Over the next few days, both sides began negotiations.
The negotiation process was naturally not smooth sailing.
The atmosphere in the conference room was at times tense, and at other times briefly eased after reaching a consensus on a certain detail.
"Mr. Nakayama, regarding this unit price,"
Manager Li put down the quotation in his hand, his fingertip tapping on a certain number.
"We have repeatedly calculated, and if we follow this price, our profit margin is really... a bit tight."
A deputy beside him added, "Yes, raw material costs, labor costs, and our expected equipment depreciation all need to be taken into account."
Takuya Nakayama smiled, but his tone was beyond dispute.
"Manager Li, everyone, Sega values quality and long-term cooperation."
"This price has fully considered our strict requirements for product yield and potential future technical iteration support."
"You get what you pay for; this principle is universally applicable. And we are paying in Japanese Yen, which has been continuously appreciating. Your country also has many places that need to be paid in Japanese Yen these past few years, right?"
Manager Li felt a wave of helplessness when he heard Sega bring out the foreign exchange trump card. Who could blame them when China was short on foreign exchange?
"What about the delivery period?"
Another deputy manager in charge of production frowned slightly.
"The initial delivery volume requested by your side is not small, and regarding the time, we hope for a bit more leeway."
"The market changes rapidly; an earlier rollout means an earlier opportunity to seize the initiative."
Takuya Nakayama responded, "We understand your pressure. But to ensure every circuit board is foolproof, rushing is not a good strategy. However, we can discuss a plan for phased, gradually increasing deliveries."
When it came to core terms such as specific prices, delivery volumes, delivery periods, quality control details, and handling of non-conforming products, both sides engaged in fierce debate and repeated back-and-forth.
Sometimes, for a one-percentage-point price fluctuation or a one-week adjustment in the delivery period, both sides could discuss for half a day.
Manager Li's side gave no quarter, and Takuya Nakayama's side was equally cautious.
When the general direction of the talks was almost complete, and Huake Electronics stated they needed time to report to their superiors and conduct an internal evaluation, Takuya Nakayama did not sit idle.
He used these few days to quickly inspect several other electronic factories in Hong Kong with decent scale and qualifications, accompanied by Mr. Ishida, Director Terauchi, and Director Hatano's assigned attendants.
At each location, he observed carefully and asked detailed questions, occasionally exchanging a few words with Mr. Ishida and the attendants.
"The equipment at this factory seems older than the last one."
"Hmm, the management also seems a bit lax," Mr. Ishida responded.
This information, compared to the Huake factory visited earlier, undoubtedly strengthened Takuya Nakayama's determination to cooperate with Huake, and also gave him a more intuitive understanding of the overall level of Hong Kong's electronics industry.
At the same time, with extreme efficiency, he secretly completed a strategic layout under the guise of the factories owned by the two directors.
They quickly acquired a small-scale electronics factory located near the port, with its own property.
The factory's signboard was somewhat askew, and a faint smell of mildew permeated the workshop.
The original boss was a middle-aged man in his forties, with dark circles under his eyes and a dispirited look, sighing as soon as they met.
Takuya Nakayama just smiled and let his accompanying staff directly discuss the price.
The other party was a gambling addict, already eager to sell to repay debts, so the negotiation process was unexpectedly smooth, settling almost without any haggling.
Although this factory was not large and its equipment was not advanced, its other basic infrastructure and location conditions were actually not bad.
Its downfall into being sold could only be attributed to the factory having a gambling addict boss who gambled day and night, losing all the factory's cash, owing workers several months' wages, and even mortgaging many materials.
This factory's geographical location was excellent, right next to the dock, facilitating the entry and exit of goods.
In the future, it could serve as a transfer station and outpost for Sega's partial outsourcing business in Hong Kong, taking on the functions of receiving, dispatching, preliminary quality inspection, and even some simple processing as a secondary handler.
Takuya Nakayama had even planned to simply renovate it and add some necessary testing equipment, and it could quickly become operational.
This preparation was the result of Takuya's careful deliberation.
It could serve as a "backup plan" to be inadvertently revealed during negotiations with Huake, adding a little pressure.
It could also allow for more flexible resource allocation and response to emergencies after cooperation is achieved.
Even in the worst-case scenario, it could ensure Sega had its own production base in Hong Kong, not being completely at the mercy of others.
When Huake Electronics, after several rounds of intense internal discussions and evaluations, finally returned to the negotiating table with positive signals.
The atmosphere in the conference room was noticeably more relaxed, and Manager Li even had a slight smile on his face.
But a new problem arose.
"Mr. Nakayama, after our detailed internal calculations, with our existing production capacity, fully meeting your company's order demands may be... still a bit challenging."
Manager Li looked troubled, "Of course, we hope to go all out, but increasing capacity is not an overnight task."
Takuya Nakayama seemed to have anticipated this; he turned to Mr. Ishida and quickly exchanged a few words in Japanese.
Mr. Ishida nodded, smiling.
Only then did Takuya say to Manager Li, "Manager Li, regarding your concerns about production capacity, Sega might be able to offer some substantial help."
He paused, then proposed a solution that invigorated everyone at Huake.
"Mr. Ishida suggested that two factories under Sega are currently undergoing equipment upgrades and are phasing out a batch of old production lines. Although they are old equipment, they are well-maintained and stable in performance, sufficient to meet the current order's circuit board production needs."
"Mr. Ishida's intention is that these two production lines can be transferred to Huake Electronics in the form of offsetting payments for goods."
"Offsetting payments for goods?" Manager Li's eyes lit up, exchanging a surprised look with his deputy beside him.
Mr. Ishida and several Sega representatives were somewhat puzzled by the enthusiastic reaction from the Huake team.
Takuya timely and quietly explained to them in Japanese, "Huake Electronics is essentially a state-owned enterprise in China. A large portion of the foreign exchange they painstakingly earn needs to be submitted to the state, and the amount they can use themselves is extremely limited."
"However, if we include the condition of offsetting payments for goods in the contract, it's equivalent to them exchanging future products for equipment, which is easier to handle in terms of accounting and, to a certain extent, bypasses the difficulty of foreign exchange approval."
"It's like national assets appreciating, production capacity expanding, and they don't have to pay extra cash. Why wouldn't they be happy?"
"Naruhodo!"
"Sugoi!"
Several Japanese representatives suddenly understood and nodded in agreement.
Mr. Ishida even looked at Takuya with admiration, "Nakayama-san, you truly are an expert on China!"
With this crucial breakthrough, the subsequent negotiations went much smoother.
Huake Electronics' enthusiasm increased significantly, and they showed greater flexibility regarding some non-core terms and details.
After another round of difficult but fruitful negotiations, both parties finally drafted the initial version of the contract for the OEM cooperation of electronic pet circuit boards and accessories, as well as the accompanying matter of offsetting payments for goods with production lines.
A weighty letter of intent for cooperation and the initial version of the contract were placed in the center of the boardroom table.
Director Terauchi and Director Hatano exchanged smiles, and also subtly nodded to Hayao Nakayama, their eyes full of approval.
Hayao Nakayama also rarely showed a hint of a smile, although restrained, his satisfaction was evident.
The other directors, meanwhile, were shocked by the enormous projected production volume of the first batch of electronic pets mentioned in the contract.