Austrian Marketing Entangling Urals

- The Austrian Marketing Bureau works within the structure of the Austrian Economic Chamber membership in which is mandatory for all companies in the country. Companies get a certain package of services in exchange for the membership, first of all this is the support in finding partners in foreign markets. The Chamber has about 70 trade advisors in 58 countries. The advisor for Russia is based in Moscow.

The Marketing Bureau is a regional structure. There are three Bureaus in Russia - in Saint Petersburg, Ekaterinburg, and the recently open one in Sochi. We have been working in the Urals since 2006. Ekaterinburg was selected because the Urals region and the Sverdlovsk Oblast as its heart, from the point of view of the Austrians, takes a third place in Russia in terms of the dynamics of economic development. We also work very closely with the Chelyabinsk Oblast and Ugra and our sphere of competence is the whole Urals Federal District.

- Our key role is the support for Austrian exports. We also actively process requests from the Urals companies for finding business partners in Austria. In contrast with many foreign economic missions present in Ekaterinburg we do this free of charge.

- It is just I and my colleague in Ekaterinburg. We do not order any marketing research from other companies, we try to all ourselves. We are here to open markets and opportunities for Austrian companies. If we involve more resources for this work the spending will increase.

- According to the statistics of the foreign trade turnover they are interested, first and foremost, in the metal making sector, supplying machine building sector products to metal works. Here everything is more or less tried and tested and on the whole it could be said that Austrians have a good idea of the Russian metallurgy.

Austrians offer cutting edge technologies for plastics and timber processing so it would be interesting for them to find partners in these spheres. The construction market is also potentially interesting. The Austrian Economic Chamber conducted the ‘Industrial and Household Waste Processing' seminar not long ago.

The interest of Austrian companies to consumer markets have grown rather a lot recently. They, for instance, are offering some innovative solutions for the hotel and restaurant business sector. Which is why we are studying the development of the market of services, assess its potential. Literally a few days ago for a company from Austria we studied the market for supplying public buildings with various hygienic materials in Ekaterinburg and Chelyabinsk. The Austrians have ascertained that this particular market is fairly capacious, there is enough room for manoeuvre. Moreover, Ekaterinburg attracted them as a potential location for the production of these products since from the Urals capital it can be shipped to both the European part of Russia and to Siberia.

The most original request we had in recent times is this: an Austrian manufacturer of medical clothes for animals in post-surgery care was looking for sales channels in the Urals region. We have found two potential partners for him.

- The majority of companies coming to us do find distributors, dealers or end consumers for their products.

It does happen sometimes, however, that the market stated in the request simply does not exist. Austrians like to come up with some innovative trick or another. The Urals businessmen are not always capable of the correct assessment of the efficiency of the implementation of these products, sometimes they feel more comfortable working old ways, using "hammer and chisel", using manual labour. It is important for Austrians to understand that many enterprises in the Urals are the local economic mainstays and thus have important social functions. Production automation leads to freeing up a significant number of workers which is strategically unacceptable for many Russian enterprises.

- In general 2009 was very difficult. Austrian economy is heavily dependent on export which amounts to 1/3 of the country's GDP. Supplies of products and technologies to other countries are ongoing, of course, but less intensive at the moment.

The number of visits from Austrian businessmen to the Urals has not grown, while the number of requests for assistance in finding partners in certain sectors in the Urals market has increased. For instance a fair number of companies are looking for partners in the region to implement production process automation, renewable energy sources, application of energy saving technologies in industry and housing, as well as in consumer markets (interior design, food).

- Many similar offers to companies in the Urals also come from Germany, Czechia, Denmark. What makes Austrian products and technologies different from competition?

- Austrians, first and foremost, speak of the high quality of their products, how profitable it would be to use them within a certain period of time. Russian partners note price, want to have the payback straight away while Austrians aim for good solid business giving sustainable profits over a number of years.

Moreover, when an Austrian company comes to the market, it offers not just the product on its own but raw materials, customer support, and aftersales service. Establishment of the service centre network in Russia is one of the mandatory conditions for their presence here. Austrians treasure their ability to provide the integrated set of services. They do not just give the technology, but also the certainty that this technology will work for a long time because "I will be here with you for the whole duration of the cooperation".

Plus, training is very important. As a rule Austrians offer innovative technologies. A Russian entrepreneur has to understand how it works. Usually a company has a training centre which employs Russian speaking staff either in Russia or in Austria.

- The state support for export is carried out, for instance, through Oesterreichische Kontrollbank (OeKB) (Austrian Control Bank) whose shareholders are other Austrian banks. OeKB provides export insurance programmes either through refinancing, or less often, direct funding. Representatives of this bank often come to us in order to find out how reliable the supposed Russian partners are.

- Unfortunately, there are no special economic zones established in the Urals. With Austrian companies' representatives I went to Alabuga in the Lipetsk Oblast where such special economic zones are already working. There are certain tax concessions there, infrastructure is complete, and Austrians got very interested. Infrastructure in the Urals leaves a lot to be desired.

- So far not all Austrian businessmen know about it. When it was opened 4 years ago many of them said that getting to the Urals became much easier. Now they have to fly changing in Prague, Helsinki or Moscow.

- Since 1991 the Nizhniy Tagil Iron and Steel Works, the Pipe Metallurgical Company, Serov Metallurgical Plant equip their production capacities with Voest-Alpine equipment when modernising existing or building new capacities.

The Nizhniy Tagil plant Uralchimplast is a joint Russian-Austrian venture, this plant is one of the largest manufacturers of synthetic resins and plastics in Russia.

The Austrian LMF and Uraltransgaz cooperate in the Sverdlovsk Oblast in the construction of automobile gas filling compressor stations.

- Do you expect an economic mission of Austrian companies to the Urals in the foreseeable future?

- We have preliminary plans for a visit of Austrian companies from most varying sectors for the Autumn 2010. Three cities are visited, as a rule, Ekaterinburg, Chelyabinsk, Perm. This will either be an economic mission or a marketing trip, we have not decided on the format yet.