Chapter 315 Entering the Papermaking Industry

Chapter 315 Entering the Papermaking Industry

Chapter 315 Entering the Papermaking Industry

"Okay." Wang Fengzhi continued: "Carrefour currently has 31 supermarkets in Hong Kong, with 6 under construction. Last year, the total turnover was 3670 million Hong Kong dollars. Not counting the investment in real estate, the net profit was 410 million;
But if we take into account the huge investment in the property, it will be a loss if we calculate it over five years, estimated to be around 5 million.”

"It's hard to say what the loss is. These land and buildings have market values, and they will appreciate in value." Yang Wendong thought for a moment and said, "So, just like Changxing Real Estate, Carrefour's properties will be separated from each other in the future. The appreciation or depreciation of the land price will not be included in the financial statistics, but there will be special records."

"I understand." Wang Fengzhi nodded and said, "These properties were built by Changxing Real Estate. According to the principles you set before, when Carrefour's business stabilizes in the future, the investment will still have to be returned to Changxing Real Estate."

Yang Wendong said: "Well, yes, unless I allocate funds specifically, you need to pay it back; but Carrefour's expansion is probably not as fast as a few factories, so it may take some time."

In fact, cooperation between enterprises is very complex, and the same is true between different businesses within an enterprise.

For example, Carrefour and Changxing Real Estate. Although the latter is providing the funds, many commercial properties have also gained higher returns due to their proximity to Carrefour. That is because they are one family. Otherwise, these profit distribution negotiations would take a long time.

Wang Fengzhi finally said: "The last one is Watsons. By selling water during this period, Watsons' beverage business turned losses into profits and earned 50 Hong Kong dollars last year;
But the can production line you arranged, Mr. Yang, costs $40 per line. If you add in the factory building and initial raw material investment, it’s estimated to be at least $50.”

Yang Wendong smiled and said, "After the operation starts, we can calculate the investment of large-scale equipment based on five years and spread it evenly over every bottle of beverage."

The can production line is expensive, but there is a reason for its high price. At the front end, there is production equipment that can directly press the horse-head iron plate into the shape of a can, and at the later stage there is also a high-temperature disinfection oven production line.

Although the automation is not high and each device is manually operated, at least, apart from the raw materials that need to be purchased from outside, there is no need to worry about other aspects.

The production line arrived at the beginning of the month and was being installed and debugged. We did not take a break during the Chinese New Year period because the foreign engineers did not need to celebrate the Chinese New Year. After the Chinese New Year, we could start small-batch production.

"Okay, I've tried Watsons' herbal tea, it's delicious." Wang Fengzhi said with a smile, "When it goes on the market after the New Year, I think it will be a big hit."

"Well, I'm grateful for your words." Yang Wendong nodded and said, "In that case, last year's business situation is about the same. Please make a more detailed report for me after the New Year.
In addition, I need to prepare a property status report for all subsidiaries of the company. I need to know all the detailed data.”

Changxing Real Estate focuses on real estate business, but other industries also have their own properties, especially Changxing Industry, which owns many factories and warehouses, and has also invested in many suppliers, and shares some properties.

In the early days, the group's investment in the real estate industry was not large. Even if Yang Wendong could not remember all of it, he still knew most of it. But now that the scale is getting bigger and bigger, and the focus shifted to new industry layout last year, he can't remember much.

This is actually normal. If you ask Li Jiacheng of 21st Century Business Herald how many properties he owns, he probably only knows some of the more famous ones.
This is also one of the reasons why many people prefer office buildings or well-known properties in Central. At least they can remember them. Otherwise, the reports from their subordinates will just be a bunch of numbers about the area.

"Okay." Wang Fengzhi nodded and agreed, "In fact, all the properties of the group are also counted, but because of the rapid development, there will be great changes in a few months. I will arrange for a re-count after the new year."

"Okay, thank you for your hard work." Yang Wendong said politely, "After the New Year, the company will arrange family group travel benefits for all senior executives in batches. Sister Wang, you can discuss with your family where to go during the New Year."

The company's top management also needs to be won over. After all, they are the veterans themselves and are needed for the normal operation of the company.

This is true in any large company.

Wang Fengzhi smiled and said, "Thank you, Mr. Yang."

At noon, Yang Wendong arrived at the industrial park in Kwun Tong.

"Mr. Yang, you came without telling me in advance, so I'm not ready yet." Wei Zetao said with a smile.

He didn't know about it until his boss arrived, and although he wasn't worried about any surprise inspections, it was still better to be prepared.

Yang Wendong said indifferently: "It's okay, it's just the New Year, I came here to take a look."

"Okay." Wei Zetao asked again: "Mr. Yang, it's almost noon now. How about we go to a nearby hotel to have a quick meal and then visit the factory in the afternoon?"

Yang Wendong said: "No, just eat in the factory cafeteria. The food in our cafeteria should be similar to that in a normal restaurant, right?"

Wei Zetao replied: "It's similar to a normal restaurant. It can only be said that there are normal meat dishes, but it is definitely not as good as a slightly higher-end hotel."

"It's okay, just be normal." Yang Wendong naturally didn't care and said, "Let's eat in the cafeteria. The two of us can eat together. No one else needs to follow. I haven't eaten such ordinary meals for a long time."

This statement is true. Although he never cares about food, he has that status after all. When he is at home, he has a dedicated chef to take care of him, and when he is at work, he also has a dedicated life assistant to take care of him.

In addition, he was often very busy and for hygiene reasons, he had not eaten street snacks or ordinary fast food for a long time.

"Okay, Mr. Yang can also give some guidance on the taste of our factory." Wei Zetao also knew that he could not change his boss's intentions.

Afterwards, the two of them came to the cafeteria while the others dispersed.

At this moment, there were many people in the cafeteria. Yang Wendong asked, "Is this the only cafeteria in our factory?"

Wei Zetao shook his head and said, "No, there are three in total. In the early days, there was only one. Later, we found that the food in the cafeteria was getting worse and worse. We changed the supplier but it was still the same.
When the factory had more people, we opened two more. All employees, including management, had stamped meal tickets and came to the canteen to get food and eat. They were free to choose whichever restaurant tasted better. "

Yang Wendong immediately became interested and asked, "Then the meal tickets are allocated based on price? Are the prices of the dishes different?"

Wei Zetao explained: "No, one ticket can be exchanged for one meat and one vegetable, and the meal is free. Each worker can get a corresponding meal ticket according to the working hours. One ticket is enough for 8 hours of work, and two tickets are enough for 12 hours.

As for how to match meat and vegetables and how to let employees choose, that is left to the three suppliers. According to market principles, they will find ways to compete on their own.”

Yang Wendong asked again: "Then there will be nothing to eat in the morning?"

Wei Zetao paused and said, "Mr. Yang, most people don't eat breakfast. However, there are buns and steamed buns for sale at the factory gate and dormitory gate. The workers need to buy them with their own money."

"Oh, that's possible." Yang Wendong nodded and asked, "Aren't you afraid that the bosses behind the three canteen suppliers will negotiate for a monopoly?" Wei Zetao said, "It's possible, but our meal tickets can also be traded, because some people who live in the dormitory want to eat in the canteen when they rest, or some people want to take food back to their families.

Some people, in order to save money, may eat more at noon and then go home to eat in the evening.

Some even bring their own food instead of eating in the cafeteria. We don’t approve of this, but we don’t stop it. Things are different now than before. Basically, our factory workers don’t feel like eating too much.”

"Yes, there is competition with outside businesses." Yang Wendong nodded and said, "This way it is impossible to monopolize, because many people can choose to eat out."

Wei Zetao said with a smile: “Yes, another advantage of this is that we can see the quality of the canteen based on the fluctuations in the prices of employee meal tickets;
The higher the price, the better the food in the cafeteria, because everyone wants to eat in the cafeteria. Otherwise, we will investigate whether there are any problems in the cafeteria."

Yang Wendong praised and said, "Not bad, control in a market-oriented way. We can refer to this when we have large factories in the future."

Wei Zetao said: "This is also a matter of experience, which I have gradually figured out."

"it is good."

Soon, the two of them got their meals, a simple combination of meat and vegetables, with plenty of choices. Yang Wendong ordered a roast chicken with potatoes and a plate of dried soybean tofu.

"Are there no purely meat dishes?" Yang Wendong asked again.

Wei Zetao replied: "Mr. Yang, the cost of pure meat dishes is too high. Usually, meat dishes are also a combination of meat and vegetables, and there is plenty of oil and soup. Many workers like to soak rice in oil and soup, which makes them very full."

"Okay." Yang Wendong nodded.

In this era, it is impossible to compare with the mainland, which had the lowest PPP (average purchasing power) in the world in the past. Especially because of the immaturity and high cost of transportation refrigeration technology, the import cost of Hong Kong is still high, whether it is imported from the mainland or from Southeast Asia.

After lunch, the two walked around the workshop and came to the administrative building in front of the factory:
Yang Wendong said with a smile: "I have also received the performance of Changxing Industrial this year from Sister Wang. It is very good. In terms of annual profit, it is estimated that there are few companies in Hong Kong that can surpass it, and these companies are involved in many industries."

According to Jardine Matheson's annual report, its net profit last year was HK$1.43 million, but this was the profit of all industries, including overseas.

Several other large foreign companies are not listed, so it is difficult to know the specific data, but the only ones that can reach the level of Changxing Industrial are probably HSBC, Swire, and Wheelock.

The top Chinese companies, such as Hang Seng Bank, Bank of East Asia, and Goldsoft Shipping (owned by Tung Chao-Yen), have profits estimated to be in the tens of millions of Hong Kong dollars, but probably not to the level of 5000.

Changxing Industry is just a member of Changxing Group.

However, other industries are still in their growth phase, so even if they are added in, it will not be of much help to the group if we only look at the net profit.

Wei Zetao said awkwardly: "This is all thanks to Mr. Yang. Currently, more than 90% of Changxing Industrial's revenue comes from the industries that you originally planned. Even though we have a research and development team of hundreds of people, our total revenue is only more than 2000 million."

"We need to take our time to expand our product line." Yang Wendong said with a smile, "I also hope that you can develop popular products like sticky notes or luggage, but this kind of thing requires time to accumulate."

"Yes." Wei Zetao replied.

Yang Wendong added: "As a business, we cannot rely solely on creative research and development. This is like winning the lottery. If you win, you will be very happy, but if you don't win, the business needs a way out.

So, including 3M, in addition to R&D creativity, there are also four areas of efforts. The first is channels, the second is technology, the third is the industrial chain, and the fourth is brand.

Today, Changxing Industrial has become a large company, the market share of several major products has been growing slowly, and production capacity is not a problem at present, so we need to explore these four directions.”

Even 3M, whose R&D capabilities are a hundred times that of Changxing Industrial, has only had a few hit products over the years.

What supports 3M to become one of the top 50 companies in the world is not these popular products, but their extensive technology accumulation and industrial chain expansion.

For example, in the field of glue, 3M is the absolute king. It has corresponding tapes or glues in every field where it is needed, including aviation, medical, automotive, industrial, home appliances, deep sea, shipbuilding, etc.

As for channels and brands, they are the inevitable result of long-term operation after gaining strength.

After listening to this, Wei Zetao said: "The core is technology and industrial chain. Channels and brands need a foundation."

"Yes, so our focus is on technology and the industrial chain." Yang Wendong nodded and said, "In terms of technology, judging from the current products of Changxing Industrial, the main focus is on plastics and various appearance designs, and the requirements are not very high at present.

As for the industrial chain, I have considered it and plan to enter the papermaking industry at the right time.”

Wei Zetao asked with a smile: "Mr. Yang, are you planning to make paper in Taiwan?"

"You seem to understand my thoughts very well." Yang Wendong smiled.

Wei Zetao replied: "In fact, I have considered entering the papermaking industry for a long time. All paper in Hong Kong needs to be imported, and with the demand for our sticky notes, it is enough to meet the needs of a medium-sized paper mill.

However, paper mills are highly polluting and require a lot of chemicals and water, so it is not suitable to be placed in Hong Kong. However, placing it in Taiwan, which is also a gathering place for Chinese people, is the best choice.”

"Well, there is such a paper mill in Taiwan. We can just poach the team." Yang Wendong said again.

Wei Zetao smiled and said, "Okay, actually I have already done some research on this in Taiwan."

"Very good." Yang Wendong asked again: "Where do the raw materials for the paper mill in Taiwan come from? Is it wood pulp or waste paper?"

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(End of this chapter)