Owning a glass production enterprise, Zhao Yuhai, who has been engaged in glass trade for more than 30 years, once dared not think about it. "At present, it needs at least 300-400 million yuan to build a new glass factory, and the working capital needs at least tens of millions, even up to 100 million yuan. Therefore, in the past, most glass factories were state-owned enterprises, and ordinary private capital often couldn't cross such a high threshold."

However, a few months ago, when pieces of flat glass were continuously manufactured from the automatic production line, Zhao Yuhai finally opened the deepest "glass production complex" in his heart.

As a successful real estate developer, why did he invest more than 200 million yuan in the glass production industry? What is his biggest feeling after engaging in the real economy? The glass production line is like a huge gold eater, which "eats" hundreds of thousands of yuan every day, and can never stop for 24 hours and 365 days... What are the unknown secrets of glass production? In this issue of entrepreneur stories, listen to 66 year old Zhao Yuhai uncover the secrets one by one.

A 40 million yuan M & A started from the "big glass" complex

"At first, I was a glass distributor and wholesaler. There was an almost insurmountable capital gap between glass trade and glass production." Zhao Yuhai frankly said that in the early 1980s, he began to do glass trade. At that time, the old Dalian glass factory was famous all over the country, and domestic customers basically recognized the products of "big glass". It was with the light of "big glass" that he made the glass business north and south.

From the late 1990s to the beginning of this century, with the domestic real estate industry gradually entering the golden period, Zhao Yuhai's glass business is more prosperous. At that time, he could sell about 2000 pieces of train leather glass a year.

With the growing business, Zhao Yuhai gradually became the leading glass dealer in Northeast China at that time. Although it cannot be compared with Cao Dewang, the "king of glass", Dalian's "big Lao Zhao" is also famous in the glass industry.

In the glass industry chain, glass trade has limited profit space and less autonomy. Therefore, around 2004, Zhao Yuhai expanded his glass deep-processing business and moved towards the middle reaches of the industrial chain, but at that time, he did not dare to think about going up the industrial chain.

In 2000, Zhao Yuhai established Dalian Yihai enterprise group. Began to enter the real estate market, and has successfully developed seven real estate projects. Later, the company gradually faded out of the field of glass trade, but still retained the glass deep-processing business segment.

"In the real estate industry, we have completed a certain amount of capital accumulation. The emergence of an unexpected opportunity in 2018 has made me realize my dream of glass production deep in my heart." Zhao Yuhai told reporters that as early as 2004, a large glass enterprise in Jiangsu invested and built Dalian xinrunhua building materials Co., Ltd. in liangjiadian street, Jinzhou, Dalian to engage in glass production. But in 2015, the company stopped production and then filed for bankruptcy. In May 2018, Yihai Group invested 40 million yuan to acquire "xinrunhua" and established Yihai big glass (Dalian) Glass Co., Ltd.

"The reason why we have the word 'big glass' in our company's name is because I have a deep complex about it. According to the data, in 1921, Japan's Nanman nitrate Co., Ltd. prepared to build a flat glass factory in Dalian. This glass factory is the first wholly foreign-owned enterprise of flat glass in China and the historical starting point of' big glass'. Now it has been nearly a hundred years! Unfortunately, it was once referred to as The old Dalian glass factory of "big glass" stopped production a few years ago, and Dalian lost its glass industry. " Zhao Yuhai said that he hopes to continue the glory and dream of "big glass", which is also his original intention to separate energy from the profitable real estate industry and set foot in the glass production industry.

Once the glass furnace is ignited, the production line cannot stop

40 million yuan won a glass factory, which does not seem to be a huge investment. However, in fact, there is a long distance between the completion of M & A and the burning of glass.

"So far, we have invested more than 200 million yuan in glass production projects." Zhao Yuhai frankly said that on August 12, 2019, Yihai big glass officially ignited the kiln. When the first flat glass was fired and slowly transmitted from the automatic production line, his eyes were wet

The reporter learned that the daily production capacity of Yihai large glass is 380 tons, and the flat glass produced is mainly sold to the southern Liaoning market. "At present, there are two large-scale glass production enterprises in Dalian. One is Yihai glass and the other is a foreign-funded enterprise located in Dalian Development Zone. The glass produced by the latter is mainly sold abroad, and there is almost no competition between the two enterprises." According to insiders, at present, the domestic glass industry is in a state of full competition and high price transparency. Therefore, most glass production enterprises have set a "reasonable sales radius", usually about 400 kilometers. Beyond the "reasonable sales radius" means that the transportation cost is too high, and its glass will lose its price advantage in the competition. From this perspective, the flat glass of Yihai large glass will occupy a high market share in southern Liaoning.

"Now, I really realize that glass production is a money burning industry. Taking Yihai glass as an example, the cost of raw materials such as soda ash and silica sand used every day, as well as the cost of fuel and workers' wages, need 5.6 million yuan. However, the produced glass can not be sold immediately, which will squeeze the inventory. In this way, it will require at least tens of millions or even hundreds of millions of yuan of working capital 。” Zhao Yuhai said with emotion that there is another particularity in the glass production industry: once the furnace is ignited and the equipment is running, it must not stop production for 24 hours and 365 days. If there is a cease-fire and power failure, the liquid glass will solidify, and all the refractory bricks of the kiln will be scrapped, while the reconstruction of the kiln requires 40-50 million yuan.

From a certain point of view, this is a non-stop industry. Therefore, sufficient working capital must be prepared to ensure the sustainability of production. In addition, there must be plans to ensure that the equipment can operate continuously in case of emergencies. For example, Yihai glass has set up double circuit power supply, diesel generator power supply and UPS triple power supply system.

What is his biggest feeling from real estate to real economy?

From the real estate industry "cross-border" to the real economy, how does Zhao Yuhai feel? "My biggest feeling is that it's really not easy to make money in the real economy. In the past two years, the market of flat glass has been stable, but even so, the average profit of the industry is only about 10%. Moreover, glass production needs to invest a lot of money and the production process is complex... There is a test of stone and fire."

However, after intervening in the real economy, Zhao Yuhai also felt very down-to-earth. "The domestic glass industry has experienced a major reshuffle. The backward production capacity such as the old lattice glass production plant has been eliminated, and the industry is in a period of benign development. Under this background, although the profit of glass production is not high, it is generally stable and predictable, and the risk is small in the short term." Zhao Yuhai sincerely said that the glass production project had not kept him awake at night.

In addition, he also obtained a great sense of achievement from the project. "Yihai big glass has 309 employees, who are involved in hundreds or even thousands of families. The glass production project provides these workers with jobs and makes them live happily. I think it is more meaningful than making more money." Zhao Yuhai, who has passed his comfortable years, obviously has a higher pursuit beyond material aspects in the second half of his life.