Story of a Big Player from Gangnam - Chapter 706
Chapter 706: Establishing subsidiary companies in India and in China (1) – Part 1
Gun-Ho was dozing off in his office after having a cup of tea that Secretary Hee-Jeong Park brought to him. President Song entered the office after knocking on the door.
“It’s almost lunchtime, sir. Are you not going out for lunch today?”
“Oh, it’s already noon?”
“Would you like to have lunch with the executive officers? It has been a while since we all had lunch together.”
“Sure. Why not?”
“I will call them.”
Gun-Ho went to a Korean restaurant in the middle of a plum farm, for lunch with GH Mobile’s executive officers. The restaurant was not far from GH Mobile. Ms. Accounting Director Min-Hwa Kim, who was the only female director in the group, looked so excited when she saw plum trees there.
Gun-Ho sat at a table and looked around. There were President Song, the chief research officer, the general affairs director, Ms. Accounting Director Min-Hwa Kim, Mr. Production Director Park, and the director at the quality control department.
President Song looked at Gun-Ho with a smile, and said, “The general affairs director and Production Director Park have been working hard and busily since we acquired the former food packaging company next door.”
“I’m aware of it. I went there this morning.”
“The new building that we just acquired will be our second factory. We will refer to it as GH Mobile’s factory no. 2. Once we complete the painting and building the storage there, we will move our hydraulic press machines to that location.”
“Hmm.”
“We couldn’t hire enough workers even though we need more labor, because our factory no. 1 is already full, and there is no room for additional workers to work at. Since we now have an additional production site, we will post job openings as soon as possible. We currently need 50 more production workers, but we will eventually hire 100 more workers for the production department.”
“We need that many production workers?”
“Our sales are on the rise as we need more people. We will generate more than enough income to pay additional workers. You don’t have to worry about paying the new workers, sir.”
The food that they ordered hadn’t come out yet. They had a glass of water in front of each person at the table. Director Chang-Ik Pyo from the product quality department, who was fiddling with his glass of water, said, “The product quality department needs more workers as well. We lost many of the workers at the product quality department to Dyeon Korea when it was established. We haven’t added anyone to the team since then.”
Gun-Ho said, “Those people, who we lost to Dyeon Korea, successfully enabled for Dyeon Korea to obtain the environment management system certificate— ISO 14001, and be officially recognized as a startup company with technology.”
The food finally came out.
While having lunch, Gun-Ho asked, “How are we doing with the employee stock ownership plan of Dyeon Korea?”
“We have received the application to participate in the program from about 50% of our employees so far. We are expecting to see a lot more people applying for it on the last day. Many of them want to see what other people decided to do before making their own choices.”
“Are we receiving more product orders from the companies other than A Electronics and H Group?”
“We don’t see any noticeable changes in their product orders. Even if they increase the volume of their product orders, we won’t be able to take them under our current production capacity. Our production site is now crammed with the work from A Electronics and H Group.”
“We should rush into getting our second factory ready to work then.”
“Once the second factory is open, we will be able to breathe again.”
After lunch, Gun-Ho came back to GH Mobile. When he arrived at its front entrance, he said to President Song, “Why don’t you come over to my office for a cup of coffee. I have something that I’d like to discuss with you.”
Gun-Ho and President Song were sitting on the sofa in Gun-Ho’s office while having their afternoon coffee. Gun-Ho asked President Song, “If someone among our employees wants to take the forfeited shares, just let him or her have them.”
“Okay, no problem, sir.”
“How much fund do we have in our reserve right now?”
“As of today, we have 5 billion won. We had 6 billion won, and we used 1 billion won when we purchased our second factory. It cost us 4 billion won, and Dyeon Korea had sent us 3 billion won for our investment in-kind to it. So we added the 1 billion won to it in acquiring the building next door.”
“So, we currently have 5 billion won left.”
“That’s correct. Since our sales are on the rise, we will soon have more funds accumulated in the reserve. We are anticipating making more than 10 billion won as our after-tax profit this year. Our sales will possibly increase more rapidly, and if that happens, our cost of sales to revenue ratio will be lower, and that will allow us to generate even more profits.”
“Hmm.”
Gun-Ho went to Dyeon Korea in the afternoon.
“Dyeon Korea’s Director Kim must have gotten back to his office from a client site by now.”
As soon as he sat at his desk in his office, Gun-Ho called for Secretary Seon-Hye Yee.
“Would you like to have a cup of tea, sir?”
“Yes, please. Also, please ask Director Kim and the internal auditor to come to my office now.”
“Yes, sir.”
After a moment, Director Kim and the internal auditor came into Gun-Ho’s office. Secretary Seon-Hye Yee prepared three cups of jujube tea for them.
Director Kim said, “I heard that GH Mobile is opening their second factory, and they will hire quite a number of production workers soon. Dyeon Korea currently has 100 workers. As we are getting more work from GH Mobile, we will need at least 30 more workers too. In preparation for our future labor shortage, I suggest that we hire 50 more workers now.”
“Hmm, really?”
“In order to maintain our ISO certificate and the recognition as a startup company with technology, we sometimes have to send some of our workers to a training or a meeting. And, all of our 16 machines are fully working right now, and we don’t afford to have them off the work even for a short period of time. We are short of labor sometimes even with our 100 workers.”
“Discuss with Vice President Adam Castler, and hire workers as many as you think we need.”
“Yes, sir.”
“The reason why I asked you two to come to my office today is that I wanted to discuss our future factory establishment in China and India.”
“Have you received a call from them? Did they find a factory on the market for sale?”
“Manager Lee from India called me the other day. He found a 5,000 pyung large factory near the Chennai Industrial Park. It’s on the market for sale.”
“Is that right, sir?”
“Also, President Min-Hyeok Kim called me, and let me know that there is a factory for sale in the Suzhou Industrial Park. I want you two to go on a trip to India and China to visit those properties that are for sale. If you determine that they are adequate properties for our business, then make a purchase contract.”
“Well… sir,” the internal auditor hesitantly said.
“Yes. Please tell me freely about what you think.”
“My area of expertise is the finance field where I have been working for a long time. I don’t think I’m the right person for it. Mr. Director Kim is the perfect person to handle this type of work though.”
Director Kim looked at the internal auditor and said, “Mr. Internal Auditor, if we have to make a contract to purchase a factory, you are the right person for it. Let’s do this then.”
“What are you suggesting?”
“I’ve already been to India previously, so, I suggest that you go to India this time, and I will go to China. If you are not comfortable going on a trip to India by yourself, you can go with Mr. Adam Castler. One of India’s official languages is English, so Mr. Adam Castler will be of great help during the trip.”
