MTL - Reborn Capital Empire-v2 Chapter 710 global strategy
Chapter 710: Strategies for Universal
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"Mr. Grubman, I think it's better to work for a company that better fits my career aspirations than to waste my precious time on pointless arguments, don't you think?"
Looking at the smiling and confident young man beside him, Richard Grubman's face became more thoughtful.
After a long time, "Mr. Guo, if I say that I take over Universal, I will reduce or even temporarily stop the investment in container ships. In addition, I will sell some terminal berths and warehouses. Will you agree?"
"Before answering this question, I would like to know the reason why Mr. Grubman did this." Guo Shouyun said.
Richard Grubman nodded and organized the language, "In 1862, the French physician and economist Clement Jugella wrote in "On Commercial Crises and Cycles in France, England, and America". The book first proposed that the market economy has 9-10-year cyclical fluctuations, and this medium-length economic cycle was later called the 'Jugla Cycle', also known as the 'Jugla Medium Cycle'."
“…The change cycle of the heavy industry chain, including steel, manufacturing, shipping, electric power, metal mines, coal, ports, building materials, etc., is undoubtedly a typical “Jugla cycle”. Under normal circumstances, the cycle change is about In 10 years, the ratio of the length of the rising period to the falling period is about 4:6. Although not absolute, it roughly maintains a 10-year cycle change.”
"...The last 'Jugla mid-cycle' of the shipping industry was from the third quarter of 1992 to the fourth quarter of 2001. The next shipping industry cycle, if there are no surprises, should be from the fourth quarter of 2001 to the fourth quarter of 2011 or the first quarter of 2012. Quarterly. According to the Jugla cycle of rising for 4 years and falling back for 6 years, from the fourth quarter of 2001 to the fourth quarter of 2005, the shipping industry was in a stage of rapid development, and then began to enter a downward cycle from 2006.”
“…It is now the third quarter of 2004, and one more year will be the peak of the Jugella cycle. If Universal invests heavily in shipping, it will undoubtedly be in time for the high point of the market, not only spending a lot of unnecessary money, but also Bearing high operating costs after the shipping industry has entered a down cycle. So if Universal is really going to invest in the shipping industry, around 2009, when the shipping industry reaches the bottom of the down cycle is more appropriate.”
"...According to the survey data of Reuters and Bloomberg, the world's 20 large shipping groups added an average of 37,000 TEUs each year, and the global shipping industry added 3.15 million TEUs each year, with an annual growth rate of 8.6%. The new demand for transport capacity is 2.87 million TEUs, a growth rate of 7.9%! Although excess capacity is the norm after competition in the shipping market, once it becomes long-term, the excess capacity will inevitably overwhelm the market.”
“…Universal is not a traditional shipping company, but a comprehensive company established around commodity trading, involving finance, shipping, logistics, terminal operations, etc. There are a large number of small and medium shipping companies and Freight companies provide services for them, so in addition to ultra-large container ships, ultra-large LNG carriers, very large oil tankers, and chemical tankers, etc., these small and medium-sized shipping companies will not be involved. In addition to ultra-large and professional ships, There is absolutely no need to invest. This way Universal is less affected by the shipping cycle and has higher profit margins.”
“…In addition, with the continuous development of the global shipping industry, the large-scale ship has become more and more mainstream. This is conducive to saving freight and maintaining profitability during the shipping recession. With the large-scale ship, the requirements for terminals and supporting facilities are also increasing. Higher, small and medium-sized terminals will become more and more marginalized. Therefore, increasing the number of berths in the terminal is not the best development measure. Concentrating financial resources to deepen investment in large terminals and optimizing supporting facilities is a long-term strategy. Take the United States as an example, Global and There is no need to invest in dozens of terminals, it is enough to focus on three or four main terminals on the east coast, west coast and Caribbean Sea. This will not only improve the utilization of the terminals, but also increase the net profit of the terminal operation. ."
"...The operation of the terminal is the same, and the operation of the warehouse is also the same. It is meaningless to pursue the number, but should increase the radiation area of the core warehouse, increase the utilization rate, and improve the profit margin. Terminals, warehouses, but lack of railways and cargo airports. Universal wants to build a large platform that spans all aspects of the logistics industry, and railways and airports are indispensable parts.”
After Richard Grubman finished speaking, he exhaled. After noticing his eyes, Guo Shouyun smiled and said: "Mr. Grubman's words have made my understanding of the logistics industry more in-depth. Moreover, I also agree with your analysis very much. Therefore, now I am more than ever. I hope you can take on the role of CEO of Universal Corporation."
"Mr. Guo, in addition to what I said before. If I were CEO of Universal, I would reduce the variety of commodities on the Universal Commodity Exchange."
"I want to know why."
After Richard Grubman nodded, "Since it is a commodity trading website, there must be buying and selling of commodities. Pacific Energy is the world's largest electricity producer and supplier, as well as the world's top natural gas transportation, distribution and retail. business, Unocal is the fourth largest oil and gas producer in the United States and the top 20 oil and gas producers in the world. Therefore, on the global commodity trading website, the trading volume of electricity, natural gas and oil is the largest. Over the years, with Guo's business group, With a large investment in agriculture and animal husbandry, the trading volume of soybeans, corn and fresh food is also increasing.”
"...In contrast, steel, copper, coal, lumber and other trading types, because Mr. Guo's company does not have similar support, under the competition of the Chicago Mercantile Exchange and the New York Mercantile Exchange, it has never been able to form a scale. So , I think we should give up trading in small categories and focus on the seven major categories of electricity, natural gas, oil, soybeans, corn, wheat, and fresh food. Only when there is enough trading volume and a market can be formed can it be attractive enough futures market, increasing our financial revenue.”
Commodity trading is naturally accompanied by the formation of the futures market. When the global commodity trading website was not big, futures trading was not very noticeable or even developed. However, as Pacific Energy's power production scale becomes larger and larger, Unocal continues to grow in the oil and gas field through continuous mergers and acquisitions.
In addition, Guo Shouyun's Guo's Charity Fund and several affiliated charitable funds have invested almost half of it in buying land.
The United States has more than 2 million farms and 1.669 million square kilometers of arable land, ranking first in the world. In recent years, Guo Shouyun's charitable methods include donating to Stanford University; the United States going to Huaxia, or Chinese students coming to the United States; and several of his own charitable schools, most of them have purchased land. The land is then given to those who are homeless and willing to engage in agricultural cultivation in the form of charitable donations. The vast majority of these people are Chinese, with a small number of Hispanics and Hispanics.
In order to take care of more rural men from China who can't read and only farm the land, Guo Shouyun dismantled the large farm he bought into small farms of more than ten acres.
The general situation in the United States is that small farms will work intensively and grow cash crops such as sugar beets and spices to obtain higher incomes. However, these require a high level of knowledge and experience, and are really not suitable for Chinese farmers who have just arrived. So, they simply planted simple corn, wheat, and soybeans from the very beginning. Every year, Guo's Farm Company makes these farms grow corn, wheat and soybeans by order, and then purchase them together and sell them on the Guo's Commodity Trading website.
With accumulation year after year, the Kuok Charitable Foundation has invested more than $5 billion in agriculture. At the same time, the trading volume of corn, wheat and soybeans on the global commodity trading website has become larger and larger, and the influence has become stronger and stronger.
Coupled with the investment of Guo's Farm Company in animal husbandry, the trading of beef on the global commodity trading website has also increased.
Today, electricity, natural gas, oil, corn, soybeans, wheat and beef have nearly constituted the largest trading variety on the global commodity trading website.
Of course, someone might ask. Since the land has been donated, the owner of the land can plant whatever he wants, and he doesn't have to sell it to Guo's farm. OK, my friend, if you don't sell it to Guo's Farm, in the future your children will not be able to get donations from the sub-funds of the Guo's Charitable Foundation. Don't expect to get donations when you are seriously ill.
By contrast, Cargill, Bunge, and LDC don't give you that. It's obvious how to choose.
“… Fewer categories will help Universal become more specialized in storage, transportation, sales, etc. This will further improve Universal’s service level, market share and influence. Mr. Guo has abundant capital. In order to strengthen Universal’s trade in the field, Dominance in agriculture, in particular, should pick one acquisition from ADM, Cargill, Bunge and Louis Dreyfus.”
ADM, Cargill, Bunge and Louis Dreyfuss are the world's four most famous grain merchants, and they control 80% of the world's grain trade. The annual transaction volume is hundreds of billions of dollars. If it can win one of them, the global commodity trading website will become one of the real leaders in the global agricultural and animal husbandry field.
“…for the transformation of the logistics system. In terms of shipping, I hope to sell container ships under 10,000 tons of TEU; tankers under Suezmax and all single-hull tankers; LNG carriers under 200,000 cubic meters. Because small and Although economical ships are the mainstream of shipping now, they are also the most vulnerable to losses once they encounter a shipping cycle. On the contrary, super-large ships can obtain orders at low shipping times by virtue of their economy.”
“…In terms of air freight, I would like to sell all the cargo planes. We are in the commodity business and the price of cargo planes is clearly not for us.”
"...On the terminal side, strengthen the stake and interests of the hub port, expand the throughput capacity of the hub port through investment, and win more orders."
“…In terms of land transportation, it is mainly railway, road transportation, as well as the construction of warehouses and storage and transportation equipment. We can acquire one of the six Tier 1 railroad companies in the United States.”
American Freight Railroad is divided into 3 categories according to the annual turnover. Those with an annual turnover of more than 250 million US dollars are Class I railways, and those with an annual turnover of 20 million to 249 million US dollars are Class II railways (regional railways). ), the annual turnover of less than 20 million US dollars is a class III railway (local railway).
There are currently six Tier 1 railroad companies: Pacific Union, North Burlington-Santa Fe, CSX, Norfolk Southern, Illinois Mid-Gulf, Missouri-Kansas-Texas Railroad . All six railroads are national railroad companies, and their transportation network can reach all states in the United States, as well as Canada and Mexico.
“…If all this happens, we will be the world’s largest integrated logistics and commodities trader.”
After Guo Shouyun nodded, he pondered for a moment and said, "Building a world's top comprehensive logistics and commodity trading platform is also my expectation for Universal. However, in your envisaged development plan, I agree to sell the aviation business. Indeed, the high shipping costs of air transport are too high compared to larger commodity transactions, and there is no need to keep the aviation department after reducing the categories of the global exchange website.”
“…Also, I don’t agree with the strategy of selling container ships below 10,000 TEU; Suezmax and all single-hull tankers; LNG carriers below 200,000 cubic meters. Because Pacific Energy, Unocal, Guo’s Business itself requires a large number of specialized ships to provide logistics services. This is a business that Universal will not lose, and there is no need to give this money to other shipping companies to earn.”
"About port investment~www.novelbuddy.com~ It's okay to focus on investing in core hub ports, and investing in expansion is also what it should be. It's just that the assets of the six major US railway companies are huge. I agree with your acquisition strategy, but it will wait until next year. "
"next year?"
Guo Shouyun nodded affirmatively. It will take time to sell eBay and Yahoo shares, and this year's has been used to acquire 22.4% of Scottish Power's shares. The rest won't be possible until at least next year. In addition, the assets of each of the six major US railway companies are as high as tens of billions of dollars. It is obviously not enough to sell the shares of eBay and Yahoo, and even the sale of 40% of the shares of Dabor Steel Phase I is not enough. So, to buy one of the six major railroad companies, you need to use the Bruce Fund, which has $180 billion in capital reserves.
At present, the 180 billion US dollars are all invested by Guo Shouyun in oil futures and spot gold. There is a clearing in March of each year.
The purpose of liquidation is to comprehensively evaluate the total value of assets under the Bruce Fund, such as Kuo, Pacific Energy, Unocal, Matrix, and Phoenix Bank, and then issue a new asset-backed securities to cover the previous batch of asset-backed securities and repay interest.
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