Episode 113: The Local Broker
Upon hearing that Lee Chang-jin had come to visit, Kim Jung-oh, who was immersed in his work, greeted him warmly.
“Oh my, who do we have here? Isn’t it President Lee?”
“Hyung, how have you been?”
“Oh, you know, just getting by. I heard you went to the Middle East? When did you come back?”
“A few days ago. I’ve been busy catching up on the backlog. Here, I brought you a bottle of Ballantine’s 21-year-old whisky and a date palm moisture cream that’s quite famous there. Your wife will love it.”
Kim Jung-oh smiled broadly as he checked the contents of the gifts.
“You’re still as courteous as ever. So, what brings you here after such a long time? What do you want to dig into now?”
“Do you think I would come empty-handed? Let’s take a look first.”
Lee Chang-jin showed the documents and clothing photos he had brought.
As he listened to the explanation, Kim Jung-oh’s expression changed moment by moment.
“So, you and I form a consortium to take over the business that Taeyang Group has its eyes on. Is that it?”
“‘Take over’ is a bit strong. They haven’t even signed a contract yet, have they?”
“Hey, you rascal. It’s the same thing. You’re saying we should fight Taeyang now, aren’t you?”
Kim Jung-oh’s face showed unease. Noticing this unusual reluctance, Lee Chang-jin sensed something was up. Being quick-witted, he probed further.
“Hyung, are you scared of Taeyang Group? The great Kim Jung-oh?”
“What do you take me for! Of course not.”
Lee Chang-jin squinted his eyes at Kim Jung-oh’s hesitant attitude.
“This is suspicious. Hyung, do you have something going on with Taeyang?”
“Nothing like that.”
“Then there’s no reason for Cheongwoo to back out of this deal. Be honest with me.”
“It’s hard to trust people these days. Are you reading my mind now? There’s nothing like that.”
“You can’t fool me. We’ve known each other for a long time. Are you going to keep this up?”
“I told you, there’s really nothing.”
As Lee Chang-jin stared at him silently, the pressure made Kim Jung-oh sigh deeply and confess.
“Fine. They promised us a subcontract. Happy now?”
“For how much?”
“Five million dollars. We’ll handle half of the claimed amount separately.”
“Geez, that’s a lot. Five million dollars. But is Cheongwoo Group satisfied with just that?”
Embarrassed by Lee Chang-jin’s sarcastic tone, Kim Jung-oh blushed.
Trying to save face, he explained.
“Stop mocking me. This wasn’t my deal. It was decided from above. It was the chairman’s decision, and it’s not my place to interfere.”
“There are better ways. Cheongwoo should be the principal, not the subcontractor. Wouldn’t you prefer to be the boss?”
Kim Jung-oh chuckled at Lee Chang-jin’s words.
“You really intend to get involved, huh? You’ll end up making enemies with Taeyang. Those guys may look decent on the surface, but they’re scoundrels with no ethics. What kind of guts do you have?”
Lee Chang-jin smiled and replied.
“That’s why I’m suggesting we team up properly. If you don’t take this, I’ll go to Mirae or Ohsung. They hate Taeyang, so they’ll jump at the chance.”
“Hey! You really…”
“Are you in or out? The first phase alone is worth 30 million dollars, and the second and third phases combined are nearly 100 million dollars. Are you satisfied with just five million? If we win the contract, Cheongwoo will handle at least half of it.”
After much deliberation, Kim Jung-oh sighed deeply. In truth, he had never been comfortable with the contract bowing to Taeyang. After some thought, he made up his mind.
‘Damn it, even if it doesn’t work out, let’s give it a shot. The chairman wouldn’t kill me, would he?’
With Lee Chang-jin backing him, he might have a safety net.
Finally, Kim Jung-oh raised both hands in agreement.
“Alright, alright. I’ll support you. But this project must succeed. If we completely fall out with Taeyang and don’t deliver results… you know? I’ll get my head smashed in by the chairman.”
“Thank you. So you’ll help us. Thank you, hyung!”
With Kim Jung-oh’s approval, the only thing left was to prepare. Lee Chang-jin and Daese Trading employees spent several weeks reviewing over a hundred items. Exporting military uniforms also meant selling other military supplies.
Besides combat uniforms, they had to select sleeping bags, water bottles, buckles, thermal underwear, socks, gaiters, and boots. While reviewing the RFQ documents from the UAE Ministry of Defense, they received a message from Brandon, who had submitted the uniform samples and offers.
“Mr. Lee, the UAE side is requesting a TBE (Technical Bid Evaluation) meeting regarding the RFQ requirements for the supplies. It seems they liked our proposal. We need an urgent meeting with the broker, so please come here as soon as possible.”
Foreigners participating in public bids in the UAE had to use a local broker registered with the state-run ADNOC (Abu Dhabi National Oil).
After coordinating with Cheongwoo, Lee Chang-jin headed to Gimpo. Along with Daese Trading’s manager Jung Ho-seong, they traveled through Bangkok and Karachi to reach Abu Dhabi Airport on the Red Sea.
The scorching heat that greeted them outside the airport was overwhelming.
It felt like stepping into a hot bath.
Fanning himself constantly, Jung Ho-seong shook his head.
“Wow, it’s incredibly hot here. The heat is different from Seoul.”
“This is nothing. Saudi Arabia is even hotter…”
Abu Dhabi, a city of 300,000 people in the middle of the desert, was famous for its beautiful Persian white sand beaches lined with new houses and date palms.
Wealthy Saudis had extended the coastline with their money.
The limousine took them to the Intercontinental Hotel, where they checked in.
They stayed at the same hotel as other Daese Trading employees dispatched for the housing construction project in Dammam.
In the evening, Lee Chang-jin met Brandon at a local restaurant.
Brandon introduced him to the local broker from the UAE side.
The man, around 40 years old with graying hair and a neat suit, was introduced.
“This is Colonel Bayezad. He is a former logistics officer in the UAE army and a Yale classmate of mine.”
“May God’s peace and mercy be upon you. I’m Lee Chang-jin from Daese Trading.”
“Hello, I’m Bayezad Bin Rashid Al Maktoum.”
“Al Maktoum? Could it be…?”
“Haha, I’m a distant relative. If I were a direct descendant, I wouldn’t be here.”
Though he spoke modestly, being a member of the Al Maktoum clan, one of the two ruling families in the UAE, was no small matter. The choice of broker had a significant impact on securing contracts, highlighting Brandon’s skill.
After exchanging pleasantries, Lee Chang-jin and Bayezad quickly got down to business.
“We reviewed the samples and estimates you sent. The design and functionality of the uniforms are excellent. It seems you’ve prepared well.”
“Haha, thank you.”
“Shall we try them on?”
Lee Chang-jin showed Bayezad the military uniforms he had brought. After trying them on, Bayezad was impressed.
“How do they feel?”
“They’re comfortable and functional. I especially like the field jacket. How did you make it?”
“We added Gore-Tex to some of the fabric. Gore-Tex allows moisture to escape, keeping the inside of the jacket dry and preventing frostbite. It’s perfect for soldiers operating in harsh conditions.”
The winter clothing was designed for soldiers on guard duty or in forward areas, where sudden temperature changes in the desert often led to frostbite.
The thoughtful design quickly won over Bayezad.
“The stitching is excellent, and there’s no need to look further. Shall we start the real discussion?”
With Bayezad’s words, Brandon, who had been sitting with them, stood up.
“I’ll leave you two to talk. We’ll take a walk in the meantime.”
He stepped out to give them privacy for the sensitive cost negotiations. Once alone with Bayezad, Lee Chang-jin began the discussion.
“We anticipate an initial import volume of about 30 million dollars. As previously discussed, the commission will be 10% of the first order. The fee is separate.”
A 10% commission for intermediaries in such projects might seem high, but it was standard practice. Local brokers connected foreign companies with Middle Eastern royalty and businesses.
However, Lee Chang-jin wasn’t willing to easily agree to such a high commission.
“10% is quite steep. Is there any way to adjust it?”
“It’s the industry standard. Lowering it would be difficult.”
Noticing the local broker’s immediate reluctance, Lee Chang-jin proposed a new condition.
“If you add tax and processing costs on top of the 10% commission, we will additionally settle 1% of the uniform export price as a fee on a quarterly basis.”
“1% of the sales revenue?”
“Yes, it’s an after-service condition. Isn’t this reasonable?”
For Lee Chang-jin, it was a minimum safety measure. Many had been burned by brokers who disappeared after the deal was done.
After some back-and-forth, the contract was notarized, and Bayezad extended his hand for a handshake.
“Mr. Lee, you’re impressive. You’ve done this before, haven’t you?”
“Haha, I learned by observing while working at Mannheim before starting my own business.”
“Mannheim, huh? As expected, those from good companies are different. I look forward to a good relationship.”
“Likewise. How long do you think it will take to meet the minister?”
“Give us about two weeks. I’ll arrange a meeting with the minister within that time.”
With a positive response, Lee Chang-jin decided to stay in Abu Dhabi for a few days. Compared to Saudi Arabia, Abu Dhabi was quite open, offering plenty to see.
While exploring Abu Dhabi, Lee Chang-jin checked for potential export opportunities.
During this time, he received a reply from Bayezad.
“The meeting is scheduled. Mr. Lee, please come to the residence next Tuesday at 2 PM.”
- To be continued in Episode 114 -
