Chapter 73: Initial Success

Regarding the production at the distillery, Zhu Daodong did not meddle. Liu Wei, a former technician, was involved in the development of Shumuling Liquor. Now, all that was needed was to follow the existing recipe. Zhu Daodong believed that professionals should be used in their respective fields. He trusted that he could not do better than Liu Wei in this area, so there was no need to interfere with production.

However, in terms of management and operations at the distillery, Zhu Daodong offered his own insights. First, the production process needed to be standardized and institutionalized. While he could not interfere with the production of Laobai Gan, the production of Shumuling Liquor should strictly follow the production techniques.

Another point was to register the trademark for Shumuling Liquor and increase packaging options. Currently, all the bottles produced by the distillery were 500ml, or one catty. However, Zhu Daodong believed that 250ml and 125ml bottles should also be added for Shumuling Liquor.

Finally, there was the issue of advertising and promotion. To get the new liquor to market sooner, the production of Laobai Gan had been reduced by 30%. The township government, to support the new liquor, returned the 10,000 yuan management fee that Zhu Daodong had paid. Of course, if the distillery's profits increased next year, the management fee would also rise. In the long term, the township government was making an investment.

However, even with this, the distillery did not have extra funds for advertising. On this point, Liu Wei's opinion differed from Zhu Daodong's. He believed that any surplus funds should be used to expand production and increase output, rather than spending money on TV and newspaper ads.

Liu Wei's stubbornness made Zhu Daodong feel that Liu Wei was only a competent technician, or at best an ideal workshop director or deputy factory manager in charge of production, but definitely not a qualified factory manager. He was too rigid and lacked innovation.

If Zhu Daodong had not taken charge of the new liquor, Liu Wei would have only fulfilled his duties as a production manager, waiting for distributors to come and pick up the liquor after it was produced. Although Shumuling Liquor was well-known in Yuhua County, the county alone was not enough to absorb the new production of Shumuling Liquor.

Perhaps at first, Shumuling Liquor would be popular, but in three to five years, its fate would be the same as the original premium Laobai Gan—ignored and filling the distillery's warehouse.

However, advertising on TV and in newspapers was indeed expensive. With the distillery's annual output of 400,000 yuan, it could not freely advertise on these media. Therefore, Zhu Daodong could only use the cheapest but effective form of advertising: wall advertisements.

Wall advertisements involved using the walls along the roadsides and painting various promotional messages with colored waterproof paint. With just two or three people and a small amount of paint, the process could begin. Compared to other forms of advertising, wall advertisements were low-cost, widely distributed, long-lasting, quick to produce, and visually appealing.

"Director Zhu, wall advertisements are indeed feasible, but the factory needs to study this matter," Liu Wei firmly opposed advertising on TV and in newspapers. The distillery was so small that the annual sales might not cover the cost of a few ads, and the distillery could go bankrupt before the ads were even finished. However, he could not oppose wall advertisements, but he could not make the decision alone and needed to consult the leadership.

Zhu Daodong was only responsible for guiding and supervising the production of Shumuling Liquor, but Liu Wei had the final say in specific operations and sales.

"Alright, I hope this matter is decided quickly. We have six months before the new liquor is launched, and we can use this time to set up wall advertisements throughout the city." Zhu Daodong knew that Liu Wei would not just study the matter in the factory but would seek approval from the township government.

Yuan Ping did not oppose Zhu Daodong's plan for wall advertisements. After the Shumuling Liquor incident, Zhu Daodong's business acumen had won his trust. As the township's financial manager, his biggest concern was the monthly budget. If the distillery could increase its profits, that would be a welcome development.

To create wall advertisements for the distillery, the township government assigned five officials, and the distillery's supply and marketing department sent five people, forming five teams. Starting from Shumuling Township, once the teams were familiar with wall advertisements, they would expand to the surrounding areas. The five teams were each responsible for one of the three counties and two cities in Shachang. They would spend six months outside, and their additional task was to find potential distributors in other regions.

A month later, the effects of the advertisements began to show. The distillery's supply and marketing department's phone rang non-stop with inquiries about Shumuling Liquor, and Liu Wei's mouth was constantly open.

The distillery's initial success was mirrored by the tofu factory in Houjiatang. The tofu factory, which had been producing only dried tofu and preserved tofu, now began producing fresh tofu. The production capacity increased from 1,000 pounds of soybeans per day to 2,000 pounds. One pound of soybeans could produce 3 to 3.5 pounds of fresh tofu, 1.5 to 2 pounds of dried tofu, and 1 to 1.5 pounds of preserved tofu.

All the tofu produced each day was transported to the city's farmers' markets before dawn and sold out by the end of the day, regardless of whether the factory used 1,000 or 2,000 pounds of soybeans. When the factory consumed 1,000 pounds of soybeans daily, the gross profit was about 300 yuan, and after deducting necessary expenses, the net profit was 220 yuan. After increasing to 2,000 pounds of soybeans, the gross profit doubled, but the expenses did not. With a gross profit of 600 yuan per day, the net profit reached 480 yuan after basic expenses.

480 yuan a day, 4,800 yuan in ten days, how much in a month? How much in a year? When the first month's financial report came out, everyone was overjoyed. The tofu factory had invested over 60,000 yuan, and at this profit rate, it would recoup its costs in five months.

The factory leaders of the tofu factory were mostly village officials from Houjiatang. Hou Lihua was the factory's party branch secretary, and the village chief, Hou Manyi, was the factory manager. Hou Feng, the accountant, was also the factory's accountant. Hou Gan, responsible for production, was the deputy factory manager. Liu Dan, the women's director, became the office director, and the militia captain became the head of the supply and marketing department. The tofu factory's products were directly supplied to distributors, and in the six farmers' markets in the city, each market had two to three distributors. Therefore, the head of the supply and marketing department had a relatively easy job, mainly accompanying the delivery trucks, almost like a security captain.

"Father, the tofu factory has made a big splash. Should we maintain the current state or expand production? Should we invite Director Zhu to discuss this?" Hou Gan, who had been in charge of production, knew that the distribution channels were already established, so production was the key. As long as production was managed well, the tofu factory would not worry about profitability. However, with 2,000 pounds of soybeans per day, the factory was at its maximum capacity. To expand production, more investment was needed, and the first person he thought of was Zhu Daodong.

"Of course, I tell you, any major decisions in the factory must be discussed with Xiao Zhu first. This is a basic principle that must be adhered to," Hou Lihua said. After paying the workers' wages, electricity, coal, and raw material costs, the month's profit surprised and delighted him. Although he knew the tofu factory would make money, he never imagined that the monthly profit would exceed 10,000 yuan. To be honest, he had never thought that the village could earn more than 10,000 yuan a month.