African Entrepreneurship Records 2

Chapter 984: The First Five-Year Plan - Steel Industry
"Since the late 19th century, the steel industry has undergone major changes due to technological advances, which has led to major changes in the production structure and location of the steel industry. Due to improved efficiency, the steel industry's demand for coal has decreased, and the dominant industrial factor in the steel industry has shifted from coal to iron ore."

"Because of factors such as transportation and the market, the entire steel industry should make major changes. Take transportation as an example. The railway network has taken shape, and the development of roads and internal combustion vehicles has enabled more resources to interact with each other in inland areas of the country. A typical example is the development of the steel industry in New Frankfurt. Almost all of its raw materials and energy come from other regions. There are no iron ore or coal mines, which are the basic resources for industrial development, in the local area."

"Maritime transport and inland water transport have also greatly changed the current industrial landscape in East Africa. With the advancement of the times and the continuous improvement of technology, ships are getting bigger and bigger, carrying more and more cargo, which has promoted the industrial development of coastal and inland water transport hubs, such as Mwanza in the Great Lakes region and various coastal cities in East Africa."

"Going back to what I said before, the steel industry's demand for coking coal is now declining, and transportation costs are also falling, which is bound to have an impact on my country's traditional steel industry structure."

"Therefore, the task requirements for improving my country's steel industry during the First Five-Year Plan should also be adjusted accordingly. On the one hand, we should take measures according to local conditions and focus on iron ore production areas as the main construction direction. On the other hand, we should be guided by transportation and the market to make a more reasonable layout of my country's steel industry."

In the 19th century and before, the steel industry was mainly based on coal resources as the dominant location factor. A typical example was coal mining in the UK, which helped Britain become the world's first industrial country. The northeastern industrial zone of the United States, the Ruhr area of ​​Germany, and the industrial zone of Matabele Province in East Africa and the Lake Malawi Industrial Zone, etc. Most of the steel industries were built near coal mines.

The immaturity of early technology led to inefficient use of coal in the steel industry and a large demand for coal. As a result, if the steel industry was not built near coal mines, transportation costs would be high.

After the mid-19th century, the steel industry ushered in a technological revolution. With the promotion and application of new technologies such as the Thomas Steelmaking Process, the steel industry ushered in major changes. By the beginning of the 20th century, the steel industry's dependence on coal production had greatly shrunk.

In other words, even if the steel mill is not built in a coal-producing area, but built in a railway producing area, the cost is already the same or even lower.

“So starting from 1900, my country’s steel industry will focus on building steel industries in the central and southern parts of western Angola, the northern part of Southwest Province, Tete Province in Mozambique, and the Lake Malawi Industrial Zone, and promote industrial upgrading in traditional steel industry areas such as Bohemia Province, Lorraine Province, and Hansa Province (northeastern South Africa and southwestern coastal Mozambique).”

East Africa's iron ore resources are distributed relatively evenly across the country, but the main reserves are still in the central and southern regions, and overlap with the main coal producing areas in East Africa. This means that heavy industrial areas such as the Bohemian Province (Zimbabwe) will continue to maintain their dominant position in the traditional steel industry.

Among them, Tete Province in Mozambique is quite special. As a less developed area in East Africa, it is rich in local iron ore and coal resources. At the same time, it is located on the southern shore of Lake Malawi and belongs to the Lake Malawi Industrial Zone together with the city of Mbeya in the north.

The south-central part of Angola and the northern part of the Southwest Province, which is the border area between Namibia and Angola in the past, is mainly rich in iron ore resources. However, due to transportation and climate reasons, the focus of its steel industry development is definitely biased towards the Angolan side, that is, in Letania Province.

“By the end of 1905, my country’s steel production will have exceeded million tons, three new steel production bases will have been built, four new large state-owned steel enterprises will have been built, namely Tete Steel Plant and , Letania Steel Plant , Maputo Steel Plant, and existing steel industries will have been renovated and expanded, including steel industries in Mbeya, Harare, Bulawayo, New Hamburg Port, Mombasa, Dar es Salaam and other regions.”

The city of Maputo is close to the Port of New Hamburg, a city with a strong steel industry. It can make full use of resources such as coal and steel in the South African plateau area, and has outstanding advantages in sea transportation.

Tete Province is even more amazing. It has significant resource advantages and is located between the Lake Malawi Industrial Zone and the Bohemian Industrial Zone. With the completion of the Colimane Railway in Tete Province and close to the Zambezi River, its geographical, transportation, water resources, and social advantages rank first among the newly planned steel industry bases in East Africa. Therefore, the East African government is preparing to invest in two large state-owned steel companies in Tete Province at one time. After all, relying on the thighs of the two most developed heavy industrial regions in East Africa, it is difficult not to succeed.

In contrast, the East African government is more cautious about investing in the steel industry in Letania Province. It is far away from the traditional industrial areas in East Africa, lacks personnel and technology, is not easy to undertake industrial transfer, and is late in development, so the industrial base of the province is relatively weak.

Letania Province is one of the four provinces of Angola, and East Africa's early construction of Angola focused on coastal cities such as Cabinda and Luanda. Therefore, the difficulty of developing the steel industry in Letania Province is the most difficult of the three preset new steel industry bases.

Apart from other things, the transportation conditions alone are far inferior to those of Tete Province and Maputo City. Tete Province is located on the East African railway trunk line, and the Maputo City railway was completed early. It is the earliest railway built and put into use in Mozambique in East Africa. On the other hand, Letania Province, as the southernmost part of Angola, has no other railway lines except the Atlantic Coast Railway.

However, the Atlantic Coast Railway passes through the Letania Province area, which is not an iron ore producing area. Therefore, if we want to build and put into production the Letania Steel Plant, we must work hard on transportation.

Of course, compared with other regions, the conditions in Lethania Province are already quite good. After all, many places do not even have iron ore or coal resources, and do not have the basic conditions for investing in the steel industry.

In addition to the three new steel industry bases mentioned above, East Africa will build a number of inland or coastal small and medium-sized steel enterprises during the First Five-Year Plan to meet the region's steel needs.

These small and medium-sized steel enterprises will be concentrated in transportation hubs or regional centers relying on policies. For example, northern East Africa is relatively lacking in relevant minerals, so northern East Africa will be the key investment area for this type of enterprises.

However, based on East Africa's current capabilities, it is estimated that the scale of investment will not be too large. After all, East Africa is too large and the government does not have enough energy to take care of all places.

The above is a general picture of East Africa’s steel investment during the First Five-Year Plan. East Africa’s current steel output is approximately 3 million tons, only behind the United States, Germany and the United Kingdom, and ahead of Tsarist Russia and France. The Austro-Hungarian Empire has just exceeded 1.1 million tons, ranking behind France.

That is to say, in terms of steel production alone, the United States, Germany, Britain, East Africa and Tsarist Russia were in an absolute leading position over other countries. The lowest steel production of Tsarist Russia was over two million tons, while East Africa was between Tsarist Russia and Britain, at around three million tons.

If East Africa's steel production exceeded five million tons in 1905, there would be little change in the world ranking, because in 1900, Britain, as the world's third largest steel producer, had already reached nearly five million tons. By 1905, Britain's steel production should have reached at least six million tons.

As for Germany and the United States, they are completely worthless for reference and are far ahead of other countries. Although the current gap between Germany and the United Kingdom is not too big, the growth rate of Germany's steel industry is much higher than that of Britain. By 1905, Germany may have become one of the only two countries in the world with a steel production of over million tons, far ahead of other countries except the United States.

(End of this chapter)