Chapter 331 The Ambitions of the Paper Industry

"I see. The market potential of this woven bag is indeed very large." Wei Zetao smiled and said, "Mr. Yang, there is one more thing. We have made new progress with the Taiwan government on investing in the construction of a paper mill."

Yang Wendong asked, "Have the land and policies been negotiated?"

Unlike the "free market" policy of the Hong Kong government, other local governments will provide support for overseas capital coming to invest. The most basic support is cheap land, tax incentives, etc.

The Taiwanese government began implementing policies to attract foreign investment as early as the mid-50s. In the 60s, many foreign companies came to invest, which was somewhat similar to the reform and opening up of the mainland in the 80s and 90s.

The scale of Changxing Industrial's investment this time is not small. It is directly planning to build the first paper mill in Taiwan. Naturally, some conditions need to be discussed before investing.

Wei Zetao replied: "Yes, the Taiwan government gave us a piece of land near the sea in Taipei City, but the location is very remote, far away from the city and even the towns."

Yang Wendong asked: "Is it because our paper mill is polluting too much?"

"Yes, even though we have pollution-free recycling measures, the discharged water is still toxic." Wei Zetao explained: "So what Taiwan wants is to build this factory on the seashore in an uninhabited area, and after the sewage is treated, it will be discharged directly into the sea."

Yang Wendong asked again: "What about the other paper mill in Taiwan? Does it do the same thing?"

Wei Zetao replied: "Yes, the Yongsheng Paper Mill is located in Kaohsiung, which is also close to the sea. Some large international paper mills are actually built on the seaside.

It is also because it is impossible to treat the wastewater from papermaking cleanly, so it must not be discharged inland. Discharging it into the river will cause serious ecological disasters.”

"Then let's build it by the sea?" Yang Wendong nodded: "But it's too remote. Will there be problems with water, electricity and transportation?"

No one wants pollution, and everyone wants to have a pollution-free and high-profit industry. However, the reality is that this is not possible. Many industries are accompanied by pollution, and even the power generation that is the foundation of industry is extremely polluting in this era.

If you want to develop the economy and industry, you must sacrifice a certain price. Compared to the agricultural society where people could hardly get enough food and clothing, a little damage to the environment can be exchanged for jobs, cheap industrial products, large amounts of food, electricity, tap water, and even home appliances and cars. That is naturally a good deal. Many countries cannot even sacrifice the environment.

Only after the economy improves, can we consider controlling the environment or relocating heavily polluting factories to other countries. This is the repetitive history of modern mankind. From Europe and the United States to Japan and the future mainland, every country has done this.

"Water and electricity are all accessible. Taipei is not big, and this place is remote, but it is actually not far from the main city." Wei Zetao said, "There is only one small road for land transportation, and large trucks cannot go on this road. The Taiwan government wants us to build a small dock nearby, and then all large materials will be transported by sea."

Yang Wendong asked: "Then are there such conditions for building a dock?"

Wei Zetao said: "We do have this. What we want to build is a small dock that can allow small boats to approach. In the future, our waste paper, wood pulp or produced paper can be transported through the dock.

If it's not something very heavy, you can go by land and just drive over there."

"It's quite troublesome." Yang Wendong said with a frown.

Wei Zetao said: “Mr. Yang, investing in Taiwan is actually like this. Economically, Taipei in Taiwan is only equivalent to Hong Kong 10 years ago, and its infrastructure is still very poor;
As for heavily polluting industries, especially those that produce large amounts of wastewater, no one dares to locate them near cities, so it is normal that infrastructure is poor, and this is actually similar in Southeast Asian countries.”

"Well, okay, how big is this land? How much does it cost?" Yang Wendong asked again.

If it is exhaust gas pollution, then there may be a possibility of bargaining, as long as you choose the downwind side of the city; but if it is water pollution, you really can't mess around. Many cities are built on water, and if the fresh water is polluted, the economy will be even more ruined.

It is said that after the reform and opening up in the previous life, Shanghai City closed down and relocated countless water-polluting enterprises in order to control the water pollution of the Yangtze River.

Wei Zetao said: "The land provided by Wanwan is a total of 25 square feet (2.5 square meters), and the price per square foot is 0.5 Hong Kong dollars."

"5 cents a foot? That's only 12.5 in total?" Yang Wendong asked.

Wei Zetao said: "Yes, this is basically half-sale and half-giveaway. If it weren't for policy reasons, Taiwan would have wanted to make it free.

And in terms of taxation, they also proposed a 50% tax policy for the first five years after opening the business.”

"Even if the tax rate is half, it can't compare to Hong Kong." Yang Wendong smiled and said, "But Hong Kong is indeed not suitable for building such a heavily polluting enterprise."

"Yes." Wei Zetao added: "In addition, my people have investigated and found that the chemical industry in Taiwan is also very good. The strong acids and alkalis and some compounds needed for papermaking can be purchased. Basically, as long as we build the factory and have the raw materials, we can start production."

"Okay, that's it." Yang Wendong nodded and said, "Entering the papermaking industry is also an important milestone for our Changxing Industry this year. In the future, we can't just rely on creative products;

Although there is fierce competition in conventional products, the market is large enough and we have many opportunities.”

Creative products are indeed very profitable, especially those protected by patents. Even if there is pirated copy, they are still much better than conventional products.

But after all, the market potential of this kind of product is limited. The demand for sticky notes is more than a thousand times lower than that of A4 paper, toilet paper, and carton paper. For such a business, even if the profit margin is very low, the total turnover will be very high, and the total profit is not low, not to mention the employment, front-end and back-end industrial chains, etc. that can be driven.

As long as the scale is large enough, it will be enough to increase one's international influence.

Today, with the employment and economic influence it has created in Hong Kong, it is time to gradually enter the international market.

"Okay." Wei Zetao said with a smile, "There is one more thing. I have communicated with the Hong Kong government's education department. They are also willing to add engineering subjects and plan to add 300 engineering students every year, covering majors such as electronics, mechanical design, mold making, and factory management."

"300?" Yang Wendong thought for a moment and said, "It's still a little too little."

Changxing Industry now has 1.5 workers. In the future, there will be Honor Electronics, plus industries driven by new creative ideas. It is estimated that in the 70s, it will have at least to workers.

Wei Zetao explained: "Mr. Yang, the land area of the Chinese University of Hong Kong is also limited. We can increase the number of students by 300, which also reduces the number of liberal arts students. This is basically the limit."

"Okay." Yang Wendong nodded.

There is really no need to demand too much. In a small city like Hong Kong, the technology and number of talents are limited. If you want to focus on conquering various technologies in the future, you will probably still need to rely on overseas R&D centers or recruit people from overseas to Hong Kong.

On the local side, it is enough to provide part of it.

Another week passed and Wei Zetao arrived at the Changxing Building in Hong Kong Island.

"Mr. Yang, we have already reached an agreement with Taiwan." Wei Zetao handed over a document and said, "This is the investment contract, which includes our land purchase costs, Taiwan's tax benefits, environmental protection restrictions, etc.

Our first phase plan is to build a paper mill with an annual output of 10 tons, mainly producing A4 paper and sticky note paper."

Yang Wendong took the document, read it carefully, and asked, "Has the legal department confirmed it?"

"Yes, we asked lawyers from Hong Kong and Taiwan to look into it together," Wei Zetao replied.

Yang Wendong asked again: "Then I don't understand the data on pollution treatment requirements. What kind of equipment and cost do we need to treat the wastewater to the required level?"

"Not very high. Such equipment costs about HK$20. The energy source is electricity, which consumes about 500 kWh of electricity per day. Add some neutralizing compounds and most of the pollutants can be recovered." Wei Zetao continued: "The principle is this. Use a centrifuge to separate heavy metals and some compounds. This consumes electricity. Some organic matter requires the environmental protection cost of one ton of paper."

Wei Zetao introduced it step by step, and Yang Wendong listened carefully. After the introduction, he said, "The cost is not too high, so let's decide it this way."

Even if a factory is built on the seaside and the bay turns a blind eye to sewage discharge, it is not allowed to discharge directly into the sea without any treatment. There are still some basic restrictions. Otherwise, if these heavily polluted waters flow to other shores with the sea, it will be a huge loss.

Wei Zetao smiled and said, "Okay, that's because Taiwan has reduced environmental protection requirements in order to attract investment. Otherwise, with Japan's current environmental protection requirements, the cost would have to be increased by at least five times."

There is a characteristic of pollution treatment. If pollution is divided into 100 points, the first 80 points are easy to deal with, but the latter 80-100 points are difficult. The more you want to deal with it, the more difficult it becomes exponentially, just like sweeping the floor.

"Yes, I understand." Yang Wendong nodded and asked, "Have you confirmed the equipment with the Japanese equipment factory?"

"The only remaining issue is the price. You can go and have a look." Wei Zetao took out a bunch of photos and placed them in front of Yang Wendong, pointing to different places and explaining, "This equipment is brand new and uses the latest technology. When pulp is put in, it can be produced into paper in an assembly line mode, and finally it will be automatically cut and packaged.

If it is waste paper raw material, there is also a special equipment for refining waste paper, which is converted into paper through chemical compounds and centrifuges. "

"Okay, I don't really understand all this. I'll go and see it in person later." Yang Wendong smiled.

Although he had ambitions to enter the papermaking market and develop it well, this first factory was just a small-scale trial. Therefore, he would not make a special trip to Japan to take a look and would just leave everything to his subordinates.

Once the equipment arrives in Taiwan and the factory is opened, it won’t be too late to take a look.

"Okay." Wei Zetao said with a smile: "Both sides are moving very fast. I think we can start construction in the second half of this year."

"Okay." Yang Wendong nodded, and then said: "But we need to be prepared for the market. Although Changxing Industry itself will absorb a lot of production capacity, it is more important to do well in other markets. Otherwise, I don't need to do the papermaking industry myself."

Even though the sales volume of Post-it Notes is in the billions, the consumption of paper is not that much. Entering the papermaking industry and reducing the cost of Post-it Notes is only one of the goals. The bigger goal is to expand in this industry.

Wei Zetao said with a smile: "I understand that the paper market is too big. If we can really do well, it will definitely be much bigger than the market for suitcases."

"Yes, my goal is to build one of the largest paper mills in Asia." Yang Wendong added: "Now that the Asian economy is beginning to develop, the demand for paper will inevitably increase. This is our opportunity."

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(End of this chapter)

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