Food Factory Sets Sail

"Capitalists are all profit-driven!" — Das Kapital

Steward Karl's ability to get things done was quite impressive, and the results were heartening; the owners of eight of the factories had expressed a willingness to sell.

No one is willing to run a business that doesn't make money! In Austria, where industrialization was already at a high level, flour mills were already a sunset industry, and the brutal competition left people unable to see any "financial future."

Ferdinand left the negotiations to Karl, as the old steward's talent in this area made him feel quite ashamed by comparison. The previous procurement for the supermarket had already proven this; Ferdinand himself was truly ill-suited for haggling.

In the end, Ferdinand acquired a flour mill named "Katwe Porto" for the price of 18,000 pounds.

The machinery and equipment had been replaced just a year ago, and the mill possessed over 180 skilled technical workers and more than 50 employees. At full capacity, it could produce 2,000 metric tons of flour per day.

Since those machines were bought, Katwe Porto had never operated at full capacity, and the staff had been reduced from its peak of over 500 people to its current level.

Even so, Katwe Porto was barely hanging on, hovering on the edge of profit and loss.

Ferdinand was very satisfied with this acquisition. A new boss must bring a new atmosphere, so he changed the name of Katwe Porto.

"Shineway Food Development Group" — this high-sounding name was the new title for the flour mill, signaling a fresh start. Well, in truth, it was entirely Ferdinand's prank; he intended to pirate every familiar brand he could think of in the future.

Ferdinand retained the original factory manager, Willian Schubert. In the fiercely competitive environment of Vienna, the fact that the flour mill could break even was enough to prove his ability.

In fact, the original Katwe Porto factory was running quite well; it was managed well inside and out, and costs had been compressed to the absolute minimum.

However, in terms of sales, it could be said to be a total mess. There was no brand, no major wholesalers, and the products were mainly sold to the vast countryside.

There was no help for it; as a latecomer, the urban market had already been carved up. That the previous owner could open up the rural market was enough to show he had strategic vision, but unfortunately, he was too far ahead of his time. In this era, the countryside was dirt poor; trying to complete the "encirclement of the cities from the countryside" was truly a pipe dream!

But now that Ferdinand was here, none of that was a problem. Of course, in the short term, the supermarket's sales volume was limited, so the rural market could not be abandoned immediately.

As the boss, Ferdinand personally went to the factory to reassure the employees. He made a public promise never to delay wages and inspected the current state of the factory.

Finally, seeing the dark, coarse bread, he felt a pang of sympathy and announced an increase in the standard food allowance by 20 percent, immediately winning the workers' support.

He dispatched management personnel, and thanks to the workers' cooperation, the factory resumed operations after a short period of adjustment.

To improve production efficiency and stimulate the workers' enthusiasm, Ferdinand proposed a constructive bonus plan to Willian.

Willian quickly produced a practical factory reward system and submitted it to him.

Ferdinand was very satisfied with Willian's approach. As a boss, he could be generous to the workers, but for managers, it was the exact opposite.

Like many bosses, only he could play the "good guy" to buy people's hearts, while the managers had to be the "bad guys" to save him money.

According to Willian's plan, workers would receive a reward based on the existing monthly average output or an overall increase in quality. For every one percent increase in output or quality, the corresponding team would receive a bag of flour as a reward.

This measure was beneficial without being expensive; the flour was produced in-house, so the cost was very low. The workers could also take it home for their own consumption, which had the same effect as giving out cash bonuses.

Ferdinand also discovered that Willian still had a basic conscience; he had increased the benefits for the workers as much as possible without harming his own interests, which made Ferdinand even more satisfied.

"Mr. Willian, you have done a beautiful job with this plan; the workers need motivation. How about this: go down and take a census. For every employee working in the factory, count their family members. In the future, they can all buy their rations from the factory at the ex-factory price." Ferdinand once again threw out a strategy to buy people's hearts.

"Very well, Your Highness! I will see to it immediately!" Willian said, somewhat excitedly.

From the factory gate to retail, the price of flour increased by at least 30 percent. Moreover, flour was a staple food in Europe, so this would greatly reduce the workers' living expenses, effectively increasing their salaries by 20 to 30 percent.

This was the best way Ferdinand could think of under the current conditions to improve the workers' living standards without harming his own interests.

Facts proved that Ferdinand's strategy was very effective. As his industries expanded, the welfare policies enjoyed by his workers increased.

Later, when the labor movement was in full swing, his factories were always the most stable, and the influence of trade unions there was almost zero!

Time flew, and the flour mill soon got on the right track. Production rose steadily, and quality continued to improve. When it finally stabilized, the total output had increased by nearly 30 percent, and the proportion of high-quality products had increased by 11 percent.

The price he paid was merely a few hundred extra bags of flour distributed each month; on average, each worker could receive two or three bags of flour.

When calculating the rewards, Willian was quite generous and basically gave out the full amount. However, when distributing the rewards, he quite shamelessly switched the rewards to smaller bags. Since it hadn't been specified clearly at the time, the workers had nothing to say!

These were sizes specifically developed to suit supermarket sales. There were 50kg large bags, 20kg medium bags, 10kg small bags, 5kg extra-small bags, and even 1kg micro-bags. Of course, on average, the smaller the packaging, the higher the unit price.

Willian still had a bit of human touch; he didn't switch to the smallest packaging, or the workers would have been truly heartbroken. Now that they were receiving 10kg bags, two or three bags were enough for a person's rations, so the workers still happily took them home.

Fearing bad debts later on, Ferdinand had separated the finances of the factory and the supermarket very early on. Even supermarket procurement required payment, settled according to market prices.

Because the supermarket added a sales channel, the flour mill soon began to turn a profit. In the first month, it made a profit of 300 pounds, though it still couldn't compare to a single supermarket.

However, Ferdinand was still very satisfied. This was a good start. The factory's capacity was currently only at one-third, and many products were sold to the countryside with almost no profit. If everything could be produced and sold internally, there was still a lot of room for the factory's profits to grow.

Ferdinand came up with another trick commonly used by merchants in later generations. He quite shamelessly changed the packaging bags and created seven or eight brands for customers to choose from. Just like the unscrupulous merchants of the future, he sold the same flour at different prices, which proved to be quite profitable.