Chapter 403: Entering the Grain Trade Industry
The plastic storage box quietly made its debut in the Hong Kong market—without any flashy promotion, not even a single ad by Changxing Media.
The reason was simple: storage boxes weren't consumables. Once a household bought a few, they wouldn't need more for years. Waiting for a box to wear out could take a decade or longer. There was no need to push consumers—they would buy them when they saw them.
Of course, that logic only applied to Hong Kong. The local market was small, and with Carrefour already covering over half the population, exposure was high. But in Japan or other overseas markets, marketing would still be necessary.
Time passed quickly, and July arrived. This year's summer was far better than the last—still hot, but at least it rained.
In particular, South China had seen more rainfall, which meant Eastern Guangdong, right next to Hong Kong, had more water reserves. That made transporting water into the city easier. To be clear, the water situation wasn't perfect, but there was no crisis anymore. People weren't suffering from shortages, and factories weren't shutting down due to lack of water.
On this day, Zheng Yuhua, Zhou Haoran, and Wei Zetao arrived at Yang Wendong's office.
Yang Wendong smiled as they walked in. "All three of you together? This must be important. Sit."
Zheng Yuhua said, "Mr. Yang, Zhou and I are here mainly to discuss the water transport issue."
"Alright, let's hear it," Yang Wendong nodded. "The Hong Kong government hasn't needed us to deliver much water recently, right?"
"That's correct," said Zheng Yuhua. "We're down to just five ships now. This time last year, we had over thirty. Internally, we've already begun to wind down the business."
"Let it go," Yang Wendong replied calmly. "The more money we make off this, the more it's built on people's suffering."
There were too many industries to make money in. Even real estate speculation was morally acceptable by comparison. Water transport? While Yang Wendong had done it with Hong Kong's 3 million citizens in mind, he had no interest in turning it into a long-term business.
In history, the phrase "great drought" meant mass death—people dying of thirst or starvation. Of course, modern Hong Kong wouldn't see people dying in the streets, but the suffering was still widespread.
Yang Wendong had grown up in the 1980s and experienced poverty. But he had never seen real water scarcity. Last year in Hong Kong, he realized: living without water was more painful than being poor. With no water, there was no substitute.
Zheng Yuhua continued, "Yes. Changxing Shipping has already reassigned most of the water transport vessels. The few remaining second-hand oil tankers—once the Dongjiang Waterway is complete—I plan to retire and scrap them."
"Good," Yang Wendong said. "We bought those old tankers specifically for transporting water. I wouldn't dare use them for oil."
Old tankers were ideal for carrying water—cost-effective, safe. The ones they used were nearly decommissioned anyway, so even if they leaked, it would just be freshwater, no harm done. Plus, it trained a new generation of large-vessel crew members. Multiple wins from one move.
Now that the ships had reached the end of their lifespan, it was time to scrap them.
Once Dongjiang water flowed into Hong Kong, the water crisis would effectively be over—a major win for Yang Wendong as well. It meant he could start investing in industries with high water usage locally.
"Understood," said Zheng Yuhua.
At that moment, Zhou Haoran spoke up. "Mr. Yang, on my end, things are wrapping up too. Since Hong Kong is no longer short on water, our booming purified water business from last year has dried up. I'm planning to convert the production lines into aluminum canning lines for Pepsi production."
"Go ahead. It was profitable while it lasted, but I never liked that business anyway," Yang Wendong replied. "How's the cooperation with Pepsi going? You're already building a second production line?"
"Yes. Pepsi's formula is even simpler than our herbal teas. They ship us concentrate from abroad; we just add syrup and water. That's it," said Zhou Haoran.
"Pepsi can't beat Coca-Cola in Asia, but it still sells way better than our herbal teas. Current production capacity is already falling behind demand."
"Alright then, just get your proposal and data ready. Once HQ approves, I'll sign it," said Yang Wendong.
"Understood. One more thing," Zhou Haoran added. "The people from Dongsheng approached me. They said they'd like to try their hand at building beverage production lines. Since this involves Pepsi, I didn't dare give them a reply without your input."
"Dongsheng?" Yang Wendong raised his eyebrows. "Do they even have that capability?"
Dongsheng had been one of Changxing's earliest equipment partners—they made the first Post-it machines and later helped with injection molding. But beverage production was more complex. It involved food-grade materials, environmental standards, and intricate automation.
Zhou Haoran replied, "I visited their factory. It's quite large now. They already make various transmission equipment found in beverage machines.
They're confident about the mechanical side, but less so about the can stamping and filling systems. They want to give it a try."
"Without a confirmed order, I doubt they'd risk investing tens of thousands to develop a full prototype," Wei Zetao commented from the side. "Hong Kong's beverage machinery market isn't small, but most equipment is imported. No local brand has dared to go all in."
"Nor should we gamble," Yang Wendong said firmly. "Pepsi's production must not have any issues."
He paused, then added, "But local production of equipment is necessary. If successful, it would benefit us greatly. We need to develop the beverage sector here in Hong Kong.
Let's proceed like this—buy the next line from Germany or Japan, but give Dongsheng a trial run. Let them build a small-scale production line, for our ginger ale. If it performs well, we'll increase their orders gradually."
If the partnership with Pepsi went well, future beverage output in Hong Kong would be massive. Once container shipping was fully rolled out and logistics costs dropped, order volumes would skyrocket. Plus, Changxing's own beverage brands would grow.
In such a scenario, having a local equipment supplier would be a game-changer. And with China's reform and opening-up just over a decade away, being able to immediately supply that market would be invaluable. Equipment demand would surge.
"Alright then, I'll place a small line order with Dongsheng," Zhou Haoran said with a smile.
"Good. Beverage will be one of Watsons' flagship categories going forward," Yang Wendong said. "But for now, we're limited by shipping costs and brand recognition. Let's lean on Pepsi for now, and focus our herbal teas and ginger drinks on Southeast Asia."
Making drinks wasn't hard. Even a small workshop could do it. But scaling up was a different beast.
The biggest challenge wasn't the formula—it was marketing. Without a massive advertising budget, no beverage had ever succeeded on a large scale. Yang Wendong knew this well. Even with the best product, you still needed money and brand power to win the war.
Now was not the time for Yang Wendong to go all-in on the beverage industry. The simple truth was: capital was still limited. Even though Changxing Group's annual revenue had already reached several hundred million, that kind of capital meant little on the global stage—barely enough to dominate a small place like Hong Kong, or to exert minor influence in Southeast Asia.
Only after Hong Kong's property market soared several times, and after a few more years of development in manufacturing and shipping—grabbing a few golden opportunities along the way—would Yang Wendong have the financial power to expand overseas. Without that scale, trying to compete in mature global markets purely on product strength was nearly impossible.
"Understood," Zhou Haoran said with a grin. "The Pepsi orders are enough for us to build a mid-sized sugar refinery. If our own beverage brands struggle overseas, maybe sugar production or snack foods could be a new avenue."
"That's worth exploring," Yang Wendong said. "Sugar and snacks aren't expensive to ship, so even if the overseas market isn't huge, at least we can establish logistics channels."
Zhou Haoran added, "I once spoke to a contact at China Resources. The mainland has a serious sugar shortage. In 1959, total sugar output was 1.1 million tons, but last year it was said to be just over 300,000 tons. And due to economic constraints, they don't dare buy too much on the international market."
"Hundreds of thousands of tons of sugar—that's no small figure," Yang Wendong said thoughtfully. "You're thinking of taking on that trade? That won't be easy."
Sugar wasn't like rice or wheat. It was essential, yes—but global production capacity was limited, and it didn't have the supply flexibility of major grains.
Zhou Haoran nodded. "We can't take all of it, of course. But part of it, sure. We can expand our factory's capacity bit by bit. The only real risk is if the mainland suddenly boosts domestic production again—then we might end up over-invested."
"That's unlikely," Yang Wendong said. "Southeast Asia's economy is growing too. They also need massive amounts of sugar. We should be able to sell excess inventory if necessary." He paused. "But sugar is a strategic material, not just a food item. In wartime, it can be used in weapons. Are there any restrictions from Western countries?"
Most people didn't realize how versatile sugar was. At its core, sugar was pure energy. Combined with certain chemicals, it could become explosive. In war, it could also be used to quickly replenish a soldier's energy or as a makeshift wound disinfectant. Of course, that applied only in emergencies.
Zhou Haoran responded, "No restrictions that I'm aware of. The West mainly controls weapons and high-end equipment. Only countries like Cuba face heavy trade restrictions.
Cuba itself is a sugar powerhouse and is rumored to be selling sugar to the mainland. Our business should be fine. The real reason China doesn't buy large amounts of sugar is fear of price speculation. If word gets out, international capitalists could drive the price up two or three times."
"Alright. As long as there are no policy barriers," Yang Wendong said. "Let's start small and scale up. And to protect ourselves, let's insert an intermediary between us and China Resources—just in case."
Yang Wendong wanted to help the mainland, yes—but protecting himself came first. Only by staying safe could he continue investing in the future and ultimately reach mutual benefit.
"Got it," Zhou Haoran agreed. "Our early deals won't be large anyway. By my estimate, it'll take 3 to 5 years before we reach any real volume. We don't even have the capacity for big deals yet."
Yang Wendong laughed. "Good. Let's ease into it. If your sugar refinery really takes off, I can consider investing in sugarcane plantations in Southeast Asia or South America."
Zhou Haoran's eyes lit up. "Thank you, Mr. Yang. I'll give it my best."
At this moment, Wei Zetao chimed in, "Mr. Yang, investing in sugarcane fields in Southeast Asia is very risky. From what I know, Jardine Matheson and Swire Group have tried it—and lost money. It's a murky business."
"I'm aware," Yang Wendong replied calmly. "That's why I'd take it slow—start small. If the early results are poor, we won't lose much, and we can pull out early. No big deal."
The biggest problem with overseas investments was the uncontrollable risk factors. In his past life, many mainland Chinese who grew up during reform and opening-up thought all foreign companies made easy money in China. But China was a unique case.
In reality, many countries were hostile to foreign capital. For example, India was notorious. Southeast Asia was slightly better, but still treacherous. Just because a government welcomed you didn't mean the local business tycoons wouldn't try to sabotage you.
That's why all future investments had to be built on scale, local partnerships, and political backing. Without that, you might as well buy U.S. or European stocks. At least those markets wouldn't ruin their own reputation over a few million dollars—unless you were trying to buy a high-tech company.
"I guess I was being overly cautious," Wei Zetao admitted. "Mr. Yang, as for me, I've got something to report. With the drought in Hong Kong and mainland easing, grain imports are also dropping.
But over the last few years, Changxing Trading has built a strong foothold in Southeast Asia's grain markets. It would be a shame to pull out now."
"So you're thinking of continuing as a dedicated grain trader?" Yang Wendong asked.
"Yes," Wei Zetao replied. "It's just that without China buying as much, we lose pricing power in Western markets."
"That's fine," Yang Wendong said. "That's just how business works. Just like a factory—we have to find new buyers. It's tough, but what part of business isn't? Now that we've laid the groundwork, giving it up would be a waste. Keep going.
And don't forget—we're also building up a snack trade. If that expands, the two sectors can support each other, lowering costs."
As Changxing Group grew, new business divisions naturally emerged. A true conglomerate needed to carefully choose the right direction, then steadily expand.
For example, Changxing Industrial was focused on plastic and paper, and was expanding upstream and downstream. Those two materials were future essentials—no matter how advanced technology got, they would always be needed. By mastering the full supply chain, Yang Wendong could protect his profit margin and market control.
The same applied to the food industry. No matter how advanced technology became, people had to eat. Staple foods were essential. Unless one day controllable nuclear fusion allowed humanity to produce starch from carbon dioxide in a lab… but even by 2064, that seemed unlikely—and Yang Wendong wouldn't live to see it.
"I agree," said Wei Zetao. "And the fact that we own our own ships gives us a massive advantage. We don't need to worry about transportation costs. Ms. Zheng's retired oil tankers can be repurposed for grain shipping—so long as the hull holds up, it's fine for internal use."
"Alright," Yang Wendong said. "Work it out among yourselves. Now that our business divisions are coming together, our synergy is our greatest strength."
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