Chapter 721 New Market in the Middle East and Control of Industrial Chain

Time soon came to the end of March, and the oil crisis that affected the world finally ended. The Middle Eastern countries gave up the oil embargo on European and American countries, and the global oil shortage crisis finally came to an end;
However, the oil price that has already risen is impossible to go back. The Middle East now accounts for more than 6% of the world's exports. Its price is the price of other oil field companies and even countries in the world, including polar bears and a few oil exporting countries. Unless they go against the Middle East and increase production capacity on a large scale and then export at a low price, it is possible to lower the oil price.
However, anyone with a sound mind would not do this. They are all oil exporters. The higher the oil price, the more money they will make. Who would complain about not making enough money? Besides, the oil production costs and oil quality of other countries are not as good as those of the Middle East. How can they compete with them on price?

The recovery of global oil supply has also helped Hong Kong's economy to improve slightly. At least, many people speculate that the global economy will gradually recover in the future, and Hong Kong's industrial exports will inevitably increase, which will at least help a large number of Hong Kong factories.

But they thought too simply.

On March 3, Yang Wendong convened a brief meeting with the heads of several manufacturing export companies under Changxing Group.

"Mr. Yang, judging from overseas consumption data, even after the oil crisis, it is difficult for the economy to recover to its previous state in a short period of time." Wei Zetao replied: "Oil prices are still high. Many people lost their jobs before, causing consumption to shrink, which was then passed on to factories, creating a vicious cycle of economic crisis;
According to this trend, a new round of economic crisis is likely to break out in Europe and the United States, which is not good news for us.”

"Well, this is normal. Oil drives up the cost of energy, transportation and various industrial products. The price increase of several times will inevitably drive up inflation in Europe and the United States." Yang Wendong nodded and said.

Oil is not only used for burning, but also a necessity for many industrial raw materials, such as the most common plastics and chemical fibers. It affects the prices of almost all industrial products, clothes and even food. The price of the supply materials at the front end rises, and then there is another wave of price increases. When it comes to the terminal, the increase is even more exaggerated, which will inevitably lead to serious inflation.

However, this is also something that Europe and the United States should bear. In the past, Europe and the United States had strong militaries and forced the Middle East to sell cheap oil. As a result, the Middle East, which controls a large amount of the world's industrial bloodline, became poor as a ghost, and then hundreds of millions of Europeans and Americans lived a happy life. Even the mainland, which was previously an oil exporter, was indirectly affected.

Now, things have returned to normal, oil prices have returned to normal, and life is no longer so easy for people in Europe and the United States.

Wei Zetao went on to say: "In the next one or two years, we will all have to go through some hard times. According to the economic trends in Europe and the United States, it will take at least one or two years to gradually recover."

Yang Wendong smiled and said, "One or two years is nothing. We have been developing smoothly for more than ten years. No company can be smooth sailing all the time. This fluctuation is normal.

Besides, we have been setting up business in the Middle East for a long time, and it is now also a dumping ground for various products of our group. Although the losses are not as great as those in Europe and the United States, they can still ease the pressure a little bit.”

As a "time traveler", he also knew that without oil futures, it would be difficult for him to make a fortune by taking advantage of the oil crisis. Since his manufacturing industry was mainly exported to Europe and the United States, he would inevitably be affected by the oil crisis.
Therefore, a long time ago, even if it was a loss, he had to invest a lot of channel resources in many major cities in the Middle East to ensure that he could get some benefits from the future economic take-off of the Middle East, and at least guarantee the jobs of tens of thousands of people under his company.

Wei Zetao smiled and said, "Yes, the demand in the Middle East is very high. My plastic suitcases, adhesive hooks, and even various toilet papers are all in high demand in the Middle East."

Zhou Haoran also said: "It's the same here."

Wang Zhiqun also said: "I am almost the same. All kinds of electrical appliances are very popular in the Middle East. However, the Middle East has now stopped the oil embargo. Although it is still rejecting European and American products, I don't think it will last long, especially for several countries headed by Saudi Arabia that have good relations with the United States.

It is estimated that after a period of time, similar companies in Europe and the United States will also enter the Middle East market.”

"Just enter, it's a matter of time. How can there be a separate market for us?" Yang Wendong shook his head and smiled.

Being able to develop the Middle East market on a large scale and gain a certain reputation in the past six months through early layout, coupled with some priority opportunities in the future, is already a huge opportunity for any company.

You know, decades ago, in order to open up a market of hundreds of millions of people, many countries would have to go to war.
Wang Zhiqun said: "There is one more thing. It's quite hot in the Middle East. The demand for refrigerators, air conditioners and electric fans is particularly high. The recent production in Hong Kong is a bit too late. Mr. Yang, do we need to expand the factory?" "Are you worried that after our factory is expanded, the market in the Middle East will be occupied by brands from other countries?" Yang Wendong asked back.

Wang Zhiqun nodded and said, "We do have this concern. In terms of brand, technology and quality, we are still not as good as some European, American and Japanese brands. It doesn't matter for small appliances, and refrigerators are okay, but the gap in air conditioners is really big."

Among the electrical appliances, the ones with the highest technical content are color TVs and air conditioners, while the others can still be made up and have lower technical requirements;
Although Honor Electronics has been developing for about ten years, its technology is still lagging behind those giants with decades of history and who have occupied the market long ago.

Yang Wendong thought for a while and said, "It doesn't matter. Just expand directly. The current economic situation in Europe and the United States is not good. In fact, it is also a good time for us to take advantage of the opportunity to purchase technology. We can take action when there is a chance, or directly acquire some such companies.
In addition, don't forget Best Buy. In a few years, Best Buy's development speed will definitely be able to obtain a large number of domestic sales channels and after-sales service in the United States. As long as our products are not too bad, then being diligent in after-sales service can also make up for the shortcomings.

Besides, the wealth in the Middle East is growing exponentially. Even if other giants come to compete in the future, I believe that if we do our own thing well, we will have the opportunity to at least gain a certain market share.”

Ten years ago, Yang Wendong focused on developing in Hong Kong, and ten years later, he naturally had to expand globally, among which channels were the top priority. Only by mastering the channels could all profits be guaranteed.
This is true for the Middle East, Europe and the United States. In the long run, the global economy will develop rapidly in the next few decades;

Of course, there will be a mainland, but at this moment, I guess even the mainland itself doesn’t believe it.

"Okay, then I will expand the investment in these electrical production lines that are in high demand in the Middle East as planned." Wang Zhiqun agreed.

Yang Wendong looked at Wei Zetao and Zhou Haoran and said, "It's the same for you. The Middle East market is of great significance to us. Now that we have the first-mover advantage, we must seize it with all our strength.
As long as they have demand, we will try our best to expand production to meet their needs. In terms of cost control, Europe, America and Japan cannot compare with us, especially for various products with low technical content. "

When it comes to high-tech products, such as color TVs and cars, Yang Wendong cannot make them no matter how rich he is. The color TVs of Hong Kong RCA are actually still RCA's, not Honor's. Of course, Honor has probably understood the situation of RCA's color TVs over the years, and even many supply chains are controlled by it with capital. But the patents are in their hands, so even if you can produce, you can't do it;

Besides, RCA is also American-funded, so it is difficult for it to enter the Middle East market. Over the years, Honor's TV production line has mainly produced black-and-white TVs and color TVs of average quality, focusing on markets such as Southeast Asia, South America, or Eastern Europe.

It is precisely because they did not touch RCA's level that the two parties were able to cooperate smoothly. Otherwise, if RCA acted normally, it would not be possible for it to cultivate a competitor.

However, when it comes to other ordinary commodities, Changxing Group has been working hard to control the entire industry chain over the past decade, such as beverages, papermaking, plastics, etc. Those who are capable will operate it alone, and those who are not capable will invest in companies such as Formosa Plastics Group and Berkshire, and then develop together. With the addition of sea transportation, various costs are eventually reduced to the lowest. Whether it is choosing the market or choosing profits, it is up to them.

"Yes," Zhou Haoran said with a smile, "Mr. Yang, there is another good news. China Resources told me yesterday that the mainland is considering setting up a new agricultural product center base in East Guangdong Province. The core task is to supply Hong Kong with various agricultural materials.
In this way, not only will the prices of daily necessities in Hong Kong drop, but our group’s procurement costs for various meats, vegetables and even starches will also be significantly reduced.”

"Well, good, that's great. It's also a good thing for the mainland." Yang Wendong smiled and asked, "Can the country export staple food now? Is it enough for the mainland itself?"

Zhou Haoran replied: "I don't know. It is said that the country is still a net importer and there is a food shortage. But there may be special policies for Hong Kong."

"Okay, then we just follow the market principles." Yang Wendong didn't think much about it;
There are some things that he doesn't need to worry about too much. There are many talented people in the mainland who naturally know what to do and what not to do.

Moreover, in many cases, grain is both exported and imported, because the demand for various staple foods is different. To put it simply, when there is not enough food, it is necessary to export high-priced rice in exchange for low-priced wheat or corn. This is a normal operation in many countries.
Just follow your own needs.

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

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