Chapter 303 Lake Malawi Heavy Industrial Zone
The Austrian business delegation had a good impression of Mombasa. The most important thing for overseas investment is stability, and East Africa is better in terms of stability. Although the delegation thought that East Africa was a bit conservative in its use of black people, the size of East Africa itself was enough for them to invest here.
At present, Wolfgang, the leader of the delegation, plans to invest in a few small factories in East Africa to test the waters. The other members basically have the same idea because they are still skeptical about East African politics. The typical feudal monarchy and extreme conservatism in East Africa make them somewhat worried about the business environment in East Africa.
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While Wolfgang and others were investigating in the north, no one was interested in the area east of Lake Malawi in the south that was planned to be left for Austria to develop.
The first is that the location is too remote, deep in the interior of East Africa. Although the northern industrial zone is planned to be in the Great Lakes region, the unique advantages of the port of Mombasa are incomparable to those around Lake Malawi. The only port in the south, Mtwara, is also not as large as Mombasa.
The transportation conditions in East Africa make it clear that products produced in the region are difficult to transport by sea. The products can only rely on purchases by the East African government, which means they are completely dependent on the domestic market in East Africa, which carries too much uncertainty.
Secondly, the coal and iron resources that have been explored here cannot impress the Austro-Hungarian Empire and are not very attractive to investors. After all, the Balkan Peninsula is nearby, and there is no need to travel across the ocean to East Africa for development. In the absence of investment, the Hexingen Consortium can only take over.
Finally, the positioning of East Africa near Lake Malawi is to develop heavy industry, which is also contrary to the Austrians' idea. It is well known that light industry has the characteristics of small investment, short cycle and quick return on investment, which is incomparable to heavy industry, so capital prefers to invest in light industry.
Therefore, industrial development near Lake Malawi can only be developed by East Africa itself, and the Hexingen Group has basically zero experience in this regard. Although East Africa also has related industries, they are all still at the handicraft workshop stage.
Only the coal mining in Mbeya has initially reached the level of some small-scale coal mining in Europe. In addition, with the replacement of relevant equipment, the output is currently increasing steadily.
In the field of heavy industry, not to mention East Africa, even the European part of the Hexingen Group does not have much experience in this area. At this time, it can only complete its local investment by spending money.
Fortunately, the Hechingen Consortium now has sufficient funds and has made a fortune just by purchasing bonds from the Franco-Prussian War. So Ernst used the old trick to acquire a small steel company in the Saar region and packaged it and sent it to East Africa.
This steel company originally made its fortune from a small iron mine in the Saar region, but the outbreak of the Franco-Prussian War disrupted normal production order, broke its capital chain, and eventually led to bankruptcy.
Ernst took advantage of the situation and took over this small and powerful steel company. At the same time, he extended invitations to local workers who were temporarily unemployed at home. In the end, only more than one hundred employees were willing to leave the Saar region and develop in East Africa, most of whom were Germans.
After three months of turnover, the workers were basically in place, and in order to improve the efficiency of iron ore resource development, Ernst simply purchased new production equipment directly from Austria.
At the same time, Ernst acquired a steel mill in Kapfenberg, Austria. After the merger of the two companies, they were renamed East African United Steel Company. This was a difficult start for East Africa's own steel industry. The Hechingen Consortium also began to get involved in heavy industrial production from scientific research, light industry, shipbuilding, trade and other fields.
East Africa attaches great importance to the development of the area near Lake Malawi. After all, it is the only region in Tanzania that has both coal and iron resources, and only with coal and iron can there be a foundation for industrialization.
Ernst specifically spoke to Constantine about the development of the Lake Malawi area.
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. East Africa already has these conditions. In addition, the Lake Malawi region is located in the hinterland of East Africa and the environment is relatively safe, so there is no big problem with investment and development."
Although there is Mozambique to the south of Lake Malawi, it can be completely ignored for East Africa. If it were the Kingdom of Portugal itself, East Africa might still pay attention to it, but that's all. The size of East Africa has reached the level of Portugal, that is, the capital is relatively weak compared with Portugal. However, the Portuguese capital is scattered in private hands, while East Africa's capital is mostly concentrated in government hands.
Constantine: "It is now certain that the Austrians are not interested in investing in the Lake Malawi region. Von der Leyen's telegram yesterday made it very clear. Even in the northern industrial zone, they prefer to invest in Mombasa and have little interest in the interior. If it weren't for the attractive development plan for Nairobi, I'm afraid they would have remained indifferent."
Ernst: "I had expected this, but it's not a big deal. The Lake Malawi Industrial Zone is indeed inherently deficient, especially the transportation conditions in East Africa. We can only rely on ourselves to support its development. And since they have invested in Mombasa, as long as we provide them with convenience and make more money, they will gradually increase their investment in the northern industrial belt driven by interests."
Constantine: "So what specific plans do you have for the Lake Malawi region?"
Ernst: "Lake Malawi is positioned as a heavy industrial base, but it can only meet the initial industrial development needs of East Africa. In the future, with the development of East Africa, East Africa's heavy industrial base will definitely be transferred to the Matabele Plateau. Therefore, what we need to do in Lake Malawi is to cultivate talents and reserve technologies to lay the foundation for the future development of the Matabele Plateau. At the same time, Lake Malawi connects Tanganyika and Zambia, from which we can better radiate inland areas and strengthen East Africa's control over the inland areas. Relying on the heavy industry of Lake Malawi, we will develop related industries in the surrounding areas to drive inland development and reduce East Africa's dependence on coastal cities. After all, the coast is not a peaceful area and may be threatened by the sea at any time. The strength of our East African navy is not enough to deal with enemies at sea, so we must develop inland areas in East Africa, even for security reasons."
As mentioned before, the East African Army is far superior to the Navy. When it comes to inland, the East African Army is not afraid of any challenge. However, the situation on the ocean is more complicated. Mozambique's naval power alone is not weaker than that of East Africa, not to mention the maritime power Portugal behind it.
Ernst: "Steel production is the most direct reflection of a country's comprehensive strength. East Africa can only undertake more industries if it can achieve self-sufficiency in steel production. The current difficulty for the Hexingen Consortium to move to East Africa lies in the lack of infrastructure and industry. If the Lake Malawi Industrial Zone is built, I can at least transfer one-third of the consortium's industries to East Africa within three years."
Heavy industry provides the main means of production for the material and technological foundation, and the products of the Hechingen Group's enterprises are developed based on the heavy industries of Germany and Austria, with parts and technology coming from both. Only when East Africa solves this problem first can it undertake the industrial transfer of the Hechingen Group.
The current foundation of heavy industry is the steel industry. Only when steel production increases can we have the ability to develop related industries.
Constantine: "In the end, it's still a transportation issue. With transportation, everything will be more convenient. The issue of railway construction should also be put on the agenda. I heard that the progress of the First Railway is currently slow. I don't know if it can succeed."
Ernst: "The main reason is that there is a lack of technical accumulation. Vienna Energy Power Company cooperates with Austria, but both of them do not have enough experience and technology in wide-gauge locomotives, so now they have not even made an experimental locomotive. I will reconsider this aspect. Anyway, the First Railway is an experimental railway, so it is better to overthrow and rebuild it later."
It's not that the wide-gauge locomotive envisioned by East Africa cannot be built, but even if it is built, it cannot be compared with locomotives with other standard gauges and has many defects. The first-mover advantage in technology is indeed not so easy to solve.
Ernst did not intend to waste time on this. It would be better to choose the existing railway standards. At least it would avoid a lot of detours. The development of East Africa cannot wait.
However, it cannot be said that this attempt was fruitless. Vienna Energy and Power Company has also explored many new technologies in its cooperation with Austria, which can be applied to the East African Railway. At the same time, it has also given Vienna Energy and Power Company mature ideas on locomotive research and development, and there will be no technical difficulties in realizing the localization of East African Railway in the future.
At present, the advice given by various Austrian railway companies to East Africa is to directly adopt mature railway standards. In this regard, they mainly promote 1435mm, followed by meter gauge, and even 760mm, etc. These are all railway gauges that existed in the Austro-Hungarian Empire itself and are technically mature.
There was no unified standard for railways in the provinces of the Austro-Hungarian Empire, so the advice given to Ernst was rather mixed, but the main recommendation was to use their own technology.
Ernst is willing to promote the 760mm narrow gauge, which is suitable for mountainous areas and mining areas. It can be introduced to various mining areas in the current Malawi Lake area to increase the transportation volume of coal and iron ore. 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 track gauges that meet this standard in the past. 1435mm is the standard gauge, which is used by the most countries. 1524mm is mainly used in Eastern Europe, Russia, Mongolia and other countries. Finally, 1676mm is used by India, Argentina, Chile and other countries.
1676mm and 1524mm are actually not the same. For example, Portugal is 1665mm and Spain is 1674mm, which are only slightly worse, and 1524mm also has 1520mm.
For example, for meter gauge, some countries use integers, which is 1000mm, while others use 1067mm.
There are also options for 1600mm rails that exist in Brazil, Australia and Ireland.
With the adoption of the above railways, no railway in East Africa will exist in isolation in the future, because there will always be countries with the same railway standards as East Africa.
The 2500mm railway track gauge is too controversial. We are now soliciting your suggestions. The one with the highest number of likes will be adopted. The deadline is July 24, 2023.
(End of this chapter)
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