African Entrepreneurship Record

Chapter 183: Chapter 172: Independence of the Food Industry

January 13, 1869.

Vienna.

As soon as the end of the year passed, Ernst immediately set off for Austria. It was still quite cold in Austria in January, and the snow in Vienna had a unique charm.

Vienna Heixinggen Consortium Office.

”This place is about two li from the urban area of Vienna. The surroundings are basically farmland, and due to topographical restrictions, the land is not very fertile, so the price is not high.

What’s most rare is that this area is one of the few places near Vienna with large open spaces, and its owner is Viscount Lexton of Austria. We’ve already negotiated a price with him. If we purchase the entire block, the price can be even cheaper,” Boen, the head of the Heixinggen Consortium in Vienna, reported to Ernst while pointing to a piece of land on the outskirts on a map.

”How large is the area?” Ernst asked.

”A total of 1.642 qianmu, enough for several factory sites, so there’s absolutely no issue with the size,” Boen said.

”Hmm, what about the transportation conditions?” Ernst asked.

”It’s less than a twenty-minute journey to the train station and the Danube River. If we can refurbish the roads, it will definitely be faster, so distribution of goods from here is very convenient,” Boen answered astutely.

”Very good, go and negotiate the price with Viscount Lexton! Also, inquire whether there are any intentions to sell land in the surrounding area, try to make this place larger, of course, the premise is that the land should be contiguous,” Ernst made a decisive decision, essentially declaring that the ownership of this land would fall into the hands of the Heixinggen Royal Family.

In the new year, Ernst plans to separate food production from the daily necessities group under the Heixinggen Consortium and establish a dedicated food group.

Previously, because the Heixinggen Consortium’s scale in the food processing and manufacturing industry was relatively small, it was placed under the management of the daily necessities group.

However, by 1869, the East African colony had undergone three years of development and was no longer the same. It could now provide the Heixinggen Consortium with sufficient agricultural raw materials.

Most importantly, in 1869, the immigration task in East Africa was reduced, which would save a large surplus of food for export.

For the first three years, East Africa prioritized immigration as much as possible, and settling new immigrants required food. To support the new immigrants, the initial ration for immigrants was jointly advanced by the East African colony and the Heixinggen Consortium until the land development brought in harvests.

Fortunately, East Africa had consistent temperatures year-round, allowing immigrants to quickly engage in production, though immigrants in the dry season were prioritized near rivers and lakes.

This year, East Africa will no longer pursue the maximum number of immigrants, freeing up more food for export.

Directly exporting grains is unlikely to be very profitable, especially now that all of Europe is flourishing, with orderly production. England, France, Russia, Austria, and Prussia are all focused on development.

Therefore, to enhance the competitiveness of East African grains, Ernst is determined to establish a modern food enterprise group in Europe.

Unlike before, this time Ernst will place the headquarters of the new company within the Austro-Hungarian Empire, implementing the Heixinggen Consortium’s German-Austrian-African integrated development model for the first time.

The food industry is not inferior to the production of daily necessities. If developed, it will undoubtedly be another heavyweight industry within the Heixinggen Consortium’s territory.

The Heixinggen Consortium has natural advantages in developing the food industry, backed by the East African colony with abundant raw materials, and this year funds are more affluent as past resources used for expanding immigration can now be invested in new industries.

Additionally, Austria’s advantageous geographical position and stable social order give natural advantages for establishing food enterprises in Austria.

Of course, the most important factor is the ability to better leverage Austro-Hungarian Empire resources. The Austro-Hungarian Empire is itself an agricultural powerhouse; the raw materials for Heixinggen’s wine are provided by the Austro-Hungarian Empire, and the Heixinggen Consortium frequently sells Hungarian grain throughout Europe using supermarket systems.

There is a natural foundation for cooperation between both sides. Politically, the Heixinggen Royal Family has close ties with the Austrian Royal Family, giving Ernst the advantageous alignment of time, location, and people.

The same conditions exist in the German regions, but Austria has a geographical advantage that Germany cannot match: Austria is on the shores of the Mediterranean.

As soon as the Suez Canal opens at the end of the year, goods from the East African colony can travel directly through the Suez Canal to Trieste. By that time, the Austro-Hungarian Empire will be the center connecting Germany and the East African colony.

Furthermore, the level of industrialization in German areas is high, including the food processing sector. In comparison, the Austro-Hungarian Empire has a considerable gap in this area, allowing the Heixinggen Consortium to fill this void and avoid direct competition.

Moreover, Ernst’s decision to come to Vienna at this time to arrange the construction of the food enterprise can be considered very subtle.

It takes at least several months from land acquisition to the completion and commissioning of a factory, and this is just in the Vienna area; factories will certainly also need to be set up later in Trieste.

Vienna can fully utilize Austria’s and Hungary’s agricultural resources, while Trieste connects with East Africa’s agricultural resources.

This dual advantage greatly enhances risk resistance, while the construction timeline for the Trieste factory is scheduled for the second half of the year, perfectly aligning with the opening of the Suez Canal.

Building the Vienna factory in the first half of the year, and the Trieste factory in the second half, means there’s no rush with the schedule, and everything aligns seamlessly with the opening of the Suez Canal.

Ernst sat at the table, using a red pencil to circle cities like Hamburg, Berlin, Heixinggen, Vienna, and Trieste on the map.

These cities and regions will become the pillars of the Heixinggen food enterprise in Europe, simultaneously covering the entire European area.

The competition in the European food industry is definitely intense, challenged by both European countries and overseas colonies.

Thus, Ernst does not harbor high hopes for profit margins; exorbitant profits are unlikely. Instead, a steady flow will suffice, and with East Africa’s products focusing on volume, sufficient quantity can still generate substantial revenue.

Meanwhile, it also paves the way for East Africa’s agricultural products in the future market, as a population of two million can produce a considerable amount of grain output.

After all, during this era, the vast majority of countries still rely on agricultural taxes to sustain their finances. East Africa has no agricultural tax, yet more than ninety percent of agricultural production profits are controlled by the Heixinggen Consortium.

However, the initial investments in the East African colony over the past three years were significant, so the funds the Heixinggen Consortium received were essentially reinvested into the development of East Africa. In fact, in the first two years, the Heixinggen Consortium operated at a loss, subsidizing large amounts of money to build up East Africa, which in turn slowed the development of enterprises in Europe.

Moreover, East Africa’s current population is only nearing two million, and only when this population is simultaneously engaged in production can agricultural profits be high. This means that only in a few months will East Africa truly produce agricultural value equivalent to a population of two million, as agriculture has cycles, and crops need time to grow.