If we are to name a country whose business successfully pairs the desire to go international with the know-how to meet unaddressed demands, then that country should be Austria. A closer retrospective look at Austria's investment march into Bulgaria reveals that many market niches that have emerged here just recently were the offspring of Austrian efforts.

This strategy of acting before the real game begins started a decade ago, when the Austrian business community felt confident that Bulgaria had curbed the worst of the transition woes and was firmly on course to building a full-fledged market economy.

Mobilkom Austria tapped Bulgaria's nascent mobile telecommunications market by buying Bulgaria's first cell phone operator MobilTel. Billa pioneered retail trade through hypermarkets. OMV made an early challenge to the monopoly of Bulgaria's fuel retailer Petrol. Soravia built Bulgaria's first modern office building years before Bulgaria witnessed its real estate boom.

This strategy continues to the present day. first facility, a member of EVN Group, now breaks ground for the facility management concept, namely the offer of all maintenance services that corporate and retail buildings would need. A score of Austrian companies have identified the same need for residential buildings, head of the commercial section of the Austrian embassy Michael Angerer told The Sofia Echo.

Angerer recalls that the first Austrian wave of investment was in service-related sectors such as banking, telecoms and energy, and came mainly through privatisation. In a follow-up push came industrial players, which, primarily through greenfield investments, expanded Austrian presence to the real estate, building materials, road and civil engineering sectors.

Presently, about 360 Austrian companies have subsidiaries in Bulgaria, Angerer says. Counting trade exporters to Bulgaria would have increased the figure to a thousand, he also says.
And the bottom line of Austrian operations here is: Austria is the largest long-term investor in Bulgaria, according to Bulgaria's central bank. With 5.305 billion euro in investments, Austria holds a 20.9 per cent share of Bulgaria's total investment for the 1996/2006 period, figures from Bulgarian National Bank show. Investments in 2007 alone totalled 638.9 million euro.

Trade turnover has also run a steep climb to 1.184 billion euro in 2007, in what was a 13.6 per cent increase on the year. The export-import structure is heavily skewed in favour of Austria, a trend re-affirmed annually, with Austrian imports to Bulgaria always outpacing Bulgarian exports to Austria. As in previous years, Austria's imports in CIF prices last year rose by 15.4 per cent against a 7.3 per cent increase for Bulgaria's exports in FOB prices, in what resulted in the largest-ever trade gap of 684 million euro.

However excellent Austria's performance, Angerer does not think it has lived up to its potential.
"Bulgaria lacks the large investment that could make it better known in Austria and lead to fringe investments," he says, benchmarking Bulgaria's popularity in Austria to Romania's. Romania attracted two large-scale Austrian investments - oil producer and retailer Petrom and BCR bank. They brought an avalanche of follow-up smaller investments, which collectively raised Romania's profile in Austria.

For this very reason, Angerer says, "it would be very positive if Bulgaria lured Voestalpine". The 5.5 billion euro steel mill project would be Austria's biggest ever abroad. Coupled with the fringe benefits it would bring, the project would shoot up investment and trade turnover figures to unprecedented levels, he says.

Voestalpine was to complete preliminary evaluations of locations in Bulgaria, Romania, Turkey and Ukraine and select one by the end of this year. On October 16, however, the Austrian speciality steel maker said the global financial crisis made it shelve the investment until the end of next year.
With or without Voestalpine, Austrian investor presence is already tangible, not least because Austria has deployed here the entire instrumentality in support of business' foreign expansion. The commercial section of the Austrian embassy and the Austrian Federal Economic Chamber (WKO) are, respectively, the government- and business-sponsored tools, which offer the full array of services a prospective or existing investor or trader would need. An Austrian company can receive information about a certain sector or competitors, receive references for a PR company, a lawyer or a bank or resolve a problem.

Problems referred to Angerer usually concern delays in issue of operational or building permits. His team and he then inquire with the relevant authorities where the problem lies.
"Some procedures take very long, and to business, time is money," Angerer says. His office receives two or three complaints a month.
Information exchange and networking, an essential feature of Austria's promotional efforts, occurs through monthly gatherings of the Austrian business community in Sofia, collective presentations on the sidelines of local fairs and business events, as well as self-propelled showcase facing sectors of bilateral importance such as tourism, renewable energy sources (RES), environment.

An upcoming event is the November 19 environment technology and RES conference at Holiday Inn, Sofia. There, Angerer hopes that Austrian companies dealing with "water and waste water treatment, waste management, as well as biomass, small hydropower stations, wind and solar energy" will meet Bulgarian counterparts, whether private companies or municipalities, and governmental officials in charge of RES and environmental regulation.
Austria has shown that it can translate business handshakes to value in the bilateral trade and investment backlog. In Angerer's words, there is much to watch out for because Austrian business is now becoming even stronger.