Chapter 1543 - 53: Industrial Relocation (2)

Chapter 1543: Chapter 53: Industrial Relocation (2)

O’Keane said with a resentful look, "Big brother, you might as well say I’m useless. I’m not one to quibble."

"Ahem..." Gorishon said awkwardly, "In short, it’s about the same. You just need to know that our factory isn’t as important as you think. After all, from the government’s point of view, we’re also replaceable."

"The products we produce mainly involve buying ready-made machinery from others and then hiring workers to help us do the work."

"Since that’s the case, it means we don’t have core technology. Such a simple factory can basically be managed with money, so it’s easy for others to control us."

"Of course, this isn’t the main reason. The deeper issue is that the city plans to eliminate backward factories like ours, either move away from Cabinda or stop production."

The latter is obviously not within Gorishon’s consideration range. After all, he’s still counting on the factory for a livelihood! O’Keane is very aware of this simple reasoning too, given that if the factory shuts down, he’d lose his position as workshop manager, and then he’d have nowhere to find such an easy job.

So, O’Keane tentatively asked, "Then, big brother, do you mean to relocate the factory, or what?"

Gorishon said, "Currently, there are two options. The first is to follow the city government’s requirement and fully reform our factory. The second is to move the factory to another place, so Cabinda can’t manage us."

O’Keane asked puzzledly, "Is the national policy different? Will the policy change if we leave Cabinda for another place?"

Gorishon explained his brother’s confusion, "There’s still a difference. For example, Cabinda can be said to be one of the most economically developed areas of the Empire, so its situation is definitely somewhat different from most other regions around here."

"This little factory of mine is indeed insignificant in Cabinda. After all, there are too many enterprises in Cabinda; they don’t lack a factory like ours. But for economically underdeveloped areas, having a factory is already very good, given they have no other choice."

With that said, O’Keane naturally understood. He said to Gorishon, "So your intention is to move the factory to other parts of the country?"

"However, that’s also quite difficult! Our customers are all here, and it’s impossible for the workers to follow us to a new place. Once we get there, we’ll have to retrain a new batch of skilled workers. It’s not as good as not relocating it! After all, Cabinda’s economy is developed. At worst, we’ll just spend more money and replace the equipment."

This aspect of Cabinda’s developed economy is what O’Keane values. He certainly doesn’t want to follow his brother to the backwoods, and surely other places can’t be more interesting than Cabinda.

Here, O’Keane naturally ruled out other big cities in East Africa. After all, land prices in big cities are expensive, and his brother certainly wouldn’t want to waste money on that. With the money to buy land and build a factory in a big city, it would be better to just replace the equipment and continue to stay in Cabinda.

In general, O’Keane is reluctant to go to a backward place, which is inconvenient for his own life and consumption.

Gorishon said to him, "Hum, do you think why I want to move the factory? You don’t even look at the machinery and equipment in our factory. They’re all seventy percent new; they can be used for another decade without issue. With one word from the government, I have to replace them, which is too wasteful."

"These machines weren’t blown in by the wind but were bought with money. I’ve just started using them to recoup some of the costs, and I don’t want to just eliminate them. I must earn some more first."

"As for the problems you mentioned, I’m also well aware. Actually, the domestic are not good choices. After all, under the country’s overall policy, even though local enforcement and regulations might differ, they’ll ultimately move in the same direction."

"Relocating the factory to those places is just desperate survival. Plus, our raw material suppliers are also in Cabinda, so even if the factory moves, it can’t be too far from here."

Gorishon’s factory produces electrical components, but in fact, he has many upstream manufacturers. Thus, the development of the electrical factory also needs to consider the upstream suppliers; if the distance is too far, it’s definitely unworkable.

Although East Africa now has relatively convenient and developed transportation, Gorishon is unwilling to shoulder the shipping costs. Plus, if he has to consider market distance, he might end up paying additional shipping costs, unless he can develop a new market in a new place, which wouldn’t be worthwhile. Hence, the factory can’t be too far from Cabinda.

Gorishon’s words left O’Keane completely bewildered. He asked, "If this doesn’t work, and neither does that, what do we do, big brother?"

But Gorishon spoke with confidence, "This is where the gap between you and me lies. You only think about domestic options, while my gaze is already abroad."

O’Keane exclaimed in shock, "Abroad! Big brother, are you planning to move the factory to the United States or Europe?"

Gorishon glared at O’Keane before saying, "You really are a blockhead. Moving that far, cost is already a big issue, plus there are more troubles, given our suppliers and market are domestic. Moreover, a powerful outsider won’t overpower local players; going to the United States and Europe might just be giving away some pie."

Then, he switched his tone to one of pride, "The abroad that I’m talking about is far away yet close at hand—it’s neighboring Black Horn City."

With this said, O’Keane suddenly realized, "It’s the territory of Belgium. I thought it was Europe and America!"

Gorishon ignored his surprise and analyzed, "Black Horn City’s taxes are low, management is relaxed, and the land prices and labor costs are relatively lower than East Africa. And of course, the key point is that it’s right next door to Cabinda."

"Moving our factory to Black Horn City won’t cost much. This way, these machines can be used for many more years. Moreover, because Black Horn City is close to Cabinda, railway and road transportation are convenient, making the procurement of materials and transportation of finished products convenient."

"Additionally, there are no tariff issues between Black Horn City and East Africa, saving us a lot of troubles."

Black Horn City is the administrative center of the Congo Autonomous Territory under Belgium, and Belgium has joined the East Africa-dominated Eastern Southern Africa Common Market. So, Gorishon realized that investing in Black Horn City actually presents better conditions than domestic investments.

Naturally, East Africa wouldn’t suffer losses by establishing this common market; East African goods can also use this platform to enter Belgium domestically, or further penetrate Europe through Belgium.

As for the choice of enterprises, the Congo Autonomous Territory is right under East Africa’s nose; they can’t run away even if they want to. What’s more, they can’t escape the complete industrial system and the large domestic market of East Africa.

Just like Gorishon, his factory couldn’t be set up in Europe and America. Even if they go abroad, they can only be in surrounding regions and countries in East Africa. And the place can’t be too backward, given his factory’s demands on electricity and infrastructure.

Therefore, Black Horn City, with some economic and industrial foundation, and right next to East Africa, becomes Gorishon’s best choice.

Black Horn City and Cabinda can be said to be brother cities. Both are in the northern part of the Congo River, only dozens of kilometers apart, and there’s basic convenience for personnel and trade exchanges, so it’s very suitable for Gorishon to move the factory to Black Horn City.

Of course, Gorishon cleverly thought he considered everything, but there are inevitably drawbacks. After all, the Belgian government in Black Horn City clearly isn’t a charitable place; expected taxes wouldn’t be fewer.

Moreover, now there’s an increasing global industrial overcapacity. Holding onto one’s factory without making changes will lead to competition with other European and American manufacturers. If he doesn’t want to upgrade the industry, after others adjust their strategies, costs will only be lower than his, thus profits would get progressively lower, eventually risking being washed up by the economic crisis on the shores.

Meanwhile, East Africa is also cracking down on products that don’t meet national standards. Even if he moves the factory to Black Horn City, it doesn’t change that fact, meaning he would lose quite a few domestic customers he originally had.

Of course, the specific future development of Gorishon’s electrical factory still depends on his operations. If he can blaze a new trail, he might earn more money, while another scenario leads to bankruptcy.

Nonetheless, if he indeed chooses to move the factory to Black Horn City, the East African government naturally doesn’t need to consider the future fate of his enterprise.