I Am the Third-Generation Heir of a Conglomerate - Chapter 512



Only Noblemtl

## 512. Food Cartel (2)

Cargill’s annual sales reached $140 billion.

If you add up the sales of the remaining grain majors, it comes to about $200 billion.

Which company wouldn’t be greedy when they receive investment equivalent to 50% of total sales?

In particular, the grain companies other than Cargill had no choice but to become even more greedy.

If they could get $100 billion in investment, they could easily surpass Cargill’s sales.

“The US agricultural belt has adjusted its ratios based on the size of the company, but why would other regions do so?”

“I agree. Wouldn’t it be better if the companies that meet the conditions that Taewoo Group wants had a larger percentage?”

Archer Daniels and Bungie’s representatives spoke almost simultaneously.

In response to their active response, Cargill Chairman McRae raised his voice urgently.

“Do we really need to compete with each other? The grain market is already difficult. There is no reason to engage in cutthroat competition.”

“We are not trying to compete. Archer Daniels simply owns a large number of farms that meet the conditions that Taewoo Group wants.”

“We also own a large amount of farmland in Brazil and Southeast Asia. This is land that Taewoo Group can lease and use as much as it wants.”

The situation I wanted happened.

The moment they start competing with each other, the amount of grain that can be purchased with $100 billion increases exponentially.

“Wouldn’t it be too much of a burden for Taewoo Group? If they buy too much grain, everything from storage to transportation and sales will be problematic.”

“You don’t have to worry about that problem. Taewoo Group has large warehouses all over the world. In particular, there is a lot of empty space in the Korean logistics warehouse, so you don’t have to worry about storage. And you don’t have to worry about transportation either. Taewoo Shipping has the largest number of ships among global shipping companies.”

Storage, transportation and sale.

All issues except sales were solvable.

And there was no major concern about sales either.

If you just stored it until the food crisis, you could double your business.

Considering the storage and transportation costs, at least 50% would be left over, so the larger the quantity secured, the greater the profit.

“But buying too much grain at once is too risky.”

“I agree with that. How about this? First, let’s skip this year since there are only a few days left, and start investing in the second half of next year. We will invest $50 billion in the second half of next year, and $100 billion the year after that as planned.”

Of course, grains also had an expiration date.

If you use methods like freezing, you can keep it for several years, but considering the shelf life, it would be better to buy a lot of grain starting from the year after next.

“Are you saying that you will sign the grain contract starting next year now?”

“Yes, I would like to contract in advance for the grain to be produced over the next five years.”

“We don’t know how grain prices will fluctuate. So, would you be okay with signing a long-term contract for five years?”

The long-term contracts were lucrative for the grain majors.

Grain prices were expected to continue to fall due to the US-China trade war.

Not only is the price down, but the amount of surplus grain is also expected to increase, so the risk can be resolved through long-term contracts.

“We are prepared to sign a long-term contract. And if there is no suitable place to store it, we are also planning to sign a warehouse lease.”

“So you want to sign a long-term contract that includes grain, farmland, and even a warehouse?”

What better conditions could there be than these?

The condition was that they would not simply purchase grain, but would also pay rent to use the infrastructure of major grain companies.

Although Taewoo Group has many warehouses.

It was not a dedicated grain warehouse, and it was cheaper to rent a warehouse from a grain major than to remodel it.

Taewoo Group is good, and grain companies are also good suggestions.

Of course, to others, this would seem like a proposal overwhelmingly in favor of grain companies.

Grain production was increasing every year, and no one expected the trade war to end within five years.

“And we also have plans to purchase farmland. So please feel free to make an offer and we will consider the situation as much as possible.”

“Are you also interested in Brazilian corn farms?

“Of course I am interested. If the price can be negotiated, I am willing to buy it at any time.”

The bungee opened the gates.

Proposals poured in, starting with the Brazilian corn farm.

Grain supplies for the next five years were secured in advance, and contracts for leasing and purchasing farmland were gradually concluded.

“You can’t conclude all the contracts in one day, can you? How about proceeding with the remaining contracts sequentially over time?”

“That’s a good idea. Everyone needs time to think about it, so it would be better for each company to negotiate with Taewoo Group on their own.”

Given time, they could have conspired.

However, the reason for giving time was because the heads of major grain companies had already turned their attention.

They would rather deal quietly than collude with each other.

That’s why I laid out the table, and the grain company representatives quickly accepted it.

“Hehe, it seems like it’s been a long time since I’ve met someone I really get along with. I hope we can continue this relationship in the future.”

“If it’s a proactive company like Taewoo Group, we can definitely open the door to you. And since they’ve acquired Viterra, isn’t Taewoo Group also a grain company?”

“Thank you for your kind words. I will often ask for help and learn from you with the mindset of a junior.”

I expressed my gratitude in a polite, Korean way.

How great would it be to encounter Korean etiquette, where you bow at a 90-degree angle, after only seeing American etiquette?

They were grain company representatives whose mouths and eyes always seemed to be going up towards the sky.

* * *

Representatives of major grain companies who have concluded negotiations with Taewoo Group.

They were still at Cargill headquarters, enjoying tea time.

“Is Taewoo Group that rich?”

“Isn’t Taewoo Group involved in all profitable businesses such as semiconductors, automobiles, electronics, and IT? The Taewoo Group is probably the richest company in Asia.”

“No matter how much money you have, it seems like you spend it too recklessly.”

“Isn’t that because you’ve had success in other fields by using money to press the button? You don’t seem to know that you can’t succeed in the grain industry that way.”

It was a truly enjoyable tea time.

Grain companies were having their worst year ever due to China’s ban on imports of American grain.

But how could we not be happy that we were able to get through this crisis without any damage thanks to the savior or protector who flew in from Korea?

“But if you pour in money for about 20 years, wouldn’t you be able to secure a certain position?”

“It would be possible if Taewoo Group invested all of its operating profits in the grain market. If you have that much perseverance, wouldn’t you be qualified to join us?”

“If you continue to invest like this for 10 years instead of 20, I am willing to accept it.”

“Are you planning to keep picking for 10 years? You are really poisonous.”

“Hahaha, it’s rude not to eat the food you’re offering.”

But they were still smiling.

Inwardly, they were keeping each other in check.

These were grain company representatives who were wondering how they could exploit the large sums of money they had brought in to get more of their profits.

“Let’s make one promise. How about we compete only within a reasonable range? If we sign a contract by lowering the price too much, we will have problems, and Taewoo Group will also have problems.”

“I agree. If you put too much pressure on them from the beginning, they might get scared and leave the grain industry.”

“Then, we will proceed slowly until next year and increase the contract size starting the year after.”

On the surface it looks like an agreement has been reached.

They had no intention of keeping the promises they made with their mouths.

It seemed like there was no other way than to secure a stable source of income by somehow signing a large contract with Taewoo Group.

“Well then, I guess I’ll be going now.”

“I should leave now so I can get home before it’s too late. Hehe. Then let’s meet again.”

The second and third place runners were in a hurry.

I had to move before Cargill could move.

So, I had to return to the company as soon as possible and start preparing the contract.

* * *

After meeting with representatives of major grain companies.

I headed with David to the headquarters of the fintech bank where Diamond was waiting.

As we entered, it was Diamond who congratulated us with applause.

“Congratulations on your full-fledged entry into the grain market.”

“It’s not something to celebrate right now. We’re going to see a huge deficit for a year or two.”

“I’ve already been contacted. Major grain companies are asking if I’m interested in additional contracts.”

It was David who arranged a meeting with representatives of major grain companies.

That’s why the major grain companies were trying to use David to win additional contracts.

“I thought it would be a little different because it was a major grain company, but it’s not that different from Wall Street.”

“If it was a contract worth $100 billion, I think I would actively court him.”

“It won’t be that big this year. It’ll be at most $40 billion, and next year it’ll be around $50-60 billion.”

“But aren’t you planning to increase it to $100 billion starting next year? Honestly, I think it’s an excessive amount. We could see a deficit of up to $10 billion.”

A $10 billion deficit?

It was quite cute to that extent.

If a food crisis were to occur, it would be an amount that could immediately recover the initial investment.

“The size of the deficit will depend on what comes out of the White House.”

“I think the ethanol policy will pass this year without much difficulty. It is a bill that the White House and the Republican Party are pushing for, and it is also an environmentally friendly policy, so the Democratic Party has no reason to reject it.”

The ethanol bill was soon also a grain bill.

Because it was a law that set the national standard for how much ethanol made from grains could be mixed into oil.

“Since the re-election is just around the corner, it will definitely pass. By the way, is the preparation for securing the warehouse going well?”

“We have decided to lease some of Amazon’s logistics warehouses.”

“We have signed a contract to lease a warehouse from a grain company, but please secure the warehouse in advance.”

Large-scale grain storage facilities were, of course, monopolized by grain companies.

So, we had to secure a space to store grain in case of an emergency.

There was no major concern as we could utilize the world’s number one logistics company, Amazon.

Moreover, if Taewoo Group utilizes the warehouses it has around the world, it can store any amount of grain.

“The grain business is not in big trouble except for the deficit, but isn’t the problem semiconductors? If Taewoo Semiconductor continues to take a stance of profiting from both the US and China, it could face great difficulties.”

“It sounds like you’re saying we could end up like Japan.”

“Yes. It is the US government that has a history of killing the Japanese semiconductor market through the Plaza Accord. And Korea is also structured in a way that it cannot produce semiconductors without a US license.”

Korea, like Japan, may have had to give up its semiconductor industry.

To avoid that, we needed to have more influence than we have now.

“Don’t worry. It won’t end up like Japan.”

“Do you have any plans?”

“If Taewoo Semiconductor can just create the image that it is competing with China’s semiconductor industry, the U.S. will not touch Taewoo Semiconductor.”

I wasn’t satisfied with simply leaving it untouched.

Because Taewoo Semiconductor will increase its influence to the point where the world economy will not be able to function without it.