"This is not just a problem for Berkshire Hathaway, but a problem for the entire American textile industry. Labor costs are too high." Chaikens said helplessly.
"What should be eliminated in the market must be eliminated. The U.S. textile industry is no longer good. The correct approach is to let it go." Chen Zhiwen said lightly.
The textile industry may be slightly more technical than the garment industry, but for Europe and the United States, any country can produce it. Since the birth of the textile industry, there have been a large number of such companies in various countries. After all, clothing is a necessity of life.
Before the emergence of containers, the cost of shipping was relatively high. In addition, without perfect maritime transportation protection, textiles may be damaged during shipping. Therefore, cross-ocean transportation of textiles is not non-existent, but the cost is high. It is generally exported to countries such as Europe, the United States, and Japan. Countries in Asia, Asia, Africa and other countries that do not have basic industries are responsible for their own internal markets.
Because their costs are almost the same, it is impossible for anyone to occupy the other's market after transoceanic transportation costs, unless it is some special high-end products or products for professional use, but these quantities are very small and do not affect the European and American countries. textile industry. Therefore, before the 1950s, the textile industry in various countries was very prosperous and they controlled their own countries' markets.
Berkshire Hathaway is one of the leaders in the U.S. textile industry. It once controlled 10% of the textiles in the United States. However, after the emergence of containers, the cost of textile transportation became lower. In addition, Asian countries began to develop their industries. The first step was the textile industry. As a result, it suffered an unprecedented impact. After all, both clothing and textiles require a lot of manpower. As for labor costs, how can the United States compare with Asia? The same is true in Europe, but Europe has more high-end clothing brands. It can be sustained for a while longer.
The same cannot be said for Berkshire Hathaway. For such a large company, the annual net profit is only a few hundred thousand dollars. This is due to Buffett's investment profit transfer. The pure textile industry is already losing money. If it were not for social responsibility , Buffett has already cut off this business.
"Although I don't want to admit it, this is indeed a fact." Chaikens took a sip of white wine and said with a frown.
"The U.S. textile industry is absolutely hopeless and no one can save it, but Berkshire Hathaway can still be saved." Chen Zhiwen looked at Chaikens and said, "Just move to Hong Kong."
"Mr. Buffett is indeed right. Mr. Chen went to him last time for this purpose, right?" Chaikens said with a smile.
"Yes, Hong Kong needs a high-end textile industry. This is my purpose." Chen Zhiwen admitted with a shrug.
"As far as I know, Mr. Chen's industry does not have a garment industry or a textile industry. Why are you interested in this?" Chaikens asked.
"I have a trading company that specializes in purchasing textiles. Naturally, I hope that the cost of Hong Kong's textile industry will be lower." Chen Zhiwen said with a smile.
There are also many textile factories in Hong Kong. The largest spinning factory in South Africa is very large and has thousands of employees. However, in terms of technology and quality, it is not as good as many foreign textile factories with a long history. Some of the local textile factories in Hong Kong are slightly smaller. Many high-end garment manufacturing companies have to import from outside, which increases costs.
For Chen Zhiwen, who wants to turn Hong Kong into the best supplier for his retail empire, this kind of cost is wasted. If a foreign-funded textile industry with good technology is introduced to Hong Kong, it can not only reduce his procurement costs, but also make people more comfortable. If local brands make more profits, they may be able to develop Hong Kong's high-end textile manufacturing industry.
The most important thing is that it can develop into the mainland of China in the future. At the same time, it can be considered as a way to get acquainted with Buffett. Maybe there will be other opportunities for cooperation in the future.
Of course, there is another larger purpose, but it has not been laid out yet, and it may not be successful.
"So that's it." Chaikens nodded. It's really not easy to find a company like Trading, and he only did a rough search.
Chen Zhiwen then said: "Mr. Chai Kens, you are willing to come to Hong Kong. In fact, you should also have such thoughts, right?"
"Yes, I actually had this idea of investing and building factories overseas a few years ago, but Mr. Buffett has always disagreed." Chaikens said helplessly.
"With Buffett's shrewdness, it's impossible for him not to know that the textile industry in the United States has no future. Why don't he agree?" Chen Zhiwen asked with some confusion. This can be said to be basic common sense. In the United States, such labor costs are high. In such a developed country, if you engage in labor-intensive industries, aren't you committing suicide?
Chaikens said: "Of course Mr. Buffett knows this, but he would rather give money to maintain the operation of the textile factory because he does not want the workers to lose their jobs, so he naturally refuses to let the factory move. He never expected Make money from textile factories.”
"So that's it." Chen Zhiwen nodded and said. It turns out that Buffett doesn't like the textile industry at all. Even if he moves abroad, even if he makes some profits, it will definitely not be as good as his investment in the capital market. He is still maintaining the textile industry. The factory, obviously because of "social responsibility", or tens of thousands of employees, cannot be dismissed so easily.
"So I need to provide evidence to prove that moving overseas can bring sufficient benefits to the company. Looking at it now, Hong Kong is indeed suitable for us to invest. Although it is small, the market is big enough and there are no strong competitors." Cai Ken Si said with a smile.
"But compared to Mr. Buffett's financial income, this is still not enough." Chen Zhiwen said with a smile. The profit of Hong Kong's largest Nan Fung Textile Factory is estimated to be less than that of one of Buffett's investments. This is a completely different world. The line of earth.
In future generations, except those Internet companies or high-tech electronics companies and those traditional monopolies, whose profits can match those of the financial industry? So many countries and companies have turned away from reality and become imaginary in the end. Isn't it because finance is so profitable? Even for automobile giants like Volkswagen, nearly half of their annual profits come from financial services.
"It's far from enough, but it's still worth a try." Chaikens nodded and said.
"If Buffett is not willing to invest too much money, I can invest in a joint venture. Here in Hong Kong, I am familiar with everything. Besides, I can also provide some orders." Chen Zhiwen continued.
"A joint venture? Actually, I have thought about this. Mr. Chen's purpose should also include this, but I still need to go back and discuss it with Mr. Buffett." Chaikens was not surprised at all, as if everything was expected.
"Of course." Chen Zhiwen nodded and said. The investment in the textile factory is not like the cooperation with Zeng Zixin. It requires a real investment of a lot of money. Tens of millions of Hong Kong dollars are still needed. But if it is really invested, in the future, The income is still considerable. The most important thing is that it has provided Hong Kong with a new high-end textile factory, which will be good for him in the future. It may also help the transformation of Hong Kong's textile industry, although the probability is not high.
Of course, it doesn't matter if Buffett doesn't agree to the joint venture, and it doesn't matter to Chen Zhiwen, as long as the factory can come.
Chaikens continued: "Mr. Chen, although I checked some Hong Kong data in the United States before, it was not clear. Although I have come to Hong Kong now, my time is limited, so I hope Mr. Chen can help me. Can you collect some data for me? Data, I can pay for.”
"Okay, no problem." Chen Zhiwen nodded, not stupid enough to agree to help for free. Although he didn't like the money, the other party had to give it.
