African Entrepreneurship Records

Chapter 403 Divestment

  Cape Town took the initiative to choose to compromise, which was a good thing for Ernst. Now he can get away from South Africa and focus on a more important matter.

 In October, Ernst did not return to the first town, but came directly to Nairobi.

Hechingen Investment's factories in Nairobi have been fully constructed and put into production at this time. At the same time, the headquarters of Hechingen Bank has also been relocated here, leaving a new location in Nairobi to house the headquarters of Hechingen Bank and A luxurious infrastructure configuration.

“How is the current investment situation in North America?” This was the first question Ernst asked after arriving at the headquarters of Hechingen Bank.

"Your Highness, we have now begun the eleventh round of asset sales, and we still have 30% of fixed high-quality investments in hand. This has allowed us to withdraw a large amount of funds and make a huge profit. However, according to the current economic conditions in North America, we Essentially we are still losing money, the assets we lost are still continuing to increase in value, and the entire market is on fire."

Ernst nodded and said: "Bite off more than we can chew. After all, we can't let us take all the good things. How is the situation in Europe?"

"According to your instructions, we did not sell as many assets in Europe as North America, but we made more money than in North America. Because the good impression created by many brands of the Hechingen Consortium made many people willing to take over the assets at high prices, such as supermarkets This major project, even if it is located in an unfavorable location and difficult to make a profit, has been very popular, but Your Highness, many of these people who have taken over the project hope that we will authorize them to continue to use their previous names."

Ernst shook his head and said: "This is not possible. We can continue to provide supply channels without even taking a commission from them, but we cannot let them use our registered brand name. This is a credibility issue. Of course, if it is a franchise, Brands that can be introduced to them.”

Supply channels are the most important support for the survival of various supermarket brands under the Hechingen Consortium. As an all-round player, the Hechingen Consortium operates extensively in the fields of light industry and electric power industry. It is a unique super giant in the entire Germany. Heavy industry has just It has started, but most of the heavy industry investment is deployed in East Africa. As for Europe and North America, the Hechingen Consortium cannot squeeze in.

 The rich industrial chain enables supermarkets under the Hechingen Consortium to obtain a wide variety of product supplies. The most important thing is that agricultural products from East Africa can also be sold through supermarket channels.

It is unknown how many businesses and companies will go bankrupt during this economic crisis, and the Hechingen Consortium cannot have anything to do with them.

Ernst continued: "Also, we are now starting to clean up the bank's bad debts and sell off all risky assets while the market is hot. Next, we will raise our loan thresholds and remove all companies with operating problems and Unrealistic projects were rejected, and all branches began to withdraw funds to ensure that there would be no problems with the savings."

“Your Highness, our bank will probably lose a lot of money this way.”

"Just do as I say. Any company that wants to operate for a long time cannot turn a blind eye to its own problems, blindly pursue short-term profits, and choose to ignore risks. It will not be strong and will damage the long-term health of the company. Moreover, the reputation accumulated previously has to be rebuilt, which is also a huge waste.”

Under Ernst's operation, the Hechingen consortium sold everything that could be sold and continued to slim down. However, this also brought some negative effects, because many properties were sold, and some investors and savers believed that the Hechingen consortium There are operational risks in root banks. The most likely problem is that there is a problem in the capital chain. Otherwise, how could it sell so many "good" assets? The current market has brought unprecedented confidence to the world. It means selling air. As long as you blow it well, you will be fine. It can make a lot of money, but the reverse operation of the Hechingen Consortium is completely contrary to the mainstream.

Therefore, many investors and depositors turned their money to other banks or the currently hottest railway industry. Hechingen Bank faced a wave of small runs. However, it came and went quickly. Hechingen Bank's original cash flow There is plenty of money, and with the sale of a large number of assets and the return of a large amount of funds, we are basically confident.

Hechingen Bank subsequently refuted these false rumors: the bank is currently optimizing the investment industry structure and there is no so-called operational risk.

 However, the effect of refuting rumors is not satisfactory (praise). In Germany, relying on the credibility accumulated over the years and the media and newspapers controlled by the consortium, it has stabilized the confidence of depositors, but it is not so good in other regions. In particular, Hechingen Bank’s competitors are doing everything possible to discredit Hechingen Bank. Many financial institutions in London have rated Hechingen Bank as a high-risk enterprise.

The Sun newspaper, which is fully controlled by Hechingen Bank, spoke out to refute the rumors. As a result, London residents believed it even more. What is the content of the Sun newspaper? Everyone still doesn’t know? It's okay to play around with colors and edges, and you're worthy of talking about finance.

However, as the center of the financial empire, London has numerous banks and financial institutions, and the Hechingen Consortium does not have much market share here.

Some depositors who blindly followed the trend saw their money being exchanged, and the theory that the capital chain was broken disappeared, and they deposited their money again. This is good, because some time deposits are exchanged, Hechingen Bank can pay a lot less interest.

This minor turmoil did not affect Ernst at all. After giving instructions to the Hechingen Bank, Ernst visited many textile factories in Nairobi.

"Your Highness, our currently invested textile production capacity in Nairobi can meet approximately 70% of East Africa's demand. The remaining 30% is provided by Far East factories. The factories in Germany have changed hands, but the Far East factories are We account for the bulk of exports to Europe, and labor costs play a big role. If we had not split up the textile factories in the Far East before, we would definitely be able to gain more profits."

 In general, the textile factories invested by the Hechingen Consortium in Jiaozhou in the Far East were split into three parts. One part was sold to Shanxi and Anhui merchants, another part continued to operate and was exported to East Africa and Germany by taking advantage of cost advantages, and the other part was moved to Nairobi.

 The Far East market is indeed very popular. First, it is large in scale and has high demand, but the profits are not as good as those in Europe. The second is that the cost of survival is extremely low, its human resources are too abundant, and the raw materials are quite abundant. The third is that there are few things to do. As a foreign-funded enterprise, Jiaozhou Textile Factory does not need to be affected by bureaucracy. This aspect can be seen from Shanxi merchants and Huizhou merchants. They operate In addition to the tax revenue, local officials also had to take a commission. As for the Jiaozhou Textile Factory, these issues were entrusted to the consulate, and no one dared to go to the East African consulate to cause trouble.

By the way, the business environment of Huaihai Economic Zone and Zhuhai Commercial District has been improved. For example, Jichanglong Silk Reeling Factory, a famous modern national enterprise in the Far East in previous textbooks, has been rebuilt from Nanhai County in Zhuhai Commercial District.

Chen Qiyuan, the owner of Jichanglong Silk Reeling Factory, originally built a factory in his hometown of Nanhai County. However, he died before leaving the army. He was jointly strangled by the local people, bureaucrats, and gentry. Fortunately, Chen Qiyuan was able to do this because of his outstanding ability. The Jichanglong Silk Reeling Factory can continue to operate in a difficult environment and be able to compete with foreign companies.

This life is different. Most of the economic say in the Zhuhai Trade Zone is in the hands of the Xiangshan Consulate. The local gentry and bureaucrats have already been beaten once by East Africa. The Guangzhou government is also keeping a close eye on the local bureaucrats, not wanting to have the last conflict. Repeat.

At the same time, by settling in the Zhuhai Trade Zone, you can also get preferential policies from the Kingdom of East Africa, which mainly make loans more convenient. The Far East market is an area that Hechingen Bank attaches great importance to, ranking only after East Africa and Europe, and at the same level as North America.

Ernst is not afraid of thunderstorms. The Far East is a traditional agricultural country. The benefits of this economic crisis outweigh the disadvantages, and more investment will not cause losses.

This has also resulted in the current shrinkage of Hechingen Bank around the world, with only East Africa and the Far East being the only regions with additional investment.

 (End of this chapter)