CH7 : Hyesung Group

"I'll review the documents for a moment, so go ahead and take care of your work."

"Yes, sir."

Even though the acquisition wasn't completed yet, I was already being treated like the president.

I needed to find the company ledgers.

No matter how poorly the previous president managed the factory, there must have been ledgers.

To run a factory, I needed to know how much raw materials cost and the fixed expenses like electricity.

If a president can't calculate basic operating costs, it's only a matter of time before they fail.

"Bingo!"

As I dug through the documents, I found the ledgers.

Despite the chaos, they were intact with a solid hardcover.

Nylon/Cotton Blend 12,000 yards order

- 4,000 pounds of yarn acquired.

- Gabone 120 denier yarn: 60 cents/pound (smuggled)

- Korean Nylon 120 denier yarn: 80 cents/pound

"Pounds? So they buy yarn by weight. It takes 4,000 pounds to produce 12,000 yards, so they can produce 3 yards per pound."

Yarn refers to thread, so my guess was probably correct.

And it seemed there were two suppliers.

Gabone and Korean Nylon.

'Gabone sounds like a Japanese company. Is 120 denier a material specification?'

Denier... denier... I seemed to have heard it somewhere. It must be the thickness of the thread.

'Smuggled... Did they really use smuggled yarn? Those scoundrels.'

Smugglers were those who secretly took goods from U.S. military bases or harbors.

I hadn't heard the slang since I was a kid in the ironworks alleys.

Back then, smuggled goods were cheaper and of better quality than domestic products, so scoundrels preferred them.

But Japanese yarn was 60 cents and domestic was 80 cents? If the cost was 25% cheaper, smuggling made sense.

"Hey, Team Leader Gu!"

"Yes!"

"Yes, sir."

"Did you call?"

I called out through a small window in the wall. It meant any of the three—Sung-gu, Yong-gu, or Dong-gu—could answer, but all three looked at me.

It was very convenient.

"Did you use 120 denier thread here?"

"Yes. For pyjama or shirt fabrics, we need to use 120 deniers. It's soft to the touch."

"A few years ago, we used 300 denier, but it was too coarse and expensive, so we stopped using it."

Okay, so denier is the thickness of the thread.

"Are there any yarn suppliers nearby?"

"They're all gathered across the street. You'll easily find them if you go out to the main road."

"Did you mainly use Gabone yarn here?"

"Yes, of course. Italian thread is too expensive."

The team leaders seemed to take imported yarn for granted.

"Didn't you use domestic yarn?"

"Well... we wanted to, but it kept breaking and pilling, so the quality was really poor. It's also more expensive than foreign yarn."

Seeing the team leaders frown at the mention of domestic yarn, it seemed the quality was really bad.

"Really?"

I needed to compare the quality myself.

If it's really bad, I have no choice but to use Japanese yarn for now. I need to produce fabric immediately, so I can't start with domestic yarn production.

Anyway, finding this factory was lucky.

If I produce fabric directly at my factory, I can set the supply price and quality specifications when outsourcing.

It was tough, but it felt like I was solving problems one by one.

**

「Gabone Agency」

I left the industrial complex and came out to the main road. It wasn't difficult to find the yarn agency.

"If you don't know Gabone, get lost."

Usually, signs have some explanation like 'specialty store' under the name. But here, the sign just had 'Gabone' in big letters.

Ding. Ding.

"Is anyone here?"

"Welcome. Where are you from?"

A female employee greeted me as I entered.

It seemed they screened out peddlers at the employee level.

Amusingly, the place exuded a superiority vibe.

It's just a company selling yarn.

"I'm from Daese Industries. I'm here to purchase nylon yarn."

I felt awkward without a business card. I need to get some printed today.

"What kind of nylon yarn are you looking for?"

"I'm looking for nylon-cotton blend yarn for tricot fabric, 120 denier."

I answered confidently.

Sambok confirmed the fabric was for tricot, and the team leaders said 120 denier was used for shirts or pajamas.

If I export my fabric to Singapore, they'll likely make shirts and pajamas.

"Boss! We have a customer. Boss!"

"Miss Kim, what's the matter?"

"The customer is looking for 120 denier nylon-cotton blend yarn for tricot fabric."

My request seemed to exceed the novice level, so the employee immediately called the boss.

"Ah, welcome..."

"I'm Woo Chan-soo, president of Daese Industries. Can I see some samples of nylon-cotton blend yarn?"

"Yes, please come this way. At Gabone, we have products with blend ratios from 5% to 65% cotton."

Behind the counter, there was a long table with yarn samples lined up, and sample fabrics to feel the texture.

It seemed Gabone's Korean branch was quite reputable.

"I'd like to purchase these models as samples."

A few models felt like the yarn I wanted. I could take the samples, weave the fabric, and find the optimal blend ratio.

In the 21st century, I could simply send the sample fabric chosen by Razak to a national testing lab to analyze the blend ratio of cotton and nylon.

But in this era, without testing labs or basic analytical equipment like electron microscopes, I had to solve problems through trial and error.

"We can provide samples, of course. How much do you need for mass production?"

"About 500,000 yards of fabric, so roughly 200,000 pounds of yarn."

"Whoa! 200,000 pounds?"

"What's the price? It should be under 60 cents per pound..."

When I mentioned 60 cents per pound, the Gabone branch manager's eyes changed. He realized I knew the final delivery price.

"Ahem, Miss Kim. Get us some coffee. I have important business to discuss with the customer."

"Yes, boss."

He sent the female employee beyond the partition and brought me into his private office.

The small table and comfy sofa were suitable for conversation.

"President Woo, how much barter credit do you have?"

"Barter credit?"

What? Barter credit out of the blue?

Barter means exchanging goods, right?

Even in the 60s, this isn't the 18th century Age of Exploration. Why would a transaction require barter?

"You don't have barter credit? Are you suggesting we use smugglers for all 200,000 pounds?"

What are you talking about? What is barter credit?

This isn't a secondhand market, why do we need barter credit?

If it's a formal supply, why talk about smuggling?

"Well, I don't plan on using smugglers. I intend to get the rest of the yarn from Korean Nylon."

"You're willing to take that loss?"

"Well, what can I do?"

"Sigh, it seems you've already used up your barter credit. That's understandable. The export-import linkage system eats up all the barter credit."

'Export-import linkage system!'

The word sparked my memory.

Seniors said that in the 60s and 70s, Korea suffered from chronic foreign exchange shortages, even traders couldn't use dollars properly.

For instance, limestone was abundant, but without importing cement, they couldn't build cement plants to become self-sufficient.

As a desperate measure, the government allowed the import of raw materials proportional to exports.

If you exported fabric, you could import an equivalent amount of yarn.

The problem was you needed export results first.

'Now I get it. Small textile companies that couldn't export had to use expensive, low-quality domestic yarn reluctantly. Or they smuggled yarn if they didn't want that!'

Now I understood why smuggling was rampant in this field.

Domestic supplier Korean Nylon was brazenly exploiting domestic fabric manufacturers.

No wonder the cost was 25% higher compared to imports, they were selling because they could.

The previous president boldly used Gabone smuggled goods because the market was chaotic.

"Smugglers are not ideal. Is there another way?"

I hadn't planned on buying Gabone yarn.

I intended to check the quality and get a quote to negotiate domestic yarn prices, but the situation became intriguing.

"Without barter credit, formal import is difficult."

"Formal import is difficult..."

There must be a way.

"It's not impossible. You said you would export 500,000 yards?"

"Yes."

"Then after exporting, you'll get barter credit. Can you sign a contract to transfer that barter credit to me?"

"And if I do?"

"I'll contact Gabone headquarters to borrow dollars. We'll import 50,000 pounds first, and you transfer the barter credit as soon as you get it."

Hmm, barter credit is practically dollars.

No, it's like a trade letter of credit guaranteed by the Korean government.

I could even sell barter credit at a premium to traders.

"That sounds good. I'll consider it. I'll look around elsewhere."

"Please do. But you won't find a place offering 60 cents per pound and loaning dollars."

"I should check, just in case."

"If you're thinking of Korean Nylon, forget it. Korean technology is laughable. They can't even make 100% nylon yarn properly, let alone blends. Japanese yarn is the best

."

"Right. Got it."

Damn it...

Even for a merchant, he's too harsh.

Insulting Korean technology, calling it laughable?

It's been 20 years since Japanese occupation, and he still self-deprecates like this?

"Look around. I'll be here."

The Gabone branch manager confidently saw me out with a smile.

Though I disliked his words, I grasped the reality of trade in this era.

Now I understood why domestic companies struggled with overseas markets until the early 70s.

Entrepreneurs then believed exporting was often a losing proposition because smuggling was more profitable in the domestic market.

With a shortage of trade dollars, rampant smuggling, domestic monopolies by early market entrants, the government's struggle to promote exports must have been tough.

Developing countries easily fall into vicious cycles with one wrong step.

I respected my previous generation who navigated through this.

'So there was an innovative company that broke through this... which one?'

It probably wasn't Korean Nylon.

They monopolized the domestic yarn market and had bad quality.

Successful companies weren't likely to be innovators.

Innovative companies always rise from desperate situations.

If I had worked in the textile industry, I'd know which company emerged as an innovator, but I didn't.

Historically, from the late 60s, Korea's textile exports surged, so some companies should have stood out around this time.

「Hyesung Nylon」

"Huh?"

As I walked, lost in thought, I found myself away from the main road.

A shabby building appeared in front of me.

It looked like a remodelled tile house, with the sign 'Hyesung Nylon' catching my eye.

Didn't people call nylon 'nairon' in the 60s?

Using the 21st-century standard term 'nylon' and the familiar name 'Hyesung'...

'Hyesung... Could it be that Hyesung Group?'

Hyesung Group is a chemical conglomerate.

In the 21st century, their main business is refining, but they could have started with chemical fibres.

Chemical fibres and refining are technically related.

I was familiar with the group, having participated in their refinery expansion projects while working at Daese Construction in my previous life.

Rattle.

"Is anyone here?"

I opened the old sliding door with frosted glass and peeked inside the factory.