African Entrepreneurship Record

Chapter 1064: Chapter 73: Developing from “Demand”

Hermes continued: ”Improving food taste doesn’t necessarily have to follow conventional routines. Take tofu pudding for example, some like it sweet, some like it salty, and others prefer spicy. There’s a huge market for all kinds of tastes, it’s just that not many people have noticed this before, and this is an opportunity for our city’s food processing enterprises.”

”Take the flour mill for instance, relying on the flour mill we developed a biscuit factory, and to produce more flavors of biscuits, the demand for sugar, salt, dried fruits, and other things will naturally increase. Based on this, I can develop material supply factories.”

Randall and others carefully considered the scenario Hermes described, and had to admit that it made a lot of sense.

Randall said: ”We can make some preliminary attempts, and if the results are significant, we can gradually develop supporting industries.”

Hermes: ”I can’t speak for other places, but definitely within the entire region, there’s no problem. Of course, if it’s just to meet the needs of city residents, then the scale doesn’t need to be too large, small to medium-sized factories will suffice.”

This is actually establishing local food processing enterprises, which is relatively common in East Africa. However, currently, the categories produced by East African food processing enterprises are too singular, and Iringa City plans to build the city’s food industry from the perspective of meeting different ’needs’.

Hermes continued: ”Food processing is a very basic industry, fully utilizing the city’s wheat to achieve related industrial layout.”

”And there’s actually another resource in East Africa that has long been neglected. If it can be utilized, I think our city’s light industry can definitely achieve substantial development.”

Hermes didn’t keep it a secret, he directly said: ”And this resource is labor. At the beginning of this century, my country’s population had already reached over 80 million. East Africa is actually not too lacking in population, and utilizing these labor resources can develop manufacturing, compensating for some disadvantages of our city.”

”Like the textile industry, it doesn’t necessarily have to be built near cotton-producing areas. Cities like Nairobi, Bulawayo, Jezira, and Mogadishu have developed strong textile industries relying on cotton planting.”

”But looking at Great Powers like Germany and the United Kingdom, their cotton is almost entirely dependent on imports. East Africa’s New Frankfurt City’s cotton industry also relies on the railway transport hub.”

”This shows that the development of the cotton textile industry does depend on raw materials, but not necessarily on proximity to production areas. The cotton textile industry is a typical labor-intensive industry, and labor and market factors greatly impact it.”

”Take Germany for example, it has a very high population density, abundant labor force, and a vast market, which are the prerequisites for Germany’s textile industry development.”

Germany’s area is less than one-twentieth of East Africa, but its population reaches nearly 50 million, about half of East Africa, so even for East Africa, Germany is a veritable population Great Power.

The characteristics of a large population, developed industry, and high income have determined that Germany’s textile industry has a broad domestic market, and the rich labor population provides convenient conditions for Germany to develop the textile industry. Compared to East Africa, Germany has more advantageous conditions for textile industry development aside from cotton planting.

Reflected in labor, technology, capital, and market, all far exceed East Africa. Besides the domestic market, surrounding countries’ consumption levels are strong, and German textiles are also very popular in the international market.

”This shows that Iringa City isn’t without conditions to develop the textile industry. Our city, although not a major cotton-producing area, is not far from the cotton-producing areas around Lake Malawi and Province Soron Lake.”

”Regarding labor, now that urbanization levels have improved, agricultural populations are moving towards cities, so it isn’t a problem for us.”

Randall interrupted: ”But other cities in the cotton textile industry are doing well too, how can we compete with those state-owned factories?”

Hermes explained: ”This touches on the demand I mentioned earlier, which can also be understood as the market.”

”The cotton textile industry is quite a large industrial category, involving many sectors, and whether value can be created ultimately depends on whether products can be sold. Our city’s geographical location, along with the condition of domestic cotton textile products, predestines the national market to have great potential.”

”East Africa through over a decade of development still faces a severe problem, which is the industrial products are too singular and cannot meet everyone’s needs. Just like reading ’Hamlet’, a thousand people have a thousand Hamlets, everyone has different aesthetics.”

”And the clothing, bedding, and other terminal products downstream of the cotton industry most readily reflect this result. Clothing varieties available in East Africa are minimal, which results in limited domestic choices, but minimal choices don’t mean there’s minimal demand. The reality is quite the opposite, people do want choices, but there’s nothing to choose from.”

”Take my daughter as an example, last week, my eldest daughter purchased a skirt produced in Dodoma City, but this set of skirts was very unattractive. So with her mother’s help, they sewed on many patterns.”

”Then why did my eldest daughter still buy this unattractive skirt? Because she felt the skirts in state-run stores aren’t the ugliest, only uglier. Of course, my daughter’s aesthetic might differ from others, but isn’t this a new demand? If there were skirts on the market that my daughter liked, she wouldn’t need to modify the purchased skirt.”

”Therefore, when developing light industrial products in our city, we should cater to the needs of the domestic population, providing more diversified products, ensuring the market won’t be a problem.”

”We don’t necessarily need to develop the upstream cotton textile industry; we can entirely focus on terminal industries like ready-made garments, tablecloths, curtains, which require fabric.”

”And raw materials can be imported from other cities. By conducting processing improvements based on market demand, we form a perfect closed loop driving local light industry development.”

”The same reflects in other industries too. For instance, in ceramics manufacturing, we can innovate, produce attractive products to gain market share, rather than rigidly judging product quality by durability or material solidity.”

Hermes’s speech can be said to have given Iringa City’s government officials a lesson that industrial development ultimately must sell products, and selling products depends on customer needs, which might not be quality and price but personal aesthetic, creating different demands.

Mayor Randall happily said: ”Hermes’s words have enlightened me. Next, our city’s industrial investment will follow this insight. As Hermes mentioned, only by producing goods that people need is the key to our city’s industrial development.”

”Moreover, through this form, we can create differentiated competition with other cities, accelerating our city’s industrial development. Our city indeed encounters limitations in heavy industry development regarding talent, education, mineral resources, transportation, and industrial foundation. But light industry is our tool to not fall behind other cities, and developing light industry needs more emphasis on market demand.”

”Our city isn’t a coastal region, so we should focus more on the domestic market, using it as a foundation to massively develop food processing and other labor-intensive industries, providing more light industrial product categories to meet society’s diverse demands.”

Ultimately, towns like Iringa City need to aim for breakthroughs in the industrial stage based on light industry. Globally, light industry takes the main stage, and East Africa isn’t a strong light industry player. Cities can seize the opportunity at present to occupy a niche in the East African industrial system through light industry, even surpassing some heavy industrial cities.