The economic relationship between Romania and Austria is a continued success story with our bilateral trade volume increasing rapidly over the past years. Romanian exports to Austria have gained momentum and amounted to EUR 1.21 bn in 2014 – a plus of 9.5% year-on-year. It was also a good year for Austrian exports with a total volume of EUR 1.88 bn (+4.4%). The first half year of 2015 sees a continued positive trend, further intensifying our bilateral trade relations.
Austria is also a major investor in Romania. According to the latest available official figures, the overall investment by Austrian companies reached EUR 11.4 bn, amounting to 19.1% of total investments in Romania, compared to EUR 10.9 bn and 18.5% by the end of 2012. According to surveys of the Romanian National Bank, Austria therefore remains a top investor. As investment capital flows are becoming more and more complex with statistics not fully reflecting actual origins of investments, we can constitute that Austria is the strongest investor in Romania and one of the major driving forces of economic development and progress in the country.
Even in times of a tougher economic environment, economic ties between Romania and Austria are strengthening: Romania is among Austria’s top 20 economic counterparts worldwide and our most important trading partner in Southeast Europe. Romania is also an attractive destination for Austrian FDI: There are currently close to 7.000 companies with Austrian capital registered in Romania, directly creating over 100,000 jobs in the country.
These companies provide modern technology, keep high standards for sustainable and environmentally friendly projects and hold up social values. The biggest Austrian investments in Romania were made by OMV acquiring a majority in Romania’s Petrom and Erste Bank taking over BCR. In fact, these two are the biggest investments ever made by Austrian companies outside of their home country. There are also a number of other large Austrian investments in a multitude of sectors with Austrian companies being particularly strong in banking and insurance, oil and gas, environmental technology and services, real estate, agriculture, construction material and services, wood processing, packaging, transport, logistics and retail.
For the years to come, we expect the overall investment amount to increase and the economic relationship to tighten further. A lot of the new investment projects come from companies that are already established investors in the market which is a clear evidence of the excellent relationship that our countries enjoy. To give a few examples, Biogest has opened a 1,5 MW biogas plant in Satu Mare, Salesianer Miettex opened their second industrial laundry facility in Romania with Oradea, Hobas Rohre enlarged their production facilities in Bucharest, OMV continues to reinvest their profits in Romania (investment of EUR 600m. in the modernization of Petrobrazi refinery, successful gas exploration activities in the deep-water sector of the Black Sea) and Schweighofer operates a new sawmill in Reci/Covasna.
However, Romania still has room for improvement in certain sectors, increasing the attractiveness of its investment location. Investments require long term planning and strategizing, which is particularly difficult if the economic framework is changed as frequently as in Romania. Trust in political stability as well as predictability of political decisions are of utmost importance for international investors. The changes in the renewable incentive system and the introduction of the building tax are clear examples of how Austrian and other foreign investors were affected negatively due to short term alterations by the Romanian Government.
Another issue that concerns also Austrian investors is a certain lack of skilled labor in Romania. The Austrian system of dual education could prove a helpful model in this regard as it has two major benefits: It gives businesses the chance to interact with educational institutions on training plans to teach the skills thought after by companies and also offers students a highly practical and attractive training, providing them with an education to succeed on the job market. A highly skilled labor force is also a substantial competitive advantage for a market to attract investment and to increase the value added of local businesses. The Commercial Section of the Austrian Embassy is already working with a school in Bucharest on a pilot project for dual education in the field of retail salesmen.
It is a strong statement of a trusted partnership that all major Austrian investors stayed in the Romanian market over the past seven years. They have been a continuous and reliable partner strengthening economic stability. Romania has produced extraordinary growth figures over the last years and hopefully continues this path of lasting growth. Austria is proud to be a reliable partner in this process.