Offer To The CEO 323 Starting Lu Corporation's Downfall - Part 2

Wednesday, continued …

"Phillipa, despite her pa.s.sion for what she does, along with her sisters are the only heirs to Chen Corp that her father and grandfather run. She has a brilliant business brain but given that after her mother she will inherit her maternal grandfather's t.i.tle and everything that comes with that she is not really interested in Chen Corp as she realises that she will not be able to be involved with it in the long term."

"How good she is, is what she has managed to do with her maternal grandfather's estate in the last five years. She has taken an estate that was just covering costs to one that makes millions of pounds in profit each year. That profit is over and above what has been needed to even do major works on the historical buildings in the estate. That makes her ideal for being the tie-breaker for the joint venture."

After pausing for a few seconds, Hou Yi continued "The new joint venture, led by XF International's Film and Television division has already moved and signed eight of the top ten top actors and actresses employed by Lu Corporation, along with a number of others. The remaining top two are likely to sign in the next few days."

"But that is the tip of the iceberg, we have signed three high quality directors and other key behind camera staff. Additionally XF International's Film and Television staff, have agreed to go to the new company, with the proviso that if the joint venture folds, they return to XF International's film and Television division. The joint venture along with the agreement for it to be responsible for three productions that Lu Corporation thought they had locked in will be announced on Monday."

"All that will leave Lu Corporation is its international activities. The thing that their legally required to be published financial reports shows that they use profits from domestic activities, in particular its profits from the Film and Television Division to fund them. It will take, on my view about five years for most of those those international expansions to be self-supporting. There are a couple of smaller ones, that will be profitable in a year of so."

"The problem for them was that the rushed to expand to multiple locations at one time. Most likely trying to keep up with Hou Enterprises. From very early on when my father took over the company, our expansions were always strategic. We staggered projects throughout the world, so that a collapse in one area would not impact another."

"Additionally, we look for developments and projects that can add profits supporting already existing businesses. For example, given our control of Fengs we have gone carefully into precious metal and gem mining, refining and a.s.sociated activities. We feed some into Fengs, and the balance into the world market. Importantly that has secured Feng's supply chain but also allowed us to expand into less exclusive jewellery chains.

"Years ago, Dad helped develop a coal power station that supplied out manufacturing businesses in an area, and then purchased into coal mines to guarantee its supply and the excess power was sold into the national grid. Dad being conscious that public opinion was s.h.i.+fting more towards renewables we sold the power stations to put it into renewable power developments."

"At the same time the government looked towards developing a domestic nuclear power supply industry, we worked with French and US companies experienced in the nuclear power industry, to build a power station. Conscious of the risks, it is in a somewhat isolated area and the land around it is restricted for future development, although we have manufacturing industries nearby."

"We build a high speed train line from the outskirts of City A, to the station, that takes everyone from a particular train station stopping only at the factory station and then to the power station. It takes about forty minutes to get to the power station and the staff pay only a nominal fee to commute, but can also pay extra for meals and the like.

"Unlike Lu Corporation, we factor in considerations of horizontal and vertical integration, which maximizes our profits. LU Corporation simply want to compete against us, and that means their investments are risky."

"When we moved into the tourism industry, we started with a small travel company which over time has developed into a major worldwide travel company. We slowly built it up while also investing in hotels, tourist activities, tour companies and the like. The travel company's mantra is to get the best deals for the clients, our other investments with aligned businesses means that we can offer better deals to clients, resulting in better profits. The Sunrise development, is part of our ongoing expansion in that industry."

"Lu Corporation rather than having a strategy have simply brought a travel company, and hotels, resulting in those becoming highly debt laden businesses. The problem is there they have very little strategy for any international investments that they make. Most of their strategy is around competing with and then destroying Hou Enterprises. That, while not obvious from their financials and other public information, can be determined when you look at their activities. That is their downfall."

"Yi, I did not think …"

"Anna, I know most men would have loved to do to Lu Jinhu what he did to you. I wanted to do that, but when I fell in love with you six months ago, I fell in love with all of you. That includes the part that respects the law. If I had done what I really wanted to, I would have been disrespecting you."

"Added to that, was some discussions I had with Phillipa. She made me understand that violence and abuse in any form would send you running in the other direction. I understood after talking to her that the last thing you needed was to go from the relations.h.i.+p with Lu Jinhu that was categorised with physical and verbal abuse, to another relations.h.i.+p where you would fear that would do the same as I demonstrated violence. I knew the day that we married that I was going to do the right thing to respect you, no matter how much it went against what I wanted to do because in the end, my goal always was you and a relations.h.i.+p, everything else was secondary to this."

"Yi, you idiot."

Hou Yi lent down and taking Anna's face in his hands kissed her.