Chapter 439: Food Production Base and the Hot-Selling Sausages
The expansion of the cinema business was, in truth, a small matter. In Hong Kong, things were already stable; overseas expansion, on the other hand, would take time. For now, Yang Wendong's funds weren't suited for large-scale real estate investment in Southeast Asia.
By April, Hong Kong's property market had dropped between 15% to 20% since January.
That number might not seem dramatic, but many people were speculating on housing with heavy leverage. For them, a drop of that size meant financial ruin. In order to cash out and repay debts, they were forced to sell cheaply. Meanwhile, banks were tightening credit, which further pushed the real estate market into a downward spiral.
At this stage, even if a miracle appeared, it couldn't save Hong Kong's real estate sector.
For Yang Wendong, however, the current drop still wasn't enough. According to his memory of the original timeline, by the end of the year, the drop would exceed 50%, and in the first half of next year, it would rise slightly before plunging again to rock bottom.
In other words, for the next two years, Yang Wendong didn't need to think much about the Hong Kong property market—unless a truly exceptional piece of land went up for sale. And actually, such opportunities did arise, since the colonial government, in an attempt to save the market, put high-quality plots up for auction multiple times. All Yang Wendong needed to do was wait and see which ones were worth picking up.
Of course, his existence would inevitably alter history to some extent, but the overall trend wouldn't change.
By mid-April, Yang Wendong traveled to Sha Tin, which had become home to Hong Kong's largest chicken farm and was now known as a major food processing hub.
Inside a meeting room:
"Mr. Yang," said Zhou Haoran of Watsons as he pointed to a map of Sha Tin. "Right now we operate five poultry farms here, one grain processing plant, one refined sugar facility, one beverage plant, two instant noodle factories, one large snack production facility, and over here—this is our sausage processing plant."
"Very nice," Yang Wendong said, looking at the red-circled locations on the map. "How many workers do these factories employ in total?"
Even though all of this belonged to his group, Yang Wendong hadn't paid much attention to the specifics. He knew they existed, but that was about it. Today's trip to Sha Tin was specifically for him to get a clear picture.
"We have about 2,000 employees total, including administrative staff," Zhou Haoran replied. "Our group is now the largest employer in the Sha Tin area."
"Good," Yang Wendong nodded. "Creating this many jobs is a good thing. Continue focusing on overseas expansion—only exports can create scale. Local demand in Hong Kong is limited."
While domestic demand in Hong Kong wasn't insignificant, it paled in comparison to the international market. For Changxing Group, controlling the Hong Kong market was necessary. But conquering foreign markets was the real goal. Only by boosting exports could the local economy improve—and later, when the mainland began reform and opening, it would provide even greater advantages.
"Understood," Zhou Haoran smiled. "I've already set up an internal snack division, producing biscuits, potato chips, and the like. We use Changxing Trading's channels to export them. Last year alone, we generated several million in revenue and created jobs for 300 to 400 people."
"Excellent. For these small businesses, take the initiative," Yang Wendong said approvingly. "If any of them succeed, the group will fully support them."
That's how big corporations worked. Many departments would launch new projects—most would fail or achieve mediocre results. But even if one out of a hundred succeeded, it was a win. In theory, it was the same logic that powered venture capital in his past life.
"Thank you, Mr. Yang," Zhou Haoran said. "From our sales data, the potential for snacks is enormous. For instance, we import potatoes from the mainland. If we tried to sell them elsewhere raw, they wouldn't be profitable—the shipping costs are too high. But once we process them into chips, we can sell them across stores in Europe and the U.S.
The only downside is that we don't have a brand yet, so we can't charge premium prices. We're stuck on the low-cost, high-volume route."
"Food and beverages take time to build up. It's not like Changxing Industries—or even Rongyao's home appliances," Yang Wendong said. "You'll need to improve taste quality across your product line. Have our overseas teams do more testing in local markets.
As long as the products taste good, sales will rise quickly. Once that happens, we can invest in advertising, and then you'll see real results. Snacks are a huge market, but whether we can conquer it is up to your team."
For this sector, there wasn't much Yang Wendong could contribute—he could offer advice and limited resources, but the rest had to come from the team.
His overseas supermarkets were still in their infancy. It would be at least a decade before they matured and could support cross-promotion.
Zhou Haoran nodded. "Got it. I've already recruited several experts from Tao Hua Tat Tung to work on flavor development. But whether they'll create something successful is still uncertain."
"That's the hard part," Yang Wendong agreed. "Tao Hua Tat Tung is the company that makes soy sauce, right?"
"Yes," Zhou Haoran replied. "They produce soy sauce, oyster sauce, soy paste, and various cooking condiments. They're the biggest seasoning company in Hong Kong. They also dabble in paper products, beverages, and milk—but on a small scale."
"That's quite a mess," Yang Wendong chuckled. "Their business lines don't seem very synergistic."
Diversification was fine, but it needed structure. And it only made sense for very large companies.
Zhou Haoran laughed. "That's true. A lot of Hong Kong companies are like that—random diversification. Not like our group, where everything revolves around the supply chain."
Take Watsons' food and beverage division, for instance. Its operations were all interconnected. First came the beverages, then sugar refining. Sugar then supported the snack division. Meanwhile, Changxing Trading's overseas grain import business justified building a grain processing plant in Sha Tin. The byproducts from grain processing could be used to feed chickens. Once grown, those chickens were sold to Carrefour.
It was a tightly woven network, and the factories were all in one place. Transport was handled by their own docks and shipping fleet. Efficiency was through the roof.
Most factories couldn't even dream of such vertical integration. Even a giant like Jardine Matheson would struggle to replicate it.
"Exactly," Yang Wendong nodded. "Sha Tin will be our food and beverage hub from now on. Take cues from the plastic industrial zone in Kwun Tong."
"Got it," Zhou Haoran replied. "Also, Mr. Yang, I'd like to put our new medical device company in Sha Tin. The first products will be bandages and adhesive bandages. It's not a large operation—we can't handle many orders at first. We'll expand depending on how the market reacts."
"Alright, that's your decision to make," Yang Wendong said. "Like I always say—if it grows well, I'll support it. If it doesn't, then deal with the outcome."
When it came to new business ventures proposed by his subsidiaries, Yang Wendong was generally supportive. As long as they weren't absurdly illogical, he allowed his people the space to explore and take initiative. His philosophy was simple: raise a hundred different beasts and wait for one king to emerge.
"Thank you, Mr. Yang," Zhou Haoran said with a smile. "We're heading over to the sausage factory now. Dongsheng has spent over six months working on the equipment, and they've finally completed it."
"Good, let's go take a look. I've been looking forward to these sausages hitting the market," Yang Wendong nodded.
The sausage idea had been on the table for a long time. It wasn't difficult to make—just a mix of starch and meat. While perfecting the taste required some adjustments, it wasn't too time-consuming. The real challenge was the packaging.
Unlike traditional sausages, these couldn't be stored long-term, so they required very high standards for sterilization and vacuum-sealing. Developing that kind of packaging technology was tough.
In the food and beverage industry, designing high-efficiency packaging that keeps ingredients from spoiling was extremely difficult. That's why professional food packaging companies—like Tetra Pak—often made more money than the actual food producers.
In Sha Tin, all the factories were located together, though they were built separately from the chicken farms to avoid contamination.
It took less than ten minutes of walking before they arrived at one of the workshops. Zhou Haoran pointed and said, "Mr. Yang, this is the facility. That's Director Tao of the factory coming this way."
A slightly chubby man walked over and greeted them. "Mr. Yang, Mr. Zhou, welcome."
"Hello," Yang Wendong nodded. "We're here to see the equipment and production process for the sausages."
"No problem," Director Tao smiled. "Please come in. The plant is already running."
They followed him into the workshop, touring the production line. The setup wasn't massive. Up front were two branches—one line produced starch, while the other ground the meat into mince, which had already been chopped manually in the prep room.
The two ingredients were then fed into machines for mixing and high-temperature sterilization, followed by extrusion into sausage casings. Workers at the front had already prepared the synthetic casing bags. Then came shaping, sealing, and finally, slicing into individual sausages, which workers collected and placed on racks.
Yang Wendong asked, "How many sausages can this line produce in a day?"
Director Tao replied, "This equipment can make 1,200 sausages per hour. So about 28,000 a day. Accounting for maintenance or unforeseen issues, we plan for 25,000 daily."
"With the other three lines, that's 100,000 a day," Yang Wendong noted.
"Correct. As long as there are orders, we can meet demand. If more capacity is needed, we can order additional equipment from Dongsheng. They'll deliver quickly," Director Tao confirmed.
"Then our sales team has their work cut out for them," Yang Wendong said with a grin.
Zhou Haoran added, "Exactly. Sausages can be produced faster than beverages."
"What's the cost per sausage? What's the selling price?" Yang Wendong asked.
"We ran the numbers," Zhou Haoran said. "Raw materials cost about 4 cents per unit—mostly flour, since there's not much meat. Including labor, equipment, and factory overhead, the per-unit cost is about 5.5 cents. So our wholesale price will be 8 cents."
"So at 8 cents per unit wholesale, retail price will probably hit 15 to 20 cents each," Yang Wendong estimated. "Not exactly cheap, but not expensive either. As long as it tastes good, people will buy it."
Hong Kong's economy had grown rapidly in recent years. Wages were rising, and so were prices.
In 1958, when Yang Wendong first arrived, a bowl of noodles at a rural street stall cost 30 cents. Now, it was around a dollar. In a place that imported almost everything, inflation was always fast and fierce.
"Right," Zhou Haoran said. "I've already spoken to Mr. Liu. The first batch of sausages will be hitting Carrefour shelves soon."
"Excellent. I look forward to seeing the sales data," Yang Wendong nodded.
Sausages had once been a massive hit in mainland China, and later gained strong sales globally. They were the kind of product that could catch on in any era.
More importantly, whether sausages or instant noodles, both were excellent emergency food and military supplies—high in calories, long-lasting, and ready-to-eat without heating. Given how chaotic the world was before the 1980s, with wars almost every year somewhere, this was a major advantage.
On April 20, all 46 Carrefour supermarkets in Hong Kong featured new advertisements for sausages—bright, colorful posters hung outside their doors.
"Sausages? Is this some kind of hot dog?" some people asked, confused. But when they saw the price—1.5 HKD for a pack of ten—they were intrigued. That was cheap for anything resembling sausage.
Many curious shoppers went to the snack aisle. There, several store employees were offering free samples. On small plastic trays were bite-sized pieces of sausage.
"Feel free to try our new sausages!" one employee called out.
Free samples always worked. Shoppers popped a piece into their mouths. The texture was soft, the flavor mildly meaty. It wasn't mind-blowing, but it was tasty enough.
Employees introduced the different flavors, answering any customer questions. Many people didn't overthink it—they just tossed a 10-piece pack into their baskets. After all, 1.5 HKD for ten sausages? That was practically a meal.
From morning till night, the same pattern played out. The employees repeated their demonstrations. Stock on the shelves kept disappearing and was constantly replenished.
The next morning, Liu Huayu and Zhou Haoran went together to Yang Wendong's office to report the results.
"Mr. Yang," Liu Huayu said excitedly, "we got the data—yesterday we sold 53,000 packs of sausages. Total revenue: 80,000 HKD."
"Nice," Yang Wendong grinned. "Time to prepare for export. Start with Taiwan, then push into Japan. Let's make some money off the Japanese, too."
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