What RC Marketing Does...

They sent us information about projects they are involved in:

Framework of
Seattle Investments (China) LTD

1. Mission and Vision


For many years now, every generation has felt that life was getting better, that we were improving quality of life for our children. In the last decade or so, we hear a different view - that if we don't do something about it, we may be viewed as the golden era, fuelled by a mortgage on the future, a debt our children must pay. We deem this unacceptable.

- Seattle Investments Limited


Seattle Investments (China) Limited (Ltd) is the investment arm of Seattle Investments Ltd in China. As such, its mission is to wisely invest funds whose profits can then go to support good works. It applies broader principles so that its profit making endeavours seek - in addition to being economically profitable - to assure that the social, cultural and environmental effects are positive, or at the very minimum, that they not be adverse.

Seattle Investments Ltd believes that China is a good place for us to realize the mission and it will be good for all of us: Seattle Investments, China as well as other parts of the world.


2. Business Structure
Seattle Investments (China) Ltd will be registered in Shanghai – the economic and financial centre in China – as the holding company for all the other investments in China. While the head office of Seattle Investments (China) Ltd is registered in Shanghai, other offices in some other important cities will be set up to look after the potential business opportunities in targeted regions.


At the beginning, sub offices will be set up in the following cities: Beijing, Nanjing, Hangzhou, Guangzhou - these cities are the regional economic centres located in the wealthiest provinces. The total GDP of these provinces is about 50% of the whole of China’s GDP. Further more, Beijing is the capital of China and many big government projects are decided there.


While a potential business opportunity is matured to an outstanding project through the hard work of the Project Development Department, Seattle Investments (China) Ltd will raise money from its mother company Seattle Investments Ltd. and register a subsidiary company to actuate the project. Projects with common elements may be incorporated into a single company to reduce unnecessary duplication of infrastructure, but for very substantial projects there are often advantages in registering a specific subsidiary company.



3. Company Structure
In Seattle Investments (China) Ltd there will be many different functional departments with initially, four local offices. Each functional department and local office will be led by a Manager who reports directly to the General Manager. Every Manager will have a very detailed and clear Job Description, Person Specification and Accountabilities detailing their responsibilities, tasks, and expectations. Their achievements will be reviewed every 3-6 months through a rigorous appraisal process.

The General Manager is responsible for the day to day work of the company and will enjoy clear delegated authority to make these day to day decisions within the general policy directions determined by the Board of Directors and the strategic direction set by the Managing Director. The General Manager reports directly to the Managing Director.

4. Business Development
To make the Seattle brand famous and successful in China, relationships with the Government, banks and other large companies are very important. As a new comer, Seattle Investments (China) Ltd must create long-term relationships with all the important people and organizations.

To create such a relationship with the Government and the bank, we need to know what the Government thinks and wants at any given time. We need to know clearly its industry policies, and the government project lists. We need to be active in meetings held by the Government and if possible become the supporter and sponsor for these meetings.

To create a good relationship with big companies, the quickest way is to join the business association with which we have the most in common. Another very useful way is to become a friend and classmate of the leader of these companies. This can be achieved by joining the EMBA class. If we want to go deep into the Shanghai high grade business society, the best route is through the China Europe International Business School EMBA Class, and if we want to get to know businessmen in Beijing, then the most effective method is though joining the Beijing University EMBA class.

To create a high grade brand in China it is essential to create relationships with newspaper reporters and TV station personnel and management. The newspapers and TV stations are controlled and monopolized by the Government, and their number is limited. So the power of the media in China is far more influential than the media of other countries.

Creating these effective relationships will make it very easy for us to be successful in the China market. Further more, because it is developing so rapidly, China needs these funds urgently, so if Seattle Investments China Limited becomes well recognized, famous even, and enjoys effective relationships with all the important organizations and people, then we can expect outstanding and safe business opportunities and projects to come to us automatically.

Further more, because of our special New Zealand background, agriculture and environment technology projects in China will be recognized and easily accepted business opportunities. We should pay more attention to these fields.

5. Business Costs for Seattle China and its further projects


Costs for Seattle Investments (China) Limited

　
Head Office
Beijing Office
Nanjing Office
Hangzhou Office
Guangzhou Office
Office Purchasing
￥15,000,000
￥2,000,000
￥2,000,000
￥2,000,000
￥2,000,000
Office Fitment
￥3,000,000
￥400,000
￥400,000
￥400,000
￥400,000
Car purchasing
￥5,000,000
￥1,500,000
￥1,500,000
￥1,500,000
￥1,500,000
Company Registration Fee
￥1,000,000
￥0
￥0
￥0
￥0
Security System
￥2,000,000
￥500,000
￥500,000
￥500,000
￥500,000
Entertainment and Gifts p.a.
￥2,000,000
￥100,000
￥100,000
￥100,000
￥100,000
Business trip cost p.a.
￥2,000,000
￥100,000
￥100,000
￥100,000
￥100,000
Administration cost p.a.
￥1,000,000
￥100,000
￥100,000
￥100,000
￥100,000
Office Cost p.a.
￥1,000,000
￥100,000
￥100,000
￥100,000
￥100,000
Government fees p.a.
￥1,000,000
￥100,000
￥100,000
￥100,000
￥100,000
Personnel Cost p.a.
￥22,000,000
￥1,000,000
￥1,000,000
￥1,000,000
￥1,000,000
Sub Total
￥55,000,000
￥5,900,000
￥5,900,000
￥5,900,000
￥5,900,000
Total Cost in RMB
￥78,600,000
Total Cost in US Dollars
US$10,621,622


1. The head office in Shanghai will be 500m2 and the other offices will be 100m2.
2. The head office will buy3 cars and the other office will have only 1 car.
3. The head office will have 11 manager level staff and 40 normal level staff plus 5 part-time advisors.
4. The other offices each will have 1 manager level staff and 5 normal level staff.
5. The manager level staff average compensation will be RMB500,000 per year, and the normal level staff average compensation will be RMB100,000 per year. The part-time working advisor average compensation will be RMB200,000 per year. The compensation for MD and GM are included. The usual ratio is 5:1 for Responsibility For: Responsibility To in compensation.



Costs and return for Seattle Hi-Tech Ltd
The Securiport project will be the main business of Seattle Hi-Tech Ltd. There are lots of new airports being built in China, but the biggest four airports are Beijing Airport (Beijing), Pudong Airport (Shanghai), Hongqiao Airport (Shanghai) and Baiyun Airport (Guangzhou). As our business model, if we place Securiport systems for these airports for free, and get US$10 in return from each passenger, then our income will be as below:


Air Port
Beijing
Pudong
Hongqiao
Baiyun
Nanjing
Hangzhou
Number of Passengers per year
48,500,000
26,660,000
19,350,000
20,320,000
5,500,000
6,000,000
System Cost
US$100,000,000
US$50,000,000
US$50,000,000
US$50,000,000
US$30,000,000
US$30,000,000
income per year
US$485,000,000
US$266,600,000
US$193,500,000
US$203,200,000
US$55,000,000
US$60,000,000
maintain service cost per year (5% of the income)
US$24,250,000
US$13,330,000
US$9,675,000
US$10,160,000
US$2,750,000
US$3,000,000
profit for the first year
US$360,750,000
US$203,270,000
US$133,825,000
US$143,040,000
US$22,250,000
US$27,000,000

The system cost and the maintain service costs are estimates here, but because of the huge number of the passengers, the profit will be quite good even in the first year. To set up a company and start the Securiport business in China, it will cost no more than US$10 million.


Costs and return for Seattle Oil Ltd
China imported 949 million barrels of crude oil in 2006.
The crude oil business will not cost too much investment, perhaps only US$10 million. The profit will be US$50 million if we can get 5% of the 949 million barrels in one year and earn only US$1 per barrel. Now the China government’s policies about licenses to import crude oil have been changed. More province level companies have now got the right to import crude oil into China, so it is a good chance for us to start our business in China now.

Costs and return for Seattle Manufacture Ltd
To set up a factory in China to manufacture the seats, the investment may need to be about US$5 million. The profit rate for the seats in China may be about 3% to 12%, depends on the quality and quantity.

Costs and return for Seattle Education Ltd
The Investment for a school similar to the East Century School in Shanghai is about RMB60 million (US$8.1 million). The education industry’s profit rate is about 10%-35%, depending upon the type of education.

Costs and return for Seattle Food Ltd
Usually for a food company that imports wine or milk powder products into China, requires a registration fund of RMB10 million to RMB100 million (US$1.35 million to US$13.5 million), and usually the profit rate is about 15%.

Costs and return for Seattle Real Estate Ltd
The Government’s requirement for foreign real estate companies is usually at least US$10 million, and the average profit rate for the real estate company is about 27% in China. Some companies claim that the profit rate is only a little more than 10%, but researchers indicate that it is often up to 45%.

Costs and return for Seattle Bank
The Government’s requirement for registration capital of a foreign invested bank is at least RMB300, million (US$41 million) for the first class (which can only do some kinds of financial services) and RMB1, billion (US$135 million) for the second class (which can do all kinds of financial services). In China the profit rate of the foreign bank is 8%. The Bangladeshi economist Muhammad Yunus’s Grameen (who lent loans to millions of poor people and got the Nobel Peace Prize in year 2006) Bank’s profit rate is 10% per year.

The OLPC project
The OLPC project (http://laptop.org/) is aimed to supply laptops worth only US$100 to poor children for education. We may get involved in the project in some way to make us use the least money, but get the most for the poor children as well as our good brand in China. If we spend US$10 million on this project, we may help up to 100,000 poor children to get better education. This money can be spent during up to ten years, and each year we can give 10,000 laptops to poor children. With this activity, our Seattle brand will be famous and recognized by both the China government and Chinese normal people, and the cost is only US$1 million per year.


6. Points To Notice
a) The China companies law has some very strict regulations on an investment company (Usually an Investment company needs at least USD30 million registration capital), so if we do not put up the USD30 million, then we may need to use some other name instead, for example Seattle China Ltd. But the final result is up to the Shanghai Pudong district industrial and commerce administration.
b) It will take about 2-3 months to complete the whole registration process, so if we want to start our business for next year, we have to prepare the documents and start to register it right now.
c) Before the company registration application is lodged, the office of the company must be rented or purchased.