Chapter 117: Joint Venture (1) – PART 2
People entered the event hall for the contract signing of the joint venture.
There were journalists present as well.
The event hall looked just like the one when they had signed the letter of intent. They added a big flower basket on the table this time.
The president of Jinxi Construction Company signed on the contract and the journalists started taking pictures of the moment. Everything looked about the same at the time when they signed the letter of intent except there was one more person standing behind Gun-Ho—the interpreter, Eun-Hwa Jo, and she would appear on the picture this time.
Gun-Ho hadn’t transferred all of his investment money of 1,500,000 dollars to the joint venture yet. He sent 150,000 dollars for now as a start. The money was sent through Kukmin Bank in the Shanghai location to Industrial and Commercial Bank of China in Kunshan City.
“The business will start with this money.”
The vice president of the joint venture—Kkangsin Kkao who used to be the planning director of Jinxi Construction Company was called Kkao-jjong—President Goh—by Chinese people.
Kkao-jjong was looking for Min-Hyeok.
“Jin-jjong—President Kim—! We received funds from Korea. 30 workers from Jinxi Construction Company will join the joint venture. Let’s talk about our organizational structure.”
“Okay.”
Min-Hyeok and Kkangsin Kkao discussed what departments they want to have, and how to assign the workers to each department and so on. In fact, most of the work was done by Kkao-jjong. He was in his 50s, and he had twenty years of work experience. He used to be a planning director in a construction company. He made the organizational structure, and Min-Hyeok added some idea to it.
“I will closely monitor the joint venture business so they don’t waste the precious money that was sent from Korea. That’s my role in the joint venture. President Goo told me the same thing before he went back to Korea.”
On the plane back to Korea, Gun-Ho thought that Seukang Li was a smart government official.
“He developed the vacant lot in Kunshan City and set up the electricity and water system to build an industrial complex there. That will be recorded as one of his major successful projects. It costs a lot of course, but if we can successfully attract enough companies, then it is a success.”
Gun-Ho smiled.
“He wanted me to join the joint venture in order to attract Korean companies into the industrial complex. They didn’t ask me to be their co-venturer because of the investment fund. I’m sure they will let me go once they have enough companies in the industrial park. If the business goes well, and they become financially affluent, they will increase capital stock without consideration and ask me to leave. Even if I stay, the duration of the joint venture is set for twenty years, so I will leave the business then anyway.”
Gun-Ho calculated how much he would make if they increase the capital stock by 30%.
“My shares will be worth 1.95 billion won. I invested 1.5 billion won, so I would make 450 million won. That’s not bad. However, it’s not just money I could make from this joint venture. I will learn about Chinese companies, and their business environment, rules, and customs so when I am ready to make an M&A of a Chinese company, I can do it effectively and efficiently. Hahaha.”
A flight attendant brought the inflight meal to Gun-Ho.
“Thank you.”
Gun-Ho thanked the flight attendant, and she nodded her head to Gun-Ho in return.
“The female flight attendants of Asiana Air are always so pretty. Anyway, how was the fight going between the two owner brothers of Kumho Asiana Group?”
Gun-Ho wanted to check his Kumho stock once he arrived in Korea.
Ji-Young placed a fax they received on Gun-Ho’s desk.
“What is this?”
It was a weekly report that Min-Hyeok sent to him from China.
“Hmm, where did he download this report form? It looks alright. I guess his 1 and a half years of work experience at a quality assurance department is being utilized after all. I do like his paperwork.”
Gun-Ho reviewed the weekly report.
“They finished organizing departments and personnel placement. They found a house to rent for the president and determined the amount of wage for each worker. They also implemented the company policy. The organizational structure and the status of current expenses are attached. Okay, this is good. Min-Hyeok seems to be doing a good job. Since I put my precious 1,500,000 dollars in this business, I, of course, have to have someone there to monitor how my money is spent. That way they will be careful with spending the money.”
Gun-Ho signed on the report.
“I will prepare a separate folder for the reports sent from the joint venture.”
“Sounds good.”
Manager Kang was craning his neck to look at the weekly report of the joint venture.
“Sir, do you want me to ask him to send a daily report instead of a weekly report?”
“It’s okay. They should be very busy doing business especially in the beginning.”
Gun-Ho smiled while reading an economic newspaper.
“The younger brother of Kumho Asiana Group is pressing his older brother to fulfill the joint management agreement?”
Gun-Ho was not sure what the joint management agreement was about, but he thought the owner brothers’ fight would start soon again.
“I’ve purchased an additional 5 billion won worth of the Kumho Chemical stock a month ago. They already tried to get rid of little investors once. Let me see how much the price had increased.”
The price of Kumho Chemical stock had increased twice.
“Hahaha. Of course. My 15 billion won became 30 billion won.”
Gun-Ho was smiling broadly while looking at his stock account when Ji-young asked him,
“Sir, you have any good news? I’ve noticed that you have been smiling for quite a while. Any funny news articles you found online?”
“No, nothing. I was just thinking about something that happened a long time ago.”
Gun-Ho was thinking whether he would sell all of the Kumho Chemical stock now since he made 15 billion won already.
“Nah. The real fight between the brothers starts now. New little investors will begin to purchase the stock. They will once more try to get rid of them soon. This time I will do the work with my money. I will leave the stock for one year and wait for the price to increase again substantially. Hahaha.”
Min-Hyeo stated on the weekly report that they placed an advertisement in the newspapers in the Shanghai and Suzhou City area. He sent the actual newspaper with the advertisement to Gun-Ho two days later.
“The advertisement looks good. I guess the company has someone who knows how to design.”
Gun-Ho made a call to Min-Hyeok.
“How’s it going? You must be very busy there. I just received the newspaper advertisement. Have you received any inquiries yet?”
“We have received inquiries from over ten companies. I guess we would make a contract with two of them. Ten companies were Korean companies that were already doing business in China. I explained to them what the industrial park is about. Kkao-jjong has been talking with several Chinese companies, and one of them would make a contract soon.”
“Really? You did a good job.”
“We think we will need more companies who show interest. So we are working on an advertisement we could place in a Korean newspaper.”
“Really? There should be advertisement firms there who could help you with the advertisement design. I mean Korean advertisement firm.”
“Okay, I will find one. But we will still have to work on the contents first. Once we are done with a draft, I will send it to you. Well, I mean I will send you a report.”
Min-Hyeok sent Gun-Ho a draft of the advertisement that would be placed on the Korean newspaper.
Gun-Ho called for Manager Kang and Ji-Young.
“Look at this draft.”
Manager Kang and Ji-Young carefully looked at the draft.
“Is this done in China? I guess there are many design professionals in China.”
“No. It was designed by a Korean company there. The contents and words are done by Min-Hyeok.”
“I guess he is good at it. It looks good.”
“I can show it to my friend next door—the design company—for her opinion.”
“Sure.”
Ji-Young took the advertisement draft and went to the office next door.
Jin-Young came back to the office while smiling.
“She said it looks really good, and she confirmed that it was done by a professional.”
“Really? Okay then. Manager Kang can start calling newspapers and get a price quote, and also discuss with Min-Hyeok when we should make a reservation at the Koreana hotel for the presentation.”
“Okay, sir.”
Gun-Ho headed to the Japanese restaurant that was run by President Hee-Yeol Byeon in Yuksam Town for lunch. It was after lunchtime, and there were not many people in the restaurant.
“How’s business, sir?”
“Hey, President Goo. You didn’t bring your car today?”
“I walked all the way here from the office. It is a good exercise.”
The chef with a shaved head came out from the kitchen to greet Gun-Ho while laughing.
“President Byeon, your business seems to be doing very well. President Gwang-Ho Yoo of Yangji Construction said last time that this restaurant is always crowded with customers.”
“Yes, we do have many customers coming in, I guess because my nephew is a very good cook. The problem is our debt.”
“What about it?”
“Since the restaurant is located in Gangnam, we had to pay high premium and rent.”
“How much did you pay?”
“We paid 300 million won for the premium and the rent altogether. We borrowed money from a bank using my condo as collateral, so we have to pay the loan interest every month, and it is a lot. So even though we are having a lot of customers, we don’t make much money.”
“I guess the bank who lent you the money is making money instead.”
“I guess so. Oh, a customer just came in. Welcome to Minado!”
President Byeon greeted loudly and ran to the new customer while carrying the menu book.
“Hmmm. They have debt… and it is holding them back.”
Gun-Ho talked to himself.