Chapter 174: Independence of the Food Industry
January 13, 1869.
Vienna.
As soon as the year turned, Ernst immediately traveled to Austria. January in Austria was still very cold, and the snow in Vienna had a unique charm.
Blackxinghen Group Office in Vienna.
"This place is about two miles from downtown Vienna, surrounded mostly by farmland, and due to the terrain, the land is not very fertile, so the price is not high. The rare thing about this location is that it's one of the few large empty areas near Vienna. Its owner is the Austrian Viscount Lextron, and we've already discussed the price with him. If we purchase the entire area, the price will be even cheaper," said Boone, the head of the Blackxinghen Group in Vienna, pointing to a piece of land on the map in the outskirts of Vienna while reporting to Ernst.
"How large is the area?" Ernst asked.
"The total area is 1,642 acres, which is enough to build several factories, so size is absolutely not a problem," Boone replied.
"Mm, how about the transportation conditions?" Ernst inquired.
"It's less than twenty minutes from the train station and the Danube River. If the roads are renovated, transportation will be even faster, so it's very convenient for collecting and distributing goods from here," Boone answered, listing all the details.
"Very well, go ahead and negotiate with Viscount Lextron about the price! Also, check with the nearby people to see if they are interested in selling their land. Try to make the area larger, but of course, the land must be contiguous," Ernst concluded, effectively securing the land for the Blackxinghen Royal Family.
In the new year, Ernst planned to separate food production from the consumer goods division under the Blackxinghen Group and establish a dedicated food group. Previously, due to the small scale of the food processing and manufacturing industry under the Blackxinghen Group, it had been placed under the consumer goods division for management. However, by 1869, after three years of development, the East African colonies had transformed significantly and could now provide sufficient agricultural raw materials for the Blackxinghen Group.
Most importantly, in 1869, the immigration task in East Africa had lightened, saving a large amount of surplus grain that could be used for export. During the first three years, East Africa focused on immigration, and settling new immigrants required food. To support the new settlers, the food had to be jointly subsidized by the East African colonies and the Blackxinghen Group, continuing until the land was developed and harvests were gathered. Fortunately, East Africa had a consistent climate throughout the year, allowing immigrants to quickly engage in production, though in the dry season, priority was given to arranging them near rivers and lakes.
This year, East Africa no longer aimed for maximum immigration numbers, allowing for more grain to be exported. Direct grain exports were unlikely to be highly profitable, especially now that Europe was experiencing peace, with production orders in full swing and countries like Britain, France, Russia, Austria, and Prussia focusing on their own development.
To enhance the competitiveness of East African grain, Ernst aimed to establish a modern food enterprise group in Europe. Unlike before, this time Ernst planned to set up the new company's headquarters in the Austro-Hungarian Empire, marking the first implementation of the Blackxinghen Group's integrated development model spanning Germany, Austria, and Africa.
Food production was as important as consumer goods manufacturing. If it could be developed, it would become a major industry within the Blackxinghen Group's empire. The Blackxinghen Group had a natural advantage in this area: with the East African colonies backing them, there was an abundant supply of raw materials, and this year, with more funds available, the money previously used for expanding immigration could now be invested in new industries. Additionally, Austria's advantageous geographic location and stable social order made it a prime spot for building a food business.
The most crucial aspect was the ability to leverage the resources of the Austro-Hungarian Empire. Austria-Hungary was an agricultural powerhouse, providing wine raw materials for the Blackxinghen Company, and the Blackxinghen Group often used its supermarket system to sell Hungarian grain throughout Europe. There was a natural foundation for cooperation between the two. Politically, the Blackxinghen royal family had a close relationship with the Austrian royal family, and with the right timing, location, and people, Ernst had the perfect conditions.
These conditions were also available in the German region, but Austria had an advantage that Germany could not match: Austria's access to the Mediterranean coast. Once the Suez Canal opened at the end of the year, the agricultural products from East Africa could be transported directly through the canal to Trieste. At that point, the Austro-Hungarian Empire would serve as the central hub connecting Germany and the East African colonies.
Moreover, the industrialization level in Germany was higher, including in the food processing sector. By contrast, Austria-Hungary had a significant gap in this area, which the Blackxinghen Group could fill, thereby avoiding competition.
The timing of Ernst's trip to Vienna to set up the food company was, in many ways, very strategic. From acquiring the land to building the factories and getting them operational, it would take at least a few months, and this was just for the Vienna area. Later, factories would also need to be built in Trieste.
Vienna could fully utilize Austria and Hungary's agricultural resources, while Trieste would connect to East Africa's agricultural resources. This would create a balanced system that greatly increased their ability to withstand risks. Moreover, the construction schedule for the Trieste factory was planned for the second half of the year, coinciding perfectly with the opening of the Suez Canal.
The Vienna factory would be built in the first half of the year, and the Trieste factory in the second half, avoiding a rushed schedule and aligning perfectly with the opening of the Suez Canal.
Ernst sat at his desk, using a red pencil to circle cities like Hamburg, Berlin, Blackxinghen, Vienna, and Trieste on the map. These cities and regions would become the key points for the Blackxinghen food business in Europe, perfectly covering the entire European region.
The food industry in Europe was extremely competitive, not only against local European products but also against the competition from overseas colonies. Therefore, Ernst did not have high hopes for massive profits; instead, he expected steady, long-term growth. East African products would focus on quantity, as there was plenty of supply, which would also generate considerable revenue.
At the same time, this would help lay the groundwork for future East African agricultural products, with the potential to provide a significant amount of food for Europe. With a population of two million, East Africa's agricultural output would be considerable.
After all, in this era, most countries still relied on agricultural taxes to support their finances. East Africa did not have agricultural taxes, but the profits from agricultural production were largely controlled by the Blackxinghen Group.
However, during the first three years, there had been heavy investments in the East African colonies, so most of the money earned by the Blackxinghen Group was reinvested in East Africa. In fact, the first two years had been a loss for the Blackxinghen Group, as they subsidized a large amount of money to develop East Africa, leading to slow development of their European businesses.
Furthermore, East Africa's population was still close to two million, and only when these two million people were engaged in production activities would agricultural profits truly rise. In other words, only in a few months would East Africa be able to produce agricultural value on a scale appropriate for its population of two million, as agriculture has its cycles and crops take time to grow.
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