Holy Roman Empire

Not yet having become the powder keg for a World War, Sarajevo was still just an ancient city surrounded by mountains, with beautiful scenery.

Among Austria’s many cities, it is unremarkable, especially after failing in its bid to become the capital of the Bosnia and Herzegovina province, which further dimmed its status.

This outcome can be traced back to the Austrian government’s administrative policies. To avoid excessive concentration of resources and unnecessary waste, administrative, economic, and industrial hubs are typically kept separate.

While Sarajevo serves as a land transportation hub for Bosnia and Herzegovina, boasts impressive industrial development, and is rich in historical heritage, these advantages ironically became its disadvantages in the competition for provincial capital status.

Despite its low profile, Sarajevo’s economic development has been anything but stagnant. Particularly after Bosnia and Herzegovina became another heavy industrial center under Austria, the local economy soared to new heights.

Thanks to its geographical advantages, Sarajevo ranks among Austria’s top twenty cities in terms of economic performance.

In an office building on Ulrich Avenue, the headquarters of the hardware giant, Fick Group, are located. At this moment, CEO Arnold is presenting a report to his boss.

“Mr. Schloff, our proposal to establish an integrated food processing plant was rejected. The government’s reasoning was that the market is already saturated, Sarajevo is not suitable for food processing industries, and they suggested we consider another investment direction.”

Fick Schloff furrowed his brow. During wartime, the most profitable goods, besides weapons, are food, especially ready-to-eat packaged meals.

Compared to the high-risk and complex arms trade, food production is far easier to manage. While the profit margins may not match those of weaponry, the sheer volume of sales more than makes up for it.

Austria, as a neutral country, can export supplies to both Prussia and Russia. The combined military forces of both sides have long exceeded two million soldiers, with twice that number in conscripted laborers.

It’s impossible for so many people to cook fresh meals daily. Often, to save time, they can only rely on homemade dry rations.

But eating dry rations every day is hardly sustainable for anyone. This creates a demand for “better-tasting” and “more nutritious” convenience foods, such as biscuits, canned goods, potato chips, and alcohol…

Schloff had done the math: the daily consumption of convenience food by Prussian and Russian forces exceeds 2,000 tons, with a total value surpassing 280,000 guilders.

If the war lasts for one year, this translates to a market worth over 100 million guilders. And that’s a conservative estimate. Schloff believes the war will last at least 2-3 years, equating to a 200-300 million guilder market.

War-time trade is immensely profitable. Schloff doesn’t need much and securing just 1% of the market share would not only recoup his investment but also yield significant profits.

After pondering for a moment, Schloff said slowly, “Send someone to investigate who’s obstructing us. Also, arrange a meeting with Director Danilo. I want to have dinner with him soon.”

Overcapacity? Schloff saw no such thing. What he saw was Prussia and Russia waving their checkbooks and buying supplies frantically. Where’s the overcapacity? Clearly, there’s more demand than supply!

Arnold, feeling a bit uneasy, explained, “Mr. Schloff, I don’t think anyone is specifically targeting us this time. After our proposal was rejected, I had someone look into it. It’s not just us. Recently, no food processing investment projects have been approved.

This might be related to the risk warning issued by the Austrian government not long ago. Investments in the food processing sector have surged recently, and existing food enterprises are also rapidly expanding their production capacity.

It takes time for investments to translate into actual production, and in this little amount of time, the market hasn’t fully adjusted. Frankly, we might have entered the market a bit too late.”

Arnold opposed entering the food processing industry. Even though the concept of food safety was virtually nonexistent in this era, investing in food production within a heavy industrial hub was far from a reliable business venture.

If the company remained small-scale, it might not be an issue, but once scaled up, sourcing raw materials would become a significant headache.

Having survived and even thrived in this cutthroat era, Schloff was no fool. He had already considered these risks.

High profits always come hand-in-hand with high risks. Sure, there are safe and guaranteed profitable businesses, but those opportunities had long been snapped up by the great nobles. There was no chance for someone like him to get a slice of that pie.

As for the overcapacity crisis, even if it were to happen, it would only occur after the war. During wartime, Prussia and Russia would continue purchasing supplies aggressively.

This wasn’t up for debate, it was a reality dictated by war. If one side didn’t buy, the supplies would fall into enemy hands. Without sufficient resources, how would the frontline troops survive?

It was better to overstock warehouses than to risk shortages leading to military defeat.

The post-war crisis would depend on who could withdraw from the market the fastest. Schloff was an opportunistic player, a “dragon crossing the river.” He planned to make his profit and leave, as this wasn’t his primary industry. The sector’s long-term health wasn’t his concern.

While Schloff wasn’t bothered, the Austrian government certainly was. Without government approval, as long as everything complied with legal regulations, he could still invest and build a factory, but he would lose government support.

Schloff asked, “If we fail to secure government support, how much more will our investment and construction costs increase?”

After a moment of contemplation, Arnold slowly replied, “According to government regulations, the food processing industry qualifies as a priority-supported sector, which mainly includes free land provided for factory construction and a 50% tax reduction for the first three years.

Based on our plan, building the factory and warehouses would require approximately 158 acres of land. At the current land price in Sarajevo, this would cost about 126,000 guilders.

The tax reduction spans multiple areas, making it hard to estimate an exact figure. However, the tax rate for the food processing industry is relatively low, roughly 3.5% of turnover.”

After hesitating briefly, Schloff sighed helplessly, “Forget it. Cancel the plan. Redirect the funds to expand our hardware production capacity and do it quickly.”

There was no other option. Without free land use rights, the land cost alone would account for one-third of the total investment. Without tax incentives, profits would also shrink significantly, leaving an imbalance between risk and reward.

And this was industrial land, which was already relatively inexpensive. If it were commercial or residential land, the prices would skyrocket even further.

Although the Austrian government had not heavily promoted real estate development, the steadily advancing urbanization still caused land prices to surge continuously.

This wasn’t something the government could control. Besides state-owned land, most of Austria’s land was privately owned, following the principles of free-market transactions. Prices were essentially impossible to regulate.

Land prices in Sarajevo were still considered moderate. In Vienna’s city center, land prices had already reached an astronomical 10,000 guilders per acre. Aside from developing luxury housing or commercial properties, no other industry could afford such costs.

This was already the result of decentralized development and Vienna’s relatively small population. Otherwise, land prices would have been even more outrageous.

…

Unable to gain a foothold in the most profitable industries, Schloff had no choice but to settle for second best and expand their existing operations. In the face of a booming market, every industry was currently making huge profits.

After a brief hesitation, Arnold proposed, “Mr. Schloff, how about we add some auxiliary businesses? For example, manufacturing tin cans for canned goods.

The canning industry is booming right now, and the demand for cans is skyrocketing. With our technology, producing tin cans wouldn’t be a problem at all.”

Most canned goods at this time used tin containers, while glass jars were considered a luxury item.

It wasn’t because glass production technology was insufficient but because glass jars were relatively expensive, difficult to transport, and prone to breakage.

Higher costs meant higher prices, which would erode market competitiveness.

During wartime, the choice was clear: affordable and durable tin cans were the only viable option. Food safety wasn’t even a concern. After all, the elites weren’t eating these products themselves.

Manufacturing tin cans was a small side business, but even small profits add up over time. As a savvy capitalist, Schloff never believed he could have too much money.

“Excellent, Arnold. That’s an outstanding suggestion. This is exactly the kind of innovative thinking we need.

With such fierce market competition, we must diversify our business as much as possible, maximize company profits, and secure our place in the future market.

It’s not just tin cans—bottles for alcohol, water flasks, and other small items can also be part of our production line. Make the arrangements right away!”

Since Austria joined the free trade system, market disruptions have become a daily occurrence, and a “crisis mindset” has taken root in society.

If not for the timely arrival of the Russo-Prussian War, an industrial market competition crisis spreading across the European continent might have already erupted.

Smart people understand that the war has merely delayed this process. What must come will eventually come. This is not something any individual can stop.

One must either seize this opportunity to soar to new heights or be swept away by the tides of competition.

While the Russo-Prussian War has postponed the outbreak of the crisis, it has also intensified its eventual arrival. The Austrian newspapers constantly highlight this issue, and capitalists are certainly paying attention.

Some have chosen to diversify their portfolios, expand into new industries, and spread their risks. Others have opted to focus deeply on their core industries, improving their competitiveness within their sectors.

Schloff himself was an advocate of diversification, hoping to capitalize on the opportunities brought by the war and expand his business into the food processing industry.

Don’t be fooled by the fierce competition in food processing, this is Austria’s flagship industry. Compared to Austria, all other European competitors are significantly weaker in this field.

Under the free trade system, Austria’s dominant position in food processing gives it a stronger resilience to market risks than other industries.

However, reality pulled Schloff back to the ground. Sarajevo, after all, is an inland city with relatively limited access to timely information, and Schloff’s reaction was not fast enough.

Unable to expand into the food processing industry, he had no choice but to deepen his focus on hardware components and build related auxiliary businesses around this core sector.

As for Austria’s stronger sectors like electricity and internal combustion engines, it’s not that Schloff lacked ambition, he simply couldn’t break into these fields.

These technology-driven industries aren’t something an ordinary entrepreneur can casually enter.

The era of copycat products is long gone. Austria has already entered the era of patents, and without core proprietary technologies, it’s impossible to gain a foothold.

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