Rebirth of the Hong Kong Millennium Conglomerate

Chapter 78 Sugar Shortage Benefits

Over the next half hour, the group discussed in detail the specifics of the sugar delivery and the relevant loan agreements in the meeting room.

After the meeting, Zhang Guangdou, Zhang Zhenghong, and Guo Henian left Qiangu Group with great excitement.

In a simply furnished office in Beijing, Zhang Guangdou stood before several elderly leaders with graying temples, reporting on the entire process of his trip to Hong Kong.

He recounted in detail everything from the sudden crisis of the international sugar shortage to Mr. Robert Kuok's inability to reverse the situation, to Zhang Zeyang's generous promise of a 50-ton sugar supply, as well as the favorable terms of interest-free installments, barter, and an additional $500 million interest-free loan.

Several senior leaders sat upright, listening attentively to the report. Their expressions gradually changed from solemn to gratified, and finally to moved.

When the old leader heard that Zhang Zeyang was selling white sugar at a low price of £80 per ton, and offering interest-free installments for up to 30 years, and even lending an additional $5 million, he suddenly stood up, tears glistening in his eyes, and said "good" three times.

"Excellent! Excellent! Excellent! True friendship is revealed in times of crisis. Mr. Zhang is young and promising, with a heart for his country. The nation will never forget this kindness!"

As soon as he finished speaking, the old leader walked to the desk, personally spread out the Xuan paper, and wrote a heartfelt letter.

The letter expressed sincere praise for Zhang Zeyang's righteous act, solemn remembrance of this patriotic sentiment, and deep condolences to Zhang Zeyang.

After finishing writing, the old leader carefully folded the letter and solemnly handed it to Zhang Guangdou: "Comrade Guangdou, you must personally deliver this letter to Mr. Zhang and convey our country's gratitude and respect."

Zhang Guangdou accepted the letter with both hands, nodded solemnly, and said, "Please rest assured, Commander, I will personally deliver it and will not fail your trust!"

Time passed, and it was Friday, May 25, 1973.

At 5 p.m. sharp, the afterglow of the setting sun bathed Repulse Bay in a warm golden light.

Mailis and Ma Shiming walked out of the Qiangu Group's office building side by side, both of them showing undisguised fatigue, yet also an irrepressible excitement.

Over the past period, they have devoted themselves almost entirely to the layout of spot and futures trading of white sugar, working day and night. Now it is finally time to report their results to their boss, Zhang Zeyang.

Driving along the picturesque Repulse Bay Road, we soon arrived at Zhang Zeyang's villa.

Butler Li Fu was already waiting at the door, smiling as he led the two into the mansion. It was nearly 6:15 p.m., and the setting sun cast long shadows on the floor through the villa's French windows.

Zhang Zeyang, dressed in comfortable casual wear, was sitting in the living room waiting.

Upon seeing the two arrive, he stood up and gestured, "You must be tired from your journey. Please come with me to the study to discuss this further." With that, he led Mai Lisi and Ma Shiming to the study on the second floor.

After they were seated in the study, Zhang Zeyang personally poured them both a cup of tea and got straight to the point, asking, "Melis, thank you for your hard work these past few days. How are things going with the sugar spot and futures market?"

When the topic of the sugar war came up, both Michael and Ma Shiming felt an indescribable sense of admiration.

From Zhang Zeyang's initial prediction of a global sugar shortage and his decisive order to stockpile large quantities of sugar, to his later accurate grasp of market trends and gradual profit-taking, every step he took was astonishing.

Unless they were personally involved, they could hardly imagine that this young boss possessed such profound strategic vision and amazing business talent.

After hearing Zhang Zeyang's question, Mailis composed himself and took the lead in reporting: "Let me first report to you on the current situation of white sugar."

As per your plan, we began to expand globally, investing huge sums of money and acquiring a total of 1350 million tons of spot sugar.

According to our research data, this amount accounts for approximately 90% of the global spot sugar reserves, giving them complete control over the market.

"With the outbreak of the global sugar shortage, the international market is in short supply of white sugar, and prices have soared. Sugar merchants from all over the world have come to us, and orders have poured in like snowflakes."

Following your strategy, we began selling spot sugar in batches, starting at £120 per tonne. To date, we have sold approximately 1000 million tons of spot sugar.

At this point, Michael paused slightly, a hint of hesitation in his eyes, but he couldn't help but ask, "Sir, of the 1000 million tons of white sugar that have been sold, 50 tons were sold to the mainland at a price of £80 per ton."

Based on current market conditions, even at a price of £120 per ton, these 50 tons would still yield an additional profit of £2000.

£10,000.

Currently, the profit per ton is only about £20, and the total profit is no more than £1000 million, which is equivalent to losing a lot of money.

I really don't understand, is it really worth it?

In Melis's business logic, it is only natural for businessmen to pursue profits, and such a huge loss of profits is, in his view, a great pity.

Ma Shiming, who was standing to the side, nodded slightly, clearly agreeing with Mailis's opinion, and looked at Zhang Zeyang with a hint of doubt in his eyes.

Upon hearing this, Zhang Zeyang responded with a calm smile, "It's worth it! We're not making money from this deal for short-term gains, but for the infinite possibilities of the future."

These words made Michael and Ma Shiming fall into deep thought. Although they still did not fully understand Zhang Zeyang's deeper considerations, they did not ask any more questions and just nodded silently.

After organizing his thoughts, Melis continued his report: "Apart from the 50 tons sold to the mainland, the sales of the remaining 950 million tons of white sugar spot market are very satisfactory."

After deducting all costs, the average profit per ton reached £70, resulting in a total profit of £6.65 million, equivalent to approximately HK$9.67575 billion.

"Currently, we still have 350 million tons of white sugar in stock. It's not that there are no buyers; on the contrary, we are receiving a constant stream of inquiries, with some even willing to offer as high as £150 per ton."

However, instead of selling off all at once, we adopted a limited supply strategy to avoid a sharp drop in market prices due to concentrated shipments, which would affect overall profits.

Merris added: "The cost of acquiring these 350 million tons of white sugar is relatively low. We started building up our stock gradually from around £40 per ton, and the highest acquisition price did not exceed £60, with an average cost of about £55 per ton."

If all were sold now at the current market price, a profit of £2.45 million is expected, equivalent to approximately HK$36 billion.

However, we believe there is still room for price increases, and we will continue to hold our positions for now.

The fact that such substantial profits have been made from just the spot trading of white sugar is a miracle in the history of global commerce.

When Mailis and Ma Shiming finished their report, they both wore expressions of pride.

It's important to know that before this sugar shortage, the global sugar market had been stable. No one expected that Zhang Zeyang would be able to accurately predict market trends and stage such a textbook-level business operation.

After reporting on the spot market situation, Melis's tone became even more excited, his eyes gleaming with excitement: "Compared to the spot sugar market, the returns in the futures market have exceeded our expectations, almost equivalent to making a profit at zero cost!"

"On the London Futures Exchange, we followed your instructions and used leverage to buy large quantities of white sugar futures contracts."

As the sugar shortage worsened, futures prices soared. We closed our positions at the most opportune moment, ultimately reaping a net profit of £10 billion.

"On the New York Mercantile Exchange, we adopted the same strategy, using leverage to accurately grasp the market rhythm, and ultimately made a profit of nearly $10 billion."

After being converted into Hong Kong dollars, the total profit from the sugar futures business reached a staggering HK$200 billion!

HK$200 million!

Even Zhang Zeyang, who had been mentally prepared, couldn't help but nod slightly and a hint of approval flashed in his eyes when he heard this number.

Michael and Ma Shiming were so excited they could hardly contain themselves. You have to understand, in Hong Kong in 1973, HK$200 billion was an astronomical figure, enough to shake the entire financial market.

Adding the profits from spot and futures trading, the total profit from this sugar war has reached over HK$300 billion.

Such a rate of wealth accumulation was astonishing, both then and in the future.

More importantly, through this transaction, Zhang Zeyang not only amassed a huge fortune, but also won profound favors from the mainland for Qiangu Group, paving the way for its future development.

"In addition, boss, the mainland side has begun to fulfill the repayment agreement," Ma Shiming added. "They are offsetting part of the payment by selling high-quality liquors such as Moutai and Wuliangye, and the remaining amount will be paid on time according to the installment plan agreed upon by both parties."

The first batch of liquor used to settle the debt has already been shipped to Hong Kong, and subsequent batches are being arranged.

Zhang Zeyang nodded slightly, not surprised by the result.

He knew that the mainland side always kept its promises, and they would certainly handle this favor and debt properly.

Michael continued, "In addition to the huge short-term profits, we have also successfully established a global sugar sales channel through this sugar war."

We established Qian Gu Sugar Industry Company, and have now established sales networks and warehousing bases in many major markets around the world.

Even if global sugar resources recover to a sufficient level next year and market prices stabilize, we can still profit in the white sugar market thanks to our well-established distribution channels.

He paused, then added, "Currently, Qian Gu Sugar Company has more than a thousand employees."

The management team was prepared in advance by Ms. Lin Huimin, the group's human resources director, and consists of experienced and outstanding elites.

The grassroots staff were formed through temporary recruitment and professional training. Although they have not been with the company for long, their business capabilities have already been tested by the market.

Today, Qian Gu Sugar Industry is a large-scale and powerful leading enterprise in the sugar industry market of Hong Kong and even the whole of Southeast Asia, and you have rightfully become the sugar king in the global sugar industry.

Ma Shiming added, "Yes, with the channels and influence accumulated this time, Qian Gu Sugar Industry's future development potential is limitless."

We have received long-term cooperation intentions from multiple countries and regions, and our profitability is expected to continue to grow.

Inside the study, Zhang Zeyang sat at his desk, listening to the reports from Mailis and Ma Shiming, a calm smile always on his face.

But Zhang Zeyang also knew that this time he not only gained a huge fortune of more than HK$300 billion, but also improved the sugar industry's distribution channels. Coupled with the deep personal connections on the mainland, this sugar war can be described as a great victory!

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