Rebirth in Hong Kong: From Dessert Shop to Industrial Empire

Chapter 43 The Exorbitant Barrier (Please add to your favorites, vote for monthly tickets, recommend this book, and keep reading!)

HK$200,000, no interference with the creative process, just the requirement to naturally incorporate elements of Chan Kee Dessert into the film.
The conditions were so good that Wu Siyuan found it hard to believe, and even felt a little uneasy.

"Ah Qiang," he whispered to his assistant behind him, "go and investigate this Chen Bingwen, and his Chen's Dessert Shop."

The sooner the better, and the more detailed the better.

"Understood, Mr. Wu." Assistant A-Qiang immediately responded, turned around and quickly left the tea room.

Wu Siyuan picked up his teacup, his mind churning.

The film industry is a murky place; seemingly easy money often comes with hidden traps.

Is this young man simply fearless like a newborn calf, or is there a deeper meaning behind his actions?
He had to figure it out.

On the other side, Chen Bingwen had just returned to the Kwun Tong factory when he was told that Professor Zhou wanted him to go to the R&D center.

"Mr. Chen, international manufacturers capable of producing aseptic filling equipment have been sending back their quotes via fax."

Professor Zhou looked unwell, and as soon as he saw Chen Bingwen, he took out several thick fax documents and handed them over.

Seeing this, Chen Bingwen had a bad feeling.

He took the document, his eyes quickly scanning the section describing the equipment's performance and specifications, before finally settling on the price quote.

Aseptic filling production line, including high-speed filling machine, aseptic processing unit, capping machine, labeling machine and supporting control system, quoted price: US$120 million.

One million two hundred thousand US dollars!

Chen Bingwen cursed under his breath.

This is outrageous!

In the past, domestic aseptic filling production lines ranged in price from tens of thousands to hundreds of thousands or even millions of yuan, which could meet different production needs.

He anticipated that introducing advanced equipment would be expensive, but he didn't expect it to be so outrageously expensive.

In 1978, the exchange rate between the US dollar and the Hong Kong dollar adopted a floating rate of approximately 1:5.

This means that the price of this aseptic filling equipment is equivalent to as much as six million Hong Kong dollars!

Chen Bingwen quickly calculated in his mind: Chen Ji Foods' current net assets (including Cheung Sha Wan and Kwun Tong factory buildings and equipment) are estimated by Dexin to be approximately HK$1.83 million;
Although the monthly net profit is around 300,000, it is necessary to maintain operations and pay for research and development expenses.

Although Thailand's Golden Elephant has acquired a controlling stake, it is still in a recovery period and is mainly used for raw material supply. It cannot provide substantial cash support in the short term, and it also has a four million pound bridge loan outstanding.

The HK$2 million earned from speculating on Wharf Holdings was used to purchase Golden Garden, Cheung Sha Wan, and Kwun Tong Factory for HK$1.16 million. After paying off a loan of HK$300,000, only HK$1.02 million remained.

Including the 1.6 million+ in Sugar Heart Capital's accounts.

I can only come up with a maximum of 2.7 million right now.

Faced with such a quote, Professor Zhou was also somewhat helpless. "Mr. Chen, Krones of Germany is a world-class company with mature and stable technology. It is the first choice for giants like Coca-Cola and Pepsi."

But the price is indeed prohibitive.

He paused, then pointed to another quote: "This is from Sacmi in Italy. Its performance is slightly inferior to Krones, but it can still meet our basic needs."

However, compared to Krones, stability and long-term maintenance costs may be concerns. Its asking price is $80.

“Tetra Pak of Sweden quoted $75 for their cardboard filling line, but their technology is different from our vision for glass bottles, and our current product form and brand positioning may not be suitable for cardboard packaging.”

Professor Zhou added that brand image issues were obviously taken into consideration as well.

As Chen Bingwen listened to Professor Zhou's introduction, he analyzed the pros and cons of each option in his mind.

Krones?
Cutting-edge technology, but the price is astronomical.

HK$600 million!
This is almost all the cash he can currently access, plus his loan amount!
Is it a desperate gamble for a bottled sugar water project?
The risk is too great. If the market reaction is not as expected, Chenji will instantly fall into a desperate situation of broken capital chain.

Sacmi?
US$80, approximately HK$400 million.

The price is still hefty, but significantly more "friendly" than Krones. The performance meets basic needs, but is it enough for those "basic needs"?
Chan Kee's goal is to create a stable bottled beverage business. Spending four million Hong Kong dollars on a basic version could be devastating if the equipment is not stable enough, frequently breaks down, and causes fluctuations in product quality or even safety issues.

Tetra Pak?

When Chen Bingwen thought of paper packaging, images of milk and juice cartons commonly seen in later generations came to mind.

The technology is mature and the cost is relatively low, but the biggest problem is that it doesn't fit the brand image of Chenji Dessert!
Chen Ji Desserts, whether it's the freshly made desserts in the shop or the bottled drinks in the future, one of its core selling points is the use of high-quality ingredients and the fact that you can see it for yourself.

The transparent glass bottle allows consumers to see directly the tempting red bean paste, sesame paste, or golden mango pomelo sago inside.

If an opaque cardboard box is used instead, the visual appeal and the sense of reassurance that comes from seeing is greatly diminished.

“No.” Chen Bingwen almost instinctively rejected the Tetra Pak solution. “Cardboard packaging is not suitable for us.”

What we want to create is bottled sugar water that clearly displays its contents, has a translucent texture, and makes people want to drink it at first glance.

Glass bottles are the only option.

Chen Bingwen looked at Professor Zhou: "Professor Zhou, besides these three, are there any other options?"

What about Japanese manufacturers?
Or is it possible to buy used equipment?

Or should we only import the core aseptic processing unit and filling head, and have the other auxiliary equipment custom-made and assembled locally on Hong Kong Island?

Professor Zhou pushed up his glasses and said with a wry smile, "Mr. Chen, aseptic filling technology has an extremely high threshold. There are only a handful of giants in the world that can provide mature and reliable complete production lines."

Japanese manufacturers such as Mitsubishi Heavy Industries and Toyo Cans also have similar equipment, but the price is not much cheaper than that of Europe and the United States, and the delivery time may be longer.

As for second-hand equipment

He sighed: "The aseptic filling line has extremely stringent requirements for equipment condition, sealing, and control system."

Buying second-hand equipment is extremely risky. If you buy a refurbished machine or one with hidden defects, the subsequent maintenance costs and production stoppage losses will be a bottomless pit. It may even lead to the scrapping of the entire batch of products due to equipment contamination. The risk is too high!

"As for introducing only the core unit, it is theoretically feasible, but in practice, it requires extremely strong system integration capabilities and local precision machining capabilities to support it."

This means we need to find suppliers who can design integrated solutions, precision machine non-standard parts, and debug complex systems.

However."

Professor Zhou's voice lowered, "This is precisely the biggest weakness, or rather, the structural flaw, of Hong Kong Island's manufacturing industry."

He picked up the teacup on the table but didn't drink it. "Mr. Chen, Hong Kong's manufacturing industry is based on small factories, low costs, and OEM export models."

Thousands of small and medium-sized factories survive by taking on low-value-added orders from Europe, America, and Japan.

They excel at processing orders based on provided samples and are adept at cost control.

“This model,” Professor Zhou emphasized, “created a facade of prosperity for Hong Kong’s manufacturing industry, but it also severely limited its potential.”

It neither needs nor has the capacity to support cutting-edge research and development.

High-end fields such as precision machining and CNC machine tools are almost non-existent in Hong Kong Island.

Professor Zhou put down his teacup, looking disappointed, and said, "That's why I said Hong Kong Island probably doesn't have the supporting capabilities right now."

This is not a denigration, it's a fact.

Those engineers and experienced workers may be able to fix a sewing machine or optimize a toy assembly line, but getting them to understand and install a sterile filling production line is another matter.

This was beyond the scope of their experience and technical reserves.

Forcibly piecing things together by having several small factories each make a section will inevitably result in incompatible interfaces, substandard sealing, and countless hidden dangers, ultimately potentially worse than buying a refurbished secondhand machine!

The exorbitant price of the aseptic filling production line instantly became the biggest obstacle on Chenji's road to realizing its bottled sugar water dream!

　Thank you everyone for your support!! A huge thank you to TigerKK and Kai_eB for their generous and long-term donations!! Thank you to Alex for the donation!
　　
　
(End of this chapter)