Rise of Empires: Spain.

Chapter 470 Economic Development
Although he instructed the two major Spanish film companies to make films related to Spanish history, Carlo's focus was not on these two film companies.

Although the current film shooting process is relatively rudimentary, it still takes several months to complete the filming of a movie.

Carlo doesn't have that much time to focus on a movie. For him, there are too many affairs in the current United Kingdom of Spain and Portugal that require his personal attention. For the sake of national stability, these are things that cannot be taken lightly.

In mid-March 1908, Carlo, along with Carlos Fernando and other high-ranking government officials of the United Kingdom of Spain and Portugal, boarded a train from Madrid to Lisbon.

The primary purpose of this trip to Portugal was to inspect the newly established industrial zones. Compared to Spain, Portugal is far too impoverished; whether in terms of economic products or mineral resources, it lacks any competitive advantage.

However, since Portugal had become Carlos's territory, they couldn't just focus on developing Spain and ignore Portugal's feelings.

Regarding Portugal's economic development, after conducting on-site investigations of various economic products in Portugal, and based on his main impressions of the Portuguese economy in later generations, Carlo formulated an economic development model with the textile and cork industries as the two pillars, supplemented by the wine industry.

Portugal's textile industry wasn't particularly developed, but it was certainly one of its most notable sectors. The cork industry was perhaps Portugal's only truly successful industry; the country was later known as the "Cork Kingdom," producing half of the world's cork.

Cork is not soft wood, but the bark of a specific tree. The official name of this tree is Cork Oak, and its bark has an extremely well-developed cork layer, which can be several centimeters thick. It is a good raw material for making corks, fishing net floats, flooring, and even industrial products.

More importantly, the bark formation process of cork oak is a secondary growth of the tree trunk, which means that this bark, known as cork, is regenerable.

Due to its waterproof, heat-insulating, and renewable properties, it has been welcomed by many industries, which has also stimulated the growth and prosperity of the cork industry along the Mediterranean coast.

Although cork has many applications, its primary use in Spain and Portugal is for making wine bottle stoppers.

The wine industry is currently a very important economic sector for both Spain and Portugal. The Spanish and Portuguese people alone consume a large amount of wine every year, not to mention the wine exported, which is countless.

Under these circumstances, major wine producers consume a great deal of wine bottles and corks. Currently, the main cork-producing regions in Europe are generally concentrated along the Mediterranean coast, with Portugal, Spain, and Italy being the largest producers within Europe.

The reason why the cork industry was designated as one of the pillar industries of Portugal's economy is not only because of Portugal's achievements in the cork industry in later generations, but also because Portugal did not face many competitors in the cork industry.

Portugal's main external competitor is Italy, but Italy's potential in the cork industry cannot compare to Portugal's.

Spain may be Portugal's biggest competitor in the cork industry, since both the Iberian Peninsula and Morocco are cork-producing regions in Spain, and their cork production capacity is higher than that of Portugal.

However, Spain certainly won't compete fiercely with Portugal in this regard, since Spain has better options.

Portugal developed the cork industry because it had few other decent industries to support its economy, while Spain had many more options.

The vegetable and fruit industry, the automobile industry, the shipbuilding industry, the military industry, and a series of light and heavy industries can all serve as the pillar industries of Spain's economy.

This is why Carlo ultimately decided to locate the cork industrial park in the southern part of Lisbon, Portugal, where, as well as further south in the state of Benjamin, are very suitable for planting cork oak and developing the cork industry.

By entrusting the cork industry to Portugal, Spain can focus its main efforts on wine production. Portuguese cork can be used to make wine bottle stoppers, meaning the wine industry benefits both Spain and Portugal.

Although the Spanish and Portuguese wine industries do not currently require such an exaggerated number of corks, consuming several million corks a year is still not a problem.

In addition to other consumption of cork products, Portugal's cork industry can easily provide thousands or even tens of thousands of jobs.

Then there are the textile and wine industries, which can also provide tens of thousands of jobs for Portugal. The industrial park being built in the state of Lisbon, Portugal, encompasses industries such as textiles, wine, and cork processing, and is expected to accommodate hundreds of factories and businesses of all sizes, providing tens of thousands of jobs and benefiting hundreds of thousands of people in the surrounding area of ​​Lisbon.

In addition to inspecting this large industrial park, Carlos also plans to visit Portugal's only medium-sized industrial base and the Lisbon shipyard, and attend a routine meeting of the Portuguese Regional Council, playing his role as King of Portugal.

The most important part of this visit was actually the inspection of the Lisbon shipyard.

Portugal's decline was far more severe than that of Spain at the time. Not only did its industry lag behind most European countries, but even its once-glorious shipbuilding industry had fallen into ruin.

Portugal's only notable asset is a state-owned joint venture shipyard in Lisbon, which built magnificent sailing warships over a century ago. However, since the era of ironclad warships, the shipyard has received fewer and fewer orders from the government navy each year, and its development has been consistently limited.

The shipyard's largest order in recent decades dates back to a small-scale expansion of the Portuguese navy in the mid-to-late 19th century.

The Portuguese Navy at the time ordered an ironclad warship from this shipyard, which was named Vasco da Gama.

This ironclad warship is also the only main warship built by the Portuguese Navy in the past 30 years.

在1903年，瓦斯科·达·伽马号在里斯本进行了强行改造。船体被切开延长了30m，武装从2门263mm火炮变成两门8英寸炮，1门6英寸炮，1门12磅炮和6门3磅炮，换装亚罗式锅炉把航速从10节提升到15.5节，强行称作装甲巡洋舰。

Although this gave the ironclad ship, which had been in service for nearly 30 years, a second life, both in terms of its specifications and actual performance, it was still far behind the battleships equipped by other countries at the same time.

However, this refit also proves that Portugal's shipbuilding industry still has a certain foundation. Carlo also hopes to make use of Portugal's remaining shipbuilding resources to expand this shipyard in Lisbon into a military shipyard capable of building giant ships of tens of thousands of tons, thus contributing to the construction of future Spanish warships.

Carlo has invested a considerable amount of money to expand this shipyard. The total investment has exceeded tens of millions of pesetas. The initial reconstruction of the shipyard has been completed. The largest dry dock is now capable of building battleships of tens of thousands of tons, while the smaller No. 2 dry dock can build cruisers and coastal defense gunboats of around five thousand tons, which can meet Carlo's requirements.

Spain doesn't actually need this Lisbon shipyard to build dreadnoughts exceeding 20,000 tons for the Spanish Navy. The main purpose of expanding the shipyard is to have it build smaller auxiliary warships for the Spanish Navy, and incidentally provide maintenance services for those warships.

As mentioned before, Lisbon is not a true coastal city, but rather is built on the north shore of the bay, connected to the Atlantic Ocean through the bay's mouth.

The advantage of doing this is that by deploying a large number of coastal defense batteries on both sides of the bay's mouth, Lisbon and its surrounding cities can be protected, preventing enemy naval invasions into the bay where Lisbon is located.

The reason why Spain was able to land easily around Lisbon was actually because it chose to land on the Atlantic coast, rather than in the bay where Lisbon is located.

After merging the military forces of Spain and Portugal, the Spanish-Portuguese Union also passed a bill on the reconstruction of the Lisbon Bay fortifications, planning to transform Lisbon into a formidable military stronghold and make it one of the bases for the Spanish-Portuguese Union Atlantic Fleet.

With the Atlantic Fleet stationed in the bay where Lisbon is located, there is absolutely no need to worry about enemy naval attacks. With the help of coastal defense batteries, it can be said that no matter how many enemy warships come, they will all be sunk.

These coastal defense guns mounted on the coastal defense forts are no joke. Coastal defense forts are generally divided into two types: rapid-fire guns and main guns, with calibers ranging from 75 mm to 125 mm and 254 mm to 305 mm, respectively.

The former primarily targets smaller, faster warships, preventing them from suddenly approaching the coast for a surprise attack. The latter, however, targets larger capital ships; a single hit can damage an enemy battleship or even a dreadnought. Along the coast of Lisbon Bay, Spain deployed dozens of coastal defense guns of varying calibers, and further inland along the bay's coastline, dozens more.
The combined number of these coastal defense guns is equivalent to nearly ten main battleships. Without sufficient preparation, anyone who dares to sneak in and launch a surprise attack will simply be fed to the fish.

The main reason for building so many coastal fortifications was that Spain had successfully defeated the British Mediterranean fleet through a surprise attack during its war with Britain.

Britain was highly likely to participate in World War I, and would very likely stand against Spain. Under such circumstances, Spain would certainly need to guard against a possible British naval attack.

The British wanted to avenge their previous humiliation, and Spain naturally wanted to continue to condemn the British navy to the pillory of history.

After touring the country, Carlos was quite satisfied with Portugal's current development.

Portugal's wine, cork, and textile industries are booming, and some products with Portuguese characteristics have successfully entered the Spanish market.

The exchange of goods between Spain and Portugal was certainly a good thing for Carlo. As large quantities of goods from both sides flooded each other's markets, the relationship between the Spanish and Portuguese was also brought closer.

It's worth mentioning that in the Portuguese market, the most popular items are not fruits and vegetables from Spain, nor wines from Spain, but rather various flavors of cola from the Spanish Coca-Cola and Pepsi companies.

When relations between the Spanish and Portuguese governments were not so good, economic exchanges between the two sides were limited. This also meant that Coca-Cola did not spread widely in Portugal; it was only sold in a limited number of Portuguese cities near Spain.

Because of the limited supply of Coca-Cola in the market, the price of Coca-Cola in Portugal is slightly higher.

Some Portuguese workshops came up with the idea of ​​imitating Coca-Cola, but their Coca-Cola couldn't capture the soul of Spanish Coca-Cola, and it didn't have that refreshing, soul-stirring feeling.

After two Spanish cola brands entered the Portuguese market, the market was flooded with cheap and delicious cola, and the few cola counterfeit workshops in Portugal went out of business instantly.

The good news is that the existence of these Coca-Cola counterfeit workshops has inadvertently expanded the Coca-Cola market in Portugal.

After two Spanish cola brands entered the Portuguese market, this uniquely flavored soft drink quickly gained popularity among the Portuguese people.

According to reports from PepsiCo and Coca-Cola in Spain, the two companies sold more than 1000 million bottles of cola in 1907 alone, with total revenue exceeding 200 million pesetas and net profit reaching 100 million pesetas.

When Coca-Cola was first invented, the production cost of a cup of Coca-Cola was around 0.15 pesetas, and the selling price had to be maintained at 0.25 pesetas.

As time has passed, and with the reduction in costs due to large-scale production of Coca-Cola, the cost per cup has now dropped to around 0.1 pesetas, and the selling price has also been reduced to 0.2 pesetas.

Such a price is acceptable to most Portuguese people, after all, it is impossible to drink Coca-Cola every day, and most people are already quite lucky to be able to drink one Coca-Cola a week.

The cost of cola cannot be reduced. Both the glass bottle and the sugar used in cola have actual costs.

Sugar prices were relatively high at that time, which is why Cuban colonies were considered wealthy. Cuba made a fortune from the sugar industry and was once the only Spanish colony with positive returns, even providing a significant amount of revenue to the Spanish government each year.

After Spain relinquished its Cuban colonies, it also extensively cultivated sugarcane in its African colonies, attempting to replace the role that Cuba had previously played.

The reality is that although Africa's environment is also suitable for growing sugarcane, it cannot compete with Cuba in the sugar industry because it started relatively late. Sugar produced in African colonies is mostly sold to Spain and is rarely imported by other European countries.

However, this was also good news. Large quantities of sugar produced in the African colonies entered Spain, effectively compensating for the reduced sugar production caused by the loss of the Cuban colony.

Currently, the price of sugar products in Spain has dropped to the level it was during the Cuban colony. Considering Spain's growing population, the demand for sugar is also constantly expanding.

Therefore, it can be tentatively inferred that sugar produced in African colonies has already begun to replace sugar produced in Cuban colonies.

Both Coca-Cola companies have achieved the remarkable feat of selling tens of millions of bottles of Coca-Cola annually in Portugal, not to mention their home market of Spain.

According to statistics from the two cola companies, Spain consumes over 100 million bottles of cola annually, with total sales of nearly 20 million pesetas and annual net profits from cola sales exceeding 10 million pesetas.

In terms of the quantity of Coca-Cola sold and the revenue earned, the Coca-Cola Company has achieved quite good results.

However, if we consider Spain's current population, the sales of hundreds of millions of bottles of Coca-Cola, when divided among every Spaniard, is actually equivalent to each Spaniard drinking only two bottles of Coca-Cola per year.

Even if you exclude the elderly and children, the average Spaniard would consume no more than five bottles of Coca-Cola per year.

This also shows that there is still a lot of room for improvement in Coca-Cola sales. Furthermore, in addition to Spain, the two Coca-Cola companies have entered the markets of other European countries, and Coca-Cola has become an indispensable beverage for leisure and entertainment for Europeans.

Of course, in addition to entering the markets of other European countries, Coca-Cola also successfully entered the US market.

The US economy is still relatively prosperous, and with the continuous expansion of its population, the overall market remains quite large.

The two Spanish colas entered the US market relatively early, which caused the colas that were originally supposed to be produced in the US to be abandoned before they were even born.

Because two Coca-Cola companies in Spain have begun large-scale production, the actual cost of Coca-Cola has been squeezed to a minimum.

Other cola companies that want to compete with the two Spanish cola companies have to lower their cola prices to the same level as the Spanish cola companies, even at a loss.

Even at the same price, Spanish Coca-Cola companies are profitable. This means that most companies simply cannot compete with Spanish Coca-Cola companies. Lowering prices is unsustainable in the long run, and raising prices simply won't sell, since most people prefer the cheaper Coca-Cola, unless they can achieve the ultimate taste.

However, the two Coca-Cola companies in Spain had already been exploring various flavors at Carlo's suggestion.

In addition to the classic Coca-Cola flavor, PepsiCo and Coca-Cola have also launched various other flavored soft drinks, such as citrus, lemon, and apple.

Trying to compete with the two Spanish cola companies on taste under these circumstances would be asking for trouble.

With prices and reputations inferior to those of the two Spanish cola companies, other cola companies in Europe and the Americas can only watch helplessly as their markets are squeezed by the Spanish cola companies, eventually facing bankruptcy or being acquired.

(End of this chapter)