Chapter 523 New Investment in Malaysia

TVB immediately became busy. Qi Ruifan personally led a team of more than 20 people to carry out various details of the "Voice of China" program.

Yang Wendong naturally did not urge them. When they were almost done, they would check it for him.
Soon it was the end of November, and Yang Wendong, Zhou Haoran and Wei Zetao took a chartered plane to Kuala Lumpur, Malaysia;
"Hello, Mr. Guo." Yang Wendong looked at Guo Henian who came to pick him up at the airport, smiled and shook hands with him.

Guo Henian said with a smile: "Hello, Mr. Yang, I have already prepared a hotel for you. I want to be the host this time, so please don't be polite to me."

Yang Wendong said: "Okay, I won't be polite either."

For super-rich people like them, this amount of money is not much at all, and being overly polite will not be pleasing. It is just like two ordinary people, and if one person offers to treat the other to a bottle of drink, it would be inappropriate if the other person refuses.

After they arrived at the hotel, Robert Kuok said, "Mr. Yang, Mr. Zhou, Mr. Wei, you guys take a rest here for a day. Tomorrow, I will take you to Kedah to see the land we are about to buy."

"Okay." Yang Wendong nodded and said;
The main purpose of coming to Malaysia this time was because Guo Henian had found a larger piece of land for the joint venture company, which was several times larger than the one he had in Perlis before;
Such a large-scale project may require an investment of more than one million US dollars in the future, which is a considerable investment in Europe and the United States. Therefore, he is also ready to come and see it in person;

The next morning, several people set out together and came to Kedah, which is close to the Thai border. The advantage of a small country is that it looks like it has many provinces, but a province is the size of a city in the future mainland. A small country like Vietnam also has dozens of provinces.
Of course, the traffic in Malaysia is not very good now, and the cars on the road cannot be driven fast. We did not reach our destination until noon.

Robert Kuok opened a map and said, "Mr. Yang, this is the land I am interested in. It is 1.7 acres in total, which is a rectangular land measuring 6*11 km.

This piece of land is also cut off by a 30-meter-wide river. There is also a large amount of water underground, and it rains a lot. However, to be on the safe side, after we buy it, we need to dig an artificial lake to ensure that there is water during the dry season. "

"Almost 70 square kilometers?" Yang Wendong was also somewhat tempted. Such a large area is only slightly smaller than Hong Kong Island (not Hong Kong);

Although we can only engage in agriculture, with such a large area, we feel a sense of accomplishment.

"Yes, if we buy it and turn it into a farm, it will definitely be one of the largest farms in Asia." Robert Kuok's tone was also happy.

Yang Wendong asked again: "What is the price of this piece of land?"

"I have negotiated with the government here and the purchase price is only US$10, but there are some other conditions regarding future development," said Robert Kuok.

"Tell me about it." Yang Wendong nodded.

The average price was more than 1000 US dollars per square kilometer, equivalent to less than 1 US dollar per acre. This price was very cheap even in the 70s.

However, if you want to develop this piece of land, you have to invest a lot of money. Even if you use manpower in many aspects, you can't save on the most basic roads, water networks, and prevention of wild animal damage.
This is obviously what the Malay government is thinking. If no one invests in this land, it will just be a wasteland. It will only have value if there is investment, so the price they sell it for is just a token of their appreciation.

Guo Henian said: “What Kedah means is that we need to transform this land into a complete sugarcane plantation within 5 years, and then we need to employ more than 1500 people to manage it on a daily basis;
In addition, during the sowing and harvesting seasons, local people will also need to be hired to do the work;

But there are also some tax incentives here, such as

"Does it take 1500 people to manage the daily operations here?" Yang Wendong asked.

Guo Henian nodded and said, "Yes, Mr. Yang's farm in Perlis is not yet completed, so he probably doesn't know much about it. Such a farm also requires a large number of people to maintain it on a daily basis, and when it is busy, it also needs to recruit a large number of temporary workers to weed and spread pesticides.
These tasks all require supervision by formal workers. In addition, these people need to patrol daily, monitor pests, weeds, and water sources. We also need experienced people, and we will need to train them in the future."

Listening to Guo Henian's very professional introduction, Yang Wendong naturally couldn't deny anything, so he said: "It seems that professionals like Guo Sheng should be responsible for this aspect."

"Haha, I'm not an expert, I just know a little bit." Guo Henian added: "This large-scale agricultural planting is actually very demanding. From the management team to everyone below, if they are experienced and responsible for their work, then the farm's output can definitely be increased;

Even though it may only be a 20% increase, the various profit gaps are there, and the same is true for cost advantages.”

"I know this principle. It's actually the same in industry." Yang Wendong nodded and said.

Except for a few industries, no company can withstand a 20% loss of production capacity;
For example, the rise of new energy vehicles in the past had a great impact on German and Japanese companies. When these companies lost 20% of their sales, they were faced with a drop from their original high profits to profits close to zero or even losses.

Therefore, Volkswagen has laid off a large number of employees in Germany, and several Japanese companies are doing the same, not to mention American companies. No one cares whether they die or not.

Then he asked, "Mr. Guo, how much more money will be needed to invest in this farm?"

Guo Henian said: "According to my estimation, it may cost more than one million US dollars, including several reservoirs, some gravel roads, underground water pipes, and fences around the farm. These are the core must-haves;
As for other aspects, we can do it slowly later. In the early stage, we can use manpower to replace them. The same applies to harvesting. The labor cost in Malaysia is also cheap. "

"That's fine. If you can hire someone first, then hire someone." Yang Wendong agreed and said, "In principle, I have no problem with that, but the specific investment plan still needs to be approved by my company."

As a boss, he does not understand the details of many professional projects, nor does he need to understand them. Therefore, after agreeing to the investment plan, professionals will review the feasibility of the plan, the accuracy of the investment amount, time issues, risks, etc.

"Okay, I'll give Mr. Zhou the specific plan soon." Guo Henian smiled and said, "Mr. Yang, there are several other places in Kedah. I just took a look and didn't discuss it with the officials. Why don't we go and have a look together? If everyone agrees, I'll negotiate with the officials."

Yang Wendong asked: "Mr. Guo, are you planning to turn this state of Kedah into your sugarcane plantation?"

The total area of Kedah is about 9000 square kilometers. If a few more large-scale farms are built, it will be as large as one point in the local area.

Robert Kuok said with a smile, “This is also very good. There is still a lot of land to be developed in Kedah. We can cooperate to turn the wasteland into productive crops. Many local people will have jobs, including many Chinese, and the government will also have tax revenue. We will also get a stable and high-capacity sugar supply to ensure the interests of both sides.
In fact, I have wanted to do this for a long time, but the funding required is too high. Now that Mr. Yang has joined, it is natural to take it a step further. "

Yang Wendong added: "But this time span is probably very long."

Even if you are rich, it takes a lot of time to develop such a large farm. Many farms in Europe and the United States are the result of several generations of hard work. Even if it is a piece of fertile wasteland, it takes a long time to convert it into agricultural land.

However, it has to be done even if it is costly. If you want to do well in the sugar market, you must invest. If you rely solely on procurement, you will easily be stuck, just like in industry.

Kuok said: "Yes, the time may be in the unit of ten years, but now we are just watching and making plans."

"Okay, let's go and take a look together." Yang Wendong nodded and said.

This tripartite cooperation is indeed beneficial to everyone. Henian provides the money, Kuok provides the management, and Malaysia provides the land. In the end, all three parties will have high returns. As large plantations have a high demand for labor, it can also create jobs for tens of thousands of people.
In the following days, the group visited many places in Kedah, and Guo Henian also circled the places that he liked.
It wasn't until a week later that the group returned to the hotel;

Yang Wendong said, "Mr. Guo, looking at this area, there are more than 4 acres in total. Can you manage such a large area?"

Even though I think Guo Henian is very capable, such a large area is still too terrifying.

Guo Henian smiled and said, "It's definitely not possible to do it all at once. My idea is to run the first one well first, and then do it one by one. This way, we can ensure that the subsequent farms can learn from the previous experience, and there are enough experienced people. This is the safest way.
But it’s rare for Mr. Yang to come to Malaysia, so I thought I’d take you around first, so it will be convenient when we discuss this matter later.”

"Okay, let's start with a farm. Once the first one makes some progress, we'll consider the rest." Yang Wendong nodded.

Any person or company that comes from a country has limited management capabilities, and many things have to be done step by step.

"No problem, I will start preparing right away." Robert Kuok was very happy and asked, "Mr. Yang, did you hear that you are planning to build a large pulp mill in Malaysia?"

"Yes, they specialize in making paper pulp." Yang Wendong nodded.

Although he refused to invest in large-scale industries in Malaysia, he would still gradually invest in industries that could make full use of local resources, such as sugar and paper. Even if Malaysia's oil industry developed further in the future, he could also move the plastic manufacturing industry here.

Robert Kuok said, "Mr. Yang, you also know that I have a forest farm here. How about we cooperate? I will supply your pulp mill?"

"No problem." Yang Wendong said, "As long as the price is right, there is no need for us to discuss this. But there is another matter that I think we can talk about."

"What's the matter?" asked Robert Kuok.

Yang Wendong said, "You know that my Carrefour has invested in two supermarkets in Kuala Lumpur. I plan to expand next, but I don't plan to invest alone. I want to find a local partner. If you are interested, Mr. Guo, we can discuss it."

At the highest level of government, foreign investment is certainly welcomed, but the people below them may not be so far-sighted. Many people just think, "I want to eat first, and then I want to worry about the future."
Only places with strong centralization and integrity can avoid such problems. Relatively speaking, Hong Kong and Singapore are much better than Malaysia in this regard. Even in his early years in Hong Kong, Yang Wendong had to cooperate with some officials for mutual benefit.
The same is true for investment in Malaysia. Industries that export to other countries and bring high returns to the local area are still okay, but those that earn insider wealth, such as supermarkets, are more likely to run into problems.

The two supermarkets I had before were often scammed, both by black and white merchants. Although it was not enough to shut down the business, it was still very troublesome.
Yang Wendong was also very concerned about these two supermarkets, because they were testing the local operating environment, and it didn't matter even if they failed. After knowing the results, he naturally knew what to do next;

When investing in other countries, especially in the service industry that makes local money, the best model is to form a joint venture with local people.

"Running a supermarket? I don't have any experience in this area." Guo Henian said.

Yang Wendong smiled and said, “It doesn’t matter. I have it here. What I need is that you can ensure the normal operation of the enterprise, and eliminate any interference, whether official or unofficial.

This is different from our farm cooperation. You manage the farm, and I manage the supermarket."

"I understand. Then how do we divide the shares?" Robert Kuok asked again.

Yang Wendong said: "It's 73% to 7%. I'll take 3% and you'll take %. You don't need to do anything. Once you've established the relationship, just wait for the money to be divided."

Purchasing is in his own hands, and if the profit is split 73%, then at least 8.5% of the profit belongs to him; but Guo Henian does not lose out either, after all, he does not need to invest too much.

Although resources are important, he is not the only partner he can choose.

"Okay." Robert Kuok thought about it and agreed.

If someone else proposes such a cooperation, it is basically a 55- split, which is also a common practice;
However, as Yang Wendong is one of the top Chinese businessmen in Hong Kong, his global influence is much greater than his. He will still need to rely on him in many aspects in the future, so there is naturally no need to worry about such trivial matters.

Yang Wendong smiled and said, "That's good. I will let someone from Carrefour contact you later. I hope we can have a pleasant cooperation in the new field."

The supermarket joint venture in Malaysia is not only for the local market, but more importantly, it can set a good example. If it succeeds, Guo Henian will have good profits, and it will be much easier for him to enter other countries in the future.
According to the previous cases of supermarket groups investing overseas, basically none of them have been successful, so they must attract local resources and connections, and then work together to expand the business. It is impossible to eat alone in other people's territory;
Furthermore, the most important thing for a supermarket is the supply chain. As long as the supply chain is in its own hands, even if it gives up 50% of the shares, the core profits are still in its hands. Just like the foreign party in the joint venture automobile in the past life, they controlled the industrial chain. Although on paper the profits were split in half with the state-owned enterprises, in fact, more than 8% of the profits were taken away by them.

After negotiating the cooperation with Guo Henian, Yang Wendong went to visit the newly built pulp mill. However, this mill was quite professional and polluting, so just showing up was enough.

PS: Please give me a monthly ticket
(End of this chapter)

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