Chapter 511 Purchase of a Farm

Chapter 511 Purchase of a Farm

Chapter 511 Purchase of a Farm
As PepsiCo's OEM business grew, and Watsons' own beverage industry also developed, the demand for sugar increased.
In the early years, Watsons simply built a raw sugar processing plant in Hong Kong, purchased raw sugar from overseas, and then processed it by itself to turn it into syrup and refined sugar. The former was used by the beverage industry, and the latter was used for normal sugar trade.

Regardless of the demand for beverages or the market demand for sugar, the scale of sugar factories in Hong Kong is getting bigger and bigger. When it reaches a certain level, it can consider moving to the front end;

Malaysia is the most suitable place for investment. It has a large area, the sugar industry has just started, there are many Chinese people, and it is not far from Hong Kong, so there is a plan to build a large raw sugar processing factory here.

Zhou Haoran replied: "We are still negotiating with the Malaysian government. There is no problem with building a raw sugar factory, but they want us to produce refined sugar as well. This requires a higher investment and places high demands on employees, so I don't want to agree."

"I don't agree with this either." Yang Wendong said, "Tell them that cooperation should be done step by step. They can't expect us to invest heavily right away. Trust is also developed gradually between each other."

Sugar processing mainly consists of two steps. The first step is to extract raw sugar from sugar cane, beets and other plants with high sugar content. This step must be completed near the agricultural site, otherwise the transportation cost is very high. It can be said to be dirty and tiring, and the product is not worth much.

The second step is the fine processing of raw sugar, which is much more technical, the equipment is very expensive, and the requirements for technicians, quality inspectors, etc. are also very high;

If it weren’t for the fact that Swire already had this industry in Hong Kong in the early days, allowing Watsons to directly poach people, it would have been difficult to succeed.

"Okay." After getting the boss's reply, Zhou Haoran naturally knew what to do.

Yang Wendong asked again: "Didn't they say before that Malaysia was interested in selling the farm?"

"There is a piece of land with an area of ​​2 mu, in a small town below Perlis, Malaysia, bordering Thailand," Zhou Haoran said, "but there is a problem. This land used to be a small forest and is considered wasteland. If we get it, we still need to invest a lot of money to develop it?"

"Wasteland? Is this land suitable for growing sugarcane?" Yang Wendong asked.

2.3 mu is about 15 square kilometers. This area would be very large in the past, but in some countries with more land and fewer people, farms of this size are more common.

For example, the largest farm in the United States in the past was 2070 square kilometers, and there were even larger farms in Australia or South America.

Zhou Haoran replied: "In theory, it is possible. It is close to southern Thailand, and the climate is similar to Thailand. I sent someone to analyze the soil, and it is also similar. Southern Thailand is the main place for growing sugarcane.

In addition, local people have also planted sugarcane on this land, and the finished product is also good, but it is not a large-scale planting, but a small amount. "

"Then there shouldn't be any big problems," Yang Wendong nodded, and then asked, "How much did they quote for this piece of wasteland? How much will the subsequent development cost be?"

Zhou Haoran said: "Their offer is 2 US dollars, which is not expensive, but if we want to turn this land into sugarcane field, it will probably cost hundreds of thousands of US dollars. But we can do it in batches, or rely on bank loans, and then repay the debt after we have profitability."

"Are you sure?" Yang Wendong asked with a smile.

Zhou Haoran replied: "I'm definitely not 100% sure, but we have our own demand, which means we don't have to worry about not being able to sell it, which is the biggest risk factor in large-scale agricultural planting;

The remaining issue is whether this piece of land can be used to the maximum extent. I have also investigated this point. It requires a professional team to operate a large farm. There are such people in the local area. "

Yang Wendong thought for a moment and asked again: "Is it a permanent property right?"

"Yes." Zhou Haoran replied: "Now the Malaysian government is also promoting the 999-year land transfer, but before that, there were a lot of permanent property rights land in private hands outside. No one cares about the 999-year land offered by the government unless it is very cheap.

I still want it to be permanent. For us, the real investment is the subsequent transformation, not the land cost. "

Everyone knows that permanent property rights are better. If there are choices outside, whoever buys your property for 999 years will do so. Although humans cannot live that long, the value can still be reflected.

This situation also exists in Hong Kong. Any government that wants to promote this kind of thing will take a very long time to succeed.

"Okay, let's talk about the price later." Yang Wendong also agreed and said, "For loans, you can go through Hang Seng Bank or Standard Chartered Bank. They have businesses in Southeast Asia."

Doing business naturally involves some small risks, and agricultural planting is indeed not their forte, but since they want the entire industry chain, they need to give it a try. It’s not that they want to save the money, but Yang Wendong knows that there will be many times in the future when sugar prices will skyrocket and even become difficult to buy.

It's a small matter that his sugar industry can't make money, but it will be over if it affects the beverage industry, especially since he has signed a contract with PepsiCo. If he can't buy sugar, they won't care what your reason is;
The additional thing is that if you want to make Red Bull yourself, you have to be prepared;

Your own farm doesn’t need to be able to meet your own needs, but if you have one, your supply chain will be much safer.

"Okay." Zhou Haoran agreed and said, "Mr. Yang, such a large piece of land has to be developed piece by piece, so it will probably take three or four years to reach the maximum planting scale."

"It doesn't matter. We can just treat this farm as an experiment." Yang Wendong said, "If it succeeds, we will have a firm foothold in the future in the successful debt-based sugar industry."

Guo Henian, the Sugar King in his previous life, started to invest heavily in the sugar industry after achieving some success. If he wanted to expand in this industry, he must have his own farms, processing plants, sales channels, etc.

The investment of several hundred thousand dollars is indeed not small, but such a large piece of land will basically not depreciate in the future. Even if the sugar plant is not good, other things can be planted. "No problem, I will do my best." Zhou Haoran asked again: "Mr. Yang, do you want to go and take a look?"

"Go to Malaysia?" Yang Wendong thought for a moment and said, "That's fine. I'll take some time to go there during this period and take a look at what Kuala Lumpur is like."

As for a place that may become his new industrial base in the future, he would naturally go to see it, just like he went to Singapore three years ago;
In the past three years, Changxing Industrial, Honor Electronics, and Watsons have all developed rapidly, and the scale of industry has also expanded rapidly. The production capacity in Hong Kong and Singapore is sufficient for now, but it is hard to say what will happen in the next three years.

"Okay, I will discuss the itinerary with Miss Aying." Zhou Haoran said with a smile.

Yang Wendong asked again: "How is the research on Red Bull beverage going?"

He has already registered the Red Bull brand, and his subordinates all know the name of the drink he is now researching.

Zhou Haoran paused and said, "Mr. Yang, we have already developed several flavors that taste good, but we are not sure which one is suitable for the market. How about you try them and see which one is suitable?"

"It's not me who decides which one is suitable. It's up to the market." Yang Wendong smiled and said, "Let's try it first."

"Okay, this way."

Zhou Haoran brought Yang Wendong to a laboratory not far away;

Although Watsons has many factories, none of them are polluting industries. Except for the chicken farm, all other factories are built together into an industrial park. Although its scale is not as large as the Changxing Industrial Park in Kwun Tong, it has become the most important economic core of Shatin Town.
The entire Sha Tin town has become economically active because of Watsons' investment. There are many more real estate, service industries and even official organizations, and a large number of people nearby work in the industrial park.

Inside Watsons Beverage Lab:
Soon, several different light red drinks were served. Yang Wendong tasted them and said, "The taste is OK, but I really can't say which one is better. How are their refreshing effects?"

The taste of these is a little different from the Red Bull in his previous life, but there are no two leaves in the world that are alike, so it is obviously impossible for him to develop the same Red Bull in this life.
But this is not important. As long as the taste is good and the functions are similar, what needs to be done next is to concentrate a lot of resources on marketing. We can see how delicious Red Bull was in the past. Even Coca-Cola was not the best tasting, but it was enough to promote it.

Zhou Haoran replied: "The refreshing effects are similar. We also sent a lot of drinks to the factories within the group and let the night shift workers drink them at night. They all have some effect and can help people recover mentally."

"In that case, we will research a few more flavors and send them to some supermarkets in Europe and America, asking locals to drink them and see what flavors they like." Yang Wendong nodded and said, "The main market for our future Red Bull drinks will be Europe and America."

Red Bull can only go the high-price route, as it is a niche beverage and few people are bored enough to buy it. In addition, it will invest heavily in publicity in the future, with the goal of making it a high-end beverage.

In the beverage era dominated by Coca-Cola and Pepsi, only high-end differentiation can be more suitable for the market. This is also the reason why many local brand beverages in the mainland were more expensive than Coke in the past. They could not compete with other brands at the same price.

Moreover, the high profits can ensure the establishment of factories for production in Hong Kong and even Europe and the United States in the future. It can also alleviate the situation in the future where the group only dumps products in Europe and the United States but does not invest in factories.

Zhou Haoran agreed: "Okay, I will send these models to Europe and America first."

A week later, Yang Wendong, Zhou Haoran and their assistants chartered a plane to Malaysia, but they did not go directly to Kuala Lumpur. Instead, they went to Perlis first and came directly to the farm they were about to buy.

"Mr. Yang, this is a farm that is about 6*2.5km, but there are no roads inside, so we can only use these jeeps to get through." Zhou Haoran said, "It will be a bit uncomfortable to sit in these jeeps."

"It's okay. I like jeeps too." Yang Wendong smiled.

When he was a child in his previous life, that is, in the 90s, Jeep was famous all over the country.

A team consisting of several vehicles with welded steel bars and several people carrying hot weapons quickly set off and circled the entire farm.

Half a day later, everyone started to build a bonfire. Yang Wendong said, "This place is not bad. There are many ponds, plenty of rainwater, and a small river inside. It is indeed a good potential stock for a farm."

"Mr. Yang, there are actually many places like this in Malaysia." Zhou Haoran said with a smile, "It's just that it costs a lot of money to convert these places into agricultural land, and the return on investment is not very high, so not many investors are willing to try."

"In fact, there are many such places in Australia and America." Yang Wendong also said: "We don't need to invest in farms on a large scale. Everything should serve the sugar industry."

In this era, environmental awareness is not very strong. Even if there is, many of them are only aimed at emitting polluted air and water, etc., that is, the kind of business activities that directly harm the human body;

As for converting forests to farmland, almost no one objects. So many people are not getting enough to eat or are even starving to death, so why should we protect the forests?
"Yes." Zhou Haoran nodded.

Yang Wendong added: “Then go back. Once you have negotiated the price here, you can sign a contract with the Malay government. We will buy this land and then try to grow sugarcane and build a raw sugar processing plant next to it.
This will be our test field in the future. If it succeeds, we will consider purchasing other land.”

PS: Please give me a monthly ticket
I checked and found that the current price of large farms in the US and Australia is between tens to hundreds of dollars per acre, and about 10 to 50 dollars per square kilometer, depending on the location and infrastructure;

So in comparison, in the 70s, the price of a Malaysian farm was a few hundred dollars per square kilometer for wasteland and a few thousand dollars for finished products.
(End of this chapter)