International Business, Part 1: The Rise of Douhang
Douhang’s logo. It has become quite recognizable in modern times.
In the bygone days of the Han dynasty, an imperial prince pressed soy curds into a mould, squeezed out the moisture, and created one of China’s most iconic foodstuffs. Or, more likely, he didn’t. Chinese chroniclers tended to attribute the inventions of an age to the leaders who reigned at the time, and
tofu was no exception. It is thought that the first tofu was made through the addition of seawater to soy milk—the salt served as a coagulant, reacting with the organic molecules in the soy milk to create thick curds of solidified proteins, fats, and oils. Pressing these into moulds would have created rudimentary, semi-liquid antecedents of modern tofu. However, tofu improved and diversified as it spread across an increasingly Buddhist China. The various schools of Buddhism that proliferated in post-Han society mandated vegetarianism for monks and recommended it for the laity, and tofu became a low-calorie and guilt-free source of protein that could viably replace meat in the diet of monks, villagers, and city-dwellers alike. Whether brittle and soft or meaty and extra-firm, it exploded in popularity during the Song Dynasty and maintained it even after the Mongol Conquest. A
Ming dynasty treatise on medicine, regarded as one of the greatest scientific achievements of the time, included sections on tofu-making.
In the lead-up to the 20th century, the
Yongwu and Shangwu emperors began top-down modernization in Shun China. One of the pioneers who led the bottom-up response was
Wei Jiacheng, a native of Nanjing. While studying agricultural science at the University of Bologna, Wei learned of the various industrial methods and practices, such as the introduction of chemical fertilizers and mechanical harvesting, that the Europeans had steadily perfected. His populist inclinations led him to the conclusion that modern agriculture held immense rewards not just for the elite but for the common, tofu-eating man and woman. In 1905, Wei and his Italian-educated associates founded the Soybean Production Company (
Dadou Shengchan Gonghang, 大豆生産公行), better known today as the
Douhang Corporation.
Wei Jiacheng. Though later leaders of Douhang professed unflinching respect for his business acumen and expansive vision, his activist political views would not be so strictly adhered to.
Douhang’s business model was a resounding success, and it didn’t take local and national authorities very long to catch on. The nascent company’s land acquisitions, grain drills, phosphorus, and sulfur were paid for with assistance from the government in Nanjing, from authorities further inland in Central China (a historical heartland of soy where Douhang’s Nanjing office and rural crop fields were based) and, eventually, from the imperial government. One of the first acts of the
Jiaqing Emperor, who ascended to the throne in 1916, was to grant honors onto the “Citizen-Heroes of Diligent Work and Frugal Study,” a category that included Wei Jiacheng.
Over the next few decades, Douhang leaped from strength to strength. The conquest of Mongolia and Xiboliya began in 1919, and was accompanied by the reassertion of control over lands that, fortuitously, proved to be exquisitely fertile ground for the production of soy. When the Imperial Bureau for the Development of the North began the leasing of land in the Jurchen territories to private companies, Douhang eagerly signed up. The company opened up its second office in
Haishenwai [1] in 1924, securing a spot in the economic and cultural hub of the Jurchen lands and eastern Xiboliya.
Tan Xinpei, Wei’s young wife, had relatives in Guangdong, and used them to seek out vendors who would buy Douhang’s products. Though Shun China was progressive in some respects—the early Shun emperors had frowned upon Ming-style footbinding, and later modernizing emperors successfully banned it completely—China remained a deeply patriarchal society. Tan’s role in Douhang was small in the 1920s, but she was already getting ready to be one of the most vocal exceptions to her society’s rules.
All this, however, was almost put to a stop by the
Yangtze flood of 1931. At a stroke,
one million lives were lost to the flood and its consequences, and a small push in the form of a French Flu outbreak thrust the nation into an economic crisis. Douhang’s assets in Central China—still the company’s heartland—were almost completely wiped out. Seeking to avoid the future concentration of eggs in a single, vulnerable basket, Douhang spread its wings. The southern offices of the company in Guangdong and Fuzhou had, in conjunction with the imperial government, begun reaching out to Southeast Asia in the 1920s. The Empire of Lusang, eager to continue its own modernization efforts, imported Douhang products as early as 1926, and Joseon Korea followed suit in the same year. During outreach efforts in the lands that would become Nusantara, Douhang noticed the presence of
tempeh in Java. While tofu was made from soy milk, tempeh was made by shelling whole soybeans, fermenting them in acid and edible fungus spores, and letting the fungus knit the softened beans together into a solid cake of protein, dietary fiber, and vitamins. By selling Chinese soybeans to tempeh vendors and later buying out the vendors themselves, Douhang sought to diversify its product line by muscling in on the tempeh market. Real diversification would begin in force in 1933, when the aging Wei Jiacheng stepped aside in favor of his son,
Wei Xiaowen, who studied chemistry in France.
Wei Xiaowen and Tan Xinpei.
As if anticipating the loss of political dominance over Europe, France used the 1910s to push the boundaries of science. In 1914, Antoine Rocard found that immersing casein, a protein found in milk and cheese, into formaldehyde yielded a new material. It was ivory-white, odourless, insoluble in water, biodegradable, and inflammable.
Rocardite [2], as it was later known, was the first of the synthetic organic compounds that came to be known as plastics, and Wei Xiaowen was caught up in the ensuing chemical revolution. His studied were eagerly supported by Tan Xinpei, a doting mother whose advice would be invaluable to her bookish and reclusive son. When Wei Xiaowen returned to China and told Tan of what he had learned, she told him that she was able and ready to hire his chemistry professor and anyone else who could help push Douhang in a new direction.
Fuguo Laboratory (
Fu Guo Shiyanshi, 富國實驗室) was established by Wei Xiaowen in 1930 in Nanjing as an independent venture, but, after Wei succeeded his father as the chief executive of Douhang, Fuguo became the corporation’s research and development department [3]. French and Chinese scientists at Fuguo found that soy oil made an excellent base for paints, resins, inks, and waxes. Though Douhang’s line of scented candles held a niche appeal at best, their line of paints and inks proved lucrative as supply contracts were signed with construction companies and pen manufacturers. Casein had long been used in France to create nontoxic glues, and these techniques were copied almost wholesale to create soy-based glues and wood adhesives that offered maximal profit with minimal time and effort. It was soon revealed that the proteins in soy could, like casein in milk, be used to produce new plastics. Glycerol and water could make soy protein isolates into biodegradable plastics, but these were at first not very water-resistant [4]. Heat treatments and mixing with other plastic varieties helped fix this, but the results weren't perfect. Still, Wei Xiaowen was able to oversee the release of plastic-based cutlery, tableware, Sengupta casings, and even
clothing in not just the Chinese home, but in Lusang, Vietnam, Korea, Nusantara, and other countries where Douhang had a noticeable presence. A large slice of the profits from this venture were plowed back into Fuguo, which commenced experiments with non-biodegradable plastics derived from gasoline. The expansion of Fuguo’s efforts inaugurated a kind of diarchy in Douhang; while Wei crafted long-term plans for new products, he trusted his mother Tan Xinpei to oversee the sales of existing products, and their expansion to new markets.
Tan did not have to search hard for opportunity: the Chinese military buildup that accompanied the formation of the EASA offered one almost immediately. The Imperial army and navy needed nutritious rations, and Yang Long’s government offered Douhang a contract for supplying tofu and tempeh, its traditional mainstays. As tensions with Japan grew, Douhang acquired one of the clothing companies that manufactured uniforms, and soy-based materials started to weave their way into the shirts, buttons, and boots of the Imperial Armed Forces. And even as news of the Sino-Japanese War and the terrible conditions in blockaded Japan washed over the Chinese national consciousness, Tan Xinpei still saw opportunity. Positing that international and national opinion would not permit the Chinese government to avoid fixing up postwar Japan, she predicted that Douhang could secure a share of the Japanese food and construction markets (in which there were, unfortunately, very few competitors) by supplying Douhang’s diverse products as part of a Chinese-led aid and reconstruction effort. But Japan was not the only part of the Pacific world that drew attention. The Tawantinsuyu Empire of South Vespucia sought to develop itself by becoming an agricultural breadbasket, and held territories perfect for soybean agriculture [5].
Douhang had evolved dramatically during the tenure of the younger Wei, and by the late 30s it could no longer be summed up as a simple food producer. Now, as it prepared to straddle an ocean, it stood ready to mutate further still.
[1] OTL: Vladivostok.
[2] OTL: Galalith.
[3] Inspired by Bell Labs.
[4]
http://lib.dr.iastate.edu/cgi/viewcontent.cgi?article=2838&context=etd
[5] Inca lands in the OTL Chaco and Paraguay.
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Unilever was established by a margarine company and a soap company to build up a supply of animal fat, upon which both of their products depended. Now, soap and food are just two of the myriad products which Unilever sells. (
Business Casual tells this story much, MUCH better than I can.) I looked around for another natural material with which a company could carve out a niche in a number of diverse markets, and then use those niches to start innovating and creating entirely new products. Soy turned out to be a perfect fit.