Chapter 685: The End of the Mountain-Walled Era

  Chapter 670 – The End of the Age of Cottages

Without being the trigger for a world war, Sarajevo was still just an ancient city surrounded by mountains and beautiful scenery.

In the many Austrian cities, not at all conspicuous. Especially after the failed competition for the capital of the province of Bosnia and Herzegovina, it was even more inconspicuous.

This also has to do with the Vienna government’s policy. In order to avoid too much concentration of resources, resulting in unnecessary waste, administrative centers, economic centers, and industrial centers are usually not clustered.

Sarajevo is the land transportation hub of the province of Bosnia and Herzegovina, industrial development is also good, and is a historical city, these advantages have become his competition for the capital city of the province disadvantage.

Although the popularity is low, but the economic development of Sarajevo is not at all slow, especially after BiH became another Austrian center of heavy industry, the local economy is soaring.

By virtue of its geographical location, Sarajevo can also be ranked in the top twenty among many Austrian cities.

Sarajevo Urho Avenue in an office building, as hardware accessories field giant Fike Group headquarters is located here. At this moment, Executive President Janor was making a work report to his boss.

“Mr. Shroff, our proposal to establish an integrated food processing plant plan didn’t pass the review, the reason given by the government is that the market is already saturated, as well as the fact that Sarajevo isn’t suitable for the development of the food processing industry, and suggests that we change the direction of our investment.”

Fik Shroff frowned, the best selling material in times of war, besides arms, was food, especially food that could be consumed by tearing open the bag.

Compared to the high-flying arms trade, it was still food that was easier to get into. The profit of food might not be as high as arms, but the sales volume was high!

Austria was a neutral country and could export goods to both Russia and Prussia at the same time. The total number of troops on both sides of the war had long exceeded two million, and the number of conscripts was twice that.

It was impossible for so many people to build fires and cook every day, and very often they had to use homemade dry rations in order to make time.

Eating dry food every day was too much for anyone to bear. This required a lot of “better tasting” and “more nutritious” convenience foods, such as cookies, canned food, French fries, and wine. ……

Shirov has calculated that the Russians and Prussians consume more than 2,000 tons of instant food per day, with a total value of more than 280,000 s.r.l.

Based on the war lasting a year, that’s a market of more than 100 million shillings. This is only the most conservative, Shroff believes that the war will last at least two or three more years before a winner can be determined, which is a market of two or three hundred million.

Wartime trading was highly profitable, it didn’t need to be much, as long as he could get one percent of the market share, he would need to recover his investment and make a big profit.

After contemplating for a while, Shroff slowly said, “Send someone to find out who is targeting us. Also arrange a time as soon as possible, I want to invite Director Danilo for dinner.”

Overcapacity, Shirov didn’t see it, what he saw was that both Russia and Prussia were waving checks to buy buy buy, where is the overcapacity coming from? It’s clearly an oversupply alright!

Yanor explained with some apprehension, “Mr. Shroff, this time it shouldn’t be someone targeting us.

After the plan was rejected, I sent people to check, not only us, but the projects that invested in the food processing field in recent times have not been approved.

It might have something to do with the risk warning issued by the Vienna government not long ago. There has been a surge of capital investing in the food processing sector in recent times, and the existing food processing companies are also desperately trying to expand their production capacity.

It takes a certain amount of time from investment to production, and the market has not reacted in the short term, so it’s too late for us to enter the market.”

Yanor was against entering the food processing industry, even if there was no concept of food safety these days, investing in the food processing industry in a heavy industrial center was not a reliable business.

The small scale of the business was just fine, once it became large, raw materials were a headache.

To be able to survive in this era of the strongest and weakest, and live a good life, Shiloh naturally is not a fool, these risks he has long considered.

Profit is always the same as the risk, the steady business naturally have, just such a business, the big nobles have long been divided up, it is not his turn to do.

Overcapacity crisis, even if it is to break out will only be in the post-war period, the war period of Russia and Prussia will desperately sweep the goods.

This is the reality of the decision, by them not to buy. Whoever doesn’t buy, the supplies fall into the hands of the enemy. What will happen to the troops at the front if they don’t snap up enough supplies?

It is better to buy more supplies and leave them in the warehouse than to have insufficient supplies and lose the war.

The crisis after the war, that depends on who runs fast. Anyway, he is a dragon in the river, fishing for a hand and leaving, and not the main business, the industry is good or bad Shirov is not concerned.

Shirov doesn’t care, but the Austrian government can’t help but care. Can not pass the audit, as long as in line with the provisions of the law, the same can be invested in the construction of factories, just the government’s support is gone.

Shirov asked: “If we can’t get government support, how much will the cost of investing in a factory increase?”

After contemplating for a while, Yanor slowly answered, “According to the relevant government regulations, the food processing industry belongs to the key support industries, mainly including: the government provides free land for factory construction, and taxes are halved for the first three years.

According to our plan, to build the factory and warehouse, we need about 158 acres of land, and with the current land price in Sarajevo, it will cost about 126,000 God’s Guilders.

The tax breaks cover a wide range of areas and it is difficult to determine the exact figure, but the food processing industry has a low tax rate, roughly equivalent to about 3.5% of turnover.”

After hesitating for a few moments of effort, Shroff sighed helplessly, “That’s just it, the plan is canceled. Use the funds to expand our hardware production capacity, fast.”

There was no way to get free land use rights, the cost of land alone took up a third of the total investment; without tax incentives, the profit dropped drastically, and the risk and return were no longer proportional.

This is still industrial land, the price is relatively low, if it is commercial land, residential land, land prices have to grow substantially.

Vienna government did not vigorously develop real estate, but with the continuous advancement of urbanization, land prices are still rubbing upward.

This is not something that the government can control, in addition to state-owned land, Austria’s most or private land. These lands follow the principle of free trade, and the price is simply uncontrollable.

The price of land in Sarajevo is still moderate, and there are still tens of thousands of guilders an acre of sky-high land in the center of Vienna, which is simply unaffordable for other industries except for the development of high-grade residential and commercial real estate.

This is still the result of multipolar development and Vienna’s small population, otherwise land prices would be even more crazy.

……

Unable to plug into the most lucrative industries, Shroff could only choose to settle for the second best, expanding the original industry. In front of the crazy market, what industry is now making blood money.

After hesitating for a few moments of effort, Yanor proposed, “Mr. Shroff, why don’t we add some more auxiliary businesses. For example: processing canned boxes.

Now that the canning industry is growing rapidly, the demand for boxes is also growing rapidly. With our technology, there is no problem to produce canning boxes.”

These days, most of the canned goods are in iron boxes, and glass cans are a luxury item.

It is not that the glass production technology does not work, the main reason is that the cost of glass cans is relatively high, and transportation is difficult and easy to damage.

The cost went up, the price also went up, the loss of market competitiveness.

The war years, not to mention, must be used inexpensive tin box cans ah! Food safety, that’s never been an issue, and the big boys don’t eat it anyway.

Processing canned boxes is just a small business, but a mosquito is meat even if it’s small, and as a qualified capitalist, Shroff never minded that he had too much money.

“Very well, Yarnall. That’s a very good proposal you have, and it’s right to open your mind.

Now that the market is so competitive, we must open and expand new businesses as much as possible to increase the profits of the company in order to survive in the future market competition.

Not just canning boxes, wine bottles, water bottles, these small items we can also produce, go ahead and arrange it!”

Since Austria’s entry into the free trade system, market shocks have been occurring every day, and a sense of crisis has taken hold.

If the Russo-Prussian War had not come in time, an industrial market competition that affected the European continent, I’m afraid it would have already broken out.

Intelligent people know that the war only slowed down the process, what should come will still come, which can not be stopped by individuals.

Either with this opportunity to soar, or sink in the competition.

The Russo-Prussian war, while delaying the outbreak of the crisis, is at the same time aggravating it. The Austrian newspapers publicized it daily, and naturally the capitalists did not fail to react.

Some chose to diversify, expanding into new businesses and spreading the risk; others chose to go deeper and improve the competitiveness of their companies in the industry.

Shroff himself was a promoter of diversification and wanted to capitalize on the opportunity of the Russo-Prussian War to expand his business into the food processing industry.

Don’t look at the food processing field is highly competitive, but this is Austria’s ace industry, all the competitors in the whole of Europe, in this field is the younger brother.

Under the free trade system, the Austrian food processing industry, which occupies a dominant position, is more resistant to risk than other industries.

However, reality pulls Shroff back, there is no way Sarajevo is, after all, a landlocked city, the news is relatively closed some, Shroff’s reaction is not fast enough.

Unable to expand to the food processing industry, he had to choose to deepen the cultivation of hardware accessories, as the core of the expansion of related businesses.

As for Austria’s more competitive power, internal combustion engine field, not Shirov no idea, completely is not enough.

These areas rely on science and technology to eat, not ordinary people can casually participate in.

Play cottage era has passed, Austria has long entered the patent era, without their own core technology, simply can not stand.

(End of chapter)