Chapter 344 Strategic Cooperation with Pepsi-Cola
A few days later, May 7.
Zhou Haoran came to Changxing Building and met Yang Wendong: "Yang Sheng, the person in charge of Pepsi-Cola's Hong Kong office and I met yesterday and informed us of our intentions here,
because The matter involved is relatively important and involves Southeast Asia, so he has already called the United States. In a few days, a senior executive from the United States will come to Hong Kong to have face-to-face talks with you."
"Well, okay. I'm free during this time." Yang Wendong nodded and agreed.
Such large-scale OEM cooperation also affects Southeast Asia, and it does require people with rights to negotiate.
Zhou Haoran added: "Okay, in addition, I have also investigated the situation of the Coca-Cola industry in Southeast Asia. The entire Southeast Asia region, like Hong Kong, although Coca-Cola entered early;
But These places are too big, have large populations, mixed languages, and local culture. Therefore, even if Coca-Cola entered early, it could only gain a foothold in some big cities. In Southeast Asia, more than 90% of the markets The market is still blank.”
“Normally, Hong Kong is a city with such a concentrated population, and any product can be produced in a few months.” Yang Wendong smiled and said, “But Southeast Asia is too complicated. Europe is much more complicated.”
Even in the mainland of the previous life, it took 20 years for Coke to go from a luxury product to a daily drink. This was the result of a unified culture and a unified language.
The current economy in Southeast Asia is estimated to be similar to that of the mainland in the 1980s. It still lacks media tools and has a higher illiteracy rate. As a beverage in developed countries, it has just begun in this market.
Zhou Haoran agreed: "Yes, but now some local economies in Southeast Asia are still developing well. Some medium-sized cities have also begun to rise economically, and the demand for imported goods is getting higher and higher, and Coca-Cola is one of them. 1;
Coca-Cola is now also fully deploying in Southeast Asia. However, due to various reasons, the main production area is still in Hong Kong. Swire produces the beverage and then uses its own fleet to transport the beverage to Southeast Asia.
PepsiCo is also trying to compete in this market, but it entered the market late. Even the drinks have to be shipped from the Japanese factory, and the transportation is not its own, so the cost is extremely high.”
"So, cooperation with us will be of no harm to them." Yang Wendong said with a chuckle.
Although Hong Kong is a small city, it still has many advantages, otherwise it would not have become a small world factory in the 1970s.
The tax rate is very low, the cultural level is high (compared to Southeast Asia), workers are willing to endure hardships, shipping is developed, and politics is stable. These characteristics are actually similar to the mainland in the previous life, and are much better than Southeast Asia.
In the 1950s and 1960s, many international giants invested in Hong Kong in order to do business in Asia. Only after the establishment of Singapore in 1965 did another group of Chinese people begin to have the ability to compete with Hong Kong by taking advantage of their more advantageous position.
Now, Yang Wendong has become the largest Chinese-funded consortium in Hong Kong, and is good at industry. It can be said that he has hit it off with the international giants who want to develop the Southeast Asian market.
Zhou Haoran said: "Yes, only our group has the ability to create the second Taikoo."
"Okay, let's wait until the people from PepsiCo come over." Yang Wendong thought for a while and then asked: "But if we cooperate with PepsiCo now, will Taikoo cut off our sugar supply?"
"It's possible." Zhou Haoran replied: "But our current sugar consumption is not high, and the sales volume of herbal tea drinks is definitely not as good as that of cola, so don't worry, I can also import some from Wanwan. Sugar.
And if we cooperate with Pepsi, even if we can’t make sugar in the early stage, we can still buy it directly from Southeast Asia. There are still many sugar companies in Southeast Asia.”
"Asian sugar industry?" Yang Wendong asked: "I remember Malaysia is a big country in the sugar industry, right?"
Speaking of sugar, he thought of the future Asian sugar king Robert Kuok.
Zhou Haoran said: "It's not a big country in the sugar industry, but there is a powerful Chinese over there called Robert Kuok. He is very famous in the Asian sugar market by relying on various trading methods. He also has a sugar factory, but mainly Or import jaggery from places like Thailand and South America and then process it.”
“ Malaysia doesn’t grow sugarcane very much? I thought.” Yang Wendong paused and then said: “Then Kuok Henian can import jaggery and process it, so in theory we can do it.”
Zhou Haoran said: “Yes. If we develop towards the front end of the beverage industry, the first step is to build a sugar factory in Hong Kong. We can then import jaggery and process it. There are many sources of jaggery, so there is no need to worry about running out of goods.
Even if we invest in sugar cane farms overseas, we will not be able to transport the sugar cane here for processing. We will still have to simply do it near the farm. Extraction process to extract the jaggery and then send it back to Hong Kong, Taikoo This is how it works."
"Well, OK, we will also find out the information about this sugar factory." Yang Wendong said: "We will negotiate with Pepsi later and we will come up with it ourselves. Only if we can reduce costs will PepsiCo be able to give us its production capacity with confidence.”
"Okay." Zhou Haoran agreed.
In the following days, Yang Wendong, Zhou Haoran, and people in the group headquarters office began to read books on the two American cola giants, the global cola market, and Asian economic development.
Without the Internet, it would be difficult to find these materials. Fortunately, my group has a lot of connections. After finding the books directly from the libraries of some countries in Southeast Asia, I bought them at a high price and then flew them to Hong Kong.
May 18, Hong Kong Kai Tak Airport.
Two white ghosts, a man and a woman, walked out of the airport.
The blond woman seemed to be a little uneasy and said: "David, this airport is too dangerous. I have been to so many cities around the world, and this airport scares the hell out of me."
David, the man with brown hair He smiled and said: "Christine, Hong Kong is a small island, and the construction of the airport must be restricted, but there is still no problem with safety, so don't worry."
"Since it is an island?" Christine asked curiously Said: "Then why does the headquarters attach so much importance to this cooperation this time?"
David said: "That's because the company we are cooperating with is a large consortium in Hong Kong and the largest manufacturing group in Hong Kong. , there is also a large shipping company, which is very suitable for Pepsi’s need to find a suitable OEM in Southeast Asia.”
“The largest manufacturing group?” Christine? asked again.
"No." David pointed to the trolley suitcase in his hand and said, "The trolley suitcase was invented by this company, as well as the sticky notes we often use and the sticky hooks we use at home were all invented by this company. "
"Oh my god? These were invented by Hong Kong people?" Christine looked surprised.
David nodded and said: "Yes, and not only are their inventions great, their business operations are also great. Before I came to Hong Kong, I checked a lot of information and found someone who had just come to the United States. Hong Kong students learned some things, and I briefly told Li that the founder of this company is called Wendong Yang, whose English name is. His name is Eric. In 1958, he was still a..."
After hearing this, Christine's eyes were full of disbelief and said: "It's really amazing, 5 Starting from scratch in 2016, if such a thing happened in the United States, it would definitely become the most dazzling entrepreneurial myth in the media.”
"Yes, so the board of directors also attaches great importance to this cooperation." David said: "We are more optimistic that this person will definitely become a top businessman in Asia in the future. Cooperating with such a person will make up for the Asian market. We are suppressed by Coca-Cola. "Situation."
"Yes." Christine nodded and said, "Is the time set?"
" David said with a smile." Let’s take a rest one night and learn more about the situation here tomorrow, and meet formally the day after tomorrow to discuss cooperation issues.”
Two days later, Changxing Building:
Zhou Haoran brought two ghost guys and several others. A Chinese man came to the conference room on the top floor and introduced: "Yang Sheng, this is David, the head of Pepsi-Cola Asia. David, this is my boss, Mr. Eric Yang."
"Hello." Yang Wendong shook hands politely.
David shook his hand in the same way and said with a smile: "Nice to meet you."
"Then please sit down." Yang Wendong said again.
Then, the assistant also asked about the needs one by one and served coffee or tea to everyone present.
The two parties chatted casually for a while before the meeting started. After five or six minutes, they officially entered the topic:
David first said: "Eric, the board of directors of PepsiCo is also very optimistic about our cooperation, but I just want to confirm some issues with you."
"Please tell me." Yang Wendong asked.
“Issues involving funds and details can be discussed later.” David said: “In terms of the direction of cooperation, we also know that you also have your own beverage industry, and even a cola industry. This is There is competition with us, so we are definitely not at ease.”
“I understand this,” Yang Wendong nodded and said, “But doing OEM work for you doesn’t mean we can’t develop ourselves. Its own beverage industry? Just talk about the cooperation between Coca-Cola and Swire Group. Isn’t it the same? Swire Group still has its own beverage brand. "
David asked: "But Swire Group does not have its own Coke."
Yang Wendong was also prepared and said: "Actually, the scale of my cola industry is very small. You should also know that if you are worried, we can make an agreement. I will provide you with the OEM market, and my cola will not How about entering?”
“Not entering the OEM market?” David repeated, thinking carefully.
Yang Wendong said: "Yes, for example, if your OEM order in Malaysia is produced for me, then my cola drinks will not enter this market, and there will be no competition.
But there must be a premise. You have to give me a certain percentage of the order. Otherwise, it would be unfair if you give me a little bit. In addition, we sign a contract every few years to customize similar agreements and then decide based on the specific situation. Negotiation, how about it? This is good for everyone.”
In fact, Watson’s cola industry is basically non-existent. It is difficult even for Hong Kong to really develop it, and it is even more difficult to export. It's still a good deal to exchange the order for Pepsi.
However, you can't limit yourself to death. If your own Coke can rise in the future, if you have to avoid Pepsi, you will suffer a huge loss, especially in the future mainland market.
"It sounds okay." David said: "What about your other drinks?"
Yang Wendong said: "I will OEM Coke for you, then I will let my Coke industry It is my freedom to avoid your market, but I don’t have OEM drinks. I can’t give you any OEM drinks. "Le Production, will you restrict my entire beverage industry?"
It is normal for customers to have some restrictions on OEMs. This is also human nature. As a customer, Changxing Group will not tolerate supplier rebellion. Come over and make the same product as your own, but it can only have certain restrictions and cannot be expanded infinitely.
For example, Changxing Industrial’s suppliers are also free to make other plastic products.
"I'll write this down first, and then we'll see what the United States means." David paused, and then said: "The second point of our cooperation is whether we build a factory together as a joint venture, or you build a factory alone. , and then supply us?”
“What do you mean?” Yang Wendong asked.
David said: "We prefer the latter. PepsiCo does not participate in investment in Hong Kong, and your company's investment can be calculated into the cost of future beverages and then slowly recovered."
"Okay, I agree to this." Yang Wendong nodded.
Many foreign investors do not like to invest overseas. Unless they have to, it is better to outsource if they can. Even the early Changxing Industrial, if it could not only do it by itself and take into account future real estate income, then he would definitely We will also try our best to adopt the outsourcing model.
Investing in a factory is a trivial matter, it doesn't cost much, and I can still take the opportunity to hoard land. If we really cooperate, then in a few decades, Hong Kong real estate prices will skyrocket, and PepsiCo will have to pay dividends to me, which will be troublesome.
"Okay." David was overjoyed. He originally thought this point was the most difficult to discuss, but he didn't expect the other party to agree so readily. Then he said: "There is also a third point. Our US headquarters needs you to provide us with the ability to discuss it." The best evidence for producing Coke at the lowest cost is to be lower than Coca-Cola.”
“It’s difficult to be lower than Coca-Cola,” Yang Wendong shook his head and said. "The Swire Group has basically controlled the entire beverage industry chain. If I can receive an order from Pepsi, I will also learn from them and gradually start with sugar production and develop upstream.
But the prerequisite is still you. Give the order first, and then I will slowly optimize it, so the initial cost will definitely be much higher than that of Coca-Cola.”
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(End of this chapter)