Budapest Business Journal 19/21

POLICY COMMENT Christopher Mattheisen, chairman-CEO of Magyar Telekom is worried about demand

BBJ HUF 1250 | €10 | $15 | £7.5

LOGISTICS

〉PAGE 3

SPECIAL REPORT INSIDE VOL. 19, NUMBER 21

Budapest Business Journal

I NOV 18, 2011 – DEC 1, 2011

$2,000 the price an ounce of gold could reach by the end of the year 〉PAGE 4

HUNGARY’S PRACTICAL BUSINESS BI-WEEKLY SINCE 1992 | WWW.BBJ.HU

€ IN THE ER With the forint in freefall and several unsuccessful state bond auctions, Hungary is increasingly pointed to as the next bleeding vein of Europe. Panic about the state debts of EU countries has spread so fast that it could even threaten the life of the euro.

Fidesz set to lose votes over eva Besides increasing the burdens on businesses, eliminating EVA would also be an administrative nightmare for entrepreneurs.

BBJ GABRIELLA LOVAS

The government and the parliamentary groups of the ruling Fidesz and KDNP parties have banged heads in recent weeks over the future of the EVA (simplified business tax). The cabinet wants to scrap it completely, claiming it has become redundant due to the 16% flat tax, while the party groups are lobbying to keep it alive for at least another year, even if at a higher tax rate.

Unfortunately, the public ping-pong match over EVA has further increased uncertainties in the business environment, which has already caused serious damage to the economy. Business owners are now totally confused about what to expect concerning EVA. “The original idea of eliminating the tax form at the beginning of 2012 would be an administrative nightmare for many,” said Attila Tibor Nagy, an analyst at the Méltányosság Center for Fair Political Analysis. continues on page 5

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BUSINESS Exchange-traded funds spread in Hungary, too

ENERGY Alteo seeks firms to buy in Hungary and abroad

TRENDS A maze of discounts in mandatory car insurance

Exchange-traded funds are simple instruments that allow small investors to own a diversified portfolio of assets at a low cost. While certain ETFs can be part of a long-term investment strategy, others are best avoided, unless you are an experienced trader. The latter are looking at the funds as an alternative to state bonds. 〉PAGE 5

Hungarian energy supplier and trader Alteo has publicly offered three-year bonds under a HUF 2 billion program announced in June to finance new projects, which include both acquisitions and greenfield investments. The firm is looking to buy into several windfarms and a solar project as well. 〉PAGE 7

Although switching mandatory car insurance policies is no longer limited to a one-month period at the end of the year, the battle for clients continues. In order to gain market share, some insurers are willing to pay the new accident tax for car owners, and they are also offering a record number of discounts this year. 〉PAGE 4

Allianz K&H Biztosító KÖBE Uniqa Generali

current market share

forecast market share

Anticipated market share changes at certain insurance companies after the campaign period

LIFE & PEOPLE

Live or leave Changes to the spatial plan of Budapest’s agglomeration are changing how towns outside the capital will be able to regulate developments in their area. This could finally bring some order to the chaotic growth of commuter towns, making them a much better place to live – sometime in the future. 〉PAGE 18

Ildikó Szüts of OTP Bank talks about the intricacy of details in leadership

Q&A 〉PAGE 20

Expat advice German-born SAP director Markus Hilken came to Hungary in 2007 and now lives here with his Hungarian wife and two kids. He admires Hungarian creativity and name days, but gets irritated by the Hungarian habit of working without invoices. He advises German newcomers not to talk about the “Miracle of Bern” to Hungarians. 〉PAGE 21

2 NEWS

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NEWS FOR THIS PAGE IS FROM THE BUDAPEST BUSINESS JOURNAL’S DAILY BRIEFING, HUNGARY A.M.

NEWS in brief

Budapest Business Journal | Nov 18 – Dec 1

Hungary’s advertising market grew 4% in the third quarter from the same period a year earlier. Year-on-year growth, based on list prices, was up from 3% in Q2 and stagnation in Q1.

Spending for advertising on cable television was up 23% during the period, which industry insiders attributed to price rises. Revenue from online advertising edged up 3.1%.

ALSTOM METRO CARS GET GREEN LIGHT FROM TRANSPORT AUTHORITY

Hungary’s National Public Transportation Authority (NKH) has approved the brakes on trains French engineering giant Alstom is to deliver for Budapest’s number two underground line, exempting them from Hungarian regulations. NKH experts accepted Alstom’s technical solution for the brakes after modifications were made and the brakes were tested, clearing the way for them to be issued a permit after a 4,000km test run. Alstom asked for an exemption for the brakes because some parts were not made according to the technical specification in Hungarian railway regulations. Under a contract signed in May 2006, Alstom was to deliver 22 trains for the capital’s second metro line for €150 million and 15+7 trains for the fourth line, under construction at present, for €114 million.

ECONOMY GDP better than expected Hungary’s GDP rose 1.4% according to both unadjusted and a workdayadjusted figures in Q3 from the same period a year earlier, slowing slightly from 1.5% growth in Q2, said the Central Statistics Office. Agriculture was the main driving force behind growth, followed by industrial exports. Quarter-on-quarter, GDP rose 0.5% in Q3: the highest since a 0.7% increase in Q3 2010. Though GDP growth was strong in Q3, it is likely to slow in coming quarters because of austerity measures, the weak forint and a poor outlook for the country’s biggest export markets, analysts said.

Exports continue to drive growth in Hungary, although the payout of yields on private pension fund assets in the summer caused consumption to stabilize, said Gergely Suppan of Takarékbank.

BSE trades foreign blue chips The Budapest Stock Exchange (BSE) on Tuesday launched trade in shares of ten West European blue chips on an alternative platform, CEO György Mohai announced.

Shares of BASF, BMW, Commerzbank, Deutsche Bank, E.ON, Nokia, Santander, Siemens, ThyssenKrupp and Total trade on the platform, dubbed BETa. Transactions are made with forints, at exchange rates constantly adjusted to market rates, but dividends on the shares are paid in euros. Erste Bank’s brokerage, which developed the platform and is supporting pricing on BETa, expects the alternative platform to generate daily turnover of HUF 1 billion.

The brokerage wants to expand the number of shares traded on the platform to 30 from January, said Erste Befektetési chairman-CEO Róbert Cselovszki. BETa’s opening hours, trading periods, offer types and validations all conform to BSE rules.

Banks set EC against FX scheme BayernLB, Erste Group, Intesa Sanpaolo, KBC, Raiffeisen Bank International and its parent Raiffeisen Zentralbank, Österreichische Volksbanken, and UniCredit have pressed the European Commission to take action against a Hungarian government scheme allowing early repayment of foreign currency-denominated mortgages at discounted exchange rates, leaving lenders to cover the difference.

The banks said the scheme was a “blatant violation” of their rights in a letter sent to Michel Barnier, EU commissioner in charge of regulating finance.

Data from financial regulator PSzÁF shows the scheme cost banks about HUF 44 billion by the end of October, about a month after its launch.

Matolcsy: 2012 reserves enough Hungary’s combined HUF 300 billion in reserves in the 2012 budget bill should be sufficient to defend against risks arising from a prolonged crisis, National Economy Minister György Matolcsy said in a written response to a question posted on the website of Parliament. No further fiscal measures will be necessary on top of the expenditure- and revenue-side steps already announced with the 2012 budget bill, Matolcsy said. Measures approved ensure the general government deficit target of less than 3% of GDP will be met in 2012, he said. The government has taken into account the worsening global economic environment and based the budget on significantly downward revised mac-

NUMBERS

in the news

0.5% the rate the European Commission projects Hungary’s economy will grow in 2012 in its European Economic Forecast.

HUF

272 bln the amount businesses are expected to apply for in VAT refunds under a recent European Court ruling.

roeconomic projections, compared to the latest Convergence Program.

Savings outlined in the Széll Kálmán Plan for 2013 will counter the effect of the elimination of sectoral “crisis taxes” as well as the halving of the bank levy, Matolcsy said.

POLITICS New data-protection head PM Viktor Orbán nominated Attila Péterfalvi to head the new Authority for National Data Protection and Freedom of Information to be set up from the start of next year. The President of the Republic will make the nine-year appointment final. In June, parliament decided to establish a new data-protection authority, which will have the power to make fines for mishandling personal data of up to HUF 10 million. The establishment of the new authority is part of an overall reform of the way the ombudsman system works in Hungary, introducing the post of a single ombudsman with two deputies, to replace the current four ombudsmen for different areas.

Gyurcsány elected party leader Hungary’s Democratic Party has changed its name to Democratic Coalition (DK) and elected former Socialist PM Ferenc Gyurcsány its leader. DK will be Hungary’s “most democratic party” with all the members electing its officials directly at the party congress, Gyurcsány said, adding that the authority of each member in the party’s 12-strong presidium and the chairman itself will be virtually the same. The new formation has so far received over 3,800 membership applications.

DOMESTIC Labor fines at 5,486 businesses Hungarian labor market watchdog OMMF has investigated 16,500 companies in the first nine months, uncovering irregularities regarding employees at 8,239 of them and imposing fines of a combined HUF 1 billion on 5,486. OMFF found some form of irregularities at 44% of the 160,000 employees checked in the period. Late payments constitute 10% of all uncovered irregularities. Other frequent problems related to holidays, overtime and wages. More and more companies go “phantom” after a first inspection, with their tax numbers revoked or even under liquidation during a planned second phase of investigation by the OMMF. The sector employing most illegal laborers has shifted from the construction industry to security firms, OMMF figures show.

New law limits CCourt appeals Hungary’s Parliament on Monday approved a bill that limits the scope of parties who may initiate reviews of laws with the Constitutional Court from the start of 2012. Only the government, one-quarter of MPs or an ombudsman may start a review.

At present anybody may do so. The legislation also extends the Constitutional Court’s powers to include taking decisions on the constitutionality of court rulings. It can as before decide on the constitutionality of the application of law in specific court proceedings. The legislation will terminate all ongoing Constitutional Court procedures related to challenges of laws on constitutional grounds on January 1, 2012, unless the aforementioned parties initiated them.

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Budapest Business Journal | Nov 18 – Dec 1

NEWS FOR THIS PAGE IS FROM THE BUDAPEST BUSINESS JOURNAL’S DAILY BRIEFING, HUNGARY A.M.

COMPANY news

NEWS 3

Hungarian companies active in factoring have signed a code of conduct based on that recently adopted by banks. The code holds the signers to transparent and responsible conduct, and states that to save debtors from foreclosure is in the common interest of debtors, creditors and factors.

POLICY COMMENT FAST, CONTACTLESS ELECTRONIC PAYMENT BECOMES MAINSTREAM

SPAR has made a contactless payment system available in 400 SPAR, Kaiser’s and INTERSPAR stores, supported

by MasterCard and Maestro bankcards.

SPAR is the first retail chain in Hungary to make contactless payment available in all its outlets.

When paying with MasterCard or Maestro PayPass it is enough to hold the card close the terminal as a PIN code is not asked for totals under HUF 5,000. This can reduce the time spent paying to less than five seconds, data from MasterCard shows. In Hungary, contactless paying systems are available at OTP Bank, Takarékpont and Cetelem Bank.

Christopher Mattheisen, Chairman and CEO of Magyar Telekom is worried about domestic demand

Q: HOW DO YOU SEE THE BUSINESS ENVIRONMENT IN HUNGARY? A: It is pretty challenging. One thing that keeps me up at night is what is going to happen with domestic demand next year. We originally expected positive GDP growth, even if it was mostly export-driven. Now, GDP growth expectations are going down every passing week, with the ‘scissor’ in state finances growing wider and wider. This does not give me cause for optimism. There are of course countervailing impacts on disposable income.

For instance, I was not so concerned by inflation, though now, with fuel prices going up, that might change. Indebtedness is certainly an issue, but it is difficult to judge how it is affected by the government’s “végtörlesztés” scheme [for the fixed-rate early repayment of foreign currency loans]. Then there are the tax changes: the flat rate tax is slightly negative, as shown by the fact that many businesses have had to make up the difference to the workers. And of course a rise in “áfa” (VAT) would affect everyone.

In general, I need to pay attention to many more macroeconomic indicators than in the past as the number of risk areas has grown so much. And of course the eurozone crisis and the HUF 300 euro exchange rate don’t help either.

Q: HOW HAVE RECENT CHANGES IN TAX POLICY AFFECTED YOUR BUSINESS? A: I would not like to comment on the telecoms tax. To be fair, the government is chasing a moving goalpost as Hungary’s macroeconomic environment changes. However, after a point, even if a tax is “indokolt” [justified], if there are too many changes in policy, then you could argue that this is a problem in itself. At this point, there are still many changes in progress; we are waiting for the dust to settle before we can draw any conclusions. MTD

Danubius Hotels’ Q3 net income plunged 82% to HUF 542 million from the same period a year earlier, the company’s consolidated IFRS report shows.

Revenue edged down 3% to HUF 13.78 billion during the period. Operating costs fell at a faster rate, dropping 4% to HUF 11.07 billion to lift operating profit 1% to HUF 2.71 billion. Operating profit was also flat at HUF 1.55 billion. The company’s financial loss increased to HUF 1.57 billion from a HUF 970 mln loss in the base period. Danubius Hotels booked a HUF 212 mln loss for the period, compared to net income of HUF 314 mln in Q1-Q3 2010.

Magyar Telekom on Monday said it will file with the US Securities and Exchange Commission to terminate registration of its shares and American Depositary Shares (“ADSs”). The company expects the deregistration to become effect on February 12, 2012. “The main purpose of the deregistration is to reduce complexity in financial reporting and administrative costs,” Magyar Telekom said. Magyar Telekom delisted its ADSs from the New York Stock Exchange effective November 12, 2010.

Nyilas Cellars, which exports about 70% of its output, is trying to strengthen its position on the domestic market, vintner László Babiczki said. The cellars, owned by Solybor and based in Gyöngyössólyom (northeast Hungary), mainly exports its wines to Canada and the United States, but also makes deliveries to Czech Republic, China, Germany, and Italy, Babiczki said. The cellar is launching a new product family, dubbed “horoscope”, targeted at Hungarian oenophiles, he added. Solybor has annual net revenue of about HUF 600 million. It turns out some 20,000 hectoliters of wine a year.

The Hungarian Auto Club unveiled its expanded service center in Budapest.

The club has 102,000 members, about 10% more than a year earlier, said chief secretary Zoltán Kovács. About 380,000 people take advantage of its network each year and the club has partnerships with 500,000 car owners, he added. The Hungarian Auto Club has invested HUF 2.5 billion in its network of service centers over the past six years.

Nokia Siemens Networks has signed a job creation agreement with Hungary’s government. Nokia is spending HUF 2.7 billion to expand its research base in Hungary. The investment, which will create 224 jobs for people with advanced degrees, is supported with a HUF 270 million state grant. Most of the new jobs at the research center will be filled with participants in Nokia Siemens Networks’ scholarship program. About 50 students participate in different research projects each semester under the program, which involves 13 universities. Nokia Siemens Networks established its R&D center in Budapest in 1998.

Hungarian drug maker Egis, majority-owned by France’s Servier, is standing by its projection for revenue growth of 2-4% in its business year started October 1. Egis expects a 6-8% drop in turnover on the domestic market because of unfavorable regulatory changes. It projects a 10-12% increase in revenue in

CIS countries and 3-5% growth in Eastern Europe. Turnover and profit in Egis’ business year ended September 30 was in line with expectations, in spite of the increased burden of the sectoral tax on drug makers in Hungary.

OTP Bank has disclosed ownership of a stake in advertising agency Multipont Program. OTP Bank said it owns a 19% stake that was registered on November 7.

Paris-based pharmaceutical company Sanofi will eliminate first-phase R&D activity at its Hungarian subsidiary Chinoin, the latter company’s Communications Director Iván Rózsa said. The move is part of global restructuring of R&D activities within the Sanofi group, he added. Rózsa emphasized that Chinoin would continue to conduct later-phase R&D activity in the country. These could bear results more rapidly and are export-oriented, he said. The elimination of initial-phase R&D activity will affect 160 employees.

Hungarian maize grower MG. Produkt has sold 10,000 tons of maize to a South Korean company for HUF 500 million. The South Korean company buys maize from China, but an increasing population and rising demand for fuel production “put Hungary in the picture”. Somogy County produced an estimated 550,000600,000 tons of maize in 2011. The purchase price for maize dropped from HUF 50,000-51,000 per ton in September to HUF 44,000-45,000 in November.

Hungarian rabbit meat processor Tetrabbit has been granted a permit to export to Russia and the Customs Union of Russia, the company said. Tetrabbit is the third company from the world’s biggest rabbit farming countries – China, France, Italy, Spain and Hungary – to be granted a permit. Tetrabbit expects Russian deliveries to generate 20% of export revenue next year. Exports account for 90% of the company’s turnover. This year, it expects revenue to climb to HUF 4.8 billion from HUF 4.5 billion in 2010, managing director Zsolt Csúvár said.

Hungarian-owned supermarket chain CBA would be interested in buying the Louis Delhaize group’s stores in Hungary if the Belgian company were to offer them for sale, daily Magyar Nemzet said. CBA communications director Attila Fodor told the paper CBA would seriously consider buying the group’s Profi, Cora and Match stores in Hungary if they were offered. The transaction would boost the share of Hungarian-owned supermarkets, which is low by Western European standards, he added.

Contract electronics manufacturer Flextronics has agreed to make UK-based Karbon Kinetics’ Gocycle at its plant in Sárvár (northwest Hungary). The Gocycle is the world’s first electric vehicle made using injection molding technology.

After-tax profit at Zwack Unicum, Hungary’s most famous spirits maker, rose 20.2% to HUF 894 million in the first half of its business year started April 1, conmpared with the same period a year earlier, as margins improved.

4 TRENDS

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Budapest Business Journal | Nov 18 – Dec 1

NUTRITION ISSUES

CAR INSURANCE

COMMODITIES

RETAIL

Kids’ all time favorite

A maze of discounts

A golden outlook

Small is beautiful

Milk the most popular dairy product for kids.

Battle for clients once again brings falling prices.

Ten-year bull run is expected to continue.

Boom sets back and recession fosters specialty stores.

4.38 15-20%

$2,000/ounce

60%

is the popularity index of milk on a scale of 1-5

drop seen in insurance fees this year

could be the price of gold by the end of 2011

growth in the number of specialized bakeries

According to a recent survey by a dairy product distributor, Hungarian children have more milk than any other type of dairy product, but don’t necessarily eat enough meat or eggs to support their daily protein needs.

The findings of the survey show that kids at the age of 6-15 have more milk than meat, cold cuts, fresh fruit or vegetables.

Some 80% of youngsters eat dairy products every day, or several times a day. Thus dairies are the main protein sources of this age group, with milk being by far the most popular product. Though 71% of children already have milk daily, most mothers believe they should incorporate more milk in their meal plan.

Of those queried, 55% have fresh fruit every day as opposed to fresh vegetables, which only 44% take daily. The consumption of frozen food is not that typical in this age group: nearly 60% eat them less than weekly. Surprisingly, salted crisps are not so popular, and are only consumed daily by 9% of the polled. Sweets are more appealing, with nearly 30% yielding to their temptation every day. The proportion of cereals and soft drink in children’s daily menus is below 30%.

The daily consumption of cold meats is only 27%, fairly low, with which children are unlikely to meet their daily protein needs. Protein intake is way higher than that of the adults, says Zsolt Vági, a nutritionist of the International Nutrition Research Institute. He advices that children have at least half a liter of milk every day or other dairy products containing the same amount of calcium. Beyond that, meat and eggs are needed to meet their protein and calcium demand. According to the respondents, 28% of children follow a healthy diet while 6% eat badly. (Mona Kft, a distributor for dairy producer Montice carried out the survey. The respondents were mothers aged 29-46.) ZsV

Despite the planned accident tax that will be incorporated in mandatory liability insurance fees, car owners can bag great discounts again in this year’s insurance campaign.

Insurance fees can be 15-20% lower in some cases (calculating without the accident tax, which would be 30% of the annual mandatory insurance fee), thus the cheapest offers on the market can be as low as HUF 14,00015,000 for the entire year.

Several insurance companies will practically take over – partially or, in some cases, entirely – the burden of the accident tax from their clients with the extent of the discounts they are offering. On top of this, insurers are also offering a wide range of discounts, including insurance for speeding, or free trailer insurance.

Although price is still the main driver for switching insurers, four out of ten motorists also pay attention to the brand, a fresh poll by insurance site Netrisk.hu says.

According to the site, the most popular brand is Allianz, followed by Aegon and K&H Biztosító – in spite of the fact that Allianz does not come out on top when looking at which provider has the lowest offer.

But in spite of all the hesitation, nearly 60,000 car owners (of the 4.2 million insured motorists) decided to switch firms or simply re-contract with their existing insurer on more favorable terms in the first week of the campaign, data from Netrisk.hu shows.

Although the number is about the same as a year ago, due to a legislative amendment that ties the signing of a new thirdparty insurance policy contract to the purchase date of the vehicle, almost 600,000 motorists have been excluded from this year’s November campaign.

According to estimates by Netrisk.hu, nearly one-third of motorists affected in this year’s campaign will switch to another company by the end of the onemonth campaign. PF

Precious metal investment company Arteus Capital expects gold prices to rise after a correction of almost $300 in September. According to Arteus, the price of gold could reach $2,000 an ounce by the end of this year.

Prices started 2011 just above $1,400 an ounce and exceeded the $1,900 mark for the first time ever in August.

Gold has long been seen as a safe haven for investors, especially in times of economic downturn. As concerns grow over the eurozone debt crisis and global economic uncertainties, gold’s ten-year bull-run is expected to continue. Some analysts say it might even hit $2,500/ounce in the medium-term.

Based on a technical analysis, when the price of gold reaches the $1,805-1,815 level again, there will be a correction to about $1,775 an ounce, Arteus said. This in turn will spawn a shopping spree, which could again push the price up to $1,850 or even $1,950.

However, the usual year-end rush for the yellow metal could altogether override this scenario, Arteus notes.

According to Arteus’ more pessimistic scenario, the correction could pull the price of gold down to $1,720 an ounce. However, a recovery is almost guaranteed from this level.

But is the clamor for gold just another bubble, as some claim? One of the most significant factors determining the price of gold is the return of central banks as net buyers of the precious metal. In addition, every other asset class seems to be too risky, and investors have to put their money somewhere. On the other hand, gold is a useless asset.

Bubble or not, gold prices are expected to see higher volatility with exchange-traded funds (ETFs) that invest in gold playing an increasing role in determining prices. The SPDR Gold Trust ETF, the world’s largest gold-backed ETF with around $72 billion in net assets, is one of the most popular funds for investors seeking exposure to gold. GL

In the wake of austerity measures announced by the Hungarian government at the end of 2006, consumption relapsed, and the overall retail turnover (without automotive fuel sales) plummeted some 3% in 2007, 1,9% in 2008, 2,4% in 2009 and 1,4% in 2010. The recession has intensified the decade long market concentration where the share of big hypermarket and discounter chains has been growing continuously, with smaller businesses closing.

Even during the first year of recession the number of mixed-product FMCG shops decreased by 3,740, which accounted for 11% of the entire network. By mid-2009, altogether some 7,000 stores – one in five from every mixed store – were shut down.

Not so specialty food stores. While during the consumption boom in Hungary between 1998 and 2006 their number stagnated, during the recession their number rose from 14-17,000. The number of greengrocers’ shops has risen by 15%, but bakery shops performed the biggest jump: their number increased altogether by 60% in three years.

The contradictory phenomenon can be traced back for two main reasons: the market situation and a shift in consumer habits.

Weakened purchasing power and rising fuel prices reduced the importance of high-value family shopping trips – usually by car – to big hypermarkets built on the edge of towns.

So while in the course of the retail boom – when sales were rising 4-8% every year – the big malls could absorb purchasing power from the small competitors, statistics clearly show that from 2008 big hypermarkets suffered a greater drop in turnover than little and often specialized convenience stores located nearer residential areas where customers buy less, but more frequently.

In order to cut their costs, hypermarket chains often broke contracts with local suppliers, because these high-cost perishable products result in significantly lower margins than manufactured and branded foods. PM

REALIGNING MARKET

BANKING ON THE SHINY STUFF

NICHE RETAILERS

MOM, I WANT MEAT

FOOD TYPES

dairy meat, cold cuts fresh fruit fresh vegetables sweets bakery cereals

ONCE A DAY

26 32 22 22 23 22 17

Frequency of consumption of different food groups (%) by children Source: Mona Hungary kft

Allianz K&H Biztosító KÖBE Uniqa Generali

current market share

forecast market share

Anticipated market share changes at certain insurance companies after the campaign period Source: Netrisk.hu

Price of one ounce of gold Source: Equilor

Sales of retail trade volume (same period of previous year= 100) Source: BBJ research

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BUSINESS 5

Budapest Business Journal | Nov 18 – Dec 1

Save on fees, go for indices! vative investors typically buy ETFs mimicking large indexes, such as the SPY. There are specialized products for investors with a more active or aggressive strategy, such as biotech or clean technology ETFs. Intra-day traders prefer riskier, highly volatile products, such as funds linked to the banking sector, which currently shows very high volatility, or more innovative funds.

Exchange-traded funds are a great way for investors to diversify their portfolios at low fees, if they know what they are buying.

BBJ GABRIELLA LOVAS

As relatively low-risk, simple instruments that allow small investors to own a diversified portfolio at low cost, exchange-traded funds (ETFs) are popular among small investors worldwide. The number of ETFs is growing fast, with almost 8,000 products to choose from. Some of them track a major market index, but there are ETFs linked to a given portfolio of equities, bonds, commodities and property markets.

ETFS THAT NEED CAUTION

ETFS AND SELF-PROVISION In the US, ETFs are strongly linked to pension savings accounts, said András Somi, head of retail research at KBC Securities. In Hungary, this could work with retirement savings accounts (Nyesz), too, as certain ETFs can be part of a conservative, longterm investment strategy.

“With an easy and cheap transaction, I can ‘buy’ into the entire US stock market by investing in the SPY fund,” Somi noted. The SPY fund represents ownership in an investment trust holding a portfolio of equities that comprise the Standard & Poor’s 500 Composite Stock Price Index. “Compared to picking individual stocks, this transaction does not need time, energy or expertise,” he added.

“I would be very happy to see ETFs crowding out unit-linked products in the self-provision market, primarily because the related costs are ridiculously low,” Somi said. While ETF fund management fees are at around 0.5% and can be as low as 0.1% in case of the largest funds, those of unit-linked products vary between 5% and 7%. In addition, spreads are also insignificant, he noted.

“This is a big challenge for us, as we have to outcry those large networks that focus on selling unit-linked products,” Somi said.

Unfortunately, several investors have been pushed into buying unit-linked products they did not even need, he added. “An ETF might not be a product suited for everyone,

continued from page 1 As unhappy taxpayers, who are of course also voters, are seeing both their taxes and their supposedly beer mat-sized tax declaration forms growing, the government’s credibility and the effects of its slogans are weakening, Nagy said. “It is similar to marketing: if I buy something and it is not quite what it says on the tin, the whole thing could easily backfire,” he added.

“Taxpayers who have chosen EVA are not typical entrepreneurs in the sense that they set up a business to earning their living rather than making big profits,” Nagy said. For instance, there are numerous actors, journalists and language teachers who pay their taxes this way. “They will probably be quite angry seeing their tax burdens and bureaucracy rising,” he noted.

“The EVA story also puts into the spotlight the practice of extra fast-track legislation, which seriously damages the quality of the laws passed,” Nagy said. The contradictory statements of Fidesz politicians over EVA have been the result

but most potential investors could consider using them in their long-term savings.”

CHOOSING THE RIGHT ETF “Our clients have shown an openness to trade in foreign ETFs with a trading volume of well over HUF 10 million on the very first day of trading,” Somi said. The service to trade in ETFs online was introduced to the approximately 25,000 customers of KBC Equitas on November 1. “According to our experiences, there is a smaller group of customers who are not only aware of what an ETF is, but often know exactly which particular product they want to buy, but most of them are still learning what an ETF is,” he added.

“The most popular products were those tracking the US banking sector, which is not really surprising seeing the volatility of this market segment,” Somi said. Even the VIX index of volatility attracted a couple of customers. VIX is also known as the “fear index”, because a high VIX represents uncertainty about future prices. Clients also bought the SPY fund.

Choosing the right ETFs depends on the investors’ own strategy, Somi said. Conser-

of the need to handle too many laws at breakneck speed. Currently, major new regulations such as the Labor Code or the Municipality Act as well as other cardinal laws are also under debate, in addition to the usual budget act.

TIME TO END THE MATCH The public clash of views between the government and the Fidesz parliamentary group reflects the fact that there wasn’t enough time and energy to thoroughly consider the consequences of eliminating EVA, Nagy said. The problem is that part of the administrative preparation process of bills now regularly spills over into the parliamentary phase. “Thus, the first opportunity for different ideas to clash and to discuss the possible consequences takes place in Parliament, which I think is wrong,” he added.

Back in April 2010, Péter Szijjártó, the prime minister’s spokesman, dismissed a claim by the Socialist Party that Fidesz was secretly planning to scrap the taxes brought about by the Socialists,

As a portfolio of assets backs most ETFs, they are no riskier than other instruments traded on the stock exchange, Somi said.

However, there are trickier products, which fortunately account for only a fraction of the market. He warned that these sometimes carry special risks that investors should be beware of.

What are these products? As a rule of thumb, if you do not understand a product, you should not buy it. There are, for instance, leveraged ETFs which amplify the return on a given index and inverse ETFs which go down when a benchmark goes up, and vice versa, as well as leveraged inverse ETFs. The riskiest products include “synthetic” ETFs as well as exchange-traded notes (ETNs) and exchange-traded vehicles (ETVs). These funds do not own assets like shares, bonds or commodities. Instead, they mimic the behavior of ETFs by arranging a derivative deal with an investment bank, which guarantees to deliver the return of the targeted benchmark.

Thus, they face counterparty risk, too.

In order to educate its clients, KBC organizes investment courses and meetings on a regular basis and encourages them to establish an investment strategy that matches their risk preference and economic outlook, before investing in anything.

The first ETF fund was launched in Canada in 1990. The original concept was to create portfolios of shares replicating a stock market index, such as the S&P 500. The main difference between a plain index-tracking fund and an ETF is that as the latter is listed on a stock exchange, where investors can buy and sell it easily. Unlike conventional investment fund certificates, ETFs can be traded all day long and their price moves intraday with the underlying product. ■

such as EVA. Then, on October 27, completely out of the blue, Fidesz MP László Koszorús submitted a proposal to Parliament to scrap EVA. This was rejected by parliament’s relevant committee; instead, it proposed raising the annual revenue cap on companies eligible to pay EVA from the current HUF 25 million to HUF 30 million, and increasing the tax rate from 30% to 35%. Companies that pay EVA do not deduct any costs from their tax base.

Consulting the parliamentary groups, Prime Minister Viktor Orbán reportedly took a decisive and firm stand on eliminating EVA, but eventually put the decision in their hands. The two sides seemingly reached a compromise this Monday, with EVA to stay at least another year.

The annual income threshold will likely be raised to HUF 30 million and the tax rate is to be hiked to somewhere between 35-40%. A final decision is expected on November 20. Meanwhile, the government will next year work on hammering out a new kind of simplified tax form that is to replace the EVA from 2013.

INVESTMENT TIP Due to recent domestic and global market developments and press reports, investors fear that Hungary’s default risks are increasing again, making Hungarian government securities high risk assets, according to the analysis of investment portal netfolio.hu.

To replace these assets, the portal recommends ETFs that track bonds of various emerging countries.

By investing in the government securities of several countries of similar risk levels, the combined returns will be close to that of investing in Hungarian government securities without bearing Hungary’s direct country risks, according to netfolio.hu. Given that the forint, like the currencies of other emerging market countries, is weak, the portal recommends Local Currency Emerging Market Bonds (LEMB) ETFs. In case the forint strengthens, the currencies of the target countries will be stronger, too, thus increasing the price of the recommended ETFs, netfolio.hu says. iShares Emerging Markets Local Currency Bond Fund The index measures the performance of the sovereign, local currency bond markets of almost 290 emerging market countries. The four major countries in the index include South Korea, Brazil, Mexico and Poland.

Market Vektors Emerging Markets Local Currency Bond ETF This index is designed to track a basket of bonds issued in local currencies by emerging market governments. The largest weights are Brazil and South Korea.

NET GAIN OR LOSS? The economy ministry claims that eliminating EVA would raise budget revenues by HUF 50 billion, next year. In January-September, the tax generated HUF 86.5 billion in revenues, while annual receipts are expected to reach HUF 180.1 billion, compared to HUF 181.9 billion in 2010.

Others, however, doubt the economic rationale behind the move, saying it would actually lead to less money flowing overall into state coffers. The risks related to the elimination of EVA imply a decrease in tax revenues due to a slowdown in economic activity and increased tax evasion, according to an analysis by the Institute for a Democratic Alternative (IDEA). The drop in tax revenues could be substantial if these businesses transfer their headquarters abroad or their costs are raised to the average cost level of those who pay corporate income taxes. The decision obviously has advantages, but in the event of zero growth (which is realistic for 2012), the move will altogether be detrimental, IDEA noted. ■

6 ECONOMY

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Budapest Business Journal | Nov 18 – Dec 1

Will Hungary be next?

Hungary has been nominated the next country to be felled by a financing crisis. But is the situation really so dire? The BBJ tries to dig down to the roots of the catastrophe craze.

BBJ GABRIELLA LOVAS

Economy Minister Matolcsy should step down to restore trust in the Hungarian government, otherwise even Prime Minister Orbán might have to perform a Berlusconi to keep the state solvent. Forget Greece and Italy, Hungary will be the next to capsize. Even if Hungary survives the next few months, interest in government bonds will remain so low as to cause financing problems from January on, the time to strike a deal with the IMF is now or never.

These are just some of the more intelligent, if somewhat melodramatic sentences that have been written about the state of Hungary’s public finances in the past few weeks as the state debt crisis hit Europe. While Hungary’s economy raises serious concerns, it is not in imminent danger of collapsing. The recent exaggerated reports on the state of the Hungarian economy by foreign analysts and bloggers are due to the fact that they are betting against the forint, says Equilor analyst Ákos Kuti. He foresees the forint significantly strengthening within the next few weeks, providing that Hungary’s credit rating is not downgraded to junk status. The first comments by the rating agencies are expected early next week.

The forint freefall started at the beginning of September, after the government announced its early FX repayment scheme and the HUF/ EUR exchange rate stood at around 280. The weakening forint left space for speculative attacks. The government anticipated that when Prime Minister Viktor Orbán told Parliament in September that Hungary must be ready to fight speculative attacks on its currency as the euro zone debt crisis deepens.

Some say that the government intentionally seeks a weaker forint or, at least, is in no hurry to intervene, in order to boost exports. Nevertheless, markets are waiting for the government and the Hungarian National Bank (MNB) to stop the turbulence. However, the MNB has very little room to strengthen the forint in times of a weak economic performance.

“The central bank raised the base rate by 300 basis points when the exchange rate last reached 317 HUF/EUR, however, we do not expect such a one-off, drastic decision this time,” Raiffeisen analyst Levente Blahó said. “While an increase of 100-150 basis points would be necessary to reach the inflation target, we foresee a maximum 50 basis points increase at the next meeting of the Monetary Council on November 29.”

The problem is that neither the government, nor the MNB has said anything about what to expect and what they think about current developments, Blahó said. The MNB is waiting for the government to say something, and vice versa.

Blahó noted that the central bank and the government should have been a little more marketfriendly in their communications efforts.

On November 15, a few days after the forint hit a new all-time low of over HUF/EUR 317, the Monetary Council (MC) issued a statement implying that it is willing to increase the base rate, if necessary. “If the increase in risk aversion in European financial markets persists, it

may prove necessary to tighten monetary conditions gradually.” The base rate has been at 6% since January 2011.

Kuti described the statement as a weak effort to pacify the markets. The MC says that “the spillover of concerns over the sustainability of government debt in the euro area to the Hungarian economy and their downward pressure on the forint exchange rate are unjustified. In the MC’s judgment, the recent depreciation of the forint has been inconsistent with the fundamentals of the Hungarian economy.”

MARKET FINANCING DRYING UP? Blahó stressed that there is no need to panic, as the market of government securities continues to be liquid, suggesting that there is demand in the market. The recent uncertainty, which was spurred by unsuccessful T-bill auctions, is unfounded, as the liquidity of the government is not at an imminent danger. Still, if the upcoming auctions of five- and ten-year government bonds fail, Hungary will have to look for other financing options, such as reaching an agreement with the IMF. There is a danger that Hungary will be shut off from international financial markets, Ronald Schneider of Raiffeisen Capital Management said. Bigger foreign currency reserves could be of help, but the country might need outside assistance again from the IMF, he stressed. That would be interesting, as Orbán has reportedly said that he will resign if the IMF comes back.

THE STATE OF THE ECONOMY IN A NUTSHELL In an effort to ease worries, the MC outlined the strengths of the Hungarian economy in its statement, saying that Hungary’s current account and net financing capacity have been in persistent substantial surplus, due to significant growth in domestic savings.

“The Government has strongly committed itself to keeping the fiscal deficit below the 3% target. The country’s sound fiscal and external positions create room to reduce its debt,” according to the statement.

GDP GROWTH Hungary’s 1.4% GDP growth in the third quarter of 2011 came as a positive surprise, driven by agriculture and industrial exports. However, analysts foresee growth slowing in the coming quarters.

INFLATION Analysts put year-end 12-month inflation at around 4.1% after October CPI came in at a higher than expected 3.9%, driven by household energy and fuel prices. The MC stressed that exchange rate depreciation is leading to a deterioration in the outlook for inflation.

CURRENT ACCOUNT AND NET FINANCING CAPACITY Hungary had a current account surplus of €738m in the second quarter of 2011, according to preliminary unadjusted figures, up from a surplus of €385m in Q1.

Hungary’s net external financing capacity, the combined surplus on the country’s current and capital accounts, came to €1.07 billion in Q2.

Adjusted for seasonal effects, the external financing capacity was 3.3% of GDP. HOUSEHOLD SAVINGS Net household financial savings reached HUF 202 billion or 2.8% of quarterly GDP in the third quarter of 2011, down from 3.9% of GDP in the second quarter and 3.4% in Q3 2010. The savings ratio was 4.5% in Q3. Excluding the pension assets transfer, households saved net HUF 1,124 billion or 4% of the period’s GDP in the four quarters that ended Q3 2011. ■

ECONOMIES IN TROUBLE The economy of the 17-nation eurozone grew by 0.2% in Q3 compared to the second quarter. Most of the growth recorded by EU statistics office Eurostat came from the continent’s two biggest economies, Germany (0.5%) and France (0.4%). Future prospects, however, are not bright, since forward-looking indicators suggest that the eurozone economy is likely to slip back into recession in Q4 of 2011 and beyond. EU governments have to come up with a viable strategy by the December 9 summit.

SPAIN: In Spain, the crisis was created by long-term loans, the building market crash which included the bankruptcy of major companies and a massive increase in unemployment, which rose to 21.4% in October. The growth figures of Q3 are pushing Spain close to recession with elections right ahead.

ITALY: The Italian economy is burdened with a huge national debt, the size of which was long underreported. With the eurozone crisis unfolding, investors’ perception of Italian debt has changed, which has caused rates to rise above 7%, the mark for a country in need of a financial bailout. Now the new Italian government led by eurocrat Mario Monti has to refinance some €200 billion of bonds by the end of April.

GERMANY: Germany posted 0.5% growth in Q3 yet any problems in the coming business quarters could have wider effects in the region. The driver of the European economy is strong and shows no sign of recession according to Economy Minister Phillip Roesler, who added that it was important to stabilize growth. Its biggest problem is that it has to help the others.

PORTUGAL: Portugal will see the worst recession in the 27-bloc next year, experts agree, following the release of the country’s growth figures which showed a decrease in the fourth consecutive quarter as a result of decelerating export growth. The country’s economy will further shrink by 3% in 2012, making it hard to meet its pledge to bring its deficit down to 3% of GDP by 2013.

GREECE: The economy of the EU’s black sheep will contract 5.5% this year and 2.8% in 2012.

The country will have to approve a new €130 billion international rescue package from the European Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF). However, global markets are concerned whether an interim government with no domestic political base can impose the needed tough austerity and far-reaching economic reform.

AUSTRIA: With the focus on countries close to default, little attention has been paid to increasing sovereign stress in Austria. The danger is in Austrian banks’ exposure to Eastern and Central Europe. The region has borrowed aggressively in Swiss francs, as have Austrian households, and the record strength of the currency had made it hard for borrowers to pay on their CHF-denominated obligations, causing massive losses for Austrian banks. ZsV 10 year debt yields: Greece 30.25%; Portugal 11.50%; Italy 7.05% Spain 6.33% source: Sky News

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BUSINESS 7

Budapest Business Journal | Nov 18 – Dec 1

ENERGY NEWS Alteo seeks targets in Hungary and abroad Wind farms and solar parks are the new acquisition targets of energy company Alteo.

BBJ

GABRIELLA LOVAS

Alteo launched the public offering of its 2014/D bonds in order to finance the acquisition of high-return projects that are already in the pipeline, the company said. The three-year bonds, which have a fixed yield of 12.37%, will expire in August 22, 2014.

The minimum offer was HUF 50 million to retail investors and HUF 100 million for institutional investors. The best yield available at subscription will be 12.37%.

A balanced, diversified and dynamic growth that includes both greenfield investments and market acquisitions has been an important part of the company’s strategy since the beginning of its operations, CEO Attila Chikán said. The focus of Alteo’s growth strategy is energy generation based on renewable sources, alternative decentralized energy production, energy trading and energy efficiency services.

The next six months will be about acquisitions, Chikán said. “We seek acquisitions primarily in Hungary, but there are plans to buy foreign targets too,” said the CEO. The company aims to launch greenfield investments from mid-2012. Alteo is interested in acquiring two wind farms in Hungary and a solar park in central Europe, Chikán said in an interview with the daily Világgazdaság.

Alteo launched development projects worth HUF 800 million at its Győr and Sopron plants (both western Hungary) in September of this year. Two new steam boilers have already been installed at the Sopron plant to enhance efficiency.

About HUF 500 million was invested to install three generators, each with the capacity of 1MW, at the plant in Győr. When completed, the plant’s capacity will reach 5MW. The Győr plant, located in the city’s industrial park, ensures the heating supply of companies like Audi Hungária. Alteo was granted a license for electrical energy trading at the end of 2008. The company provides electricity for both its SME and large corporate partners since January 2009.

Alteo’s profits fell to HUF 3 million in the first half of 2011, down from HUF 283 million in H1 of 2010, as margins narrowed.

Revenues dropped 10% to HUF 2.63 billion during the period. Alteo’s revenues rose more than 400% to HUF 5.66 billion in 2010.

Alteo, a B-category issuer at the Budapest Stock Exchange, is a complex energy service provider with a focus on renewable energy generation, energy trading and energy efficiency services. The company, which was established in March 2008, has seven power plants, within that four uses renewable energy resources and three are natural gas based cogenerational power plants.

14.65% share of renewable energy in gross final energy consumption by 2020. This is well over the 13% target set by the EU. ■

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FROM ENERGY TODAY, THE BBJ’S DAILY ENERGY NEWS SERVICE

Hungarian oil and gas company MOL plans to build a gas-fired power plant at the site of its Slovak unit Slovnaft in Bratislava, Slovnaft CEO Oszkár Világi told business daily Napi Gazdaság. The plant would have the same capacity as an 860-megawatt plant that MOL is building at MOL’s refinery in Százhalombatta, just outside Budapest, as part of a joint venture with Czech strategic partner ČEZ energy group. ČEZ holds 7.3% of MOL. The 860MW power plant in Hungary will generate about 8% of Hungary’s total electricity consumption, so most of its output will be sold on the market here. Ózdi Szénbányák has obtained a permit to reopen a coalmine in Ózd, northeast Hungary, which was shut down more than two decades earlier, regional daily ÉszakMagyarország said. Mining could restart in Ózd in 2013, creating about 1,000 jobs, the paper added.

Croatian prosecutors have named Zsolt Hernádi, chairman of Hungary’s largest refiner, MOL, as a suspect in the bribery trial of former Croatian Prime Minister Ivo Sanader. Sanader is accused of taking a bribe of €10 million ($13.6 million) from MOL between 2008 and 2009, when he was premier. In exchange, he arranged with Hernádi to give it controlling rights over Croatian refiner INA Industrija Nafte d.d. in a January 2009 shareholding agreement, Tamara Laptos, deputy head of the Office for Suppression of Corruption and Organized Crime, told the district court in Zagreb. Sanader and MOL deny the accusations.

AMBITIOUS RENEWABLE ENERGY TARGETS The government aims to reform the subsidy system of electricity and heat generated from renewable and alternative energy sources. The current mandatory purchase system will be replaced by base prices and bonus prices under a feed-in tariff mechanism. Under the current system, electricity generated with renewable and alternative fuel is purchased at prices higher than market prices.

The government approved the Hungarian Renewable Energy Consumption Action Plan (REAP) in December 2010. In the plan, the government set an ambitious target to reach a

Gas and energy trader Emfesz will file a request for judicial review with the Supreme Court on a failed appeal of a decision annulling the sale of the company, Emfesz manager István Góczi told MTI. The Court of Appeal recently rejected the appeal by Emfesz of a ruling in March by the Municipal Court of Budapest annulling the sale of the company. Emfesz’ gas trading license was suspended in January and later withdrawn.

The company has not been active since.

KEY AREAS OF HUNGARIAN RENEWABLE ENERGY POLICY ■ security of supply, ■ environmental

sustainability and climate protection, ■ agriculture and rural development, ■ development of green economy, ■ contribution to European Community goals.

The state-owned Hungarian Electricity Works (MVM) will start operating an electronic backbone network for the government in December, the National Development Ministry announced. MVM said in September it would consolidate the state’s existing telecommunications backbone network and expand it to 44 hubs. In addition to serving state institutions, the telecommunications network also offers new opportunities for business use, it added.

The board of directors of HUN Mining has announced the signing of a term sheet to sell most of the company’s subsidiaries to Davies Corporation. The decision to sell was taken because of a lack of financing for the mining units and “financial problems caused to the company by third parties”, the board said.

BBJ LOGISTICS SPECIAL REPORT

HOW TO GET BETTER TO RETURN TO THE PEAK PERFORMANCE YEAR OF 2008, HUNGARIAN LOGISTICS SERVICE PROVIDERS NEED TO IMPROVE IN A NUMBER OF FIELDS. In a grading system of one to five, there are few things more annoying than getting a three on a test. Unlike a four, which equals a reasonable effort, or a two, which is rather straightforward, a three sends the message that you are neither good enough to excel nor bad enough to fail. The worst thing about it is that you know you could have done better.

This, a three (or 2.99 to be precise), is the mark that Hungary got in the World Bank’s global Logistics Performance Index (LPI). The country ranks 52nd on a list of 155, ranking in the same neighborhood as countries such as Panama, Mexico, Vietnam and Greece. Not great company, when it comes to the economy.

On a more positive note, a three means that with some effort you can get better, you just need to improve in some areas.

tion. The network is in so poor a state that it is nearly impossible to prepare a timetable due to delays caused by technical failures.

Today, only 88% of passenger trains run on time as a result of speed restrictions introduced at numerous damaged tracks. Ten years ago, the rate was 96%. Freight trains may not run that fast, but the changes in schedule caused by delays mean they won’t arrive in time either.

This is the field that must improve most, but it won’t happen overnight. Railway renovation is expensive. Building one kilometer of new track costs HUF 320 million (using secondhand raw material, it would be HUF 170 million). This does not include the cost of technical equipment and the renovation of overhead cables. Add these, and the costs would run to HUF 650-700 million/km. Taking this into RAILWAY DEVELOPMENTS consideration, even the 200 km/year of renovations planned by the government until In logistics, this should start at the rail- 2020 no longer sounds bold. If this project is way network. In Hungary, a sizable propor- not started in time, then by 2014, running on tion of the rails are in dire need of renova- schedule will become impossible.

Another disadvantage of rail freight forwarding is the demise of an extensive network: gate-to-gate forwarding is impossible in many instances. Apart from a few lucky companies like BorsodChem or the Diósgyőri Acélművek steel works, which have rail terminals at their premises, the rest have to deal with combined shipping.

Yet the major barrier in the way of rail cargo expansion is uncompetitive rail freight rates, according to Koppány Bíró, general secretary of the Hungarian Association of Logistics Service Centers (MLSzKSz). The association is in talks with state railways MÁV and the ministry on working out a more business-friendly system. “We try and achieve a rate that will make carriers want to travel on the rails.” That is, they are trying to convince MÁV to shave its profit margin and the ministry to support rail cargo more.

In favor of rail freight are a number of EU guidelines that set ambitious CO2 targets for the future. The target value in freight transportation is a 40% drop in emissions between 2008 and 2050. This translates into a target of transferring all road shipments exceeding distances of 300 km to rail or river. The EU’s White Book on transport policy devises several more points to make rail freight more competitive (see table 2).

Thankfully, the dates are years down the

line, as countries have to put their economies back on track first.

THE ROAD LESS TRAVELED What damaged tracks are for rail forwarders, volatile fuel prices are for road haulers. In the past 18 months, fuel prices have risen by 30%. For forwarders with pre-fixed rates for a year in advance, this equals disaster. Gergely Ódor, FTL Product Developer at Damco, one of the world’s leading providers of freight forwarding services, could talk a lot about that.

Coming from a family of logistics workers (his father was the first captain to steer a shipment from Budapest down the Rhine–Main–Danube Canal), he knows exactly where the soft spots of the industry are.

He is sitting at home with two laptops and two smartphones switched on to keep him busy even on his day off. While talking, his mailbox keeps signaling incoming letters.

One is from an important contractor asking him to do something about rising fuel prices. “We have to somehow compensate our haulers,” says the client, “they can no longer make up the difference.”

“This happens on a daily basis,” Ódor notes. Price hikes are painful for everyone, especially for those who won tenders that, in general, require a flat rate. “Some operators think ahead and incorporate a semiannual compensation for price increases.

Others have a multiplier to adjust freight rates,” he notes. Either way, rising fuel prices will make forwarding more expensive. Every 10% increase in fuel prices translates into a 4% freight rate hike.

And the volume of road freight is forecast to increase. A number of steps, including the phasing out of RoLa subsidies, are pointing in this direction. (RoLa is a combined transport system to transport trucks by rail.)

▶WWW ▶ Danube .BBJ.HU freight: submerged plans Budapest Business Journal | June 4 – June 17 ▶▶ Logistics news ▶▶ Untapped potential on the roof ▶▶ LIST: State-accredited logistics centers ▶▶ MARKET ANALYSIS: Logistics service providers ▶▶ LIST: Logistics service providers ▶▶ MARKET ANALYSIS: Logistics parks ▶▶ LIST: Logistics parks

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SPECIAL REPORT 9

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GRADES IN LOGISTICS Abolishing RoLa will put 35,000 extra trucks EXCHANGE RATE MISERY on roads and will take about HUF 2 billion out of MÁV’s pockets, Bíró calculates. But it Though not directly linked to logistics, will also earn the state budget HUF 3.5 bil- exchange rate fluctuations make the job, lion, which at present takes precedence. and the profitability, of some firms tough.

Domestic companies are usually stronger ROAD TOLL CHANGES in exports. Export freight rates are also subsidized, which puts import-heavy internaThe debate over rail versus road freight tional carriers at a disadvantage. The rate for forwarding goes back a long time. From an a standard 20-foot container under 8 tons environmentalist viewpoint it seems more from Hamburg to Budapest is €430, while legitimate to favor rail over road. Rail trans- from Budapest to Hamburg it is €375. The port is far less harmful to the environment real problem for firms is Hungarian cusand less exposed to fluctuations in fuel toms regulations, which add VAT on top of prices. This is the route the EU wishes its the goods already levied by a customs duty. member states to follow and which many Those who can declare their goods at other forwarding associations, including MLSz- borders, thus depriving the state of some KSz, are lobbying to improve. badly needed income.

Road transport is undoubtedly the main Until a year ago, carriers filled their tanks at culprit of air pollution, and right now, most Slovakian gas station to get cheaper fuel. The freight transportation within Hungary takes introduction of commercial gasoline this Janplace on the roads. So it is hard for the sector uary – in which carriers with trucks above 7.5 to understand why the government is delaying tons can reclaim HUF 6.5/liter (until October) the introduction of distance-based road fees. and HUF 19.50/liter (from November) – seems Especially since it is expected to bring an addi- to have settled this problem, however. “The tional HUF 60 billion in revenues as opposed compensation paid was lower than the income to the annual HUF 40 billion earnings from generated from fuel sales,” said Karmos, “so toll fees. The Hungarian Road Haulers Asso- the state came out better off altogether.” With ciation (MKFE) is also keen to see the new sys- current prices hitting HUF 400 and above, tem introduced – the current date set is Janu- however, there are still many who fuel up outary 2013 – and used for the right reasons. side the country’s borders.

“Every country that has implemented this The country’s logistics performance mirtoll incorporated some protectionist elements rors its general competitiveness, said Attila in the system,” said Gábor Karmos, general Chikán, a former economy minister, at secretary of MKFE. In the association’s case, MLSzKSz’s annual logistics conference this this would mean a proportionate lowering of September. He believes current trends in the the vehicle tax, which currently is 40% higher economy (and logistics) favor the country, than the EU average. Karmos hopes that the which has untapped potentials in the field, extra sum will only be used in part to fill bud- but the lack of a macroeconomic action plan get holes (as proposed by the National Econ- makes it hard to take advantage of these. omy Ministry) and a significant sum will be The hope is that this shortcoming, along spent on the development and maintenance of with those above mentioned, will be repaired roads and training. “We often have difficulty and Hungary can improve its grades when finding well-trained drivers,” he admits. the next report card is issued. ZSV

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10 SPECIAL REPORT

Budapest Business Journal | Nov 18 – Dec 1

Danube freight: submerged plans Improving shipping conditions of the Danube would greatly contribute to the competitiveness of the country, but the government has decided to focus on preserving the natural environment instead of developing freight shipping.

BBJ PATRICIA FISCHER

Back in 2005, when preparations for improving the navigability of the Hungarian section of the Danube were started, no one argued that this was necessary. Now, however, a lack of consensus is slowing things down.

Before taking over the EU presidency, Hungary claimed at the end of 2010 that the Danube strategy would be a key priority during its six months in the hot seat. The EU commission’s Danube strategy aimed at improving navigation and cleaning up pollution on Europe’s longest river, involving some 14 countries through which it flows. But in March this year, state secretary in charge of environmental protection Zoltán Illés announced that Hungary has decided to pursue a green Danube strategy that focuses on preserving the natural environment, rather than developing freight shipping.

Illés said that Hungary has no Danube fleet and developing freight forwarding on the river would mainly serve German, Austrian and Russian interests.

At the moment, there is only one freight shipping port in the picturesque Danube bend, a situation that is unlikely to change according to trends in current policy

“Instead of adjusting the river to boats, the boats must adjust to the river,” Illés said, emphasizing that the river bed will not be excessively swept and new dams will not be built.

FREIGHT SHIPPING ON THE HUNGARIAN DANUBE SECTION

NUMBER In 2009 (with average river depth of 2.1 meters) OF SHIP 4,996 - 4.8 MILLION TONS FORWARDED Potential with the desired 2.5 meter depth FREIGHT 3,630 - AN ADDITIONAL 665 TONS The statement from the state secretary caused turmoil amongst players on the freight shipping market. “Hungary would be paralyzed without transport and logistics, so maintenance of our main waterway should be a priority,” Botond Szalma, president of the Hungarian Shipping Association said.

In Hungary, favorable shipping conditions exist on 200-250 days a year only, instead of the 300 that would be optimal for logistics firms. This causes extra financial burdens for freight forwarders, but on top of that, if plans for improving navigation aren’t submitted by the end of November, Hungary has to pay back more than HUF 1 billion in EU funding it has already received for the project, according to a recent article by Hungarian business weekly HVG. Planning improvements to navigation on the Hungarian Danube started in 2005 when the transport ministry assigned a consortium led by Vituki Nonprofit Kht with completing a feasibility study. That study, along with environmental assessments and technical plans, was submitted on time, but the process came to a standstill in March after Illés refused to issue further permits for realizing plans to resolve depth and width at pinch points along the river.

According to expert calculations, losses caused by reaching the optimal navigation conditions result in decreased competitiveness.

For ideal freight shipping conditions, a consistent depth of 2.5 meters is required; it is only around 2.1-2.2 meters at the moment, depending on weather conditions. The lack of depth caused a total loss of €27.4 million in 2009, of

which €15.1 million hit ship owners and €12.3 million was burdened by freight owners, said Attila Bencsik, president of the Association of Hungarian Inland Freight Forwarders. ■

BOTTLENECKS By connecting the Danube to the 170 km long Danube-Main-Rhine Canal in 1992, a 3,300 km inland waterway system – Europe’s longest – was established. One significant section – the middle part – runs via Hungary. Thus, the condition of this section substantially influences utilization of the entire waterway. The Hungarian-Slovakian and the Hungarian stretches of the Danube currently do not meet navigation requirements applying to the Danube. Present transport of goods on the Danube is only 10-15% of the potential capacity. The Danube would be capable of bearing ten times more traffic than currently, both in the number of vessels and in the quantity of goods transported. Compared to the regulations of the United Nation’s Economic Commission for Europe, depth and width restrictions need to be reckoned at nearly 50 spots, which considerably hinder the utilization of the waterway.

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SPECIAL REPORT 11

Budapest Business Journal | Nov 18 – Dec 1

LOGISTICS NEWS Duvenbeck to further expand logistics center German logistics company Duvenbeck will continue to expand its logistics center in Kecskemet (central Hungary) with a 14,000 sqm storage facility for almost EUR 10 mln. The first phase of the development includes a 5,000 sqm hall that allows 70 new hires. Duvenbeck is paying the city HUF 247 mln for two properties that serve as the location for the new facilities, said regional paper Dél-Magyarország. In September Duvenbeck inaugurated the first 5,000 sqm section of a new logistics center built at a cost of EUR 4 mln to serve the nearby Daimler plant.

Teva to expand production in Gödöllő Israeli generic drug maker Teva will soon complete construction of a new production hall at its plant in Gödöllő, just outside Budapest, as part of an almost HUF 30 billion investment, daily Világgazdaság said, quoting communications chief Peter Paplanos. The plant will start producing the active ingredient for the cancer drug 5-fluorouracil next year, the paper said. The paper notes that several hospitals in Hungary have run out of 5-fluorouracil recently.

Antal Feller, CEO of pharmaceutical wholesaler Hungaropharma, said there is a shortage of the product across Europe as the plant making the drug in the Netherlands has been temporarily shut down due to a technological problem. Teva announced a €65 million expansion at the Gödöllő plant in January 2010. The drug maker said the project, to be completed by the end of 2014, will mainly affect the production of cancer drugs, eye drops and injections.

BECOM unveils HUF 480 mln production hall Austrian-owned BECOM Electronics Hungary unveiled a HUF 480 million production hall at its base in the TatabányaKörnye Industrial Park (northwest Hungary).

BECOM Electronics Hungary won a HUF 144 million European Union grant for the project. The company will make digital electricity meters in the production hall, hiring 20 people to work there, said managing director Johann Bock. The company plans a further HUF 820 million of technology upgrades and sees headcount rising from 97 to 250, he added. BECOM Electronics Hungary expects to close this year with revenue of almost €7 million, about 40% above last year’s HUF 1 billion. The company’s business partners include Panasonic, Siemens and GE-Medical.

Dana Hungary leases logistics property in Győr Eston International’s industrial and logistics property division concluded a lease transaction of 6,000 sqm in Győr with Dana Hungary. Dana Hungary, a subsidiary of the international Dana Corporation primarily supplies service parts for vehicle manufacturers. Dana Hungary chose VGP Park, where it leases 5,540 sqm of storage and 616 sqm of office space. VGP Group is present in six countries in Europe with various industrial projects. Its Hungarian development, VGP Park Győr is located within the civic borders of the city, on the ViennaBudapest line, near the M1 highway and with direct connection to it. VGP Park also hosts tenants such as Skiny, Szemerey Transport, and HL-Display.

Pepperl+Fuchs lays cornerstone of HUF 1.3 bln production hall German-owned electronic sensor maker Pepperl+Fuchs has laid the cornerstone of a HUF 1.3 billion expansion at its base in Veszprém (northwest Hungary).

Pepperl+Fuchs is building a 3,200 sqm production hall at the base, said factory director Jurgen Chrobak, which is slated for completion by the end of next June.

Chrobak said the parent company had recently acquired a plastics manufacturer in the UK and would move its equipment to Veszprém. Pepperl+Fuchs will take on about 200 new hires to work in the production hall. At present, 410 people work at the base. Pepperl+Fuchs’ Hungarian unit expects to close 2011 with revenue of HUF 4 billion, up from HUF 3 billion in 2010.

Raben invests in Hungarian logistics center Raben Hungary will open a new crossdock warehouse in Dunaharaszti, adding to the 27,000 sqm of high storage warehousing that the company currently uses, in the second quarter of 2012. An increasing number of shipments and the need to maintain its quality of service require continuous improvements in processes, equipment and facilities, the company said. This led to the €2.2 million investment in the new facility, which will cover 4,000 sqm and comprise of 42 docks.

BILK completes development in Budapest After 10 years of continuous construction, the development of the 100 hectare large

Budapest Intermodal Logistics Center (BILK) was completed in November. In the last phase a 9,000 sqm warehouse and a 1,000 sqm office were built. In order to provide high level services, a 18,000 sqm warehouse has been equipped with complete infrastructural solutions. As part of the project, IT and logistical equipments, like trucks and standard racking systems, were purchased to be used on the whole territory of the facility. The first 19,000 sqm warehouse was built in 2003. Since then the company has borrowed €55 million for development. The development of the 18,000 sqm warehouse, which was completed in November 2010, was sponsored by the European Union and co-financed by the European Regional Development Fund.

WWW.BBJ.HU

12 SPECIAL REPORT

Budapest Business Journal | Nov 18 – Dec 1

The use of renewable energy sources in logistics development is still in its infancy in Hungary, but in a few years high energy prices might force developers to rethink their strategies and switch to renewables.

BBJ PATRICIA FISCHER

Delog Kft, a unit of logistics group Transped, recently inaugurated a HUF 1.3 billion warehouse in Debrecen, in eastern Hungary. The 10,000 sqm facility uses an air-sourced heat pump system to generate heat, provide hot water and also take care of cooling. According to Zsolt Fülöp, the company’s managing director, installing the system took up about 10% of the entire budget and was approximately twice as expensive as a traditional heating system.

But, considering the increasing price of fossil energy sources, it’s worth it, he said.

Besides being environmentally conscious, the heat pump system allows for heating or cooling the different units in the warehouse according to precise needs, thus making operation of the system entirely economical.

Delog calculates a ten-year return on investment, and has further plans for using other renewable sources. Currently, the heat pump requires electricity, which the com-

pany is planning to provide from its own resources in the future. The roof structure of the warehouse has been constructed in a way that solar panels can be installed on them at any time, and once it’s done, they will deliver the necessary power for the heat pump system.

But this is only a future option, Fülöp said. “The return on investment would not be economical at the moment. But with the development of the technology, initial costs of installing those solar panels might be lower, so we can go ahead and generate our own power for the heating-cooling system.”

Delog’s warehouse base is a refreshing exception on a market where there are hardly any new developments and developers with ongoing logistics projects try to keep building costs as low as possible.

As in any other segment of the real estate market, logistics developments can save significant amounts on operating costs in the long-run by implementing renewable energy sources. However, such investments are costly, and not surprisingly, only developers of builtto-suit projects will consider it as an option.

There are only a limited number of logistics centers that use some sort of renewable energy source, Koppány Ajtony Bíró, general secretary of the Association of Hungarian Logistics Service Centers told the Budapest Business Journal. The most common solution applied is the implementation of solar panels on building roofs, but even this is considered only at

Delog’s green warehouse in Debrecen – the expensive heat pump will be cheaper to maintain

new developments. “Installing complex green systems boosts development cost to an extent which is difficult to incorporate in the sales price or in rents,” Bíró said.

However, increased cost in the development phase is only one factor that hinders such developments; another is the general mindset of industry players. “I think making more information accessible for developers on these green technologies, e.g. on initial costs and return on investment, would facilitate the spread of renewables in the sector,” the expert said.

According to him, it will take a further 3-4 years before renewables can be widely used at logistics developments. “The increasing price

of traditional energy sources will definitely contribute to this process,” Bíró added.

Real estate agency DTZ Hungary is also optimistic about the future. “Companies will be increasingly aware of the importance of renewables in the future,” Éva Tamás, industrial properties consultant at DTZ Hungary told the BBJ. “We have already seen some clients whose basic requirements include the use of renewable energy when looking for industrial properties,” she noted.

However, tenants are price sensitive in today’s hectic economic and business environment, and price still rules when it comes to renting or buying industrial sites, Tamás added. ■

Photo: Delog Kft.

Untapped potential on the roof

WWW.BBJ.HU

SPECIAL REPORT 13

Budapest Business Journal | Nov 18 – Dec 1

STATE-ACCREDITED LOGISTICS CENTERS

The BBJ’s Book of Lists contains 100+ sector-specific listings of leading companies. The Book of Lists comes free with a BBJ subscription, or can be ordered separately by e-mailing circulation@bbj.hu

Ranked by total net revenue

4

ÁTI Depo Public Warehousing Zrt www.atidepo.hu

5

6

7

8

Magtárház Kikötő Kft www.magtarhaz.hu

BILK Kombiterminál Zrt www.bilkkombi.hu

Győr-Gönyű Port www.portofgyor.hu

ÁTI Depo 1136 Budapest, Pannónia u. 11.

(1) 305-2200, (1) 305-2234 www.atidepo.hu Central Port Adony 2457 Adony, Rév u. 8.

(25) 5414-424, (24) 514-444 www.magtarhaz.hu BILK Kombiterminál Zrt 1239 Budapest, Európa u. 4.

(1) 289-6000, (1) 289-6060 www.bilkkombi.hu Győr-Gönyű Kikötő Zrt 9011 Győr, Kikötő u. 1.

(96) 544-200, (96) 544-204 www.portofgyor.hu

Baja National Public Port Baja Public Port Operating Kft 6500 Baja, Szentjános u. 12.

Operation Kft (79) 422-502 www.portofbaja.hu

NR GySEV Cargo Zrt www.gysevcargo.hu

M3 Logistics Service NR Center www.m3logisztika.hu

ProLogis Park Budapest NR - Harbor www.prologis.hu

ProLogis Park BudapestNR Batta www.prologis.com

ProLogis Park BudapestNR Gyál www.prologis.hu

ProLogis Park BudapestNR Sziget www.prologis.com

NR ProLogis Park Budaörs www.prologis.com

ProLogis Park NR Hegyeshalom www.prologis.com

NR Záhony-Port Zrt www.zahony-port.hu

»=

www.portofbaja.hu

1,848 859

1,712

» 1,522

» 1,509

»

542

»

62

»

Year established

Budapesti Szabadkikötő Logisztikai Zrt 1211 Budapest, Weiss Manfréd út 5-7.

(1) 278-3500, (1) 278-3501 www.bszl.hu

2,522 1,477

No. of full time employees on Sept. 1, 2011

www.bszl.hu

Transpoint International (HU) Kft 2890 Tata, Barina u.1.

(34) 586-600, (34) 309-252

Ownership (%) Hungarian Non-Hungarian

Other

3

Budapest Freeport Logistics Zrt

www.vrtranspoint.com

Distribution

Transpoint International Kft

»

Customs warehousing

2

6,973

Domestic warehousing

www.delog.hu

Delog Kft 4030 Debrecen, Vámraktár u. 3.

(52) 510-100, (52) 510-193 www.delog.hu

Rail logistics

Delog Debrecen Logistics Center and Industrial Park

Distribution logistics

1

Company Website

Operating company name, address, phone & fax no., website

Total net revenue (HUF mln) 2010 H1, 2011

Warehouse logistics

Rank

Services

30,000

9

9

9

9

9

9

–

406

1990

Zsolt Károly Fülöp (50) Logistic Investment (50)

Zsolt Fülöp Szabolcs Terdik Márta Fogarasi

4030 Debrecen, Vámraktár utca 3.

(52) 510-100 (52) 510-193 info@delog.hu

25,000

9

9

–

9

9

9

Full customs clearance, inland transportation and freight forwarding, international road, sea and air transportation

102

2008

– Transpoint International (100)

Sándor Bátki Zsuzsanna Nagy Gergely Bognár

2890 Tata, Barina utca 1.

(34) 586-600 (34) 309-252 gergely.bognar@vrtranspoint.com

11

2003

BSZL Invest Befektetési Zrt. (49.50), Multicont Terminal Szolgáltató Kft (25), Szabadkikötő Invest Befektetési Kft (24.50), Magyar Nemzeti Vagyonkezelő Zrt (1) –

Zsolt Szabó Edina Sponga –

1211 Budapest, Weiss Manférd út 5–7.

(1) 278-3100 (1) 278-3501 freeport@portfobudapest.hu

Net warehouse space used for logistics warehousing (sqm)

94,000

9

9

9

9

9

9

147,000

9

9

9

9

9

9

–

172

1996

Z. I. Logisztikai Zrt (100) –

Tádé Alföldy Mária Szabóné F. Györgyi Kovácsné Szabó

1131 Budapest, Pannónia utca 11.

(1) 305-2200 (1) 305-2234 mail@atidepo.hu

170,000

9

–

9

9

–

–

Port logistics

7

2005

Agriport Investment Holding Kft. (100) –

Gyula Timár Erika Botos Erika Gáspár

1012 Budapest, Magtárház utca 7.

(1) 213-4250 (1) 213-4251 magtarhaz@magtarhaz.hu

92,000

–

–

9

–

–

–

Container loading, storage and depot

82

2001

Rail Cargo Hungária Zrt (93.10) –

István Fullér László Vass Zoltán Fábián

1239 Budapest, Európa utca 4.

(1) 289-6000 (1) 289-6060 bilkkombi@bilkkombi.hu

Ákos Pintér – –

9011 Győr-Károlyháza, Kikötő utca 1.

(96) 544-200 (96) 544-204 info@portofgyor.hu

180,000

9

9

9

9

9

–

–

»

1993

Gabona Zrt. » ( ) Johann Breiteneder » ( )

27,330

9

9

9

9

9

9

Ro-Ro intermodal transportation

3

1999

Baja Municipality (33.30), National Asset Management Zrt. (33.30), ÁTI-Depo Zrt. (33.30) –

László Nagy – –

6500 Baja, Szentjánosi utca 12.

(79) 422-502 (79) 422-502 info@portofbaja.hu

230

2009

GySEV Zrt (100) –

Norbert Kőrös Balázs Molnár Gábor Márta

9400 Sopron, Mátyás király utca 19.

(99) 517-139 (99) 517-401 –

»

1998

János Vágott (27.90), Nóra Vass (0.50), Péter Kuti (0.50), Zoltán Gazdag (0.50) Z. E. M. Establishment (70.40)

Katalin Juhász – –

1151 Budapest, Székely Elek út 11.

(1) 445-1930 (1) 445-1927 titkarsag@m3logisztika.hu

2004

– ProLogis B.V. (100)

László Kemenes Peter WhiskerdWegorzewski Marta Tesiorowska

1225 Budapest, Campona utca 1.

(1) 577-7700 (1) 577-7700 info-hu@prologis.com

2004

– ProLogis B.V. (100)

László Kemenes Peter WhiskerdWegorzewski Marta Tesiorowska

2440 Százhalombatta, Iparos utca 11.

(1) 577-7700 (1) 577-7701 info-hu@prologis.com

2004

– ProLogis B.V. (100)

László Kemenes Peter WhiskerdWegorzewski Marta Tesiorowska

2350 Gyál (1) 577-7700 (1) 577-7701 info-hu@prologis.com

2004

– ProLogis B.V. (100)

László Kemenes Peter WhiskerdWegorzewski Marta Tesiorowska

2310 Szigetszentmiklós, Leshegy utca 30.

(1) 577-7700 (1) 577-7701 info-hu@prologis.com

2004

– ProLogis B.V. (100)

László Kemenes Peter WhiskerdWegorzewski Marta Tesiorowska

2040 Budaörs, Seregély utca 8.

(1) 577-7700 (1) 577-7701 info-hu@prologis.com

2007

– ProLogis B.V. (100)

László Kemenes Peter WhiskerdWegorzewski Marta Tesiorowska

9222 Hegyeshalom (1) 577-7700 (1) 577-7701 info-hu@prologis.com

1997

MÁV Zrt (100) –

József Farkas Péter Simon –

4625 Záhony, Baross Gábor utca 1.

(1) 513-3010 (45) 425–212 info@zahony-port.hu

– 5,735

320,000

9

–

9

9

9

–

Road freight management, customs services

M3 Logisztikai Kft 1151 Budapest, Székely Elek út 11.

(1) 445-1930, (1) 445-1927 www. m3logisztika.hu

– –

63,000

9

9

9

9

9

9

–

–

Professional building management, 24 hour guard service, personal development facility

–

Professional building management, 24 hour security, personal development facility

–

Professional building management, 24 hour security, personal development facility

–

Professional building management, 24 hour security, personal development facility

–

Professional building management, 24 hour security, personal facility development

–

Professional building management, 24 hour security, personal development facility

» »

Prologis Hungary 1095 Budapest, Lechner Ödön fasor 7.

(1) 577-7700, (1) 577-7701 www.prologis.com

» »

Prologis Hungary 1095 Budapest, Lechner Ödön fasor 7.

(1) 577-7700, (1) 577-7701 www.prologis.com

» »

Prologis Hungary 1095 Budapest, Lechner Ödön fasor 7.

(1) 577-7700, (1) 577-7701 www.prologis.com

» »

Prologis Hungary 1095 Budapest, Lechner Ödön fasor 7.

(1) 577-7700, (1) 577-7701 www.prologis.com

» »

Prologis Hungary 1095 Budapest, Lechner Ödön fasor 7.

(1) 577-7700, (1) 577-7701 www.prologis.com

» »

Záhony-Port Zrt 4625 Záhony, Baross Gábor u. 1.

(45) 525-073, (45) 425-022 www.zahony-port.hu

» »

Address Phone Fax Email

Leasing office, this total area 11,525 sqm , RO-RO terminal: 12300 sqm,, container storage area: 78,169 m2, outdoor storage area: 35,000 sqm, IT services, customs local service, customs agency

Gysev Cargo Zrt 9400 Sopron, Mátyás király u. 19.

(99) 517-139, (99) 517-401 www.gysevcargo.hu

Prologis Hungary 1095 Budapest, Lechner Ödön fasor 7.

(1) 577-7700, (1) 577-7701 www.prologis.com

Top local executive Finance director Marketing director

132,149

38,688

151,396

120,519

29,136

24,093

136,000

9

9

9

9

9

9

9

–

–

–

–

–

–

–

–

–

–

–

–

–

9

–

–

–

–

–

–

9

–

–

–

–

–

–

9

–

–

12

12

12

12

12

12

480

This list was compiled from responses to questionnaires received by Nov 16, 2011 and publicly available data. To the best of the Budapest Business Journal’s knowledge, the information is accurate as of press would not disclose, NR = not ranked, NA = not applicable time. While every effort is made to ensure accuracy and thoroughness, omissions and typographical errors may occur. Additions or corrections to the list should be sent on letterhead to the research department, Budapest Business Journal, 1075 Budapest, Madách Imre út 13–14., or faxed to (1) 398-0345. The research department can be contacted at research@bbj.hu

WWW.BBJ.HU

14 SPECIAL REPORT

Budapest Business Journal | Nov 18 – Dec 1

Freight firms step on brakes BBJ

LOGISTICS SERVICE PROVIDERS

+8.6% Change in total net revenue of firms on the list in 2010

“Logistics is a great indicator of a country’s consumption. When consumption stagnates or decreases, so does the logistics market,” Ottó Cseh, managing director of Masped Logisztika Kft, told the Budapest Business Journal.

Given today’s uncertain economic environment, the market has seen very few speculative developments – another sign of stagnation.

“Uncertain global markets and extremely high raw material prices will force industry players to be increasingly cautious,” Bálint Varga, head of sales at Gebrüder Weiss told the BBJ. This means that service providers

probably need to extend their service portfolio, with value-added services topping the list of possible extensions.

The first wave of the crisis has passed the logistics market, and in volume terms, it has returned to pre-crisis levels, but profitability is significantly down.

More work is needed for the same level of income, market players say.

“In line with the indebtedness of the advanced economies, our prospects are unfavorable too. For the next year, we would happily settle for the same results we have this year,” Varga from Gebrüder Weiss said.

UNBALANCED MARKET The market has seen oversupply in the last year or so, meaning competition is strong.

“Square meter prices for warehouses couldn’t be increased,” Cseh said. But while the market won’t tolerate higher prices, the service providers cannot drop rents either.

“They reached a level under which logistic service providers cannot go without jeopardizing their operation.”

Others have experienced a clearing process on the market.

“Several domestic manufacturers and distributors are now giving up on operating their own vehicle fleet,” Varga said. He contributes this partly to stricter regulation, but the main cause is cost effectiveness.

“These companies have become increasingly open for cooperation with professional forwarding companies. Therefore several, mainly large international logistics service providers have tried to grab the opportunity and start to offer competitive group freight forwarding services in Hungary,” Varga said, adding that as a result, a number of medium-sized companies are stopping such services.

Gebrüder Weiss also decided to focus on group forwarding services and connected warehouse logistics services. “We put longterm goals first instead of rapid profit making,” Varga said.

The company introduced a new standardized group freight forwarding system that covers the entire European market, with a fixed delivery period and guaranteed daily delivery services.

“We have experienced a leap in demand for this new service, both in forwarding within Hungary and to other countries,” Varga said. “At the same time, we haven’t seen much movement on the warehouse logistics market, probably due to the uncertain prospects of potential clients.”

ADDING VALUE In the competitive environment, only companies that offer value-added services can survive or grow. “It’s not about only a warehouse with shelves anymore; clients can only be won

or kept with more sophisticated services,” Cseh from Masped claimed. “A service provider needs to get involved in production as well. The more points at which a service provider is connected to its clients, the bigger the chance of keeping them in the long-run.”

Market players are uncertain about the future. According to Cseh, there will be no significant changes in 2012, and he didn’t want to look any further ahead than that.

“Even if the projected 1.5% GDP growth becomes a reality next year, logistics service providers still have narrow elbow room, as consumption is not likely to pick up in the near future,” Cseh noted.

Gebrüder Weiss’ Varga is also uncertain about medium-term outlooks, but agrees that simple forwarding from point A to point B will not satisfy clients’ needs anymore. “Complex logistics services, ranging from supplying parts from various countries through warehouse logistics to assembling and installing products are in the forefront now,” he said. PF

MOVING ON +14 places Delog +6 places DHL Group -7 places Lagermax -3 places Kühne+Nagel Largest changes in the list

➔ ➔ ➔➔

The logistics service providers’ market stagnated in the past year, with companies not expecting a turn in the trend any time soon.

[ PROMOTIONAL FEATURE ]

Lurdy Offices offer new deal on office market It is not easy to stay above water in today’s office market. Unless an office building is in an exceptionally good location, staying above water – or surviving, you could say – is only possible for an office building if it finds a special, unique service element that allows it to rise above the office building crowd. Everyone does this in different ways.

An environmentally friendly green office with a minimal environmental footprint and an intelligent building controlling system is one way to do so. Though of course, in these cases the question is how you can capitalize on the extra investment. Can you bring in enough to offset the extra expenditure on a tenants’ market?

Other market players see their niche in extending high tech IT services. But this is becoming so commonplace that even B category buildings offer it, and it is basically expected of all A category offices.

Another office market service in demand is that of a shared office or office hotel. These allow price sensitive small- and medium-size enterprises to take advantage of very flexible office services, even for only a few hours.

The Lurdy Office Center in Lurdy-Ház offers its clients a combination of all the above.

The recently renovated office center invites

In its new campaign, the Lurdy Office Center is giving new clients offices without rent for a year, if the clients build their own offices. The Lurdy Office Center’s new slogan is: Build the office of your dreams and enjoy it free for a year! its clients to use its world-class IT services in a plaza environment, which is particularly suited for the needs of IT firms. The continuous building control services, its 24-hour opening hours, its server hotel and flexible interior spaces makes it attractive to those interested in shared offices.

On top of this, you will also enjoy a good location, a renowned office address and all kinds of services to make your life easier from free parking to dry cleaning, shopping and entertainment as well as banking and postal services and other facilities including car cleaning services.

WWW.BBJ.HU

SPECIAL REPORT 15

Budapest Business Journal | Nov 18 – Dec 1

LOGISTICS SERVICE PROVIDERS

The BBJ’s Book of Lists contains 100+ sector-specific listings of leading companies. The Book of Lists comes free with a BBJ subscription, or can be ordered separately by e-mailing circulation@bbj.hu

Warehousing services

Total net revenue (HUF mln) 2010 H1, 2011

International

Domestic

Cargo consolidation

FTL

LTL

Domestic goods

Dutiable goods

Transportation

Distribution

Other

www.posta.hu

Other

Net warehouse space used for logistics warehousing (sqm)

Railway

Magyar Posta Zrt

Freight forwarding services

Distribution

1

Company Website

Logistics services

Net revenue from logistics services (HUF mln) in 2010 H1, 2011

Warehousing

Rank

Ranked by total net revenue

191,164 –

» »

»

9

9

–

9

9

9

9

–

9

9

9

9

–

»

1990

74,967

72,380

»

–

–

9

9

9

9

9

–

–

–

9

–

–

»

2005

»

»

Main clients in 2010

Year established No. of full time employees on Sept. 1, 2011

»

Ownership (%) Hungarian NonHungarian

Top local executive Finance director Marketing director

Address Phone Fax Email

State (100) –

László Geszti – –

1138 Budapest, Dunavirág utca 2–6.

(1) 333-7777 (1) 321-3210 ugyfelszolgalat@posta.hu

– Rail Cargo Austria AG (100)

Imre Kovács, Arnold Schiefer – Mónika Kurdi

1133 Budapest, Váci út 92.

(1) 512-7300, (1) 512-7344 (1) 512-7799 cargo@railcargo.hu

– EXPRESSINTERFRACHT Internationale Spedition GmbH (100)

Zoltán Potvorszki, József Bor, Tibor Varga – –

1037 Budapest, Montevideo utca 4.

(1) 430-8586 (1) 430-8599 a.hartman@express-interfracht.hu

Rail Cargo Hungaria Zrt www.mavlcargo.hu 2

3

Express-Interfracht Hungaria Nemzetközi Szállítmányozási Kft

22,545

»

» »

»

» » » » » » » » » » » »

–

»

»

1992

»

1993 26

– Deutsche Post AG (100)

Tibor Födelmesi Zoltán Antalffy Bernadett Török

2220 Vecsés, Lőrinci út 59.

(29) 556-000 (29) 556-090 sales.budapest@dhl.com

»

1999 213

– Dachser GmbH & Co. KG (50) Engelbert Liegl (50)

Zsolt Bognár Judit Sövényi Kádár Roland Pászti

2085 Pilisvörösvár, Ipartelep utca 1.

(26) 532-000 (26) 532-005 customer.pilisvorosvar@ dachser.com

– Kühne + Nagel Eastern European AG (100)

Elemér Élő Péter Kisch Miklós Csaba

2071 Páty, M1 Üzleti Park (23) 889-000 (23) 889-099 info.budapest@ kuehne-nagel.com

»

www.express-interfracht.hu

4

5

6

7

DHL Group www.dhl.hu

Liegl & Dachser Kft www.liegl-dachser.hu

Kühne + Nagel Kft www.kn-portal.com

Deltasped Kft www.deltasped.hu

19,663

»

12,425

»

11,781

»

9,260

»

» »

» »

15,000

22,555

9

9

9

9

9

–

9

9

9

9

9

9

9

9

9

9

9

9

9

–

9

–

9

–

9

Quality control, customs services, consulting, display construction, installation, innovative IT services

» »

32,400

9

9

9

9

9

9

9

9

9

9

9

9

–

»

1991 190

» »

1,400

9

9

9

9

9

9

9

9

9

9

9

9

»

»

1989 50

Waberers Holding Zrt (100) –

Gábor Kiss Ferenc Szili László Nagy

1239 Budapest, Nagykőrösi út 351.

(1) 347-2000 (1) 347-2020 delta@deltasped.hu

9

–

Magyar Telekom Nyrt, Zwack Unicum Nyrt, MARS Hungary, Reckitt Benckiser, COCA-COLA HBC Hungary, AUDI Hungária Motor Kft

1991 384

Waberers Holding Zrt (100) –

Zsolt Barna – –

1239 Budapest, Európa utca 6.

(1) 421-8505 (1) 421-8504 info@wabererslogisztika.hu

» » » » » » » » » » » »

–

»

Révész Logisztikai Holding Zrt (100) –

Gábor Maczkó – –

3581 Tiszaújváros, Pf.: 199 utca (49) 887-410 (49) 887-411 revesztrans@reveszgroup.com

Zsolt Károly Fülöp (50) Logistic Investment (50)

Zsolt Fülöp Szabolcs Terdik Márta Fogarasi

4030 Debrecen, Vámraktár utca 3.

(52) 510-100 (52) 510-193 info@delog.hu

Waberer's Logistics Kft www.wabererslogisztika.hu 8

9

10

11

12

Révész Trans Kft www.reveszgroup.com

Delog Debrecen Logistics Center and Industrial Park

14

7,124

» »

»

»

6,973

Schenker Kft

6,515

www.dbschenker.com

Trans-Sped Logistics Services Center Kft

Eurosped Zrt www.eurosped.hu

Wincanton Hungary Logistics Kft

Lagermax Autótranszpor Kft www.lagermax.hu

16

122,000

»

www.wincanton.co.uk

15

8,212 4,300

www.delog.hu

www.trans-sped.hu

13

8,212 4,300

Bi-Ka Logistic Kft www.bi-ka.hu

»

6,048

»

5,698

»

4,957

»

» »

9

9

–

9

9

9

9

9

9

9

–

9

–

9

–

9

9

9

9

9

9

9

–

»

–

»

1990 406

1999 322

– DB Hungaria Holding Kft (100)

László KáldorÁrpád Vásárhelyi – Zsuzsanna Papp

1239 Budapest, Európa utca 5.

(1) 278-7878 (1) 278-7888 info@schenker.hu

» »

37,000

9

9

9

9

9

9

9

9

9

9

9

9

–

Automotive, FMCG, electronics, chemical, timber and grain industry

» »

86,500

9

–

9

9

9

–

9

–

–

–

9

–

Customs

»

1998 332

DELOG Kft. (99.50), egyéb (0.50) –

István Erős Szabolcs Terdik Márta Fogarasi

4030 Debrecen, Vámraktár utca 3.

(52) 510-100 (52) 510-193 info@trans-sped.hu

» »

26,000

9

9

9

9

9

–

9

9

9

9

9

9

–

»

1989 100

Masped Logisztika Kft. (80), employees (20) –

Mária Magdolna Kocsis Judit Tankovics József Várnagy

1138 Budapest, Szekszárdi utca 14.

(1) 450-9000 (1) 450-9090 eurosped@eurosped.hu

»

2003 325

– Wincanton Trans European Holding B.V. (100)

Péter Szabados Katalin Botyánszky –

2330 Dunaharaszti, Jedlik Ányos utca 31.

(24) 502-000 (24) 492-222 office@wincanton.hu

»

1990 272

– Beteiligungsgesellschaft Lagermax Autologistik International GmbH (100)

Róbert Bálint Róbert Bálint –

2040 Budaörs, Vasút utca 3.

(23) 506-100 (23) 506-107 lagermax@lagermax.hu

»

1991 47

György Karmazin (100) –

György Karmazin Csaba Frigyes Anna Barbara Bagi

5000 Szolnok, Városmajor út 23.

(56) 524-050 (56) 524-040 info@bi-ka.hu

» »

3,976 2,124

2,124 1,738

2,800

» »

»

80,000

9

52,000

230,000

3,000–4000

9

9

9

9

9

9

–

9

–

9

9

9

9

9

9

–

–

–

9

–

9

9

–

9

9

9

9

9

9

9

9

9

9

9

–

9

–

9

Logistics consulting, customs clearance, cargo insurance

WWW.BBJ.HU

16 SPECIAL REPORT

Budapest Business Journal | Nov 18 – Dec 1

Life is in the countryside +2.4% Change in total net warehouse space of list parks in 2010

This has been a lean year in terms of industrial development. Barely any new projects have been taken on, with the exception of a few built-to-suit (BTS) developments. In the Budapest and Central Hungary regions, there is no demand for new space anyway, experts say. Most developers have sufficient vacant or adjustable space to meet any given inquiry. The current vacancy rate is 22%, up from 20% last year, which equals to 400,000 sqm of available space.

BTS projects have been scarce too, as developers are unwilling to take any risks.

They will not usually strike a deal under 5,000 sqm. In practice, the limit was often double that size and one developer even said no to a 20,000 project as it did not want to split up a larger area. Recent BTS projects resemble more standard buildings, providing developers with better leasing options in the future.

ABLON’s Airport City renewed its contract with one of its biggest tenants, Panalpina Magyarország in August

warehouses and other facilities themselves.

Developers will only build for manufacturers if they have a 10-year contract. This may seem overly cautious, but manufacturing halls are often so specialized that if tenants vacate, the developer has trouble filling it anew. Logistics firms, however, cannot make such a long commitment, which leads to the absence of new projects.

NEW TREND BEGINNING

VR TRANSPOINT ANDRÁSSY PALACE

OUR SERVICES Domestic and international road freight Warehousing Customs Air and sea freight Value added services PLEASE CONTACT US! Transpoint International (HU) Kft. Tel: +36 34/586-600 Fax: +36 34/380-052 e-mail: hungary@vrtranspoint.com web: www.vrtranspoint.com

A considerable difference compared to previous years, and also the beginning of a new trend, is that the focus of new developments has shifted from the capital to the countryside.

This sounds reasonable enough, as with its 1.8 million sqm of space available, Budapest and its hinterland is not likely to expand further in the near term. The countryside, however, with new plants settling around bigger industrial centers like Győr, Székesfehérvár, Szentgotthárd and Kecskemét, is likely to absorb more space. The fact that more and more tenders are invited and

leasing agencies are hired also shows there is much untapped potential in the country.

Speculative developments are not likely to be launched next year. The only way experts can imagine a speculative project is to build pre-leased property somewhat bigger, allowing space for future take-up. The volume of new developments may increase.

A slight decrease in vacancy on the Hungarian market is also expected. Developments in the countryside are expected to grow. Traditional industrial cities located near the M1-M3 and M5-M7 motorways will continue to develop. ZsV

MOVING ON +6 places Airport City -6 places Europolis Park (Aerozone) -5 places ÁTI-sziget -5 places East Gate Largest changes in the list

CORRECTION VR Transpoint Hungary offers the complete palett of logistic solutions for the current and prospective customers in case of road, air and see freight too.

EUROPOLIS PARK BUDAPEST M1 ANDRÁSSY PALACE

In our last issue, there was an error in Otthon Centrum Franchising Kft’s data in the real estate agents list. The company’s net revenue in 2010 was HUF 396 million, which would have given it eighth place in our ranking, instead of the 11th where it was incorrectly placed.

EUROPOLIS PARK BUDAPEST AEROZONE ANDRÁSSY PALACE ADDRESS 2071 Páty, M1-es autópálya, 21-es km-kő BUILDING YEAR 2005 FREE SPACE 14,000 sqm

ADDRESS 2220, Vecsés, Lőrinci út 59-61.

BUILDING YEAR 2003 FREE SPACE 4900 sqm PUBLIC TRANSPORT

PUBLIC TRANSPORT

Bus 200 E

Coach from Széna tér

CONTACT Tarró Emília

CONTACT

Cushman & Wakefield +36 1 268 1288

DTZ, Tamás Éva, Tel: +36 1 472 7276

Good location and accessibility are the essential traits of a successful logistics centre. But this facility does not stop there. At Europolis Park Budapest M1 your company can also look forward to maximum efficiency and flexibility.

And of course maximum security: The property and its landscaped grounds are guarded round-the clock 365 days a year. For all that, you and all the other prominent national and international tenant companies will benefit from the full service property management.

There is only one logistics centre suitable for successful companies, only one that can be reached quickly and easily from anywhere in the world. This logistics centre is Europolis Park BUDAPEST AEROZONE. At this site, a mere 300 metres from Budapest Airport and a few kilometers from the junction of ringroad M0 and M4 motorway, your company is virtually connected to the whole world. Nice restaurant, representative offices, 24 h security, CCTV, car park with access control, on-site property management serve your company’s comfort at Europolis Park BUDAPEST AEROZONE.

Photo: ABLON

LOGISTICS PARKS

In general, the market has been dominated by renewals and relocations. More than 50% of tenants have renewed their contracts. Those who moved mostly looked for smaller spaces: especially logistics providers, who needed less space for the decreased volumes they manage. Demand for big-box units of half the previous 2,000 sqm size is, however, up. Industrial parks try to provide new space to their clients at existing premises, often at the cost of extended letting time. The number of inquiries varies by agency, but there is general stagnation or slightly negative trend in take-up. Net absorption has been negative due to the absence of new developments and space shrinkages.

In the tenant mix, logistics and light manufacturing firms remained the main clients of warehouses, followed by clients from business services and retail. More firms are reporting increasing client demand from manufacturers related to the logistics sector. Makers of cars and electronics products need flexible, high-quality space in prime locations.

It is not a new thing that customers look for the best possible deals. It is not easy though: rates are already flat and have been so for at least a year. The rate for A-category buildings in prime locations (near the capital, along highways) is €3.5-€4/sqm. Only warehouses near the airport are more expensive, with rates from €4.5 to €6. B-category is less expensive, but higher maintenance costs often make up the difference.

Developers are more risk-averse than ever before. Only a few are open to developing projects outside the capital, which leaves manufacturers no option but to build

➔

BBJ

CHANGES IN THE LEASING MARKET

➔ ➔➔

Growing demand for industrial property in the countryside may become the new driver for the sector.

WWW.BBJ.HU

SPECIAL REPORT 17

Budapest Business Journal | Nov 18 – Dec 1

LOGISTICS PARKS

The BBJ’s Book of Lists contains 100+ sector-specific listings of leading companies. The Book of Lists comes free with a BBJ subscription, or can be ordered separately by e-mailing circulation@bbj.hu

Ranked by Ranked by total totalnet netrevenue warehouse space

2

ÁTI Depo Közraktározási Zrt www.atidepo.hu

3

4

5

ProLogis Harbor Park www.prologis.com

DEPO Törökbálint www.depologisztika.hu

ProLogis Park BudapestSziget www.prologis.com

6

7

BILK Kombiterminál Zrt www.bilkkombi.hu

M4 Anvil Business Centre www.m4abc.hu

8

Airport City Logistic Park www.airportcity.hu

9

Raben Trans European Hungary Kft www.wincanton.hu

10

Euro-Business Park www.ehl-hu.com

Europolis Park BUDAPEST M1 11

12

13

www.europolispark.com

Westlog DC www.westlogdc.com

ÁTI-Sziget Industrial Park www.atisziget.hu

14

East Gate Business Park www.egpb.hu

Europolis Park BUDAPEST AEROZONE 15

16

17

18

www.europolispark.com

M5-Gyál Business Park www.businesspark.hu

Dél-Pest Business Park www.wing.hu

Goodman Üllő Airport Logisztikai Központ http://hu.goodman.com/

9

–

9

» 9 »

Ownership (%) Hungarian Non-Hungarian

Iron Mountain, Wincanton, Sauflon, Géodis Calberson, Nagel Hungária, Diebold

2001 –

ProLogis Hungary Management Kft. (100) –

László Kemenes – –

2160 Gyál, (1) 577-7700 (1) 577-7701 info-hu@prologis.com

–

–

1996 172

– "Z.I." Logisztikai Zrt. (100)

Tádé Alföldy Mária F. Szabóné Györgyi Szabó Kovácsné

1136 Budapest, Pannónia utca 11.

(1) 305-2201 (1) 305-2234 mail@atidepo.hu

24 hours security

Fiege, Unilever, Ringier, Sanofi Aventis, Lekkerland, Anda Present, Budapest Papír, Avex, Buvihír, Trilak, Hensel, Herlitz, Alexandra, B-Fiesta

2001 –

ProLogis Hungary Two Kft (100) –

László Kemenes – –

1095 Budapest, Lechner Ödön fasor 7.

(1) 577-7700 (1) 577-7701 info-hu@prologis.com

Other

–

Customs service

Building management

9

Distribution

Domestic warehousing

152,000

Main clients in 2010

Year established No. of full time employees on Sept. 1, 2011

www.prologis.com

Prologis Hungary Kft 1095 Budapest, Lechner Ödön fasor 7.

(1) 577-7700, (1) 577-7701 www.prologis.com

Accessible via water

ProLogis Park Budapest-Gyál

Accessible to trucks

1

Rail logistics

Company Website

Net warehouse Operating company space name, address, used for phone & fax no., website logistics warehousing (sqm)

Warehouse logistics

Rank

Services

–

Top local executive Finance director Marketing director

Address Phone Fax Email

ÁTI Depo Zrt 1136 Budapest, Pannónia u. 11.

(1) 305-2201, (1) 305-2234 www.atidepo.hu

147,000

9

9

9

9

Prologis Hungary Kft 1095 Budapest, Lechner Ödön fasor 7.

(1) 577-7700, (1) 577-7701 www.prologis.com

132,000

9

9

9

–

9

» 9 »

DEPO Logisztikai Kft 2046 Törökbálint, Hosszúrét (23) 338-044 www.depolgisztika.hu

125,000

9

9

9

–

9

9

9

–

AUTÓKER HOLDING Zrt, BBK Raktár Kft, Central-Drinks Kft, Ikea Lakberendezési Kft, dm Kft, Masped Log.Log. és Vámügynökségi Kft, ROCHE Magyarország Kft, Triumph International (Budapest) Kft

1978 –

AUTÓKER Holding Zrt. » ( ), cégek és közintézmények » ( ) –

Béla Mescsán Józsefné Sebő –

2045 Törökbálint, Hosszúrét (23) 338-044 (23) 334-666 –

Prologis Hungary Kft 1095 Budapest, Lechner Ödön fasor 7.

(1) 577-7700, (1) 577-7701 www.prologis.com

121,000

9

–

9

–

9

» 9 »

–

NCR, Quadrant, Trans-Sped, SchneiderElectric, DHL, ADR Logistics, UTi Hungary, Filtrona Filters, Bertrans, Rhenus

2001 –

– ProLogis B.V. (100)

László Kemenes Ildikó Braun Marta Tesiorowska

1095 Budapest, Lechner Ödön fasor 7.

(1) 577-7700 (1) 577-7700 info-hu@prologis.com

Rail Cargo Hungaria Zrt. (86), Hungarokombi Kft. (14) –

István Fullér László Vass Zoltán Fábián

1239 Budapest, Európa utca 4.

(1) 289-6000 (1) 289-6060 bilkkombi@bilkkombi.hu

9

–

9

9

9

BILK Kombiterminál Zrt 1239 Budapest, Európa u. 6.

(1) 421-8551 www.bilk.hu

95,000

» 9

» » » » 9

–

–

2001 –

Harbor Ipari Ingatlanfejlesztő Kft 1122 Budapest, Csaba u. 34/a (1) 270-5123, (1) 339-9333 www.industrialdeveloper.hu

80,000

» » » » » » » »

–

–

2006 –

Anvil Project Kft. (100) –

Tamás Wachsler – –

2225 Üllő, Sóderes köz 1.

(1) 339-9333 (1) 270-5124 info@m4abc.hu

Ablon Kft 1132 Budapest, Váci út 30.

(1) 225-6600 www.ablon-group.com/hu

72,000

–

–

9

–

9

9

9

–

FedExm, Trilak, Jas Cargoways, Ceva Logistics, Kühne + Nagel Kft

1993 –

– ABLON Group (100)

Adrienn Lovro Tamás Tiborcz Zsuzsanna Makkai

2220 Vecsés, Üllői út 807/B (1) 225-6600 (1) 225-6601 sales@ablon.hu

Raben Trans European Hungary Kft 2330 Dunaharaszti, Jedlik Ányos u. 31.

(24) 502-000 www.raben-group.com/hu

72,000

9

–

9

»

9

» » »

–

HIPP, Philips, Pernod Ricard, British American Tobacco, Dr.Oetker, Groupe SEB, SSL International

1998 –

– Raben GROUP B.V. (100)

Péter Szabados – –

2330 Dunaharaszti, Jedlik Ányos utca 31.

(24) 502-000 (24) 492-222 info@wincanton.hu

EHL-Hungary Kft 1133 Budapest, Árboc u. 6.

(1) 451-8040 www.ehl.at/hu

70,000

9

»

9

»

9

9

»

9

–

Schneider Papir, Novartis, Bayer, Lilly, Cemelog, Schering

1989 –

– Immofinanz Group (100)

Stefan Linder – –

2040 Budaörs, Vasút utca 9.

(1) 451-8040 (1) 451-8041 office@ehl-hu.com

CA Immo Hungary Kft 1074 Budapest, Rákóczi út 70-72.

(1) 501-2800 www.caimmo.com

69,000

9

–

9

–

9

9

–

–

–

Kühne+Nagel, LGI, Stora Enso, DHL EXEL, Transdanubia

2004 –

– (100)

Ede Gulyás – –

2071 Páty (1) 501-2800 (1) 501-2801 office@caimmo.hu

Colliers Magyarország Kft 1124 Budapest, Csörsz utca 41.

(1) 336-4200 www.colliers.hu

69,000

9

»

9

–

»

9

–

Liegl & Dachser, Retz Trend, Avantek, Boy, Eurodoc 2000, Tatárpék, DSV, Holleman, Foxconn, Huawei, Hanaro

2009 –

– Industrial Securities Europe (100)

György Szucsány – –

2051 Biatorbágy, Verebély László utca 2.

(23) 804-333 (23) 804-334 info@westlogdc.com

ÁTI-Sziget Ipari Szolgáltató Központ Kft 2313 Szigetszentmiklós Pf: 18.

(24) 406-120 www.atisziget.hu

68,200

9

–

9

–

9

–

–

–

–

–

2002 –

ZI Logistics Zrt. (100) –

Gabor Boér, Mihály Fejős – –

2313 Szigetszentmiklós, Pf. 18.

(24) 554-100 (24) 406-110 director@atisziget.hu

Wing Zrt 1095 Budapest, Máriássy u. 7.

(1) 451-4760 www.wing.hu

65,000

–

–

9

–

9

9

–

–

–

GE Hungary, Philip Morris Magyarország, Phoenix Pharma, Lear Corporation, Volánbusz

2006 –

Wing Zrt. (100) –

György Mucsi – –

2151 Fót, Akácos út 36–38.

(1) 451-4760 (1) 451-4289 egpb@wing.hu

CA Immo Hungary Kft 1074 Budapest, Rákóczi út 70-72.

(1) 501-2800 www.caimmo.com

65,000

9

–

9

–

9

9

–

9

–

Csemege-Match, Malév, BMW, DHL, UPS, Fedex

2004 –

– (100)

Ede Gulyás – –

2220 Vecsés, Lőrinci út 59-61.

(1) 501-2800 (1) 501-2801 office@caimmo.hu

Autóker Logisztikai Kft 2360 Gyál, Heltai Jenő utca 73.

(29) 544-690 www.businesspark.hu

50,000

9

9

9

–

9

» 9 »

–

Coca-Cola, Richter Gedeon, General Motors Hungary, Tesco

2004 –

(100) –

László Gyenge – Csaba Leskó

2360 Gyál, Landler Jenő utca 73.

(29) 544-600 (29) 544-602 info@businesspark.hu

Wing Zrt 1095 Budapest, Máriássy u. 7.

(1) 451-4760 www.wing.hu

45,000

–

–

9

–

9

–

BÉFLEX, UPC, Bunge, Arburg, Solvent

2004 –

WINGPROP Ingatlanfejlesztő és Beruházó Zrt. (100) –

György Mucsi – –

1097 Budapest, Táblás utca 36–38.

(1) 451-4760 (1) 451-4289 ipari@wing.hu

Goodman Hungary Kft 1024 Budapest Lövõház utca 39.

(1) 336-2270 hu.goodman.com

44,000

9

» 9

–

» 9 » »

–

Oriflame, Rossmann

2008 –

– Goodman Belgium NV » ( ), Goodman Europe SA » ( )

Zsombor Török – –

2225 Üllő, M1 kijárat (1) 336-2270 – info-hu@goodman.com

9

–

9

» »

–

–

LIFE

PEOPLE Q&A with Ildikó Szüts, communications director of OTP Bank

▶ PAGE 20

LIVE IT OR LEAVE IT FRESH AIR, THE PROMISE OF A CALMER LIFE AND CHEAP PROPERTY HAS SPURRED THOUSANDS TO LEAVE THE CAPITAL AND MOVE TO NEARBY TOWNS. MOST OF THEM COME BACK WITHIN A FEW YEARS. NOW THIS COULD CHANGE.

The law on the Spatial Plan of the Budapest Agglomeration was created in 2005, and seemingly ignored environmentalist aspects but aimed to give investors as much space as they needed to deploy residential or industrial developments. The current modifications, which came into effect on September 1, 2011, emerged from the mandatory five-year revision of the plan and are an end to an era of uncoordinated real estate developments.

As a result of the former lazy regulation, huge residential parks and single house areas were often built far away from the town centers. Many of these territories formerly served as agricultural areas and then were relabeled as inland, meaning that the infrastructure development of these areas is far below the inhabitants’ needs.

The modified plan, besides many other measures, requires proximity to fixed-rail transportation for developing residential areas of at least 300 flats or that occupy more than five acres. It also reduces the limit of the extension of city-like inland territories from 3% to 2%. At the same

time, it forbids the granting of building permits in outlying territories that could have been developed according to the former regulation, but have not been labeled for development so far. This single measure affects 3,900 acres of the agglomeration; the owners of these territories will have to face a serious devaluation of their properties.

One of the most remarkable symbols of this is thThe population of Páty has risen by more than one-third in the past decade, which made the village in the western sector of the agglomeration a symbol of Budapest’s deurbanization.

The example of Mézeshegy residential park illustrates a common problem well. Despite the 700 inhabitants living there, Mézeshegy is still labeled a holiday resort, meaning that the services there do not include “extras” such as regular waste collection, and residents cannot even dream about a road that would make it easier to access their homes. “The only problem with the new plan is that it is late,” István Varga, the Deputy Mayor of Páty, told the Budapest Business Journal. “We could have prevented such mis-

takes. When I moved to Páty ten years ago, I did not even know what traffic jams were. Nowadays, I spend hours in gridlock every day, which drives me crazy sometimes,” Varga said, pointing out that the drastic rise of the population accompanied by uncoordinated property developments had lead to terrible infrastructure in some parts of the agglomeration. “If created earlier, property developments could have been harmonized with infrastructure developments such as the M0 orbital ring road,” Varga said.

Local municipalities always had the power to refuse permission for schemes to build residential areas on territories that were not fit for the purpose, but the extra income the new inhabitants meant for local budgets were probably too tempting.

GREEN AIMS

The ecologically sustainable use of lands is communicated as one of the primary aims of the modification. Nonetheless, the regulation is not overwhelmingly popular among greens.

The modified plan orders an increase in the proportion of forests from 19% to 29%, but does not allocate any sources to establish those forests.

Also, the plan does not outline any tangible steps to ease, for example, traffic on the roads heading to Budapest Ferenc Liszt International Airport (BLFIA), which occupies parts of Budapest’s 18th district and Vecsés in the eastern agglomeration. While the airport welcomes the idea of developing high-speed railways connections with BLFIA, it was disappointed by a lack of plans to widen the clearway around the airport. Frequent traffic jams here have led to BLFIA being ranked 12th out

Páty, which used to be a small town famous for its row of wine cellars, went through explosive – and chaotic – growth

of 14 European airports in terms of ground transportation on the appreciated Airport Service Quality list. The jams also cause serious air pollution in the area; indeed, ground transportation around the airport produces more significant pollution than ground handling or even the airplanes themselves.

TRANQUILITY OR LONELINESS?

The modified plan also has the reported aim of boosting social life in the agglomeration.

“People just move out here and then live apart,” said Father Atanáz, a priest in Biatorbágy in the western agglomeration. It is a common criticism of the agglomerations that a lack of community events makes life there boring and also alienates families from one another.

Mariann Sárváry from Csobánka in the north-western agglomeration somewhat disagrees. “We feel that we belong to a community,” she said adding that they live a peaceful village life there, although there are not enough entertainment opportunities. “However, those living in some new residential areas further away from the village center and its public transport, communal places and cultural happenings, do have to deal with some kind of isolation,” she admitted.

The new regulation aims to handle such problems, too, by practically stopping the extension of villages, a step that intensifies the city-like and family-house areas. A more easily accessible transport system is also destined to put people into circulation. Still, according to Sárváry, choosing between living in a village or in a city is often only a question of faith. “It won’t be perfect anywhere.” ÁV

k

LIFE 19

OPINION The Hungarian economy’s future is increasingly a question of choosing between bad and worse. Especially so for PM Viktor Orbán, who allegedly stated that were the country forced to apply for another IMF loan, he would resign. ▶ PAGE 23

Hound tax causes howling New legislation will allow municipalities to tax dog owners in Hungary up to HUF 20,000 per dog per year. Owners of “average” dogs can be asked to pay HUF 6,000, but dangerous dogs – whatever that might mean – could cost much more. One controversial aspect of the tax is that neutered dogs and the eight accepted Hungarian breeds are exempt, which has led many mixed breed or non-Hungarian breed dog owners to call the regulation dog-Nazi.

But that might be going a bit too far, after all, maintaining a healthy population of Hungarian g breeds should be a cultural ggoal. Magyar gy breeds are espep cially valuable in this world full of non-Hungarian dogs, but they also have inherent values. Read the breeds’ description below to understand the true worth of real Magyar dogs. MTD

Full disclosure: this Hungarian greyhound works at our office. He thinks the tax is OK.

PULI It loves its owner, even if the feeling is not mutual.

It growls at everyone else, people and dogs alike. Not sheep, though.

PUMI It is smart, too smart to put up with all the bullshit. If it can’t run enough, it becomes a bit neurotic. Like the puli, it has no eyes.

MUDI So rare even Hungarian spellcheck doesn’t know it. Descended from the curly haired Asian hyena, like many Hungarians.

ERDÉLYI KOPÓ If you have never had a strong-willed hound, avoid this Magyar master, or you will find yourself fetching and rolling over.

KOMONDOR An unfriendly guard dog that enjoys scaring everyone away by shaking its hair threateningly. Extra points for wet fur.

KUVASZ A pleasing shade of dirty white, it is likely to stand out in any environment. Standoffish, but hey, what did you expect?

MAGYAR AGÁR Legs are faster than its thoughts, leading to flamboyant crashes. Spends its days dealing “likes” to mates on Facebook.

VIZSLA So smart and motivated, it’s always on and fast and vibrating and looks so sleek that some confuse it with a smartphone.

PEOPLE THE INTRICACY OF DETAILS

〉I THINK IT IS IMPORTANT FOR BOSSES TO SEE HOW EXACTLY A TASK IS HANDLED BY THEIR TEAM

BACKGROUND If women in general are from Venus and men are from Mars, then male and female bosses are certainly also from two different planets. However, in a company, they need to take the same role and make things run smoothly – usually in wildly different management styles.

How does Ildikó Szüts, head of communications at OTP Bank and winner of AmCham’s Excellence in Leadership award make it work for her, asks Melinda Tünde Dóra, editor-in chief of the BBJ, hoping to learn some tricks of the trade.

Q: Your prize as the winner of AmCham’s Excellence in Leadership award is a pair of shoes designed personally for you by young Hungarian design label rekavago.

What sort of shoe will you get?

A: To be honest, I haven’t decided yet. Personally, I would like a comfortable shoe, but my job requires me to wear elegant high heels in dark colors. I do like to stand out a little, though. My favorite color is purple, which they say is the mark of a harmonious personality, as it is made up of so many colors.

Q: Standing out is probably useful in corporate communications, too. Is that difficult when forming the public image of a company such as OTP Bank?

A: You know, I am always surprised by the consequences of the long history OTP Bank has.

People say “I am going to OTP” even when their account is at another bank, it has become synonymous with “bank”. Such a long history has its advantages, but its challenges, too.

I always strive to position the bank as an innovative and caring entity, through for example helping young people understand the financial system. I feel passionately about teaching them

how to take care of themselves in the world. In OTP’s alma mater program, managers go back to their old high schools and talk to the kids there.

Once you become a leader in such a large company, I think you have to consider your responsibility towards society.

Q: These days, innovative and responsible are contradictory terms in banking, don’t you think?

A: I think a big innovation is trying to get people to really understand the financial products and the exact risks they entail. The authority [financial watchdog PSzÁF] is of course always pushing banks to do everything in their power to bring customers up to speed, but this is actually my favorite part of my job.

I am very interested in how business processes can be helped by corporate communication.

For example, we have a Q&A for each product on our homepage for customers who do not want to read through pages of fine print, but want to be able to understand what they are buying.

Q: Let’s talk about your leadership style.

Do you personally read the Q&As your team puts together?

A: [Laughs] I even rewrite or add bits sometimes. I am interested in details, I like to know what’s really going on, and details are key to that. Of course how many and what sort of details you can keep tabs on depends on your position. I sometimes get up at 5 in the morning to read something or work over the weekend. Being meticulous allows me to sleep easy.

Q: It is said that being detail-oriented is typical of female leaders, who fuss about stuff that men wouldn’t bother about.

Have you run into this?

A: Once I asked a male colleague why he had not personally read a particular part of a document. He looked at me, shrugged, and said: “Why should I have? It was put together by a woman, and you are going to read it in the end anyway.”

So yes, I think this sort of detail-orientation really is characteristic of many female leaders.

Still, one cannot look at every little thing.

Q: So how do you choose when to check things personally?

A: I do delegate. Obviously, time is an issue.

And delegating is also important because responsibility is a challenge and a stretch assignment an opportunity for my team members.

Also, if there is an existing method of doing something that works, then I won’t interrupt the workflow. If, however, an issue at hand is a new one, or very important, or just sensitive, then I will dive into the details. I think it is important for bosses to see how exactly a task is handled by their team.

Q: What happens when it is not done the way you want it to be?

A: I am very demanding, I have to admit.

But I balance that with empathy and patience.

If there is a conflict, I try to bring it out into the open as soon as possible, and resolve it. I aim to convince people that my way is the way to go. If we cannot come to an agreement, I try to set the problem aside for a while, and bring

CURRICULUM VITAE Szüts started her career at the Hungarian Chamber of Economy, where she was a training manager.

She oversaw German-Hungarian training relations and was in charge of the Hungarian implementation of manager training courses. She started her own firm, Human Investment Tanácsadó Kft in 1992 and ran it for six years. The company managed human resources and organizational development projects within the framework of privatization, restructuring and liquidation programs, and developed HR systems with clients such as BAT, Lehel Electrolux, Antenna Hungária, Akzo Nobel, Matáv (now Magyar Telekom) and several banks. She took a position at Magyar Posta Rt in 1999 and stayed there for more than a decade, initially as an HR director and eventually CEO. She directed the firm for two years. it up later. This takes a lot of effort on my part, but it is worth it in the long-run.

As a leader, I think it is very important to understand the other side’s version of the story, and my experience is that people open up to this interest. You have to be open to new options if you want people to tell you what they really think. And also, being a good boss requires some humbleness: you have to want to understand the organization, learn how the company works and why.

Q: With whom do you share your doubts?

A: Other managers, usually, or if it is not a professional issue, then with my husband. Every decision maker has his or doubts, and it is important to get these out. And then there are the big questions of life, too. I have two very good friends with whom we share a long history and a set of values. They are very important to me.

Q: What advice would you give an ambitious young woman at the start of her career?

A: Decide what you want to be successful in, and do everything you can to learn about it. And don’t be afraid to have a career AND a family. I think that to be really successful, you need a family background to support you, and life is only complete when you have children.

Children bring something to life that is difficult to talk about. It is not easy, you might need to go to the hairdresser’s at 6 in the morning and put yourself last in many things, but it is worth having a fulfilling life. MTD For a full version of the interview, check bbj.hu

WWW.BBJ.HU

LIFE 21

Budapest Business Journal | Nov 18 – Dec 1

Name Michael Buhl Current company/position Budapest Stock Exchange/ chairman Previous company/position -/-

Name Tanja Vainio Current company/position ABB/CEO Previous company/position -/-

The board of the Budapest Stock Exchange appointed Michael Buhl, CEO of the Vienna Bourse, as chairman after an extraordinary general meeting last week. Buhl has been a member of the board of directors of the BSE since 2006. He was appointed joint CEO of the Vienna Bourse in 2005. Before that, he was with Erste Bank, where he was managing director and head of the investment banking division. He also worked at CA-IB Investment Bank AG and started his career at Creditansalt Bankverein in 1987.

Vainio has been with automation technologies firm ABB since 1998 and was appointed CEO of ABB Hungary in August, 2011. She has managed various strategic, value-chain development and change management projects across the world. She obtained an MSc degree in mechanical engineering, and also holds an MBA. Vainio is from Finland and has three children.

Do you know someone on the move?

Send information to research@bbj.hu

Name Csaba Pankotai Current company/position Est Media Nyrt/CEO Previous company/position EMG Médiacsoport Kft/ managing director

Name Marcus Hill Current company/position Colliers International/ director of investment services Previous company/position -/-

The board of directors of Est Media Nyrt has appointed Csaba Pankoati as new CEO after previous post-holder Csaba Balázs resigned. Pankotai has been actively involved in the reorganization of the Est group and the capital raise that has recently been completed. Before that, he was founder and owner of program guides Sapte Seri in Romania and Programata in Bulgaria. He is now responsible for supervising the company’s program magazines and other out-of-home media products in Hungary, Romania and Bulgaria.

New Zealander Hill has recently arrived in Budapest following a fiveyear period in the United Kingdom.

Prior to this appointment he was senior development consultant to the Royal Borough of Kensington and Chelsea (London), advising on high value commercial redevelopment projects in central London. He has also held agency positions with Jones Lang LaSalle in New Zealand.

Hill holds qualifications in valuation and business studies and is a member of the Royal Institution of Chartered Surveyors.

Name James Brennan Current company/position TARGET Executive Search/ regional consultant CEE Previous company/position Reed/European recruitment manager

Name Péter Jenei Current company/position Sanoma Media Budapest/ head of Kirakat.hu and Olcsóbbat.hu Previous company/position Generál Média/business development director

James Brennan joined executive search company TARGET in October 2011. Previously he worked at recruitment firm Reed, first as country manager for Hungary and was later promoted to European recruitment manager. Prior to that he was London city manager for Highams Group, managing 12 consultants focusing on IT insurance sector. He has more than seven years recruitment experience across the UK and Europe. He also loves spending time with his wife Zsuzsi and two crazy dogs Pepsi and Ozzy in the countryside.

Jenei has been named to head two online sales support portals of the media company, Kirakat.hu and Olcsóbbat.hu. Previously, Jenei was with Generál Média where he worked as business development director. Between 2005 and 2008, he was online services manager at Nők Lapja Café. He has worked as project manager on developing the two portals at Sanoma since this Spring.

E X PAT A D V I C E F O R N E W C O M E R S MARKUS HILKEN Director, SAP Global Support Center Hungary

WHEN DID YOU ARRIVE IN HUNGARY AND WHAT BROUGHT YOU HERE? In the summer of 2002 I began to commute between Budapest and Vienna, where I lived at the time. My company needed a mentor, a local coordinator for the newly established Support Center here, mainly for teaching SAP know-how, and they asked me to do that. After years of commuting, I settled down near Budapest in 2007 with my family.

WHAT HAD YOU HEARD OF HUNGARY BEFORE YOUR ARRIVAL? When I first wanted to travel to Hungary by car in 2001, some warned me not to do that, because “people will bump into you from behind when you stop to fuel, and your car will be stolen.” I was confused a bit, but quickly realized that the opposite was true, when I arrived for the very first time in Budapest and was guided by a local to the address I was looking for without even having asked this person.

German-born SAP director Markus Hilken came to Hungary in 2007 and now lives here with his Hungarian wife and two kids. He admires Hungarian creativity and name days, but gets irritated by the Hungarian habit of working without invoices. He advises German newcomers not to talk about the “Miracle of Bern” to Hungarians.

WHAT DO YOU THINK OF HUNGARY NOW? My generation in Germany still has the image of “pirospaprika” and “gulyás” in their head. For example, when I was telling my family that I have a girlfriend who speaks German but is Hungarian, they immediately reacted by saying “Wow, they are so friendly, so nice.”

This is what my mother also confirmed, when she was here for the first time, and got acquainted with the family

of my girlfriend (who has become my wife in the meantime). Everybody was so funny, helpful and nice, she was overwhelmed. Most Germans are a little bit “cool”, reserved – I needed some time to get used to the openness and local habits, which are really great.

This is what I would tell others, and this is what I really think.

WHY IS HUNGARY IMPORTANT TO YOUR COMPANY? The German-speaking countries account for one of the most important key markets for SAP. We support them from Budapest. This is really a huge task and shows a tremendous trust in Hungary and Hungarian talents. So, for example if local SAP experts at one of the world’s biggest car making sites can’t solve an SAP challenge, we have to do it via remote connection very fast and in a very professional manner.

IF YOU HAD A CHANCE, WHAT WOULD YOU IMPORT TO HUNGARY (IDEA, PRODUCT, MENTALITY, ETC.)?

After the years spent here, I still cannot wrap my head around people not giving invoices for their services, products (which they are even proud of sometimes), and at the same time, in general, people don’t even ask for them.

Often these people complain in the next minute about the bad shape of the infrastructure or hospitals and obviously don’t realize that we are paying this in

our own interest to improve our overall quality of life.

WHAT WOULD YOU TAKE WITH YOU FROM HUNGARY TO YOUR HOMELAND (IDEA, PRODUCT, MENTALITY, ETC.)?

I think Hungarian creativity is really great and the ability to always find ways to think outside of the box. I truly like the “name days” also – sometimes it is a bigger celebration than a birthday. I would also take with me the openness – this was strange at first, but I got used to it, and would miss it now.

BESIDES BUSINESS, DO YOU HAVE OTHER TIES TO HUNGARY? My wife, our two children, our friends, our house, food and drink . . . To be honest, I already consider myself a Hungarian.

WHAT WOULD BE THE ADVICE YOU’D GIVE TO AN EXPAT WHO IS JUST ABOUT TO ARRIVE IN THE COUNTRY? Years after crossing the Hungarian border, I got married and had children.

From a professional point of view, I have become the leader of 150 fantastic colleagues and the unit I lead has become a strategic location. I think it’s fair to advise that “be aware, because your life can change in such a positive way that you never expected”. And as a German, you should not mention in Hungary the “Miracle of Bern” of 1954 [when West Germany beat Hungary 3:2 in the soccer World Cup Final]. PF

PROMOTIONAL PORTRAIT

WHO'S NEWS

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22 PEOPLE

Budapest Business Journal | Nov 18 – Dec 1

NETHERLANDSHUNGARIAN CHAMBER OF COMMERCE: CLOUD COMPUTING SEMINAR All you need to know about cloud computing – this was the topic of the seminar, spiced up with interesting presentations from On-Demand Zrt, KPMG and Microsoft.

November 16, DBH Group headquarters

GERMAN-HUNGARIAN CHAMBER OF INDUSTRY AND COMMERCE: JOUR FIXE

UPCOMING

events NOV. 22 AmCham Thanksgiving Dinner LOCATION Budapest Marriott Hotel, Dist. 5, Apáczai Csere János u. 4 TIME 6:30 p.m. – 10 p.m.

FEE AmCham members: HUF 15,000 + VAT; non-members: HUF 30,000 + VAT ORGANIZER American Chamber of Commerce in Hungary CONTACT Ildikó Takács-Berka, ildiko.takacs-berka@amcham.hu; 428-2084 NOV. 22 Speed Business Meeting LOCATION Sofitel Budapest Chain Bridge, Budapest, Dist. 5, Széchenyi tér 2 TIME 6 p.m.

FEE BCCH MEMBERS: 4,400 HUF + VAT ORGANIZER British Chamber of Commerce in Hungary, French-Hungarian Chamber of Commerce and Industry, DEFH (Dirigeants et Entrepreneurs Francophones en Hongrie) CONTACT www.bcch.com

The traditional Jour Fixe event of the chamber provided a great opportunity to participants for networking and indulging in culinary pleasures.

October 27, Larus restaurant

NOV. 24 DUIHK German Gourmet Days LOCATION Kempinski Hotel Corvinus, Giardiano restaurant, Budapest, Dist. 5, Erzsébet tér 7-8 TIME 6 p.m.

ORGANIZER German-Hungarian Chamber of Industry and Commerce CONTACT Marietta Németh, 345 7626, nemeth@ahkungarn.hu NOV. 24 HR Seminar - “New approaches to drive sales effectiveness” LOCATION LeasePlan Hungaria Zrt, Budapest, Dist. 11, Bocskai út 134-146 TIME 4 p.m. – 7 p.m.

ORGANIZER Netherlands-Hungarian Chamber of Commerce together with Gaal & Partners Kft and LeasePlan Hungária Zrt FEE Members: HUF 2,500 + VAT; non-members: HUF 4,000 + VAT CONTACT www.dutcham.hu

Photo: Péter Kőhalmi

AMERICAN CHAMBER OF COMMERCE: SME SEMINAR SERIES - SOCIAL MEDIA AND ONLINE MARKETING

DEC. 3 18th Canadian Lobster Dinner LOCATION Hotel Intercontinental Budapest, Dist. 5, Apáczai Csere János u. 12-14 TIME 6 p.m.

FEE HUF 28,000 (including VAT) ORGANIZER Canadian Chamber of Commerce in Hungary CONTACT Gusztáv Rapp; lobster@ccch.hu

The recently launched series aims to provide useful and easily applicable knowledge for SMEs in communications, IT and HR. The series will be continued in 2012.

The Budapest Business Journal is happy to publish news on business, social or charity events in its calendar section. Please submit your request at least two weeks in advance of publication date to news@bbj.hu

October 26, Infopark

For community events visit our partner:

András R. Nagy, Próbakő Communications, Dr. Sándor Erdei, Chair of the AmCham SME Committee, and Ákos Bognár, Image Factory

OPINION GREAT

〉

QUOTES

〉THE KIND OF PROBLEM THAT GREECE OR ITALY

HAS TO DEAL WITH IS UNCONCEIVABLE IN HUNGARY AS FIDESZ-KDNP HAS A TWO-THIRDS MAJORITY; THAT IS, THE COUNTRY IS POLITICALLY STABLE. János Lázár, faction leader of Fidesz on TV2’s Mokka program.

〉THE ABSENCE OF POLITICAL PERSONALITIES

IN THE GOVERNMENT WILL HELP RATHER THAN HINDER A SOLID BASE OF SUPPORT FOR THE GOVERNMENT … BECAUSE IT WILL REMOVE ONE GROUND FOR DISAGREEMENT. New interim Italian PM Mario Monti on the advantages of a technocrat government.

〉WE DON’T WANT THE COUNTRY TO RELY ON

INTERNATIONAL FINANCIAL INSTITUTES FOR BENEVOLENCE. HUNGARY CAN STAND ON ITS OWN FEET Péter Szijjártó on MTV’s Ma Reggel, commenting on the need for another IMF loan.

〉EUROPE COULD BE LIVING THROUGH ITS

TOUGHEST HOUR SINCE WORLD WAR TWO.

[ EDITORIAL ]

Hoping for the highest bid etween an IMF loan, and one from China, which would you choose?

Does the European route (the former) or the US path (the latter) offer more for a country like Hungary? Is a lower debt level or a higher financing capability more important for Hungary? Is the new Constitution’s statute that debt should become lower each year more binding, or the government’s responsibility to put Hungary back on a growth track?

The Hungarian economy’s future is increasingly a question of choosing between bad and worse. Especially so for PM Viktor Orbán, who allegedly stated that were the country forced to apply for another IMF loan, he would resign.

Regardless of the verity of this statement, or the PM’s eventual decision, it is now almost certainly a fact that the government will have to accept some external help.

Then the question becomes, whose help? The European Central Bank is otherwise occupied, the EBRD has done its part. Luckily, there are some fans of Hungary who would be more than happy to help the country out. The Chinese, for instance, have shown a huge interest in the country’s bonds lately, even when others did not. What’s more, prior to the general elections in 2010, there were rumors of Orbán offering to trade a loan to refinance Hungary’s $25 million IMF debt for 100,000 Chinese residence permits. The deal was never made, but the possibility is still there.

And the question remains: would it be worth it? Ten-year bond yield rates for Hungary have already hit 8%. If foreign analysts keep speculating that the forint will weaken further, yields could go even higher. This could make IMF financing, which in general, has lower interest rates, more attractive. But it also comes with a consequence Orbán wants to avoid at all costs: an active intervention into the nation’s economic policy. (Though judging from the events of the past year, you could argue that the government ends up doing what the IMF wants anyway.)

In the end, it is not the person who gives the money that matters, but what they ask in return.

B

Do you have an opinion about the state of affairs in Hungary and the region?

German Chancellor Angela Merkel, talking to her CDU party on the current eurozone debt crisis.

Become a BBJ-blogger 〉ANYONE WHO WANTED COULD GET A LOAN. László Domokos, head of the state audit office of Hungary, on the reasons for the indebtedness of the municipalities.

by submitting a synopsis (500 words) on what you feel passionately enough about to

share your views.

Your first address if you like to start business in Slovakia! cegekalapitasa.hu

Email to dmt@bbj.hu

BBJ-PARTNERS Netherlands - Hungarian Chamber of Commerce

Media representation: Absolut Media Zrt Address: Madách Trade Center 1075 Budapest, Madách Imre út 13-14., Building A, 8th floor Telephone +36 (1) 398-0344, Fax +36 (1) 398-0345, www.bbj.hu Editor-in-chief: MELINDA TÜNDE DÓRA dmt@bbj.hu • Copyeditor: TAMÁS DEME • Proofreading: ROBIN MARSHALL Editorial staff: PATRICIA FISCHER, ANIKÓ JÓRI-MOLNÁR, GABRIELLA LOVAS, ZSÓFIA VÉGH • Lists: BBJ RESEARCH (research@bbj.hu) News and press releases: news@bbj.hu Design: ABSOLUT DESIGN STÚDIÓ (production@bbj.hu) • Art director: Tamás Tárczy • CEO: TAMÁS BOTKA (publisher@bbj.hu) Operations director: BALÁZS ROMÁN • Advertising: ABSOLUT MEDIA KFT (hirdetes@amedia.hu) • Sales: Viola Farkas (viola.farkas@bbj.hu) Circulation and subscriptions: Vanda Taletovics-Vedres (circulation@bbj.hu) • Printing: Absolut Print Kft

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