Chapter 389: First Trial of the Petroleum Derivatives Industry

Chapter 389: First Trial of the Petroleum Derivatives Industry

Chapter 389: First Trial of the Petroleum Derivatives Industry

"Okay, there are a lot of farmlands in Kwai Chung. With the permission of the Hong Kong government, they can be converted into industrial land in the future." Wei Zetao paused and asked, "Mr. Yang, in the spinning industry, although there are many such factories in Hong Kong now, they are actually just processing, and all the core raw materials are imported."

"The raw materials for spinning are cotton and chemical fiber, right?" Yang Wendong asked again.

Although I am not very familiar with the textile industry, as someone who has been educated by the Internet, I can understand a little about many things.

"Yes, it is cotton and chemical fiber, but high-end clothes may also contain wool, duck down and the like." Wei Zetao continued: "Hong Kong cannot produce these two materials. Cotton naturally comes mainly from the mainland. Among the materials that Hong Kong imports the most from the mainland, in addition to daily food, cotton is the second largest.

Chemical fibers are mainly imported from Japan. Currently, there are only a few countries in the world that can produce chemical fibers on a large scale, and Japan is the cheapest among them.”

"We can't produce cotton. This is an agricultural matter." Yang Wendong paused and said, "So you want Formosa Plastics to produce chemical fibers?"

As for agricultural manufacturing, he will not participate for the time being. He currently does not have the ability to guarantee a safe environment for overseas agricultural investments, after all, he does not have American capital. Furthermore, even if there is no problem with security, it would be too unprofitable to invest in agriculture at this time.

In the 60s and 70s, there were so many golden opportunities that it was not cost-effective to invest capital in land. It would be better to wait until there was too much money in hand and no direction to invest, and then consider investing in land to preserve value.

Wei Zetao nodded and said, "Yes, Wang Yongqing is now preparing to double his plastic production capacity, so this is a good opportunity for him to build another chemical fiber production line.

This will make it much easier for us to enter the spinning industry in the future, whether we open a factory in Taiwan or Hong Kong. Even if we do not make this investment, Formosa Plastics will not lose money in chemical fiber. The current demand for chemical fiber in Hong Kong is enough to support a medium-sized chemical fiber factory. "

"Can they make chemical fibers?" Yang Wendong asked again.

Wei Zetao said: “I’m not sure about this, I still need to communicate with Wang Yongqing, but they are all oil derivatives, so there should be no problem;
Wang Yongqing is very ambitious. He is no longer satisfied with the Hong Kong and Taiwan markets and is focusing on exports to Southeast Asia. If we let him do another business, and we will provide him with financial and even order support, he will definitely be interested.”

"Okay, then you can discuss it with Wang Yongqing." Yang Wendong nodded and agreed.

……

In the following days, work and life continued, and nothing major happened.

The entire Changxing Group is itself a very large ship. It can move forward smoothly on its own while running at high speeds. Even the direction is controlled by professional managers.

As for the boss, Yang Wendong, he only needs to decide the direction within a period of time and then refuel at the right time.

Such a ship will continue to move forward with great momentum even if Yang Wendong stops caring about it one day. All the sailors, managers, captains, etc. on the ship have become a community of interests.

……

A week later, Wei Zetao and Zheng Zhijie came to Yang Wendong's office again.

Zheng Zhijie opened a map and said, "Mr. Yang, I have selected three suitable locations in Kwai Chung. You can see that they are all on the edge of Kwai Chung town."

Yang Wendong took the map, looked at it for a while and said, "These areas are not very large, tens of thousands of feet, are you planning to build an industrial high-rise?"

Land prices in Hong Kong are not cheap, which will inevitably affect industrial costs. However, the existence of industrial buildings has led to many industries sharing the land prices, and eventually they can compete with other places overseas.

The same is true for Changxing Industry. In the industrial park, various equipment are placed on the first floor, and above are assembly or other workshops that do not place much pressure on the ground, thereby reducing costs.

In addition to Honor Electronics' TV and transistor production lines!

However, this problem has led to the fact that the main industries in Hong Kong are dominated by light industries. If they want to enter more high-end industries, they will face the problem of insufficient land, because high-end production lines are basically impossible to place in the air.

Zheng Zhijie nodded and said, "Yes, it's not that I want to do this, but after I negotiated with the Hong Kong government about this matter, they required us to build high-rise buildings instead of using a large area to build a one-story workshop, unless we can have evidence of special requirements like the production line of Honor Electronics."

The Hong Kong government is not a fool and will approve land based on demand.

Selling land is one of the core sources of the Hong Kong government’s fiscal revenue, and its location and size will inevitably be determined based on actual demand.

Many times, the manufacturer will not go too far and a little token of appreciation will suffice. However, if the manufacturer is obviously hoarding land or does not have sufficient reasons, then they will definitely not be given too much land.

"Well, okay, there's no rush." ​​Yang Wendong didn't care.

In the early days, he wanted to take advantage of industrial development and hoard land first, but now his scale has become very large and the land price is still high. Unless it is necessary, it doesn’t matter whether to acquire other land or not.

By 67, people were selling buildings even in Central... By that time, there were so many opportunities.

"Okay." Zheng Zhijie then asked, "Mr. Yang, which of these three plots of land do you think is suitable?"

Yang Wendong looked at Wei Zetao and asked, "Old Wei, what do you think?"

Wei Zetao pointed to a red circle and said, "I think this location is good. It has a total area of ​​6.88 square feet. We can build a large 10-story industrial building, and we can also put warehouses and the like in it.

In this way, even if the garment industry develops rapidly in the future, the factory area will not be a problem. The location is also closest to the Kwai Chung seaside, so it can be shipped by sea. However, this place is the farthest from the Kwai Chung town..."

"Are you worried that you won't be able to recruit people?" Yang Wendong asked.

Wei Zetao said with a smile: "That's not necessary. The textile factory doesn't have high requirements for employees. We can just build a dormitory.

I just think that this may not be in line with the group's strategy." "That's okay." Yang Wendong smiled and said, "The group will choose the best location to build a factory, mainly to consider future real estate returns.

But the core is the needs of the factory itself. This need comes first. Otherwise, it won’t work even if we build a factory in Central.”

Although real estate is very important in the future, the current focus is still on manufacturing. Of course, Central is just an example, it is actually impossible.

Wei Zetao said with a smile: "Then choose this location. I will discuss with the Hong Kong government and optimize the transportation."

"Okay, let's confirm the location." Yang Wendong continued, "I will discuss this with Yiyi later, after all, she is currently in charge of the clothing industry."

The core of Changxing Group's multiple industries were created by Yang Wendong in the early days. However, as the group gradually becomes a conglomerate, the group itself will try to expand into other industries. This is the characteristic of large groups or conglomerates. When the scale becomes large enough, they will decide to engage in many industries.

The textile industry is one of them, which is in charge of Su Yiyi. If the scale can continue to grow in the future, it will also become one of the core industries of the consortium.

It is not just the textile industry. As long as there are people willing to do it and can do it well in other industries, they will eventually get funding from the parent group. Once these industries have reached a certain scale, they may help each other, become intertwined, and eventually promote each other, similar to the future super consortium in Japan.

"Okay." Wei Zetao continued, "A few days ago, I also went to Taiwan and discussed the chemical fiber issue with Wang Yongqing. He didn't agree on the spot, but just said that he would do an investigation first to see if it would work from the technical and market aspects."

"There should be no problem with the market. The global textile industry is developing well now. As for the technology, it depends on him." Yang Wendong nodded and said.

When the entire Asian economy began to take off, the first things to develop were food, clothing, housing and transportation. The cost of housing and transportation was too high and required government operation, while food and clothing were much simpler, so these two markets developed absolutely rapidly. Even the mainland, which was reformed and opened up more than a decade later, was the most successful in these two industries in the early stages.

"Yes." Wei Zetao paused and said, "But I feel that Wang Yongqing seems reluctant. Although there is a market, this should not be in his plan."

"I think Wang Yongqing does have his own ideas." Yang Wendong nodded and said, "If it doesn't work, we can just invest in other chemical plants in Taiwan. Taiwan doesn't lack such plants."

There are so many things in this world that can make money. It is impossible for a company to make money from everything. Capable leaders generally have their own development steps.

There is no need to say much about Wang Yongqing's ability. In this case, even if he is the major shareholder, he may not always be willing to disrupt his steps to cooperate with him, after all, it is not his subsidiary.

"Yes, if Hong Kong was not unsuitable, I would have wanted to invest in Hong Kong." Wei Zetao said with a smile.

Yang Wendong thought for a while and said, "That's not necessarily the case. When Hong Kong has enough water, we may have this opportunity."

In the past, Hong Kong did not have any oil-related industries, but Singapore, which is about the same size, has an oil industry, so theoretically, Hong Kong can do the same.

However, Singapore has its own advantages, and Hong Kong is still a little different. We will have to wait and see how it will be implemented specifically. If it really doesn’t work, you can also invest in Singapore. Anyway, Singapore will be established next year.

At the beginning, there was a lot of work to be done there, and the Li family was also looking for international capital investment. It just so happened that they could make huge profits in Singapore in the early stages, and it also coincided with the beginning of the Hong Kong real estate crisis, so a large amount of funds could be mobilized to leave. Everything was a perfect match.

Wei Zetao thought for a moment and said, "According to my investigation of the Formosa Plastics factory, in addition to water, it also needs electricity and people, and it must be by the sea to facilitate drainage and various transportation."

"Yes, that's true for all heavy industries." Yang Wendong nodded and said, "People are easy to find. We can just go to Taiwan to recruit them and then train them internally later. As for electricity, we can negotiate with China Light and Power. They shouldn't disagree."

Wei Zetao said with a smile: "In that case, Hong Kong can indeed make plastics, as long as there is no more water shortage. But even if there is not much water now, we can still give it a try."

"Do you want to do it now?" Yang Wendong understood Wei Zetao's meaning.

Wei Zetao nodded and said, "Yes, but my idea is that we should do a small one first and study it carefully, similar to an experimental one, to see if we can really do the oil derivative industry in Hong Kong.

We used to judge what problems we would encounter in this process based on some knowledge, but if we don’t operate it ourselves, we will never know. ”

"That's fine. Let's try a small-scale investment. Even if we don't make money or even lose a little, it doesn't matter. It won't affect our fundamentals." Yang Wendong thought for a while and agreed, "But if we succeed, or learn some experience, it will be more beneficial to us.

Even if it is ultimately determined to fail and Hong Kong cannot do it, it will be a possibility that has been eliminated, and it can also give us complete peace of mind, so that we can specialize in financial investment to control this industry, or invest overseas in the future.”

"It's superficial on paper, and I absolutely know that this matter has to be done."

This sentence is a summary of the wisdom of the ancients, and it is equally applicable in modern times. Let alone the complex petroleum derivatives industry, even when making Post-it notes, many problems were encountered in the later production process that could not be imagined in the early stages. Friends who have worked in factory management must have a lot of experience in this regard.

Now that we have sufficient capital, it is a safer approach to do a preliminary test, which is what large companies usually do. Once it is confirmed, they will either give up if it doesn't work, or continue to increase investment if it does.

"It's just that, Mr. Yang, I've asked some professionals, even if the investment in this industry is small, it will cost at least several hundred thousand dollars." Wei Zetao said, "The entry point is to have a small one, and then you need to make some imported oil infrastructure equipment. Formosa Plastics also went through this process, Wang Yung-ching invested 50 US dollars."

"A few hundred thousand dollars is not much." Yang Wendong asked, "But how do we import naphtha? Hong Kong doesn't import naphtha directly."

Hong Kong imports oil from overseas every year. The operation of a city requires oil, and the largest merchant is Mobil Oil;

However, what is imported are diesel, gasoline, aviation fuel or heavy oil for ships for consumption, while naphtha is needed for refining plastics.

Although they are all petroleum derivatives, the differences between them are huge. Even one type of naphtha can produce different plastics through different processes.

"We can only import this from Taiwan. Formosa Plastics also imports it every year. We just need to buy a portion of it." Wei Zetao added, "But the problem is that ordinary ships will definitely not do this kind of small-scale oil delivery, so we can only rely on our own Changxing Shipping."

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(End of this chapter)