Chapter 180: Taiwan's Future Richest Man
"Plastic pellets are getting more expensive?" Yang Wendong immediately became serious.
Aside from Post-it notes, all of Changxing Industrial's major products relied heavily on plastic. He asked, "Did international oil prices go up?"
"No," Wei Zetao replied. "Oil prices haven't changed in a long time. If they had, it would have caused price fluctuations across many sectors—especially here in Hong Kong, where everything is imported."
"So that means a group of these traders are raising prices together?" Yang guessed.
Before the first oil crisis, international oil prices were firmly controlled by the so-called "Seven Sisters"—the major Western oil companies.
Middle Eastern sheikhs were just glorified oil field workers. To maximize profits, the oil giants intentionally suppressed prices, which remained stable for many years unless disrupted by conflicts or logistical crises like the Suez Canal closure.
Wei nodded. "Yes, that's what I suspect. They pulled the same trick two years ago when plastic flowers became a hot commodity. Back then, they raised prices too, but only for high-end plastic pellets.
This time, it's across the board."
"Could it be because our demand has skyrocketed, so they want to bleed us a little?" Yang asked.
"Highly likely," Wei confirmed. "Our plastic-based products require a massive amount of pellets. And if current trends continue, demand will only increase.
These British trading houses control supply, and now that they've seen our scale, they probably want to profit from it.
To avoid targeting us directly, they're raising prices across the board."
"Sounds about right." Yang nodded. "Many Hong Kong factories have been stifled for years because they're trapped by these British trading houses.
They control both the supply of raw materials and the sales channels. That's why local manufacturing never really took off."
And it wasn't just a Hong Kong problem—other resource-poor regions faced the same dilemma.
In Yang's past life, countries like Vietnam struggled the same way: when business boomed, clients slashed prices while suppliers jacked them up—squeezing you until the last drop.
The only long-term solution was to upgrade the entire industrial chain and gain technological control. But that was incredibly difficult.
Since World War II, only a few countries—China, South Korea, Japan—had truly succeeded.
"Yes," Wei said. "This gives me an idea.
Since our ships are going to Japan and the U.S. to deliver suitcases, we can haul plastic pellets back with us. Given the weight limits, we could carry even more pellets than suitcases. We might even sell some to other factories. Two birds, one stone."
"Smart!" Yang laughed. "So you want to take business away from the British trading firms?"
"Just a happy coincidence," Wei chuckled. "They're so arrogant because they control the supply lines and treat us like helpless sheep.
We didn't want to compete with them—but now they've forced our hand."
Yang nodded. "How was the price hike handled two years ago?"
"There wasn't much we could do. Everyone just accepted it," Wei said. "Only factories like ours, with large-scale procurement, could afford to bypass them. For smaller operations, it's more expensive to go solo."
"True," Yang agreed.
Big factories didn't deal in small orders. Changxing didn't even sell Post-its directly to individual retailers anymore—it had handed off that task to longtime partner Zhao Chengguang.
Yang continued, "Alright then. Buy some warehouses near the Hung Hom or Wharf piers. We'll use them to store imported plastic pellets.
Also, set up an import trading company. I want to break the British trading houses' monopoly. Hong Kong needs tons of imported industrial materials—we can branch out into all of them."
Whether the trading company made money didn't matter. Yang just couldn't allow himself to be controlled by third parties. And once you're in the game, why not grab some of their business too?
Wei grinned. "Sure. With our own ship and warehouses, we can crush our costs. Those trading houses may have money, but they don't have the guts to invest like this."
"Exactly. Our shipping is just a convenient side operation. I wouldn't buy a ship just to haul plastic pellets," Yang said with a laugh.
"Of course," Wei nodded. "I'll have our U.S. contacts look for pellet suppliers in Los Angeles and start preparing for bulk orders."
"Do it," Yang said. "From a supply chain cost-control perspective, this will significantly reduce our raw material expenses.
But to get the best results, we'd need to control the pellet production itself."
"You want to make plastic pellets?" Wei was visibly shocked.
"Can it be done in Hong Kong?" Yang asked calmly.
"Almost impossible," Wei shook his head. "Unless we're recycling old plastics and reprocessing them into pellets. But those are low-grade.
High-quality plastic is derived during the oil refinement process. That requires access to petroleum chains—it's capital intensive, heavily polluting, energy-hungry, and water-intensive. There's no way Hong Kong can support it.
Even if we import everything and run it like our glue factory, the scale would be too small. Unit costs would be sky-high."
"Then it's not worth doing." Yang nodded.
The most profitable businesses in the world rely on massive scale to achieve low-cost dominance.
If someone else had scale and you didn't, you'd be crushed.
Even simple products like woven sacks or urea fertilizer were hard to profit from unless you had massive output.
Plastic pellets—so reliant on the oil supply chain—only made sense when produced at national or multinational scale.
Wei nodded. "Exactly. No scale, no profit."
"Then Hong Kong is out of the question." Yang paused, then added, "But there may still be an opportunity.
Old Wei, we'll keep importing pellets from the U.S. and Japan for now. But I want you to send someone to Taiwan. Find out everything you can about their plastic industry. I want detailed information."
The British colonial government wouldn't develop this type of heavy industry—but Taiwan in the 1960s would.
Just like mainland China would in the 1970s.
It was precisely because of the early, decade-long (or longer) investments in heavy industries like steel, chemicals, petroleum, and even transportation—regardless of cost—that countries like Japan and South Korea laid the groundwork for sustained economic takeoff in the decades that followed.
That's why they ultimately succeeded, while countries like Vietnam and the rest of Southeast Asia did not.
Even with U.S. support, these other nations only saw fleeting prosperity before stagnating.
"Taiwan?" Wei Zetao responded, "Alright, I'll send someone immediately to investigate."
"Good, the sooner the better," Yang Wendong nodded.
In Central, at a steakhouse in Hong Kong:
A group of white expats gathered, eating their food with elegance.
"Steve," one of them said, "with this round of price hikes, aren't you worried we might anger those Chinese factory owners?"
Steve smirked, "And what if we do? What are they going to do—import plastic pellets themselves? Charter ships to transport them to Hong Kong? Then rent their own warehouses? Do you know how much that would cost?
Relax. I've already done the math. Over the past two years, Hong Kong's export manufacturing has exploded, and the profit margin on plastic goods has gone up significantly. A 20% price increase is something they can still absorb.
Remember two years ago? We raised prices then too, and they just swallowed it."
"Haha, Steve, you're really ruthless," another expat laughed. "These small factories finally start making a little profit, and you squeeze them dry."
Steve sipped his red wine and said, "No, Ted, we're actually helping them. Because if we don't squeeze them, the export trading companies they work with will.
And let's be real—Chinese factories compete by undercutting each other's prices just to win contracts. Better we strike first and force them into line."
Ted frowned. "Steve, what worries me is that new company—Changxing Industrial. Their procurement volume is massive. If we push too hard, they might just start importing from overseas. You know the Hong Kong government won't interfere—any factory is free to import directly."
"Impossible," Steve said confidently. "I've run the numbers. Even if they import from overseas and arrange their own shipping, the cost would still be higher.
You think there aren't distributors in the U.S. and Japan? It's not that easy to buy directly from manufacturers. What gives us an edge isn't just Hong Kong—we're leveraging our broader Asian network."
"That's true." Ted thought about it and nodded slightly, though a sliver of unease lingered.
...
Three days later, Wei Zetao returned with the report.
"Mr. Yang, I've completed the investigation into Taiwan's plastic industry," he said.
"So fast?" Yang looked up from his newspaper, visibly surprised. Given that there was no internet, even though Taiwan was geographically close, gathering this kind of information wasn't easy.
Wei chuckled. "It was only this fast because there's really only one company in Taiwan that fits our criteria. It's called Formosa Plastics."
"There's only one plastic company in Taiwan?" Yang asked skeptically.
Hong Kong alone had hundreds of plastic manufacturers—making everything from consumer goods to toys, plastic flowers, industrial parts, piping, and more.
Taiwan's economy wasn't as advanced as Hong Kong's yet, but it couldn't be that far behind. There had to be many plastic-related businesses, especially considering that plastic also had military applications—and Taiwan, at this point, still maintained a strong military focus.
Wei explained, "There are many plastic manufacturers in Taiwan. But Formosa Plastics is the only one that produces plastic pellets.
According to our research, their current monthly output is around 1,200 tons."
"1,200 tons? That's not a small number." Yang nodded.
A single cargo ship could carry up to 10,000 tons of plastic pellets in one go. But Taiwan's proximity to Hong Kong made it an ideal source for frequent shipments. Even when returning with an empty ship, there was always a cost.
Proximity mattered—a lot. In his past life, Chinese industrial zones always emphasized clustering upstream and downstream partners nearby. It wasn't just about cost savings—it saved time and improved efficiency.
"Exactly. Plus, the company's only been around for three years," Wei added. "In its first year, they could barely produce 100 tons a month, and even then, they struggled to sell.
Their founder was smart, though. When no one trusted the quality of their pellets, he set up another company—Nan Ya Plastics—that used his own pellets to make PVC piping.
Back then, everyone else still imported from Japan, which made his product much cheaper. Within two years, he had taken over more than half of Taiwan's PVC piping market, and now even other factories buy their raw materials from him."
"Impressive," Yang said, intrigued. He took the file from Wei and looked down at the name.
"Wang Yung-ching?"
"That's right," Wei said. He noticed a flicker of recognition in Yang's eyes and asked, "Mr. Yang, have you heard of him before?"
"Mm, I've heard the name," Yang replied with a smile.
In his past life, when people talked about Taiwan's top entrepreneurs, many would mention Morris Chang—founder of TSMC, the world's largest chip foundry and the long-standing cornerstone of Taiwan's economy.
But before the era of semiconductors, Taiwan's richest man had been a plastics tycoon—Wang Yung-ching.
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