African Entrepreneurship Record

Chapter 153: Chapter 143: Tobacco Factory

The Zanzibar merchants simultaneously acquire people and goods from East Africa, while the Heixinggen consortium is also striving to reduce production costs, facilitating greater profitability.

Moreover, to ensure the secure and smooth supply channels for raw materials, prior to the establishment of the East African colonies, global tobacco cultivation was monopolized by several overseas colonial nations, and the East African colonies precisely resolved this issue.

Of course, currently, the Heixinggen consortium hasn’t encountered the predicament of being cut off. The present world is one where multiple powers coexist, and no country can reign supreme.

When purchasing tobacco, the Heixinggen consortium can even compare products from multiple sources, selecting the ones they are satisfied with.

Especially after the development of the East African colonies over the past two years, the area for tobacco cultivation has expanded significantly, making the Heixinggen consortium even less concerned.

The cost of colonial tobacco cultivation is extremely low, so ultimately, all that’s needed is to transport it back to Europe by ship, and the return immigration ships can easily solve this.

Furthermore, Ernst himself doesn’t know the exact variety of industrial products produced by the Heixinggen consortium now, basically covering all products closely related to German life.

The required raw materials for so many products are inevitably varied and in great demand.

Fortunately, the industrial scale of this era cannot be compared to Ernst’s previous life, and the people’s consumption capacity is also incomparably lower, so many raw materials can be supplied by native Europe alone.

The coal of the Ruhr area is a classic example, providing abundant and cheap energy for the future rise of German industry, with coal being one of the crucial indicators of the First Industrial Revolution.

The East African colonies are tasked with the supply of raw materials, but the current major imports into German territory from East Africa are not minerals, but timber and some local specialties.

When the immigration ships return, they carry back a large batch of timber and agricultural products, naturally drawing little attention.

Some of this timber is kept by the Heixinggen consortium for their own use, for making handles for razors or some furniture, while the rest is sold cheaply. Europe doesn’t lack timber, so expecting high returns from selling raw timber is unrealistic.

Although selling timber doesn’t earn much, significant savings are made in timber procurement, as during sales, those cunning merchants incessantly criticize the goods, but when buying, they constantly praise them and even cite reduced production as an argument.

It’s the colonial era, the whole world is a backyard for Europe and America, and timber is found everywhere except deserts and ice fields, yet they shamelessly talk about reduced production?

However, after the Heixinggen consortium became a timber supplier themselves, they faced the harsh reality of becoming the very merchants they despised.

The East African specialty agricultural products, meanwhile, represent the most profitable items, such as cloves, sisal, various unique fruits and vegetables...

August 11, 1868.

Mbeya.

Today’s weather is clear and breezy, and workers are constructing a new building in the city area.

Under the guidance of German engineers, the immigrant-formed construction team is meticulously completing their tasks.

East Africa now possesses a professional team of construction workers, fighting on every construction site, road, bridge, and special-purpose building in East Africa. These construction workers are currently the backbone of the East African workforce.

The new building in Mbeya city noticeably features a European-style factory workshop, with reserved ventilation and chimney openings indicating the installation of steam-powered equipment.

Judging by the timeline, the machinery should already be docked, and within a month, it will be shipped, assembled, and operational. Once the machinery is in place, this factory will become East Africa’s first industrial cigarette factory.

Ever since the initial establishment of the East African colony, there was a clear goal to supply raw materials for the Heixinggen consortium.

As the tobacco industry is a lucrative business for the Heixinggen consortium, it naturally received great attention from Ernst. The opening of the East African colony was aimed at supplying raw materials for the Heixinggen Tobacco Company.

At the establishment of the First Town in the East African colony, there were attempts to cultivate tobacco, which gradually expanded inland later.

Many areas within the East African colony are suitable for tobacco cultivation, especially around the lakes, with Lake Malawi’s shoreline being a major production area.

Mbeya serves as the capital of the upper Lake Malawi region, and the northern part of Lake Malawi falls under Mbeya’s jurisdiction, making it very close to the tobacco growing areas.

Compared to harvesting and processing tobacco and then shipping it back to Germany for processing and sales, completing the process in East Africa and then selling externally is certainly more cost-effective.

The transport costs for tobacco and finished cigarettes are substantial; for the same weight of tobacco, the volume far exceeds that of the finished product, and the more transported, the more losses incurred. For merchants, any decrease in profit is a loss.

Moreover, Mbeya, as one of the tobacco growing areas, has abundant raw materials. Coupled with rich coal mining resources, it can provide continuous power for factory production.

The exportation of finished goods is straightforward too; cigarettes are already a highly profitable product, and the transported weight per vehicle is quite minimal, barely significant. Mbeya must also distribute coal across the East African colony, so transportation is not an issue.

Additionally, producing cigarettes locally in East Africa allows direct supply to the local immigrants, extracting even more from their meager wages.

Simultaneously, the supply can be extended directly to Zanzibar and Arab merchants, providing an opportunity to expand the markets around the Indian Ocean, enhancing the reputation of Heixinggen Tobacco.

Expanding markets around the Indian Ocean, or even Southeast Asia, is a temptation difficult for any merchant to resist.

In the colony, labor is much cheaper compared to Germany, and since raw materials are self-sufficient, costs are practically non-existent.

The Heixinggen tobacco factories in Germany will continue to purchase tobacco from other countries’ tobacco merchants, as monopolizing the market invites attacks, so caution is advised.

The East African colony’s development period is too short to genuinely satisfy the German and European tobacco supply needs, though it holds tremendous potential.

Thus, comprehensive consideration prevents deteriorating relations with cooperative merchants, especially when the Germans have virtually no presence in the oceans.

The Heixinggen consortium itself is the largest maritime trader in Germany, while the Prussian navy can only operate in the Baltic Sea, and the Austria-Hungary Empire navy is active only in the Mediterranean.

Apart from these two regions, the world’s oceans are dominated by English, French, Dutch, Portuguese, and Spanish nations. The merchant ships under Ernst cannot dare to provoke.

Not only these ocean powerhouses, but some countries in the Arabian region also have significant maritime forces in the Indian Ocean, so the East African colony must remain low-key.