Chapter 104: No Compromise and a New Win-Win Cooperation
"The U.S. market has only just begun, and you're already pushing for other regions? Isn't that a bit early?" Yang Wendong said with a smile.
He had already guessed the purpose of Robert's visit. Either they were looking to buy the patent again—at a higher price—or they wanted exclusive distribution rights for other countries.
Or maybe they were hoping to revisit the possibility of manufacturing in the U.S.…
In short, the visit was definitely because the Post-it market had proved to be far bigger than 3M had initially expected. Previously, they had seen potential—but now they had actual sales data, and it likely exceeded their forecasts.
With so much at stake, they had flown to Hong Kong in person.
Robert smiled. "That's exactly why we're offering you funding—to help you expand production faster.
That way, we can continue developing the U.S. market while also moving into new territories. Isn't that a win-win situation?"
"It's a great idea, no doubt," Yang said with a chuckle. "But honestly, given the state of my business right now, I don't have trouble securing loans from Hong Kong banks.
In fact, the factory and equipment you saw today were financed by local banks—not just by American capital. The U.S. doesn't have a monopoly on bankers."
Without control over the end-user channels, the safest approach was never to let any distributor become too dominant. Unlike many Hong Kong factories that had to depend on external channels, Yang wasn't in that position.
Giving 3M exclusive rights to the U.S. had been a strategic move. They had the strength and the reach to scale the market, and Yang needed them to maximize his return.
But now, it was a different story. Yang had always said they'd discuss other markets in the future—but that was just lip service. Unless the benefits were substantial, he had no plans to hand over other territories to 3M.
Of course, business was business. If the terms were generous enough, or if it helped him accomplish something crucial, then he was open to negotiation.
Robin offered a composed smile. "Eric, we're offering you one million U.S. dollars at a very low interest rate. That's more than enough for you to build Hong Kong's largest factory and buy a full set of equipment.
We could even connect you with American banks. From what I understand, the big foreign firms in Hong Kong don't exactly make it easy for Chinese companies to access capital.
Working with American banks might be a good alternative."
"Thank you, 3M, for your generosity," Yang said with polite distance. Of course, the moment he heard one million dollars, his mind began to turn—but he quickly composed himself. He understood the true value of Post-it notes far too well.
Besides, American banks had much stricter approval processes. Even if they eventually released the money, it would take far too long—unlike the relatively unregulated Hong Kong banks, which were far more agile.
So he replied politely, "Whether we're talking about this cooperation or this loan, the interest rate isn't really what matters."
For regular businesses and individuals, interest rates from banks or other financial institutions were a lifeline—especially in real estate.
But for Changxing Industrial, which held the exclusive patent to a massive emerging market, as long as the interest rate wasn't outrageous, what mattered more was the loan amount.
Hong Kong banks were extremely cautious when it came to unsecured loans. Even with proof of cooperation with a major foreign company, they wouldn't release much capital. Yang didn't blame them—if he were a banker, he wouldn't either.
3M, on the other hand, had full insight into the opportunity. They knew the risk was minimal—and so they could afford to be generous.
But even so, it wasn't enough to sway Yang just yet.
Robert and Robin exchanged a look, and then Robert said, "Perhaps we should talk about this more thoroughly."
They both knew they didn't have many cards left to play.
It wasn't like they could threaten Yang by withholding the U.S. market—that would only hurt 3M itself. And if word got out, the company's reputation would take a huge hit. Who would ever want to work with them again?
Capitalists are bound not by conscience, but by self-interest. Even when they bend the rules, they must preserve the appearance of fairness. Destroying their own brand would cost far more than they could gain.
That was also why 3M didn't dare violate the Post-it patent. The profits were tempting, but it wasn't worth tarnishing their brand. Gaining regional distribution rights legally and reasonably was the optimal way to profit.
"Alright then, please follow me," Yang said, smiling. Even if the talks led nowhere, he still had to show basic hospitality.
The group moved to the meeting room. It wasn't as fancy as a downtown office suite, but it was quieter and more comfortable than the factory floor.
Su Yiyi served coffee for two and tea for two, then sat down beside Yang.
After a few sips, Robert spoke up. "Eric, let's be direct. What would it take for you to grant us the exclusive rights for countries outside the U.S.?"
Yang replied with his own question, "Which countries are you referring to?"
In business negotiations, it was bad form to reject outright—even if you had no intention of agreeing. You always left room for the other party to save face. That was universal, East or West.
And Yang wanted to probe deeper—to see just how seriously 3M was taking the Post-it opportunity. No matter how much he talked up the market potential, bankers wouldn't believe it. But if 3M was taking it seriously, that was a whole different story—and it would help him with future bank loans.
"Europe and Japan," Robert replied.
"That's practically the entire world," Yang shot back.
At this point in time, ignoring the Soviet bloc, the combined GDP of the U.S., Europe, and Japan made up nearly all of global commerce.
The U.S. led the pack, but Yang knew that in the next couple of decades, Europe and Japan's share of the global economy would rise significantly.
Which meant that while America was the largest current market, it wouldn't be the largest forever.
And as far as a product like Post-its—which relied heavily on business users—was concerned, the rest of the world mattered far less.
Robert smiled. "But it's still in your best interest. I said this months ago—back when your factory was tiny and your cash flow couldn't support rapid expansion.
Now you're in a much better position, and I must say, Eric, you're not only a brilliant inventor—you're a savvy businessman as well."
"That's flattering, but not very helpful," Yang replied dryly.
Robert nodded. "Alright then, Eric—what are your conditions?"
"There might be one area where we could cooperate," Yang said after a pause.
Robert's eyes lit up. As long as the other party wanted something, the deal was still on the table.
Yang didn't answer directly. "Let me be clear: Europe and Japan are off the table for now. But I'd be willing to give 3M the exclusive rights for other American countries—outside of the U.S."
"South America included?" Robert asked, a bit disappointed but still hopeful.
"Yes, South America included," Yang nodded.
In this era, South America still had decent economic strength. It wasn't yet the struggling continent it would become decades later—rich in farmland and minerals, yet unable to feed its own people.
After WWII, much of Europe and Asia needed rebuilding, and raw materials were in high demand. With its abundant resources, South America had become a second-tier economic player—still trailing behind the West, but worth targeting.
Robert nodded, then asked, "So what do you want in return?"
Yang exchanged a look with Wei Zetao, who then said, "Mr. Robert, we'd like 3M's support in developing adhesive technology—specifically, help us build a glue factory here in Hong Kong."
"A glue factory?" Robert blinked in surprise, then asked, "Is this for your mouse trap product? Or for Post-its?"
Robert had learned about the mouse traps on his previous visit. Though 3M had no involvement in that market, he'd taken note of it.
Post-its and glue traps both required adhesive—the former used a little, the latter a lot.
Yang smiled. "If we're going to build a glue plant, we might as well do both. Better to set it all up at once."
Ordinarily, Yang wouldn't even dream of making glue. Without an industrial supply chain, even government-led initiatives often failed.
But with 3M's support, it might actually be feasible. 3M was a global powerhouse in adhesives. Even if they just "leaked" a little know-how, it would be enough to help him get started.
Robert frowned. "A glue plant isn't like a Post-it factory. We can help you build one—but running it properly is a whole different matter.
For one, all modern adhesives are patented. Anything developed in the past few decades is protected. Producing it without a license would be infringement.
And older formulations? They're outdated, weak, and highly polluting. You wouldn't be able to sell it—some countries wouldn't even let it in."
Yang smiled. "Exactly. That's why I want to buy some of 3M's glue-related patents."
"Eric, you've really thought this through," Robert said with a laugh. "You want to buy our patents and have us help you build a plant?"
Yang replied calmly, "For a company with 3M's technical strength and existing infrastructure, it's really not much. But in return, you'd get exclusive rights to a product with massive global potential.
Whether that's a good deal for you… well, I think it speaks for itself."
Robert didn't reply immediately. Instead, he fell silent, deep in thought.
Yang was right.
Even if building a glue plant was expensive and complex, it was nothing compared to the potential profits from the global Post-it market.
There was no way around it—just a piece of paper and a bit of adhesive, a combination so simple it couldn't be simpler. And yet, it was practical to an extreme, with tens of millions, even hundreds of millions of potential customers worldwide. It was a consumable item in the office space.
No one could deny it.
The reality was harsh: hundreds or even thousands of researchers might spend years developing a new technology, only for it to be outshined in market value by one man's flash of inspiration.
That's just how the world works.
Yang Wendong was in no hurry. He sipped his tea calmly.
After a short while, Robert asked again, "And your raw material sourcing—how do you manage that? I assume none of these things are made in Hong Kong."
"Japan has them. So does the U.S. and Europe. I can just import," Yang said casually. "Even though the materials are chemical in nature, they're not classified as hazardous, so importing them into Hong Kong isn't difficult.
As for the wide variety of components—that does make it a bit troublesome, but not unmanageable. It just requires more manpower and some planning.
As for inventory, we'll just increase warehouse stock levels."
Yang also knew that Taiwan would begin investing heavily in the chemical industry within a few years, and importing from there would be cheaper. But there was no point in mentioning that now, and he certainly wouldn't be sharing that information.
Robert smiled. "In that case, your production cost might not even be cheaper than just buying finished glue."
"In the short term, you're absolutely right," Yang nodded. "But in the long term, that may not be the case."
Building a factory where there's no supply chain was always tricky. But if Yang wanted to scale up his Post-it and glue trap business, then owning adhesive production was non-negotiable.
The primary goals were to reduce costs and prevent even the rare possibility of a supply shortage.
So even if it started as a small factory in Hong Kong, he would begin developing internal talent and processes—laying the groundwork for the future. Otherwise, once output increased by dozens or hundreds of times, relying entirely on external glue suppliers would be asking for trouble.
Fortunately, although adhesives fell under chemical manufacturing, they were categorized as light industry. Their raw materials weren't hazardous chemicals, and pollution levels were moderate.
Besides, in 1950s Hong Kong, there were still many sparsely populated areas. Starting a factory in such a place was doable. Wei Zetao had already asked around in government departments—environmental awareness wasn't very strong yet. As long as it wasn't something extremely toxic, permits could be granted.
Robert thought for a moment, then asked, "So how big do you plan to build this factory?"
"Not big," Yang replied. "I'm thinking 1,000 tons a year to start."
A thousand tons might sound like a lot, but averaged out, it was just over three tons a day.
A single glue trap used about 20 grams of adhesive. Changxing Industrial was already producing 20,000 glue traps per day, consuming roughly 0.4 tons of glue daily.
Everyone in the company knew that glue traps were about to experience explosive growth. Wei Zetao and his team had secured strong distribution partnerships in Japan and Europe—they were just waiting for summer demand to surge.
As for Post-its, while each used significantly less adhesive, the market potential was far greater. Once production scaled into the billions, glue demand would skyrocket as well.
If worst came to worst, Yang could keep importing from Japan. But now that he had the chance to start something of his own, he had to seize it. If he didn't establish a local adhesive factory soon, future problems were all but guaranteed.
Giving 3M the rights to the South American Post-it market wasn't a big deal. They could still generate profits for him. But in exchange, he needed 3M's help to build that factory—then he'd gradually learn and develop from there.
Once he had his first small plant running, trained up a core team, and his company had more capital, he could poach experts from Japan or the U.S.
Raw materials could be imported from Taiwan, which would soon have a thriving chemical sector. Then, the full adhesive supply chain could be built right in Hong Kong.
If it still didn't work out? Then he'd just shift the entire operation to Taiwan, which had a suitable industrial environment for chemical production.
Either way, Yang knew he had to control the core raw materials for his most important products.
Robert nodded. "Theoretically, it sounds like a fair deal. Tell you what—when I get back to the hotel tonight, I'll speak with our headquarters."
Yang smiled. "Sounds good. I'll be waiting. But this deal only works if you're truly willing to share some patent technology and help us build that factory."
Robert hesitated. "The issue is… building a glue plant and training talent takes time. Are you saying we only move forward with the deal after that's done?"
Yang replied calmly, "The South American market will naturally be developed later than the U.S. market.
Even now, we're not able to fully satisfy U.S. demand. As long as we move quickly, it's more than doable. Besides, your headquarters hasn't even approved the deal yet—there's no point discussing too many details now."
Robert thought for a moment, then said, "Alright. We'll revisit this tomorrow."
Yang reminded him, "Just don't forget—at the heart of this deal, it all comes down to certain patent rights."
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