The Growth of Refugee Inc.

Anton Troianovski, Wall Street Journal, September 14, 2015

The annual report in 2013 from a multibillion-dollar London private-equity firm that counts a French pastry baker and a Dutch shoemaker among its holdings touted a new opportunity with “promising organic and acquisitive growth potential.”

That investment was the management of refugee camps.

“The margins are very low,” said Willy Koch, the retired founder of the Swiss company, ORS Service AG, which runs a camp in Austria that overflowed this summer with migrants who crossed from the Balkans and Hungary. “One of the keys is, certainly, volume.”

Since early 2014, more than a million people have claimed asylum in the European Union. Germany alone is preparing for at least 800,000 asylum-seekers this year. The surge, experts say, amounts to the biggest movement of people in Europe since World War II. The crisis has produced harrowing tales of tragic deaths and lives in upheaval.

It is also giving shape to an industry that everyone from small Greek shop owners to some of America’s biggest pension funds are benefiting from: the business of migration.

In many ways, private companies are increasingly defining the European migration experience. In some cases, the companies see potential to win favor with a future group of European consumers, a welcome jolt amid the Continent’s economic doldrums. In other cases, they are stepping in to help provide services that governments can’t or won’t. At times they have provoked protests from advocacy groups who accuse them of cutting corners in order to profit from human misery.

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ORS has expanded from Switzerland into Austria and Germany, competing with the nonprofit organizations that traditionally cared for migrants in Europe. The company recorded revenue of $99 million last year, according to Chief Executive Stefan Moll-Thissen, who wouldn’t disclose its profits. It had about $33 million of revenue in 2007.

The company now offers a range of refugee-related services, from setting up shelters to providing food and managing the camps. In Austria, the company won the right in 2011 to manage all of the federal government’s asylum-seeker shelters. The government, trying to cope with the more than 65,000 asylum applicants it has received since January 2014, paid ORS some $24 million last year to run camps housing the people.

ORS’s contractual obligations include offering German classes, providing special protection for minors and teaching refugees Austrian values such as “the importance of punctuality and reliability.” The government pays ORS a set rate for every camp it runs plus an additional price for every asylum seeker it houses. (It doesn’t disclose the figures.)

ORS’s main competitors are nonprofits such as the Swiss Red Cross, Caritas and the Protestant charity Diakonie, which also bid for government contracts to provide migrant reception services.

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