Chapter 114 Financial Risk Control

Chapter 114 Financial Risk Control

Chapter 114 Financial Risk Control

Before the advent of the Internet age, there was basically no such thing as companies giving shares to senior employees. Naturally, even the former Hong Kong working emperors, Ma Sai Ming and Huo Jianning, could only take salaries.

Of course, after they get their salary, if they are optimistic about their own business, buying it again is another matter, and there will usually be a discount.

Besides, stocks are actually a kind of dream. Only crappy bosses will talk about dreams with their employees. Serious bosses will talk about salary and benefits.

Yang Wendong was naturally a pragmatic person. After discussing with Qian Shangde, he gave him 1.5 times the salary in the United States, and provided him with a house and a car in Hong Kong. After the glue factory was built and successfully produced, his salary would increase by 30%.

This income is basically the limit in Hong Kong's technology field, but it is what people deserve, because ordinary talents are restricted by the local average wage level no matter where they work. In today's Hong Kong and the United States, the gap is several times higher.

But this does not exist for elite talents, because they can also get relatively high incomes in Europe and the United States, so if you want them to come to poor areas, you have to pay a higher price.

After the consultation was completed, everyone had another light meal together;
"Mr. Yang, it will take about half a month for me to resign from Dow Corning." After drinking a little beer, Qian Shangde said, "But during this time, I can also go to 3M's factory in New York State for an on-site inspection;
In addition, the people in Hong Kong who are going to be sent to the United States also need to prepare as soon as possible. The sooner they go, the better. The core of the factory is these technical talents. With enough technical talents, even if there is no 3M equipment, we can directly purchase other production lines. "

"Okay." Yang Wendong nodded and said, "Recently, Changxing Industry has been recruiting people with some education or who know some English. Currently, there are more than a dozen people who are interested."

This matter has actually been going on even without the planning of the glue factory;
If an enterprise wants to develop, it must have sufficient talents, especially when its production capacity is about to expand rapidly. It urgently needs a large number of people, whether it is directly recruiting talents with corresponding skills from the society or recruiting them and training them itself.

As the company grows bigger, it can no longer operate like the small workshop model of the past. At least the middle-level people need to be able to understand all the texts, have certain social work experience and the ability to think well. Otherwise, the simplest and most complex batch management in the company will become a mess.

Qian Shangde added: "That's good. When I return to the United States, I will study the types of glue we will need in the future and obtain the 3M patent. Then this factory will basically be fine."

Yang Wendong smiled, raised his glass again, and said, "Thank you Professor Qian."

"Mr. Yang, please don't call me Professor Qian." Qian Shangde laughed and said, "Just call me Old Qian like everyone else. Only people who are not very familiar with each other would call me that politely. People who are close to each other would call me by my name."

"That's right, Lao Qian, come on, have a drink." Yang Wendong was also very straightforward. Since everyone would be colleagues in the future, they would naturally be acquaintances.

Qian Shangde is right. In any place, including places with different cultures such as China, America, and Europe, honorifics are used for strangers or people you just met. People with whom you have a close relationship do not use honorifics. If you are a young person of the same generation, it is good enough not to call him son.
After eating and drinking, Yang Wendong arranged for someone to drive Qian Shangde back to the hotel in his own car, while he himself returned to the company in the car assigned to Wei Zetao by the company.

"Old Wei, I remember you wanted to buy an American car, didn't you?" Yang Wendong asked curiously while sitting in the car, "Why did you buy a Volkswagen again?"

Wei Zetao said with a smile: "I was originally planning to buy a Ford, but this Volkswagen is very special. The previous owner was a woman who drove it very seldom, less than 10,000 kilometers, and the price was very cheap, so I bought it. It's almost like a new one."

"That's not bad." Yang Wendong smiled.

Wei Zetao added: "Mr. Yang, now that we have money for the glue factory, there won't be many problems later. We should also choose a site for the factory."

"Well, this factory is different from the previous ones." Yang Wendong paused and said, "Although the glue factory is considered a light chemical industry in the chemical industry and has relatively little pollution, it is still relatively speaking and cannot be placed near residential areas.

You should discuss with the Hong Kong Waterworks and China Light and Power Company, and choose a sparsely populated area with water and electricity, and build a factory there."

Although he is optimistic about the future of the real estate industry, even though it has not yet officially entered the market on a large scale, as long as he builds a factory, he will also choose some places that will be worth a lot of money in the future. After all, he is not a fool, and everyone will do the same.

But this glue chemical factory will not be operated in this way, and the area itself will not be very large, so the benefits it can bring will not be many. If it is built in a residential area, there may be a lot of disputes in the future, which is completely unnecessary.

Besides, there is no need to infringe on the living environment of ordinary people in order to make money. There were plenty of opportunities to buy and hoard land throughout the 60s, so this little bit was not a big deal.

"Okay." Wei Zetao agreed and said, "But we also have to consider the transportation problem. The raw materials come in and out, and the products we produce also need to go out. It will be troublesome for the workers to commute too long."

Yang Wendong nodded and said, "So we have to find a balance. If it really doesn't work, we can build another dormitory for the workers to live in."

In Hong Kong, factories basically do not provide accommodation. It is said that a long time ago, some factories did provide accommodation, which made it convenient for workers to go back to work immediately after a good rest. Some factories even locked the factory area to prevent employees from leaving.

But normal capitalists in Hong Kong obviously would not provide a good environment, not to mention the poor living conditions. Firefighting naturally would not be taken seriously, and as a result, a fire broke out, causing heavy casualties.

Although accountability was not so severe in the old days, many people died and the capitalists always had to pay a certain price. Gradually, factories in Hong Kong no longer provided accommodation.

Including Changxing Industry, hundreds of employees are now not provided with housing. It’s not that Yang Wendong is reluctant to spend the money, but he does not dare to take the risk of something going wrong.

However, if there are only a few people, who are still elite talents, it is still worthwhile to spend a little more money to build a dormitory and ensure a good environment and fire protection. After all, the glue factory is related to the core development of the company in the future.

"Okay, Mr. Yang." Wei Zetao smiled and said, "There is one more thing. I have already negotiated with the Hong Kong government. Our new factory will buy the land in Huarong Road, but the price has not been fully negotiated yet."

"Okay." Yang Wendong nodded. This piece of land is 35 square feet high and was the land he favored the most in the early days. Even now, the land on the edge of the Kowloon Peninsula is not valuable, otherwise you can't buy it even if you have money.

So he asked again: "Has the Hong Kong government not given in on its asking price yet?"

Wei Zetao replied: "No, the Hong Kong government's offer is HK$3.2 per square foot. I have already commissioned a professional lawyer team in Central to negotiate with the Hong Kong government and try to reduce the price to HK$ million."

"One million?" Yang Wendong nodded after listening, and then asked: "How much will it cost to level the land later?"

The flat land in Hong Kong that is in a good location has basically been gone. The remaining land needs to be developed and leveled at a great cost. Otherwise, there wouldn’t be so many people living in squatter huts who are forced to live on the mountains.

Wei Zetao replied: "If we level the whole site, it may cost HK$40 or , but our first phase only occupies % of the area, so the cost in this regard will be much lower."

Yang Wendong nodded and said, "Well, looking at it this way, with the large amount of new equipment, material preparation, and factory infrastructure that will be needed later, the money from 3M alone is still not enough."

Wei Zetao also said, “Yes, we must also keep a certain amount of funds to purchase production lines, technical patents and other investment needs of the glue factory from 3M;
So, Mr. Yang, we also need to negotiate with Liao Chong Hing Bank or other banks as soon as possible for the next loan." "Okay, Liao Liewen called me once during this period and invited me to their headquarters building in Central." Yang Wendong smiled and said, "It just so happens that we have done everything we can with the glue factory, and it's time to plan to build a new factory."

The purpose of building a new factory is to spend a large amount of money to solve the production capacity problem in the short and medium term at one time. Otherwise, it will be like Li Jiacheng last year. The production capacity will expand too fast, and you will have to rent a new factory every two or three months, and then you often can't rent it, or the landlord will see that you are anxious and try to rip you off.

Therefore, the choice of location and planning of factory layout are all done with great caution. No matter how urgent it is, you cannot wait for a few days to finalize it. Otherwise, if it is not done well, there will be trouble in the future.

Besides, buying land from the Hong Kong government is not something you can do immediately if you want to. On the contrary, if you act in a hurry, you will be ripped off. The British Hong Kong of this era always touted the principle of "free market" and would not care whether you come to invest or not. Unlike the mainland government in later generations, when it comes to large investments, the government will be more anxious than you, the entrepreneur.

It just so happened that during this period of time, he also needed to settle the glue factory issue first. Now that it was almost ready, he needed to decide on a new factory and start construction to ensure production capacity for at least the next one or two years.

Of course, this is just according to the current plan. If one day, there is another hot-selling product comparable to sticky notes, the factory may not be enough. Everything is possible. Just do it according to the current situation.
Wei Zetao asked with a smile: "When do you plan to go?"

"I'll call back this afternoon and make an appointment. It will probably be within these few days." Yang Wendong thought for a while and said that the sooner such things are done, the better.

The new factory is planned to be large enough. Once the investment is completed, a large number of post-it notes, mouse traps and fly traps can be exported to meet the needs of the US market and even develop markets outside of America. The company's funding problems will then be solved.

With the high profits from post-it notes, even if we need to build other factories in the future, we probably won’t need to take out loans anymore. Our own financial problems, at least in the field of factory production, will not be a big problem.

Real estate is another matter. After all, as long as there is excess capital in the industrial sector, there is a high probability that it will be invested in the real estate sector. At this time, it is natural to cooperate with banks, but this should be a long time in the future.

Wei Zetao added: "I heard that the headquarters building of Liao Chong Hing Bank is going to be relocated. They recently acquired a piece of land in Central, and they are expected to build a taller headquarters building."

"This Liu Chong Hing Bank has developed very rapidly in Hong Kong in recent years." Yang Wendong paused and said, "The high-interest small deposits they pioneered have enabled Liu Chong Hing Bank to develop rapidly. Not only are branches opening quickly, but even a new headquarters building is being built."

Wei Zetao said: "Mr. Yang, although I am not specialized in finance, I always feel that what Liao Chongxing Bank does is very risky, especially when I heard that Liao Baoshan directly used the depositors' money to speculate in real estate. If something goes wrong."

"Well, I know. So after this loan is successful, we will change the cooperation accounts with other major dealers." Yang Wendong paused and said.

As a time traveler, he knew that in two years, Liao Chong Hing Bank would be caught in a serious bank run crisis, so he would of course make preparations early.

The reason why I have been cooperating with this bank during this period is that in the early days I could only find this bank that was willing to accept a deposit of 100 yuan to open an account.

In addition, in order to obtain a loan, he has no fixed assets as collateral. If he wants to obtain more funds, he has to find a bank that dares to take "risks".

It's a matter of each taking what they need.
If there is a bank run on Liu Chongxing in the future, his deposits and liquid funds in his account will surely be gone. As for his loans, of course he can't get rid of them, but at least there is no risk.

Wei Zetao said with a smile: "It seems that Mr. Yang has been prepared for this, so I don't have to worry."

Yang Wendong added: "Old Wei, I am not as good as you in the specific operation of the company and the factory, and I am not as good as you in technology.

But I am also very aware of this kind of business risk, and you have reminded me very well. If you have any concerns in this regard in the future, you can tell me. "

As a time traveler, he also knew about some major events. When these events broke out, they would have an impact on a wide range of commercial enterprises.

But in addition to this, every business will have its own risks during its operation. In this regard, Yang Wendong does have experience in starting a business in his previous life, but he may not be able to compare with today's business elites, especially many of the risks of this era, which he may not be able to predict in advance.

"Okay, Mr. Yang, don't worry." Wei Zetao agreed, and then asked, "Then Mr. Yang, which bank should we cooperate with in the future?"

Yang Wendong thought for a moment, looked at the Hong Kong Island area across Victoria Harbour in the distance, and asked, "Is HSBC okay?"

Wei Zetao replied: "If we just want to open an account, given our company's current cash flow situation, the bank will not refuse us, so it's fine to choose HSBC.

But this bank mainly cooperates with British companies, so it might be a bit difficult to get a loan. Mr. Yang, you know that big British companies look down on Chinese people. "

"Hmm..." Yang Wendong nodded. The British foreigners were like that in the 50s. There was nothing they could do about it. It was not until the 80s when they were suppressed and rubbed by Chinese capital that they changed.

Relatively speaking, HSBC is quite smart. It discovered very early on that Chinese capital is the future, so it invested in many Chinese people with great potential. However, it is only the 50s now, which is a bit too early. It is not known whether there are people with this vision in HSBC's history who are still working in HSBC today.

Then he asked, "What about Hang Seng Bank? It is the largest Chinese bank in Hong Kong."

Wei Zetao replied: "There should be no problem in lending to Hang Seng Bank, as the Ho family of Hang Seng Bank is quite supportive of Chinese enterprises in Hong Kong.

It’s just that their control is stricter, so under the same conditions, the loan amount is definitely not as high as that of Liao Chong Hing Bank.”

"Haha, this is normal. How can you have both?" Yang Wendong smiled and said, "Then open an account at Hang Seng Bank first and transfer the funds slowly."

Among Chinese capital, the best choice is Hang Seng.

"Okay." Wei Zetao agreed.

After a while, Yang Wendong said again: "Let's open an account with HSBC first. There's no harm in having multiple banks!"

……

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(End of this chapter)