Charlie frowned and asked, “Why do you produce Chinese furniture in Romania?”
Aron replied, “Mainly because Romania has a very high production of wood and their labor costs are relatively cheap.”
Charlie asked again, “Then how many workers do you have in Romania? What is the annual output value?”
Aron thought about it and said, “We have about 10,000 employees there, with an annual output of about two billion euros and a net profit of about 20%.”
Charlie nodded and said, “In that case, you have a net profit of 400 million euros a year from this business alone.”
“Yes.” Aron said, “A few years ago our production base was still in China, and I was the one who suggested my family moved the production base to Romania.”
Charlie asked him, “The production base was placed in China, why did you suggest moving to Romania?”
Aron explained with some pride, “Originally we produced in China and sold in Europe, although the logistics cost was much higher, but because the domestic labor is relatively cheap, so the overall profit margin is even a little higher than now,”
“But I had a hunch five years ago that the EU will definitely continue to raise tariffs and other taxes on foreign products in the future, in that case, our products in the European market will lose all advantages.”
“And then the profit margin will also decline significantly, and I really did not guess wrong, since three years ago, the EU has been increasing the tariffs on imported furniture, and so far has increased by at least 40%!”
Charlie nodded and said, “After you moved your business there, you will be able to avoid this tariff policy of Europe’s foreign countries, right?”
“That’s right!” Aron explained, “When we moved our production base to Romania, we also re-registered a company there, which is equivalent to turning our products into local goods production,”
“And because Romania also joined the European Union, the whole European market gives great preferential policies to Romanian products, so that we also effectively enjoy benefits of this preference.”
“With lower tax costs, our prices can be lower, which also allows us to have more sales, so the overall profit margin is also considerable,”
“Compared to those other companies that have been producing Chinese furniture at home and selling it to Europe, each of them has suffered heavy losses.”
Charlie smiled and said, “It seems that you are quite good at business.”
Aron said confidently, “That’s for sure, I finished my bachelor’s degree at Yale University at the age of twenty and my MBA in two years, and I have been involved in the operation of the family business since I was eighteen,”
“I dare not say I am a genius in business, but I am definitely much better than most entrepreneurs who talk on paper.”
Charlie nodded slightly and smiled, spoke: “In that case, then you do not need to go back this time, stay in China to give me a hand, by the way, I also will test you to see whether you are what you say!”
FAQ Novel
Q: Why does Charlie want the Ancestor Ritual held once a year?
A: Charlie wants the Ancestor Ritual held once a year to continuously strengthen the family’s loyalty to the Wade Family and reinforce their master-subordinate relationship.
Q: What is Aron Wade’s family business overseas?
A: Aron Wade’s family produces and sells Chinese furniture for the entire European market, mainly for Chinese customers, with their production facility located in Romania.
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