African Entrepreneurship Record

Chapter 1187: Chapter 196: Steel Trade in 1914

Rhein City.

Recently, East Africa hasn’t had much time to focus on changes in the European war situation. On one hand, East Africa has overindulged in the past two years, expanding its colonies by nearly over a million square kilometers. On the other hand, East Africa’s third five-year plan is about to conclude.

With colonial expansion came the growth of East Africa’s overseas markets. In the Far East, South America, the Middle East, and West Africa, East Africa has achieved significant success. As long as it can maintain its market competition advantage in these relatively neutral regions after the war, even if it shrinks, the size of East Africa’s potential overseas markets will surpass France and not be inferior to the United Kingdom and the United States.

The United Kingdom has too many colonies of high economic value, and like East Africa, the United States is seizing markets overseas and is currently East Africa’s strongest competitor in expanding overseas markets.

Sivert addressed government officials: ”The steel production report for last year has been summarized. In 1914, our country’s steel production reached 37 million tons, setting a new record. Particularly in the latter half of the year, affected by the European war, our steel production increased by over three million tons.”

”During the same period, U.S. steel production should be around 27 million to 30 million tons. The U.S. steel industry has revived due to the war, but the previous economic crisis severely hit the U.S. steel industry, temporarily preventing it from returning to its peak production. However, next year we may face fiercer competition from the U.S. steel industry.”

”Due to the war, it is difficult to determine the specific data of European countries, but the overall data should have increased somewhat. Of our steel production, about four million tons flowed to Europe through various means, with France, Russia, and Austria-Hungary ranking in the top three.”

France’s luck can be said to be quite bad, as its homeland already lacked the basic raw materials for the development of the steel industry. After Belgium was conquered by the German Army, it dealt another blow to France’s steel industry development.

Before the war, much of France’s coal and steel needed to be imported from Belgium, and France’s colonial production was limited. Meanwhile, due to the war, young and middle-aged labor flowed into the military, resulting in a relative lack of industrial population, inevitably affecting industries like steel. This led to a dire need for steel in France, further making France East Africa’s largest steel buyer in 1914.

As for Russia, they lack everything. Their pre-war steel production was comparable to France’s, but Russia mobilizes far more people than other countries.

Except for manpower, Russia cannot satisfy its domestic needs for production, particularly for industrial goods, which depend heavily on imports from other industrial countries. However, unlike France, Russia lacks the financial resources and owes debts to several countries, severely limiting its purchasing power.

East Africa does not dare to use Russia’s government credit as loan collateral. Given Ernst’s understanding, the future stability of the Russian regime is uncertain, and lending to Russia now risks having even the principal confiscated by the Soviet regime.

The most crucial aspect is Russia’s collateral, such as mines and oil fields, which East Africa cannot develop even if acquired.

Thus, East Africa’s trade with Russia is primarily conducted using silver or through bartering, resulting in East African merchant ships returning from the Black Sea with large shipments. Whether East Africa has a use for them is another matter.

Austria-Hungary becoming East Africa’s third-largest steel import nation in Europe is also understandable, as their steel industry is even inferior to France’s, yet their population far exceeds France’s.

Besides the orders from the three great powers, many smaller European countries also heavily rely on East Africa’s steel output, resulting in East Africa’s steel production reaching an astonishing 37 million tons in 1914.

It’s noteworthy that at the end of World War I in the previous life, the U.S. steel output was only a bit over 40 million tons, and East Africa is now less than 3 million tons short of that threshold.

”There’s still room for increasing steel production. Besides Europe, most countries in the world, except for a few like the U.S., are experiencing temporary steel shortages due to European production countries being unable to export because of the war.”

”This portion of the market is by no means inferior to the European market, so there’s room for our steel industry to further increase this year; breaking through 40 million tons is just within reach.”

”In steel exports, special steels are particularly prominent. Other than Germany and the United Kingdom, many countries need to import special steels from our country for military production, especially in the field of artillery.”

Before the outbreak of war, East Africa had already become a top-three special steel production nation alongside Germany and the United Kingdom. Britain has deep historical accumulation, Germany holds technological prowess, while East Africa’s favorable natural conditions played a crucial role.

Except for tungsten, most of the other key alloy minerals are mainly sourced from East Africa. East Africa ranks first in the world for manganese, chromium, and aluminum; its copper production is also in the top tier; it lacks no nickel, lead, or zinc either. In fact, East Africa also possesses tungsten mines, just on a much smaller scale than the Far East Empire.

This positions East Africa’s steel industry, particularly in high-end steel products, advantageously in terms of time, geographical benefits, and human resources. By the end of 1914, even established imperialist nations like France, Russia, and Austria-Hungary had to increase orders of special steel from East Africa to manufacture artillery and other weapons.

”As our steel industry thrives, our imports of iron ore and coal from other regions have also notably increased, especially from the Middle East, South America, and Tsarist Russia, with the fastest growth in total mineral imports coming from these three areas.”

A large part of the minerals imported from Russia is used to offset debts, while besides oil, there are many other minerals in the Middle East that are often overshadowed by oil resources but are abundant nonetheless.

The current leading nation in the Middle East, the Ottoman Empire, has closely worked with East Africa over recent years, with trade between the two nations steadily increasing, thereby promoting further prosperity in East Africa’s trade with the entire Middle East region.

Ironically, South America is relatively lacking in coal. Now, due to the limited industrial scale of various South American countries, they have become sources of coal for East Africa. After all, East Africa’s West Coast has limited coal resources, whereas it does not lack iron ore.

The fact that East Africa’s West Coast was once part of the same landmass as South America makes the parallels in mineral resources unsurprising; for example, in the previous life, Brazil was the world’s second-largest iron ore exporter, only second to Australia, home to mining giant Vale.

In contrast, East Africa’s West Coast, along with other parts of Africa’s West Coast, such as the Belgian Congo and the Cameroon Colony, and in the past Guinea, have abundant iron ore.

Conversely, East Africa’s coal resources are situated in the east and south regions. Hence, importing iron ore from various South American countries and shipping it via sea to East Africa’s West Coast has become a viable and profitable venture.

Ernst was quite pleased with the development of East Africa’s steel industry, adding, ”While advancing the steel industry, particular attention should be given to regions beyond Europe.”

”Though currently the steel prices in Europe are extraordinarily high due to the war, allowing us to earn more through European exports, this trade should be considered short-term profit since the war in Europe will inevitably end one day.”

”For a steady development of East Africa’s steel industry in the future, regions in Asia, Africa, and Latin America deserve special focus.”

”Especially concerning investments in overseas mineral resources, regions like Australia, Brazil, and Peru have great potential. With a gap in competition, currently, our main competitor in overseas market encroachments is the United States. Therefore, East African capital needs to venture abroad, particularly taking proactive steps in underdeveloped regions in Asia, Africa, and Latin America.”

Once the European war ends, those established great powers will restore their normal production and undoubtedly find ways to drive the United States and East Africa back out. Hence, while current profits in Europe are substantial, they are also likely to last only about four to five years, plenty of time for East Africa to stake claims in areas outside Europe and America.