Chapter 145: The Tobacco Factory
At the same time that Zanzibari merchants were taking both people and goods from East Africa, the Hechingen consortium was also working to cut production costs for its merchandise, so as to reap greater profits.
They also needed to ensure the security and smooth flow of raw materials. Before the East African colony's founding, global tobacco cultivation was basically monopolized by a few overseas colonial powers; the East African colony happened to resolve that issue.
Of course, at present the consortium isn't being "choked off." This world is one in which several powers coexist; no single state dominates. The consortium can compare prices from various suppliers and pick the tobacco products that suit them best. Especially after East Africa was opened up, in these last two years, tobacco fields have expanded more and more, giving the Hechingen consortium additional security.
Colonial tobacco's production costs are extremely low; it merely has to be shipped back to Europe, and the ships returning immigrants can handle that conveniently. Meanwhile, the consortium's industrial product line is so vast that even Ernst himself can't list all of it—anything tied to German daily life is covered. The raw materials needed by these numerous products are likewise varied and large in volume.
Fortunately, this era's industrial scale is in no way comparable to the one Ernst knew before, and people's purchasing power is also weaker. Hence many raw materials can still be supplied by Europe itself. The Ruhr region's coal is a classic example, providing abundant, affordable energy for the future rise of German industry. Coal was a key factor in the first Industrial Revolution.
The East African colony carries the responsibility of furnishing raw materials, but currently the most exported items to Germany aren't minerals but rather lumber and certain specialties. Immigrant ships on their return voyage carry back loads of timber and farm products, which doesn't draw much attention. Some of that wood is retained by the consortium to produce items like razor handles or furniture, while the rest is sold cheaply. There's plenty of timber in Europe, so fetching high prices for logs is basically impossible.
Even if selling wood doesn't bring handsome profits, at least it saves a pile of money in procurement. If they sold it themselves, those profiteers would say it's no good; but if they had to buy it themselves, they'd talk it up, complaining about "reduced production" and so forth. This is the colonial age; the entire globe is basically a backyard for Europe and America, and there's no shortage of timber except in deserts and ice fields—who'd believe talk of "reduced production"?
Though in becoming a lumber supplier themselves, the consortium ironically turned into what they used to curse, eventually becoming the very thing they hated.
Meanwhile, East Africa's special agricultural products remain its most profitable exports, things like cloves, sisal, various distinctive fruits and vegetables…
August 11, 1868.
Mbeya.
Today the weather is sunny, the breeze mild. Workers are putting up a new building downtown. Under the direction of German engineers, the immigrant construction team is scrupulously carrying out their tasks. By now, East Africa has formed a skilled construction workforce. They serve on every project site: roads, bridges, buildings for special uses. Construction workers are effectively the main force of the East African labor class.
The new building in Mbeya clearly follows a European industrial design, with vents and chimneys indicating that steam-driven equipment will be installed. Given the schedule, machinery should already have reached port, and within a month it will arrive, get assembled, and go into production. Once the equipment is in place, it will become East Africa's very first industrial cigarette factory.
From the colony's inception, East Africa had a clear mission to supply raw materials for the Hechingen consortium. As tobacco was a main source of huge profit for the consortium, Ernst paid it special attention; part of the purpose in founding the East African colony was to provide raw materials for Hechingen's tobacco operations.
When they first established the colony, they tried growing tobacco, then gradually extended cultivation inland. Many parts of the colony suit tobacco farming, especially around the lakes; along Lake Malawi in particular is an important production zone. Mbeya is the capital of the Upper Lake Malawi area, so its territory covers the lake's northern part. That means Mbeya lies very close to the tobacco fields.
Hauling harvested tobacco all the way back to Germany for processing and then shipping it out again is costlier than completing the product in East Africa itself and exporting it. Tobacco and finished cigarettes carry different transport costs: the same weight of raw leaves occupies far more volume than the finished product. The more shipped, the more money lost. From a business viewpoint, less profit means a loss.
And Mbeya, being close to the tobacco fields and endowed with abundant coal resources, can provide continuous power for the factory. Transporting the finished product out is easy—cigarettes are high-profit and don't weigh much. Compare that to the colony's distribution of Mbeya coal throughout East Africa; shipping is hardly an issue.
Besides, manufacturing cigarettes right in East Africa lets them supply the local settlers, draining that modest wage from many of them. They can also supply Zanzibar and Arab merchants, leveraging the opportunity to expand into Indian Ocean markets and boost Hechingen Tobacco's brand. Conquering the Indian Ocean region—even Southeast Asia—offers a lure no merchant can resist.
In the colony, labor is far cheaper than in Germany, plus raw materials are on hand, basically making production costless. Meanwhile, Hechingen's tobacco factories in Germany continue purchasing from other suppliers. Hogging the entire supply would risk a joint backlash, so caution is wise. East Africa has only been under development briefly. While it holds great promise, it can't yet meet all demands for the consortium's German and European tobacco operations.
Hence a balanced approach: maintain some partnerships. Especially given Germany's presence on the seas is effectively nil. Even the Hechingen consortium is the largest German maritime trader, and the Prussian navy can only operate in the Baltic. Austria-Hungary's navy is active in the Mediterranean. Outside those seas, the British, French, Dutch, Portuguese, and Spaniards control all major oceans. Ernst's merchant vessels aren't strong enough to pick fights there.
Leaving aside those ocean powers, even certain Arab states around the Indian Ocean are formidable at sea. Thus the colony must keep a low profile.
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