Budapest Business Journal 20/07 by Business Publishing Services Kft.

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VOL. 20, NUMBER 5

I APR 10, 2012 – APR 19, 2012

Budapest Business Journal

HUNGARY’S PRACTICAL BUSINESS

LOGISTICS SALARIES

63.5%

OF THE NATIONAL AVERAGE BASIC WAGE IS PAID TO MANAGERS SEE TRENDS

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Fragile logistics

PLUNGING TRANSPORT VOLUMES AND SMALLER FIRMS DISAPPEARING FROM THE MARKET ARE THE MAIN TRENDS IN THE LOGISTICS SECTOR.

FOCUS

SPECIAL REPORT

BUSINESS

Floating downstream

Hectic demand: the ultimate challenge

Easter ham, Hungarian salami

After nearly three months of turmoil that can be regarded as the biggest moral drama of Hungary’s young democracy, President Pál Schmitt finally offered his resignation at the beginning of April. What led to this dénouement? PAGE 8

Cost savings, that magical pair of words, have started to lose their appeal in logistics software implementation, giving way to highly specialized services and so-called “complex simplicity”. PAGE 14

Never try to win with your prices – this could be the motto of Attila Horváth, CEO of Zimbo Perbál Kft, a subsidiary of the German food industry manufacturer. Not even before Easter, when sales skyrocket. PAGE 10

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EDITOR-IN-CHIEF:

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Contents NEWS

SOCIALITE

NEWS

digest

NEWS

bi-weekly

NEWS

Energy

COPYEDITOR:

Tamás Deme PROOFREADING:

FOCUS

Robin Marshall

The end of the Schmitt presidency

EDITORIAL STAFF:

Patricia Fischer, Anikó Jóri-Molnár, Gabriella Lovas, András Szarvasi, Ági Vinkovits, Zsófia Végh, Dániel Csordás (graphic artist) LISTS: BBJ

21 7

The Pest cabarets

Research (research@bbj.hu)

NEWS AND PRESS RELEASES: news@bbj.hu

Whatever hopes Fidesz had for a Schmitt presidency, the current occupant of the Sándor Palace was no longer likely to realize them.

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What We Stand For: The Budapest Business Journal aspires to be the most trusted newspaper in Hungary. We believe that managers should work on behalf of their shareholders. We believe that among the most important contributions a government can make to society is improving the business and investment climate so that its citizens may realize their full potential. The Budapest Business Journal, HU ISSN 1216-7304, is published bi-weekly on Friday, registration No. 0109069462. It is distributed by HungaroPress. Reproduction or use without permission of editorial or graphic content in any manner is prohibited. ©2011 BUSINESS MEDIA SERVICES LLC with all rights reserved. The Budapest Business Journal’s print run is audited by MATESZ, 1034 Budapest, Bécsi út 122-124, a member of IFABC.

SPECIAL REPORT

Fragile logistics With the performance of the transport and logistics industries closely connected to the state of the economy, the sector has been sharply affected by the economic slowdown.

11 15

ENTERPRISE

Meat market woes The past year could not be described as a success story for Hungary’s meat industry. Luckily, this has not left its mark on the taste of quality meat products.

SPECIAL REPORT

On the road to become CEE’s number one in logistics For Hungary to become the number one logistics hub in the region has been a dream and oft-stressed aim of governments here for decades.

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

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BI-WEEKLY

FOCUS

Bourse share turnover declines further in March

The end of the Schmitt presidency

digest

It occurred to me that nothing is more interesting than opinion when opinion is interesting HERBERT BAYARD SWOPE, THE NEW YORK EVENING WORLD, 1921

UNUSUAL UNANIMITY “In this situation, when my personal issue divides my beloved nation instead of uniting it, I feel it to be my personal duty to finish my service and resign from my presidential mandate,” these words put an end to a two-month long struggle and dilemma for Hungary’s ex-President Pál Schmitt. After hvg.hu, the online version of weekly HVG, wrote in January that more than 90% of Schmitt’s doctoral thesis submitted in 1992 is the word-by-word copy and translation of works from different authors, the former Olympic fencing champion-turned-politician tried his best to avoid meeting journalists or, when it was unavoidable to face them, to present his copy-paste technique as adequate for PhD requirements at that time. Following a long investigation, a committee put together by Semmelweis University tried to clear Schmitt of plagiarizing by saying that Schmitt’s dissertation complied with the formal requirements of the time, despite the lack of footnotes and citations, a haphazard bibliography and other flaws.

Schmitt, who was on an official visit in SouthKorea when the committee published its verdict, could feel relieved only for a very short time: two days later, on Thursday (March 29) the senate of the University, possibly in fear of losing the credibility of the entire Hungarian academics scene, decided to revoke Schmitt’s title as a doctor. Still, Schmitt stayed defiant over the weekend, insisting “there is no link” between the presidency and the loss of his doctorate and that he was not considering resignation. However, it seemed that his clear conscience failed to convince the nation. Hundreds of people went to the streets to protest against him and press was full of articles calling upon him to go. It is clear that Schmitt’s plagiarism scandal is a significant moment in the history of Hungarian journalism. Not only because the “extensive similarities” between Schmitt’s doctoral thesis and the works of others were revealed by journalists but also because this case has been the only one since the change of regime in 1990 that placed newspapers – regardless of their political preferences – on the same platform: after the senate of the Semmelweis University revoked Schmitt’s PhD, even right-wing papers called on him to resign.

SCHMITT’S RESIGNATION COMES AT A TIME OF ESCALATING TURBULENCE IN BUDAPEST. Time magazine

MARCH 31, 2012 MARCH 29, 2012 The Hungarian conservative daily published an editorial about Schmitt’s case one day after that the University committee tried to somewhat clear Schmitt, and one day before the senate revoked his doctorate. “The President residing in Soul missed a singular opportunity yesterday,” says the article in a strong entrée referring to Schmitt’s announcement that he was staying in office and considering the result of the committee’s investigation as some kind of recompense that proved him right. The article is a masterpiece of saying something very strong in an extremely friendly way. After detailing Schmitt’s achievements as a sportsman and also as a politician who reached up to the vice-presidency of the European Parliament, the article clearly says that the committee did not clear Schmitt of plagiarism. “We believe that staying in office is not even in his interests,” Magyar Nemzet says. “This battle is unwinnable. The erosion of the institution [of the presidency], the crumbling of faith in an honest public life is unstoppable. It is as plain as day.”

The editorial of the conservative weekly was published on the paper’s website one day after Schmitt’s doctorate was revoked. As such, the article held a stronger voice about the case, saying that the plagiarism scandal has turned from a personal issue into a problem of the state. It emphasized that the senate’s decision meant that Schmitt had achieved something in an unusual way that does not meet the requirements of the academics but, just to stay on the friendly side, the article adds that the requirements of a doctorate has been very much different in the ’80s and ’90s and, as such, the senate’s verdict should also be examined. “It is understandable if Pál Schmitt wants to fight and protect his – enviable – life achievements that have been unworthily attacked, but by doing so, it is not only the prestige of his political community that risks, but also the prestige of the country,” the editorial concludes.

APRIL 2, 2012 An opinionated article on the blog site of the Ameri-

can Wall Street Journal introduces Schmitt’s struggle in drawing an unfavorable picture of the Hungarian democracy. About the current case, it says that Schmitt’s resignation “was a sharp aboutface from his stance Friday, when he declared in a television interview that he had no intention of leaving his job and instead planned to write a new dissertation to prove his ‘perseverance’.” The WSJ also recalls some contradictory laws that Schmitt signed without any consideration, just as if he was a pen in Prime Minister Viktor Orbán’s hand. It also adds that the opposition “has long attacked Mr. Orbán and his Fidesz party for choosing candidates for important posts based on loyalty rather than ability”. However, the government’s future steps could be enough to ease anxiety over Hungary’s democracy, the article concludes. “It was unclear whether Mr. Orbán would reach beyond the circle of Fidesz party stalwarts when choosing a new candidate—a move that could help defuse criticism of his administration’s strong grip on political power.”

melweis University revoked Schmitt’s PhD on March 29, you could sense his end days were near.” The author examines Hungary’s situation from a wider perspective, saying that “Schmitt’s resignation comes at a time of escalating turbulence in Budapest”, and details the controversial issues of the reform of Hungary’s judicial system and the Central Bank Act, which stand in the way of the negotiations about a bailout package the Hungarian government requested from the European Union and from the IMF in November 2011. Adams, who in most of his article stays away from opinionated statements, indulges in an ironic comment at the end of his article. After mentioning Schmitt’s plan to restore his “honor” by submitting a new doctoral dissertation, Adams says that, “Perhaps Orbán will follow Schmitt’s lead and attempt to undo a few wrongs of his own.”

APRIL 3, 2012

APRIL 3, 2012 William Lee Adams’ article on Time magazine’s blog site came after Schmitt’s resignation and gives an in-depth summary of the scandal. Adams emphasizes the significance of the academics’ verdict on the President’s doctoral title. In Hungary, “intellectual achievement is highly prized and academics held in high regard. So when Budapest’s Sem-

The Polish conservative paper considers Schmitt’s resignation as proof that “democratic mechanisms work properly in Budapest”. Schmitt’s standing down also makes the fears of the liberal press questionable, Rzeczpospolita adds, saying that “if the picture that European papers draw about Hungary was realistic, the President would not have to resign”. The media’s role in Schmitt’s downfall also proves the freedom of the press in Hungary as “the free press did its job and worked effectively”. ■

04 1 News BBJ

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Budapest Business Journal | Apr 10 – Apr 19

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QUOTE OF THE WEEK

The National Bank of Hungary can help, but we don’t have the key to the solution... NATIONAL BANK OF HUNGARY DEPUTY GOVERNOR FERENC KARVALITS SAID ABOUT BANKS’ LENDING ACTIVITY

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

Bourse share turnover declines further in March BUSINESS Double-counted share turnover on the Budapest Stock Exchange was HUF 395.1 billion in March, down 16.4% from HUF 472.5 billion in February, the BSE said, citing data compiled from brokers. January-March share turnover was down 16.3% from a year earlier, totaling HUF 1,632 billion. Turnover in the 20 foreign shares traded on the Budapest bourse dropped to HUF 1.19 billion in March from HUF 1.81 billion in February, but was still up from HUF 970 million in January. Including turnover of investment fund units, compensation coupons, certificates, government securities, corporate bonds and mortgage bonds, spot market turnover was HUF 415.6 billion in March, down 14.6% from February.

OTP INTERESTED IN ACQUIRING ANOTHER BANK IN ROMANIA, DEPUTY CEO SAID Hungary’s OTP Bank is still interested in raising its share of the banking market in Romania in spite of the recent failure of talks to acquire banks in the country, the Romanian business newspapers Bursa and Capital reported, citing OTP Bank Deputy CEO László Wolf. Wolf said that OTP Bank could resume talks aimed at acquiring a bank in Romania during the second half of this year, noting that the Hungarian lender is interested in banks with low financing requirements and solvent clients. Wolf said that OTP Bank would like to expand its operations in Romania because the country’s economy is large and has major growth potential, and OTP still commands only a small share of its banking market.

MKB POSTS PRE-TAX LOSSES OF HUF 109 BLN FOR 2011 MKB Bank had pre-tax losses of HUF 109.5 billion in 2011, according to the bank’s audited consolidated IFRS report, due to continuing external and internal macroeconomic difficulties and government

measures causing major losses, the bank said. MKB’s parent bank, Germany’s BayernLB, had already said in its report for the period that its Hungarian unit had a loss of €392 million in 2011. MKB Bank losses fell slightly from HUF 117.8 billion in the previous year. MKB attributed the losses to write-offs related to subsidiaries and higher-than-average real estate project portfolio. The bank levy and the early FX repayment scheme combined directly caused losses of close to HUF 40 billion for the Hungarian bank group.

HUNGARIAN OPPORTUNITIES IN SAUDI ARABIA Diplomatic and professional preparations are paving the way for possible cooperation between Hungarian companies and research institutes active in the areas of electricity and desalination and partners in Saudi Arabia, state secretary for climate and energy affairs Pál Kovács said in an interview published in business daily Világgazdaság. Saudi Arabia’s electricity market is five times as big as Hungary’s and is expected to get even bigger.

ABOUT 40% OF INSURANCE INDUSTRY PROFESSIONALS SEE CONTRACTION IN 2012 About 40% of the participants at an insurance industry conference organized by portfolio.

hu on March 29 said the sector would contract 2-10% this year. About 35% of the some 300 participants said the market would contract less than 2% and 19% project a 2-10% expansion. About 39% said government measures would be the biggest factor affecting the industry over the next three years, while 35% said it would be the country’s response to the economic crisis and 19% said it would be the crisis itself. About 41% of the participants expect the health insurance segment to generate revenue from premiums of HUF 5 billion-20 billion by 2014, while 31% put the amount higher, at HUF 20 billion-50 billion.

PICKUP IN LENDING ACTIVITY DEPENDS ON BANKS, SAYS CENTRAL BANKER Any acceleration in lending activity in Hungary will depend on banks’ propensity to take risks, which may not take place this year or even next, National Bank of Hungary deputy governor Ferenc Karvalits said at a conference. “The National Bank of Hungary (MNB) can help, but we don’t have the key to the solution,” Karvalits said. He pointed out that the central bank was taking several steps to support lending activity, such as the introduction of two-year collateralized loans for lenders. The facility can help only if banks are ready to lend and are constrained only

by limited capacity or liquidity to do so, he said. Karvalits said the bank will also launch a mortgage bond-purchasing program. “The bank’s new facilities are designed to provide a safety net for the banking sector through enhancing credit institutions’ capacity to lend; however, the facilities cannot, and are not meant to, exert a material influence on banks’ willingness to lend,” the MNB said.

CULTURE HUNGARIAN ACCUSED OF WAR CRIME The case of Charles Zentai, a 90-year-old Hungarian living in Australia has finally reached the agenda of the Australian High Court. Hungary accuses Zentai of assaulting a young Jewish man and throwing his body in the Danube during World War II. Australia’s Minister for Home Affairs is now appealing a ruling of the Full Bench of the Federal Court, which last year found it was not open to the government to make an order to extradite Zentai because the “war crime” offence did not exist in Hungarian law in November 1944. The minister is appealing on the grounds the court made an error by ruling that the extradition may only take place where the specific offence for which extradition is

sought existed under Hungarian law at the time.

MORE REAC MEMBERS INVOLVED IN MATCH-FIXING SCANDAL One current and three former players of the REAC football club were detained on suspicion of taking part in an international betting scandal on the week of March 25. The suspects are current player Krisztián Nyerges, and former club players Tibor Pomper, Tamás Somorjai, and Gábor Torma. REAC is in the second division of the Hungarian football league. Its director committed suicide on March 2 when allegations of match fixing at the club came to light, although he was not himself involved in any wrongdoing. One former player has confessed, while Nyerges and one other suspect filed a complaint against the accusation, and pleaded innocent.

ABOUT 10% OF PRIVATE PENSION FUND MEMBERS RETURN TO STATE PILLAR About 10% of remaining Hungarian members of private pension funds plan to make use of another chance to join the state pension pillar, daily Népszabadság said on Friday, March 30 citing fresh data from fund association Stabilitás. Stabilitás said 9,565 private pension fund members, or 9.91% of the total, are returning to the state pension pillar. Private pension fund members had until the

end of March to take a decision on returning. Given the option last year, more than 97% of private pension fund members decided to make the move, taking with them their retirement savings. Stabilitás noted that the data it collected from the private pension funds of AXA and Aegon was fresh, but data from the other funds was from March 26.

BUDAPEST TO PAY FOR WATERWORKS STAKE IN INSTALLMENTS The local council of Budapest will pay the purchase price for a minority stake in the city’s waterworks in three installments, a letter of intent on the repurchase shows. The letter, published on the local council’s website, puts the purchase price for the 25% stake in the Capital Waterworks at HUF 12.1 billion. The city is to pay HUF 8.25 billion when the stake is transferred and the remaining HUF 3.84 billion in two equal installments within the following two years. Additionally, the city is to take over HUF 2.54 billion in debt owed by the waterworks and pay the owners their last HUF 469 million quarterly management fee, for Q1. Altogether, the acquisition will cost the local council about HUF 15.1 billion, excluding VAT. City Hall approved the letter of intent on the repurchase on March 25. ■

1 News 05

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energy MAGYAR TELEKOM TO SELL ELECTRICITY AND NATURAL GAS THROUGHOUT HUNGARY

Hungarian telecommunications company Magyar Telekom announced it will sell electricity and natural gas throughout Hungary beginning on April 1. The company will simplify its preference system and will offer these services for anyone with a Magyar Telekom-related subscription, the announcement said. Magyar Telekom started selling electricity and gas on May 17, 2010 for T-Home subscribers.

HUNGARIAN-CZECH-SLOVAK CONSORTIUM TO BUILD TEST GEN IV NUCLEAR REACTOR A Hungarian-Czech-Slovak consortium will build a test Generation IV nuclear reactor as part of a joint project worth several tens of billions of Czech koruna, Hungarian newswire MTI’s Prague correspondent reported. The consortium is now in the process of selecting the site, CEO Alex John of UJV Rez, the Czech member of the consortium told a conference in Prague. They are

discussing the possibility of building the test Allegro reactor near the village of Dukovany in southern Czech Republic, John said, noting that the Dukovany nuclear power station’s lifespan will expire in 2035. John said that construction of an Allegro nuclear reactor would begin in 2025 at the earliest. The European Union could join in financing the project at a later stage, he said.

GAZPROM PREPARING FOR SOUTH STREAM Russian energy company Gazprom said it completed project documents for a gas transit system meant to feed, among others, the South Stream pipeline. “According to the schedule, Phase 1 of the Southern Corridor GTS will start as early as in December 2012 to be accomplished in 2015 in parallel with the launch of the South Stream first stage,” the Russian energy company said in a statement. Phase 1 of the gas transit system calls for the construction of more than 500 miles of pipeline. South Stream is a planned

natural gas pipeline meant to diversity to Russian gas export options. The pipeline is designed to carry as much as 2.2 trillion cubic feet of natural gas to Europe each year.

AES HUNGARY TO DISCONTINUE OPERATION AT REMAINING POWER PLANT AES Hungary, the Hungarian unit of US-based AES Corporation, is to halt production as of March 31 at the company’s 900 megawatt gas-fueled Tisza II Power Plant in Tiszaújváros, east Hungary, laying off 101 workers, the regional labor centre told MTI newswire. The power plant is Hungary’s fourth biggest electricity-generating power plant, which accounted for 5% of the country’s electricity production. The AES will retain only about 30 employees in order to maintain the company’s machinery and equipment. AES, which acquired the Tisza II Power Plant in 1996, now plans to sell the plant. MTI-Econews reported in March 2011 that AES Hungary discontinued

operations at its other two power plants in Hungary for fi nancial reasons.

NORWEGIAN-OWNED COMPANY TO BUILD BIOMASS POWER PLANT IN HUNGARY Norwegian-owned Grenor Hungária Energetika plans to build a HUF 8 billion ($36.6 million) biomass-fuelled power plant in Szombathely, west Hungary, managing director Gergely Diószegi and deputy mayor Miklós Molnár said on Monday. The plant is expected to be completed by the second half of 2014. The pant, to be fueled with wood chips, will generate an annual 47,000 MWh of electricity and 180,000 GJ of heat energy, enough for half of the city’s homes with district heating, MTI newswire reported.

E.ON URGES EUROPE TO STRETCH CO2 PLANS OUT TO 2030 The European Union should adopt a target to cut greenhouse-gas emissions by 50% by 2030, rescuing the region’s carbon market, said EON AG. Without reform, the market will stagnate, Johannes Teyssen, chairman

of the utility’s management board, said Friday (23.03) in Berlin. A 2030 target would encourage companies to invest in CO2- reducing power stations and factories, Teyssen said. This would avoid “cannibalizing and destroying” the market and “infuse strength and life” into it. The EU should also adopt a floor price for allowances that would be adjusted annually, rather like the European Central Bank sets interest rates. The idea of a new 2030 target would smooth emissions reductions between now and 2050, he said. Current rules would encourage cuts mainly after 2020. E.ON emitted 88 million tons of CO2 in Europe last year, down from 89 million in 2010. It relied more on brown coal to produce power in Germany after having to switch off two virtually emissions-free nuclear reactors.

UKRAINE TO BUILD LNG TERMINAL Ukraine will build an €846 million ($1.13 billion) liquefied natural gas terminal at the port of Yuzhnyi, Vladyslav Kaskiv, the head of state

national projects, said Friday (30.03). The government will set up a managing company with a private investor within two months, Kaskiv said. The terminal will be completed in two stages, and capacity will double to 10 billion cubic meters by 2018 from a planned 5 bcm in 2016, he added. Total construction time will be 49 months, Kaskiv said.

GDF SUEZ TO INVEST MORE THAN €100 MLN IN ROMANIA IN 2012 GDF Suez SA will invest more than €100 million ($134 million) in Romania this year in wind and gas projects, exceeding its annual investment average, said Eric Stab, GDF Suez’s country manager in Romania. The operator of Europe’s biggest natural-gas network will invest about €75 million in a 48-megawatt wind farm in eastern Romania, to be completed in November, and the remainder in its gas business, Stab said in an interview. GDF Suez has invested between €60 million and €100 million on average in past years in Romania and about €75 million in 2011. ■

[ EXPERT OPINION ]

THE SENSITIVE TOPIC OF CANCER

Hungary still tops the list Figure this: over the years, each of us will be faced with at least one in every four of our relatives or acquaintances diagnosed with cancer. The number is staggering. To the best of our knowledge, no preventive measure matches up to a well-balanced, healthy lifestyle, and regular medical check-ups are also essentially important. Hungarian men are the most likely to die of cancer in the whole of Europe, while women come in second worst after Denmark. Speculation on possible causes ranges from smoking through alcohol abuse to environmental pollution, but experts think differently, blaming poor prevention and a lack of regular medical check-ups. “Man is designed to live 120 years,” says Dr. Ádám

Lelbach, our head specialist in internal medicine and gastroenterology, “at least that’s what scientific research suggests. Being more conscious and cautious, registering the physical signs of our bodies, would certainly take us closer to that respectable age. The stark reality though, is that Hungarians start the life race with a major handicap: a critically low health consciousness. Often only pain

will drive people to visit the doctor, with already advanced cancer, albeit that prevention and early diagnosis are crucial to beating the disease. Despite what most people think, cancer is not necessarily a death warrant.” According to Dr. Lelbach, the number one cause of death for 35-46 year-old women is cancer. “A heart-rending fact that nevertheless should motivate people to take annual check-ups, genetic disposition

to the disease should warrant regular medical examination even before turning 35.” At Dr. Rose Private Hospital we make it our priority to schedule check-ups so that our patients can sesmlessly fit it into their daily to-do lists. Based on a private consultation and taking into account individual risk factors, patients can be advised on a customized, personal checkup plan in advance. Unpleasant and uncomfortable

examinations, such as colonoscopy and gastroscopy, are possible with anesthetics at Dr. Rose Private Hospital. FACTS and FIGURES Men and women are both affected but in different ways. The leading cause of cancer death among men is lung cancer, while women are most at risk from breast cancer. Colorectal cancer comes in second for both men and women, followed by prostate,

oral and stomach cancer among men, lung, stomach and lymph cancer among women.

www.drrose.hu

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focus

The end of the Schmitt presidency In light of last week’s events, President Pál Schmitt’s resignation on Monday came as a surprise. The pressure on Schmitt and Fidesz had been substantial, of course, but both appeared determined to sit the plagiarism scandal out. Whatever hopes Fidesz had for a Schmitt presidency, the current occupant of the Sándor Palace was no longer likely to realize them. With SOTE’s decision to strip him of his doctoral title, Schmitt received a permanent blow and the era we termed the quiet presidency was over. Tortuous as it might have been, Fidesz may use Schmitt’s belated resignation to try to claim the moral high ground. The question now is what this means for future plagiarism scandals and whether the new president will also bring a new strategic approach to the office. BBJ POLICY SOLUTIONS

Two years ago, one might have thought that President Schmitt was not likely to make a big mark, but his election still signaled the completion of another key piece in the puzzle that is the government’s so-called National System of Cooperation. As president, Schmitt was supposed to be (occasionally) seen but not heard, quietly signing bills that his predecessors – and especially the person immediately preceding

him, László Sólyom – would have sent either to the Constitutional Court for review or straight back to Parliament for reconsideration. For well over a year this worked exceptionally well, with Schmitt realizing his most important ambition as president: to serve as a facilitator and catalyst of the government’s legislative work. He signed bills as soon as they arrived on his desk, helping Fidesz adhere to its aggressive timetable. WITHER THE QUIET PRESIDENCY Recently, however, it became mighty noisy around a president whose primary quality was supposed to be quiet obedience. Since a tenacious reader of the Hungarian weekly HVG spent months poring over Schmitt’s dissertation and showed it to be a copy in significant parts, the former president became embroiled in a scandal that reached its climax twice last week. First when the committee that investigated the plagiarism charge published its report, which ended up absolving Schmitt. It argued, somewhat paradoxically, that even though large portions of the thesis had indeed been copied and translated, the dissertation committee at the time was to blame for failing to alert Schmitt to this fault. While the press and large portions of the chattering classes – including many on the right – jeered at the sheer implausibility of the verdict, Fidesz and Schmitt let out a collective sigh of relief. Their nightmare appeared to be over and a number of statements were released to drive home the governing party’s impression that the matter was settled. Most everyone thought so, including the growing number of frustrated Schmitt-critics. UNIVERSITY STANDS GROUND What ultimately and surprisingly doomed Schmitt, however, was a higher education reform. Not the one instituted by this government – that would have been supreme irony indeed – but a previous one in the late 1990s, which had merged the college of physical education, where Schmitt got his doctorate, with Hungary’s renowned medi-

cal school, Semmelweis University (SOTE). Formally, the plagiarism committee did not decide on revoking the doctoral title, it merely made a recommendation. Since it had explicitly exonerated Schmitt despite carefully documenting his guilt, the expectation was that SOTE would follow suit. The university gave the government another option to resolve this issue by passing the hot potato to Minister of National Resources Miklós Réthelyi. The sign on Réthelyi’s desk apparently

ROLLER-COASTER RIDE Just as it had seemed obvious on Tuesday that Schmitt would be staying, his departure appeared pre-ordained following the loss of his title. Yet for a few days at least Schmitt defied expectations, giving an interview on Friday night in which he claimed that he was unfairly attacked, that the plagiarism committee had been right and SOTE was wrong. Consequently, he wanted to stay on and write a new PhD thesis. After some ambiguity, Fidesz supported him, cit-

of large segments of the left, but was also considered hopeless in parts of the generally homogenous right as well.

ambitions. Large parts of the right-wing press are already open to such a narrative, since they have been advancing this theme themselves.

ULTIMATELY AN UNUSUAL STEP Whatever desperate hopes Schmitt and Fidesz harbored, it appears that over the weekend the realization that Schmitt’s presidency was untenable had sunk in, with the consequence that the slogans of the last week gave way to a dramatic resignation address, in which Schmitt

A PRECEDENT FOR FUTURE PLAGIARISM CASES? Two questions remain. The first is whether Schmitt’s successor will be a different type of person, i.e. whether Fidesz will choose a president who will have a more independent character. The odds are that the “quiet presidency” that silently endorses everything Fidesz passes in Parliament will continue under a new name. The other interesting question is what the precedent of Schmitt’s resignation implies for future plagiarism scandals. As many rightwing commentators gleefully pointed out in warning of the ramifications of a potential presidential resignation, Schmitt’s practice and worse were common fare in the 1990s (probably before and since as well, we might add). There are in all probability a vast number of plagiarized and commissioned dissertations, not to mention astonishingly bad theses that only passed because of nepotism. Though in most cases only the first category can be both proven and damaging enough to hurt someone’s career, there should be enough of those to significantly hurt the political establishment across the aisle. Had Schmitt stayed in office – as other plagiarizers no doubt prayed he would – that probably would have settled the issue for good. If such a high-profile- target cannot be brought down by verified charges of plagiarism, then less conspicuous politicians may be safe. Schmitt staying on would have given plagiarism hunters pause for thought. The current situation is more ambiguous and in light of the immense energy it takes to unmask a plagiarized thesis, the message may well be that it’s not worth the effort. But still, bringing down a highprofile target may render the investment worthwhile, and Schmitt’s departure holds out such a possibility. ■

RIGHT WING INTERNET FORUMS WERE RIFE WITH BITTERNESS AND DISENCHANTMENT read, “This is from whence the buck returns,” however, and the minister promptly sent the whole package back to SOTE without even opening the report. Only two days after the plagiarism report was released came the stunning news: SOTE’s Senate revoked Schmitt’s doctoral degree in a crushing 33-4 vote. Newspapers reports claimed that the proSchmitt holdouts were primarily physical education scholars, among them some of the members of the review committee that had absolved him. It seems likely that had his alma mater remained a separate school, it would not have visited such a harsh judgment on its most famous alumnus. SOTE allegedly has little love for its PE division anyway, and felt only embarrassment about the affair: the Senate’s vote was most probably an assertion of academic integrity, but it certainly was not a political statement (even among Schmitt’s most desperate advocates there were hardly any claims that SOTE is an opposition cell).

ing the constitutional clause that the person of the president is “inviolable”. This new approach was quickly parroted by the few remaining Schmitt loyalists in the media – even reliable Fidesz outlets such as Magyar Nemzet and Heti Válasz had called on Schmitt to resign, though they blamed character assassination rather than the president’s own actions. More importantly than the imbroglio surrounding Schmitt’s academic transgressions, his failure to resign was the second issue in a mere few weeks on which significant portions of the right had turned against Fidesz. The right-wing forums on the internet were rife with bitterness and disenchantment, and the tortured explanations advanced by the few government politicians who dared to comment in any detail, not to mention Schmitt’s own odd interview on Friday night, served only to pour more oil on the fire. It was clear that Schmitt had forfeited the respect not only

exclusively blamed the unfair attacks of his detractors, insisting on his innocence. Still, and however long it took, resignation is an unusual step in Hungary. Scandals have plagued Hungarian politics almost continuously over the past two decades, rarely resulting in resignations or penalties. Fidesz might now be tempted to exploit the fact that Schmitt has succumbed to pressure in two ways. For one, it will likely emphasize that Schmitt was unfairly hounded out of office by a left-wing conspiracy, i.e. it will create a “stab-in-the-back” legend. More importantly, somewhat inconsistently and disingenuously, it can claim that as promised, Fidesz has put an end to the era when Hungary was the country where ill deeds never resulted in consequences for the offenders. Various socialist politicians stayed in office despite scandals that should have resulted in their resignations. Unlike them, Schmitt ultimately chose the dignity of his office over his personal

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2 Business

BBJ

SPECIAL REPORT TRENDS HR

Fragile logistics PMI up a tick Take the coach

12 19 20

Enterprise

Easter ham, Hungarian salami Never try to win with your prices – this could be the motto of Attila Horváth, CEO of Zimbo Perbál Kft, a subsidiary of the German food industry manufacturer. Not even before Easter, when sales skyrocket.

it has a 25% share. We have decided to deliver superior quality without compromise and Ábrahám meets the requirements of traditional hams. This year we sell only Ábrahám, so we do not expect that our Easter sales will be significantly higher than at other times of the year.

Horváth, himself a man of culinary joys, votes for quality even if the higher price means you buy less. Zimbo, located in Perbál, in the vicinity of Budapest, emphasizes the importance of customer trust, which is based on the high quality of ingredients and meticulous preparation methods. “Hungarian food is rich in calories. Our feasts, including Easter and Passover, are still about rich meals today,” Horváth says, leading off the conversation. “However, while consumers have less and less money to spend on meat, their stomachs do not want to adapt to this financial situation. The quantity of the purchased meat remains high but the quality of the chosen products is degrading. Price has become dominant. Meanwhile, we seek traditional flavors and qualities. We all remember our grandparents, who cooked and smoked the ham and the bacon, only natural ingredients touched the meat.” We talked to the CEO about gastronomy, the market, and even the pleasures of culinary art.

HOW CAN YOU GET OUT THE MESSAGE THAT YOUR PRODUCT IS AUTHENTIC? WHAT ARE THE PACKAGING, COMMUNICATION AND PR TECHNIQUES TO COMMUNICATE THE ZIMBO VALUES? The media has done a great job. Consumers are educated and they ask questions. They check the ingredients on the packaging – that is the first thing they do. Obviously, the usual methods include PR activities, ATL campaigns and so on, but the first is the product. Even on our website, we emphasize the quality guarantee. The basis is trust. When a customer holds the product in his or her hand it must have the natural color, nothing artificial. The percentage of fat is also crucial. Certain types of ham need a higher percentage as the real flavor comes from the fat. Its weight should not be more the 800-1,200 grams to make it sellable. As far as we can monitor the market, the sales of ham specialties are not spectacularly high. It is also important to point out that on the Hungarian market, approximately 80% of products have added water and artificial ingredients, and only 20% remain authentic like ours. Anyway, whoever is buying considers the color and the fat content first, which helps to filter the 80%.

TALKING ABOUT EASTER, WHAT PERCENTAGE OF YOUR ANNUAL SALES COMES FROM THIS HOLIDAY? We are not specialized on ham. The brand called Ábrahám represents this segment of our portfolio, and

DO YOU HAVE A PROFILE OF YOUR CUSTOMERS? Before Easter everybody becomes a customer. But of course there is huge diversity. During the year mostly middle-class families and intel-

BBJ ANDRÁS RÁC

lectuals buy our products. There is no real difference between urban and countryside citizens, although western Hungary seems to be the strongest market. HOW ABOUT EXPORTS? We mostly import ham from abroad. It is salami that we export, to Czech Republic, Germany, Romania, Slovakia and Switzerland. WHY DO THESE NATIONS IMPORT THEM? Because it is good! Hungarian salami has a strong reputation and we also develop new products. It doesn’t matter how strong your PR activity is if customers are undereducated. Your sector could benefit from the increased gastronomical knowledge of consumers. How would you describe the level of this knowledge? The majority of consumers are visual and practical. They believe what they see and taste. We educate through our tast-

WE HAVE DECIDED TO DELIVER SUPERIOR QUALITY WITHOUT COMPROMISE ing sessions and we train our hosts. At these sessions, hosts and their guests can compare various products. Of course we use PR for education as well. However, Hungarian customers keep a distance from this education, probably because of the flood of advertisements reaching them. In every sector one company takes the role of the advisor. In the dairy market it is Danone, in the mill and bakery market its Ceres. In the meat sector it has become more complex, as two major companies carry this

role besides us. And one more thing, no matter how overused the term is, word of mouth is the most effective way of education and marketing. HOW CAN YOU MEASURE ITS EFFECTIVENESS? In the rate of return customers. This measures satisfaction, and satisfaction generates word of mouth marketing. We do not have radio or TV ads, only PR and point-ofsales marketing. But PR and marketing work only once if the product does not sat-

isfy. Most Hungarian producers’ attempts fail at this point. When we introduce a new product and its sales rise sharply in the same store sale, we understand that the returning buyer is high. HOW ABOUT ETHICAL ISSUES? CURRENT PHILOSOPHIES, MANY OF THEM SUPPORTED BY SCIENTIFIC WORKSHOPS, QUESTION THE OVERWHELMING EXTENT OF MEAT CONSUMPTION AND PRODUCTION. During the last 10 years I have heard that fat is bad for health and margarine is the right choice. Then I heard that fat

LET’S CONDUCT A LITTLE EXPERIMENT; WHICH OF YOUR PRODUCTS WOULD YOU SUGGEST FOR THE FOLLOWING OCCASIONS?

1st child’s 5th birthday Vienna sausages. They can eat enormous amounts.

1st date Parma ham with watermelon.

Most popular colleague leaves the company Debreceni.

10th anniversary Serrano, red wine, Edam cheese.

10th year class reunion Thüringishe fried ham.

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is OK and margarine is bad. The science is moved by lobbies. Vegetarianism is a trend nowadays. I believe that we are human genetoically coded for with a mixed diet, including meat. The real answer is to be sensible. Anyway, it is not really these ethical pressures that we feel, rather the high VAT and prices. A NEW AUTHORITY WAS BORN RECENTLY, THE MÉBIH (HUNGARIAN FOOD SAFETY OFFICE). DO YOU BELIEVE THAT A BUREAU CAN AND SHOULD OVERSEE THE MARKET? As long as the EU says that it is the standards of the country of origin that matter and not the standards of the country of sale, a national bureau is truly needed. Meanwhile, I cannot really see what such a bureau can do. EU regulations in some cases are half as strict as Hungary’s and low-quality products can easily be imported and sold. If the bureau can help this, we support its efforts. These terribly cheap and low-quality products can also cause a deterioration in public health over a period of time. DON’T YOU THINK THAT STRICTER REGULATIONS WILL RAISE PRICES AND MAKE MEAT PRODUCTS OUT OF REACH FOR LOWINCOME CITIZENS? If a customer buys less of a good-quality product, he made a better purchase than buying a lot of the poor-quality products. And do not misunderstand me, this is not a Hungarian-foreigner conflict: the local grey and black market has a 30-35% share. No question, quality comes from a strict obedience to guidelines. Nobody is going to consume less meat because we become more lenient with the black market. If the guidelines state clearly that a certain percentage of beef, pork, water, fat and salt is required for a product, if only meeting these requirements allows a producer to call its product “Debreceni” sausages for example, if everybody follows these guidelines, then the customer will trust the product. Meanwhile, it is crucial to understand that Hungary is a small market. Germany, with a population of 80 million, or Great Britain, with 60 million, are the real strong markets. That is why our immature idea of export causes problems. I had the privilege of working for a Dutch company, and I could see that even in the Balkans, during the war, the Dutch-owned companies received enormous support from their home country. The Hungarian foreign network has just started such activity, and we, who employ hundreds and pay our taxes, expect such support abroad as well. ■

Meat market woes The past year could not be described as a success story for Hungary’s meat industry. Luckily, this has not left its mark on the taste of quality meat products. BBJ ZSÓFIA VÉGH

Starters: foie gras tarts with onion jam or lecsó cream soup. Main course: pork sirloin cakes, Prague ham with polenta demi-glac and black forest ham filled with pâté. Dessert: chicken breast Gerbeaud with garlic and plum gravy and green apple ice cream with crispy rashers of bacon. This could be the menu of any restaurant. Instead, the dishes, made exclusively from Hungarian meat products, are served at the annual press conference of the Hungarian Meat Industry Federation (MHSz). The event is always well attended thanks to the delicacies on offer and the goodbye-kit every participant receives. Though still generous, the basket this year felt somewhat lighter. As if it was reflecting the downward tendency present in the sector for years. This is the sixth time the press conference has been held. “In the past six years, my hair has grown greyer and I have got bigger but not an inch more optimistic,” said Tamás Éder, head of MHSz. There is not much to be happy about. In 2011, continuing the trend of the past several years, the country’s hog stock dropped 4% to 3 million. Sow stock decreased by the same percentage, currently numbering 210,000. Pig killing in domestic slaughterhouses also slumped by 300,000: a more than 7% drop year-on-year to around 4.3 million. The share of imports has dropped too, but still accounts for more than 10%. To serve the Hungarian market, Hungarian livestock should number 5-6 million swine at least. Now the difference is covered by imported pigs that, unlike their Magyar counterparts, are not raised on corn and other high-quality feed. The decline in the number of

slaughters has caused many factories and meat processors to shut down. This may work well for some big companies but does not help the sector as a whole, resulting in a situation that is uncharacteristic for the rest of Hungarian agri-business: the sector imports raw materials and exports high-quality, high added-value products. Buying pork at home or outside the borders may differ in quality, but not in price. The price of Hungarian livestock is pegged to the EU average. Farmers, however, have been unable to incorporate this into their retail prices, Éder said. Add to that last year’s feed price boom, a two-point increase in VAT plus a 30% rise in the cost of production in a year and you will see why the industry has not been growing. Retail prices have not followed this hike, even though many of us may feel they have. The result is slowdowns and shutdowns. What has driven framers’ prices up, beyond the factors listed above, is the addition of new tax burdens to existing ones. To fight black market expansion, the Rural Development Ministry has set up a food safety supervising body. The body promises to crack down on illegal players who push many producers to the edge of bankruptcy. But in order to do that, it needs some additional contributions from market players. The MHSz disagrees. It claims the sector has already paid enough to the central budget and another tax item will not likely solve the problems. Overall, meat producers are to pay the state an environmental fee, a food safety supervision fee, wages and 2% higher VAT, while a so-called disaster protection fee is also looming. “These put meat at a disadvantage with other protein-source foods like cheese, which have 18% VAT on them,” Éder explained, who fears this will push more legal players to the grey or black market. “As it appears, there are miracles,” he said. “Otherwise, how could some companies offer smoked ham for HUF 695/kg,” he asked sarcastically. (The price of livestock is HUF 360-380/kg. Ideally, half of the pig can be processed.) “We would rec-

ommend that authorities review the operation of these companies, which is remarkable even at an international level, and share their experiences with us.” For all the strain it puts on market players, enhanced supervision is needed. Last year alone, there were at least 100 severe food safety abuses.

Many of these involved production in so-called kraals, places completely unfit for food production. With the food supervision initiative, the government expects to collect about HUF 6 billion this year, Lajos Bognár, deputy state secretary of the Rural Development Ministry told the Budapest Business

Journal. To work efficiently, they would need to double this amount. The ministry sees integration to be the way out. “Small farms could stay afloat with the help of integrator contracts while state subsidies would allow big ones to develop technology and machinery,” he said. Suppliers to large chains can also expect their situation to improve, he added. The modification of the act on suppliers has started, and will probably be concluded this year. What about consumers? According to statistics of GfK Hungary, they still go for Hungarian products but due to high prices, they often end up buying the cheaper offerings. A hint for Easter ham buyers: don’t go under HUF 1,500/kg unless you want to have rapidsmoked ham injected with flavorings. ■

12 2 Business BBJ

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SpecialReport LOGISTICS MARKET PREPARES FOR DEEPER SLUMP IN 2012

Fragile logistics With the performance of the transport and logistics industries closely connected to the state of the economy, the sector has been sharply affected by the economic slowdown. BBJ GABRIELLA LOVAS

Of the major market segments, investments in transportation and storage decreased at the highest rate in 2011, by 23.3%, due to a considerable drop in investments in land and pipeline transport, air transport and the construction and renovation of road networks. “I do not see anything on the horizon that could revive the logistics sector, although we cannot know yet what the government has up its sleeve in terms of new investments or whether the Chinese connections will be fruitful or not,” said Péter Kiss, chairman of the Hungarian Association of Logistics,

Purchasing and Inventory Management (MLBKT), and also the head of supply chain management and logistics at pharmaceutical producer Mylan Hungary. Kiss is a little skeptical about potential Chinese investments saying that it is a huge mistake to think, “anything will do for the Chinese”. He pointed out that the Asian country has undergone significant developments over recent years, they now employ the most advanced technologies and they expect the highest quality services. He added that the recently announced big investments by car makers Mercedes, Audi, Opel and Knorr-Bremse, could help somewhat, but alone they are not enough to revive the sector. Kiss does not consider the grounding of national carrier Malév a major blow to the transport of goods, as this activity can easily be taken over by other providers, such as Lufthansa or KLM. Ground handling at Liszt Ferenc International Airport is not a problem either, as it is carried out by

Turkey’s Celebi, a company completely independent from Malév. On the other hand, the temporary closing

of the airport’s older Terminal 1 represents a significant drop in capacities, which will inevitably lead to a deteriora-

tion in the quality of logistics services. He thinks the terminal should be reopened as soon as possible.

In turn, the recent Nokia announcement that it was laying off 2,300 employees will “trigger an ava-

ON THE ROAD TO BETTER FORWARDING fairly quick, the postwar policies of the communist regime made development possible only to a certain extent.

Back in 1920, the subsidiaries of large foreign shipping companies operated in Hungary and this process did not change until the beginning of World War II. During the war, almost the entire infrastructure of the country was destroyed. Although rebuilding was

As with all its Eastern Bloc neighbors, the Soviets made it clear Hungary could not join the Marshall Plan, and thus it was cut off from its resources. Still, the communist-controlled government of the time set out to improve things in 1948 – mainly in line with Soviet requirements, without regard for resources and capabilities. The nation’s infrastructure, services, and technologies were not developed to benefit the people; instead, they were developed to support the needs of the state, Captain Imre Eszenyi, an instructor at the Logistics Department of at the former Miklós

Zrinyi National Defense University, wrote in a study prior to Hungary’s NATO accession. The requirements of the Soviet Union, based mainly on military and not economic considerations, hindered the development of Hungary’s infrastructure in many ways. Between the1950s and the 1970s, plans by the Hungarian government to build new river bridges over rivers were vetoed by Moscow. It was only in the 1980s that Hungary was finally able to build a new bridge over the Danube. Similarly, the interests of the Soviet defense apparatus overwrote economic priorities in railway transport. Moscow did not seem to mind that it had a different railway gauge from Buda-

pest, rationalizing that this would create largescale mobility problems for NATO if it had to operate in Hungary. (The width between the rails in Hungary, like almost everywhere else in Europe, was 1,435 millimeters, but it was 1,520 millimeters in the Soviet Union.) Neither did the Soviets mind the cost of changing the wheels

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lanche”, as it has more farreaching consequences than just the restructuring of Nokia’s operations, Kiss said. The Komárom Industrial Park, where both Nokia and Mylan are located, is largely based on Nokia with the exception of only a few businesses. “The park now sees its buildings becoming empty as the companies here are losing business,” he said,

adding that other firms in the region will be able to take on only so many of the employees.

DISAPPEARING WAREHOUSE DEVELOPMENT There is also an oversupply in warehouse capacity, which has led to continuously decreasing rental fees even in the premium category, Kiss said. Another unfavorable trend is that contract times have shortened from the previously common five to ten years to only one to three years.

According to property advisor Eston, speculative warehouse developments have disappeared from the

market due to financial difficulties and decreasing tenant activity caused by uncertain economic circumstances and low domestic consumption. In such a business environment, logistics market players, manufacturers, distributors and suppliers all aim to rationalize their production and property use. The volume of modern industrial and logistics property stock in Budapest

and its agglomeration stood at 1,807,207sqm at the end of 2011, of which 1.637 million sqm is within logistics

parks, while the registered stock of city-logistics takes up 170,000sqm. On the upside, the need for outsourcing logistics activity even in smaller areas is likely to be more common, which will increase the demand for the warehouses of professional suppliers, Eston said. In addition, companies involved in international distribution may restructure their real estate use strategy on a regional level, meaning Hungary could successfully compete for new regional distribution centers due to its favorable geographic location and low rental fees. “Concerning the quality of logistics services, we are very far from the top countries, such as Holland,” Kiss said. Only the best Hungarian logistics parks are able to provide truly sophisticated services, but they are rare and not always in the best possible locations, he added. TRANSPORT PERFORMANCES INDICATE RECESSION The 2011 freight data published by the Central Statistical Office (KSH) highlight concerns over macroeconomic stagnation. Although there was a small increase in transport performances measured in freight tonne kilometers (ftk) in 2011, it was because international goods transport was able to offset a drop in domestic road performances. International transport rose by 5% in volume and 3% in ftk terms, while domestic transport declined by 11% in volume and 6% in ftk terms.

In 2011, the volume of goods transported decreased by 6% to 263 million tonnes. By modes of transport, rail transport and pipeline transport increased by a respective 2% and 7%, while road transport dropped by 8% and inland waterway transport by 28%. Road transport accounted for 70% of total volume and 89% of domestic transport volume, which the KSH attributes to the primary international character of rail, inland water, pipeline and air transport. Transport performance saw a 1% increase to 51 billion ftk. Rail and road freight transport both increased by 2%, while inland waterway and pipeline transport fell by 23% and 1%, respectively. Within the total, road transport accounted for 67%, followed by rail transport (18%), pipeline transport (11%) and inland water transport (4%). Domestic road goods transport decreased by 12% in volume, while a 16% increase was seen in international transport. KSH attributes this to a change in the road vehicle fleet, as road vehicles with a carrying capacity of more than 3.5 tonnes tend to take part in long-distance international goods transport. An alarming trend is the 19% decrease seen in the volume of goods transported by individual entrepreneurs, while corporations saw only a 6% decrease. The decline in the volume of domestic goods transport resulted

on every railcar moving across the border if it hampered the advance of NATO forces.

warding authorization in 1983. All major transportation and forwarding companies (Hungarocamion, Malév, Mahart, Volán) received a limited license for international shipping.

The development of road freight transport in Hungary began between the world wars. In 1948, as a result of a state decree, forwarding activities became a state monopoly. During the nationalization of foreign trade, large state companies were established. These specialized in only one type of goods to make sure there was no competition between them. The same year, the first Hungarian General Forwarding Company Limited (Masped) and the National Freight Forwarding Company (Tefu N.V.) were set up. All foreign trade activities required the use of the services of Masped. This situation eased in 1958 when trading companies were allowed to participate in freight forwarding as long as this did not involve the exchange of foreign currency. In terms of volume, Comecon coun-

primarily from a sustained decrease in construction output, which last year’s favorable agricultural output was unable to offset, according to the KSH. The volume of goods within the total that crossed the border was up to 18% from 14% in 2010. The performance of road goods transport measured in ftk was up by 2%. This increase resulted from a 7% growth in international transport and a 6% decrease in domestic transport. The KSH points out that fewer goods were moved for a longer distance both in international and domestic transport. The average length of haul increased, while the proportion of empty running remained essentially the same at 20-21% in the case of enterprises and more than 31% in the case of individual entrepreneurs. Rail goods transport increased by 2% both in volume and in ftk terms in 2011. Inland waterway goods transport decreased by 28% in volume and by 23% in ftk, primarily as a result of a significant decline in export volume. In 2011, the very low water level of the Danube was also responsible for the unfavorable change in inland waterway transport. Ships under Hungarian flag accounted for only 7% of both the total goods transported and the total performance. In air traffic at Budapest-Ferenc Liszt International Airport, goods traffic was up 6% to 69,700 tonnes. ■

tries accounted for approximately two-thirds of Hungarian foreign trade.

Csepel and Skoda vehicles. (The Csepels were later replaced for being inefficient.)

In the late ‘60s, ad-hoc permission could be obtained to make shipments in-house. It was due to this easement that Hungarocamion received a permit to ship package freight and started operations, leading to collective forwarding. The country’s first carrier that shipped abroad, it was established in 1966. Hungarocamion’s fleet consisted of 270 Mercedes, Saurer,

Strict regulations on dealing with international shipment gradually relaxed. In 1972, the Gyor-Sopron-Ebenfurt Company (GySEV), a railway firm, was granted permission to forward containers on its own line, which was then extended abroad. Raabersped was given permission to transport traditional packaged goods in the late 1970s and received full for-

In 1989, five companies (Masped, Raabersped, Voláncamion, Hungaroring Cargo and Technosped) established the Hungarian Freight Forwarders’ Association, later called the Association of Hungarian Forwarding and Logistics Service Providers (AHFLSP). The association has nearly 100 Hungarian companies registered. Its main objective is to represent the professional interests of its members on operating conditions and directions for development in both forwarding and carriage. The Freight Forwarder Association for Small- and Medium-Sized Enterprises (SZKKÉSZ), established in 1997, was created with the aim of representing the interests of forwarders in legal disputes over regulation, or any conflict of interest. ZsV

14 2 BusinessSpecialReport BBJ

WWW.BBJ.HU

Budapest Business Journal | Apr 10 – Apr 19

Hectic demand: the ultimate challenge Cost savings, that magical pair of words, have started to lose their appeal in logistics software implementation, giving way to highly specialized services and so-called “complex simplicity”. BBJ ANIKÓ JÓRI-MOLNÁR

Enterprise resource planning, or ERP, is the most obvious starting point for implementing a specialized program for management of the supply chain. No wonder that all the major vendors offer complementary modules able to handle this. SAP’s supply chain management (SCM) module offers not just planning and execution software to manage enterprise operations, but also visibility and collaboration technology to extend those operations beyond the boundaries of the company. Actually, SAP not only sells its solutions in Hungary, but also develops them here. SAP Labs opened here in 2005 with 70 employees to work on the logistics module with local experts. Currently, 250 people work at the Labs, also developing software for mobile devices, although logistics remains the main focus. Many international companies, both medium- and large-sized, use the SCM module, from Bombardier through Coca-Cola to Ferrero. The development is based on market demand: one of the greatest challenges for supply chains today is coping

with ever-changing production volumes. Before the crisis, companies were used to coordinating larger volumes of goods within the chain with a steady planning process. “Now the planning and execution levels have changed to meet instant demand and software development has to measure up to that,” said Ádám Dudits, managing director of SAP Labs Hungary. That increased complexity, on the other hand, motivates companies to create simpler user interfaces. The applications developed in Hungary work on-site, but SAP is responsible for support through its global support centers, one of which also operates in Hungary, serving clients in German and Hungarian languages. FROM GENERAL TO COMPLEX Microsoft takes its share of the logistics market through Dynamics AX, and many of its partners offer specific versions to meet the needs of the various sectors. XAPT, which now provides services to well-known players of the stationery industry such as Ápisz, ICO and Cardex, as well as to printing houses, started out with a complex approach to the broad logistics demands of clients. “Then the claims of individual projects were added to the general concept and the solution became more and more complex,” XAPT expert Imre Sasfi told the Budapest Business Journal. The latest trends point toward fully automated task management and productivity tools for measuring both the logistics system and employee performance. The optimal use of available resources is key in productiv-

ity and a good supply chain management tool can help manage the execution of tasks according to their priorities. “To really improve and not just measure processes, the controlling perspective should be expanded to logistics and develop the system according to its indices,” Sasfi explained. The system should also ensure the availability of such data, both factual and planned, in the right format. Lately, the integration of mobile devices has become a must for developers, using more platforms and approaches. On XAPT’s part, this means the options for online, realtime integration or MobiAccess, which makes ERP data available offline as well. In the first case, PDAs communicate every single transaction by retrieving and modifying data from the central database. The second solution is an expanded functionality of the whole ERP system to the mobile devices offline and online as well, with continuous synchronization. “This way salespeople can register client data and actual orders on site while checking current stocks and booking the orders at the same time through a mobile network,” said Sasfi. The integration of mobile devices offers the market a natural expansion, as remotely accessible support of the business processes can be provided in any field. Nonetheless, traditional demand for cost savings is still on client wish lists. It can be seen in several areas: less need for human workforce in warehouses as a result of automatization, less delay resulting from the proper timing of processes, less failure in product identification and therefore fewer losses from shipping

EUROPOLIS PARK BUDAPEST M1 ANDRÁSSY PALACE

errors. Current practices also show a dramatically decreased bias discovered during inventory in both volume and value, according to Sasfi. SPECIAL EXPERTISE PAYS OFF Targeting a niche market has proven to be a successful strategy for Hungarian companies to compete with the multinationals in this field. SZEGED Software, founded in 1989, has been concentrating on pharmaceutical wholesalers and developing specific logistics software for the sector. Two of the three major Hungarian pharmaceutical wholesalers have been using PharmaLog in their warehouses for a long time. SZEGED Software has just finished updating the software for Teva’s TLK warehouse to the latest version, a two-year project that included the development of a graphical user interface based on new RIA technology using a relational SQL database and the inclusion of mobile devices that run some of the programs. The inclusion of mobiles is not generally widespread but can be demanded by larger companies that have higher turnover and typically need a oneoff system that can fit in very special items of development. SZEGED Software is also developing solutions for smaller companies, however. “Instead of uniqueness, they consider the safety of their data and operations, good references and the level of support when choosing a supplier,” managing director István Kovács told the BBJ. So they usually take advantage of hosting services with all the technical support, and pay a fee based on the number of transactions.

However, Kovács also noted that the market is quite saturated, with new possibilities limited to a few newly set up pharma representative offices and drug agent importers, a situation in which expertise and customer services gain extra value. The managing director mentioned as an example a client who, when adding new sites to its operation, announced a new tender to select the best supplier. SZEGED Software lost the tender initially, but was later called back because the new supplier was unable to properly launch its service at the expected level. And while pharma was a good market from a liquidity perspective until the most recent times, with companies willing to pay and on time, the crisis has now reached this sector as well, and even the largest clients are cutting back on their spending. “We had tried to develop for other sectors as well, but it turned out that they didn’t need the level of refinement that pharmaceutical companies do, with all their compliance to strict regulations. So we decided to return to the core business and expand geographically instead,” Kovács explained. SZEGED Software opened a representative office in Romania in 2007, serving one wholesaler and open to serve new clients. HANSA-KONTAKT: A CASE STUDY Hansa-Kontakt Kft, founded in 1995, works in the retail sector, supplying food and chemical products to four southeastern counties and the south of Pest County, and is also one of the founders of the CBA and Partner chains. The firm now has about HUF 30 billion in annual turnover and 390

employees. It is also a top logistics service partner of Dreher Breweries. The company moved to a new, 28,000sqm logistics base in the fall of 2009 in the Szeged Industrial and Logistics Center. Hansa-Kontakt wanted to end the risks associated with an individually developed system in 2007, when it decided to implement a new ERP. At that time, it was also planning to close sites in Szeged, Kecskemét, Makó and Csongrád, to build a new logistics base and to further expand its network of partners. Therefore it was looking for a solution to increase the efficiency of operations and also flawlessly manage changes resulting from the restructuring. The company decided to implement XAPT’s intelligent Supply Chain Manager (iSCM) based on Microsoft Dynamics AX. After closing down the sites, turnover increased by 50%, but the company was able to manage this with the same number of employees and a minimal number of mistakes in the withdrawal and shipping of goods. The number of warehouse employees can be flexibly adjusted to the changes in turnover of seasonal products. The training of new workers takes a single hour, compared to days previously, thanks to PDAs with barcode scanner capabilities. The performance of employees can be precisely measured, the organization of shipping is more efficient and trucks are better loaded. The system provides detailed realtime data for purchasing and planning, as well as a direct connection to special partners’ ERP. It also supports continuous innovation and expansion cost-efficiently. ■

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.

2 BusinessSpecialReport 15

BBJ

WWW.BBJ.HU

Budapest Business Journal | Apr 10 – Apr 19

Become CEE’s number one in logistics For Hungary to become the number one logistics hub in the region has been a dream and oft-stressed aim of governments here for decades. By moving from a transit country only to rewrapping and storing products at Hungary’s logistics centers, the sector could become the economic breakout point for the country. BBJ ÁGNES VINKOVITS

It is not only the country’s great geographical situation that makes it a reasonable aim but some changes on Continental markets are also favorable. The expansion of the European Union in 2004, boosted with the accession of Romania and Bulgaria in 2007, rearranged the European logistics market. These newcomers increased the

EU’s territory by 33%, which, of course, did not mean an increase in solvent demand but still shifted Europe’s distribution trunk lines to the east. The lines to reach non-EU markets such as Ukraine or Russia cross Hungary. In the northeastern town of Záhony, which is not only at the border of Hungary but also of the EU, the huge Záhony-Port logistics park connects East and West. Lying on the so-called corridor 5 connecting Trieste-Budapest-Kiev-MoscowHorgors, Záhony-Port mostly focuses on the transshipment of broad gauge wagons arriving from the CIS countries into normal gauge wagons. Due to European Unionfinanced developments, the park it is able to manipulate 10-15 tons of goods a year. The Intermodial Logistics Center in Budapest (BILK) can also be thankful for its location and good accessibility. The park in south Budapest has its own connection to the M0 orbital motorway and to the railways, while it is also easy to reach from the water and, due to the close proximity of

Budapest Ferenc Liszt International Airport, also by air. The approximately HUF 25 billion development of BILK ten years ago was partly financed by the EU. The park, one of the CEE’s largest, is likely to perform even better if the V0 railway that would skirt Budapest on the south is finally established. The development plan contract for the orbital rail link was signed by Hungarian railways MÁV, logistics center association MLSzKSz and a V0 consortium including FŐMTERV Zrt and ÁKMI Kft, in December 2011. The HUF 1.2 billion development, which has not been scheduled yet, might compensate somewhat for the cancellation of the huge cargo center development at Ferenc Liszt Airport, recently mothballed by the Budapest airport operator after the collapse of national carrier Malév forced it to overhaul its plans. While Záhony-Port and BILK have been performing well even at times of crisis, due to their geographical situation and capacity, smaller logistics centers that rely on a few partners or focus on the auto indus-

try or electronics, sectors more exposed to the crisis, have had to face hard years. NOT A LOSING GAME “Hungary is basically able to become the distributor of the region,” said Márton Lányi, the Regional Overland Operations Manager at Germany-based logistics giant Kühne+Nagel, adding that Vienna and Bratislava are Budapest’s biggest competitors in this field. “Vienna is even more appealing, due to its huge carriage capacity and the availability of well-trained work force that also speaks foreign languages,” he said. As such, a coherent state strategy that covers all issues from infrastructural developments to the workforce education could do a lot for Hungary to become the regional distributor. According to Attila Chikán, a former economy minister and currently co-president of the Hungarian Association of Logistics, Purchasing and Inventory Management (HALPIM), current trends in logistics the econ-

omy favor the country, which has untapped potentials in the field, but the lack of a macroeconomic action plan makes it hard to take advantage of these. The need of some improvement and a strategy is also suggested by the World Bank’s global Logistics Performance Index (LPI), which in 2011 graded Hungary three (or 2.99 to be precise) in a 1-to-5 rating scale. The country ranked 52nd on a list of 155, in the same neighborhood as countries like Panama, Mexico, Vietnam and Greece. Developments should start with the railway network. In Hungary, a sizable proportion of the rails are in dire need of renovation. The network is in so poor a state that it is nearly impossible to prepare a timetable due to delays caused by technical failures. However, 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 consideration, even the 200 km/year of renovations planned by the government between now and 2020 no longer sounds bold. As rail transport is far less harmful to the environment and, as a result, the EU enthusiastically supports such developments, the introduction of distance-based road fees would sound reasonable to market players. Especially since it is expected to bring an additional HUF 60 billion in revenues as opposed to the annual HUF 40 billion earnings from toll fees. The Hungarian Road Haulers Association (MKFE) is also keen to see the new system introduced – the current date set is January 2014 – and used for the right reasons. Provided these revenues were used to cover developments in the sector, rather than for filling budgetary holes elsewhere, Hungary could get much closer of its fond dream of becoming a leader in logistics. ■

[ PROMOTIONAL FEATURE ]

Lurdy Ofﬁce Centre announces new promotion in the ofﬁce market It is not easy to stay afloat in today’s office market. Unless it offers the benefits of exceptional location, staying afloat – or simply survival – in the market is only possible if an office building is able to provide special, unique features which demonstrate that it is better than the rest. There is no single right approach. Presenting an eco-friendly option, a “green” office building with minimal emissions and an intelligent building management system may be one way to gain an advantage. Even so, the return-on-investment remains a question. Will it even be possible to recover the costs of extra investments in what is overwhelmingly a renters’ market? Some market players believe the potential solution lies in offering high-tech IT services; these, however, are no longer really considered extras even for “category B” office buildings, and are essentially the norm for “category A” buildings. There is increasing demand in the world of office services for so-called shared office solutions or office hotels. These options allow cost-sensitive small- and mediumsized enterprises to access office services – if necessary, even for just a couple of hours at a time – with flexible conditions.

The recently renovated facilities offer tenants world-class IT solutions in a shopping center setting, allowing even IT companies to feel at home. The building is monitored around the clock and is open 24/7, houses a server hotel and offers flexible layout options making it suitable also for those interested in shared office solutions. What else does Lurdy offer? Convenient accessibility, a recognized name and a shopping center setting home to countless convenience services, from unlimited free parking to drycleaning services, shopping and entertainment options – not to mention a post office, banks and other administrative outlets, including its own carwash.

The Lurdy Office Centre, located in the Lurdy-Ház, offers a combination of these solutions.

In a new promotion, Lurdy Office Centre is offering all new tenants use of its offices free of charge if the

tenant agrees to build and furnish its own space. The Lurdy Office Centre slogan: Build your dream office, and enjoy it free of charge for one year! Lurdy Office Centre’s efforts appear to be rewarded by what is otherwise a highly saturated lessors’ market. Last autumn, OBI moved its entire management to the Lurdy

Office Centre, occupying nearly 2,000 square meters. Early this year, AEGON Magyarország Általános Biztosító Zrt. signed a long-term lease agreement with Lurdy Ház. Under the agreement, the insurance company will establish its new Hungarian headquarters at the Lurdy Office Centre in three phases, occupying thousands of square metres of space.

16 2 BusinessSpecialReport BBJ

WWW.BBJ.HU

Budapest Business Journal | Apr 10 – Apr 19

Logistics parks Ranked by net warehouse space used for logistics warehousing

OPERATING COMPANY NAME, ADDRESS, PHONE & FAX NO., WEBSITE

WAREHOUSE LOGISTICS

RAIL LOGISTICS

ACCESSIBLE TO TRUCKS

ACCESSIBLE TO VIA WATER

DOMESTIC WAREHOUSING

BUILDING MANAGEMENT

ÁTI DEPO KÖZRAKTÁROZÁSI ZRT www.atidepo.hu

ÁTI DEPO Közraktározási Zrt

153,000

–

GOODMAN ÜLLŐ AIRPORT LOGISZTIKAI KÖZPONT www.goodman.com/hu

Goodman Hungary Kft

150,000

–

Prologis 1095 Budapest, Lechner Ödön fasor 7. (1) 577-7700, (1) 577-7701 www.prologis.com

150,000

–

PROLOGIS PARK BUDAPESTGYÁL www.prologis.hu 3

PROLOGIS PARK BUDAPESTHARBOR www.prologis.com 4

PROLOGIS PARK BUDAPESTSZIGET www.prologis.com 5

MAHART CONTAINER CENTER KFT www.containercenter.hu

EUROPOLIS PARK BUDAPEST M1 www.caimmo.com

EAST GATE BUSINESS PARK www.egpb.hu

EUROPOLIS PARK BUDAPEST AEROZONE www.caimmo.com

Prologis 1095 Budapest, Lechner Ödön fasor 7. (1) 577-7700, (1) 577-7701 www.prologis.com

132,000

–

CUSTOMS SERVICE

COMPANY WEBSITE

NET WAREHOUSE SPACE USED FOR LOGISTICS WAREHOUSING (SQM)

OTHER

MAIN CLIENTS IN 2011

DISTRIBUTION

RANK

SERVICES

YEAR ESTABLISHED

OWNERSHIP (%): HUNGARIAN NONHUNGARIAN

TOP LOCAL EXECUTIVE CFO MARKETING DIRECTOR

ADDRESS PHONE FAX EMAIL

–

1996

– (100)

Tádé Alföldy Mária F. Szabóné Györgyi Szabó Kovácsné

1136 Budapest, Pannónia utca 11. (1) 305-2200 (1) 305-2234 mail@atidepo.hu

–

Rossmann Magyarország Kft, Oriflame Hungary Kft

2007

» »

Kristof Verstraeten – –

2225 Üllő, M4 exit (1) 336-2270 (1) 336-2289 info-hu@goodman.com

–

BTS

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

2008

– ProLogis B.V. (100), Hollandia

László Kemenes Peter WhiskerdWegorzewski Marta Tesiorowska

2360 Gyál, Ipari Park, Helyrajzi szám: 7. (1) 577-7700 (1) 577-7701 info-hu@prologis.com

–

Fiege, Unilever, Ringier, Sanofi Aventis, Lekkerland, Anda Present

2008

– ProLogis B.V. (100), Hollandia

László Kemenes Peter WhiskerdWegorzewski Marta Tesiorowska

1225 Budapest, Campona utca 1. (1) 577-7700 (1) 577-7701 info–hu@prologis.com

2008

– ProLogis B.V. (100), Hollandia

László Kemenes Peter WhiskerdWegorzewski Marta Tesiorowska

2310 Budapest, Leshegy utca 30. (1) 577-7700 (1) 577-7701 info-hu@prologis.com

–

Prologis 1095 Budapest, Lechner Ödön fasor 7. (1) 577-7700, (1) 577-7701 www.prologis.com

120,000

–

NCR, Quadrant, Trans-Sped, Schneider-Electric, DHL, ADR Logistics

81,000

–

Container storage

MAERSK, MSC, Metrans, PSZ, DAMCO

1998

MULTICONT Terminal Kft (50), WINTCO Kft (50) –

Márta Gajdán Anita Györkefalvi –

1211 Budapest, Weiss Manfréd út 5–7. (1) 278-3231 (1) 277-0167 mail@containercenter.hu

CA Immo Hungary Kft 1074 Budapest, Rákóczi út 70-72. (1) 501-2800 www.caimmo.hu

69,000

–

Kühne+Nagel, DHL, Transdanubia

2004

– (100)

Ede Gulyás – –

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

–

Restaurant, Non stop security and reception services, sprinkler

GE Hungary, Philip Morris Magyarország, Phoenix Pharma, Lear Corporation, ABB, Nefab Packaging Hungary

2006

(100) –

György Mucsi – –

2151 Fót, Akácos út 36–38. (1) 451-4760 (1) 451-4289 egpb@wing.hu

2004

– (100)

Ede Gulyás – –

2220 Vecsés, Lőrinci út 59–61. (1) 501-2800 (1) 501-2801 office@caimmo.hu

Wing Zrt 1095 Budapest, Máriássy utca 7. (1) 451-4760, (1) 451-4762 www.wing.hu

65,000

–

CA Immo Hungary Kft 1074 Budapest, Rákóczi út 70-72. (1) 501-2800 www.caimmo.hu

65,000

–

Csemege-Match, BMW, DHL, UPS, Fedex

GOODMAN GYÁLI LOGISZTIKAI KÖZPONT www.goodman.com/hu

Goodman Hungary Kft

44,000

–

HOPI Hungária Kft

2007

» »

Kristof Verstraeten – –

2360 Gyál, M5 exit (1) 336-2270 (1) 336-2289 info-hu@goodman.com

MASPED LOGISTICS KFT www.logisztika.masped.hu

MASPED Logisztika Kft

40,000

–

Excise tax investory services

2001

» »

» » »

1211 Budapest, Szikratávíró út 17–21. (1) 278-0951 (1) 278-0807 logisztika@masped.hu

2010

– ProLogis B.V. (100), Hollandia

László Kemenes Peter WhiskerdWegorzewski Marta Tesiorowska

2440 Százhalombatta, Iparos utca 4. (1) 577-7700 (1) 577-7701 info-hu@prologis.com

PROLOGIS PARK BUDAPESTBATTA www.prologis.com 12

Prologis 1095 Budapest, Lechner Ödön fasor 7. (1) 577-7700, (1) 577-7701 www.prologis.com

38,600

–

2 BusinessTrends 17

BBJ

WWW.BBJ.HU

Budapest Business Journal | Apr 10 – Apr 19

PROLOGIS PARK HEGYESHALOM www.prologis.com 15

CITY POINT 9 VÁROSI LOGISZTIKAI KÖZPONT www.citypoint.hu 16

AIRPORT CITY LOGISTIC PARK www.airportcity.hu 17

BUILDING MANAGEMENT

DISTRIBUTION

CUSTOMS SERVICE

DÉLPESTI ÜZLETI PARK www.wing.hu

DOMESTIC WAREHOUSING

ACCESSIBLE TO VIA WATER

GOODMAN KECSKEMÉTI LOGISZTIKAI KÖZPONT www.goodman.com/hu

ACCESSIBLE TO TRUCKS

OPERATING COMPANY NAME, ADDRESS, PHONE & FAX NO., WEBSITE

RAIL LOGISTICS

COMPANY WEBSITE

NET WAREHOUSE SPACE USED FOR LOGISTICS WAREHOUSING (SQM)

WAREHOUSE LOGISTICS

RANK

SERVICES

Goodman Hungary Kft

33,000

–

Wing Zrt 1095 Budapest, Máriássy utca 7. (1) 451-4760, (1)451-4762 www.wing.hu

30,000

–

MAIN CLIENTS IN 2011

YEAR ESTABLISHED

OWNERSHIP (%): HUNGARIAN NONHUNGARIAN

TOP LOCAL EXECUTIVE CFO MARKETING DIRECTOR

ADDRESS PHONE FAX EMAIL

–

Bertrans Logisztikai Zrt, Mecanova Fémlemezgyártó Kft

2007

» »

Kristof Verstraeten – –

6000 Kecskemét, Fuvar utca 1. (1) 336-2270 (1) 336-2289 info-hu@goodman.com

–

BÉFLEX, UPC, Bunge, Arburg, Solvent

2004

(100) –

György Mucsi – –

1097 Budapest, Táblás utca 36. (1) 451-4760 (1) 451-4289 ipari@wing.hu

2007

– ProLogis B.V. (100), Hollandia

László Kemenes Peter WhiskerdWegorzewski Marta Tesiorowska

9222 Hegyeshalom, Helyrajzi szám: 1073/1 (1) 577-7700 (1) 577-7701 info-hu@prologis.com

OTHER

Prologis 1095 Budapest, Lechner Ödön fasor 7. (1) 577-7700, (1) 577-7701 www.prologis.com

24,000

–

BTS

ETL Hungary, FIEGE

ConvergenCE 1062 Budapest, Teréz krt. 55–57. A/5 (1) 225-0912, (1) 375-0445 www.convergen-ce.com

21,500

–

Sprinter, Studio Moderna, Chio, JTI, OBI, Imperial Tobacco, Equinoxe

2005

– Europa Fund II (100)

Attila Baksa-Soós – –

1097 Budapest, Gubacsi út 24. (1) 225-0912 (1) 375-0445 office@convergen-ce.com

Ablon Ingatlanfejlesztő Kft 1132 Budapest, Váci út 30. (1) 225-6600, (1) 225-6601 www.ablon-group.com

20,000

–

Free truck park

Panalpina, Trilak, Kühne+Nagel Kft, UPS, Ceva Logistics, FedEx, Agility, Jas Cargoways

2008

– ABLON Group (100)

Adrienn Lovro – –

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

18 2 BusinessPartnerWatch BBJ

WWW.BBJ.HU

Budapest Business Journal | Apr 10 – Apr 19

Logistics service providers Ranked by total net revenue

11,000

300

2,000

OTHER

WABERER'S LOGISTICS KFT www.wabererslogisztika.hu

LIEGL & DACHSER KFT www.liegl-dachser.hu

BI-KA LOGISTIC KFT www.bi-ka.hu

TRANSPOINT INTERNATIONAL KFT (HU) www.vrtranspoint.com

2,681

25,000

–

ÁTI DEPO WAREHOUSING ZRT www.atidepo.hu

1,860

153,000

–

9,181

9,001

3,483

9,181

3,483

122,000

30,500

15,000

–

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

Municipality of Szolnok (100) –

1946/1991

László Lehel – –

1113 Budapest, Bocskai út 77–79. (1) 317-4052 (1) 209-2133 office@mogurt.hu

1990

– Family business (100)

Thomas Schauer – Annamária Duzmath

2330 Dunaharaszti, Raktár utca 2. (24) 506-800 (24) 506-805 gw.hungary@ gw-world.com

1993

Rail Cargo Hungária Zrt (85), Hungarokombi Kft (15) –

István Fullér László Vass –

1239 Budapest, Európa utca 4. (1) 289-6000 (1) 289-6048 bilkkombi@ bilkkombi.hu

2006

– Euroministorage Investments (Cyprus) Ltd. (100)

Danu M. Temelie – –

1097 Budapest, Gyáli út 50. (1) 333-8888 (1) 333-8890 info@ euroministorage.com

1993

State (100) –

Gergely Domonkos Horváth, László Geszti – –

1138 Budapest, Dunavirág utca 2–6. (1) 333-7777 (1) 321-3210 logisztika@posta.hu

Imre Kovács Arnold Schiefer –

1133 Budapest, Váci út 92. (1) 512-7300 (1) 512-7799 cargo@railcargo.hu

László Káldor, Árpád Vásárhelyi – Zsuzsanna Papp

1239 Budapest, Európa utca 5. (1) 278-7878 (1) 278-7888 info@schenker.hu

–

MOGÜRT TRADING PLC www.mogurt.hu

200

10,000

–

GEBRÜDER WEISS SZÁLLÍTMÁNYOZÁSI ÉS LOGISZTIKAI KFT www.gw-world.hu

–

Hewlett Packard, Schneider Electric, Philips, Grundfos, Robert Bosch, Legrand

Eurogate Intermodal, Hungaria Intermodal, MSC Magyarország, HUPAC

EURO MINI STORAGE NR HUNGÁRIA KFT www.euroministorage.com

MAGYAR POSTA ZRT www.mpl.hu

RAIL CARGO NR HUNGARIA ZRT www.railcargo.hu

SCHENKER KFT www.dbschenker.com

7,500

–

2890 Tata, Barina utca 1. (34) 586-600 (34) 309-252 hungary@ vrtranspoint.com

1999

Sándor Bátki Zsuzsanna Nagy Gergely Bognár

5000 Szolnok, Jókai utca 3. (56) 340-797, (56) 500-100 (56) 340-280, (56) 344-424 info@ ipariparkszolnok.hu

5000 Szolnok, Városmajor út 23. (56) 524-050 (56) 524-040 info@bi-ka.hu

Imre Andrási Edit Kardosné Faragó Viktor Kovács

BILK KOMBITERMINÁL ZRT NR www.bilkkombi.hu

György Karmazin Csaba Frigyes Anna Barbara Bagi

1136 Budapest, Pannónia utca 11. (1) 305-2200 (1) 305-2234 mail@atidepo.hu

–

1991

György Karmazin (100) –

Tádé Alföldy Mária Szabóné F. Györgyi Szabó Kovácsné

2085 Pilisvörösvár, Ipartelep utca 1. (26) 532-000 (26) 532-005 customer.pilisvorosvar@ dachser.com

» »

–

Zsolt Bognár Judit Sövényi Kádár Roland Pászti

1996

1999

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

1239 Budapest, Európa utca 6. (1) 421-8505 (1) 421-8504 info@ wabererslogisztika.hu

Zsolt Barna – –

1991

Waberer (100) –

2008

1239 Budapest, Nagykőrösi út 351. (1) 347-2000 (1) 347-2020 delta@deltasped.hu

14,000

–

Gábor Kiss Ferenc Szili László Nagy

1989

– Waberers Holding Zrt (100)

– Transpoint International (FI) OY (100)

268

ADDRESS PHONE FAX EMAIL

Grundfos Magyarország, FCI Connectors Hungary, AGC Glass Hungary, Coloplast Hungary, SanminaSCI Magyarország, Nokia Komárom

SZOLNOK INDUSTRIAL PARK www.ipariparkszolnok.hu

47,500

TOP LOCAL EXECUTIVE CFO MARKETING DIRECTOR

OWNERSHIP (%): HUNGARIAN NONHUNGARIAN

EAGLE OTTAWA Hungary Kft, BSM Magyarország Kft, STADLER Szolnok, Vasúti Járműgyártó Kft, F Segura Hungaria Kft Log. központ, Rail Cargo Hungaria Zrt, Rail Service Hungaria Kft, Far East Land Bridge Ltd.

YEAR ESTABLISHED

OTHER

MAIN TENANTS IN 2011

DISTRIBUTION

TRANSPORTATION

DUTIABLE GOODS

WAREHOUSING SERVICES

DOMESTIC GOODS

LTL

FTL

CARGO CONSOLIDATION

DOMESTIC

FREIGHT FORWARDING SERVICES

INTERNATIONAL

RAILWAY

DELTA SPED KFT[1] www.deltasped.hu

NET REVENUE FROM LOGISTICS SERVICES (HUF MLN) IN 2011

DISTRIBUTION

COMPANY WEBSITE

TOTAL NET REVENUE (HUF MLN) 2011

NET WAREHOUSE SPACE USED FOR LOGISTICS WAREHOUSING (SQM)

WAREHOUSING

RANK

LOGISTICS SERVICES

–

Individuals (99.80)

–

2005

– Rail Cargo Austria AG (99.90)

1999

DB Hungaria Holding Kft (100) –

–

MOL Nyrt, Audi Hungaria Motor Kft, Borsodchem Zrt, ISD Dunaferr Zrt, Magyar Suzuki Zrt, Mátrai Erőmű Zrt

–

Automotiv, FMCG, electronic, chemical, wood and cereal industry

NOTES: [1] Delta Sped Szállítmányozási és Szolgáltató Kft - along with three other companies in the group - was merged with Waberer's International Zrt (the legal successor of Waberer's Holding) on March 1, 2012.

»= would not disclose, NR = not ranked, NA = not applicable

This list was compiled from responses to questionnaires received by April 04 , 2012 and publicly available data. To the best of the Budapest Business Journal’s knowledge, the information is accurate as of press 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

2 BusinessTrends 19

BBJ

WWW.BBJ.HU

Budapest Business Journal | Apr 10 – Apr 19

PMI up a tick

Business replanning

Logistics salaries

Showing a slight expansion

Logistics firms prepared for another recession.

Underpaid logistics professionals

50.5

After four months of declines, Hungary’s seasonally adjusted Purchasing Managers Index (PMI) rose to 50.5 points in February from 49.8 in January, just over the 50-point threshold and therefore corresponding to an expansion, but still below the long-term February average of 52 points. The index, published by the Hungarian Association of Logistics, Purchasing and Inventory Management (Halpim), was steadily above 50 points between July 2010 and July 2011. Among the sub-indices that comprise the PMI, the delivery time index value has now been below 50 points for an unprecedented 27 months. The delivery time itself increased compared to January, while this year’s is the second lowest February value since 1995. The new orders index also showed a decline for the fourth time in the last five months, comparable to period between April and August 2009. The production volume index was higher compared to January, for the first time after three months of contraction. However, the current value is still the sixth lowest February value in the last 15 years. The purchased stocks index started to rise and is above the average of the February values of the last 14 years, but is the ninth highest only. In January, the sub-index showed a contraction. In October, employment declined in the processing industry, with the trend continuing in November and December. In January, however, the value of In February 2011, the value of the employment index the index was 57 points. The rose above 50 points and processing industry had been stayed there in February. A showing an expansion since decline in employment for July 2010 and the volume of this more than three months growth had been permanently last occurred in September high since November 2010. The value of the PMI was higher, at and November of 2009. 58.2 points, in April 2007. Regarding previous February values, this year’s is the highest since 1995.

AJM

Purchasing Manager Index, Purchasing Manager Index, January-March 2011 January-March 2012 JANUARY

Source: HALPIM

16%

WAS THE PMI IN FEBRUARY 2012

63.5%