Nanyang 1931: From piglets to giants

Chapter 127 Nanyang needs to have its own brand

Unless it is customized, Taiyou Machinery's research and development direction is now mostly set up in the sixth factory area, which is also the most important development direction of Taiyou Machinery in the future.

Ordinary mechanical processing and manufacturing has relatively low profits. Competitors have begun to appear in the market, and with the rising labor costs in Penang, it is gradually losing its competitive advantage.

The biggest advantage of Taiyou Machinery back then was that it was cheaper than European, American and Japanese machines, and it saved shipping costs. They started with equipment that was worthless but extremely inconvenient to transport.

However, things have changed. Now, wages in Penang and the management costs of Thai Machinery are higher than those in Japan, catching up with Europe and the United States, so the competitive advantage has naturally declined.

This kind of basic machining technology is not a unique skill in Nanyang, and competitors naturally already exist.

On the contrary, it was those large equipment and the permanent magnet motor they developed at the time that became the new core competitiveness of Taiyou Machinery.
Even compared with European and American companies, their core technological competitiveness has been widened, and the market is no longer limited to Southeast Asia, but is facing the whole world.

Li Jiazhi seldom came to the factory. As Zheng Yi took her for a walk, Li Xiaowu couldn't help but proudly introduce her:
"Currently, the best-selling machine in the factory is the injection molding machine, which is a machine for processing plastics. We have caught up with the market and made a lot of money during this period."

"Of course, this is all thanks to Ayi. Who would have thought that the petrochemical plant could produce so much plastic? The injection molding machines are sold along with the plastics. I tell you, they're hard to come by. And the extruders, blow molding machines, and calenders are all selling like hotcakes."

"Ever since I took over this factory from my eldest brother, I've been making a ton of money. In just six months, I've made over five million dollars!"

"Of course, I can't compare to Ayi, but now in the whole of Nanyang, apart from those petrochemical plants, who can make as much money as me?"

As he spoke, Li Xiaowu looked as if his tail was raised to the sky.

Li Jiazhi: "Yes, yes, my second brother is the most capable, second brother, you are the best!"

"hehe."

Zheng Yi, however, smiled and explained to Li Jiazhi, "Injection molding, blow molding, and calendering equipment only have high profits for a while. It's too easy for European and American machinery factories to imitate them. They just have a first-mover advantage. After making high profits for half a year, it's almost time for them to run out of money.

If these devices could be scaled up, they would have some technological potential, but the transportation costs of large-scale equipment are also high, and we can only sell them in Asia at best. It would be difficult to continue to enjoy such high profits in the future."

To put it bluntly, they are all customers who buy plastics from Zheng Yi. Since he has bought the plastics, he must also buy injection molding, blow molding, and extrusion machines.

Plastic is such a new thing. No one has ever sold plastic by the ton before. No one else sells this machine except Tai.
Even if he knew that the machinery was simple and any machinery factory in Europe or the United States could produce it in a year or two, could he still just buy the plastic without the machinery?
Isn't it a pure seller's market? The price is what it is.

The key point is that the customers who come to Zheng Yi to buy plastics are indeed not short of money.

"Oh~"

Li Jiazhi seemed to understand, but she just said, "Even if he only made money in the past six months, it's still five million US dollars. Who would have dared to think of such a figure in the past? Second brother, you are still amazing."

You have to know that just a few years ago, the Li family sold all their property and could not get even one million US dollars. Even so, the Li family could be regarded as one of the richest people in Kuala Lumpur.

In the past, one million Malaysian ringgit was a huge sum of money, but now, even one million US dollars seems to be commonplace.

It all seemed like a dream.

Li Xiaowu was very proud and said, "It's not me who's amazing. In the final analysis, it's my eldest brother-in-law who's amazing. As long as Ayi is still the general manager of our Taiyou Machinery, we can continue to come up with new designs. We'll never stop making money. Look, here comes the new product."

As they were talking, the group had already arrived at the sixth factory area. The entire factory area was already in chaos. Seeing Zheng Yi coming, everyone cheered excitedly again.

Li Jiazhi: "What the hell is going on? There are so many people here at this late hour, and it's so lively."

Li Xiaowu: "Area 6 is researching motor miniaturization and related applications. Big sister, ding ding ding ding~ Look, this is an electric juicer designed, developed, and produced by our own engineers in the factory!"

"Juicer? Eh? Wasn't that designed by Yi?"

Zheng Yi smiled and said, "That's not the case this time. I just gave a few simple suggestions. The fact that you can research something like this shows that Tai has what it has now. Even if you leave me, it can still be a top company in the world."

Li Xiaowu said modestly, "It's all thanks to Ayi's ideas. Otherwise, we wouldn't have been able to develop it."

As she spoke, Li Jiazhi looked at the juicer from left to right, finding it quite novel.

In fact, a juicer is not difficult to design or manufacture. The most important part is the motor inside.

Before the invention of permanent magnet motors, it was difficult to make motors too small, and naturally difficult to use them in household appliances.

With the advent of permanent magnet motors, in addition to the powerful advantages of the permanent magnet motors themselves, miniaturization has also opened the door to countless applications.

In the past two years, Zheng Yi was so busy that he didn't pay much attention to the motor business.

Secondly, the production capacity of permanent magnet motors is limited. Since we are cooperating with ASEA and British Electric Power, the first thing we need to meet is definitely large motors. In essence, Taiyou Machinery is just a foundry.

In fact, until now, all of Thailand's large motors are OEMs. Those that seem to be joint ventures are all labeled with the ASEA logo.

However, after more than two years of development, the output of permanent magnet materials has gradually increased, and the profits of large motors have begun to decline slowly.

Most importantly, during the two years of cooperation, Taiyou has learned a lot of technology from ASEA, the best motor manufacturer in the world, and has truly acquired the ability to independently produce and even design motors.

This is when I started to get involved in and research the field of small motors and small household appliances.

Of course, ASEA certainly has the ability to produce small motors a long time ago, but they have never been interested in motor miniaturization, at least not for the time being. Their production capacity is not even enough to produce large motors.

Therefore, this small motor, and a series of household appliances derived from it, is Taiyou Machinery's unique business.

Only a unique business can fetch a high price. So this juicer was created.

Apart from the motor, the entire machine has very little technical content. The motor drives the blade to rotate, which is the simplest application of motors in any field.

The cup wall is made of transparent plastic, which can reduce the weight and make it look high-end and beautiful.

Anyway, this kind of new stuff must be given priority to satisfying the powerful and wealthy classes around the world. The powerful and wealthy classes don’t care about cost-effectiveness, so they can just sell it at a higher price.

"Look, big sister, just put the cut fruits or vegetables in it and it will crush them easily. By adjusting the blades, you can also make it into a soy milk maker, rice porridge maker, etc. How much do you think this thing would cost?"

"That... I don't know about that. I feel like it's actually quite useful. If it comes on the market, I'll buy one no matter how much it costs."

Zheng Yi: "When production is limited, fifty dollars a set shouldn't be a problem. That's the wholesale price. The actual selling price is probably around one or two hundred dollars. The rich and powerful will be happy to buy it."

Upon hearing this, Li Jiazhi nodded and began to work with a smile, squeezing sugarcane juice, watermelon juice, orange juice, and all kinds of juices, all of which she enjoyed very much.

She is good at cooking, especially Western food, French and Italian food, so she knows very well that this thing is really quite practical in the kitchens of the upper class elites in Europe and the United States.

Anyway, if this thing costs one or two hundred dollars, she will definitely buy it.

For a real top tycoon, when buying something, she only considers whether she likes it or not, without considering the price. For her, there is no difference between one hundred dollars and two hundred dollars when buying something.

She knew that there were many people like her in the world.

Those who are a little bit lower off, although they are sensitive to prices when buying things, will follow people like them, because anything that is used or bought by people of their class is fashionable.

Even some people who don't actually have that much money, such as ordinary wealthy families or nouveau riche, will grit their teeth and buy this thing in pursuit of so-called fashion.

This thing is not expensive, and the selling price is almost pure profit.

Li Xiaowu: "Sister, this juicer is for women, and this, this, look at this."

As he spoke, Li Xiaowu took out something like a small box and gave it to Li Jiazhi.

"What is this?"

"The electric shaver was also developed."

It's no surprise that electric shavers and juicers were developed together.

Because their principles are exactly the same, they both use motors to drive the blades to rotate.

For a first-generation product, there is no need to worry about issues like fit, annular blade net, noise, etc. As long as it works, it is already a high-end product.

Li Jiazhi fiddled with it for a bit and then lost interest, but she knew that this thing should sell well.

"Yi? What is this?"

But Li Jiazhi suddenly picked up a long stick beside her, which had a fist-sized rubber ball on it. She turned on the switch and the rubber ball began to vibrate with a buzzing sound.

Li Xiaowu: "Oh, that one, it's a massager that Ayi designed specifically to help us open up our minds. It's not going to sell well.
However, Ayi made this design to open our minds and demonstrate the principle of using small motors in household appliances."

"Oh~, a massage? That looks weird."

Zheng Yi, standing aside, felt a little embarrassed. He quickly snatched the item away and put it aside, saying, "I was just sitting there playing with it. The design of this thing is simple. I was busy at the time, so I just drew a few strokes casually. There's not much application scenario."

Li Xiaowu also nodded: "Indeed, the company's current products are all positioned at the high end. Those who can afford to buy these things must have servants and maids at home, and they don't need machine massage."

Zheng Yi: "Ahem, ahem, well, let's not talk about this anymore. Let's get down to business. Xiaowu, now that this thing has been made, what I mean is, we shouldn't produce it ourselves. Let's invite bids and build a new factory."

"Bidding? Building a new factory?"

"Taiyou's goal should still be to focus on mechanical equipment and research and development. Now that this product has been developed, Taiyou will be responsible for making the mold. As for production, we might as well cooperate with other merchants. We will be responsible for the production line, technology, small motors, and provide trademarks, but we will not be responsible for production and sales."

"After all, what Taiyou produces are industrial products, while these small appliances are consumer products. The logic behind industrial and consumer products is different. Why not create a brand new consumer product brand?"

"I also suggest that for each type of small household appliance, we should find a new partner so that there can be internal competition among these small household appliances. After all, their core is small motors, and the production capacity of small motors is limited."

"As the saying goes, money scatters people, and when people gather, money comes. The Li family also has shares in Penang Petrochemical, so they are not short of money. Compared to money, social welfare is naturally more important to us. You know, I don't have any other relatives, so you have to help me win over their hearts."

"This is about distributing money to others. As my brother-in-law, you have to help me a little. Penang's population is growing, and there are more and more things to do, but I have less and less to do. In the end, I still have to rely on my family for help."

"Besides, Taiyou is already big enough. If we continue to make small appliances, how much will the management cost? And how can we possibly do everything well? Outsourcing the work not only allows us to share the money with others but also saves us trouble. Why not do it? You just need to manage the quality inspection. After all, the motors are in our hands."

Li Xiaowu: "I understand, Ayi, don't worry, I will carefully select a partner. Taiyou Machinery, at least in the field of small household appliances, should focus as much energy as possible on research and development."

Zheng Yi: "Although Taiyou Machinery is not as profitable as a petrochemical plant, it is a business owned by the Chinese in Nanyang, with no foreign investment. It is a representative enterprise of Penang and even the entire Nanyang. Moreover, these are consumer products directly sold to consumers, which represents the image of Penang."

"Nanyang, we can't just have multinational corporations setting up factories here. We also need our own brands. For now, at least for a few years, small motors won't be so easy to imitate. As long as we seize the initiative, even if we lose this unique advantage in the future, our brand will still survive."

"As long as everyone knows that we in Nanyang are the earliest in making small household appliances and specialize in high-end products, then even if others have the same products as ours in the future, we can still sell them at a much higher price. This is the real long-term success."

(End of this chapter)