Chapter 175 The Problem of Shipping

Robert added: "However, because the scale of our investment this time is not small, you may also need to expand the scale of investment, that is, build a new glue factory."

"Build a new factory?" Yang Wendong thought for a moment and said, "That's not a problem, but you have to give me some guarantees, right? Otherwise, if I build it and you don't want my glue anymore, I'll be at a loss."

Robert smiled and said: "In the initial stage of cooperation, you don't need to purchase a new production line immediately. If there are no quality issues, we can sign a long-term supply agreement."

"Okay." Yang Wendong nodded and said, "Then there shouldn't be any big problems."

"OK, we'll discuss it again after we choose a place to invest," Robert said with a smile.

"Okay." Yang Wendong smiled. This was just a small cooperation.

Compared with how much money he can make, he is more optimistic that companies like 3M will invest in Hong Kong and use Hong Kong as an industrial production base, which will inevitably drive a lot of employment and economic growth.

It may not have much impact on him, but it is different for ordinary Chinese people. After all, it is a good thing that benefits the Chinese people.

My own butterfly effect has played a positive role.

Robert paused and said, "Eric, we came to Hong Kong for this matter, but now, there may be one more thing."

"What's the matter?" Yang Wendong asked.

Robert said with a smile: “The day before yesterday I saw the trolley suitcase you invented at the airport, and then I realized that you had invented another new thing.

I really admire you. How did you come up with so many inventions? Post-it notes, sticky hooks, and the spinning mop. "

"Maybe, it's really just talent." Yang Wendong explained "confidently". It's okay to speak like this in front of Westerners.

Talent is something that is difficult to explain, and it is normal for there to be a gap of tens of millions of times between people.

"Indeed." Robert added, "Your suitcase has just been launched on the market, right? How about we cooperate again like we did with sticky notes?"

"Do you want to be an agent for suitcases? I remember you don't have similar products?" Yang Wendong was not too surprised to be approached so soon.

Suitcases are different from products like sticky hooks. Once someone buys them, they will carry them around everywhere, so it is very likely that they will quickly attract discerning people.

But I didn’t expect that this person was actually from 3M. It just so happened that they were preparing to invest in Hong Kong and discovered this.

Robert said, “Yes, although our 3M company does not deal with products such as luggage, it is not difficult to promote this product with our channel resources;
Eric, we have been cooperating for more than a year. I think you also know our company's attitude towards partners, so I think this will be a new cooperation between us."

"We can discuss it." Yang Wendong thought about it and finally said.

Overseas countries all rely on distributors. Large items like suitcases require very high channel and transportation costs, and it is impossible to do so without sufficient strength.

"Okay." Robert said happily, "I will go back and discuss this with the board of directors. I think they will agree when they see your suitcase."

"I hope so." Yang Wendong smiled.

We have only decided on a direction for cooperation now, and it is hard to say how the cooperation will be carried out in the future.

After Robert and Robin left, Yang Wendong quickly called Qian Shangde, who was in charge of the glue business and technology, and told him what happened.

After listening to it, Qian Shangde said: "There is no problem on the technical level. The glue needed for general tape is ordinary strong glue, and we can also make it ourselves.

If the supply is large, we can just buy another production line from overseas.”

"Do we have our own patent?" Yang Wendong asked back.

Qian Shangde said: "Yes, we have purchased some different patents in the past year, mainly for new products of mousetrap and tape. There is not much difference unless 3M has special requirements."

"Well, that's fine." Yang Wendong nodded and said, "You will be responsible for negotiating this matter with them when the time comes. I still hope that their project can be implemented."

"Okay, no problem." Qian Shangde agreed.

Yang Wendong then asked Wei Zetao next to him: "Old Wei, do you know what Robert did in the next few days?"

Wei Zetao said: "They are going to visit Tian's Chemical Factory in the next two days. They probably want Tian's Chemical Factory to produce the film for the tape."

"That's not bad. If Tian can do it, then Hong Kong will have a tape industry." Yang Wendong nodded and said.

Tin Ka-ping, the owner of Tin's Chemical Factory, is also a celebrity in Hong Kong. Like Yang Wendong, he is a "king of industry" and is known as the "chemical king."

Its main products are thermal insulation films used in construction and agriculture.

Qian Shangde said with a smile: "In theory, it can be done, but it may require additional investment in purchasing equipment, just like us. It depends on the conditions proposed by 3M."

Wei Zetao added: "If 3M sets up a tape industry in Hong Kong, I think many people will also do this."

"That's normal. It's a good thing for the Hong Kong economy." Yang Wendong smiled and said, "It's also good for our glue business." With a local industrial chain, naturally there will be businessmen looking for ways to expand their business.

This is also why in many countries, the government takes the lead in building the industrial chain. Once it matures, internal enterprises will develop normally on their own.

Unfortunately, Hong Kong does not have such an environment and the British Hong Kong government would not do such a thing.

Qian Shangde said: "Yes, the greater the sales volume of glue, the lower the costs in all aspects, especially the cost of purchasing raw materials."

"Well, that's it. We just need to cooperate with 3M later." Yang Wendong said, "Old Wei, our core task now is to increase the production capacity of trolley cases. Especially if we can reach a cooperation agreement with 3M, the order volume will definitely exceed the production capacity."

"Okay, but there will be a big problem with transportation now." Wei Zetao said: "I checked the cost of goods from Hong Kong to the United States yesterday. The price per cubic meter is 21 US dollars, and one cubic meter can hold up to 10 suitcases.

The shipping cost alone is about HK$12 per box, plus the port handling costs, so the price in the United States is too expensive.”

"This problem is indeed troublesome." Yang Wendong nodded. Before the emergence of containers, the cost of ocean transportation was very high.

Even the global free industrialization that was possible in the 70s was due to the fact that containers significantly reduced costs.

However, even though he knew about containers, this was not a creative issue but an infrastructure issue, and the concept of container ocean transportation had been proposed long ago.

There are actually container ships in the United States or Europe, but there are very few ports where they can unload cargo.

This requires a step-by-step container revolution on a global scale. In Hong Kong, it should have started in the late 60s, which is still quite a long time from now.

Perhaps in the future, he will have a chance to get involved, but it is not possible now. Just the investment in a port terminal alone is something he cannot afford even if his current net worth is ten times higher.

Wei Zetao added: "Yes, it is not just a matter of cost. At worst, we can just sell it at a higher price in the US. This is a new thing and 3M has the ability to do it.

The biggest problem is that our suitcases take up too much space. If we export them on a large scale, we may not even be able to book a seat on the ship because the export ship space is very limited now. "

Yang Wendong thought for a moment and said, "So you mean to buy a boat yourself?"

"If we want to do well in the European and American luggage market, I think this is necessary." Wei Zetao nodded and said, "Otherwise, the transportation alone will be a bottleneck for us."

"Shipping?" Yang Wendong thought for a moment and said, "What kind of ship should I buy?"

"Second-hand." Wei Zetao said, "A not-so-old second-hand ship that can hold 50 tons of cargo usually costs about $5, and has an internal space of nearly 7 cubic meters. Our suitcases are square and can easily hold to tons.

If you follow the normal quotation, including the fuel and operating costs, you can make your investment back in 10 trips a year.

Not to mention, with my own boat, there won’t be any major issues with time, and everything can be controlled within my own plan.”

“5 to 7 suitcases at a time?” Yang Wendong thought for a moment and said, “This business is indeed good.”

Wei Zetao added: “Yes, it is definitely economically worthwhile. The only downside is that since it is not a new ship, we cannot get a loan from Japan.
Banks in Hong Kong basically won’t lend us money, so we have to pay for it ourselves, unless we use other assets as collateral.”

Yang Wendong asked: "What is the price of the new ship?"

Wei Zetao replied: "A new 7000-ton ship produced in Japan costs $100 million. A 150-ton ship would cost $200- million, and it would take more than a year to wait."

"Forget it, it's really expensive and we can't afford to wait that long." Yang Wendong shook his head. It turned out that shipping required a lot of capital.

The status of the shipping tycoon in this era exceeds that of the real estate or industrial tycoons.

Wei Zetao said with a smile: "Actually, second-hand ones are more cost-effective. At most, the maintenance cost is a little higher and the fuel consumption is a little higher. The current fuel price is not very expensive."

"I can still come up with $50." Yang Wendong didn't care about this and said, "But after buying the ship, how do we operate it? We need to hire a complete team."

Wei Zetao said: "As long as you are willing to spend money, it is not difficult to recruit people. Compared with the cost of buying a ship, this is nothing. A captain in Hong Kong generally only has a monthly salary of 2,000 to 3,000 Hong Kong dollars, and a sailor generally only has a monthly salary of 300 to 400."

"Well, let's first negotiate a cooperation with 3M, and then release the news that we are looking for a captain." Yang Wendong paused and said, "It probably won't take too long for these two things to happen, so we can do it simultaneously. Once we get the ship, we'll recruit the captain."

The shipping industry still has great potential in the next 20 years, far exceeding real estate, especially when the Middle East War broke out in 1967. It is said that the ship owners at that time made a fortune.

Now we have entered the market since 60, and after 7 years, the scale will be similar.

If we were to delay for a few more years, we might have missed the golden opportunity.

Coincidentally, exports can ensure that your shipping company can still have business even when shipping costs plummet, and when shipping costs rise sharply, it can also reduce export costs.

Kill two birds with one stone.

Wei Zetao smiled and said, "Okay, I will first find a headhunter to hire someone with a shipping specialty."

(End of this chapter)

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