African Entrepreneurship Records

  Chapter 303 Lake Malawi Heavy Industrial Zone

  About the city of Mombasa, the Austrian business delegation generally has a good impression. When investing overseas, the most important thing is stability, and East Africa is better than stability. Although the use of black people in East Africa seems conservative to the delegation, the size of East Africa itself is enough for them to invest here.

  At present, Wolfgang, the head of the investigation team, intends to invest in several small factories in East Africa to test the water first, and other members basically have the same idea. Because they are still skeptical about the politics of East Africa, the typical feudal monarchy in East Africa combined with an extremely conservative style makes them a little worried about the business environment in East Africa.

  …

  When Wolfgang and others were investigating in the north, the eastern part of Lake Malawi in the south was planned to be left for Austria to develop, but no one cared about it.

First of all, the location is too remote, deep in the inland of East Africa. Although the northern industrial zone is planned to reach the Great Lakes region, the port of Mombasa has unique advantages, which cannot be compared with those around Lake Malawi. The only port in the south is Mtwara. Can't compare to Mombasa either.

  As for the traffic situation in East Africa, it is clear that the products produced in this region are difficult to be transported by sea. They can only rely on the procurement of the East African government, which means that they are completely dependent on the East African domestic market for digestion, and the uncertainty is too strong.

Secondly, it has been proven that some coal and iron resources here cannot impress the Austro-Hungarian Empire, and are not very attractive to investors. After all, the Balkan Peninsula is on the side, so there is no need to travel across the ocean to develop in East Africa. Only the Heixingen consortium can take over.

Finally, the positioning of East Africa near Lake Malawi is to develop heavy industry, which is also contrary to the ideas of the Austrians. It is well known that light industry has the characteristics of small investment, short cycle, and fast return on capital. This is incomparable to heavy industry, so capital prefers it. Invest in light industry.

  So the industrial development near Lake Malawi can only be developed by East Africa itself, and the Hechingen Consortium has basically zero experience in this area. Although there are related industries in East Africa, they are still at the stage of handicraft workshops.

   Only the coal mining in Mbeya has initially reached the level of some small-scale coal mining in Europe. With the replacement of related equipment before, the current output is steadily increasing.

  In the field of heavy industry, let alone East Africa, the European part of the Hechingen Consortium does not have much experience in this area. At this time, it can only complete local investment by throwing money at it.

   Fortunately, the Hechingen Consortium is now well-funded, and it has made a fortune just by purchasing the bonds of the Franco-Prussian War, so Ernst used the old routine to acquire a small steel company in the Saar region, and packaged it and sent it to East Africa.

   This iron and steel company originally relied on a small iron mine in the Saarland area to make a fortune, but the outbreak of the Franco-Prussian War interrupted the normal production order, broke the capital chain, and finally went bankrupt.

   Ernst took advantage of the opportunity to win this small and lean steel company, and at the same time extended invitations to local workers who were temporarily unemployed at home. In the end, only more than a hundred employees were willing to leave the Saarland region to develop in East Africa, most of whom were Germans.

  After a three-month turnaround, the workers were basically in place, and in order to improve the efficiency of iron ore resource development, Ernst simply purchased brand new production equipment directly from Austria.

  At the same time, Ernst acquired a steelmaking plant in Kaffenburg, Austria. After the merger of the two companies, it was renamed the East African United Steel Company, so that East Africa's own steel industry had a difficult start. The Hexingen Consortium also started to get involved in the field of heavy industry production from scientific research, light industry, shipbuilding, trade and other fields.

  East Africa attaches great importance to the development of the area around Lake Malawi. After all, this is the only region in Tanzania that has both coal and iron resources. Only coal and iron have the basis for industrialization.

   Regarding the development of the Malawi Lake District, Ernst made a special call with Constantine.

Ernst: "The existence of heavy industry requires two conditions. One is the supply of raw materials, and the other is the support of sufficient national funds. We already have this in East Africa. In addition, the Lake Malawi area is located in the hinterland of East Africa, and the environment is relatively safe. So there is not much problem with investment and development.”

Although there is Mozambique in the south of the Lake Malawi area, it can be completely ignored for East Africa. If the Kingdom of Portugal itself East Africa may pay more attention to it, but that's all. The volume of East Africa has reached the level of Portugal. That is to say, the capital is relatively weak compared with Portugal, but the Portuguese's capital is scattered in private hands, while East Africa is mostly concentrated in the hands of the government.

Constantine: "It is now certain that the Austrians are not interested in investing in the Lake Malawi area at all. It was clearly stated in Von der Leyen's telegram yesterday. Even in the northern industrial zone, they are more inclined to invest in Mombasa. Investment, lack of interest in the inland, if the development plan of Nairobi City is not very attractive, I am afraid that they will be indifferent.”

Ernst: "I have expected this, but it is not a big deal. The Lake Malawi Industrial Zone is indeed inherently deficient, especially the traffic conditions in East Africa. We can only rely on ourselves to support the development, and Since they have invested in Mombasa, as long as we provide them with convenience and earn more money, they will gradually increase their investment in the northern industrial belt driven by interests."

  Konstantin: "So what are your specific plans for the Malawi Lake District?"

Ernst: "The Malawi Lake District is positioned as a heavy industry base, but it can only meet the initial industrial development needs of East Africa. With the development of East Africa in the future, the heavy industry base in East Africa will definitely be transferred to the Matabele Plateau, so Malawi What we need to do well in the lake area is talent training and technical reserves to lay the foundation for the future development of the Matabele Plateau. At the same time, the Malawi Lake area connects Tanganyika and Zambia, and it can better radiate inland areas from here. Strengthen East Africa's control over the inland, rely on the heavy industry in the Malawi Lake area, develop related industries in the surrounding areas, drive inland development, and reduce East Africa's dependence on coastal cities. After all, the coast is not a peaceful zone and may be threatened by the ocean at any time , and the strength of our East African navy is not enough to deal with sea enemies, so we must develop inland East Africa, even for security reasons."

As I said before, the East African Army can beat the Navy by ten streets. When it reaches the inland, the East African Army is not afraid of any challenges, but the situation on the sea is complicated. The sea power of Mozambique alone is not weaker than that of East Africa, not to mention the maritime power behind it. Portugal.

Ernst: "Steel production is the most intuitive manifestation of a country's comprehensive strength. East Africa can only undertake more industries if it implements self-sufficiency in steel production. The current difficulty in transferring the Hexingen Consortium to East Africa lies in the lack of infrastructure and industries. , if the Lake Malawi Industrial Zone is built, I can transfer one-third of the consortium's industries to East Africa within at least three years."

  Heavy industry provides the main means of production based on material technology, while the products of the companies under the Hechingen Consortium are developed on the basis of German and Austrian heavy industry, and components and technologies come from both. Only when East Africa first solves this problem can it undertake the industrial transfer of the Hexingen consortium.

  The current foundation of heavy industry is the iron and steel industry. Only when the output of iron and steel increases can we be able to develop related industries.

  Konstantin: "In the final analysis, it is still a traffic problem. With traffic, everything will be more convenient. The railway construction issue should also be put on the agenda. I heard that the first railway is currently making slow progress. I don't know if it will succeed."

Ernst: "The main reason is the lack of technology accumulation. The Vienna Energy Power Company and the Austrian side cooperate, but the two have insufficient experience and technology in wide-gauge locomotives, so there is not even an experimental locomotive yet. Done, I will reconsider this aspect, anyway, the first railway is an experimental railway, but it will be overthrown and rebuilt later.”

  East Africa envisages that wide-gauge locomotives cannot be manufactured, but that they cannot be compared with locomotives of other gauge standards, and there are many defects. The technical first-mover advantage is indeed not so easy to solve.

   Ernst does not intend to waste time on this, it is better to choose the ready-made railway standard, at least it can save a lot of detours, and the development of East Africa does not wait for anyone.

However, this attempt cannot be said to be fruitless. The Vienna Energy Power Company has also explored many new technologies in cooperation with Austria, which can be applied to the East African Railway. At the same time, the Vienna Energy Power Company has a mature idea for locomotive research and development. Therefore, there will be no technical difficulties in realizing the localization of East African railways in the future.

At present, various Austrian railway companies suggest to East Africa to directly adopt mature railway standards. In this regard, they mainly promote 1435mm, followed by meter gauge, and even 760mm. This aspect is the railway gauge that existed in the Austro-Hungarian Empire itself. All mature.

   There was no uniform standard for the provincial railways of the Austro-Hungarian Empire, so the suggestions to Ernst were mixed, but the main recommendation was its own technology.

  760mm Ernst intends to promote it. This narrow gauge is suitable for operation in mountainous areas and mining areas. It can be introduced into various mining areas in the current Lake Malawi area to increase coal and iron ore transportation. However, the railway standards in East Africa are mainly selected from the values ​​of 1435mm and above.

  In this regard, there are mainly three types of railway gauges operated in previous lives that meet this standard. 1435mm is the standard gauge, and it is operated by the most countries. 1524mm is mainly implemented in Eastern Europe, Russia, Mongolia and other countries. Finally, 1676mm is implemented in India, Argentina, Chile and other countries.

  1676mm and 1524mm are actually not uniform. For example, Portugal’s 1665mm and Spain’s 1674mm are only slightly worse, and 1524mm is also 1520mm.

  For example, the meter gauge, some countries use integers, which is 1000mm, while others use 1067mm.

  Alternative 1600mm rails exist in Brazil, Australia and Ireland.

  Using the above railways, the East African railways will not exist in isolation in the future, because there will always be countries with the same railway standards as East Africa.

   The 2500mm railway gauge is too controversial. Now we are asking for your suggestions, and you will like it for the highest adoption. The time limit is July 24, 2023.

  (end of this chapter)