Chapter 242: Major Expansion of the Shipping Fleet
"Understood," Wei Zetao continued. "Mr. Yang, Wang Yongqing also replied about polyethylene. He mentioned that Germany has a high-pressure polymerization production technology, but purchasing the equipment to start would require at least $100,000 upfront.
Also, polyethylene comes in many types. It's best if we first acquire the patented materials and specifications, then let him choose the proper machinery, because different materials require different equipment parameters."
"Alright, then let's first focus on acquiring the material patents," Yang Wendong nodded. "Once we have those, we'll figure out the next steps."
After Wei left, Su Yiyi picked up one of the sample plastic bags and gave it a few strong twists, causing a harsh, squeaky sound.
"That noise is unpleasant," Yang said with a grimace. It reminded him of nails on a chalkboard—something that made his ears crawl.
"I don't feel anything," Su Yiyi said innocently. She stopped and added, "It doesn't tear, though. This bag is pretty good."
"It's waterproof too. Go test it out," Yang laughed.
"Alright." Su quickly dashed off to the private washroom in the back of the office. After a bit of running water, she returned and said, "This is definitely better than paper bags or bamboo baskets."
"Of course," Yang nodded. "That's why I want to mass-produce them in Hong Kong. This is something incredibly practical for the average person."
In Europe and other wealthy places, people commonly used paper bags. But in Asia, where many families struggled just to get by, paper bags were expensive and impractical—they tore easily, couldn't handle much weight, and were ruined by water. They weren't exactly disposable, but they couldn't be used many times either.
Compared to them, plastic bags had far lower costs. Although they weren't perfect yet, Asian consumers were less picky. As long as it was cheap, foldable, and waterproof, it would be a welcome replacement—even if it was a bit stiff. Being poor didn't allow for picky preferences.
Su Yiyi nodded. "Even I think it's convenient. Everyone else probably will too. It's just a pity this requires special materials. Otherwise, you could've registered a patent yourself."
"What are you thinking?" Yang chuckled. "If this could be done with common materials, someone else would've done it already."
"True." Su gave an embarrassed smile. Then she added, "But even with a patent, I don't think it'll be easy to enforce. So many people will make knockoffs—it'll be impossible to sue them all."
"Exactly," Yang nodded. "That's why I'm not trying to make big profits from these bags like I did with Post-its. I just want to get costs down as much as possible, then flood the market with cheap, thin-margin products."
Patent protections couldn't compete with a low-price strategy. Coca-Cola didn't dominate with patents—it dominated with price and global scale.
"As long as I don't infringe on others' IP, I can take over the market with price alone. In any industry, price-to-performance is king. When quality is comparable, the cheapest always wins."
"So you're not planning to make money?" Su Yiyi asked.
"There are plenty of ways to make money," Yang replied. "This kind of product will never yield high profits. Better to aim for low margins and high volume. Sell billions of units, and it'll still generate substantial revenue. More importantly, the scale will create a lot of jobs—and that matters more."
Real estate alone could make him insanely wealthy. But Yang wasn't in business just to watch his bank balance grow. In this era, making a million HKD basically meant lifetime financial freedom.
For industrial ventures, profit wasn't the only goal—employment was just as important. Hong Kong was overflowing with immigrants. Yang might not hire them directly, but labor markets were interconnected. Hiring more elsewhere would still ease pressure and improve job availability across the city.
Not to mention the secondary job opportunities that came with large-scale factories.
"Right—volume over margin," Su nodded. Yang had taught her many business principles over the years.
Yang put away the plastic bag. "Buying patents from others probably won't happen overnight. We may not succeed at all. Let's wait for a response from Europe first."
Other people weren't dumb. They might also realize the huge potential of plastic bags. Buying their patents might not be so easy. If not, the fallback was to negotiate usage rights. A small European company certainly lacked the capacity to operate in Asia, making a licensing deal more likely—but it would still mean being at their mercy.
Only time would tell what Celloplast's response would be.
"Mm," Su Yiyi replied with a nod.
Later that afternoon
"Mr. Yang, Madam Yang." Zheng Yuhua arrived at the office and greeted them.
"Sit," Yang gestured. "What's the update on the five new freighters from Japan?"
Zheng replied, "We're nearly there. Just a few details on pricing remain. Also, some negotiation on interest rates from the Japanese banks."
"Okay," Yang nodded. "What about delivery timelines?"
"All five ships will be completed in a year and a half. They'll be built in parallel at multiple shipyards. The first will be ready in ten months," Zheng reported.
"Good. The timeline is acceptable," Yang said. "Don't waste too much time haggling. The shipping market is booming. If we miss our window just to shave a bit off the price, it's not worth it."
The 1960s were a golden age for global shipping, thanks to explosive global economic growth.
With rising national incomes, countries needed to import what they couldn't produce. The U.S. had been aggressively promoting global free trade since WWII—primarily for its own benefit, but it also drove massive growth in international trade between other nations.
Shipbuilding, however, couldn't keep up with the surge in demand. As a result, there was a persistent shortage of cargo vessels. Anyone in the shipping business was making money.
"Understood. I'll finalize things with the Japanese side as soon as possible," Zheng promised.
Yang then asked, "How's progress on the second-hand ships? Our new industrial park just completed construction. It's focused on luggage production. By early next year, output will significantly increase."
Exporting suitcases required his own fleet. They were bulky and space-consuming. Renting space on others' ships would lead to heavy losses.
The newly purchased ships wouldn't be used for transporting suitcases. It wasn't economical. Second-hand cargo ships were perfectly adequate—the cargo was light, causing minimal wear and tear on the ship's components. Especially since Yang Wendong now owned a shipyard, maintenance would be easy and cheap.
Of course, the ships wouldn't carry just suitcases. They would also be loaded with other, heavier goods to maximize efficiency.
Zheng Yuhua reported, "In the past few months, I've put out feelers and identified six second-hand cargo ships. We've already sent people to inspect them. They're old, yes, but if we do our own maintenance, they should be fine.
Also, at the beginning of this month, a few shipping companies in Europe contacted me. Between them, they're looking to sell thirteen older cargo ships. I've already dispatched inspectors, and the initial feedback is positive—they're not inferior to the ships we bought from the U.S."
"Nineteen ships in total?" Yang Wendong's eyes glimmered. That was more than enough.
Zheng continued, "Mr. Yang, cargo ships all have a service life. Even our current vessels—no matter how well we maintain them—probably won't be usable past 1970. These nineteen ships would replace them around that time."
"They won't be completely unusable, right?" Yang asked.
"No, but maintenance costs would rise dramatically. It wouldn't be economical to keep them running."
"That's fine. We'll deal with that later," Yang said, unconcerned.
Even without the upcoming Middle East crisis, he'd easily earn back the investment within a few years. During the crisis years, ships could earn back their value in a single year. In fact, the Suez Canal would be closed for eight years, creating an unprecedented demand for shipping.
Even if old ships had high maintenance costs, a shipping crisis would turn them into gold mines. The most profitable years would be the early ones—before an influx of new ships diluted the market.
Zheng nodded and added, "But Mr. Yang, with so many ships, one dry dock at our shipyard won't be enough. Especially since we'll also be servicing external clients."
"Then expand," Yang said without hesitation. "I bought enough land in Kwai Chung for five docks precisely because I foresaw this need."
Building shipyards in Kwai Chung would never be a loss. If there was no redevelopment, he'd make money by servicing passing ships. If there was redevelopment, he might get dock space.
"Good. But we should wait until the first dry dock is completed before starting the next. Otherwise, we may face a labor shortage," Zheng said.
Yang asked, "How's recruitment from Taiwan going?"
Originally, they had planned to poach engineers from other Hong Kong shipyards. But that approach had limited results. Taiwan, with its growing shipbuilding industry, was a better talent pool.
"We've brought in over 30 engineers from Taiwan so far," Zheng said. "They're still in training. Also, Mr. Pao's maritime academy is up and running. They've started enrollment, and we expect the first batch of interns to be ready in six months."
"That's excellent. Mr. Pao's idea really solved our labor shortage," Yang praised.
It was a good reminder: when moving into more advanced industries in the future, he might have to train his own workforce—or work with local universities to create new departments.
"Exactly. That way, labor won't be our bottleneck," Zheng said. Then he added, "There's one last issue. Because these are second-hand ships, the banks probably won't approve loans…"
"That's not necessarily a problem. I'll figure something out," Yang said. "What's the asking price?"
Many shipping tycoons in Hong Kong gave up on second-hand ships once they became rich—not because of quality, but because of financing.
Second-hand ships were cheaper, but even new ships were hard to finance, let alone used ones. Banks were cautious. Paradoxically, better-quality used ships sometimes required more upfront capital.
Zheng handed him a folder. "Here's the current pricing. We haven't negotiated yet, but I've compiled it all:
Six standalone ships, varying in condition, asking $2.5 million USD.Thirteen European ships, older, priced at $4 million.
I estimate we can negotiate about a 15% discount."
Yang quickly calculated. "So, roughly $5.5 million—around HKD 30 million."
Originally, he had planned to buy some very cheap, borderline-scrap ships. But if he could get better-quality ones for a little more, it was worth it. He'd make the money back easily.
"Yes," Zheng confirmed. "I understand the group has many cash demands right now. This is a hefty investment."
Yang shook his head. "It's not a problem. Every major player in Hong Kong—whether in real estate, shipping, or industry—operates on leverage.
These nineteen ships might not qualify as loan collateral, but all my other businesses can. So the funding isn't an issue."
Using leverage was the key to scaling any enterprise. Especially in industries like real estate and shipping—if you didn't make the most of bank capital, you were wasting resources.
And Yang, knowing the future, wasn't afraid to use it.
What gave him the most confidence wasn't the ships themselves—it was Changxing Industrial, the group's cash cow. The company had no debt, and it generated massive profits annually. That stable cash flow could support the entire conglomerate's aggressive growth.
"We're really buying all nineteen?" Zheng asked, still a little stunned.
Including the five new ships from Japan, if both deals went through, Changxing Shipping would own thirty vessels—catapulting it into third place behind Tung Hao-yun and Chao Tsong-yen among Chinese shipping firms.
"As long as the quality is good and the price is fair—yes. Buy them," Yang said without a shred of hesitation.
Each of these ships might earn him the equivalent of two or three new vessels over the next few years.
More urgently, next year's drought was coming. He'd need as many ships as possible to transport freshwater. If he didn't act, the public would suffer—and so would Changxing Industrial, his profit engine.
"Understood. I'll begin negotiations immediately," Zheng said, clearly excited.
As a manager, nothing was more satisfying than overseeing a rapidly growing empire.
"Don't worry about funding. Just secure those ships," Yang said again.
He was going to become Hong Kong's next shipping king. And that, more than anything, would align everyone's interests—his own, the government's, and the people's.
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