to change suppliers lightly, and moreover, there were too many small vendors to communicate and pitch to, one by one.
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There was also an underlying reason why the merchants in the fish market were unwilling to change suppliers; to a large degree, it was because their current supplier was Huating Fisheries Company.
On one hand, the fish from Huating Reservoir were not much worse off than those from Shuijun Lake, at least not to an extent the average person could taste. On the other hand, those involved in the aquatic market knew that Huating Reservoir had a not-so-clean background, and it was better not to offend them if possible. Previously, there were small vendors who changed suppliers, but their end was not favorable, and they were quickly squeezed out of the aquatic market through various means.
"Isn't this too overbearing?" Suming asked Su Meng, opening his eyes wide in astonishment.
Su Meng waved his fists angrily a couple of times, seemingly ready to resolve the matter by force.
"Of course, that won't do. We are law-abiding citizens! Let me ponder this!" Going in with force was definitely not suitable. Huating Company had a reputation for corporate bullying, which was common knowledge, but if you really thought about it, there weren't any concrete legal proofs against them. You can't just claim a fish vendor is afraid of being retaliated against by Zhou Jin to prove that Zhou Jin has committed a crime, can you?
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Zhou Jin, as he wished, finally met with Mr. He. However, Zhou Jin didn't feel too happy about it. Mr. He was visiting as a representative of the city's Fisheries Association. Zhou Jin wanted to bring up certain topics several times, but Mr. He inconspicuously interrupted him each time without giving him a chance.
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There was another worrying matter: the fishery company was running out of working capital. Zhou Jin made a lot of money, but he also had more places where it needed to be spent. Despite the grand facade of the fishery company, the cost of upkeeping relationships and making investments were all large figures. Plus, having spent more than a decade in prison and experienced many hard times, Zhou Jin, a bachelor, had always been one to spend when he had money, greatly enjoying life's luxuries. As a result, the company's liquid assets weren't substantial.
According to past years' patterns, once the fish seedlings were in the water and the feed was prepared, the end of the year would bring in the sales, a cycle that would repeat itself. Zhou Jin had already arranged for the feed and fish seedlings, and there wasn't much else that really needed spending this year. The money in the account should have been enough.
But with Baldy getting injured one after another, and Zhou Jin himself suffering severe injuries and being hospitalized, not to mention the loss of fish seedlings... a series of blows tightened the financial stress. This was a common problem among private enterprises—without sufficient reserved funds, they could be aggressive when things were going smoothly, but struggled to cope with various unforeseen disasters and calamities.
For those in business, working capital is the lifeblood coursing through the company's veins. Once cash flow issues arise, the entire company could become paralyzed. And Huating Reservoir wasn't like other industrial companies that could secure mortgage loans from banks; the reservoir was leased, and the lease was nearly up. Their material assets were limited to a self-built small villa without a property title, a few cars, and several fishing boats that had seen better days, none of which could secure much in loans.
If this were the past, it wouldn't be a cause for concern because as long as the fishery business operated normally, money would continue to flow in. Especially with the end of the year approaching, which was prime time for fish sales, cash would quickly return once the fish were sold.
At the beginning of the season, inexplicably, some fish had died in the reservoir, but later on, things improved with fewer fish deaths, and the fish grew fatter and more robust than in previous years.
Just as it looked like the money was about to come in, several high-end hotels with long-term cooperation suddenly notified him that they would temporarily stop ordering fish from the reservoir!
Zhou Jin sharply realized that this was a serious problem!
These orders weren't large enough to be fatal for the total output of the reservoir. His primary sales channel was the local fish market in Yangchuan City, as well as shipments to other regions.
But the immediate settlement of the fish payments from high-end hotels provided cash in large sums within a short period, whereas repayments from the fish market were relatively slower.
Moreover, supplying fish to high-end hotels wasn't really about making money, but about building a reputation, essentially getting these establishments to vouch for the quality of the reservoir's fish.
For instance, claiming that a certain five-star hotel uses exclusively our fish, and that our fish sell exceptionally well in certain prominent restaurants, would establish a reputation. More people would come to buy the fish as a result, and there would be more willingness to collaborate and purchase fish from the reservoir.
But conversely, if it got out that a certain prestigious hotel, which had always used fish from the reservoir, was no longer sourcing from him this year but had switched to another supplier, it would be a significant blow to the reputation of Huating Fisheries Company.
Local market influence might not be affected momentarily, as Zhou Jin had the final say in Yangchuan City's fish market, no fishmonger daring to deal with fish from Shuijun Lake as yet. But for those distributors from outside the city, it was a different story. Some were as influential as Zhou Jin and bought from him because of the quality and fame of the reservoir fish, not because of Zhou Jin's influence.
Therefore, while the orders from those hotels might not have been large, their significance was critical. If someone were to snatch those orders away, one could foresee that Huating Fisheries Company's future orders would dwindle, leading more people, especially those distributors from outside, to turn their attentions towards Shuijun Lake.
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PS: Mr. Zhou is courting disaster again. How does that saying go? You don't court death if you don't seek trouble. What do you say, should we cripple him for good this time?