Chapter 454: The Beginning of Establishing a Foothold in Southeast Asia

Chapter 454: The Beginning of Establishing a Foothold in Southeast Asia

Chapter 454: The Beginning of Establishing a Foothold in Southeast Asia

It is highly unlikely that Asian capital will make good money by building factories in Europe, but sometimes it may not be so. Some products with too high transportation costs can be considered, and tariffs must also be considered.

Then there is the political factor. Multinational corporations always have to establish certain levels of mutual benefit with some overseas countries. They invest in the UK for the Commonwealth market, and for the European market, they can also consider investing in France. At this time, France is the leader in Europe, and Germany next door is not yet able to do so.

However, how to cooperate and what to do also need to be based on the specific situation in France. If it is appropriate, invest more; if it is not appropriate, invest a little just for the sake of tokenism.

Long Qi said: "Okay, I also very much hope that France can cooperate with your company."

Although the French economy is not bad, no one will dislike large-scale manufacturing industries, especially industries with almost no pollution. Europe and the United States also hope that their own countries are full of such enterprises.

Leaving behind a few people to coordinate follow-up matters with the Atlantic Shipyard, Yang Wendong brought a few people to the UK, where Changxing Industrial's factory had already started operations.

Wei Zetao naturally came here early as well. After all, it was the boss himself who came to see him, so he also needed to come.

Seeing that the structure of the factory was similar to that of Hong Kong, except that the employees were replaced by white people instead of Chinese, Yang Wendong asked, "Have you calculated the costs? Is it profitable to produce here?"

Although he doesn't care much whether the British factory can make money, it would be best if it can, because once it can make money, it will be sustainable, and its scale may expand in the future. This will also make it easier for him to maintain his relationship with the British government.

He will still need this relationship for at least the next 20 years. Needless to say, he will need connections in Hong Kong. If he knows senior British officials, the Governor of Hong Kong or HSBC will also give him more face. In addition, although the UK is gradually declining, it still has many high-quality assets. When his capital becomes stronger, he can also invest here. After all, a big capitalist wants to expand globally. No matter how well Hong Kong develops in the future, it is impossible to put all its assets here.

Wei Zetao said: "We calculated internally that if we maintain the original price, the profit will be suppressed below 5%. Once there are some additional costs, we may suffer losses."

"Now many of our parts are produced by external suppliers, right?" Yang Wendong asked again.

Wei Zetao said: "Yes, this is only an assembly plant at the moment, so we can start production so quickly. Mr. Yang, do you want us to bring the injection molding machine here as well, and then start production here?"

Yang Wendong nodded and said, "With this idea, it will definitely reduce costs, even for the raw material plastic particles. I can also let Changxing Trading Company build a branch in the UK to specialize in selling Formosa Plastics or our future plastic particles.

It not only supplies ourselves, but also other plastics companies in the UK. Changxing Shipping will also be responsible for transportation, so that costs can be minimized. "

"Of course, we can, but if we do that, we'll have to hire more people." Wei Zetao reminded him, "Mr. Yang, the laws here and previous experience all indicate that if a factory has too many people, there will be a lot of trouble, such as the labor union. Also, it will be difficult for us to evacuate someday."

"I know, but there is always a trade-off. A larger factory in the UK will ensure that we can get more benefits from other areas." Yang Wendong added, "Besides, if one day the UK is no longer suitable for factories, we can just close the factory and pay compensation according to the law. There is nothing else to say."

It is difficult for many factories to lay off employees because they still want to ensure a certain level of productivity. However, if the capitalists decide to close the factories, no matter how powerful the European and American unions are, they will have to give up. This is what Walmart did to the unions in its past life. In the process of bargaining with unions, many companies were forced to close the factories directly because they could not bear it. Even many European and American companies have moved to Asia, and local unions are definitely one of the biggest driving forces.

Wei Zetao replied: "Okay, then I will arrange for Hong Kong to send the equipment over immediately. However, considering the uncertainty in the future, it is better to send some old equipment over to save some money."

"Okay, as long as we can produce it, our product precision requirements are not high anyway." Yang Wendong agreed.

Commercial production pursues the highest profit. If a second-hand product can be used and is more cost-effective, you are a fool not to use it.

Wei Zetao added: "Mr. Yang, the Singaporean side has almost reached an agreement, and the speed here may be a little faster than Mr. Zheng's."

"Then we will prepare to go to Singapore. In the UK, there is nothing to invest in except factories." Yang Wendong added: "In the future, when you are in the UK or Europe, don't invest in real estate, just rent a factory. Simplify everything and try to open up the sales chain here."

Although in the long run, European real estate will also rise, but he doesn't know how much it will rise, so there is no point in investing. It is better to invest in Asia with a clear future, especially in Europe where there are property taxes, etc. It may even be more cost-effective in the United States than in Europe.

Of course, if it involves retail business, ports or some infrastructure, etc., it is still possible to invest. Li Jiacheng did so in his previous life. Although it seems to lose money sometimes, it is still profitable in the long run. When there is enough capital, it can also be considered.

"I understand." Wei Zetao agreed.

On November 11, Yang Wendong, Wei Zetao and many others came to Singapore.

“It feels like Singapore has changed a lot in just a few months.” After arriving at the edge of the central area, Yang Wendong said as he looked around at the many construction sites around him.

Wei Zetao explained: "Yes, a lot has changed in the past few months. After Singapore was established, the situation became stable and many Chinese investors in Southeast Asia came here. As you know, the Chinese community in Southeast Asia is very wealthy.

In addition, the policy is very encouraging to attract foreign investment, and even a lot of European and American capital has come to invest, such as the UK and the US, so there is a lot of infrastructure construction. Currently, private capital and overseas capital are responsible for business and factories, and government capital is responsible for basic construction such as roads. "

"Well, this combination is indeed reasonable." Yang Wendong asked again: "What about heavy industry?"

"Heavy industry?" Wei Zetao replied, "Singapore doesn't have any heavy industry now, except for some oil depots or simple refineries. These were also the military needs of the Western powers in the past. Other heavy industries are relatively rare."

"Oh, okay, let's just ignore it for now." Yang Wendong didn't ask any more questions.

He didn’t know much about Singapore’s history in his previous life, but he did know that there was a giant capital called Temasek in his previous life;

The original intention of establishing Temasek was to develop Singapore's heavy industry, including high-risk, high-investment industrial fields such as steel, shipbuilding, and petrochemicals, to lay the foundation for future economic development.

It is normal that Singapore’s heavy industry is not doing well at the moment.

Wei Zetao continued, "The site in front is where our factory will be located. It has a total area of ​​60 square feet, which is the largest area that the Singapore government can agree to in the central area."

"We can also help them find jobs in the central area." Yang Wendong said, "Otherwise, if we go to remote areas, where can we recruit so many educated people?"

Although many jobs in Changxing Industry do not necessarily require people with education, it is definitely better if they have education. The higher the average education level of a factory, the better the technical research and quality control will be. Compared with the high labor costs, Changxing Industry will definitely pay more attention to quality. Of course, this also refers to the production department. If it is just a porter or cleaner, it will not be deliberately required. After all, recruitment also needs to take illiterate people into consideration. Even Hong Kong has begun to recruit disabled people. Some jobs that disabled people can do are reserved for them.

Wei Zetao also agreed: "Yes, so everything has a balance. In places like the central area, we can only have such a large area."

Yang Wendong said: "It doesn't matter. Since the main business is assembly anyway, we can build a tall building. Place large injection molding equipment on the first floor. Make the building stronger. Some small equipment can be placed on the second floor and above. The upper floors can be used as warehouses and assembly workshops. We can learn from Hong Kong."

Although Singapore's land policy is better than Hong Kong's, the place is limited after all, and there are so many industries, so light industry can only be built in buildings like in Hong Kong. This is normal. It is the same as in the mainland in the past. Later, light industry also started to move into buildings.

"I see. That's my plan as well." Wei Zetao asked again, "Mr. Yang, I have another question. Do you want to build a dormitory?"

"Don't build this. There are enough people and houses near the central area." Yang Wendong shook his head and said, "This factory is not very big. Don't do it unless you have to. If you really can't, just give some housing subsidies."

When he first started his business, because it was in the remote Tsim Sha Tsui, many people lived far away and were very poor, so he had to build dormitories. The situation was similar in Kwun Tong. In addition, the factory was too large and the surrounding buildings could not accommodate so many employees, so he had to provide accommodation.

But later, with the development of Hong Kong's economy, more and more properties were built around the factory, and Changxing Industrial began to gradually cancel its accommodation policy. One reason was that it was risky, and the other was that it was too troublesome to manage. It was easy to control thousands of young people when they were working, but when they got together after get off work, even the government dared not ignore it.

Another thing is that when employees have good financial conditions, they will also seek to live outside. After all, although the dormitories are okay, they are still not as good as those outside in many aspects.

Nowadays, it is even more impossible to meddle in other people's business overseas. Even in Singapore, where the whole population is Chinese, it is good enough if you can provide a job with decent pay. It is impossible to operate the same way as in Hong Kong.

"Okay, it's better not to build dormitories, and it can save some space." Wei Zetao replied.

The car soon arrived at the destination. There was still a field in front of us. After getting off the car, Wei Zetao said: "This is where our factory will be in the future. There is also a small village over there that needs to be demolished. The Singapore government is responsible for this. We don't care about the process, but because the land is free, we need to bear the demolition costs.

As soon as the demolition is completed, the factory will immediately start laying the foundation and construction is expected to begin by the middle of next year."

"The speed is acceptable." Yang Wendong nodded and said, "Then we should complete the demolition as soon as possible. The compensation should not be too outrageous. We should achieve the scale as soon as possible. This will be beneficial to us and Singapore."

It is true that land is free, but free is also the most expensive. Behind freeness are many future operating and tax conditions, some of which are similar to the requirements of the Shanghai Stock Exchange on Tesla and Disney in the past.

"Okay, if Singapore starts production as soon as possible, the production pressure in Hong Kong can be reduced a little." Wei Zetao also said.

Yang Wendong took another look and said, "Then let me know if there is any progress here. We still have to do a good job in our first large-scale production base abroad. We will also be responsible for the future markets in Southeast Asia and even Europe."

Wei Zetao agreed and said, "No problem, I will record this in the monthly report."

"Okay." Yang Wendong nodded and said.

Every month, the heads of many subsidiaries within Changxing Group need to write a report about the company and include some important matters. After all, it is impossible to go directly to the boss Yang Wendong for everything, and even so, it needs to be recorded in documents.

After finding out the address of Changxing Industrial's future factory, Yang Wendong, under the guidance of Singapore government officials, met with the former Director Li.

"Hello, Mr. Li." Yang Wendong said politely, shaking hands.

"Mr. Yang." Director Li also shook hands.

After the two exchanged pleasantries for a while, Director Li said, "Mr. Yang, we have almost reached an agreement on the investment conditions for Changxing Industrial Factory. I think we should make a decision as soon as possible. What do you think?"

"Sure, I also hope to invest in Singapore as soon as possible." Yang Wendong nodded, and then said: "I don't know when the other investments will be completed. If everything is almost settled during my visit to Singapore, I will also need to negotiate with several banks for follow-up financing plans."

Investments involving tens of millions of US dollars must all go through a bank, and even if the deal has not yet been concluded in Singapore, it is still necessary to negotiate with the bank early on, which is a preliminary negotiation.

Yang Wendong came here to complete these things as soon as possible. The longer he delayed, the worse it would be. After all, more and more foreign capital was flowing into Singapore, and the possibility of competitors emerging was also increasing.

"Mr. Yang, there are no problems with your commercial plaza and hotel, and the land price has basically been decided. As for the formalities, I will urge the relevant departments to complete the process as soon as possible this afternoon." Director Li continued, "As for the container terminal, an American company also wants to participate in this matter recently. From a business perspective, I also need to be cautious, especially since the US side can provide some management experience and technology."

"It's good for the US to be involved. We have no experience." Yang Wendong acted unconcerned and said, "I am also a small shareholder here. I don't mind having other shareholders. I just hope that this matter can be settled as soon as possible."

I am not the only one who has vision for the port business, so it is normal for others to want to participate; and I have not signed a contract with the Singapore government, so it is normal for the other party to be hesitant.

Director Li smiled and said, "Well, in that case, I will arrange for people to sort out all the projects as soon as possible. There will be an official signing ceremony at that time. I hope Mr. Yang will also participate."

"No problem." Yang Wendong agreed.

As long as I can gain a foothold in Singapore, I will have a base in Southeast Asia in the future. However, I don’t have enough capital at the moment, so I will just operate my business in Singapore first.

A week later, Yang Wendong participated in a national-level reception held by the Singapore government, where a number of major investments were jointly announced. Yang Wendong's investments were only a part of them, but the funds involved were as high as 2500 million US dollars.

The next day, the incident was quickly reported in the local newspapers. Similarly, a day later, it was also reported in Hong Kong.

PS: Business negotiations in reality are much more complicated than in novels, and the timeline is very long. It is impossible to drag on for several years in a novel, so it was decided quickly.

(End of this chapter)