Austrian exports to UAE fall 31%

Dubai: Austria's trade with the UAE suffered a setback in 2009 as exports to the Emirates slumped 31 per cent to 427.86 million euros (Dh2.13 billion) compared to 2008.

One of the reasons was the decrease in building materials sales by Austrian companies, Wolfgang Penzias, Austria's trade commissioner for the UAE, Bahrain, Kuwait, Oman, Qatar and Pakistan, told Gulf News in an interview yesterday.

Many large developments, for example the Burj Khalifa, for which Austrian firm Doka delivered formwork technology, have been completed. Others have slowed down," he said.

Besides this, construction material traders are currently selling off their stock which has been built up in the months before the slowdown without ordering replacements. "This will be going on for some time," says Penzias.

Dubai based

Out of the 160 Austrian companies active in the UAE, 123 are Dubai-based. Due to the reduced business activities in some sectors, they are currently looking for new opportunities in other Gulf countries, mainly Qatar, Kuwait, Saudi Arabia and Oman, Penzias said.

"This does not mean that those companies are abandoning their base in Dubai. The city will remain a hub for business, trade and finance," Penzias said.

For example, Austrian steel giant Boehler is currently expanding its activities in Dubai due to rising demand from Kuwait. Construction company Strabag has a strong presence in Qatar where it is working on infrastructure and residential projects.

In the UAE, Strabag currently builds parts of the new Shaikh Zayed Desert Learning Centre in Al Ain, a massive development that comes with a zoo and hundreds of villas. Strabag is also bidding for a new toll highway project that is planned to connect the UAE with Saudi Arabia.

Another Austrian company, Unger Stahlbau, has built a huge steel and galvanising factory in Sharjah, one of the biggest in the Gulf region. Swarovksi with its crystal products has a strong presence in the UAE, as well as companies such as Doppelmayr (which specialises in ropeway engineering, lifts and urban transport systems) or Zumtobel (specialised in lighting solutions).

"If I judge it from the visitor frequency at exhibitions and fairs in Dubai, the interest of Austrian firms is still high, even better than expected after a moderate year 2008 where some exhibition halls remained almost empty," said Penzias.

"Of course, one concern is delayed payments for finished projects. There are uncertainties arising as money is paid only hesitantly, firms are asking for interest for delay or fear insolvencies. Most of the companies are forced to tighten their cash management."

However, Penzias said that payment delays are not exclusive to Dubai. They were also experienced in Qatar and Kuwait. "The result is that new business relations will be started only on the basis of letters of credit or advance payments," he said.

To jumpstart new business opportunities, the Austrian trade commission has set two new focuses for the this year, Penzias added.

One is the sector of interior finishing for numerous new properties that recently came onto the market, including bathroom equipment, spas, lighting, furniture and kitchens.

The second is a new focus on health and wellness tourism based on the experiences of Austria's Vienna Medical University and specialised project company Vamed.