Back to 1958: Creating a Century-Long Family Empire

Chapter 62: The Factory's First Profit

"Thank you again," Yang Wendong said once more.

He couldn't help but feel that he owed Elena quite a bit. But since she refused any kind of reward or favor, it left him feeling somewhat uneasy.

Elena smiled. "No need to thank me. If such a small cost can solve our rodent problem in this building, then we're the ones getting the better deal."

"A fair trade," Yang replied with a smile. "Once we do a good job here, maybe you can refer us to other government departments."

"Sure, no problem." Elena nodded, then added, "By the way, I mentioned a British trader last time. I got in touch with him yesterday — he's currently in Thailand, but he'll be visiting Hong Kong in a few days. When the time comes, get your materials and product samples ready. I can arrange for the two of you to meet."

"Perfect. Please let him know I'll be treating him to tea." Yang's heart leapt with joy.

As far as the Hong Kong market went, even though he now had his own factory, he still prioritized securing pest control contracts from government departments, large companies, and big warehouses. The market for products like glue traps and flypaper was simply too limited.

But if he could begin exporting these two products, that would be like suddenly opening up a market hundreds or even thousands of times larger — with infinite potential. Pest control services, on the other hand, could only be done in Hong Kong. He couldn't even reach nearby places like Taiwan.

Elena nodded. "Got it. He's a big fan of Chinese cuisine — a real foodie. You'd better be well-prepared."

"No problem." Yang agreed readily.

In business, it didn't matter who the other party was — if you knew their interests, it became easier to connect.

The day after their meeting, Yang received confirmation that the contract was approved.

Most likely, the weekly rate of 10 HKD was just too cheap to pass up — possibly even lower than the weekly salary of a clerical worker. That price, combined with the fact that Yang's pest control company had participated in the rat extermination at the Kowloon Wharf, made the decision a no-brainer for a government agency.

That afternoon, Yang took two of his colleagues and headed to the Municipal Council building, where he personally set traps in multiple corners of the premises.

Elena arrived with the signed contract and watched him work for a while before asking curiously, "Mr. Yang, don't you manufacture glue boards? Why are you using rat cages instead?"

Yang laughed. "Glue boards are better suited for homes or places with fewer people. In public areas, everyone is walking around — people would easily step on them. Rat cages are a much better fit."

Elena nodded in understanding. "Ah, I see."

Yang added, "In areas that people don't usually go, I still use glue boards. Around the exterior walls, I stick with cages."

Elena said thoughtfully, "Even something that seems simple has its own logic."

"Rodent control is no small matter," Yang said with a grin.

"True. Without rats, human civilization might look very different today," Elena said. "The Dark Ages in the Western world — terrifying."

Yang nodded. "Exactly."

The so-called "Dark Ages" in the Western world were largely defined by the Black Death — a plague that killed tens of millions over the course of 300 years.

What puzzled Yang, though, was how the same plague had occurred multiple times in Chinese history but typically lasted only a few years at most. The old saying "no epidemic lasts beyond three years" was rooted in experience.

But Europe... somehow managed to turn the plague into a 300-year ordeal. Truly baffling.

Back at the company, Su Yiyi walked over with a clipboard and asked, "Dong-ge, I've just finished calculating today's material costs for the Municipal Council project — we spent over 120 dollars already."

Yang asked, "Most of it went toward the rat cages, right?"

Su Yiyi nodded. "Yes. Haoyu searched all over and finally found a supplier selling them at 3 dollars apiece. We bought 50 and got a discount because of the quantity — it came to 130. We used 40 of them just today."

"Rat cages are expensive in Hong Kong," Yang agreed with a chuckle. "But if they weren't so expensive, we wouldn't even be here today."

After all, his early success with the rat tubes was only possible because of how costly iron was in Hong Kong — cages and traps were too pricey, which gave him a market.

Su Yiyi continued, "Liming came to me earlier with a suggestion. He said your business is going to expand into many buildings and organizations soon, so the demand for rat cages will skyrocket. His idea is — we should make them ourselves."

"Make them ourselves?" Yang thought for a moment, then nodded. "Could work. We're probably paying twice what the factory pays for each one. If we make them ourselves, we can save a lot. Can we pull it off?"

"Liming said yes. He's planning to make a few prototypes in the next couple of days," Su Yiyi replied.

"Alright, sounds good. Lowering costs is always a win." Yang didn't think too much of it, then added, "Maybe we can even sell the cages one day. We'd use the same sales channels anyway."

Although glue traps would become the top rat control tool in the future, that didn't mean they were perfect in every way. In crowded areas, windy or rainy environments, or places with a lot of dust, glue traps weren't ideal.

Since his business was currently focused on pest control, and he didn't yet have a better path in mind, Yang had no problem using his existing factory and distribution network to make other useful rodent control products — whether for personal use or for sale.

Su Yiyi nodded. "Alright, I'll have Liming buy some wire materials then."

"Mhm." Yang didn't press further on such a small matter. Instead, he asked, "How's the accounting looking lately?"

"I just finished the latest numbers. Come take a look," Su Yiyi said.

"Okay." Yang nodded. While he didn't micromanage, he was strict when it came to finances.

They walked over to the desk, and Yang reviewed the books for a while before nodding. "Not bad. There are still a few minor issues, but you've got the big picture down."

In modern times, accountants might panic over a discrepancy of a few cents. But for Yang, what mattered were the big numbers — the small stuff was trivial.

Back when they were making glue traps by hand, each one cost around 30 cents to produce.

Now, with batch production, bulk ordering of plastic sheets, glue, and even the printed labels, costs had dropped to just 25 cents per sheet.

After factoring in labor, rent, and other expenses, they were earning 15 cents of profit per trap — a gross margin of over 50%.

With daily shipments exceeding 1,000 traps, monthly net profits were quickly approaching 3,000 HKD.

At that rate — 3,000 a month — they'd have enough to buy a decent home within a year.

Su Yiyi added, "It looks like An Yongqiang and Zhao Chenguang's orders have plateaued."

"Well, Hong Kong is only so big. Honestly, the numbers we're hitting now are already impressive. But in theory, things will only slow down from here," Yang said. "We have to find a way to open up overseas markets."

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