Accessibility links

Breaking News

Eastern Europe: Austrian Oilmen Look East For Growth

By Louise Potterton

Vienna, 25 November 1996 (RFE/RL) - Western Europe's petrochemical industry is stagnant in growth terms. Years of intensive efforts by the private and governmental sectors to maximize energy efficiency for environmental and economic reasons are having their impact. So too is the economic recession.

Austrian companies, like the rest, have been feeling the pinch. A survey of Austrian petrol stations in 1995, for example, found that not only were sales failing to expand, but they had actually decreased by almost three percent in that year.

But located as they are on the old East-West border, Austrian companies have been quick to seize the possibilities for expansion offered on their doorstep. For instance, the Austrian national oil concern OMV this summer swallowed the Hungarian petrol station chain "Q8."

This chain of 31 stations, along with OMV's other interests there, now gives OMV control of nine percent of the Hungarian market. This makes OMV the third largest presence in Hungary in this sector.

Austria's other neighboring markets -- Slovakia, the Czech Republic and Slovenia -- are also of strategic importance for OMV. Out of the 315 OMV outlets abroad, 75 are in Slovenia, 66 in Hungary, 27 in the Czech Republic and 8 in Croatia. The company says Croatia is the next market targetted for expansion.

By means of its continuing eastward expansion, OMV seeks to secure the necessary market outlets for products from its massive refinery at Schwechat in Lower Austria, on the outskirts of Vienna.

The Aral Austria company is also active in the East. The turnovers of the Aral daughter companies in Hungary, the Czech Republic and Slovakia reached around 2,900 million schillings (about $276 million) in 1995 -- an increase in 20 percent from 1994.

One unintended result of the expanded eastern retail facilities is that Austrian petrol stations close to the borders have been hard hit. Motorists heading West are pulling into the modern petrol stations on the Eastern side and filling their tanks at cheaper prices. As a consequence, the Austrian Petroleum Industry Trade Association says, some Austrian petrol stations close to the borders have reported a disastrous 60 percent drop in turnover.