African Entrepreneurship Records 2

Chapter 1182 Middlemen

Germany has actually formed a path dependence on East Africa. The emergence of East Africa has allowed Germany to unexpectedly gain a vast market and raw material supply base that it would have been impossible to reach in its previous life since the 1980s.

Although East Africa is not a German colony, its advantages such as land area and population size can bring greater economic benefits to Germany. After all, without East Africa, Germany would not be able to compete with Britain and France. Although Germany had many colonies in Africa in its past life, the real benefits it could bring to Germany were far less than what could be earned from direct trade with East Africa, a super-large country.

At that time, East Africa had a publicly owned economy, so trade with Germany was not purely profit-oriented. Instead, political, cultural, geographical and other factors had to be considered.

It just so happened that Germany had developed into a powerful industrial country at that time, while East Africa was just a backward agricultural country that had just taken shape, so Germany had an advantageous position in early trade with East Africa.

This advantage will gradually dissipate over time, especially now that East Africa has caught up in industrial construction and trade between Germany and East Africa has actually reversed.

East Africa's industrial products could barely compete with Germany, but East Africa's agricultural products, minerals and other resources were something Germany could not refuse. Moreover, with the advent of the war, most of Germany's civilian industries came to a halt, making it impossible to compete with East Africa.

It can be said that in the absence of a war, if things continue to develop in this way, Germany will inevitably fall out with East Africa, especially when the two countries' markets actually have a lot of overlap. For pre-war Germany, Central and Eastern Europe was one of its most important markets, and the same was true for East Africa. Central and Eastern Europe has long been East Africa's largest overseas market, of course, including Germany and the Austro-Hungarian Empire.

……

Mombasa city.

As the most representative city in northern East Africa, Mombasa almost monopolizes most of the overseas trade in northern East Africa.

Although East Africa has now acquired the lands of Gabon and Cameroon, this means that northern East Africa also has access to the sea on the west coast.

However, it has little impact on the current city of Mombasa. On the one hand, Gabon’s vast tropical rainforest is a natural geographical barrier. Until now, the western section of the northern railway is still under planning and has not been started.

On the other hand, although Gabon has no shortage of natural ports, its population and industrial base are still in the initial stage, and its economy is not even as good as the hinterland of northern East Africa. Therefore, the current Gabon region does not pose any threat to Mombasa.

After the war began, Mombasa's development entered the fast lane. As the second largest city in East Africa that can compete with Dar es Salaam, Mombasa now has a population of over one million.

Unfortunately, there are too many "newcomer" cities in East Africa. Even cities with strong traditional economies such as Dar es Salaam and Mombasa are facing tremendous pressure.

Hongmei Hotel.

As a high-end consumption place in Mombasa, it is also a place where many businessmen do business.

At this time, in a private room on the second floor of the Hongmei Hotel, Italian businessman Teka was bargaining with East African businessman Du Ping.

"Du Ping, your grain prices are too high this year. Reduce them by 20 Rhine guilders per ton. Otherwise, we would rather burn more coal and trade in Dar es Salaam or Beira. I think they should be willing to give a more reasonable price." Teka said bluntly to the already slightly tipsy Du Ping.

Although he was a little drunk, Du Ping was still clear-headed. He did not agree to Teka's request directly, and analyzed: "This year's grain prices are indeed higher than last year, but this is a reasonable market change."

"There is no sign of the war between European countries ending. Instead, it is getting bigger and bigger, and the demand for food is also increasing. So your trading company can definitely make more money. The current market environment is that supply exceeds demand. I am just a small businessman. Although I don't expect to make a fortune, I can't give in too much."

Teka pretended to complain, "Du Ping, we are old friends. You should know that when you were working in the East African state-owned enterprise, I helped you to handle a lot of business. In the past few years, when you went out to work on your own, I also made a lot of efforts to help your company through the most difficult period. So, for the sake of our old friendship, you should also give your brother a hand." The fact that Du Ping's company can develop rapidly is indeed closely related to the connections he accumulated when he worked in the state-owned enterprise.

Du Ping met Teka when he was sent on a business trip to Italy by the company, so the two of them are indeed old friends.

Of course, in Du Ping's eyes, what Teka said was not the case. Teka did help him in his entrepreneurial stage, but the two of them were more of a group that took what they needed. After all, state-owned enterprises in East Africa were not flexible, and Du Ping, as a grassroots employee, was able to get lower acquisition prices in the Great Lakes region through many channels.

This was also the basis for Teka and Du Ping to hit it off. In the past, the grain trade in East Africa was monopolized by the state, and the emergence of businessmen like Du Ping, who rose rapidly in line with the wave of East Africa's new economic policy, led to the current Du Ping Grain Trading Company.

So in the face of the emotional card of his "friend", Du Ping said in a matter-of-fact manner: "Teka, don't say that I don't take care of you. You will never find a lower food price than mine in Mombasa. If you reduce it by another 20 Rhine guilders, I will lose money."

"Of course, as a brother, I can grit my teeth. Twenty Rhine guilders is too much. Reducing it by three Rhine guilders per ton is already my bottom line. If you can't accept a price, then I can do nothing to help you. After all, my men have to eat, too. The annual transportation cost from the Great Lakes region to Mombasa alone is not low."

Although the result was not achieved, Teka was satisfied. This should be the biggest concession Du Ping could make. This price was already far lower than the market price given by the Mombasa Agricultural Products Market.

He refilled his glass of wine and said to Teka, "Brother, I didn't understand your difficulties before. Now that I hear what you say, I feel that I have been a villain in vain. Don't worry, I will never forget your help today if there is something good in the future."

Du Ping smiled and said, "Okay, okay. We are a little awkward with each other, but as long as we continue to cooperate, there will be great things to do in the future."

Du Ping still values ​​Teka as a business partner very much. This is mainly due to Du Ping's latest judgment on the current trade situation in East Africa and Europe.

In Du Ping's view, the trade risks between East Africa and Europe, especially the Allies, are very high nowadays. After all, the trade routes between East Africa and the Allies are controlled by Britain and France.

For example, in Gibraltar, the Suez Canal, and even the Atlantic Ocean, if Britain and France were pushed into a corner by the Allies, they would most likely increase their efforts to hinder trade between East Africa and the Allies.

Teka's advantage as an Italian was reflected at this time, as Italy is now a neutral country.

After all, Italy is not the great power it was in the past, and its morale is far less than before, which has caused Italy to maintain neutrality until now and not dare to give up easily.

Italy borders France, Austria-Hungary, and Switzerland, which allows Italy to act as a neutral country and do business with both the Central Powers and the Entente.

If the British went crazy and completely blocked the Adriatic and Black Seas, part of the trade between East Africa and Austria-Hungary would surely be transferred to neutral countries such as Italy.

Therefore, by winning over Teka in advance, you can increase your company's future retreat options. Of course, saying retreat options doesn't sound very nice, it should be said that it is a channel.

After all, Du Ping has made a lot of money in the feast of European war so far. If he retires now, he will not lose anything. However, as a businessman, Du Ping naturally wants to make more.

Therefore, Europe's grain trade cannot be interrupted. If we sell it to Teka at a lower price now, it may play a big role in the future.

There is no need to be afraid even if Italy joins the Allied Powers. After all, Italy itself is a good consumer market and has always been an important buyer of East African grain. Therefore, the value of Teka has always been very high in Du Ping's eyes.

(End of this chapter)