Chapter 432: 1964 Wealth Summary (Part 2)
"The paper factory will need to expand," Yang Wendong said after a brief pause. "But let's wait a bit. If Singapore proves suitable, I'm planning to invest there instead."
Though he planned to remain neutral in some future geopolitical matters, Yang Wendong didn't want to get too deeply tied to Taiwan. Over the past few years, he had already invested heavily in factories there. Any further investment would create a binding dependency.
Singapore, by contrast, was the most ideal alternative—also Chinese-majority, strategically located, and offering excellent access to Southeast Asia. Using Singapore as a manufacturing base would make it easier to serve nearby markets, and even Europe was geographically closer from there.
Wei Zetao nodded. "Singapore is a great option. Malaysia has lots of timber and pulp mills, so transportation costs for raw pulp will be much lower."
"Diversification is something we have to seriously consider," Yang Wendong added. "We can't put everything in Hong Kong and Taiwan. Eventually, we'll have to invest in factories in other countries as well."
While Europe and the U.S. weren't great for manufacturing, certain specialized industries might still benefit from localized production. There were also tariffs, shipping logistics, and political factors to consider. Even in the 21st century, large mainland Chinese companies had to build overseas factories once their exports reached a certain scale—for the same reasons.
"Yes," Wei Zetao said, fully understanding the logic. "Division Two already conducted a field survey in Singapore. They found several suitable sites. I'll have them evaluate which ones are best for building a paper mill."
"Good." Yang Wendong nodded. "Plastic manufacturing is easier in that sense—no pollution, making it the cleanest and most scalable type of factory."
"Exactly. Many countries have approached me about investing," Wei Zetao said. "Last year, Division Two had total sales of 242 million HKD. Division Three had 19 million.
Luggage and adhesive hooks grew around 8%, while woven and plastic bags grew over 300%. Storage boxes were a new product—400,000 units sold for a total of 22 million HKD."
"Excellent," Yang Wendong said. "Just keep these businesses growing steadily. The key is to control both upstream and downstream supply chains through any means necessary, and to manage costs strictly. As long as our cost-performance ratio is the best, we'll be fine.
Once the group's capital becomes more robust, I'll invest deeper into the supply chain. As long as we control the plastic and paper sectors, we'll have nothing to fear."
Plastic and paper were industries that would never become obsolete. Even in the internet age, their demand would actually increase.
Of course, there were other industries too—textiles, food, sugar, and even infrastructure—but Changxing Group was only just starting in those areas. Success was still a long way off. Only in plastic and paper had they reached about halfway. With the supply chain control they already had, their competitive advantage was obvious.
Wei Zetao said, "Yes. Our own Division Four is developing new products, but none of them have achieved breakout success yet. While we approached 30 million HKD in total sales last year, that was mainly due to our existing supply chain and distribution advantages."
"That's alright," Yang Wendong replied. "Being able to leverage existing advantages is already good. Innovation-driven products are rare by nature. We can't base our whole business on that.
Your task this year is to prepare for overseas expansion. The additional capacity we'll build must be ready to deploy in Singapore. In the future, our main production hubs will be Hong Kong, Taiwan, and Singapore—with Hong Kong as the core, and the others as support."
"Yes, understood," Wei Zetao replied.
Once a manufacturing company grew large enough, production inevitably had to be decentralized. A country like the U.S. could spread factories across states. But Hong Kong? It was just a city.
Currently, there were only three Chinese-majority regions available—each with different strengths. This lineup conveniently aligned with Changxing Industries' long-term interests.
Changxing Industries remained the heart of the entire Changxing Group. It was the largest manufacturing employer in Hong Kong and would also be key when they expanded into Singapore—and even later, when opening factories in mainland China after reforms.
Of course, by then, companies like Rongyao Electronics and Watsons might become leaders in their own industries as well.
Still, alongside manufacturing, other sectors were equally critical. For instance, logistics. No matter how developed your factories were, you still needed ships, trucks, and other transportation tools to sell your products. Logistics was fundamental.
And with Hong Kong being Asia's largest shipping hub, it had naturally birthed a number of top-tier shipping companies—Changxing Shipping among them.
On January 13, Yang Wendong arrived in Kwai Chung, home to an eight-story building that served as the headquarters of Changxing Shipping.
Once on the top floor, Yang Wendong looked out toward the distant docks and asked, "Are five dry docks enough for us right now?"
Zheng Yuhua, head of Changxing Shipping, responded, "Yes, the five docks are currently used both for our own ships and for maintenance, repair, and servicing of external vessels.
In recent years, with the increase in Hong Kong's role as a shipping and export hub, the number of ships has surged. Even with five docks, we're struggling to meet demand."
"Have you applied to build more?" Yang Wendong asked.
When the company was first founded, major projects like dry dock construction had to be personally overseen by him. But with the business now scaled up, such responsibilities had been delegated.
"We did apply. I submitted a proposal to expand in Kwai Chung, but the government didn't approve it," Zheng Yuhua said. "They suggested we build on Tsing Yi Island instead."
"They didn't approve it?" Yang Wendong thought for a moment. Based on his analysis, the government was probably making preparations for container terminals. They had likely realized that Kwai Chung was prime real estate, so they weren't allocating any more land for shipyards.
Zheng Yuhua added, "Tsing Yi is probably being designated as an industrial zone. I've heard that both the Whampoa and Swire shipyards will also be relocated there."
"Then let's follow the government's guidance," Yang Wendong said.
"Understood," Zheng Yuhua replied. "Mr. Yang, the financials for last year are also ready. Please have a look."
"Alright." Yang Wendong nodded and took the file, reading through it carefully.
Compared to Changxing Industries, Changxing Shipping's business model was much simpler. The core of their operations was leasing out new ships and using older ones for internal needs—mainly to transport goods for other subsidiaries.
After reviewing the documents for a while, Zheng Yuhua said, "Last year, after deducting bank interest and depreciation, our total profit was 43 million HKD. Most of that came from leasing out vessels."
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