Plastic Industry Market Brief 2012

An Expert's View about Plastics and Synthetic Rubber in Primary Forms in Austria

Posted on: 12 Jul 2012


Austria is a dynamic EU member country with an affluent population of 8.3 million German speakers and a territory of about the State of Maine. Austria’s manageable size and stable business environment make it attractive as a market for U.S. exporters and as a test market for U.S. firms eyeing expansion into neighboring Germany. Austria’s historical and economic ties to the growth markets of Eastern and Southeastern Europe also make it a logical base for serving those markets. At present, approximately 340 U.S. firms have subsidiaries, affiliates, franchisees, and licensees in Austria, of which about 100 have regional responsibilities for Central European, Eastern European, or Balkan countries. U.S. products and services enjoy a good reputation in Austria.
This report deals with market opportunities for U.S. firms in the sectors resins/plastic material, plastic products, plastic machinery and molds.
In 2010, the total Austrian market for plastic material and plastic products amounted to about $7.9 billion. The 2010 Austrian market for plastic machinery and molds was $691.6 million and this is expected to grow to $757.2 million in 2012.
The 2010 U.S. share of the Austrian import market within these sectors was relatively limited:
Plastic material and plastic products: 1%;
Plastic machinery and molds: 2.3%.
The demand for additives to improve traditional plastic performance is high, including plasticizers and flame retardant agents. There is also an increasing interest for all innovative materials including bioplastics and biodegradable plastics.

Market Entry

The best way to enter the Austrian plastic market is to explore partnerships with local distributors. U.S. suppliers of plastic machinery need to ensure that they find an importer/ distributor which would be in a position to offer immediate repair service and easy access to spare parts.
General Background Information
Austria is a highly developed open market with relatively liberal policies and sharp competition. The import climate is favorable towards U.S. products. American exporters, like domestic and European firms, are subject to packaging and other collection, recycling, and reprocessing laws. There are no significant trade barriers or limitations on U.S. products. However, it may take up to two years to introduce a new product, owing to the conservative and complex nature of the Austrian market.
U.S. firms should plan their market entry very carefully. Given its location in the center of Europe, and a market size that makes easy to allow a quick overview, Austria stands out as a desirable, affluent pilot market for advanced U.S. products. The best strategy is to screen potential distributors, and select a qualified local one. Austrian distributors are usually knowledgeable and experienced. The majority of distributors are fluent in English. They are also knowledgeable about EU approval procedures and will obtain approval for U.S. suppliers if needed.
The successful U.S. supplier should discuss and agree on a marketing strategy with a prospective distributor. Once the agent or distributor is selected, it is preferable to maintain this relationship for a number of years. Abrupt changes in distribution patterns distract users from trusted suppliers and have been detrimental to U.S. suppliers who have taken such action in the past.
The metric system of weights and measures is standard in Austria. The electric power supply is 230/400 volt, AC 50, 1 or 3 phases.

Financing and Payment Practices
For suppliers entering the market for the first time or selling to new customers, the usual practice is to require confirmed and irrevocable letters of credit. Most trade relationships between the United States and Austria, however, are well established, and less stringent requirements, including both open account and extended terms, are often agreed upon once confidence is established. As Austria is a fully developed industrial nation, no special funding of U.S. export sales is available from U.S. governmental or multinational institutions. Austria's international credit rating gives it preferred status for trade, finance, and investment guarantees. A bilateral arbitration agreement exists and can be included in contracts.
In Austria, the period allowed for payment, is between 30 and 60 days. Early payments are credited with a three percent discount. Supplier credits are common.

Current Demand
The Austrian plastic market consists of four sectors: plastic productions, plastic processing, plastic machinery and plastic molds/tool making.
Costs for raw materials and oil, which play an important role in plastics production, have soared to industry-high levels. This development led to a tremendous price increase for plastics products within the recent years. The Europe’s plastics processors society, European Plastics Converters (EuPc), announced that another price augmentation of 10-15 % for plastics products would be necessary to equal out the growth in production costs. So far, most Austrian plastics producers have been able to pass price increases to customers.
Austria’s relatively small domestic demand for plastics products and plastics materials pressures domestic firms to consider foreign market operations as an integral part of their growth strategies. On average, Austrian plastics processors generate 33% of their total sales abroad. Some firms are even completely export-dependent.
Austria is an attractive market for plastic and resins. The following industries are buyers of these products for manufacturing of plastic consumer goods, and technical plastic products:
• Construction - tubes and fittings of pipes, foils, coating, sealants, windows and doors.
• Packaging - sheets, foils, films, bags, etc…
• Automotive - automotive parts and accessories.
• Home products - items for the kitchen, hardware, plastic footwear, etc…
• Agro industry - plant containers etc…
• Food processing industry - food packaging, plastic bottles, etc…
• Medical/Pharmaceutical industry – disposable products.

The majority of these markets mentioned above offer good potential for so-called “green” plastic materials, nano materials and smart plastics.

Read the full market research report

Posted: 12 July 2012

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