Chapter 196: The Freighter from Across the Ocean
"Haha, looks like just a 10% price cut is enough to drive everyone wild," Yang Wendong said with a chuckle.
Wei Zetao nodded. "Of course. They're not Changxing Industrial. The dozens of factories that came today probably operate on profit margins of just 10 to 20 percent.
If their most critical raw material becomes 10% cheaper, it could increase their net profits by 30 to 50% in some cases."
"Yeah, sounds about right. Maybe only the plastic flower makers are raking in higher margins," Yang agreed.
Hong Kong's manufacturing industry had only been developing for a little over a decade, and it was still focused on the lowest-tier products. For example, textile factories were mostly producing cheap clothing and socks, and the plastics industry was churning out basic, unsophisticated plastic goods.
The technical barrier was low, and these were all grind-it-out factories where profits were squeezed thin between the supply chain and downstream buyers.
Wei Zetao continued, "Some factories have already pre-ordered pellets from our next shipment, but a few others… I'd guess they're waiting to see what happens between us and those foreign trading firms."
"Totally expected. I'd do the same if I were in their shoes," Yang said casually. "Right now, even if we're shipping on our own vessels, bringing goods back from the U.S. isn't cheap.
I'm sure those trading houses still have decent margins to play with—they're bound to slash prices to protect their market."
"True. God knows how much those firms have made from their monopolies over the years," Wei agreed. "If we really want to wipe them out, we'll have to wait until Mr. Wang Yongqing's new factory is up and running. Only then will we have a real shot at crushing them."
"That's exactly what I think too," Yang said. "For now, let's compete normally. We'll keep our Taiwan investments quiet. By mid-next year, we'll start using Formosa Plastics' prices to completely drive those foreign firms out of the market."
Once plastic pellets could be produced in Taiwan, and with someone like Wang Yongqing—whose management skills were top-tier—there was no way any company in Hong Kong would be able to match the cost efficiency of Formosa Plastics.
Historically, Formosa had become Asia's leading plastic producer, and its cost control was unmatched. That was a huge part of why Yang had so much faith in Wang.
Per their previous agreement, Changxing Trading held exclusive rights to distribute Formosa Plastics products in Hong Kong. When the time came, Changxing would dominate the city's plastic supply.
And from there, the trading company could even expand into other sectors—pushing deeper into markets that had been monopolized by the foreign hongs.
Wei Zetao grinned. "We should thank those trading houses for that price hike. They forced us to invest in the supply chain.
Now we're building an ultra-efficient one of our own. Soon, they'll be the ones forced out."
"Haha—yeah, they did this to themselves," Yang laughed.
This was nothing new. Throughout history, countless companies had engineered their own demise. Capitalists, driven by short-term profits, often ended up pushing others to find alternative paths—and once those paths were established, the old ones became obsolete.
...
That night, in a villa in North Point, Li Ka-shing returned home.
As soon as he walked in, his wife, Chong Yuet Ming, brought over a bowl of fruit and asked with concern, "What's wrong? You look troubled.
Didn't you go to Tsim Sha Tsui today at the invitation of that Post-it King, Yang Wendong? What was so mysterious about it?"
Li Ka-shing smiled and began explaining. "Well, we visited one of his warehouses—it was packed with different types of plastic pellets. He brought them back from the U.S."
...
He slowly detailed everything that had happened that day.
After listening, Chong Yuet Ming said, "This Yang Wendong has serious ambition. He's trying to leverage his shipping company to take over Hong Kong's entire plastic raw material supply chain?"
"Exactly," Li nodded. "But having ships alone isn't enough. Plenty of companies here have ships. Only Yang Wendong could pull this off."
Yuet Ming quickly understood. "It's because his products are selling well in the U.S., right? He needs to ship them there anyway. So on the return trip, he brings back plastic at a lower cost."
"That's part of it," Li sighed. "But also, Changxing Industrial is one of the largest plastic pellet consumers themselves. Even if he can't sell the extra inventory, he can still use it all internally.
His large purchase volume, low freight costs, and substantial capital allow him to challenge those entrenched trading houses."
It was the combination of multiple advantages that made Yang's success possible. Even if a shipping giant like Wheelock tried the same thing, it probably wouldn't work.
"We couldn't pull that off," Yuet Ming admitted. "We don't use that much raw plastic for plastic flowers. And the capital investment to buy ships… we just couldn't do it."
Li Ka-shing nodded, then frowned. "But you're wondering why I still look troubled, right? If Yang is breaking the monopoly, shouldn't that be a good thing for us?"
"Exactly," Yuet Ming said.
"Who doesn't want to be the one holding a monopoly?" Li shook his head. "Once Yang forces out the foreign firms, won't he just become the new monopoly?
And then the price will go up. A black crow is a black crow, no matter where it flies."
Yuet Ming raised an eyebrow. "That's perfectly normal, though. If it were you, wouldn't you try to establish a monopoly? And raise prices afterward?"
"Uh…" Li Ka-shing chuckled helplessly. "Maybe I would."
"Don't worry about the future," Yuet Ming said. "Right now, Yang is fighting the trading firms. That means price wars. That means savings for us.
We might even make a good profit in the meantime."
Li Ka-shing laughed. "That's true. And anyway, I'm planning to shift more of my focus into real estate."
Yuet Ming nodded. "Good idea. But don't give up on plastic flowers completely."
"Of course not," Li said. "But that business is getting crowded. It's not as profitable as it used to be."
Yuet Ming sighed. "That's always the case. The more people know how to do something, the less it's worth. Best would be to come up with something unique—like Yang Wendong did."
"Easier said than done," Li Ka-shing said, shaking his head with a wry smile.
The next day, in Central:
Fisher rushed into an office where several foreign businessmen were gathered. Without waiting for pleasantries, he announced, "Changxing Industrial's prices are out. On average, they're 10% cheaper than ours."
"Ten percent?" Steve, seated at the head of the room, frowned. "We can lower our prices too."
Ted, seated to the side, immediately chimed in, "Then let's do it now! As long as we use price wars to drive him out of the market, we can always raise prices later to make up for it."
Steve furrowed his brows. "It won't be so easy to defeat him. His factories make very high profits. If this turns into a long-term price war, I'm not sure we can outlast him.
Our best hope is that he sees the odds stacked against him and agrees to some kind of deal."
Fisher nodded in agreement. "Yes, I'm hoping he's just trying to dabble in this business, not completely steal our family trade.
From what I've calculated, he only has one ship. Even if it runs back and forth between the U.S. and Hong Kong several times a year, the plastic pellets he brings back still won't be enough to supply the entire Hong Kong market."
"Well, that's some good news," Steve said after a pause. "But… is there a chance he'll buy more ships?"
Fisher shook his head. "That I don't know. But even for secondhand ships, such a purchase can't happen overnight. We're talking about deals worth hundreds of thousands of U.S. dollars. Even Wheelock would treat such a decision very cautiously."
"True," Steve muttered, nodding.
While there were many ships globally, the number actually available for sale was limited. And even then, buyers had to be careful—many ships might not meet operational standards or have hidden issues. Buying even one freighter was no small feat, let alone multiple. It wasn't just about having the money.
December 12th:
On the eighth floor of Ganghua Tower—now serving as the headquarters for Changxing Shipping Company—Yang Wendong smiled at the room full of professionals.
"Everyone, today marks the first time the entire management team of Changxing Shipping has met together," he said cheerfully.
Previously, Sun Zhiwei had captained their maiden voyage to the U.S. aboard the Shun An, while Yang had hired veteran shipping executive Zheng Yuhua to build the company's operational framework.
"I'd like to introduce everyone properly," said Zheng Yuhua, standing up and gesturing to both sides of the room.
One side consisted of the ship's crew, and the other, of newly hired management and technical staff. This was the first time both sides were meeting in full.
Once everyone had been introduced and formalities were done, Yang turned to Sun Zhiwei. "Captain Sun, how was the voyage to and from the U.S.? Any issues with the ship?"
"None at all," Sun replied. "Everything ran smoothly. Based on our inspections, it seems the Oslo company did a solid job maintaining the vessel."
"Good," Yang nodded, then addressed the whole group. "Now, we have another important matter to discuss—something I'll need everyone's cooperation on.
Earlier, Captain Sun mentioned a batch of secondhand cargo ships from the 1940s will soon be released for sale in the U.S. After Ms. Zheng joined us, she's been tracking this closely, and we've already been in contact with the American side.
I'd like all of you, including our captains and marine engineers, to go to the U.S. and inspect these vessels. We need to determine which ones are worth purchasing."
During his time in Hong Kong, Yang had not only hired Zheng but also brought in three captains and several high-ranking maritime officers, knowing he would soon need more freighters. Even if he didn't yet know exactly where to buy them, he wanted the team in place.
After all, labor costs in Hong Kong were relatively low—captains only earned two to three thousand HKD per month.
Yang gestured to Zheng again. "Ms. Zheng has been handling this, so I'll let her explain the details."
"Certainly, Mr. Yang," Zheng said. "We've commissioned a U.S. intermediary to investigate. These ships were indeed built during World War II.
In terms of safety, they're sound. The only real downside is that they consume more fuel than modern ships. But for us, this isn't a serious issue.
The U.S. government wants to scrap them anyway, so if we can repurpose them as cargo ships for a few years, the return on investment will be excellent.
That said, there are many vessels in the lot, so we'll need to select only the best. That's why we need experienced captains and engineers to help assess which ships are worth acquiring."
Captain Sun thought for a moment, then asked, "Will we be able to do sea trials once we're there?"
"Yes," Zheng replied. "But there will be a cost. Given the number of ships, we can't afford to trial every single one.
So before any trials, we'll need to rely on experience and documentation to narrow down the candidates."
"Makes sense," Sun agreed.
At that moment, another captain—Captain Lin—raised his hand and asked, "Mr. Yang, Ms. Zheng… is it true that other Hong Kong shipping companies are also interested in this batch?"
Yang looked at him and asked, "You mean Tung's fleet?"
Captain Lin, who had been recruited from Tung Chao-yung's company, nodded. "Yes. Before I left, Gold Mountain Shipping had already dispatched someone to the U.S."
"I'm not surprised," Yang replied. "These ships are a great fit for Chinese shipping firms."
Then he turned to Zheng again. "Ms. Zheng, please expedite arrangements. Send our people to the U.S. and coordinate with the government agencies there."
In the startup phase, secondhand vessels made a lot of sense. They were cheaper and could be delivered quickly.
Yang wasn't the only one thinking this way. Every Chinese shipping magnate began with secondhand ships—new builds came later, after they had built up some strength.
"Understood. I'll get it done as soon as possible," Zheng replied.
Sun Zhiwei then raised another point. "Mr. Yang, the Shun An is currently undergoing maintenance and loading. It'll be heading out soon. We'll need to assign a captain for this next voyage."
Captain Lin stepped forward. "Let me take this one."
Yang nodded. "Alright."
He figured Lin might also want to avoid running into anyone from Tung Chao-yung's fleet during the U.S. trip. That made sense.
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