African Entrepreneurship Record

Chapter 314: Chapter 301: Malawi Lake Heavy Industrial Zone

Regarding the city of Mombasa, overall, it left a good impression on the Austrian commercial delegation. In overseas investment, stability is the most important, and East Africa excels in this aspect. Although the delegation finds East Africa’s use of Black people somewhat conservative, the sheer size of East Africa itself is enough for them to invest here.

The current plan of the delegation leader, Wolfgang, is to first invest in a few small factories in East Africa to test the waters, and most of the other members share this idea. They still hold a skeptical attitude towards East Africa’s politics. East Africa’s typical feudal monarchy system, combined with its extremely conservative style, makes them somewhat concerned about the business environment there.

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While Wolfgang and others were inspecting the north, the area in the east of Lake Malawi earmarked for Austrian development remained neglected.

First of all, the location is too remote, deep in the interior of East Africa. Although the industrial zone in the north extends to the Great Lakes Region, the unique advantage of the Mombasa port cannot be compared with the surroundings of Lake Malawi, and the only southern port, Mtwara, cannot compare with Mombasa in scale either.

Furthermore, the transport condition in East Africa clearly indicates that products produced in this area are difficult to transport via sea and can only rely on procurement by the East African government. This means complete dependence on the domestic market of East Africa for absorption, making it too uncertain.

Secondly, even though coal and iron resources have been discovered here, they do not captivate Austria-Hungary and hold little attraction for investors. After all, with the Balkans adjacent, there is no need to go all the way to East Africa for development. In the absence of investment, only Heixinggen Consortium can take over.

Finally, East Africa’s positioning near Lake Malawi is for heavy industry development, which contradicts Austrian expectations. As well-known, light industry has the characteristics of low investment, short cycle, and quick return, which heavy industry cannot match, so capital is more inclined to invest in light industry.

Thus the industrial development near Lake Malawi can only be managed by East Africa itself, and Heixinggen Consortium has basically zero experience in this regard. Although East Africa has related industries, they remain at the handicraft workshop stage.

Only the coal mining in Mbeya has initially reached the level of Europe’s small coal mines. With the replacement of related equipment, production is steadily improving.

In the field of heavy industry, not only East Africa but the European part of Heixinggen Consortium lacks much experience. At this time, they can only rely on heavy investment to complete the local investment.

Fortunately, now Heixinggen Consortium is financially abundant, having made a huge fortune just by purchasing bonds from the Franco-Prussian War. Thus, Ernst followed the old routine, acquiring a small steel enterprise in the Saar region and sending it to East Africa.

This steel enterprise originally thrived on a small iron mine in the Saar region. However, the eruption of the Franco-Prussian War interrupted normal production, and the capital chain broke, ultimately leading to bankruptcy.

Ernst took over this compact and efficient steel enterprise and invited the temporarily unemployed local workers. In the end, only over a hundred employees were willing to leave the Saar region for East Africa, most of whom were Germans.

After three months of turnover, the workers were basically in place, and to improve the efficiency of iron ore resource development, Ernst simply purchased all-new production equipment from Austria.

Simultaneously, Ernst acquired a steel plant in Kapfenberg, Austria. Following the merger of the two enterprises, it was renamed as the East African United Steel Company, thus laying the difficult foundation for East Africa’s own steel industry. Heixinggen Consortium also began venturing into fields like scientific research, light industry, shipbuilding, and trade, entering the heavy industry production domain.

East Africa places considerable emphasis on the development near Lake Malawi, as it is the only place in Tanzania simultaneously endowed with both coal and iron resources, offering the foundation for industrialization.

Regarding the development of the Lake Malawi region, Ernst specifically communicated with Constantine.

Ernst: ”There are two conditions necessary for the existence of heavy industry: one is raw material supply, and the other is robust national financial support. In this regard, East Africa itself is already prepared, and with the Lake Malawi region being in the heartland of East Africa, where the environment is quite safe, there are not too many problems with investment and development.”

Although to the south of the Lake Malawi region is Mozambique, for East Africa, it can be entirely ignored. If it were the Portuguese Kingdom itself, East Africa might still pay somewhat more attention, but that’s about it. The capacity of East Africa has already reached the level of Portugal itself, it’s just that in comparison to Portugal, East Africa’s capital is relatively weak. However, the capital of Portuguese is dispersed among individuals, while in East Africa, it is mostly concentrated in the hands of the government.

Constantine: ”It’s now certain that the Austrians have no interest in investing in the Lake Malawi region. Yesterday’s telegram from Von der Leyen made it very clear; they are even more inclined to invest in Mombasa in the northern industrial zone, showing little interest in the interior. If it weren’t for Nairobi’s development plan being very enticing, they might have been indifferent.”

Ernst: ”I had expected this, but it’s not a big deal. Indeed, the Lake Malawi industrial zone has inherent deficiencies, particularly with East Africa’s transportation conditions. We can only rely on ourselves for development. Moreover, since they invested in Mombasa, as long as we provide them convenience and they make more money, driven by interests, they will gradually increase their investment efforts in the northern industrial belt.”

Constantine: ”What specific plans do you have for the Lake Malawi region?”

Ernst: ”The Lake Malawi area is positioned as a heavy industrial base, but it can only meet the initial industrial development needs of East Africa. In the future, as East Africa develops, the heavy industrial base will inevitably shift to the Matebel Plateau. Therefore, for the Lake Malawi region, we should focus on talent cultivation and technical reserves to lay the foundation for the future development of the Matebel Plateau. Moreover, the Lake Malawi area connects Tanganyika and Zambia, projecting inland regions better, strengthening East Africa’s control over the interior. Relying on the heavy industry of the Lake Malawi area, we will develop related industries in the surrounding regions, fostering inland development and reducing East Africa’s dependence on coastal cities. After all, coastal areas are not very peaceful regions and may always face threats from the sea, and currently, East Africa’s naval power is insufficient to counter sea enemies, hence we must develop the inland regardless, even from a security perspective.”

As mentioned before, East African Army can outmatch the navy tenfold inland; in the interior, the East African Army does not fear any challenge, while the maritime situation is intricate, with Mozambique’s naval prowess being not weaker than East Africa’s, let alone the maritime powerhouses like Portugal backing them.

Ernst: ”Steel production is the most intuitive indicator of a nation’s comprehensive strength. Only by achieving self-sufficiency in steel can East Africa bear more industries. Currently, the difficulty for Heixinggen Consortium to shift to East Africa lies in the infrastructural and industrial shortcomings. If the Lake Malawi industrial zone is built, I could at least transfer a third of the consortium’s industries to East African mainland in three years.”

Heavy industry provides the main means of production for material and technical foundations, and the enterprises under Heixinggen Consortium depend on the development of German and Austrian heavy industries, with components and technologies sourced from the two. Only by solving this issue can East Africa undertake the industry transfer of Heixinggen Consortium.

At present, the base of heavy industry is the steel industry, and only when steel production rises can related industries be developed.

Constantine: ”Ultimately, it’s still a transportation issue. With transportation, everything becomes easier. The issue of railway construction should also be brought on the agenda. I’ve heard that the progress on the First Railway is currently slow, and I’m unsure whether it will succeed.”

Ernst: ”It’s mainly due to insufficient technical accumulation. Vienna Energy Power Company cooperates with Austria, but both parties lack experience and technology in broad gauge locomotives, so they haven’t even managed to produce a prototype locomotive. I will reconsider this matter; anyway, the First Railway is an experimental railway, it is better to demolish and rebuild it once more than waste time on it now.”

East Africa conceived a broad-gauge locomotive but couldn’t produce one comparable to locomotives of other gauge standards, with too many deficiencies. Resolving technical preemptive advantages is indeed not that simple.

Ernst also doesn’t intend to waste time on this and prefers to adopt standard railway standards available, at least it bypasses many detours, and East Africa’s development waits for nobody.

However, the attempts aren’t without merit. Vienna Energy Power Company, through cooperating with Austria, has explored a lot of new technologies that can be applied to East African railways, and it also formulated a mature idea for locomotive research. The future realization of railway domestication in East Africa will pose no technical problem.

Currently, all Austrian railway companies suggest adopting mature railway standards for East Africa, mainly promoting 1435mm, followed by meter gauge track, and even 760mm etc., which are existing railway gauges in Austria-Hungary, with mature technology.

The suggestions given to Ernst by Austria were quite mixed due to the lack of a uniform railway standard in Austria. However, the main suggestion was the promotion of 1435mm, followed by 1520mm and higher.

The proposed railways above ensure that future East African railways will not be an isolated existence. Because Mozambique’s maritime power was no less than East Africa’s at the time, not to mention Portugal, which was a maritime power behind it.

Using one of the above rails, future East African railways will not exist in isolation, and because of the 1435mm standard, the connection between East Africa and the inland will be enhanced. Therefore, relying on the heavy industry of the Lake Malawi area, related industries can also be developed in the surroundings, propelling the development of the inland areas, reducing East Africa’s dependency on coastal cities. After all, coastal areas are not peaceful territories and might always face threats from the sea, and the navy’s strength in East Africa is still inadequate to handle overseas enemies; therefore, development inland in East Africa is essential, even purely from a safety standpoint.

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