Chapter 428: The Beginning of the Oil Industry Chain
"Thank you for your support, Mr. Yang," Zhou Haoran said with genuine delight and gratitude.
Yang Wendong smiled and replied, "No need to be so polite. Our group's future development can't always rely on my decisions alone. If you or anyone else in the team has an idea—so long as it's reasonable and legal—you're free to propose it. In most cases, I'll let you try it out."
The ideal model for a large corporation was for headquarters to manage only the core businesses and key resources, while its subsidiaries relied on their own imagination and market insight to decide what to do. They could run a small test, and if it succeeded, the group would back it with full support. If it failed, no big deal—failure was the mother of success, after all.
As the boss, Yang Wendong only needed to be aware of new projects. If a venture showed potential to become a key pillar of the group, then he'd step in with greater involvement. Otherwise, he'd stay hands-off.
If the entire group had to depend on his ideas, the company's future innovation would wither. Even a time traveler like Yang Wendong only had limited knowledge of future trends, and many industries required the right environment, timing, and resources to grow.
Zhou Haoran continued, "Then I'll start with a detailed market study. Once I have the report ready, I'll bring it to you for review."
"Good. Let's just try it and see," Yang Wendong said with a grin. "The medical device market is huge. If you can build something solid, this could easily become one of Watsons' core industries in the future."
Given that pharmacy expansion was proving difficult, branching into medical devices was indeed a smart move. And in the long run, if the capital and technical capabilities were there, even entering the pharmaceutical industry might not be out of the question. It was high-tech and hard to crack, yes—but Yang Wendong had the advantage of foreknowledge and funds. Why not give it a try?
In his past life, even by the 2020s, China had made major breakthroughs in sectors like automobiles, aviation, and electronics—but pharmaceuticals still lagged behind. That imbalance was glaring.
"Understood," Zhou Haoran responded.
If it was just about manufacturing bandages or adhesive plasters, any factory could do it. Yang Wendong wasn't worried about the production side at all. What mattered was how Zhou Haoran's team would handle the marketing and sales.
In fact, this trial might be exactly what the company needed. Changxing Group had grown rapidly over the years, mostly on the strength of capital and innovation—but rarely had it leaned on its sales and marketing departments. Now it was time to test that side of the business. If weaknesses were exposed, they could be addressed early. After all, as the group matured, it would inevitably have to deal with more traditional, less innovative products.
The next day, December 26—Saturday—Yang Wendong arrived on one of Hong Kong's larger islands.
Looking into the distance, he smiled and said, "Tsing Yi Island really has some nice scenery."
"It does," replied Wei Zetao beside him. "Central is getting overcrowded these days, so many real estate companies have started developing residential neighborhoods here."
"Isn't Tsing Yi Island supposed to be the site for future heavy industry development?" Yang Wendong asked in return.
"Yes," Wei Zetao replied. "But the heavy industries being developed in Hong Kong don't create extreme pollution. And regular people need to live near their workplaces. Similarly, many companies investing here also want nearby labor.
Since those workers make decent wages, they need housing and shopping options too. That's how the area slowly begins to grow."
"True enough. Sometimes, industry is more important than the environment," Yang Wendong nodded.
Where there's industry, there's pollution—it was inevitable. But people needed jobs, and they needed to support their families. When basic needs weren't being met, talking about environmentalism was useless. As long as the pollution wasn't extreme, then trading a bit of it for economic growth was absolutely worth it.
There were too many places with no factories, where farming couldn't feed a family. No industry meant no infrastructure—no roads, no electricity. In his past life, many "white saviors" in Europe, who had never suffered real poverty, had the luxury to demand environmental purity without industrial development. Some even opposed building power stations.
Wei Zetao continued his explanation: "Mr. Yang, that over there is the Mobil oil depot. Just next to it is the site for CLP's new power plant. That direction is where Jardine Matheson is building a new dockyard."
From inside the vehicle, Wei Zetao pointed out the various landmarks as they passed. After a while, they arrived at their destination.
As he stepped out of the car, Yang Wendong commented, "Our factory here isn't very big."
He had come to Tsing Yi Island specifically to visit the new plastic pellet manufacturing plant that Changxing Group had started building in Hong Kong.
Wei Zetao chuckled. "That's right. This is a small-scale facility—just a test run to help our people get familiar with the industry."
"Mm," Yang Wendong nodded. "Alright, let's go take a look inside."
"Sure, but you'll need to follow some basic safety protocols once we're in," Wei Zetao added.
"No problem," Yang Wendong replied. He never ignored safety, especially in industrial settings.
The group entered the factory and took a tour. At the final stage of the tour, they saw black plastic pellets pouring off the production line, accumulating into large piles. About a dozen young workers were bagging them into woven plastic sacks.
Yang Wendong asked, "What are the production costs like?"
Wei Zetao paused, then answered, "Right now, the cost of our plastic pellets is about 1.4 times higher than what it would cost to import them from Formosa Plastics. If we scale up production in the future, maybe we can bring that number down a bit—but reaching the same level as Formosa Plastics will be very difficult.
The problem is that Hong Kong doesn't have the full supporting industry chain, and we can't build it ourselves. Without government support, it's nearly impossible to establish. The only way would be to invest massive capital—but the ROI just wouldn't be worth it."
"Mm, it does seem like developing petroleum-derived products in Hong Kong has its limitations," Yang Wendong said with a light chuckle. "But that's okay. Even if we invest in such projects overseas, we still need trained professionals here in Hong Kong. Otherwise, in a complex field like petrochemicals, it's way too easy to get scammed by outsiders."
Changxing Group already had manufacturing operations in Taiwan and the UK, and in the future, they would likely expand to Singapore or other countries. For simpler industries, there was little risk—Hong Kong had already mastered them, and the challenges were well understood. The overseas factories wouldn't be able to pull any tricks.
But petrochemicals were different. If no one in the home base understood the industry, then any large-scale overseas investment could easily go wrong. Even state-owned multinational corporations were cautious about setting up petrochemical plants abroad—this was one of the main reasons why.
"If a foreign government's environmental agency accuses you of not being green, you'd better know your stuff if you want to argue back," Yang Wendong said. "That's why we need people here who truly understand these things. If our headquarters is in Hong Kong, but all our industries are overseas, the risks become too high."
Wei Zetao nodded. "Exactly. This factory may not bring in much profit, but it'll give us valuable experience. That alone will make international negotiations much easier later on.
And if there ever comes a time when plastic raw materials are in short supply, having our own plant means we can quickly ramp up production. It's better than being left with nothing."
"Right. If we ever run out of plastic pellets, Changxing Industries would suffer huge losses," Yang Wendong agreed.
In normal times, raw material prices follow market trends. But in special circumstances, it depends entirely on how essential the final products are. Over the next decade or two, the international oil market will be anything but stable. Having a domestic base in Hong Kong would provide a certain level of security. Plastic pellets may also rely on upstream raw materials, but the factory itself could serve as a stockpile buffer—helping the group avoid extreme risks.
"Exactly. Even if it doesn't make money, our factory will function as a large storage hub," Wei Zetao said. "Once we've trained enough professionals, we can send them abroad to manage our future overseas factories."
"Overseas factories can be run by locals, but we'll still need to have our people on-site," Yang Wendong nodded.
In truth, even internal staff couldn't always be completely trusted. But as the boss, he didn't need blind loyalty from any one person. All he needed was to assign conflicting responsibilities and opposing interests to different groups—just like ancient emperors who encouraged internal factions to ensure no one became too powerful. In doing so, Yang Wendong could remain in absolute control.
Wei Zetao then asked, "Mr. Yang, are we planning to invest in Taiwan next? Their supporting industries are pretty well developed, and Formosa Plastics has done a great job setting up the supply chain."
"No rush. We should give Wang Yongqing some face," Yang Wendong replied with a shake of his head. "Right now, our business is small, so he doesn't care. But if we make a large investment, even if he doesn't say anything publicly, you never know what he might do behind the scenes.
My ideal investment location is still Singapore. It's close to Malaysia, and Malaysia actually has a more complete industrial ecosystem than Taiwan—including oil fields. The only issue is that their political situation isn't fully stabilized yet. But I expect it will be soon."
There was another reason as well: political. His investments in Taiwan—supermarkets, cinema chains—were all small-scale assets. Even future real estate investments would be relatively easy to cash out and withdraw from. Even Changxing Industries' light-asset factories were just contract manufacturing bases.
But heavy industrial assets were different. Once you put money in, you were tightly bound to the local environment. So to avoid potential political entanglements, it was better not to get involved too deeply. A financial investment in Formosa Plastics would be enough.
Singapore, on the other hand, was far more favorable. Over the next 60 years, it would remain politically stable and ideally located—a future cornerstone for Changxing Group's Southeast Asian strategy.
"Understood," Wei Zetao said with a smile. "Once our plastic pellet production scales up over there, we can move a lot of our factories to follow."
The group had already decided internally that its number of factories in Hong Kong had reached saturation. With over 20,000 employees—nearly 1% of the entire city's workforce—their footprint was significant enough. Adding more would bring little additional benefit. Controlling "many" people or "more" people in a single place didn't make much of a difference. Plus, most Hong Kong citizens no longer struggled to find work.
It made more sense to invest overseas. Both Singapore and Taiwan were Chinese-majority regions, which made things easier. It would also expand the group's global influence. Of the two, Singapore was the long-term focus—an ideal launchpad for building an industrial network across Southeast Asia.
Yang Wendong added, "Exactly. Basic plastic manufacturing is too labor-intensive. Hong Kong simply can't meet our needs anymore. What's the global situation with our new storage box product?"
This product was labor-intensive and in high demand internationally. With several hot-selling SKUs and limited local manpower, Hong Kong simply couldn't support the scale needed. And if he forced everything to stay in Hong Kong, the vacuum created would actually hurt smaller local industries.
Wei Zetao grinned. "Sales are amazing. The storage boxes are so convenient—last month alone, we exported over two million units. They're easy to ship by sea, the costs are low... it's a near-perfect product."
"Good. Keep expanding production," Yang Wendong said. "Also, start sending people to Singapore. Investigate the local environment and identify optimal investment locations. Once the political situation there stabilizes, we'll move in."
Singapore was founded in August 1965. Yang Wendong had no reason to believe his butterfly effect would disrupt that timeline. With just over six months to go, and since major investments took months—sometimes years—to prepare, now was the perfect time to start laying the groundwork.
"Got it. I'll send a team to Singapore for reconnaissance," Wei Zetao said.
Yang Wendong continued, "Also, keep an eye on Malaysia's oil production. The earlier we understand their operations, the better we'll be able to plan our next steps.
See if we can poach talent from their industrial supply chain—especially Chinese professionals. That'll make our future operations much smoother."
In high-tech industries, talent was everything. Without it, even having endless money was useless. For example, in his past life, some oil-rich Middle Eastern countries had so much oil they could bathe in it—yet they still failed to develop any other industries. The missing piece was human capital.
"Understood," Wei Zetao nodded.
"Alright, then let's not expand this facility any further," Yang Wendong instructed. "Just use it to train internal personnel. Also, like the Mobil depot, set up a large-scale storage facility for naphtha or other petrochemical raw materials. This site will serve as Changxing Industries' emergency reserve depot in Hong Kong."
"No problem. I'll handle it," Wei Zetao replied.
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