Budapest Business Journal 21/05

BBJ WOMEN ON TOP 5.25%

VOL. 21. NUMBER 06 MARCH 08, 2013 – MARCH 21, 2013

Budapest Business Journal

HUF 1,250 | €5 | $6 | £3.5

IS THE NEW MNB BASE RATE, LAST SEEN IN APRIL 2010

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

SPECIAL REPORT

OFFICE MARKET CHUGGING ALONG STEADILY IN SPITE OF PERSISTING 〉14-20 HARD TIMES

21

Hungary’s rank on the Women’s Economic Opportunity Index of 128 countries surveyed – almost on par with Luxembourg.

Happy International Women’s Day! PAGES 10-11

NEWS

TRENDS

Q&A

New head of the central bank

Public encouragement

A Hungarian chef in Lyon

György Matolcsy is off to face new challenges after taking over as the governor of the central bank. While promising to be a conservative overseer, markets remain wary of his trademark unorthodoxy taking monetary policy the wrong way.

PAGE 07

Hungary is “doing better” according to the government and it is a concept that they are set to emphatically deliver to the public.

Another HUF 700 million is to be spent to convince the public that all is well and success abounds. PAGE 13

Tamás Széll, the first chef from Hungary to qualify for the final of the Bocuse d’Or international chefs’ contest, held in Lyon a few weeks ago, tells the Budapest Business Journal about the contest and the state of Hungarian cuisine.

PAGES 22-23

WWW.BBJ.HU

02

Budapest Business Journal | March 08 – March 21

SUBSCRIPTIONS Call +36 1 398-0344, or email circulation@bbj.hu BUDAPEST BUSINESS JOURNAL 1 year HUF 27,500+VAT 6 months HUF 13,750+VAT 3 months HUF 6,875+VAT Newsletters HUNGARY A.M., ENERGY TODAY, REGIONAL TODAY 1 year HUF 179,000+VAT 6 months HUF 104,900+VAT 3 months HUF 58,900+VAT BOOK OF LISTS 2011-2012 BOOK OF LISTS 2011-2012 CD

the editor says...

A distant spec of paradise

HUF 19,120+VAT HUF 55,900+VAT

MANAGING EDITOR:

Patricia Fischer COPYEDITOR/PROOFREADER:

Robin Marshall EDITORIAL STAFF:

Zsolt Balla, Krisztián Kummer, Gergő Rácz, Zsófia Végh, Robert V. Wallenstein, András Zsámboki LISTS: BBJ

Research (research@bbj.hu)

NEWS AND PRESS RELEASES: news@bbj.hu DESIGN:

Absolut Design Stúdió (production@bbj.hu) ART DIRECTOR: Photo: Tamás Kovács/MTI

Tamás Tárczy ADVERTISING:

Absolut Media Zrt (hirdetes@amedia.hu) SALES: sales@bbj.hu CEO:

Balázs Román PUBLISHING DIRECTOR:

Ágnes Balla PUBLISHER:

Tamás Botka CIRCULATION AND SUBSCRIPTIONS: circulation@bbj.hu PRINTING:

Absolut Print Kft

MEDIA REPRESENTATION: Absolut

Media Zrt Address: Madách Trade Center 1075 Budapest, Madách Imre út 13-14., Building A, 8th floor Telephone +36 (1) 398-0344, Fax +36 (1) 398-0345, www.bbj.hu BBJ-PARTNERS

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.

Prime Minister Viktor Orbán has never been one to shy away from citing the sweeping plans his government has for the country, plans that will create equality and prosperity for all Hungarians in the future; especially if that future is comfortably distant, and practically out of sight.

His state of the nation address this year was no different. “It is of utmost importance to have a clear idea about our future, the next 20 years, and to set off in that direction through our decisions made in politics, the economy and social affairs,” he said.

Politicians are often accused of looking solely at their own interests to stay in power and are willing to make any shortterm promises and take actions to that end. At the same time, a population isn’t exactly well off if its leaders’ promises point so far into a time horizon that, even if you squint really hard, it still takes a healthy does of belief to see even a spec of hope.

Ensuring that in two decades’ time the country is thriving is

all and well, with birth rates rising, unemployment minimal, taxes low and fairly shared and the country’s national debts sinking closer to the desired 50% of GDP. But what of those who are active adults now, or who are trying to raise families. Does the Orbán vision for the future Hungary mean that they will not be part of the central European Canaan that is now forming, that they will not be treated to the opportunities this country can possibly offer within their own lifetimes, or at least not until they are of old age? Is that truly an appealing message to a large section of society who is middle aged but still has plenty of time before they could retire?

Knowing the promises made thus far and what has become reality in the past three years, and not yet able to see the implications of the government’s recent past measures –which will become apparent way sooner than the promised golden age is meant to start – it’s hardly surprising if the population has its doubts.

A learning curve György Matolcsy’s governance of the central bank remains to be seen, but the way in which he was picked definitely gives some reason for satisfaction: the government finally seems to have learned the power of words in a global economy.

Even though Matolcsy is more of a specter than a sweetheart in the eyes of market participants given the track record of his – now former – economy ministry, news of his accession to the role of central bank governor caused little turmoil.

This shows that maybe – hopefully – the government is ready to give investors the one thing that they have demanded, ad nauseam, for the past couple of years: predictability.

It is something that doesn’t take much to achieve, and can be well provided with words.

Fidesz has had plenty to learn in this department. Officials have found out the hard way that people are actually listening to what they say, and if they aren’t circumspect, consequences will arise.

In 2010 Lajos Kósa was apparently baffled that, in a highly precarious economic situation, any comparison of Hungary to

Greece – or even mention of a sovereign default – could have devastating results. In 2011, János Lázár perhaps regretted announcing the foreign currency mortgage relief effort smack in the middle of the trading day, which caused assets to plunge and trading in stocks being suspended left and right for the 10% plus losses sustained as a result. Viktor Orbán himself learned that dismissing the significance of the IMF in late 2011 nearly caused a bank run.

While international financial businesses remain something reviled in the eyes of this conservative government, it seems to have also learned that the country relies on their money to remain operational.

Even if they are genuinely convinced that investors are wrong whenever they dump a load of Hungarian papers or currency, it doesn’t change the impact it has on the country and the families they say they are committed to supporting and protecting.

Investors are listening, and whenever a government fails to realize the implications of speaking its mind without restraint, it is gambling big: with our money.

03

1 News

BBJ

Gov’t decides on municipal debt takeover Interview with the new owner of Zsolnay

05 07

macroscope

Matolcsy takes charge of central bank No surprises, then: the governor of the central bank for the next six years is György Matolcsy. After twice holding the position of economy minister in Fidesz-led governments, market players are now anxiously waiting to see whether his signature unorthodoxy will follow him to the National Bank of Hungary.

GYÖRGY MATOLCSY’S BIOGRAPHY

CENTRAL BANK GOVERNOR GYÖRGY MATOLCSY AT HIS COMMITTEE HEARING

BBJ GERGŐ RÁCZ

The guessing finally ended when Prime Minister Viktor Orbán made the announcement everyone was expecting in his regular radio interview: Economy Minister György Matolcsy will be in charge of the central bank for the next six years, replacing András Simor, whose mandate ended on March 2.

Later the same day Matolcsy arrived for a parliamentary committee hearing where he discussed his agenda and what could be expected of the National Bank of Hungary (MNB) under his leadership.

“I support a very conservative and responsible monetary policy,” Matolcsy said, preempting any concerns that the unconventional policymaking that has been a core characteristic of his ministry in the past years would be the main driver in the MNB too.

WHAT TO EXPECT? “Out with the orthodoxy, in with the funky postmodernism at the MNB,” Nomura analyst Peter Attard Montalto said in a note to investors.

Matolcsy’s comments to the committee reveal that he has identified the main adversaries that the central bank has to face.

At the top of the list are foreign currency mortgages, which still weigh heavily on numerous households, even though many others –typically more affluent families – were able to avail themselves of government relief initiatives and get rid of their debts. Still, Matolcsy’s central bank will keep its eyes on the situation and intervene as necessary.

“I will do everything to prevent the moral, political and economic steps that

once led to the foreign currency debt situation in Hungary,” he said.

Matolcsy made efforts to reassure observers that under his leadership the MNB would not forget its key mandate of keeping consumer price inflation down. In identifying himself as an “enemy of inflation” Matolcsy explored relatively new rhetoric, given that the government frequently discusses the budget deficit, public debt and unemployment as priorities for the economy, with inflation seemingly taking a back seat.

He also took a jab at outgoing central bank governor Simor, by stressing that he is an opponent of liberal, irresponsible monetary policies, which he blames for the proliferation of foreign currency debt in the country.

RESHAPING THE BANK While presenting himself as a conservative who will exercise caution and responsibility in his work, Matolcsy quite clearly plans to restructure the bank in his own image.

He’s taking two of his close associates with him from the ministry, with state secretary Ádám Balog set to replace Ferenc Karvalits as deputy governor when his mandate expires later in March, and state secretary Gyula Pleshinger picked to become a new external member of the Monetary Policy Council.

Just before parting with the Economy Ministry, the now erstwhile minister enacted revisions to the law regulating the operation of the central bank to concentrate more power under his supervision, including personnel affairs.

HAND-IN HAND FOR GROWTH Matolcsy reaffirmed that the new approach will

fully reflect how the Fidesz government expects a central bank to work: supporting the government’s economic policies and in particular, taking all measures available to create growth.

“The central bank was always independent and will always be independent, but it is part of the state and it isn’t independent of Hungary and the nation as a whole,” he said.

The government frequently attacked Simor for considering the MNB as an institution that exists in a state of splendid isolation, reporting to the European Central Bank rather than to the Hungarian state.

Simor in turn stressed that the approach was necessary since the central bank’s independence from the political goals any government may have is of tantamount importance for the sake of the country, and argued that many of the government’s enacted or planned steps were aimed at directly infringing on that independence.

Exactly which tools the MNB would use has not been clarified. Matolcsy said there is an arsenal of some 16 solutions, which will first have to be assessed to pick those that can be of most benefit given the circumstances.

What is most likely is that since the Monetary Policy Council is now almost exclusively populated by members delegated by Fidesz – the only holdout being deputy governor Júlia Király who remains in office until July – the policy easing cycle initiated last summer by the dovish majority on the panel will continue.

“In our view, policy rate cuts will likely remain the main channel for easing monetary policy in the coming months – we expect the base rate to be cut to 4.5% by mid-year from the current 5.25%, provided the forint does not weaken excessively,” JP Morgan said in a research note. ■

Photo: Tamás Kovács/MTI

Matolcsy was born in Budapest on July 18, 1955, gained a diploma in economics in 1977 and wrote his doctoral dissertation in 1981. He first came into contact with the public sector in 1978 when he found work at the finance ministry. Later, from 1985, he worked as a researcher and published some widely read papers.

His links to party politics started in 1989, when the conservative MDF party, which was to form Hungary’s first democratically elected government after the fall of Soviet rule, asked him to participate in developing a governing agenda.

Prime Minister József Antall gave him a post as advisor, as well as official titles in the government.

During the mid-’90s he studied privatization and also represented Hungary at a number of international organizations.

His resume says his first formal links with Fidesz emerged in 1998 when he was in charge of developing the party’s economic program.

His first government assignment under Viktor Orbán came in 2000, when he was appointed economy minister for the second half of the first Fidesz government.

In the opposition years, he was active in managing the party and had a seat in parliament’s economy committee.

He was once more made economy minister after the Fidesz victory in 2010.

President János Áder appointed Matolcsy to the office of central bank governor on March 4.

04 1 News BBJ

WWW.BBJ.HU

Budapest Business Journal | March 08 – March 21

bi-weekly

QUOTE OF THE WEEK

There are books waiting for me that have to be read, there are plays waiting for me that have to be seen, there are concerts waiting for me that have to be heard, there are flowers waiting for me that have to be smelled and my grandchild, who has to be played with, is waiting for me.

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

OUTGOING CENTRAL BANK GOVERNOR ANDRÁS SIMOR ON HIS PLANS FOR THE IMMEDIATE FUTURE

György Matolcsy’s appointment as central bank governor not only brings in a new era of monetary policy in Hungary, but also entailed a considerable rearrangement of personnel in the economy ministry. Matolcsy will take with him deputy state secretary Ádám Balog (left) who will be his deputy at the National Bank of Hungary. Senior IMF negotiator Mihály Varga (center) will inherit Matolcsy’s seat in the ministry, while state secretary to the ministry Gyula Pleschinger (right) also follows Matolcsy as a new external member of the rate-setting Monetary Policy Council.

Varga told a parliamentary committee that the changes will not result in a new approach to economic policy, with the goals laid out in the 2010 election campaign still being the core guideline.

ECONOMY MNB CONTINUES EASING CYCLE The National Bank of Hungary’s Monetary Policy Council decided at its February ratesetting meeting to cut the central bank’s key rate by another 25 basis point to 5.25%, the seventh cut in a row. The decision was in line with market expectations. In a statement published after the meeting, the MPC explained its decision to cut rates citing fresh data that shows weak demand continues to have a “strong disinflationary impact on prices”, limiting companies’ ability to pass on higher production costs into prices. It added that the favorable global financial market environment could lead to a sustained fall in domestic financial asset prices.

INVESTMENT VOLUME FALLS 7.9% IN Q4 Investment volume in Hungary fell 7.9% year-on-year in Q4, the Central Statistics Office (KSH) said. Investment volume fell a seasonally adjusted 3.7% quarter-on-quarter. For the full year, investment volume was down 5.2%.

In absolute terms at current prices, investment volume came to HUF 1,459.5 bln in Q4 and HUF 4,167.7 bln for the full year.

MNB LOSSES AT HUF 40 BLN IN 2012 The National Bank of Hungary (MNB) closed 2012 with a HUF 39.8 bln loss. Operating costs came to HUF 11.9 bln, practically level with the previous year. Total revenue fell 3.4% to HUF 479 bln. The state of Hungary must compensate for the MNB’s losses.

The head of Hungary’s state audit office ÁSz said earlier in February that the MNB is expected to generate a HUF 150 bln loss in 2013.

new Constitution would require higher than expected economic growth, lower financing costs or additional measures to improve the fiscal balance equivalent to 0.4% of GDP from 2015 on, the National Bank of Hungary said. The MNB projects gross state debt as a percentage of GDP may decline from 79% at the end of 2012 to around 66% by 2027. Hungary’s Constitution contains a 50%-of-GDP limit on state debt.

The value of public procurements in Hungary dropped 8.5% to HUF 1,333.5 bln in 2012 from 2011. The number of public procurement procedures fell more, by 22.6% to 8,451 last year. The annual value of public procurement procedures in Hungary peaked at HUF 1,800 bln in 2009.

BUSINESS Hungarian asset manager Altera has launched an initial public offering. The IPO will run until March 22. The company expects its shares to float on the Budapest Stock Exchange in three to four weeks after the close of the offering. Altera is offering up to 1,250,000 shares to investors at a price of HUF 2,250 apiece.

STATE BUYS IDOMSOFT MNB SAYS GOV’T DEBT TARGETS STILL FAR Bringing Hungary’s state debt under the cap in the

AXIAL INAUGURATES NEW BASE Hungary’s Axial, which sells and repairs farm machinery, inaugurated a more than HUF 500 mln base in Zalaegerszeg. Axial has spent about HUF 2 bln on investments over the past two years and expects CAPEX to climb a further HUF 1.5 bln this year.

OPTISOFT BOOST PROFIT IN 2012

ALTERA LAUNCHES IPO PUBLIC PROCUREMENT VALUE FALLS 8.5%

up and operates IT systems in the public administration sector, for a price of HUF 1.32 bln.

The National Infocommunications Service Company said it closed the acquisition of IdomSoft Informatikai, which sets

Optisoft, a developer of software for the healthcare industry, reported lower revenue but higher profit in 2012 as material costs fell. Revenue fell 12% to HUF 422 mln, while operating profit rose by 10% to HUF 117 mln.

ALLIANZ REVENUES DOWN 8.7% Allianz Hungária’s revenue from premiums fell 8.7% to HUF 132 bln in 2012, the insurer said.

Operating profit dropped 27.5% to HUF 8.7 bln. Allianz Hungária’s branch in Slovenia, established in the spring of 2008, generated revenue from premiums of €5.1 mln last year, up 34% from 2011.

GERMANWINGS’ BUDAPEST PASSENGER NUMBERS CLIMB 5% Passenger numbers on low-fare airline Germanwings’ Budapest flights rose 5% to 100,000 in 2012. Germanwings operates flights between Budapest and the German cities of Cologne and Stuttgart. Germanwings will offer passengers on its Budapest-Stuttgart flight connections to Hamburg, Bremen and Brussels from March.

GRABOPLAST SEES PROFIT DROP IN 2013 Hungarian flooring maker Graboplast had pre-tax profit of almost HUF 900 mln in 2012 from a slight increase in revenue. The company expects 2013 revenue to grow 7-10% and projects operating profit of around HUF 1 bln and pre-tax profit of about HUF 600 mln.

MAGYAR TELEKOM TO PAY HUF 50 DIVIDEND Magyar Telekom said its board would propose to shareholders a payment of a HUF 50-per-share dividend on 2012 profits. Shareholders will vote on the proposal at an annual general meeting on April 12, 2013. Magyar Telekom’s fourth-quarter net loss narrowed sharply to HUF 1.6 bln from HUF 40.3 bln in

the base period as non-core activities lifted revenue and operating costs fell.

FIL TEAMS UP WITH CITIBANK AND FRIEDRICH WILHELM RAIFFEISEN Equity and bond funds issued

by London-based Fidelity Worldwide Investment (FIL) were made available in Hungary at the end of February, the company said in a press release. Fund manager Fidelity has set up a partnership with Citibank and Friedrich Wilhelm Raiffeisen.

MASTERPLAST INAUGURATES NEW PLANT Hungarian construction-materials company Masterplast inaugurated a new, €1.4 mln fiberglass-mesh plant in Kál.

Mostly intended for EU export, production at the new plant is expected to generate revenue of €1.4 mln this year and €2.8 mln next, when the factory’s fiberglass-mesh output will reach full capacity.

ERSTE’S HUNGARIAN LOSSES NARROW Austria’s Erste Group booked a €55.1 mln loss at its Hungarian business in 2012, a fraction of the €566.6 mln loss in the previous year. The loss of the business narrowed as risk provisions plunged to €215 mln

Photo: Tamás Kovács, Tibor Illyés/MTI, NGM

March brings major government reshuffle

1 News 05

BBJ

WWW.BBJ.HU

Budapest Business Journal | March 08 – March 21

from €812 mln. Net interest income fell 16.8% to €335.2 mln.

STADLER WINS MÁV-GYSEV TRAIN TENDER

ISD DUNAFERR UNIONS, MANAGEMENT SEAL WAGE DEAL The unions and management of Hungarian steelmaker ISD Dunaferr reached an agreement on wages, ending a weeklong strike. The sides said they agreed to a 3.5% wage rise with

tions fell to HUF 11.65 bln from HUF 11.77 bln one year earlier, despite a rise in revenues from HUF 41.4 bln to HUF 42 bln.

The company paid HUF 2.4 bln in sectoral tax in Q4, as well as HUF 2.4 bln in the telephone tax introduced in the second half of 2012.

FREESOFT NET PROFIT CLIMBS Hungarian software company FreeSoft’s consolidated net profit rose 16% to HUF 136 mln in 2012 as financial

Photo: Teg

Swiss rolling-stock maker Stadler has won the tender to supply state-owned railway company MÁV-START and regional railway GySEV with 48 multiple-unit trains.

Stadler, which was the sole bidder in the tender, will have to deliver 42 multiple units to MÁV-START and six multiple

pest, is part of a HUF 13 bln complex development dubbed ANS III. The project also involved the update of the Magyar Automated and Integrated Air Traffic System.

The Hungarian unit of German-owned supermarket chain Lidl expects revenue to climb in the 2012/13 business year from net HUF 186.5 bln in the previous year, Lidl Magyarország. Lidl has 157 stores and three logistics centers in Hungary. It employs almost 3,500 people.

dress. Orbán reiterated that the deficit would be under the European Union threshold just hours after the European Commission projected the gap would increase to 3.4% in 2013. He also said state debt would be reduced under the 50% of GDP threshold in the new Constitution.

Orbán noted that Hungary had reduced its state debt and maintained a disciplined fiscal policy in the past year, while performing better than most EU member states.

FREESOFT Q4 PROFIT DOWN 40% TO HUF 137 MLN

HUNGARY REPRIMANDED OVER RAILWAY REGULATIONS

Hungarian software company FreeSoft had net profit of HUF 136.6 mln in Q4 2012, down 40.8% yr/yr, the consolidated, unaudited IFRS report of the company showed. Revenue from sales was HUF 2.7 bln, down 7.7%. Full-year profit was HUF 136.2 mln, up 16% yr/yr. Full-year revenue from sales was HUF 8.47 bln, down 2.1%. FreeSoft is a B-category issuer at the Budapest Stock Exchange.

Hungary has failed to comply with European Union regulations stipulating that undertakings operating in the railway sector enjoy equitable and non-discriminatory access to the railway network, the European Court of Justice has announced. The ECJ sustained the European Commission’s claim that Hungary had infringed EU railway-liberalization regulations when it entrusted traffic management not to an independent body, but to the two railway companies traditionally responsible for this task – state-owned railway company MÁV and regional railway company GySEV.

most turnover of government bonds on the primary market and for being ÁKK’s biggest repo partner.

LIDL HUNGARY REVENUE CLIMBS

MFB TO RAISE CAPITAL FROM BOND ISSUE

CREAM OF PHARMA INDUSTRY CONVENES IN BUDAPEST This year saw the third installment of the Pharm Connect Congress, the annual conference and industry fair held in Budapest. The event, featuring an extensive conference agenda along with displays from leading players in the industry, attracted more than 400 participants from 20 countries. Pharm Connect hosted some 1,200 meetings that were pre-booked with the organizers, not to mention the various ad-hoc meetings that occurred at the venue. This year attendants were also invited to a cocktail party and a special visit to the Hungarian site of GlaxoSmithKline. units to GySEV by the stipulated deadline of September 30, 2015. The companies will use European Union funding to help pay for acquisition of the multiple units.

HUNGAROCONTROL INAUGURATES NEW HEADQUARTERS Hungarian air traffic control company HungaroControl inaugurated its new headquarters in Budapest. The building, located next to Liszt Ferenc International Airport Buda-

retroactive effect from January 1, 2013 and a further 1% increase from July 1. The openended strike over wages shut down the company’s steel mill.

Ukraine’s ISD Donbass Group owns ISD Dunaferr. Dunaferr expanded its annual losses by HUF 25 bln compared to its 2011 net result last year.

TELENOR PROFIT HIT BY WINDFALL TAXES Fourth-quarter EBITDA at Telenor’s Hungarian opera-

losses fell. Revenue dropped 4% to HUF 8.78 bln. The bottom line was lifted by a big decline in financial losses to HUF 9 mln from HUF 102 mln in the base period.

Hungary’s state-owned development bank MFB plans to raise $400-500 mln or more in global bond markets this year as it looks to boost economic growth by stepping up lending to local businesses, as well as funding major infrastructure investments. MFB wants to issue dollar-denominated bonds. The Hungarian government raised $3.25 bln in bonds in February, in its first foreign bond issue in almost two years.

COURT ORDERS LIQUIDATION OF MAL

DOMESTIC

State-owned liquidator Nemzeti Reorganizációs Nonprofit is to take over the management and operation of Hungarian alumina maker MAL after a court ordered the company to be liquidated based on a claim submitted by one of its creditors. MAL came under pressure following a toxic sludge spill in October 2010, which killed several people and caused huge damage.

ORBÁN CONFIDENT OF REACHING DEFICIT GOAL

GOV’T DECIDES ON MUNICIPAL DEBT TAKEOVER

Hungary’s general government deficit will be under 3% of GDP this year, Prime Minister Viktor Orbán said in his State of the Nation ad-

The central government has decided to take over HUF 600 bln in municipal debt from communities with more than 5,000 residents. The central

CITIBANK PRIMARY DEALER OF 2012 Hungary’s state debt management agency ÁKK named Citibank Europe Primary Government Securities Market Dealer of the Year for 2012. Citibank Europe was also cited for generating the

government will take over 40-70% of the municipal debt.

The higher ratio will apply to the most disadvantaged communities. The ratio will be 60% for Budapest.

BUDAPEST COUNCIL APPROVES 2013 BUDGET FIGURES Budapest municipal council representatives approved the capital’s main 2013 budget figures showing expenditures of HUF 324.3 bln and a deficit of HUF 64 bln. The city will finance HUF 41.4 bln of the deficit from residual monies. It will borrow another HUF 30.2 bln to refinance long-term development loans, but use HUF 7.5 bln to pay back principal on existing loans.

NO PLANS FOR FURTHER SECTORAL TAXES The Hungarian government has no plans to introduce further sectoral taxes, state secretary for foreign affairs and external economic relations Péter Szijjártó said. Szijjártó added that some of the sectoral taxes introduced by the government had been phased out already. He disagreed with the suggestion that the government’s measures create uncertainty for investors.

PREPARATIONS START FOR CONGRESS CENTER INVESTMENT Preparations have started for a congress center investment in Hungary, incoming economy minister Mihály Varga told a parliamentary committee.

The government has already decided on the directives for the congress center, and these are being finalized now, Varga told Parliament’s tourism committee. Budapest mayor István Tarlós said earlier that he would support the construction of a new convention center near the National Theatre, in the south of the capital, considering the opportunity offered by convention tourism. More than 125,000 people participated at international conferences in Hungary in 2011. ■

06 1 News BBJ

energy

WWW.BBJ.HU

Budapest Business Journal | March 08 – March 21

NEWS FOR THIS SECTION IS TAKEN FROM THE BUDAPEST BUSINESS JOURNAL’S DAILY BRIEFING, ENERGY TODAY NEWSLETTER AT WWW.BBJ.HU/STORE/NEWSLETTER-PACKAGE

MOL TO STEP UP EXPLORATION IN 2013 Hungarian oil and gas company MOL said that it plans capital expenditure on exploration activities of $980 mln in 2013.

MOL said it is accelerating its development and appraisal program in the Kuridstan region of Iraq this year. It is also testing a new exploration in Kazakhstan with prospective resources of 120 million barrels of oil equivalent, undertaking further exploration and production in Russia, increasing early production of recent discoveries in Pakistan, and maximizing recovery rates at matured fields in Central Eastern Europe.

HUNGARIAN FIRM BIDS FOR ENERGY EXPLORATION CONTRACT IN LEBANON A Hungarian company is among the bidders in an international tender for a big energy exploration contract in Lebanon, Hungarian Prime Minister Viktor Orbán said on March 1, after winding up an official visit

regional EU TO GIVE €144 MLN FOR RESEARCH ON RARE DISEASES The European Union on February 28 pledged €144 mln of fresh funding for research on rare diseases that currently affect some 30 million Europeans, the majority of them children. The funding will go to 26 research projects in 29 countries “in Europe and beyond” to better diagnose and treat cardiovascular, metabolic and immunological disorders, the European Commission said.

BULGARIAN PRESIDENT SETS EARLY ELECTIONS FOR MAY 12 Bulgarian President Rosen Plevneliev called early elections for May 12 after Prime Minister Boyko Borissov’s cabinet resigned amid protests against high-energy prices and poverty that turned violent. Bulgaria needs a new parliament with much higher public confidence and credibility than the current one, Plevneliev said in a speech to lawmakers in Sofia on February 28.

SLOVENIA REPLACES PREMIER AMID BATTLE TO AVOID BAILOUT Slovenian lawmakers elect-

to the country. A decision on the tender is expected at the end of March, MTI reported him as saying. Orbán said about 40 business representatives accompanied the government delegation to Lebanon. He added that prospects are good for deals in the food, waste management, water management and vehicle industries.

SHALE GAS TAX DRAFT IN POLAND Poland plans to levy a 1.5% and a 3% tax on shale and conventional gas exploration respectively, the Finance Ministry said in a detailed draft of the law regulating oil and gas levies. The new regulations are expected to be adopted in a few months, Reuters reported, citing Environment Minister Marcin Korolec.

EU COMMITTED TO NON-RUSSIAN GAS Europe aims to secure more natural gas from non-Russian suppliers in order to provide protection from geopolitical concerns over Gazprom’s role

in Eastern Europe. European Energy Commissioner Gunther Oettinger told the Trend news service that European consumers want an uninterrupted supply of natural gas from alternative suppliers.

“The aim of the Commission has always been to open the Southern Corridor for the EU in order to directly and physically link the EU gas market to the largest deposits of gas in the world in the Caspian Sea basin and the Middle East,” he said.

STATE WANTS LIMIT TO E.ON GUARANTEE The state will guarantee 80% of the price for the Hungarian gas business of German utilities giant E.ON, according to an amendment to the 2013 budget act. The amendment sets the absolute threshold of the guarantee at HUF 256 bln. The amount comes to €867 mln, suggesting the total price for the business is about €1.084 bln.

GAZPROM SIGNS 20-YRS LNG PURCHASE DEAL

WITH ISRAEL Gazprom is seeking exclusive rights to export liquefied natural gas (LNG) produced from fields off Israel’s Mediterranean coast. Gazprom Marketing & Trading has signed a heads of agreement with Levant LNG Marketing Corp, outlining the terms of a 20-year sales deal from the

Tamar floating LNG plant.

The Russian giant wants to build up its LNG trading business to diversify away from traditional European customers receiving natural gas via pipelines. The Tamar floating LNG project will produce gas from the Tamar and Dalit gas fields off Israel’s east Mediterranean coast.

ALTEO ACQUIRES 1.5-MEGAWATT WIND TURBINE Hungarian energy supplier and trader Alteo has purchased a 1.5-megawatt wind turbine in Törökszentmiklós, near Budapest. Alteo’s wind turbine capacity has increased to 7.3-megawatts as a result. ■

Affiliates of GDF Suez Group in Hungary wish to sell the following properties: Detailed information can be found in Hungarian, German, Slovakian, Romanian and English on the following website: www.gdfsuez-energia.hu/eladoingatlanok 8630 BALATONBOGLÁR, Balaton u. 2.

8252 BALATONSZEPEZD, Gesztenyesor 1.

8252 BALATONSZEPEZD, Dózsa u. 38.

5700 GYULA, Nürnbergi u. 10.

9400 SOPRON, Somfalvi u. 1.

6300 KALOCSA, Ecetgyár utca 35/A. 6100 KISKUNFÉLEGYHÁZA, Nyomás u. 24.

9700 SZOMBATHELY, Rákóczi Ferenc u. 23.

2510 DOROG, Bécsi u. 2.

We expect the inquiries of real estate agencies agreeing to enter into a contract with the Affiliates of GDF Suez Group with a success fee of 3 %.

Contact shall be exclusively made via the following email address:gdfsuez883@gmail.com

For further information and explanation please, contact the Operation and Maintenance Department at +36 96 503-100.

NEWS FOR THIS SECTION IS TAKEN FROM THE BUDAPEST BUSINESS JOURNAL’S DAILY BRIEFING, REGIONAL TODAY NEWSLETTER AT WWW.BBJ.HU/STORE/NEWSLETTER-PACKAGE

ed Alenka Bratusek to replace Prime Minister Janez Jansa to quell a political crisis as the Alpine nation battles recession and the threat of becoming the sixth euro member to need a bailout. Parliament in Ljubljana voted 55-33 late on February 27 in favor of ousting Jansa, whose coalition government crumbled after he was accused of corruption, and appointed Bratusek as the country’s first female premier. Bratusek has 14 days to get a cabinet approved or early elections will be called.

POLAND SUCCESSFUL IN FIGHTING POVERTY Poland was the leader in reducing poverty among its citizens in recent years, according to data published by Eurostat.

The percentage of Poles facing the risk of poverty fell by 3.1 percentage points in 20082011. Currently 27.2% of the overall population in Poland faces the risk of falling into poverty, making the country the tenth worst in Europe.

The European average was 24.2%. Bulgaria’s population has the highest percentage of people at risk of falling into poverty, with 49.1%.

EU COUNCIL SCRAPS SCHENGEN ENLARGEMENT DEBATE The enlargement of the Schengen area has been removed from the agenda of the forthcoming summit of the European Union’s Council on Justice and Home Affairs on March 7 and 8 in Brussels, Bulgarian National Radio reported, citing the Council’s press office.

CYPRIOT CONSERVATIVE ROMPS TO PRESIDENTIAL VICTORY Cypriot conservative leader Nicos Anastasiades won an overwhelming victory in a presidential run-off election on February 24, boosting hopes of a swift financial rescue for the near-bankrupt island nation. Cyprus has emerged as a big headache for the euro zone in recent months, triggering fears the island could plunge into a financial meltdown that reignites the bloc’s debt crisis. Anastasiades, who has pledged to hammer out a quick deal with foreign lenders, took 57.5% of the vote, 15 points ahead of his Communist-backed rival Stavros Malas, who campaigned on an anti-austerity platform. ■

CZECH PM ADDRESSES BAVARIAN PARLIAMENT In a historic address to the Bavarian Parliament on February 21, Czech Prime Minister Petr Necas expressed regret over the post-war expulsion of millions of Sudeten Germans, Radio Praha reported. Necas said the principle of collective guilt applied at the end of the war was an injustice that hurt thousands of innocent people, people who had significantly contributed to the economic and cultural development of the border region, but he made it clear that there could be no question of abolishing the Benes decrees or making property claims relating to the expulsions. Very few wrongs of the past are ever corrected, the prime minister noted.

1 News 07

BBJ

WWW.BBJ.HU

Budapest Business Journal | March 08 – March 21

Fragile business On the occasion of transferring the HUF 180 million purchase price for the 75% stake of Zsolnay Porcelánmanufaktura Kft, the Budapest Business Journal asked the new majority owner, Bachar Najari, about the deal.

treatment did I rely on. As far as the books of Zsolnay are concerned, I have already got a deep introspection into the state of the business affairs. My colleagues and I are pretty aware of what we should do to renovate both the production and the marketing side. In my entire business career I have only relied on my own business resources, never on special connections to authorities.

BBJ ANDRÁS ZSÁMBOKI

Q: There was some market gossip about Zsolnay’s real estate property in down-

town Pécs. According to unnamed sources these building sites are unmanageable.

Well, you have a facility management company in Hungary, so you have experience in real estate business, too…

A: I cannot help laughing at these charges. For the money I paid for the majority stake of Zsolnay and I am planning to invest into its remodeling, I could buy building sites in Budapest in premium quality locations. Pécs is a beautiful city, but all we know that there is no real estate market in the Hungarian countryside. ■

Q: How does a luxury watch businessman become a porcelain manufacturer?

The two businesses seem quite far removed from one another.

A: Not at all: both require a profound knowledge of culture and a high esteem for human work. Building a successful marketing strategy for either product, one has to be aware of the local traditions of the industry. When I entered into the watch business in the late’80s, once reputed Swiss brand names like Cornavin were already fading. So we had to re-establish its local prestige and then re-position the brand abroad. It took a long time. I am planning to do the same thing with the Zsolnay porcelain brand, which used to have worldwide fame as a Hungarian product. All I want is to retain the brand as a Hungaricum and to re-introduce Zsolnay products to the international porcelain market as a 21st century luxury product.

Q: For an international businessman like you, it is really odd to be committed to a so-called Hungaricum producer.

A: I am an international businessman, that is true, but I feel Hungarian as well. I was born in Latakiya, in Syria’s biggest Mediterranean port city, a really cosmopolitan place in the Levantine. I was planning to learn architecture in Italy, however, and here comes the turn in my story: as a tourist I happened to come to Hungary. I was so much astonished by the turn-of-the-century architecture in Budapest that I decided to come rather to the Budapest Technical University. So I graduated here in architecture.

It was long ago, in the early-’80s. Due to my business, I spend most of my time in Budapest, my wife is Hungarian, and most of my friends are Hungarian. All in all, I feel the remodeling of Zsolnay Porcelain my patriotic commitment as well.

Q: The Zsolnay Porcelain plant already had two domestic owners who declared remodeling as their patriotic mission: real estate developer SCD in 2010 and building contractor Közgép in 2011. However, no sooner had they left the whole porcelain business than they learned that no state subsidy could be expected. Do you expect any state subsidies?

A: Of course I do not expect any sort of special treatment from the authorities, let alone a state subsidy. As for the municipality of Pécs, I have always experienced a special kindness as an investor, but no special

BACKGROUND Bachar Najari, an international businessman famous locally for his Swiss watch-retail network in Budapest, transferred the HUF 180 million purchase price for the majority stake of Zsolnay Porcelánmanufaktura Kft at the end of February. As the only bidder for the 74.5% share of the famous and prestigious porcelain factory of southwestern Hungary, that Najari won the late January tender organized by the municipality came as no surprise. All the more striking was the Syrian-born businessman’s undertaking to invest HUF 500 mln into expanding the factory’s capacities in the forthcoming one-and-a-half years, in addition to the tender requirement of preserving porcelain production in the city of Pécs for the next five years. As a guarantee for the future investment, Najari has even transferred a non-refundable bank guarantee of HUF 200 mln to the account of the municipality.

OPINION

Buy the rumor, sell the news ANDRÁS SOMI head of retail research, KBC Securities Hungarian Branch Office

The old adage ‘buy the rumor, sell the news’ properly describes what happened on the first Friday of March with the Hungarian forint. Just watching the immediate press and analyst reactions after Viktor Orbán finally named György Matolcsy his candidate for the head of National Bank of Hungary, one could have expected the forint to collapse against all the major currencies, capital to flee Hungarian bonds, and equities to plummet in the wake of panic caused by the fearful new head of the central bank. And yet the forint appreciated, equities managed to finish in the black and bond yields stood steady or even fell a few basis points. Panic doesn’t look like this.

What we saw in the markets well reflected that participants had the time to adjust their exposure to a scenario becoming more and more likely in the past few weeks. No surprise, no sell-off. The government had also worked a lot on Matolcsy’s character, trying to build up an image of someone who is able and willing to talk and act as a credible and conservative monetary policy leader when needed. But that’s something that requires a lot more proof in the long run, and investors will have their say when it’s time.

Not because Matolcsy couldn’t eventually achieve this position, but at the moment he doesn’t seem to be longing for it. As a last act at the economic ministry, he changed the rights of the governor in appointing and dismissing people at the central bank, accumulating more power for himself than his predecessor possessed. At the time of writing this article, his long time loyal colleague Ádám Balog seems likely to land the deputy governor’s position without having had any kind of monetary policy experience or education, while the central bank law clearly states that nobody without these attributes should be appointed. These are only two of the ‘unorthodox’ measures that have so terrified many market commentators in the previous few weeks.

That doesn’t necessarily mean the forint or any other Hungarian asset should implode in the coming weeks or months. With the somewhat successful issuance of dollar debt in February and probably another similar upcoming auction, Hungary’s external financing problems are off the table, while exiting the European Union’s excessive deficit process could give more room for growth stimulus. And that’s on top of the government’s own agenda, so maybe we might see some growth surprises on the positive side in 2013 (such growth would be far from stellar, of course: maybe only a fraction of a percentage point).

While global markets are awash of excess liquidity looking for higher than zero yields, the Hungarian bond market can provide appealing yield premiums, even with further rate cuts. So we have every prerequisite to manage a seamless transition of central bank regimes and also to enjoy a more or less calm spring (unless Matolcsy provides something for the markets to be scared of, a risk that might prevent the forint from appreciating meaningfully), while in the long run we still see several fundamental factors pointing towards further depreciation of the forint and putting pressure on Hungarian asset prices.

2 Business

BBJ

Enterprise

Fundamental Law: feet of clay

The Fundamental Law was supposed to be the epitome of stability in politically and economically turbulent times, a rock solid foundation for the new Hungary. Yet Fidesz is discovering daily that the notion of solidity conflicts with something more fundamental than constitutional stability: its own ideological and political interests. Despite the initial promises of stability, the governing party has found the need to draft and adopt a number of amendments since it passed the new constitution in April 2011. Another slate of significant changes is before Parliament right now.

sequence, Fidesz lost some key amendments, including the provision that would have served as the constitutional basis for the subsequently scrapped voluntary voter registration scheme.

The Court also quashed the Temporary Provisions’ preamble, which essentially held the post-communist opposition party responsible for the crimes committed by its de jure predecessor, the Hungarian Socialist Workers’ Party, aka communist party.

Photo: László Beliczay/MTI

Hungary’s new constitutional regime is proving far less stable than its creators had promised. Even before it entered into effect last January, the governing parties had added a number of provisions to the Fundamental Law, some of which the Constitutional Court quashed on formal grounds. With the Court throwing out a number of other important laws, too, the government appears to have had enough: the impending, fourth amendment of the Fundamental Law will impose another straitjacket on the Constitutional Court, in addition to elevating previously quashed laws to constitutional rank.

TEMPORARY FAILURE The first amendments were the so-called Temporary Provisions, a fairly substantial text including 28 articles on almost eight typed pages. Though their exact legal status was hazy (and this lack of clarity was part of their ultimate demise before the Constitutional Court), the Temporary Provisions, which were adopted even before the new constitution entered into effect on 1 January 2012, were theoretically presented as provisional stipulations meant to apply only in the context of the transition from communist dictatorship to capitalist democracy. To critics, this kind of rhetorical packaging was only an attempt to rationalize the fact that the governing party needed to remedy a number of errors and omissions in the Fundamental Law. The Constitutional Court agreed with this interpretation, arguing in a late December 2012 decision that the nature of several provisions was such that they could not be considered provisional. As a result, the Court threw out a number of articles on formal grounds, without examining the substantial constitutionality of individual provisions. As a con-

BATTLE READY Fidesz subsequently adopted amendments two and three, which included, among other things, provisions protecting the pension remuneration of former President Pál Schmitt, who had to resign under the cloud of a plagiarism scandal, and a stipulation that all future amendments of the act on the distribution of land must be adopted by a so-called cardinal law, that is a law requiring a supermajority of twothirds present (rather than two-thirds of all MPs, which is the constitutional supermajority). The latter provision was especially controversial in light of the scandals surrounding the Fidesz process of land distribution, which the party’s own point man on land issues, József Ángyán, had excoriated as a massively corrupted scheme intended to deliver valuable estates to Fidesz cronies rather than the small landholders Ángyán had wanted to favor. Ángyán has since gone on a confrontation course with his own party, with the result that at a recent meeting of the party caucus the PM attacked him personally for his “betrayal”.

More problematically for Fidesz, however, despite all its efforts at reining in the Constitutional Court, the highest judicial body has nixed several key reforms in the past months, leading to increasingly open verbal attacks by representatives of the government. The odd situation is that the opposition nominated only four of the present 15 Constitutional Court judges, though it is also true that “only” six have begun their term since Fidesz entered into office in 2010. For the most part, the pre-2010 Fidesz nominees – whom MSZP could have vetoed – tend to be more inclined to reject Fidesz’ laws than the newly appointed judges, with the notable exception of István Stumpf, Orbán’s former minister of the chancellery, who has penned some of the opinions that were most grating for Fidesz.

AN AMENDMENT TO END ALL AMENDMENTS Despite having nominated 10 of the 15 judges on the Court, Fidesz has apparently decided

that it must further limit the possibility of its laws being thrown out by what some government figures have referred to as a “politicized Court”. Ultimately, the point is that the government can’t rely on the Constitutional Court to do its bidding. In fact, even the substantial limitations on the Court’s power of constitutional review instituted by the government in 2010 are not enough, so the next step – the fourth amendment of the Fundamental Law – is designed to keep the Court in check for good.

The lengthy amendment (14 typed pages) would elevate several previously quashed regulations to the constitutional level, such as clauses allowing the penalization of homeless persons for staying in designated “homeless-free” (our words) public areas and an antiquated interpretation of what the term family means legally (while it is primarily designed to exclude homosexuals, it will affect many other non-traditional partnership relations as well). Some of the quashed provisions of the electoral law discussed here previously will also be integrated into the constitution.

The amendment would further lay the foundation for the controversial idea that those former students who received their higher education free of charge but decide to move abroad early in their careers must pay tuition fees retroactively.

CAN’T TOUCH THIS Most importantly, however, the amendment seeks to ensure that the Court will not quash constitutional amendments that contain provisions which it has already deemed unconstitutional: the Fundamental Law’s new article 24 (5) would provide that the Court can only review the constitution and its amendment in terms of whether their adoption complied with the respective formal requirements. In terms of substance, however, the Court cannot quash an amendment even if it blatantly contradicts other, potentially more important constitutional clauses (as some of the amendments now proposed obviously do). Finally, the amendment would also erase the constitutional jurisprudence of the past two decades. The Court will be barred from citing any decision from the pre-Fundamental Law era, as it has done on occasion over the past year, to the great irritation of Fidesz. While the new provisions may lead to a constitutional document with massive internal contradictions, they will probably make the Fundamental Law more coherent in terms of its primary function: serving the needs of the governing party. ■

www.policysolutions.hu Political Research and Consultancy Institute

2 Business 9

BBJ

Salami tactics Local governments have intervened in an effort to save two major meat companies, Gyulai HĂşskombinĂĄt and KapuvĂĄri HĂşs from collapsing. Employees and creditors will keep their fingers crossed, as the firms struggle to survive the next few, critical months. The Budapest Business Journal now explores the credit management aspects of the story, mapping out the risks facing the entire industry.

BBJ ZSOLT BALLA

GYULAI HĂšSKOMBINĂ T

WARNING SIGNS “It’s a very rare thing for companies to go bankrupt without any warning signs.

Worsening solvency always leaves its marks in a company’s financial data; annual reports, therefore, are the most important sources of information for credit management,� states a case study by CMG investigating the run up to the two major bankruptcies.

Gyulai HĂşskombinĂĄt has been making a loss for years: its financial figures were accordingly weak, and the company frequently featured in the news in connection with cutbacks, reorganizations, and state subsidies. Its revenue has been decreasing continuously from HUF 8.1 bln in 2008 to HUF 6.6 bln in 2011. In the period between those years, the company’s ‘best’ year produced a loss of around HUF 500 million, while the worst was in the area of HUF 700 mln.

GYULAI HĂšSKOMBINĂ T

KAPUVĂ RI HĂšS

EXTERNAL SOURCES (GYULAI HĂšSKOMBINĂ T)

Related liabilities

EQUITY (KAPUVĂ RI HĂšS)

Suppliers

Loans + leasing

RISK MAP OF THE MEAT INDUSTRY

The bankruptcies of former meat industry giants Gyulai HĂşskombinĂĄt and KapuvĂĄri HĂşs have featured prominently in the news over the past few months. And while many observers are interested in the future of the two companies, concerned about the jobs of those still employed by them, very few seem to be equally worried about the supplier creditors. This is in spite of the fact that several billion forints in debt will likely be lost by the partners of the troubled giants, and that the workforce of these suppliers is not just in excess of hundreds, but may well be in the area of many thousands. Considering that non-paying customers are one of the most widespread reasons behind bankruptcies, it is easy to predict that the story of these two troubled companies will have further impact on the wider industry itself.

The final balance sheets of the Gyulai HĂşskombinĂĄt and KapuvĂĄri HĂşs, containing the aggregate sum of unpaid supplier credits, have not yet been made public, but based on 2011 documents, the estimated volume is likely to be around HUF 6 billion, up HUF 1 bln from the previous year.

The question seems to be clear: how to avoid being in the queue, waiting hopelessly and powerlessly for your money to be paid out. While there are no guarantees whatsoever, experience shows that those suppliers who pay attention not only to their products and services, but also to their credit management policies, are usually far better off in dealing with situations similar to this.

The risk map of the meat industry, which has been prepared by the Credit Management Group for a number of years, is a good illustration of how a company can foresee and identify potential risk factors in its partners. The map ‘locates’ some 20 companies from the poultry and the pork industry, based on their bankruptcy risks.

While the map was originally intended to be anonymous, CMG’s experts have now revealed the ‘location’ of KapuvĂĄri HĂşs (6) and Gyulai HĂşskombinĂĄt (4) on the map.

One thing is immediately clear: both were within the “very risky� segment. It is also apparent that other companies also heav-

the volume of unpaid, overdue invoices exceeded HUF 50 bln, figures show.

KAPUVĂ RI HĂšS

ily populate the map’s “risky� area. Based on matter-of-fact calculations and financial figures, the map shows that most meat companies fall into the risky or medium-risky area; only a few industry players stand out with high scores and a more secure financial background. According to CMG’s credit

management professionals, companies that are in the red, producing losses, usually have worse figures in other areas as well, which combined result in a substantially higher risk of bankruptcy. The aggregate losses of the 20 biggest companies in the meat industry were more than HUF 4 bln in 2011, and

A MATTER OF TIME Given the worsening results, it was up to the owner (the Hage-Nagisz group) to ensure the liquidity of the company, with the help of its own resources as well as bank loans. A change in its attitude became tangible, however, when in 2011 the owners shifted from regular capital injections towards using more of its suppliers’ resources. From this moment on, it was basically just a matter of time until one of the suppliers run out of patience, and launched a liquidation procedure against the company. d As for the other troubled company, t the previously reputable Kapuvåri Hús b became a part of the Debreceni group in 2 2004, and when the majority owner sold t bulk of its portfolio in 2008, the only the ccompany that remained in its control was Kapuvåri Hús. The company, however, K h has been unable to produce a profit since 22004, with a negative peak of a HUF 1 bln lloss in 2009. Consequently, it gradually llost its assets, until its liquidity was mainttained purely from external resources. By 22011, the ratio between financing from ccreditors’ resources and from its own w was an extremely unbalanced 92% vs. 8% rrespectively. Interestingly, the original aannual report processing the 2011 figures, rrecorded a profit of HUF 244 mln, later ccorrected to HUF 538 in losses.

The conclusion, according to credit management professionals, is plain to see. m IInformation concerning a company’s custtomers, especially those with outstanding iinvoices, needs to be closely watched, and constantly reviewed. Every piece of information can bear importance: the broader the spectrum of sources, including public financial figures, past experiences and even market rumors, the better. Making educated decisions based on sufficient information is the key to good credit management, CMG’s study concludes. â–

10 2 Business BBJ

WWW.BBJ.HU

Budapest Business Journal | March 08 – March 21

They look at the woman first BBJ ZSOLT BALLA

IT’S A VERY TYPICAL SCENARIO, FOR EXAMPLE, THAT A MAN WILL SHAKE MY HAND VERY FIRMLY AT THE BEGINNING OF AN INTERVIEW, THEN GRADUALLY EASE OFF, AND END UP OFFERING A DEAD FISH HANDSHAKE AT THE END. IT’S NOT NECESSARILY TOUGHNESS, BUT YOU DEFINITELY NEED A GOOD DEED OF CONFIDENCE TO DESERVE THAT.

According to a recent survey published by the Economist Intelligence Unit, the narrowing gap between male and female employment has accounted for a quarter of Europe’s annual GDP growth since 1995. While the global situation still appears dire, with nearly one-half of working-age women not currently active in the formal global economy, wherever women have access to proper education, are appro-

priately empowered and have the right tools, they become huge contributors, if not the most important drivers of economic performance.

While the overall Women’s Economic Opportunity (WEO) score introduced by the Economist ranks Hungary as 21st out of the 128 countries surveyed in 2012, placing it only one position behind Luxembourg and two places behind Switzerland, the relatively

Although the traditional stereotypes still stand, women do not necessarily have less opportunity than their male colleagues; at least those privileged enough to work for a company that pays attention to equal treatment of its employees regardless of their race, age or gender. While company policies usually contain these mandatory guidelines, implementing them in a firm’s everyday operation is a very different story.

GKI Economic Research Co. We analyze and forecast. You decide.

favorable position doesn’t mean that the area is free of challenges.

“Implementation of gender equality policies is weak in nearly every country in Eastern Europe and Central Asia,” the study observes.

“Laws prohibiting discrimination in employment, property ownership, reproductive health and mobility exist, but they lack adequate

ECONOMIC GOVERNANCE IN A CALMING STORM

INTERNATIONAL CONFERENCE – 20th anniversary of the foundation of GKI Economic Research Co.

26 March, 2013 (Tuesday) Corinthia Hotel (Budapest, VII. Erzsébet krt. 43-49.)

Date: Venue: Programme: 8:15 9:00

REGISTRATION Opening: László AKAR (GCEO GKI) Welcome speech: András VÉRTES (Chairman, GKI) CRISIS MANAGEMENT IN THE EU AND IN HUNGARY Elena FLORES, Director, DG ECFIN, European Commission Speaker from the Government Administration (tbc) András KÁRMÁN, Director, EBRD THE TRANSFORMATION OF THE LABOUR MARKET IN THE CRISIS László ANDOR, Commissioner, European Commission

11:30 12:00 13.00

13:30

BUSINESS ENVIRONMENT IN HUNGARY Radovan JELASITY, Chairman and CEO, Erste Bank László PARRAGH, President, Hungarian Chamber of Commerce György WÁBERER, Chairman and CEO, Waberer’s International COFFEE BREAK ROUND TABLE DISCUSSION ON CREDIBILITY AND THE CREDIT Participants: Péter Ákos BOD, Csaba KÁKOSY, László URBÁN and András VÉRTES Moderator: István MADÁR. SOME FEATURES OF A NEW ECONOMIC POLICY Gordon BAJNAI, former Prime Minister Closing remarks: László AKAR BUFFET LUNCH

Participation fee: HUF47.000 + VAT (Taxes and parking fees shall be borne by the organizers.)

Hungarian/English simultaneous translation.

Detailed program and application: w w w.gki.hu I For more information: +36 1 318 1284

SPONSORS:

MEDIA SPONSORS:

monitoring and enforcement mechanisms.” the study observes.

On the other hand, Hungary’s overall score of 74.9 (a score on a scale of 1-100 calculated using a range of analytical tools) is only outperformed by Lithuania and Slovenia from the East European and Central Asian region, with scores of 77 and 76.2 respectively, which bathes the country in a good comparative light. It also suggests that workingwomen are relatively well off if they plan on achieving business success in Hungary.

“I guess I was simply lucky from this respect all through my career thus far,” says Marinetta Molnár, director of HR and Communications at the Hungarian branch of Europ Assistance. An agile woman in her late 20s, yet a top executive already, the director has both personal experience and a professional overview on the subject of gender equality. She insists that she has

never had any problems or extra challenges that resulted from being a woman in a playground dominated by men. “Ultimately, it all boils down to one’s character and attitude, whether one can succeed or not,” she says, emphasizing that this is only her personal experience, and that her professional views are somewhat different. “I am perfectly aware that things, often, are not as bright as my example may show, and sometimes it is not very simple for a woman to build a career or to accomplish business successes,” she says.

A typical challenge, especially for a young and decorative woman, arises when female members of the HR staff interview her: more often than not, they will treat the candidate as a potential threat, or at least a future competitor. According to various HR professionals, woman-towoman contacts carry the biggest risk at workplaces, both in personal relationships and group dynamics.

“It is solely professional excellence that makes reputation unquestionable,” opines Molnár. “Quite naturally, both male and female colleagues will look at the woman first. Some women, then, learn to use it, others attempt to abuse it, but I think that this is the way it’s meant to be. It’s a very typical scenario, for example, that a man will shake my hand very firmly at the beginning of an interview, then gradually ease off, and end up offering a dead fish handshake at the end. It’s not necessarily toughness, but you definitely need a good deal of confidence to deserve that,” she says.

Enforcing interests in demanding situations, for example at a meeting or when negotiating with a business partner, can be another challenge for female employees.

Especially, since equal treatment obviously means that toughness is acceptable from both sides. And while all HR professionals agree that women should stick to certain characteristics, most importantly to being sensitive and empathic within reason, weakness is not, by any means, to be tolerated. “A woman has to remain flexible and empathic, and cannot be cruel when the other is in a difficult situation,” Molnár explains. “I think that self-knowledge is an often overlooked but crucially important factor in achieving this,” she concludes. ■

2 Business 11

BBJ

WWW.BBJ.HU

Budapest Business Journal | March 08 – March 21

The female aspect

Women have been the hardest hit by the crisis according to the female rights committee of the European Parliament. The economic impact on women, however, has deeper roots, and dates back longer than 2007.

BBJ ZSÓFIA VÉGH

Gender issues, such as balance on boards or equal pay, may well be described by engaging in a dance; ever since they have been on the European Union’s agenda, there has been a lot of moving but not a lot of going anywhere. Take the issue of women on boards.

The European Parliament first called for greater female inclusion in corporate boardrooms years ago. Commissioner Vivienne Reding has embraced the initiative and set the ambitious goal of increasing the ratio of women to 40% by 2018 and 2020 in the public and private sectors respectively. (The ruling would apply to organizations with more than 250 employees and turnovers higher than €15 billion.) Yet the prospects of that

happening by the deadlines are pretty slim.

Ildikó Gall-Pelcz, a Hungarian MEP who is a member of the European People’s Party and sits on ECON (the European Parliament’s Committee on Economic and Monetary Affairs), cites cultural differences for reluctance in some member states. The politician does not support the idea, and neither does Hungary. The country’s leaders do not find quotas and sanctions a good enough tool to boost growth. Gall-Pelcz says she would rather see a gradual decrease in the pay gap, which in some European countries can be as high as 30%. She wants a 10% drop to start off, which would at least be something tangible, she insists.

The recession has not helped the pay gap shrink: social cuts and tax increases force many women leave the labor market and work in the informal economy. Part-time jobs or fixed-term contracts are becoming more widespread, at the expense of more steady employment. In addition, women with lower wages are more likely to withdraw from the labor market, their salaries not being attractive enough to stay in.

These are the findings of a recent report by the European Parliament that looked into the gender aspects of the crisis. The report states

that men created the credit crunch in the first place. It also attributes the failed attempts to solve it to men. Looking strictly at the numbers, men could take the blame for the crisis, being overrepresented at executive levels.

Europe’s inability to get a grip on the recession could also be the fault of men with only 5% of female decision-makers in the EU’s financial institution and not one in any of Europe’s central banks. Yet it was also men who suffered more severely from lay-offs in the early years of the European crisis. Figures show that jobless rates among men rose by 3.8% between 2007 and 2012, as opposed to 2.6% for women. Massive lay-offs have been most present in male-dominated areas like construction and industrial sectors.

QUICK FIXES So where is the female aspect? Analysts warn that women will take the lead in redundancy rates in the second part of the crisis as it moves into sectors like healthcare, education and retail. Women are and will be more affected by subsidy cuts like childcare benefits too. But these arguments are not convincing enough to conclude that crisis has hit women more than men. As the crisis widens, it affects more sectors and cuts can be indiscriminate.

Figures presented by Mary Papaschinopoulou, director of the North German Chamber of Industry do not confirm that female entrepreneurs have suffered more either. It is true that women lead only 30% of enterprises.

But in terms of how many more women-led enterprises were set up or closed down during crisis, statistics are scattered. In some states, such as the Baltic countries, their number increase, but the business “death rate” is higher in Austria, whereas closedowns in Italy, Spain and Sweden have slowed.

Some of the proposals made by the Women’s Rights and Gender Committee (to be ratified at the plenary session), such as ensuring budget reductions are gender neutral, are impossible to implement. Instead of looking back, advocates and politicians should look ahead and find ways in which women could contribute to GDP increases. When adopting crisistackling measures, governments should opt for policies that reconcile work-life balance. That is, allowing maternity/parental leaves, opening more nurseries or helping flexible employment take hold. Faster implementation of pending proposal wouldn’t hurt either. Gall-Pelcz doesn’t disagree. “There are times to contemplate over decisions, but this is not that time. In crisis, we need quick fixes,” she says. ■

12 2 Business BBJ

WWW.BBJ.HU

Budapest Business Journal | March 08 – March 21

Education over taxation While the name Unilever might not be familiar to all, the company’s product lines, such as Knorr, Lipton, Signal and Algida, are part of everyday life for millions of families in 190 countries around the globe.

András Gyenes has recently been appointed CEO of Hungary and the Adria region. We asked him about facts, plans, successes and annoyances.

OUR PHILOSOPHY IS NOT TO SLICE A BIGGER SHARE FROM A SHRINKING HUNGARIAN MARKET BUT TO STOP THE DECREASE IN DEMAND THROUGH MARKETING AND OTHER METHODS.

BBJ KRISZTIÁN KUMMER

Q: You were appointed CEO of Hungary and the Adria region of Unilever recently, but you’ve come a long way to reach this position.

A: Yes, I might say I tried myself in quite a handful of positions before I became CEO. After graduating from university, I started at Unilever immediately and I’m still working there – for 20 years now. It sounded like an interesting opportunity, and within the framework of the company I had the honor to try and improve myself not just in Hungary, but also in the Netherlands, Croatia and Czech Republic. The company and I work together very well, the corporate culture is very similar to mine and vice versa.

However, my appointment wasn’t a huge surprise. In the last year and a half, I was the managing director in Hungary, so becoming CEO of the Hungary and Adria region just reinforced my position. But I think the new approaches I introduced might have helped my promotion.

Q: What kind of new approaches?

A: Our philosophy is not to slice a bigger share from a shrinking Hungarian market but to stop the decrease in demand through marketing and other methods. We had a 4.5% growth on the overall market, but performed much better on submarkets. For example we have increased the sales of our Saga black and fruit teas, because the blending meets the tastes of the Hungarian population. We also increased our share on the mayo market and we introduced Globus gourmet sauces, imported from Czech Republic; they had a great reception. Also in Hungary, our market share in home ice cream consumption lags far behind the EU. We tried to spur the market a little and with products like Mini Magnum we have achieved double-digits growth.

Long story short, in 2012 the Hungarian market was one of the most successful in Europe based on growth data. And we were not just successful by ‘Unilever-standards’ but also by the performance of our competitors.

Also, to develop markets we should develop the working environment. Unilever’s corporate culture moves towards performance-oriented concepts. We inform our employees about our goals and achievements on a regular basis. We try to draw our colleagues in to brain storming over the all-ina-day tasks as well.

also operated from Hungary. Moreover we provide the marketing services for these countries.

Q: What are your plans for the future?

A: It seems to me that we have found our path to follow and last year’s results seem to prove that I’m right. While the exact numbers are still not available, we achieved a turnover of around HUF 80 billion on the Hungarian market. We gained momentum here and we want to increase further, despite the challenging market environment. However, we know that we have to improve our position on a regional level, as recent years were not as successful in the abovementioned countries as was intended. We try to implement the changes in corporate culture we have already introduced in Hungary and to improve the employees’ satisfaction levels. I hope we have arrived at a trend-changing point in the Adria region.

CURRICULUM VITAE András Gyenes graduated from the Faculty of Business and Economics at Janus Pannonius University in Pécs, Hungary. He joined Unilever straight from there and worked as a management accountant trainee for 1.5 years. After fulfilling several different positions at the company in Hungary and abroad, he became managing director of Unilever Hungary in 2011 and then CEO of the Hungary and Adria region in 2012.

Q: How many people do you employ across the region?

A: We have more than 1,700 in this region.

We have three factories in Hungary: a household care factory in Nyírbátor; a food factory in Röszke; and an ice cream factory in Veszprém.

We also maintain a central office in Budapest.

The factories are working on a regional basis, for example 80% of the output in the factory in Nyírbátor is for cross-border markets. We established a distribution network for Bosnia and Herzegovina, Croatia, and Slovenia that is

Q: You mentioned the challenging environment. How do you manage the ongoing recession in the country and the everchanging economy policy?

A: Hungarian economic policy focuses on exports to turn the country back on to the path of growth. However, the measures choke domestic consumption. In the last quarter of 2012, consumption fell by almost 5%, the greatest decrease in the last four years. Also, inflation is rocketing: we are dealing with price increases of around 6-8% in some product categories.

The government’s measures in some cases are not really deliberate. For example, the introduction of the so-called hamburger tax [a tax on food regarded as unhealthy, containing high amounts of sugar, salt, caffeine or carbohydrates] caused a 15-20% decrease in the sales of Delikát, Knorr and ice cream products on the market. Due to the new tax, we had to cancel building a new Knorr factory in Hungary as the market collapsed. But what is very disappointing is that sugar and salt consumption didn’t decrease at all in the country. The government, in my view, would gain more through education than taxation. ■

2 BusinessTrends 13

BBJ

WWW.BBJ.HU

Budapest Business Journal | March 08 – March 21

Public encouragement Government aims to inform public about past successes

700mln

HUF

NET EARMARKED FOR CAMPAIGNS

The government has signed contracts with I.M.G. Inter Media Group Kft and Lounge Design Kft with the goal of better informing the public about the achievements of the current Fidesz administration.

The contracts involve extensive communication campaigns on a broad range of media platforms to drive home the point that the government is in control of the situation and is working for the betterment of the country.

“The majority of people support the government’s work and are satisfied with its actions. In order to turn this silent approval into an active cooperation, there is a need to found a new, comprehensive conviction,” the official documentation of the campaign says. The statement isn’t sourced and grossly contradicts the latest survey from pollster Medián, which found that only 24% of the population think the country is heading in the right direction, with 30% saying the Orbán cabinet is doing a good job.

“Government communication has so far been mainly one-directional, giving no opportunity for feedback, resulting in many messages failing to reach their destinations, since such ‘declarations’ led to increasing voter passivity and augmented their aversions towards politics,” the document continues. It bears no reference to the “national consultation” campaigns launched by the government in the past, wherein questionnaires were delivered to all registered households, seeking their opinions of government initiatives -to a muted response of 8% out of 8.2 million letters in the last round.

The newest campaign will mainly be aimed at circulating the government’s newest slogan, “Magyarország jobban teljesít,” which translates as Hungary is doing, or performing, better, a turn of phrase that has already been heard from the Prime Minister and several ranking officials in the past few weeks and that will surely stay a part of public rhetoric in the immediate future. GR

“Doing better” campaign budgets (net)

I.M.G. Inter Media Group Kft

Lounge Design Kft

Source: Kormany.hu

550 mln HUF 150 mln

Trouble with the books

Expansion hopes fading

The vast majority of businesses commit accounting errors

79.9%

2013 won’t be the year of the much-awaited recovery

0%

OF COMPANIES OWED UNPAID TAXES

Despite the government’s efforts and confident rhetoric, Hungary’s economy won’t see even the slightest growth this year, according to the latest annual projection compiled by economic think-tank GKI Gazdaságkutató Zrt. It notes that Hungary’s hopes for growth are adversely affected by a number of factors, both domestic and external. While the European Union is set to produce a minor, 0.1% growth this year (up from last year’s 0.3% contraction), Germany, which is Hungary’s most important trade partner, will see its output shrink to 0.5% from 0.7% last year.

The situation isn’t any better based on domestic factors, according to the projections. GKI expects investments to drop by at least 2% this year, compounded by a lack of confidence in the legal environment and low demand, which even an accelerated distribution of EU funds won’t be able to offset. This is all the more true considering the high level of indebtedness among the general public, which will prevent the expansion of consumption, even though real wages and the minimum wage will both increase this year.

GKI expects the government will shortly be forced to announce additional corrective measures amounting to HUF 200 bln if it aims to exit the ongoing EU excessive deficit procedure against Hungary that carries with it the threat of losing development funds. The corrections are necessitated by the latest, revised European Commission forecasts that the annual budget deficit will be above the 3% of GDP tolerance threshold in 2013 as well as 2014.

There is likewise the question of the kind of budgetary discipline the government will adopt in the second half of the year, shortly before the 2014 general elections.

GKI also cites uncertainties regarding the new management of the central bank and expects changes in exchange rates and the main drivers on the international stage to determine any hopes of additional monetary or fiscal easing. GR

Last year authorities found that four out of five companies owed unpaid taxes, meaning auditors found anomalies at 79.9% of all businesses inspected, according to figures published by data provider feketelista.hu.

The site compiled a list of the 100 companies that have outstanding payments towards the state of HUF 100 million or more. It found that 57% of them are based in Budapest, with the others being more or less evenly dispersed across the country. It highlighted that there are 12 companies based in minor localities that also managed to accumulate debts of hundreds of millions.

Of the big debtors, 96% operated as a limited liability company (kft).

Overall, feketelista.hu attributed the troubling percentage of anomalies to the fact that the authorities have adopted a more targeted method for their inspection regime. In previous years, a program would compile a random sample of companies to be audited, whereas now inspectors are specifically gunning for companies were irregularities are thought likely to occur.

Auditors normally also pinpoint specific industries that will be targeted in any given year; for 2013, the focus is on wholesale, retail of decorative plants, planting seeds, fertilizer, labor market services as well as security services.

Internet retailers, tax consultants and health service providers can also expect special attention from the tax authority this year, feketelista.hu said.

Last year yielded results, with NAV being able to reach a year-on-year increase of 13.8% in collected unpaid taxes, totaling HUF 340.7 billion. Those avoiding the payment of taxes can expect a 50% increase to their tally thanks to the related penalties, but if there are serious violations, like forging the numbers, the penalty could reach 200%. GR

Top tax dodgers of 2012. Taxes owed (HUF bln)

GROWTH SEEN FOR 2013

Lackluster economic outlooks (%)

HUF

5 ss ft.

0 0 t. t. r. dó Kf 20 . Kf in e i K Ke t K ia us elm ns m o lg ea kedő B o ra eb f t. d Sz a ked M T . r e s t W t s - K ria re Kf ib e Ex eres Fre er. é nd lg.

Cs Ag úske olg.

K K Tre s Szo H s Sz é é Source: feketelista.hu

Average euro-forint exchange rate Source: GKI

279,2

289,4

290,0

2 Business

BBJ

SpecialReport//OfficeLife

Refitting the market With the office market still in a downward cycle, office furniture suppliers expected to face challenges in the coming years. However, sector players seem to find their way around, even in a shrinking market.

BBJ MARKET OVERVIE W

Last year’s office market in the capital saw a 74% drop in completion volume compared to 2011, with the majority of the transactions expansions and lease renewals.

In such an arid market, office furniture suppliers have had to adopt a new approach, and as it

turns out in the Budapest Business Journal’s market snapshot, some have indeed succeeded.

“Companies with the right cost structure and a dynamic leadership don’t need to worry,” Ottó Feuertag, managing director of Europa Design told the BBJ. He says the firm closed last year with a turnover of €2 million, and entered two new markets: Serbia and Slovakia.

Steelcase Magyarország also had a good year in 2012, “We managed to get new partners in addition to the existing ones,” said Zoltán Petró, market manager for Hungary at Steelcase. “The pre-crisis atmosphere has obviously not come back,” Petró said. “Our clients now typically renew their lease agreements, and they have a limited budget for office interiors. But with a new approach, Steelcase offers cost efficient solutions for cli-

ents, and spectacular results can be achieved with reasonable investment,” he added.

All office suppliers have expanded their portfolios, adding new services like consulting, or office audit services. Furniture renting is also on the rise.

“We need to show a pro-active attitude, we need lots of consulting with our clients,” Petró said. “We also focus, apart from office spaces, on vertical markets, such as higher education institutions, however, Steelcase helps create great experiences - wherever work happens.”

Office Line Group, a 100% Hungarianowned business, is not pessimistic either. “We closed 2012 with profit, although our revenue fell behind the planned amount,” Ferenc Masznik, managing director of Office Line told the BBJ. “Regarding today’s market sit-

uation, we are satisfied.” As for future prospects, the market players asked by the BBJ do not expect significant changes in the upcoming two or three years.

Feuertag of Europa Design thinks internal restructuring and optimization will still characterize the market.

“On a stagnating market, maintaining turnover and profit rates can be reckoned a success. We make up for losses coming from missing new furniture orders with flexible service packages both in Hungary and in the neighboring countries,” Feuertag added.

Masznik from Office Line has no illusions.

“I’m sure that we have to work more for less, but my goal is to operate my enterprise with a profit, and based on past years’ experience, I’m not worried,” he said. ■

2 BusinessSpecialReport//OfficeLife 15

BBJ

WWW.BBJ.HU

Budapest Business Journal | March 08 – March 21

The best of the office business in 2012 This January the most important players and projects on the office market were once more pitted against one another to find the most inf luential people and the very best buildings in the industry.

The Iroda.hu website organized the “office of the year” awards for the third time this year, and presented awards in six main categories.

BBJ GERGŐ RÁCZ

OFFICE OF THE YEAR 2012 NNG KFT The HQ of the navigation software provider was picked as the best of the 22 entries based both on the audience vote and the verdict of the judges. The 6,300sqm building received recognition for its balance between efficient work and recreational spaces as well as an inspiring environment that boosts creativity.

“There is a strong competition in the market for the best programing experts, so we focus on providing our current and future staff with optimal circumstances in order to offer an inspiring working environment. Completed with the ideas of staff members in the design and implementation phase, this building undeniably belongs to us,” said Péter Balogh, chief executive of NNG. GREENEST OFFICE OF 2012 BUDAWEST OFFICE The complex situated in Budapest’s 11th district was completed in 2009 and boasts a 93% occupancy rate.

The building, developed by Vendere Ingatlanfejlesztő Kft, offers a range of environmental features such as waterfree urinals, heat exchangers, recycling, reuse of heat generated by the air conditioning as well as energy-conserving machinery.

BudaWest has 16,000sqm of leasable space and received a BREEAM environmental certificate in 2012.

MANAGEMENT COMPANY OF 2012 STRABAG PFS ZRT STRABAG PFS finished at the top in

most aspects that the judges weighed, such as focus on clients, size of the firm, complexity of activities, corporate management system, and social responsibility.

“It fills us with great pride to win this category in the same year that it was created, while competing with the best management firms,” the company’s chief executive László Vágó said. “This award reaffirms for us that our clients feel we are moving in the right direction and this recognition will hopefully also convince our prospective future partners,” he added.

OFFICE CONSULTANT OF THE YEAR 2012 KÁROLY KATKÓ, CB RICHARD ELLIS Consultant of the year Károly Katkó has worked for CB Richard Ellis since 2011 and heads the tenant representation department in the agency’s Budapest office. Katkó, whose responsibilities include representing CBRE’s priority corporate clients and securing local tenant representation commissions, emerged at the top of the category in a close contest.

“We are very proud that Károly became the Office Market Consultant of the Year in 2012. The title is a commendation for both Károly’s person and his performance, and it also attests to our team’s

commitment to the Hungarian real estate market,” said Adrienne Konthur, managing director of CBRE’s Budapest office.

OFFICE MARKET PERSONALITY OF THE YEAR 2012 CSONGOR CSUKÁS, MRICS, BNP PARIBAS Csukás, the head of BNP Paribas Real Estate, was picked as the most important figure in the office market this year. He was deemed the best in his field based on the votes of the profession, his appearances in the media, as well as his achievements on the market and how much of an inf luence he has on the industry.

OFFICE OF THE YEAR 2012 – AUDIENCE CHOICE RESIDENCE OFFICES The building located on the Buda side of the capital close both to the Danube and the “nagykörút” holds 18,400sqm of space and was developed by RE project development Kft. Having already been recognized with the Laminam Best Project award in 2009, the two Residence buildings were recognized for their exciting design solutions as well as the wide range of services in the complex. ■

16 2 BusinessPartnerWatch BBJ

WWW.BBJ.HU

Budapest Business Journal | March 08 – March 21

Office furniture suppliers

[1]

1

OFFICE DEPOT HUNGARY KFT

4,200 4,497

»

www.officedepot.hu

2

GARZON BÚTOR KFT

2,400

1,450

www.garzon.hu

3

STEELCASE S.A. (MAGYARORSZÁGI KERESKEDELMI KÉPVISELETE) www.steelcase.hu

1,900

»

9 9

3 3

– 3

Office Depot, Real Space, other

Uomo, Ergonóm, Fill, Forte, Garzon Manager, Metalo, Magnum, Mobility, Off sysis, Trend- Nova, Delta, Szigma

Steelcase, Polyvision, Coallesse

–

–

–

–

YEAR ESTABLISHED MAIN REFERENCES OVER THE PAST 2 YEARS (2011, 2012)

OWNERSHIP (%) HUNGARIAN NONHUNGARIAN

TOP LOCAL EXECUTIVE CFO MARKETING DIRECTOR

ADDRESS PHONE FAX EMAIL

RWE, COOP, MKB, Raiffeisen, Telenor

1997 RWE, COOP, MKB, Raiffeisen, Telenor

Cenkes 16 Kft Central Fund (100) –

István Miholek, Gusztáv Quittner Gusztáv Quittner Krisztina Rakos

1146 Budapest, Szabó József utca 6.

(1) 460-2300 (1) 460-2301 info@ officedepot.com

Quaestor Kft, Grabarics Építőipari Kft, ZÁÉV Építőipari Zrt, Eszterházy Károly Főiskola

1949 Lifestyle Hotel Mátraháza, ETO Hotel Park- Győr, Hotel Planai - Schladming, Sissi Park - Haus, Science Building - Szentágotai Kutatóközpont - Pécs, Eszterházy Károly Főiskola - Eger.

(100) –

Alajos Nagy Gáborné Láng Irén Hanzsek

8000 Székesfehérvár, Bakony utca 4.

(22) 512-220 (22) 329-403 garzon@garzon.hu

–

OTP Bank, Vodafone, Audi, British Petrol, MKB Bank, General Electric, Citi Bank, ING

– Steelcase S. A. (100)

Zoltán Petró – Zoltán Petró

1027 Budapest, Horvát utca 14–24.

(30) 685-2640 (1) 214-0503 info-hu@ steelcase.com

3D IMAGE DESIGN

2D DESIGN

CUSTOM FURNITURE

REPAIR

MAINTENANCE

RENTAL

DESIGN

ACCESSORIES

BRANDS

DELIVERY AND ASSEMBLY

SERVICES CONFERENCE EQUIPMENT

UPHOLSTERED FURNITURE

WORK CHAIRS

PARTITIONS

CONFERENCE TABLES

DESKS

PRODUCTS NO. OF STORES NO. OF SHOWROOMS

NET REVENUE FROM OFFICE FURNITURE SALES (HUF MLN) IN 2012[1]

COMPANY WEBSITE

TOTAL NET REVENUE (HUF MLN) IN 2012

RANK

Ranked by total net revenue

MAIN CLIENTS IN 2012

1912

»

NEWSLETTERS

Business and economic intelligence We all of us make better decisions if we understand our environment in depth. Although it is crucial to receive essential information promptly, we can rarely afford the luxury of wasting precious time on browsing the web, gathering and filtering news for ourselves.

The editorial staff of the Budapest Business Journal saves you time and money. We send you daily the most important news and offer in depth analysis. Our one-stop-knowledge center is your must-have support for better decisions!

1

Hungary a.m.

2

Energy today

3

regional today

Gather expert knowledge about the status of the Hungarian economy, business trends and politics on a daily basis. Read between the lines and fi nd the most important information that will help you make safe decisions.

Does Hungary, and Central Europe in general, hold a strategic position in the Continent’s energy supply? Does the stability of Europe depend on the energy politics and economy of the region?

Focus on the market and see the forces that move prices and diplomacy.

Central and Eastern Europe has rejoined Europe, indeed, helped forge a new Europe, after decades of isolation. The CEE nations share common features in their post-privatization economies and ex-soviet heritage. See the big picture and the individual pieces of the mosaic at the same time.

Order the package now and receive a

MASSIVE DISCOUNT

HUF

HUF

537,000

(€1,800)

299,000

(€1,000)

PLEASE VISIT OUR WEBSTORE TO SUBSCRIBE

www.bbj.hu/store/

2 BusinessPartnerWatch 17

BBJ

WWW.BBJ.HU

1,400

1,400

www.irodabutor.com

5

6

DÉLITY BÚTOR ZRT www.delitybutor.hu

ANTARES HUNGARY KFT

1,346

1,300

557

1,300

www.antares.hu

7

FALCOSOPRON KFT

823

775

www.falcosopron.hu

2 2

200 1

– 1

– 2

–

–

–

–

–

8

713

»

EUROPA DESIGN ZRT 9

www.europadesign.hu

460

410

1 1

1 1

Office and Co., Sit-Land, LD Seating

Vénusz irodabútor család

–

Antares, Rovo

FS, falPro, Sitag, ViaSit, Assmann, Wesemann

Kinnarps, Drabert, MartinStoll, Materia, Skandiform, NC NordicCare

Hermann Miller, Wilkhahn, Actiu, IVM, Della Valentina, Sitland

Teknion, Reiss, Interstuhl, Quadrifoglio, LD Seating, LAS, Sitland

KINNARPS HUNGARY KFT www.kinnarps.hu, www.spaceconcept.hu

–

–

–

–

–

–

–

–

–

TOP LOCAL EXECUTIVE CFO MARKETING DIRECTOR

ADDRESS PHONE FAX EMAIL

Tesco Global Zrt, 1994/96 Magyar Telekom Tesco Global Zrt, Nyrt, General Magyar Telekom Electric, UniCredit Nyrt, General Electric, Bank Rt, Budapest UniCredit Bank Rt, Bank Rt, Paksi Budapest Bank Rt, Atomerőmű Zrt Paksi Atomerőmű Zrt

Tamás Bagó (100) –

Tamás Bagó Ildikó Székely –

1027 Budapest, Bem rakpart 30.

(1) 212-6186 (1) 212-7450 mobilart.bp@ euroweb.hu

–

RS Áruházak (Budapest), Iroda 2000 Kft (Miskolc), Vivax Bútor Debrecen, OrakoEkler Komplex Zrt (Budapest), Febrill Bútor (Budapest)

1997 Axiál Kft. (nationwide), Paksi Atomerőmű Zrt. (Paks), Trigó-Fix Kft. (nationwide), Profi Hungária Kft. (Dabas), Szentkirályi Ásványvíz Kft. (Szentkirály)

József Ádám Délity (100) –

József Ádám Délity Mária Novák Döbrentei Mónika Willi

6345 Nemesnádudvar, Petőfi Sándor utca 7.

(79) 578-050 (79) 578-050 dbrt@delitybutor.hu

–

Office Depot, Corwell, Mobilart, PBS, Garzon, Metro, Metalobox

1995 Office Depot, Corwell, Mobilart, PBS, Garzon, Metro, Metalobox and further 370 reseller partners, public procurement

Individuals (10) Individuals (90)

Ferenc Sustik Olajos Tibor –

6763 Szatymaz, Kossuth utca 14.

(62) 583-510 (62) 283-168 antares@antares.hu

Telenor Magyarország, Bosch, LUK Savaria, Continental Automotive

1956 HungaroControl, Glencore Grain, ÉGIS Gyógyszergyár

(100) –

Andor Sárvári Krisztina Hegedűs Károly Hulesch

9400 Sopron, Bánfalvi út 27.

(1) 220-6378 (99) 221-6745 info.budapest@ falcosopron.hu

ABB, Audi, Canon, Claas Kft., EGIS, HBO, IBM, Sigma Kudos

2000 Celanese, KCI, KLM, Tetra Pak, T-Systems, Marquard Média, Unisys

– Kinnarps AB (100)

Tiberius Soltész Csilla Fehér Georgina Miseta

1133 Budapest, Váci út 92.

(1) 237-1251 (1) 237-1250 kinnarps.hungary@ kinnarps.hu

Avis, Driving Camp, Angola nagykövetség, Boiron

1994 Avis, KPMG, Citibank, Teva, Ernst&Young

(100) –

Ottó Feuertag – –

1022 Budapest, Bimbó út 37.

(1) 200-9998 (1) 200-8428 europadesign@ europadesign.hu

DBH, K&H Bank, National Instruments, Prysmian MKM, T-Systems, Varian Medical Systems

2002 DBH, K&H Bank, National Instruments, Prysmian MKM, T-Systems, Varian Medical Systems

Ferenc Masznik – –

1117 Budapest, Budafoki út 91–93.

IP West Office Building, building C, ground floor (1) 354-1620 (1) 354-1621 info@office-line.hu

– Haworth Inc (»), Haworth International Ltd. (»)

Mathias Haase – –

1031 Budapest, Záhony utca 7.

(1) 201-4010 (1) 201-1995 info.hu@ haworth.com

OFFICE LINE GROUP www.office-line.hu 390

10

HAWORTH HUNGARY IRODABÚTOR 11 KERESKEDELMI KFT

371

»

1 1

371

1 1

»

Neudoerfler, Sedus, Viasit, Hag, La Cividina, Züco,Rexite Wiener Werkstaette, Artemide

FEBRÜ, LAS, Vénusz, RIM, Antares, Stulwerk, SiniA

–

–

YEAR ESTABLISHED MAIN REFERENCES OVER THE PAST 2 YEARS (2011, 2012)

OWNERSHIP (%) HUNGARIAN NONHUNGARIAN

3D IMAGE DESIGN

2D DESIGN

CUSTOM FURNITURE

REPAIR

MAINTENANCE

RENTAL

DESIGN

ACCESSORIES

BRANDS

DELIVERY AND ASSEMBLY

SERVICES CONFERENCE EQUIPMENT

UPHOLSTERED FURNITURE

WORK CHAIRS

PARTITIONS

CONFERENCE TABLES

DESKS

PRODUCTS NO. OF STORES NO. OF SHOWROOMS

4

MOBIL ART IRODABÚTOR KFT

NET REVENUE FROM OFFICE FURNITURE SALES (HUF MLN) IN 2012[1]

COMPANY WEBSITE

TOTAL NET REVENUE (HUF MLN) IN 2012

RANK

Budapest Business Journal | March 08 – March 21

MAIN CLIENTS IN 2012

1995

290

285

1 1

250

1 1

www.neudoerfler.hu

FEBRILL 13 BÚTOR KFT

250

www.febrill.hu

BENE NR BUDAPEST KFT

»

OTIS Felvonó Kft, Opel Szentgotthárd, Signal Biztosító, AUDI, Corning, Uniqa

1998 OBI, Allison Transmission, DM, Syngenta, Samsung

(30) Neudoerfler Office Systems GmbH (70)

András Bradács – –

1115 Budapest, Bartók Béla út 105–113.

(1) 203-8108 (1) 203-8107 info@neudoerfler.hu

–

NNG Kft, Schlegel GmbH, Patak Hotel, EON, CBA, Linde

1991 Waberer's cégcsoport, Evosoft, Garzon Plaza, Zalaegerszeg Városi Kórház, MC Energy, Medicontur

Individuals (100) –

László Herendi – –

1117 Budapest, Galambóc utca 8.

(1) 213-7989 (1) 214-1519 info@febrill.hu

– Bene AG (100)

Bence Hulényi – –

1117 Budapest, Alíz utca 2, Office Garden Irodaház II. (1) 411-3411 (1) 411-3419 budapest@ bene.com

(100) –

Károly Kis – –

1138 Budapest, Váci út 135–139/B (1) 465-8060 (1) 350-6748 info@blue.hu

(100) –

János Nagy – –

6000 Kecskemét, Vasút utca 8.

(76) 484-776 (76) 484-776 bred@bred.hu

»

– 1

»

»

1 1

–

Steelcase

»

»

»

– 1

BRED, RIM

–

»

»

»

BLUE BUSINESS

BRED NR IRODABÚTOR KFT www.bred.hu

Bene, Arper, Artemide, Blå Station, Borks, Comforto, Fritz Hansen, Neue Wiener Werkstatte, Offecct, Zumtobel, Walter Knoll, Wilkhahn, Wittmann

www.bene.hu

NR INTERIOR KFT www.blue.hu

»

»

www.haworth.hu

NEUDOERFLER OFFICE 12 SYSTEMS KFT

(100)

»

1993

»

1999

»

1998

»

18 2 BusinessPartnerWatch

»

–

–

Stulwerk, Antares, Trendline, Easy

–

3D IMAGE DESIGN

2D DESIGN

CUSTOM FURNITURE

REPAIR

MAINTENANCE

RENTAL

DESIGN

ACCESSORIES

BRANDS

DELIVERY AND ASSEMBLY

SERVICES CONFERENCE EQUIPMENT

UPHOLSTERED FURNITURE

WORK CHAIRS

PARTITIONS

CONFERENCE TABLES

»

1 1

DESKS

NO. OF STORES NO. OF SHOWROOMS

BÁTHORI FURNITURE NR TECHNOLOGIES BT

WWW.BBJ.HU

Budapest Business Journal | March 08 – March 21

PRODUCTS

NET REVENUE FROM OFFICE FURNITURE SALES (HUF MLN) IN 2012[1]

COMPANY WEBSITE

TOTAL NET REVENUE (HUF MLN) IN 2012

RANK

BBJ

» »

MAIN CLIENTS IN 2012

»

YEAR ESTABLISHED MAIN REFERENCES OVER THE PAST 2 YEARS (2011, 2012)

1996

»

www.bathori.hu

NR

F-STUDIO KFT www.f-studio.hu

KARRIERNR BÚTOR KFT

www.karrierirodabutor.hu

NR

SILCOM KERESKEDELMI ÉS TANÁCSADÓ KFT

»

»

– 1

4

»

»

»

»

»

2 2

www.vitra.com

»

»

»

Diemme, Emmegi,

»

»

DVO, Meco, Della Rovere, Luxy, LD Seating

www.silcom.hu

VITRA NR

Faram, Bejot, TSD, Luxy

»

»

2 2

Vitra

–

»

2000

»

1996 Generali-Providencia Zrt, Philips Kft, Panalpina Kft, Cargill Magyarország Zrt, Denso Kft, FundamentaLakáskassza Zrt

1991

»

1950

»

OWNERSHIP (%) HUNGARIAN NONHUNGARIAN

TOP LOCAL EXECUTIVE CFO MARKETING DIRECTOR

ADDRESS PHONE FAX EMAIL

István Báthori (50), Diana Báthori (50) –

Diana Báthori – –

1118 Budapest, Diófa utca 72.

(1) 342-5203 (1) 343-6086 bathori@bathori.hu

Individuals (100) –

László Sashegyi – –

1013 Budapest, Attila út 29.

(1) 225-0041 (1) 375-8309 faram@ mail.datanet.hu

Rezső Horváth, Edit Kiss (100) –

Rezső Horváth – Edith Kiss

8000 Székesfehérvár, Gyümölcs utca 4–6.

(22) 505-807 (22) 505-808 szekesfehervar@ karrierirodabutor.hu

Szilvia Pintér (96), Viktória Bede (4) –

Szilvia Pintér – –

1122 Budapest, Székács utca 11/A (1) 250-5952 (1) 250-5926 info@silcom.hu

– (100)

Mária Szmodis (representative) – –

4127 Birsfelden, Klünenfeld str. 22.

– – –

NOTES: (1) Financial data provided by the companies has been closed by accountants but not yet audited.

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

This list was compiled from responses to questionnaires received by March 06, 2013 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

BYOD: more than a security issue The bring your own device (BOYD) trend seems to infiltrate ever more companies as the increase in mobility and effectiveness it provides seems unavoidable.

But letting personal devices near confidential business data might seem to some to be a big gamble.

BBJ KRISZTIÁN KUMMER

The bring your own device (BYOD) revolution seems irreversible; it is becoming increasingly clear to big companies that if they don’t shift towards mobility, they cannot stay competitive, innovate, maintain a productive workforce, and attract and keep top talent. Moreover, letting employees use their own devices means higher comfort and mobility for them and lower costs for employers, as fewer devices have to be purchased, leased, maintained or replaced at the company’s expense.

The initiative came from top managers who wanted to use their personal devices (smartphones, laptops, tablets) to access confidential company information and applications. As is often the case, top executives didn’t just help to bring the matter to the forefront in their companies, but they also drove it further.

“But no matter how reliable managers are, the one device-two tasks problem could lead to very sensitive issues as personal and corporate information mix on these devices: personal and business letters, personal and customer data, family photos alongside top-secret business information,” says Péter Szabó, senior product consultant of T-Systems Magyarország.

BYOD is an effective tool to raise mobility, but also raises IT-security questions that can lead to management issues. A mobility solution introduced with the best of intentions but without proper care might cause significant damage. So mobility is rapidly moving from a business to a strategic issue.

Governance is also critical to the success of BYOD in practice. Without formal controls, companies cannot define a clear path for how to move the organization successfully and strategically from a managed world to an unmanaged or “borderless” world, where the security perimeter is no longer defined and IT does not manage every technology asset in use in the organization.

“Many people think BYOD is about the endpoint, but it’s much broader than that,” explains Benjamin Darvas, Cisco’s product sales specialist. “It’s about ensuring consistency of user experience working from any device, whether it’s in a wired environment, wireless or in the cloud. It’s about the policy elements of interaction. And it’s about data: how it’s secured, and how it traverses all of

those different environments. All of these things must be taken into account when moving to BYOD—it really is a change in mindset,” he adds.

The tolerance spectrum towards employees’ devices is very wide, from total rejection to total integration. “Some companies are still wedded to the idea that security is only guaranteed if employees use their desktops only in the office, and not even a Wi-Fi router may be installed,” Szabó explains, pointing out that other enterprises let their employees use certain devices only with limited installations to

ensure maximum IT-security with already tested and proven methods.

“Even if some companies provide cell phones to the employees, they will refuse to subscribe to mobile Internet as well, although a 10% increase in phone bills with Internet subscription could increase employees’ effectiveness by more than 10%,” Szabó says. The mobility situation in Hungary improves by small steps. According to the market expectations of T-Systems, a huge battle is expected on the mobile device management market in 2013, as ever more companies show interest in the new services and methods that increased mobility can provide. ■

2 BusinessPartnerWatch 19

BBJ

WWW.BBJ.HU

Budapest Business Journal | March 08 – March 21

Office equipment manufacturer's branch offices Ranked by total net revenue

1

KONICA MINOLTA HUNGARY BUSINESS SOLUTIONS KFT

5,960[2]

–

–

2

DOQMENTOR KFT www.nyomtato.net

BROTHER INTERNATIONAL NR HUNGARY KFT

220

»

–

–

–

–

Digital printing systems, Print Audit and Image Composition software

–

Konica Minolta

Xerox, GMC Software

Brother

–

–

MAIN CLIENTS IN 2012 ACCESSORIES

HOME DELIVERY

CONSULTING

RENTAL

OTHER

Office equipment audit, document management, multifunction devices, digital presses, wide format devices, applications

www.konicaminolta.hu

REPAIR

BRANDS CARRIED

PARTS SUPPLY

SERVICES

SCANNERS

VISUAL TECHNOLOGY

MULTIFUNCTIONAL MACHINES

SHREDDERS

FAX MACHINES

DIGITAL COPIERS

OPTICAL IMAGE COPIERS

COMPANY WEBSITE

TOTAL NET REVENUE (HUF MLN) IN 2012[1]

LASER PRINTERS

RANK

PRODUCTS

YEAR ESTABLISHED NO. OF FULL-TIME EMPLOYEES IN HUNGARY ON FEBRUARY 1, 2013

CANON HUNGÁRIA KFT www.canon.hu

EPSON EUROPE B.V. MAGYARORSZÁGI NR FIÓKTELEPE

»

»

–

–

–

–

–

Inkjet Printers

–

Canon

Epson

–

»

–

–

»

»

HewlettPackard

Digital printing machines, roll printers, sheet printing machine

Océ, Canon, Vario

www8.hp.com/hu

OCÉ-HUNGÁRIA KFT NR www.oce.hu

OKI SYSTEMS NR (MAGYARORSZÁG) KFT

»

»

–

–

–

–

–

–

–

–

–

OKI

1990 115

» »

Copy General Kft, Díjbeszedő Zrt, Tata Consultancy, Dreher Sörgyárak Zrt, Banco Popolare, Pénzjegynyomda Zrt

2003 9

Ákos Gergely (80), Szabolcs Gergely (20) –

Szabolcs Gergely Beáta Szalai Ákos Gergely

1125 Budapest, Galgóczy utca 66.

(1) 236-0552 (1) 236-0553 info@doqmentor.hu

– Brother Holding (Europe) Ltd (100)

Ágnes Surányi – –

1146 Budapest, Hungária körút 179–187.

(1) 382-7450 (1) 382-7455 info@brother.hu

»

» »

Győző Kroó – –

1031 Budapest, Záhony utca 7.

Graphisoft Park 1.

(1) 237-5900 (1) 237-5901 info@canon.hu

2008 8

– Epson Europe B.V. (100)

Miklós Fábián – –

1117 Budapest, Infopark sétány 1.

2nd floor (1) 382-7680 (1) 382-7689 info@epson.hu

– Hewlett-Packard Central Eastern European Holding GmbH (99.80), HewlettPackard Gouda B.V (0.20)

Gábor Gonda – –

1117 Budapest, Alíz utca 1.

(1) 229-9999 (1) 229-9000 info@hp.com

» »

György Németh – –

1134 Budapest, Róbert Károly körút 54–58.

(1) 236-1040 (1) 239-3633 hu-sales@oce.com

– OKI Europe Ltd (100)

Piotr Jerzy Nowak Lóránd Tamás Andrea Újlaki

1133 Budapest, Váci út 76.

(1) 814-8000 (1) 814-8009 askoki@okihu.hu

– Panasonic Marketing Europe GmbH (100)

István Stark András Gál –

1117 Budapest, Neumann János utca 1.

(40) 201-006 – customer.budapest@ eu.panasonic.com

– Ricoh Europe Holdings Plc (100)

Michael Raberger Péter Eperjesi Zsolt Vermes

1138 Budapest, Váci út 135–139.

(1) 270-9797 (1) 270-9799 info@ricoh.hu

– Samsung Electronics Co. Ltd (100)

István Facskó – –

1138 Budapest, Dunavirág utca 2.

(1) 453-1100 (1) 453-1103 –

Zsolt Szabó Maciej Skupinski Cezary Urynowicz

2040 Budaörs, Liget utca 1.8/D (23) 815-000 (23) 815-001 marketing.sehu@ sharp.eu

–

»

–

–

–

»

»

»

»

»

Panasonic

Document management, managed document services, IT services, office solutions, digital printing solutions

RICOH

–

»

–

»

MOL, Richter Gedeon, NAV, Magyar Posta, OTP Bank

www.okihu.hu

PANASONIC MARKETING EUROPE GMBH SOUTHNR EAST EUROPE BRANCH OFFICE

1994

»

1994

»

»

Audi, Budapest Bank, Strabag, Unilever, Henkel, Electrolux

1991

»

1995

»

1992

»

2010

»

www.panasonic.hu

NR

RICOH HUNGARY KFT www.ricoh.hu

SAMSUNG ELECTRONICS NR MAGYAR ZRT

»

»

–

–

–

–

–

–

–

–

–

–

Samsung

–

–

–

–

»

–

–

–

Interactive whiteboard

SHARP

»

–

–

–

–

–

–

Software solutions, digital printing equipment

Toshiba

www.xerox.hu

»

–

–

Xerox

–

1989

Euronics, MediaMarkt Saturn Holding, MTVA Magyar Rádió, NAV Nemzeti Adó- és Vámhivatal, OHÜ Országos Hulladék Ügynökség, ORFK Országos RendőrFőkapitányság egységei

2008 10

– Sharp Electronics (Europe) GmbH (100)

»

1998 70

» »

Csaba Stavinovszki – –

1133 Budapest, Kárpát utca 46.

(1) 467-6111 (1) 467-6199 info@technotrade.hu

Alcoa-Köfém Kft, Magyar Telekom Nyrt, National Instruments Hungary Kft, Raiffeisen Bank Zrt

1992 169

» »

Miklós Novák – Gábor Udvardi

1138 Budapest, Madarász Viktor utca 47-49.

(1) 436-8800 (1) 436-8801 info@xerox.hu

www.technotrade.hu

XEROX HUNGARY KFT NR

»

»

www.sharp.hu

TECHNOTRADE NR RENDSZERHÁZ KFT

1990

www.samsung.com

SHARP ELECTRONICS (EUROPE) GMBH NR MAGYARORSZÁGI FIÓKTELEPE

1117 Budapest, Galvani utca 4.

(1) 464-9000 (1) 464-9069 konicaminolta@ konicaminolta.hu

»

» » » » » »

ADDRESS PHONE FAX EMAIL

–

www.epson.hu

HEWLETT-PACKARD NR MAGYARORSZÁG KFT

TOP LOCAL EXECUTIVE CFO MARKETING DIRECTOR

Dániel Székely – –

www.brother.hu

NR

OWNERSHIP (%) HUNGARIAN NONHUNGARIAN

»

NOTES: (1) Financial data provided by the companies have been closed by accountants but not yet audited. (2) Data for calendar year 2012, which does not coincide with the business year of the company.

20 2 BusinessSpecialReport//OfficeLife BBJ

WWW.BBJ.HU

Budapest Business Journal | March 08 – March 21

Cloud is not for everyone The expression “cloud services” is heard so much in the IT-market these days that it might seem a little overused. Cloud services are offered on every corner, but sometimes even entrepreneurs have no idea about the real background to services, or whether they are needed.

BBJ KRISZTIÁN KUMMER

The Hungarian market is lagging behind the United States by two to three years.

However, major corporations can already feel the winds of change, said Gábor Takács, regional sales manager for data center technologies for Cisco in Central and Eastern Europe. IT and multinational companies take the lead in the field of cloud implementation, because they already know the environment, have “best practice” experiences and fear less about the new approach.

ANYONE CAN BUILD A CLOUD? “Our company started to build its first cloud service in 2007, when the expression ‘cloud’ barely existed,” said Péter Naményi, managing director of NK Services. “In recent years, the word has been so overused that its original meaning seems to have been lost. With a little exaggeration, we could say that anyone who has installed a server that can save the letter ‘A’ from a distance has built a cloud,” he added.

“We decided to become an infrastructure as a service (IAAS) provider and try to figure out what services a company would need on the server side. In order to guarantee to our customers that they can do away with their own server room, we wanted to provide the whole spectrum of services: from IT security, firewall and physical separation to storage, replication, archival and backup,” Naményi explained the NK approach.

While ‘cloud’ seems to be the buzzword in corporate communications, it means much more from the point of view of clients than simple data storage or computing capacity. “Our clients don’t want to buy ‘clouds’, they want to buy services,” said Péter Szabó,

senior product consultant at T-Systems Magyarország. “Costumers don’t want to possess their own hardware anymore, but want a well-functioning system. Log analysis, 24/7 traffic monitoring, improved security solutions – these are the added values that we provide to our customers over the well-known cloud solutions and that move forward the business. In order to do so, we created some kind of ecosystem with our partners where we offer complex service solutions and they share their needs and expectations with us to further improve our services,” Szabó added.

TRUST IS OFTEN MISSING Even if the economical, environmental and cost reducing reasons indicate one direction, the walls of mistrust are very hard to tear down. Trust has to be earned and questions like “Where my data is stored?”, “Who has access to it?” and “Will be my data be there tomorrow too?” have to be answered precisely by service providers.

Takács, of Cisco, described the near-term trend: “Enterprises in our region still often think of traditional solutions, want their hardware and information inside the building. But on the other hand, half of the global computing workload will be processed in clouds in 2014, according to the Cisco Global Cloud Index published in October 2012.”

Naményi, of NK Services, pointed out that, “On one hand, no one questions the security of the GSM-network, even if it’s

public and used by almost anyone. On the other hand, we have major clients that already use our services with great satisfaction. If our service is good for them, why wouldn’t it be good for anyone.”

CLOUD IS NOT FOR EVERYONE According to International Data Corporation, the market research and advisory firm, in 2011 NK Services owned 12% of the Hungarian cloud market, ahead of T-Systems, Microsoft and IBM. (2012 data is not yet available.) The market is in the middle of a transformation process: everyone now knows about clouds. “We expect double-digit growth this year, which is very spectacular compared to other sectors in today’s economic climate,” Takács said. “However, the change is still led by large multinational companies. We hope that the government’s cloud strategy will help to move forward the transition and that public administration will enjoy the benefits of improved services, cost reduction and transparency.”

But while cloud services might save a lot on one-time expenditures and also fixed costs, they are not for everyone. “Clients need to examine the business process, their needs and opportunities before thinking about cloud services,” Szabó cautioned.

“I think only those who can see through the processes of their business can make a responsible decision about what, when and at what cost to introduce,” Naményi added. ■

3 Socialite

BBJ

WHO'S NEWS

Name Jonathan Hallett Current company/position Cushman & Wakefield / CE director

Hallett has been appointed at Cushman & Wakefield’s new head of Central Europe, and will lead a team of more than 400 people in Czech Republic, Hungary, Poland, Romania, and Slovakia. He also retains control over the Prague office that he has managed since 2003. Hallett also represents the CE region on the company’s EMEA management board.

Do you know someone on the move?

Send information to research@bbj.hu

Name Gergely Pados Current company/position Cushman & Wakefield / Head of Hungarian office

Hámori succeeds Ferenc Csordás as actuarial director at life insurer CIG Pannónia. Hámori joined CIG Pannónia as an actuary in 2007, and was later named head of the actuarial department.

Name Balázs Hámori Current company/position CIG Pannónia Életbiztosító / actuarial director

Name Judit Kató Current company/position Neostratus / regional sales manager

With the reorganization at Cushman & Wakefield, Pados has been appointed to the Hungarian office. He previously worked as head of the commercial real estate branch, and follows Charles Taylor, who held the position for more than 11 years, but now takes over the Polish office.

Kató, former EMEA Cloud Business Developer of NEC Corporation, a leading telco cloud enabler, joined Neostratus as regional sales manager as of February 26.

Kató has ten years of experience in international business development and has been dealing with SaaS applications since 2004.

Name Erzsébet Knáb Current company/position Audi Hungária / HR director

Name Ulrica Fearn Current company/position Diageo / general manager, global business shared services

As of March 1 Knáb has been appointed Audi Hungária’s new managing director responsible for human resources. She has served as director general of the General Cultural Center of Germans in Hungary for many years. Since September 2011, she has been Audi Hungária’s educational and scientific cooperation area manager.

Fearn has been with Diageo for 14 years. Her career with the organization stretches across treasury, commercial finance, decision support, financial control, audit and compliance. She will be responsible for all aspects of Diageo’s shared services organization in Budapest and will also have operational accountabilities across all Diageo business services centers globally.

22 3 Socialite BBJ

WWW.BBJ.HU

Budapest Business Journal | March 08 – March 21

Hungarian cuisine is 20 years behind the world’s elite Hungarians like to think of their gastronomy as a world famous cuisine, but in truth such international popularity extends only until the country’s borders. The mindset of the general population needs to change, believes Tamás Széll, the first chef from Hungary to qualify for the final of the Bocuse d’Or international chefs’ contest, held in Lyon a few weeks ago.

BBJ ROBERT V. WALLENSTEIN

Q: I AM SURPRISED YOU ARE NOT TAKING A FEW DAYS OFF AFTER SUCH SUCCESS AT THE WORLD’S MOST IMPORTANT CHEF’S COMPETITION. A: Well, summer is a bit far off. Until then

we have work to do. Anyhow, these weeks were quite intense, so it would be silly to slow down now when I am in the mood for creativity. Our job is similar to that of a professional athlete: if you take a couple of weeks off then it is much more difficult to come back to the field track.

Q: YOU MADE YOUR JOB EVEN BUSIER

BY ATTRACTING MORE VISITORS TO YOUR RESTAURANT. A: We do not have more seats available

in our place. We did well previously, and there is never much free time during our work hours. I only feel sorry that lately Hungarian guests went from 40% of our total to 20% only, which is sad. Obviously the recession lies behind it as an important factor, but I also assume that there is something else, which has to do with the openness towards high standards.

Q: MANY IN YOUR SITUATION WOULD FLIRT WITH THE IDEA OF BECOMING INDEPENDENT, AND MAKING THE MOST OF YOUR SUDDEN AND QUITE NOISY SUCCESS. ARE YOU PLANNING TO OPEN YOUR OWN RESTAURANT? A: This is out of the question now. Cur-

rently Hungary is not famous for its booming trend of quality restaurants opening.

Especially not those run by chefs. Fortunately there are some counter-examples, but over all there is this ‘let’s see where the cat jumps’ mood. We also try to be cautious, and wait to see what will happen in the next few years. Honestly, I think we need some time until the market tone will change. Naturally I also strive for independence, just as every chef does. Luckily, in my current place I have such a partnership with the owners that I feel pretty free and independent.

Q: THERE ARE CHEFS WHO ARE CALLED THE BEST, LIKE YOU AT THIS VERY HIGH PROFILE CONTEST. AND THERE ARE THOSE WHO WE REFER TO AS THE MOST FAMOUS, THE CELEBRITY CHEFS. WHAT IS THE DIFFERENCE, QUALITY-WISE, BETWEEN THE TWO GROUPS? A: I do not really know. It is hard to judge

for me. To make it clear: Bocuse d’Or is not an official chefs’ Olympics or world championship. It is regarded as the most

CURRICULUM VITAE Since the age of eight, Széll had wanted to be a chef. In 2000, after finishing cooking school in Budapest, he started his apprenticeship at Gerbeaud.

Széll became sous-chef at the Gerbeaud-owned Onyx Restaurant in 2007 and helped it receive recognition from both Michelin and Gault Millau Guides, making the restaurant one of the best in Hungary. Széll is a twotime winner of “Tradition and Evolution”, the most prestigious Hungarian cooking contest, and the first Hungarian to have reached the Bocuse d’Or final, where he finished tenth.

important contest among ambitious and talented professionals. The winner is not the best chef in this universe. Even though I am very proud of our result, this tenth place does not mean that I am the tenth best chef in the world. Some are good because of the performance, some because of fame. Usually well-known chefs are also quality creators. Gordon Ramsay, for instance, can do amazing things, although he went in the media direction a bit too

far for my tastes. This sudden attention I am experiencing now from the press can be quite overwhelming and tempting, but I don’t have much time and appetite for all this. I do not want to be a celebrity, even though some might like the idea. I believe in authentic production, not something that looks like a souff lé but has no real substance. If you lose your soberness, you can end up in a surprise fall, down on your face.

3 Socialite 23

BBJ

WWW.BBJ.HU

Budapest Business Journal | March 08 – March 21

Q: YOU WENT TO THE 2009 BOCUSE D’OR-FINAL AS AN OBSERVER. DID YOU EVER THINK THAT IN A FEW YEARS YOU WOULD END UP THERE AGAIN, BUT COMPETING AND IN THE TOP TEN? AND WHY YOU? YOUR POSITION AS SOUS-CHEF AT YOUR PLACE TELLS ME THAT YOU HAVE A SUPERIOR. AND TO TOP IT ALL, THAT PERSON IS YOUR GIRLFRIEND, SZABINA SZULLÓ, EXECUTIVE CHEF. A: Szabina is simply not the kind of a charac-

Q: THE HUNGARIAN GOVERNMENT (THROUGH HUNGARIAN TOURISM ZRT) RECOGNIZED THIS EVENT AND IT’S PR-CAPACITY. YOUR TEAM HAD BEEN AWARDED RARE FINANCIAL SUPPORT OF HUF 25 MILLION. HOW DID YOU MANAGE IT? A: We got really lucky. We financed the

tics, the accommodation and travel costs of our team (I would like to name them: Ádám Garai, my assistant; Zoltán Hamvas, my coach; and Lajos Bíró, president of our team). And yes, there were other costs, we paid around €10,000 to Geir Skeie, the Norwegian winner of 2009 Bocuse d’Or for his training and advice.

semi-finals in Brussels with our own partners. Its budget was roughly half of the Lyonevent. The surprise result – which qualified

Q: SOME JOURNALISTS COMMENTED ON YOUR ACHIEVEMENT BY SAYING “MR.

ter who would enjoy this stressful challenge.

This event is about egos with ambition and exhibitionism. But you also have to be prepared for a lot of physical and mental difficulties. Here many times things are decided not in the frying pan, but in our head. A day after the competition my stress came out through a painful attack in my thigh, causing a muscle cramp. In 2009 I could only dream about getting so far. Basically what our team has achieved is a huge success, coming out from nowhere and reaching top 10. We are certainly proud of it.

Q: WHAT ARE THE MAIN FACTORS IN THE NECESSARY DEVELOPMENT OF HUNGARIAN CUISINE? A: It is quite a complex issue. Let’s start

with the basics: try to compare the difference between our best food markets and, for example, the Naschmarkt in Vienna. That market is only 250 km distant from Budapest, but we are about 20 years behind the current top level. They sell such an abundance of vegetables there that one vendor has about 20 types of potatoes! And it is clear to every shopper – whether professional or not – what those types are good for.

This naturally generates a quality approach to the products. This is a certain culture of consumption that is sadly, but truly, quite unknown in Hungary, and this really frustrates me. I agree that there are fiscal and economic reasons behind this that are blocking progress. But I believe that there are serious social and mental factors also involved here. We have not managed to change the mindset of the people in the last 22 years in many ways. The openness towards higher standards, the overall demand that things be good, has not been developed in Hungary yet. We need to start moving ahead in order to step on the progressive track and reach a top quality level. Sticking to food and products: we need to have access to a larger selection of goods if we seriously wish to improve the level of our gastronomy.

WHAT IS THE BOCUSE D’OR? The unofficial culinary Olympics, Bocuse d’Or is named after the Lyon-based French chef Paul Bocuse. He is famous for the high quality of his restaurants and his innovative approaches to cuisine.

The Frenchman is the most prominent chef – once elected the chef of the 20th century – associated with so-called nouvelle cuisine. His progressive direction is based on stressing the importance of fresh ingredients of the highest quality. Bocuse d’Or was founded in 1987 as a biennial international cooking contest, and is one of the world’s most prestigious cooking competitions. Its finals regularly generate huge media and social attention. Thousands of international supporters gather and cheer for their fellow countrymen, creating a loud and vibrant sports arena atmosphere. The winner picks up a €20,000 prize.

A: It is true: we refer to Hungarian gastronomy as a world famous cuisine. However, this popularity extends only until reaching the borders of the country. Since the Michelin and Gault Millau guides review Hungarian restaurants, the situation has been slowly shifting. Our situation is not hopeless; however, we are far away from the top level. So, quite frankly, we are not really on that specific map of elite gastronomy yet.

Q: YOU WERE ASKED ABOUT YOUR CHOICE OF A “LAST SUPPER”. YOU NAMED POTATO CASSEROLE (RAKOTT KRUMPLI) WITH PICKLES: A RATHER HUMBLE, BUT VERY POPULAR, HUNGARIAN DISH. HOW COULD YOU MAKE IT INTERNATIONALLY WELL KNOWN? WOULD ADDING SOME COFFEE BEANS – AS YOU DID WITH GOULASH SOUP IN LYON –HELP? A: It would be quite problematic. And frankly

us for the final – attracted significant attention, and accumulated this important support. One third of the budget was the logis-

SZÉLL PUT HUNGARY BACK ON THE INTERNATIONAL MAP OF GASTRONOMY”. HASN’T HUNGARY BEEN THERE FOR A WHILE?

I do not see the point of reinventing and rebranding existing traditional Hungarian motives or folk dishes. Transformation is needed in a much larger scale, at least for us followers of progressive and experimental directions. Again, it is a complex issue, but we would definitely need a more supportive, more structured agricultural sector as well. ■