Budapest Business Journal 22/12

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NI Hungary: a Mecca

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AUTOMOTIVE & ELECTRONICS in driving the economy Automakers are shifts, plants, adding Hungary, building employment. Along and increasing pro− the government’s n is with validating policy, the expansio on− manufacturing ork for innovati laying the groundw . oriented business

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From CERN to LEGO Mindstorms

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National Instruments is a leading power in applied information technology, with most of its production capacity located here in Hungary. But as László Ábrahám tells the BBJ, NI also plays a leading role in the training of engineers in the country, organizing internships and programing competitions for high school students, manufacturing computerized measuring equipment for students’ scientific experiments, and assisting fresh graduate startups by providing free laboratory capacity. 19

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Real−time Job Hunting Site Gets VC backing

European Solidarity, Where are you?

The government probably wasn’t that surprised when Fitch Ratings kept the country at junk status; it will have quickly moved on to something more palatable, the opinion of Franklin Templeton Investments.

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Sick of your job? If you are open to a blue-collar position, Tjobs’ real-time platform will help you find one, and the CEE recruitment firm has just received a major capital injection.

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Jürgen Habermas’ name rings a bell for anyone with a social sciences background. Despite his age, the philosopher came to Budapest to share his thoughts on ‘the European project’.

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Budapest Business Journal | June 20 – July 03, 2014

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NI Hungary: a Mecca

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in driving the economy Automakers are shifts, plants, adding Hungary, building employment. Along and increasing pro− the government’s is with validating policy, the expansion manufacturing for innovation− laying the groundwork oriented business.

JUNE 20, 2014 – JULY 03, 2014

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From CERN to LEGO Mindstorms

Photo: MARC / FEJES-FOTO

National Instruments is a leading power in applied information technology, with most of its production capacity located here in Hungary. But as László Ábrahám tells the BBJ, NI also plays a leading role in the training of engineers in the country, organizing internships and programing competitions for high school students, manufacturing computerized measuring equipment for students’ scientific experiments, and assisting fresh graduate startups by providing free laboratory capacity. 19

BUSINESS

NEWS

SOCIALITE

Mixed Economic Reports

Real−time Job Hunting Site Gets VC backing

European Solidarity, Where are you?

The government probably wasn’t that surprised when Fitch Ratings kept the country at junk status; it will have quickly moved on to something more palatable, the opinion of Franklin Templeton Investments.

03

Sick of your job? If you are open to a blue-collar position, Tjobs’ real-time platform will help you find one, and the CEE recruitment firm has just received a major capital injection.

7

Jürgen Habermas’ name rings a bell for anyone with a social sciences background. Despite his age, the philosopher came to Budapest to share his thoughts on ‘the European project’.

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THE EDITOR SAYS

A Taxing Philosophy Tony Blair once declared ideology dead. It is doubtful Viktor Orbán has agreed with much the former British Prime Minister said – they come from opposite sides of the political aisle after all – but this might be one of those rare occasions. Orbán’s political journey is as long as it is interesting, taking him from young liberal to middle−aged right−of−centrist (and one who sometimes attracts the tags of nationalist and populist).

The same man who boldly told Russians to pack their bags and leave the country – the first to openly do so – at the 1989 reburial of 1956 hero Imre Nagy, and who in opposition routinely attacked deals Hungary struck with post−communist Russia, has now invited them back to both finance and oversee the expansion of the country’s sole nuclear power plant with an eye−watering €10 billion loan.

But on other things he has been much more consistent.

Take tax, and more specifically, personal income tax.

Last week, in his regular public radio interview, the Prime Minister suggested sectorial taxes would stay as long as he is in power. But he also said that, should growth reach 4−6%, the PIT could be brought down to single digit figures by 2018.

Whether Hungary can reach and maintain growth of that level is the moot point here, of course, but what is interesting is the commitment to lower income tax, for it is seemingly deep−rooted within Orbán. In the run−up to the 2008 elections, Fidesz felt the need to reach out to what is

sometimes called the ‘Euro−Atlantic’ community, diplomats and businessmen from the EU and NATO (particularly North American) countries. The idea behind a series of off−the−record breakfast briefings wasn’t so much to try and win over support as to explain where the party was coming from.

At one of the meetings Orbán told delegates he thought income tax was unfair, that when someone had worked hard to earn money, the state shouldn’t be able to take a large cut from it. He even went so far as to joke that, if he was in power and the finances (and the finance minister) would only allow him to do so, he would like to abolish it altogether, though he didn’t think that likely.

It has been clear for sometime that Hungry is moving towards a consumption bias when it comes to taxation, the theory behind it being that those who use a product or service most should pay for it. A zero−rate PIT is unlikely ever to be achieved, but it is not a bad aspiration.

Then again, perhaps you should never trust a politician when it comes to taxation. Income tax was first introduced in the UK in 1799 to finance the war against Napoleon. It was supposed to be temporary, but while it was abolished in 1802, it was back again in 1803. It was scrapped once more in 1816, the year after Waterloo, but made a surprise return in 1842, supposedly for a three year period. It is still in force in the UK, of course, though it officially remains a ‘temporary’ tax, and has to be renewed each year.

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A Strained Relationship Fidesz and Budapest have, it would be fair to say, a difficult relationship.

It is often said the Hungary is two countries in one: Budapest, by far the biggest city in the country and the only one with more than 210,000 inhabitants, and the rest of the country, the so−called vidék. Budapest is everything you might expect of a capital city, fast paced, vibrant, cosmopolitan (ironically sometimes used by the old far right Hungarian Justice and Life Party as a code word to mean Jewish). It was also, for a long period of time a stronghold for the now defunct liberal party the Alliance of Free Democrats (SzDSz).

Fidesz, intellectually and often actually, seems to see itself as a party of the countryside, the vidék. Indeed, of the most senior party figures, only György Matolcsy, Governor of the Hungarian Central Bank, and interior minister Sándor Pintér were born in Budapest.

When Viktor Orbán (born in Székesfehérvár) and his Fidesz party came to power for the first time in 2000 they found the capital city, the center and seat of government, in the hands of the sometime SzDSz party president and long−time mayor Gábor Demszky. The two sides did not see eye to eye on much, and Demszky bemoaned what he felt was a lack of support from the state.

When Orbán swept back to power in the 2010 landslide that seemed in equal measure based on anger at the past eight years of Socialist rule (in governments in which the SzDSz played a role as junior members) and fear of post−crisis austerity, Fidesz also carried Budapest. Surely the relationship would be easier this time round? Yes and no. The city was broke, Budapest Mayor István Tarlós (who was born in the capital) declared very soon after taking power. It had to pay for the ongoing Metro 4 project, but had money for no other developments. That forced the mayor to go cap in hand to the government (equally broke and

dependent on EU funding), which duly announced grandiose projects like the so−called museum quarter around Hőssök tere, and long overdue renovations for the Castle District. There are reports that the Tarlós−government relationships was at times strained during the second Orbán term, though for the most part that was kept out of the public eye.

Barely had Orbán’s third cabinet been sworn in and plans were announced to relocate the agriculture ministry of Sándor Fazekas (born in Karcag) from Budapest to Debrecen, Hungary’s second city (population 205,000) and a Fidesz stronghold.

Defense minister Csaba Hende (born in Szombathely) has reportedly been asked to relocate his ministry to Székesfehérvár, also in Fidesz hands. Tarlós has come under attach from opposition members of city hall for not doing enough to promote and protect the capital.

Fidesz is an extremely disciplined party. Public disagreements are rare (and some analysts argue that the few examples we do see are often ‘leaked’ by the party leadership itself to prove a point).

Which made the tail end of last week all the more interesting.

News portal index.hu reported that the ever more powerful János Lázár, Minister of the Chancellery, had taken control of short− and medium−term EU−funded projects in Budapest (as head of the Prime Minister’s Office he has long had oversight of EU grant dispersion) and closed them down. At around the same time, a transport project linking the major southern city of Szeged with Lázár’s hometown of Hódmezővásárhely was announced. Tarlós wrote to Orbán, suggesting that without EU money the urgently needed renovations of Metro 3 would be impossible and he might have to close it down By the weekend order had been restored. Tarlós said there was no problem, a solution would be found with the PM; Lázár praised development in the capital, but said funding criteria had changed.

For a brief while, though, intentionally or not, the veil had slipped and once again exposed that old vidék vs. Budapest tension.

Fidesz, both intellectually and often actually, seems to see itself as a party of the countryside, the vidék.

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The government probably wasn’t that surprised when Fitch Ratings kept the country at junk status ( ‘BB+’ albeit with a stable outlook, on a par with Croatia and Portugal), although it had made some noises before the announcement about how unjust it would be not to be returned to an investment grade rating.

Fidesz, as governing parties everywhere tend to do, will have quickly moved on to something more palatable, the opinion of the largest foreign owner of Hungarian government securities: Franklin Templeton Investments.

The Budapest Business Journal presents some of the most important macro data of the past fortnight.

12% Some 8,464 homes were sold in Hungary in May 2014, real estate broker Duna House told Hungarian news agency MTI. The number of transactions was up 12% compared to the same month a year earlier.

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Templeton fund held 12.2% of Hungary’s government debt at the end of 2013.

Meanwhile, the IMF also released its latest findings on the country, on the back of an annual staff visit to collect economic and financial information, and discuss with officials Hungary’s economic developments and policies. It, too, proved something of a parson’s egg.

POSITIVE NOTES On the positive side, the report noted, “Hungary has experienced a welcome reduction in its vulnerabilities thanks to a persistent current account surplus, low headline inflation, and a significant fiscal consolidation. These developments helped Hungary withstand various bouts of emerging market turmoil over the past year relatively well.”

But, as with Fitch, public debt remains a concern. “However, still−high public and external financing needs, heavy reliance on nonresident funding, uncertainty regarding advanced economies’ monetary policies, and the potential reemergence of financial stress in emerging markets pose risks.”

And, overall, the IMF seemed much less sanguine than Franklin Templeton.

“Hungary’s medium−term growth prospects remain subdued, as private consumption

is still hampered by the ongoing repair of households’ balance sheets; while the weak business environment continues to weigh on private investment. Banks remain under stress, reflecting the heavy tax burden, high non−performing loans, and a weak growth outlook. Labor participation, while somewhat increasing, remains low.

These challenges are further compounded by rising competitiveness pressures, as reflected in the loss of export market share, owing to the deterioration in the business climate, particularly the institutional framework and tax policy.”

The fund’s executive board welcomed Hungary’s economic recovery, supported by what it called “accommodative policies”, and the authorities’ “commitment to fiscal prudence and sustainable debt reduction”.

But it also “underscored the need for a recalibration of macroeconomic policies to rebuild policy buffers and ambitious structural reforms to improve medium− term growth prospects. Priorities include strengthening institutions, increasing policy predictability, and promoting private sector participation in the economy.”

Hungary was also urged to tackle VAT fraud and to improve the business climate, including “by reducing the regulatory burden and rationalizing taxes”.

Hungary’s inflation came to −0.1% year− on−year in May, the Central Statistical Office (KSH) reported. The market had expected the headline index to swing back to the positive side after 0.1% deflation in April and had predicted a figure of 0.1% for May.

27.7% State infrastructure spending helped the country’s construction output increase 27.2% y.o.y. in April, the KSH announced.

KSH reported that construction of buildings increased 9.6% between April 2014 and the same month last year, while civil engineering work increased a healthy 46.5% in that period. Construction output actually dropped 1.3% between March and April of 2014, but the trend of new orders looked positive, KSH reported.

According to the statistical office, the bulk of construction work in the period between April 2014 and a year earlier involved railway−reconstruction, road construction work and public utility projects.

Source: KSH, MTI

Hungarian wines were showcased at the ‘Lidl Wine Expo 2014 Hungary’ event in Novotel Budapest City hotel on June 17. Wineries from seven Hungarian wine region introduced some 130,594 types of wine to representatives from the Lidl supermarket chain in the Czech, Polish and Slovak markets. Among the guests was Peter Szijjártó, State Secretary for Foreign Affairs and External Economic Relations of the Prime Minister’s Office of Hungary, and soon to be the country’s Deputy Foreign Minister.

Photo: Zoltan Mathe / MTI

Fitch downgraded Hungary, the most indebted eastern member of the European Union, to junk in 2012 as Prime Minister Viktor Orbán’s cabinet introduced a series of sectoral taxes, including Europe’s highest bank levy, to plug budget holes.

In its announcement on Friday (June 13), Fitch acknowledged that what it called “conventional and unconventional monetary policy measures”, including free funding of financial institutions by the central bank to help channel credit to SMEs, were helping to boost growth, but said it was still concerned by the level of government debt.

“In the agency’s baseline scenario, public debt will still be above 70% towards the end of the decade, generating large annual gross borrowing needs and rendering it vulnerable to economic or financial shocks,” Fitch said Templeton, on the other hand, was much more positive. Michael Hasenstab, vice−president in charge of international bond markets at Franklin Templeton Investments was openly optimistic about Hungary’s economic future in a video shared on YouTube. He said the outlook of the economy is healthy, and the government can use its renewed two− thirds majority in parliament to continue reforms in the coming years.

Hasenstab, too, said the government had resorted to unconventional measures in recent years, but added that these served long−term reforms and aimed to take advantage of the underlying potential of the economy. He said the government has maintained fiscal discipline and started to turn the government debt curve down.

He also noted that Hungary had been successful in attracting foreign investments to Hungary, and the country has one of the biggest current account surpluses in the region. Press reports say the Franklin

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The ruling unquestionably states that banks took people’s money in an unfair way, and empowers the government to serve justice.

Antal Rogan, head of the Fidesz parliamentary group, in reaction to the Kúria (Supreme Court) ruling on FX mortgage loans.

Absolute Media Announces New Editor After an exhaustive search, Absolut Media is delighted to announce the appointment of Tom Popper as managing editor of the Budapest Business Journal portfolio. He will take up his new role formally from July 1, though he is already spending time in the office.

Popper is a professional journalist with 30 years of communication experience, including 10 years of editing for daily newspapers in the United States and extensive work for news, entertainment and policy publications throughout Europe.

Writing and editing credits in Hungary alone include Budapest Week and Time Out Budapest, where he was editor and oversaw the launch of the magazine. He has also edited and written for the Open Society Institute and the Szentendre−based Regional Environmental Center for Central and Eastern Europe.

“This opportunity is very exciting! I have watched the BBJ grow since it was started more than 20 years ago. I am looking forward to working with the staff to develop and enhance the BBJ, both in print and online,” says Popper, who is a joint U.S.−Hungarian citizen.

Absolut Media CEO Balázs Román is delighted to have secured the services of such a strong candidate. “It is a testament to the continuing reputation of the BBJ that we could bring Tom on board,” says Román. “I am looking forward to forming a close partnership with him as we develop the BBJ and its product portfolio still further.”

ECONOMY Danone to Close Plants in Hungary French food group and dairy product manufacturer Danone is planning to close plants in Europe, with cuts that are expected to axe 155 jobs in Hungary by the end of 2015. Danone said on June 11 that as a result of falling fresh dairy product sales in the European Union, the company might close plants in Italy, Germany and Hungary, cutting 325 jobs in total. The closure is planned to reach Hungary in the second half of 2015. Danone told international news agency Reuters that it will maintain commercial operations in Hungary, noting that Hungarian unit Danone Kft. will continue to serve as the company’s regional headquarters. The company said it intends to continue to purchase dairy products from its current production partners in Hungary in the future.

Wizz Air Gives up London Listing Hungary−based Wizz Air, Central and Eastern Europe’s largest no−frills airline, has cancelled plans to list its shares on the London Stock Exchange, citing “market volatility in the airline sector”. Wizz Air announced in May a plan to list its shares on the London Stock Exchange, seeking to raise €200 mln to shore up its balance sheet as it seeks to fund more growth. “Despite the positive response to our business story and the company’s growth opportunities and prospects within the institutional investment community, Wizz Air today announces that the Company has decided not to proceed with an IPO at this stage, due to the current market volatility in the airline sector,’ the airline said in a statement.

Varga Presents Prizes for Successful Businesses National Economy Minister Mihály Varga

on Monday presented the monthly Prize for Successful Enterprises awards to LEGO Manufacturing, Kürt and QuantisLabs. LEGO Manufacturing, the Hungarian unit of Danish construction−toy maker Lego, won the May prize in the Investor of the Month category, while Hungarian IT company Kürt won the prize in the SME of the Month category. QuantisLabs won in the Start−up of the Month category.

DOMESTIC Hungary’s Gas Supply Secure, Minister Says National Development Minister Miklós Seszták told news agency MTI on June 16 that Hungary’s supply of gas is secure, despite the heightening dispute between Russia and Ukraine regarding Russian gas deliveries.

Seszták said that gas can be delivered to Hungary via Austria, adding that Hungary is currently filling its strategic gas reserves.

Communications Director György Felkai of the state−owned Hungarian Electricity Works (MVM) said that gas has been arriving from Ukraine according to schedule. He added that MVM – which since the fall of 2013 has owned and operates the gas trade and storage business that once belonged to German company E.ON– is prepared for any eventual reduction in the amount of Russian gas arriving via Ukraine. Felkai said MVM would rely on alternative routes, domestic production and supplies contained in strategic storage, adding that Hungary’s gas−storage facilities currently contain two billion cubic meters of gas, enough to satisfy demand for an estimated three months.

POLITICS Orbán: German Occupation Statue in Budapest not a Holocaust Memorial A controversial memorial to the German

occupation of Hungary is “not a Holocaust memorial”, Prime Minister Viktor Orbán wrote to U.S. congressmen in response to American criticism last week. The statue in question will depict a German eagle descending on the angel Gabriel, representing Hungary, and bear inscriptions reading ‘German occupation of Hungary, March 19, 1944’ and ‘To the memory of all victims,’ but will make no explicit reference to the Jewish community. The Federation of Jewish Communities in Hungary (MAZSIHISZ) and other organizations have objected to the erection of the memorial, asserting that its depiction of Hungary as a passive victim is inaccurate and serves to absolve the onetime Nazi ally from responsibility for its actions.

The MAZSIHISZ and a number of other civil society organizations are currently boycotting all activities connected with the Hungarian government’s 2014 Holocaust memorial year.

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EU Decision on GMO Crops Accepted Farm ministers of the Visegrád Group plus Bulgaria, Croatia, Romania and Slovenia have welcomed a recent decision in Brussels on giving members states the right to decide on GMO crops, the Hungarian farm minister told the press on June 13. On June 12 the European Union Environment Council voted to allow member countries to decide on restricting or banning GMO cultivation. Sándor Fazekas said reverse VAT as way of reining in the black market was also discussed and it was agreed that it could only be applied for a small circle of goods. The seller does not collect this kind of VAT. Instead the buyer is responsible for paying the correct amount of VAT to the national tax agency. The minister noted that Romania, Bulgaria, Hungary and Slovakia were countries particularly affected by VAT fraud.

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Taste Hungary Wins Drinks Business Award Taste Hungary, a Budapest-based tourism company that organizes food and wine tours featuring Hungary’s leading wineries and food producers, has won the ‘Best Contribution to Wine & Spirits Tourism’ title at the ‘Drinks Business Awards 2014’. The awards were unveiled at the London Wine Fair on June 3. Drinks Business, a leading British drinks trade publication, has been recognizing and awarding the world’s top drinks companies for 11 years in categories ranging from retail sector and importers, to logistics and design and marketing. Taste Hungary won in the tourism category, beating fellow ďŹ nalists Stellenbosch Wine Routes and La Motte Wine Estate, both from South Africa. “While the New World has long embraced wine tourism, many parts of Europe are less adept at encouraging visitors to discover their region, but this year’s winner has created a novel approach to entice tourists to the heart of the Continent,â€? stated Drinks Business Awards. “We are thrilled to be recognized for our work with wine tourism in Hungary, and to have won this award, particularly among such distinguished ďŹ nalists in our category,â€? said GĂĄbor BĂĄnfalvi, Taste Hungary co-owner and founder.

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Bank of China HQ Handed Over in Budapest The Bank of China has moved into its new Budapest headquarters after Cushman & WakeďŹ eld completed the office interior work and handed the property over. The monumentally protected 1,700 sqm building at JĂłzsef NĂĄdor tĂŠr 7 in Budapest’s District 5, part of the central business district in the heart of Budapest, was the former Credit Agricole HQ. After BoC purchased the building, it appointed C&W to manage and supervise the complete refurbishment process. The new office comprises four upper oors and one oor underground. As well as back office services, a 150 sqm bank branch is located on the ground oor. Bank of China (Hungary) Close Ltd. officially opened on February 10, 2003, the ďŹ rst ďŹ nancial institution established by BoC in Central Europe. The bank has operated in China for 100 years.

Hungarian−owned alternative fuel company Geosol has completed development of a biomass and waste treatment system, with an investment of HUF 2 bln, at its facility in the MĂĄtrai Power Plant Industrial Park, the company told Hungarian news agency MTI. The project was launched in July 2012, and European Union funding covered 50% of the costs. The present investment adds 20 new jobs at the plant, which already employed 50 people. The plant now has the capacity to process 200,000 metric tonnes of alternative fuel and communal waste a year and treat 50,000 tonnes of sewage.

Join our White Night on 25 June, the ultimate summer get-together and a colourful event - without any colours!

We aim to create a new tradition with this exclusive event, organized for the ďŹ rst time in the HegyvidĂŠk Shopping Centre. Be part of a chic, high-end fashion community and invite your friends and business partners as well!

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Russian retail−chain Magnit will build a forwarding base near the town of ZĂĄhony in eastern Hungary close to the country’s three−state border with Ukraine and Slovakia, ZĂĄhony Mayor Imre Hada told state news wire MTI, conďŹ rming a report in the online edition of the weekly Heti VĂĄlasz. Construction of the base, which ministerial commissioner SzilĂĄrd Kiss told the weekly represents a deal worth HUF 100 bln, (some â‚Ź327 mln) could start as early as this summer. Magnit currently transports goods from Western Europe to its nearly 8,000 stores in Russia via Belarus, Kiss said.

Since launching its cooking oil recycling project in 2011, Hungarian fuel company MOL has collected 280 tons of used cooking oil from customers. Some 178 MOL gas stations around the country distribute red asks to customers, who ďŹ ll them with used cooking oil and bring the container back to the gas station. MOL takes the used oil to the Rossi Biofuel plant in KomĂĄrom where biofuel is produced from the waste. MOL says it started its initiative as a way to protect the environment, noting that a typical Hungarian household consumes three liters of cooking oil per month. The oil takes a long time to biodegrade, and it can enter the water supply, so recycling is preferable to disposal.

Hungarian consumer−paper product maker Vajda PapĂ­r inaugurated two new production lines built at a cost of HUF 1.8 bln at the company’s plant in Budapest, company owner Attila Vajda announced. Vajda said that that operation of the new lines would increase production capacity at the plant by 10% to more than 80,000 tonnes. The paper company has invested HUF 10 bln to date, and now employs 410 people in Hungary.

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Green in a Golden Setting Green House in Budapest has been named the ‘World Gold Winner’ in the office category in FIABCI’s ‘World Prix d’Excellence Awards 2014’. “The technical solutions of the building are outstanding. The costs are lower than estimated earlier; they do not even reach the â‚Ź3/sqm/month level. The building’s popularity is well demonstrated by the fact that the occupancy of Green House is 97%. That is unique on the current Hungarian office market, which is characterized by an average of 20% vacancy rate these days,â€? ZoltĂĄn Linzmayer, managing director of Skanska Hungary, told the Budapest Business Journal.

ANDRĂ S ZSĂ MBOKI

FIABCI – the International Real Estate Federation founded in 1945 – has been holding ‘Prix d’Excellence’ awards since

1992. In order to enter the international competition, a candidate building must first be nominated by its own national section of FIABCI. Green House, the office building in the 13th district of Budapest, received two prizes at the 15th Hungarian FIABCI ‘Prix d’Excellence Awards’ in 2013. “This result allowed our project into the FIABCI ‘World Prix d’Excellence 2014’, where, to our great pride, we became ‘World Gold Winner’. This proves that Budapest can be a home to quality office projects which are able to offer a world− class work environment to their tenants,�

Linczmayer told the BBJ. Other Hungarian winners of the ‘Prix d’Excellence Award’ are the Royal Palace of GĂśdĂśllĹ‘ (best in the Heritage Preservation/Restoration category) and the Hagymatikum Thermal Bath in MakĂł (second prize in the resort category).

The ‘gold’ title recognizes architectural as well as environmental qualities. Green House was designed jointly by two architectural firms: DPI Design, a Hungarian firm headed

by TamĂĄs PintĂŠr, and the Swedish architects Asa Haremst and Anders Svennington of Arkitekter AB. As for its environmental credentials, Green House has been broadly praised for its environmentally friendly and cost− saving solutions. The project is the first in Hungary to receive the highest, ‘Platinum’ certification in the Leadership in Energy & Environmental Design system. LEED

is a green building certification program that recognizes best−in−class building strategies and practices.

PRIME LOCATION “Nearly 100% of Green House’s 17,800 sqm of office space is rented out, which is outstanding in today’s Budapest. The success is also partly due to the fact that the building is located in the middle of the VĂĄci Corridor, one of the prime office quarters of the Hungarian capital city, yet protected from the actual noise and traffic on VĂĄci Ăşt,â€? Linczmayer explained.

After the opening of the complex in 2012, Green House was taken up by tenants at record speed. “Our biggest tenant is Avis Budget Group, which committed itself well before the completion of the building,�

Linczmayer said. “As other examples,

Deichmann occupied its new office last summer, while MSCI’s team moved in this spring,� he added. “The big advantage for our tenants is the low service costs. They are below the average service charge related expenditures of office properties in Budapest,� Linczmayer said. “Moreover, in Green House not only electricity, but also heating and cooling consumption are measurable by individual office units. Every tenant has their own meters installed.�

Among other technical solutions these also explain why the operational costs of the building have turned out to be even lower than originally estimated.

Tenants have been motivated to save on air conditioning and lighting due to these solutions.

A GREAT INVESTMENT Every investment indicator for Green House is outstanding. “Skanska intended Green House to be a reference project: we have featured a broad spectrum of environmentally conscious solutions in the building. According to the business model of our company, after completion and leasing, we always sell our commercial developments. Green House will be no exception to that rule. We are actively working on being able to report on a successful transaction.â€? Linczmayer told the BBJ. Skanska Property Hungary is an innovative developer of green office buildings that create a friendly environment for business growth. The company has been operating in Hungary since 1987 and is part of the Skanska Group, a world leader in project development and construction. Projects undertaken by the Hungary unit offer top-quality office space at great locations and undergo LEED and EU GreenBuilding certification. The upcoming 26,200 sqm Nordic Light development, also in the VĂĄci Office Corridor, is due to be handed over at the beginning of 2016.

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2 Business

Budapest Business Journal | June 20 – July 03, 2014

07

Real-time Job Hunting Site Gets Major Investment Tjobs offers a solution to meet changing supply and demand in the labor market by connecting workers from Central and Eastern Europe with employers in Western Europe in real−time via an online recruitment platform. iEurope Capital, with offices in Budapest and New York, has just backed the company with a major investment.

LEVENTE HÖRÖMPÖLI-TÓTH

The right to free movement, a cornerstone of European Union integration, is exercised so frequently that, according to European Commission data, more than 14 million Europeans study, work or retire in another member state. Even better news for the block of CEE countries that joined the EU in 2004 and 2007, all restrictions concerning free movement of workers were gone for good as of January 1, with freshman Croatia’s citizens remaining the only exception.

Some Western European countries may not welcome such development whole− heartedly, as was indicated by the rise of xenophobic and euroskeptic parties in the EU elections. But that does not change the fact that demand is up and will certainly keep growing for manpower from the new member states.

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STORY HIGHLIGHTS ■

iEurope Capital invests in a recruitment firm offering real-time sourcing of CEE blue-collar workers ■ Hungarians use the service in growing numbers, with Germany being the top destination

DISRUPTIVE The recent seven−figure investment of iEurope Capital together with Early Bird Digital in TjobsRecruit was aimed at capitalizing on that potential growth.

Combining a unique candidate−sourcing model with a proprietary online platform, Tjobs provides temporary personnel leasing services by sourcing skilled, blue−collar candidates from Central and Eastern Europe.

“Tjobs has a disruptive approach and platform that makes the cross border temporary staff leasing a more transparent and efficient process. This helps employers, workers and regulators,” Laszlo Czirjak, iEurope Capital Co−Founder/Partner told the Budapest Business Journal.

Tjobs’ real−time staffing services mean a fast and cost−efficient solution for both companies short of talent and workers in need of a reliable employer. As a result, a network of more than 700 partner agencies connects more than two million candidates with would−be employers.

“Tjobs has a great software platform that is scalable with features and functions that

TOP FIVE JOBS WITH THE MOST VANCANCIES AVAILABLE FOR HUNGARIAN JOB SEEKERS IN EUROPE (JAN-APRIL 2014) SECTOR

NUMBER

Hotel/tourism

5,647

Health Care

3,823

Cruise Ships

1,831

Elderly care

1,290

Babysitting

803

allow it to differentiate itself. The existence of this platform was therefore key to our investment decision,” Czirjak added.

AFFECTION FOR GERMANY Hungary got on Tjobs map thanks to the company’s expansion in the region.

The Hungarian branch has recently recorded a major boost in job openings as well as applications. Figures indicate that during the first four months of the year the number of open positions increased almost three−fold to some 21,000. Candidates rushed to file their applications in a similarly active fashion, generating a seven−fold hike compared to the same period of the previous year.

“Hungary is an important part of the plan,” Czirjak, a former president of the American Chamber of Commerce in Hungary and head of its Governance and Transparency Committee, said.

Not surprisingly, among Hungarian job hunters, Germany ranks number one with 5,700 jobs advertised for 2014 so far, followed by the UK and Ireland with 4,122 positions. Most jobs currently offered are in the tourism, health care or elderly care fields.

YOUNG AT HEART “As to the gender issue, male and female workers alike preferred Germany most of all, but men’s second choice was still domestic jobs,” Orsolya Csatlós, a spokeswoman for Tjobs.hu said. And if you thought it’s only the youngest going abroad, you are in for a big surprise. The under 25s are only the third largest age group at 20.24%. Those aged between 25 and 35 top the list at 32.34%, with the 35−45 year olds carving out a 22.28% share.

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08 2Business

Budapest Business Journal | June 20 – July 03, 2014

Regional Roundup Report: Austrian Grand Prix Draws F−1 Fans From Hungaroring Ticket sales for this year’s Hungarian Grand Prix are down 15% as the Formula One race faces competition from its Austrian peer, revived after more than a decade, Hungarian business daily Napi Gazdaság said. Zsolt Gyulay, who heads race organizer Hungaroring Sport, told the paper that the situation was not an easy one, considering the tickets for the Austrian Grand Prix were sold out in under 36 hours. Austria last hosted a Formula One race in 2003.

Bulgaria’s Ruling Party Leader Calls for July Election Bulgaria should hold an election as early as next month, the head of the ruling Socialist party said on June 10, saying the instability caused by having a government on “life support” was bad for the country.

The Socialists have bowed to pressure both from their own coalition partner and the main opposition GERB party to hold an early election after their poor performance in last month’s European Parliament poll, gaining less than a fifth of the vote.

Sergei Stanishev’s call for a vote in July is earlier than other parties would like. GERB would prefer an election to be held at the end of September or early October. The ethnic Turkish MRF, the Socialists’ junior coalition partner, would prefer November or December. The Balkan state has been hit ADVERTISEMENT

by political instability and street protests over corruption and dissatisfaction with the political elite since last year, and prime minister Plamen Oresharski’s minority government has relied on the support of hardline nationalists to survive a series of confidence votes.

Czech Economy Expands in Q1 The Czech economy expanded in the first quarter in contrast to the flat growth estimated initially, data from the Czech Statistical Office showed. Gross domestic product advanced 0.4% sequentially in the Q1 after expanding 1.5% a quarter ago. Year− on−year, the economy grew 2.5%, the fastest since the first quarter of 2011. The statistical office initially estimated 2% growth for the first quarter, following 1.1% expansion in Q4 2013. Final consumption expenditure rose 1.4% annually. General government institutions spent 1.4% more than a year ago, and household spending grew 1.5%. External trade also contributed significantly in the first quarter. The positive balance of trade in goods and services increased by 46.6% from last year, the Prague−based agency said.

Lithuania Ready to Adopt Euro From 2015, Commission Says Lithuania meets all the criteria for joining the euro, the European Commission has said, clearing the way for the Baltic state to become the 19th member of the single

currency from the start of next year. To adopt the euro, a country has to have government debt no higher than 60% of gross domestic product, a budget deficit below 3% of GDP, low inflation and interest rates, and its own currency has to be stable against the euro. Of the 28 countries in the European Union, only Britain and Denmark do not have to strive to adopt the euro because they have negotiated formal opt−outs. All the others are supposed to switch to the single currency at some point once they meet the criteria. The European Central Bank, which must give its opinion on the readiness of a country to join, also said Vilnius was ready but warned about maintaining low inflation rates.

80 jobs from its UK headquarters site in Manchester to a new office in Bucharest, Romania, according to thebusinessdesk. co.uk. The U.S. food group has chosen Bucharest for a European Global Business Services (GBS) center, which will handle human resources, IT, and supply chain processes, as well as finance jobs currently performed by people at the Talbot Road office in Old Trafford, Manchester, the report said. Kellogg’s generated $14.8 bln in sales last year and employs more than 31,000 people across four continents and 19 countries. The company has production plants in 18 countries and sells its products in 180 countries in total.

Poland Most Attractive in CEE for German Investors Poland is the most attractive investment location out of 16 Central and Eastern European countries, according to a survey carried out by the German−Polish Chamber of Industry and Commerce (AHK Poland).

The country retained the top spot it got last year. Poland got a score of 4.09 out of 6 points in the survey. The second and third ranks went to the Czech Republic (3.96 points) and Estonia (3.91 points), followed

by Slovakia (3.84) and Slovenia (3.73). The chamber said that 91% of the respondents viewed the economic situation in Poland as good or satisfactory compared to an average of 58% in the region.

Ukraine Rejects Autonomy Calls for Ethnic Hungarians Made by Orbán A senior Ukrainian official has rejected calls for autonomy for ethnic Hungarians in western Ukraine made by Hungarian Prime Minister Viktor Orbán, suggesting this would undermine the unity of the former Soviet republic. Ukraine’s deputy foreign minister Natalia Galibarenko told Hungarian newspaper Népszabadság in an interview that minority languages would be treated equally to Ukrainian in education and official documents in regions with significant minorities. “But cultural autonomy based on ethnicity... is not on the agenda,” Galibarenko was quoted as saying. Orbán, re−elected by a landslide win in April, reaffirmed a call for autonomy for 200,000 ethnic Hungarians in neighboring western Ukraine that he made as he was sworn in as premier. Orbán has said autonomy could take many forms, but declined to go into more detail.

Kellogg’s to Move Some Jobs From its UK Headquarters to Romania American multinational food manufacturing company Kellogg’s looks set to move around

BBJ

3Special Report Exporting Excellence 11

Opel’s Engines of Growth

12

NI Hungary: a Mecca of Mechatronics

Automotive and Electronic Manufacturing

Automakers are driving the economy in Hungary, building plants, adding shifts, and increasing employment. Along with validating the government’s pro− manufacturing policy, the expansion is laying the groundwork for innovation− oriented business.

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Budapest Business Journal | June 20 – July 03, 2014

Driving Production Automakers are building plants, adding shifts, and increasing employment. Along with validating the government’s pro−manufacturing policy, the expansion is laying the groundwork for innovation− oriented business.

TOM POPPER

Hungary’s manufacturing sector is revving up, and carmakers are in the driver’s seat.

In early June, the government announced that industrial output sped up to its fastest growth rate in three years in April, with a 10.1% year−on−year increase. The biggest component of this growth was the country’s automotive industry, where output rose 21.6%.

With Daimler’s Mercedes−Benz, Audi and GM Opel launching new factories in the last couple of years, and Suzuki also increasing production, the sector is on a tear, and the number of smaller suppliers who serve these big four is expanding.

As of May 28, there were 710 Hungarian automotive companies, and together they produce nearly one−fifth of manufacturing output and 18% of exports, according to Péter Szijjártó, the state secretary for foreign affairs and external economic relations in the Prime Minister’s Office. These companies are said to employ roughly 115,000 workers,

and the sector is estimated to contribute as much as 10% of the country’s GDP. With plant investments and the growth of local component manufacturers, the proportion of employment and production covered by the car market is likely to continue increasing.

The boom in investments and production from automakers is good news for Prime Minister Viktor Orbán, whose economic policy promotes the importance of encouraging manufacturing to create jobs.

While Orbán said in a June 13 radio address that special taxes would continue for the financial, energy, retail and telecommunications sectors, automakers still enjoy tax breaks and other incentives in Hungary. Orbán’s government has also complied with carmakers’ requests by supporting vocational training programs to improve the skills of Hungarian workers.

GROWING A MARKET FOR SUPPLIERS AND INNOVATORS In return for government support, officials have pushed the major automakers to use locally based suppliers. The big four seem happy to buy in Hungary, and they are driving growth among components manufacturers and other suppliers – thereby bringing in more investment.

For instance, American automobile interior maker Eagle Ottawa, which touts itself as the “the largest global manufacturer of high quality automotive upholstery leather”, has announced plans to raise headcount at its base in Szolnok to 1,200 by the end of the year. Hungary is also home to factories for other international “tier 1” suppliers –

Automakers drive Hungary’s production output Percentage increase, year-on-year in April 2014, by type of manufacturing:

21.6

13.1

11

10.1

7.8

7.3

Vehicle manufacturing

Manufacture of machinery, equipment

Computer, electronic & optical products

Basic metals & fabricated metal products

Rubber, plastic & non-metallic mineral products

Manufacture of coke, refined petroleum products

Food, beverages & tobacco products

Source: KSH. The image shown is a conveyor in the Audi body shop in Győr.

1.6

Magyar Suzuki has continuously upgraded its plant at Esztergom since it construction in 1991. Depending on demand, the company plans to build 154,000 autos in 2014, with production of its all new iV-4 compact SUV due to begin in 2015.

those who make essential components for manufacture of automobiles – including Linamar, Siemens and Nemak.

A big draw for any manufacturers coming to Hungary is the traditionally high level of skill of Hungarian workers – and their lower wage requirements. The abundant supply of low− cost human capital has always made Hungary a natural place to set up research facilities, and carmakers see this too. Multinationals, including Knorr−Bremse, Bosch and many other automotive firms have established R&D operations here. Meanwhile, the growing group of small− and medium−sized firms that have sprung up to supply automakers are also driving innovation.

With a critical mass of suppliers in place, Hungary is building a cluster of high−tech automotive specialists who can fuel an innovative environment. Some exciting investments could emerge from among small− and medium sized automotive firms with new ideas.

THE BIG FOUR GROW While the little players offer future promise, the auto manufacturing market is still dominated by the big four original equipment manufacturers: Audi, GM Opel, Daimler− Benz and Suzuki. All of these OEMs report expanded activity in the last couple of years.

Already operating the world’s biggest engine factory, which produced 1,925,636 engines in 2013, Audi Hungary in Győr started production last year at a €900 mln plant, where the firm produces entire cars in Hungary for the first time. That factory is expected to eventually produce 125,000 vehicles a year. According to the company: “With a total investment volume of more than €6.7 bln, Audi is today one of the most important foreign investors in Hungary and one of the biggest employers in the region,” with more than 10,000 employees.

Magyar Suzuki reports that production grew to an output of 161,106 automobiles in 2013, a 3.2% increase on the previous year and a positive step in the steady march back to the plant’s production peak. Suzuki has been in Hungary since 1991, when it built a plant in Esztergom. The factory expanded

productivity over time, achieving a capacity of 350,000 vehicles a year in 2008 before the economic crisis that year reduced demand for the cars.

Daimler AG opened the Mercedes−Benz Kecskemét factory in 2012, after more than four years of planning. The company said that it employed 3,358 people and produced 109,266 cars in 2013, and they still saw a need to employ and produce more. Noting strong growth in worldwide demand for Daimler’s vehicles, the company announced in March that it was adding a third production shift at the Kecskemét plant in May. GM Opel in Szentgotthárd, the first post− transition investment in the automotive industry in Hungary, inaugurated a new engine plant in 2012. The factory boasts state−of−the−art ‘flex’ technology that allows the staff to work flexibly and efficiently.

The company says it has the capacity to produce half a million engines per year. After manufacturing 85,000 complete cars between 1992 and 1998, Opel in Hungary shifted to engine manufacturing, steadily increasing the types of engines made there.

BIG BET ON CARS The country is betting heavily on cars. By 2013, Hungary was already among the EU countries with the highest share of GDP coming from the automotive industry – 4%, rising to 10% if you include the production of parts and accessories, according to analyst Dariusz Kałan of the Polish Institute of International Affairs. He noted the risks of putting so many eggs in one basket: The Czech Republic built its economy with a heavy reliance on the auto industry, only to suffer from layoffs when worldwide demand dropped in 2008−2009. Still, Kałan maintained that the automotive sector’s growth is currently essential to the Hungarian economy, and holds a future promise of encouraging more innovation.

For now, the industry is looking like a winner in Hungary, and both the market and government policy are encouraging growth. While things are going well, Hungary seems perfectly happy to let the carmakers do the driving.

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The country may be a center for automotive production, but sales here are not as hefty as in some neighboring states.

TOM POPPER

It’s safe to say that more cars are leaving Hungary than coming in. While the country has become a hub for automobile production and export, car sales are moderate here – even

by Central European standards.

In May, 5,739 new cars were registered in Hungary, which represents a 14.6% year− on−year increase and part of a steady trend of growth this year. It was also an increase over April, when there were 5,507 new cars registered. These numbers seem unimpressive when compared to the Czech Republic, where 17,498 new cars were registered in April, and Poland, where the figure was 28,045.

Before 2008, Hungarians used to register an average of 10,000 new cars a month, but since hitting a low of 2,425 cars in August 2009, the return trip back to the old average has been slow. Sales have been crawling back up, especially this year: In the first five months of 2014, new car registrations in Hungary reached 26,742, a 20.5% increase on the first five months of 2013.

As might be expected, the most popular cars are the more affordable ones. According to bestsellingcarsblog.com, in April, the top seller in the country was the reasonably

New car registrations in Hungary

priced Skoda Octavia, which was said to have a 6.1% share of total car sales. Second place went to the Ford Focus, followed by the Opel Astra, which was listed as grabbing 3.7% of the new car market in April.

LOCAL AUTOMAKERS COMPETE Audi’s position meant it was the best seller among the local automakers. Suzuki and Daimler AG also produce complete vehicles in Hungary, and battle for their share of the local market. Hungary’s other big automotive manufacturer, GM Opel, only produces engines in this country, but is still very interested in seeing its brand sell well here.

Since 1992, when Suzuki began to build and sell the Suzuki Swift in Hungary, that company has perhaps had the best match−up of local production and local sales. The popular Swift helped Suzuki stay the best selling car brand in Hungary between 1996−2007. In 2013, Magyar Suzuki’s domestic sales of own−production cars totaled 4,007 units, up 15.2% from 2012.

Mercedes−Benz may be a luxury car, but Daimler AG’s Mercedes−Benz Kecskemét factory is the exclusive manufacturer of the brand’s more affordable, and biggest−selling models: the van−like B−Class and CLA four−door coupé. These models have been driving big growth in Mercedes−Benz sales worldwide. In Hungary, Mercedes−Benz claims it has the fastest growing sales of any premium brand. Some 1,587 Mercedes− Benz were sold in the country in 2013.

While the Opel plant here produces engines instead of full cars, the local company closely

6166 5507 4975

5125

5038 4659

4942

5026

4167

June 2013

July

Aug.

Sept.

Oct.

Nov.

watches new car sales, and the Opel Astra is generally one of the more popular sellers in Hungary. Opel reported that, in the first quarter of 2014, sales of their cars in Hungary rose more than 50%, from 1,351 to 2,110, as compared with the same period a year ago.

At Audi Hungary in Győr, which hosts the world’s largest engine factory, production of full cars resumed only late in 2013. However, the A3 Sedan that is made at the plant is one of Audi’s more affordable models, which is how it grabbed Hungary’s number three spot in April.

5739

Dec.

4374

4957

Jan.

Feb. 2014

Mar.

Apr.

May 2014

Aside from the big four, there are plenty of other car dealers in Hungary. Budapest alone has representatives for BMW, Citroen, Honda, Hyundai, Lexus, Mazda, Peugeot, Porsche, Renault, Skoda, Toyota, Volvo and more. These sellers enjoyed a post transition boom, especially in April 2004, just months before Hungary joined the European Union, when a record of 21,340 new vehicles were registered in Hungary. But sales haven’t been close to that mark in several years.

For a long time coming, Hungary will likely remain a net exporter of cars.

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Source: Trading economics and Datahouse.

Hungary Makes More Cars Than it Takes

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Budapest Business Journal | June 20 – July 03, 2014

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Budapest Business Journal | June 20 – July 03, 2014

“Gentlemen! Start your engines!”

GERGELY HERPAI

Q

The Opel Flex Plant is just one part of the whole complex at Szentgotthárd, isn’t it?

A: Although, our most important activity is engine production and we have two engine plants, we have other activities in our profile, too, like cylinder−head production or transmission remanufacturing. The Family1 Engine Plant has a more than 20−year history, while the brand new Flex Engine plant was inaugurated in 2012 and started serial production last year. In addition to engine production itself, we also produce different engine components for other GM plants.

Q

And after production, those engines are then transported to other plants in other countries, right?

A: Yes. The products of the Family1 Engine Plant, which are used in Opel and Chevrolet cars, are shipped worldwide. While approximately 60% of the Family1 engines are delivered overseas, our Flex engines are currently transported to European countries (England, Spain and Germany) and will be installed in Opel cars only. In the coming years, we also plan to deliver our Flex engines overseas and they will serve as ‘Hungarian hearts’ not only in Opel cars, but also in other GM brands, too.

Q

Can you give us some specific numbers?

A: Last year, the total engine production of the two plants was 354,000 units. This year we plan to produce 400,000 engines, which means a 13% increase compared to 2013. Specifically in the Flex Plant, we produced 10,000 units last year and plan to produce about 100,000 engines this year. Some 70,000 of those will be diesel engines, 20,000 MGEs and 10,000 SGEs.

Q

Although the Flex Plant is new, you have been producing General Motors engines for a long time. How hard was it for you during the economic crisis?

A: Although we had some difficulties, we were lucky because most of our products were delivered to the overseas markets, so the European crisis in the automotive industry did not hit us that much, rather the contrary, in fact. Other GM plants where there used to be Family1 engine production were closed due to the crises, so we had to satisfy continuously increasing demands.

Q

Do you have a special partnership with Opel regarding the Flex Plant in Europe?

A: It is hard to say since there are other plants in Europe that also produce Opel car engines. However, we are the only one that can produce the new technology that already complies with the Euro 6 environmental standards, which is not so easy to reach.

A worker at Opel’s new Flex Plant.

Q

Your Flex Engine Plant is brand new. Do you utilize some special technology here?

A: Yes, the technology we use in our new plant is one of the most modern in the world. The name Flex comes from the flexibility of the lines on which we can produce different types of engines. We started producing mid−size, four−cylinder gasoline (also known as ‘MGE’) engines in February 2013, followed by mid−size, four−cylinder diesel engines in July. Soon, we will start the production of a third engine family, with the small size, three− cylinder gasoline engines (‘SGE’).

Q

Why is it so hard to achieve this Euro 6 environmental standard? What is so special about it that other plants could not just start making them?

A: Simply because the engines made in other European plants – Austria, Poland and Germany – are getting obsolete and at the time of their conception, Euro 6 had not yet been implemented.

All three engines in our Flex Plant are brand new designs. When we designed our engines we made them ‘future proof’ regarding environmental standards. This brand new technology has cost us an enormous investment, and a similar investment would be needed for the other companies to design their brand new technologies.

CV Gyula Kenyeres has been working for Opel Szentgotthárd since 1992.

He started his career as a technical assistant. He moved to an engineer’s position in 1993 and became a coordinator in the same year. In 1996, he was appointed deputy manager in the Family1 Engine Plant. In 1998, he started to manage Opel’s CVT (Continuously Variable Transmission) project and from 2002 the CVT Plant itself.

From 2004, he led the Family1 Engine Plant as unit manager and one year later, besides the Family1 Plant, he also became the unit manager of the Allison Transmission Plant. In the next few years, he worked as future product quality manager of the Family1 Engine Plant. In 2009, after his diverse experience at Szentgotthárd, he was invited to the European headquarters in Rüsselsheim, where he started as manager of powertrain mechanical engineering strategies and planning, and then worked as quality manager. After returning home, he took on the important role of leading the Flex Engine Plant as unit manager.

Photos: 2014- CZIKAFOTO

General Motors was the first carmaker to invest in Hungary after the political changes in 1990. It may no longer build cars here but its state−of−the art plant at Szentgotthárd, the country’s most westerly city, still produces engines. The Budapest Business Journal spoke with Gyula Kenyeres, Production Manager of Opel Szentgotthárd’s Flex Plant.

Q

Speaking about environmental standards, what do you think of electric cars as competition?

A: Well, looking at the present state of electric cars, we are not really worried. GM and Opel both have their own electric cars and neither has noteworthy sales, so we are not prepared to see them as competition.

This technology is still in a developing phase to reduce the cost of the batteries and increase range, although GM electric car owners do not have that range anxiety, given that they are helped by the small gasoline range extender engine in the cars.

Q

What about the expertise and education of your workforce?

A: Well, the college graduation rate of our employees is about 24%, which is a very good rate. We have also helped many colleges and academies to provide specific education that helps students to comply with our needs. In the last few years, we had agreements with several universities to bring students to our plant and spend half or even a whole year studying there. They can either choose to stay here or leave and work for other companies. Knowledge of languages is also a very important factor in our company.

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Litex Motors to Invest €70 mln in its Factory in Bulgaria The Bulgarian automobile producer Litex Motors is planning to invest around €70 mln at its factory in Lovech, central Bulgaria, local business paper Capital Daily reported. The sum is part of a four−year plan for expansion of the production facilities, which will include the launching of facilities for welding, metalworking and painting. The construction of the new facilities is expected to start at the end of 2015. With the launch of the two new units the company will close the production cycle. The Litex Motors plant,

Opel is Top−selling Brand in Hungary in May The number of newly registered cars grew further in Hungary by 15% year on year in May, according to JATO Dynamics data.

Opel was May’s most−popular brand in the country, but the top−selling model was the Skoda Octavia. Most new cars are purchased by businesses, which accounted for more than three−quarters of new registrations in May.

Budapest Business Journal | June 20 – July 03, 2014

Report: Apollo Picks Hungary Over Slovakia for Tire Plant India’s Apollo Tires has picked Hungary over Slovakia in its search for a site to build a plant in Europe, industry portal autopro. hu said, citing reports in the Slovakian press. The plant will create 1,200 jobs, the portal said. Apollo plans to invest $685 mln over four years in its Eastern European car and truck tire plant, industry website RubberNews.com said last week. Apollo announced in 2008 that it would build a €300 mln plant in Gyöngyös, in northeast Hungary, but it dropped the plan a year later because of delays in acquiring permits and a potentially divisive local referendum.

Hungary new car Registrations up in May The number of new passenger car registrations in Hungary came to 5,739 in May, up 14.6% from a year earlier, state news wire MTI reported, citing Datahouse.

The number was 4.1% higher than in April.

In the first five months of this year, new car registrations came to 26,742, up 20.5% from the same period of 2013. Light commercial vehicle registrations came to 1,371 in May, up 9.4% from a month earlier and up 72.5% from May 2013.

Eagle Ottawa to Raise Headcount in Hungary American automobile interior maker Eagle Ottawa is planning to raise headcount at its base in Szolnok to 1,200 by the end ADVERTISEMENT

of the year. The company is expecting the rise of the numbers as the result of a recently completed capacity expansion, Eagle Ottawa Hungary managing director Bryn Kahrl said. The company has established a HUF 2 bln expansion, which wound up in the beginning of this year and have already boosted capacity by 60%. Headcount at the unit reached ding to 600 by the end of 2012. According public records, Eagle Ottawa Hungary n in its had revenue of HUF 26.9 bln business year ended in November. r.

Hungary’s Lunar Puli Rover Reaches es for the Moon Budapest has hosted a summit of ch the ‘Google Lunar XPRIZE’ in which ng 18 teams are competing, including es Hungary’s Puli Space Technologies (PST) on June 4−5. The ‘Googlee Lunar XPRIZE’ is the largestt ze international incentive−based prize on by to date. The competition will be won the first private company to land a rover safely on the surface of the Moon, travel 500 meters above, below, or on the Lunar surface, and transmit two lunar broadcasts back to the Earth. Only 18 teams remain from the 33 that started the competition. PST has been working on its Puli Rover for more than four years, clocking up some 40,000 working hours in building it. Prototypes have already been successfully tested in the deserts of Morocco and on Hawaii.

which employs 200 people, opened officially in February 2012, three years after the Bulgarian company entered into a partnership with Chinese automaker Great Wall Motors. The annual capacity is expected to reach 50,000 cars in each of the new shops. Currently Litex Motors only assembles the vehicles from parts, shipped from China and has a total capacity of 70,000 cars per year.

Hungarian Suzuki Revenue Climbs Almost 12% Japanese carmaker car Suzuki’s Hungarian unit gener generated revenue of €1.567 bln last year, up 11.6% from 2012, Magyar Suzuki told MTI. Magyar Suzuki’s plant in Esztergom produced 161, 161,106 vehicles in 2013, 3.2% more than 12 months earlier, said Viktória Ruska, the automaker’s ccommunications director. The model composition of that m bro broke down to 48,163 Swifts, 42,161 SX4 S−Cross cars, 37,788 SX4s o the Splash model. Of the and 32,994 of cars produced at the plant, Suzuki sold the vast majority (153,748) abroad. Sales in Hungary were up 15.2% at 4,007 vehicles.

Magyar Suzuki invested €155.7 mln at its plant in 2013. This year, the unit aims to produce 154,000 vehicles, depending on demand. It will start preparations for production of the new compact SUV iV−4 model (pictured) at the end of the year, with the first examples rolling off the line early in 2015.

PROMOTION

Position of Supplier and Export Markets are Equally Important Melior Laser: 10% growth looks maintainable Development projects financed from tender subsidies will play a key role in Melior Laser Kft.’s expansion plans this year. The company has become a supplier to several international production firms in recent years and aims to increase its net revenue by 10% in 2014. It now earns net revenue of more than HUF 1 billion per year, operating in laser cutting and sheet metal fabrication, and hopes to develop by strengthening its position and increasing export sales by 25%.

“Though the development of technology and production conditions has always been the basis of our company strategy, the series of investments planned to be carried out by mid−2015 will be a milestone on the way to attracting new partners and strengthening our position as a Hungarian supplier of large international manufacturers,” said László Lendvai, Melior Laser Kft.’s managing director. The company has been awarded HUF 158 million under the European Union’s ‘Complex Corporate Technology Development for Micro−, Small and Medium Enterprises’ tender. The investments, which will be finished by the end of the year and come

both from the company’s own resources and tender financing, will serve the company’s capacity building, services extension and the acquisition of new market industries.

Consequently, Melior Laser plans to grow its net revenue by a further 10% and the proportion of export revenues within this by more than 10% this year.

“Instead of the usual response to a declining market – dismissing people – we decided to save the jobs and it is clear today that this was a good choice. Besides our great flexibility, risks also had to be taken, but we had to make sure risk management did not put safe business procedures in danger,” Lendvai said.

The sheet metal fabrication supplier company, which operates near the M1 motorway in Biatorbágy on a site of 2,000 sqm, employs 42 people. Melior Laser has continuously produced a more than 15% profit/revenue ratio for many years and has also performed an almost 10% net revenue increase each year since 2009. www.meliorlaser.hu

NOTE: ALL ARTICLES MARKED PROMOTION ARE PAID PROMOTIONAL CONTENT FOR WHICH THE BUDAPEST BUSINESS JOURNAL DOES NOT TAKE RESPONSIBILIT Y

Automotive News Roundup

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Budapest Business Journal | June 20 – July 03, 2014

EXPERT OPINION

New Consumer Claim Against Manufacturer Eszter SieberFazakas LL.M. Attorney (D), European Attorney (H) NOERR & PARTNERS LAW OFFICE

NOTE: ALL ARTICLES MARKED EXPERT OPINIONS ARE PAID PROMOTIONAL CONTENT FOR WHICH THE BUDAPEST BUSINESS JOURNAL DOES NOT TAKE RESPONSIBILITY

In passing the new Civil Code the legislator did not wish to fundamentally change existing private law but rather confirm existing judgments and the already proven legal institutions.

In the area of warranty law, this intention has not been maintained, a completely new claim was in fact ‘invented’ – the consumer can now claim directly against the manufacturer for repair or exchange if he buys a defective product.

1. PREVIOUS LEGAL POSITION Previously – as is still the case in most European states – the consumer/ purchaser could only claim against the seller for the repair or exchange of a defective object. The background to this is that, in principle, the seller is liable that the purchased object is ‘worth the money’. The consumer could only claim against the manufacturer if the defective product damaged another product or the health or bodily integrity of another.

This system is now being ignored in Hungary and the new product warranty claim has been ‘born’ as a combination of existing warranty and product liability claims – and as a result, the repair can be directly claimed from the manufacturer!

2. REQUIREMENTS FOR A CLAIM Consumer protection is stated as the explanation for this system breach.

Consumers should not be exposed to the rapidly moving trader environment, i.e. the consumer should have legal recourse by the product warranty claim even if his own contractual partner cannot be traced or has become insolvent.

2.1. Consumer as holder of the claim Only the consumer, i.e. a natural person acting outside his occupational, independent or business activity, has the right to the product warranty claim.

2.2. Defect and burden of proof A defect in the purchased product is a requirement for a claim. The decisive time is the placing of the product on the market by the manufacturer. The question of who is subject to the burden of proof for the defect will be of great significance in practice. From which of the ‘parents’ has the new product warranty claim inherited the burden of proof?

The legislative intentions indicate that the manufacturer bears the burden of proof, i.e. it is assumed that the defect existed already at the time of placing on the market by the manufacturer.

2.3. Manufacturer The manufacturer who is defined as whoever produces or distributes the product is liable. It remains to be seen how the judgments will proceed in the case of imported products. Is only the Hungarian importer liable, or the foreign manufacturer or even both jointly and severally? It is mentioned in the oral ministerial consultation that the foreign manufacturer is “of course” liable. This acquires major significance against the background that consumers can in principle claim before the court of their place of residence.

2.4. Limitation The new product warranty claim becomes statute-barred in two years after the placing of the product on the market.

In the course of regress claims of the manufacturer against the supplier, the fact that the statutory limitation period for warranty claims in Hungary is only one year and the statutory regress for businesses for the satisfaction of consumer claims is abolished with the introduction of the new Civil Code may play a part. Manufacturers should ensure by appropriate contract drafting that they can take regress against their suppliers.

3. PROCEDURAL LAW It has been left to the courts to decide how the new product warranty claim can be made procedurally: the explanatory memorandum to the Act contains a reference that the contractual warranty claim “of course” cannot be made simultaneously with the product warranty claim against the manufacturer and the consumer must choose which claim to make. If, however, the chosen claim remains unsuccessful, the consumer can follow-up with the other claim.

4. OUTLOOK It remains to be seen what relevance the newly created product warranty claim will have in practice. Manufacturing businesses in Hungary should, however, adjust to the new legal position – insofar as possible amend their supplier agreements in accordance with the changed legal situation and consider how customer enquiries under warranty law can be dealt with – since a simple reference to the seller will no longer be adequate.

www.noerr.com

The Power Behind Becoming Central Europe’s Production Center The government wants to reinvent Hungary not just as a manufacturing country, but also as a production center for the whole region, while also improving the lot of SMEs. The automotive industry is key to all three goals, with exports amounting to nearly HUF 5,000 billion in 2013, and more than 700 companies employing some 115,000 people.

ROBIN MARSHALL

The ruling Fidesz party has a long history of championing the need for a greater share of SMEs in the economic mix, going all the way back to its first period in government from 2000−2004 and beyond.

It is a moot point whether deeds have matched words, but in any case the onset of the global financial crisis ensured SMEs basically went into survival mode. The government could offer training, but little

most clearly demonstrated by BMW, which doesn’t even have a footprint to speak of in this country beyond a dealer network. Yet, according to Antal Nikoletti, deputy state secretary responsible for external economic relations at the Ministry of National Economy, “BMW has no factory here, but 10% of their components are produced here in Hungary, and the same is true for other makers.”

And according to the Hungarian Investment and Trade Agency, BMW is more than happy with what it is getting. It quotes Baudouin Denis, managing director of BMW Group Hungary, the importer and distributer of the BMW and MINI brands in this country, as calling its Hungarian supplier base “an invisible factory”. The agency says approximately 10,000 people, from 54 different suppliers, work in Hungary for the Bavarian−based automaker.

QUALIFIED SUPPLIER DATABASE There remains, however, the problem of how a Hungarian SME can establish contact with a foreign−owned manufacturer. So HITA set up what it calls a “qualified supplier database”, which is designed to enable useful connections to be made by both sides.

“This platform helps develop direct contacts

Harman/Becker Automotive Systems Kft in Székesfehérvár makes components for several car companies, including car stereo amplifiers for BMW.

else. EU grants were virtually the only source of development money, but have always been complicated to access.

But where the government has been able to take action is in getting the motor manufacturers, in particular, to source more component parts locally. Fidesz has had to tread a careful path here; it has a declared policy of shifting the country towards being a manufacturing base, rather than becoming a service state. To do that, it clearly needs manufacturers based here. In opposition, the party was critical of the tax holidays and incentives given to foreign companies to set up shop. In power it has tied some of those same incentives to creating jobs, increasing spending on local R&D, and using native component suppliers where possible.

The plan has advantages for the foreign− owned manufacturers too. Firstly, they get the well−educated, relatively low−cost workforce that attracted them in the first place. Secondly, they get those incentives.

Thirdly, they improve their carbon footprint by sourcing component parts from the hinterland of the factory. Lastly, and perhaps most importantly, they do all of this without compromising quality. If Hungarian SMEs are not up to the job, they don’t get to enter the circle of suppliers. The quality criteria are

among the participants in the market, which is essential for domestic companies for their entry to the supplier system,” HITA said. “The database is appreciated by the big companies as well, because in this way their purchasers can look for potential suppliers in a qualified database. Among the big company users we can find Audi/VW Group, Mercedes, Siemens, Denso, Linamar, Knorr−Bremse and the Continental Group.” HITA says the database contains 212 companies and rising.

On May 27, meanwhile, HITA helped arrange a meeting between auto industry leaders, municipal governments and educators with the aim of strengthening ties between the public and private sectors. The drive behind that is obvious. HITA says income from automotive industry exports amounted to nearly HUF 5,000 billion in 2013, with more than 700 companies in the field employing about 115,000 people.

The government has even been giving certain areas of the country “automotive industry center status”, with extra support for R&D and innovation, as well as engineering education and dual vocational training.

Tatabánya and Esztergom became the latest inductees this year, joining Kecskemét (2012), Szombathely, Szentgotthárd and Zalaegerszeg (2013).

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Budapest Business Journal | June 20 – July 03, 2014

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PROMOTION

True Hungarian. And Japanese.

In addition to the 3,100 workers employed directly in Esztergom, Magyar Suzuki provides tens of thousands of jobs through its extended network of dealers and suppliers, which makes the company a major stakeholder in the automotive sector and a supporting pillar for the economy of Hungary.

SUZUKI FLEET Suzuki automobiles have traditionally been known for being low cost INNOVATIVE COMPANY to operate and maintain, coupled COMMITTED TO THE with outstanding reliability and ENVIRONMENT fuel economy. The brand’s broad Magyar Suzuki is proud to be one of network of dealers and services the front-runners among Hungary- ensures efficiency in managing located businesses with respect fleet purchases, as well as speed to innovation. The company’s and a high professional standard in innovation-related expenditures servicing. totaled HUF 1.8 billion in 2012, and MSC won HUF 207.7 million While in earlier years 30% of non-refundable EU financing for Suzuki passenger cars were sold its research, development and to companies and 70% to private individuals, in 2013 Suzuki’s fleet A STRATEGIC PARTNER OF THE innovation umbrella project. sales rose to 50%. Many companies HUNGARIAN GOVERNMENT MSC is a producer of fuel efficient rationalized their car purchases, with Continuing more than 20 years of cooperation, Magyar Suzuki and eco-friendly cars. In addition to low maintenance costs, fuel economy Corporation (MSC) signed a manufacturing excellent quality products, and other advantages associated with strategic partnership agreement the company is also committed Suzuki becoming key considerations. for cooperation with the Hungarian to operating in an environmentally The Swift and the SX4 continue Government to strengthen the existing friendly way. Environmental protection economic bonds and promote is a priority throughout all phases of to be popular among companies’ sustainable and steady operations. production, including pressing, welding, regional representatives, and are also The agreement establishes the painting the vehicles and vehicle parts, used as company ‘errand cars’, while framework for the further expansion as well as the entire assembly process. its outstanding performance makes of MSC’s manufacturing and Furthermore, the company uses an the all-terrain Jimny a frequent development activities in Hungary, environmentally conscious approach, choice for hunting clubs and forestry companies. which will also enable MSC to when developing new technology. maintain its competitiveness in the European market.

SX4 S-CROSS—THE NEW FLEET CAR Suzuki launched its new model, the SX4 S-CROSS in September 2013. Its dimensions, look, and technological solutions make this car highly competitive in the market of major company fleet purchases and in public procurement tenders.

The SX4 S-CROSS is the ideal choice for medium and senior level managers of small- and mediumsized companies as well.

Thanks to its finely tuned engine, excellent aerodynamics, high rigidity materials in the body, and reduced weight, the SX4 S-CROSS boasts one of the lowest CO2 emission levels and fuel consumptions among C-segment crossovers.

NOTE: ALL ARTICLES MARKED PROMOTIONAL FEATURES ARE PAID PROMOTIONAL CONTENT FOR WHICH THE BUDAPEST BUSINESS JOURNAL DOES NOT TAKE RESPONSIBILITY

A major player in the Hungarian Economy

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Budapest Business Journal | June 20 – July 03, 2014

Automotive industry RANK

Ranked by total net revenue COMPANY WEBSITE

1

AUDI HUNGARIA MOTOR KFT.

2

www.audi.hu

MERCEDES-BENZ MANUFACTURING HUNGARY KFT.

TOP LOCAL EXECUTIVE CFO MARKETING DIRECTOR

ADDRESS PHONE FAX EMAIL

Audi Hungaria Services Zrt (100) –

Thomas Faustmann, Axel 6FKLIIHUHU $FKLP +HLQà LQJ ErzsÊbet Knåb, Gerd Walker – –

*\ĹƒU KardĂĄn utca 1.

(96) 661-000 (96) 661-210 pr@audi.hu

Âť

– Daimler AG (100)

Thomas Geier – –

6000 KecskemĂŠt, Mercedes Ăşt 1.

(76) 301-022 (76) 301-097 –

3,100

Shareholders (0.02) Suzuki Motor Corporation (97.52), Itochu Corp. (2.46)

Ryoichi Oura IldikĂł GyurjĂĄn PĂŠter TĂłth

2500 Esztergom, Schweidel JĂłzsef utca 52.

(33) 541-100 (33) 412-014 gszerencses@suzuki.hu

Âť

– Continental Automotive Holdings Netherlands B.V. (100)

5yEHUW .HV]WH +HQQLQJ '|OO – –

8200 VeszprÊm, Håzgyåri út 6–8.

(88) 540-400, (1) 881-9500 (1) 881-9585 –

Âť

– Lear East European Operations S.a.r.l. (100)

Robert Chalders Hooper – –

*|G|OOĹƒ Haraszti Ăşt 4.

(28) 520-300 (28) 520-399 –

1,650

– Compagnie Financiere Michelin (100)

Eric Faidy, Francois dAout dAuerstaedt – –

4401 NyĂ­regyhĂĄza, BottyĂĄn JĂĄnos utca 15.

(42) 502-600 (42) 502-603 gabriella.gonda@hu.michelin.com

Âť

– Robert Bosch Investment Nederland B.V. (100)

8ZH 0DQJ – –

3526 Miskolc, Robert Bosch park 3.

(46) 518-300 (46) 518-890 info@hu.bosch.com

/HH 6DQJ ,O – –

2459 RĂĄcalmĂĄs, Hankook tĂŠr 1.

(25) 556-146 (25) 556-352 –

NO. OF FULLTIME EMPLOY- OWNERSHIP (%) HUNGARIAN NON-HUNGARIAN EES ON MAY 1, 2014

TOTAL NET REVENUE (HUF MLN) IN 2013

MAIN PARTS PRODUCED

YEAR ESTABLISHED

â‚Ź5,856 mln

Vehicles, engines, parts

1993

Âť

â‚Ź2,096 mln

Vehicle production

2008

www.mercedes-benz.hu

MAGYAR SUZUKI ZRT. www.suzuki.hu â‚Ź1,567 mln

3

4

CONTINENTAL AUTOMOTIVE HUNGARY KFT.

207,971

www.conti-online.com

5

LEAR CORPORATION HUNGARY AUTĂ“IPARI GYĂ RTĂ“ KFT.

â‚Ź670 mln

Autos

Âť

Vehicle parts

1991

2011

2000

www.lear.com

6

MICHELIN HUNGĂ RIA ABRONCSGYĂ RTĂ“ KFT.

191,357

Tires

1889

â‚Ź619 mln

Engine electrical parts, generators

2003

165,617

Tires

2005

Âť

– Hankook Tyre Europe Holdings B.V. (100)

â‚Ź544 mln

Clutch production, vehicle parts

1996

Âť

– Luk Auslandsholding GmbH (99.98)LUK VermÜgensverwaltungs GmbH (0.02)

Kraus Trudbert, Michael 5HLQLQJ - UJHQ )HOL[ .UROO – –

9700 Szombathely, Zanati Ăşt 31.

(94) 588-100 (94) 588-130 LQIR OXN VDYDULD#VFKDHIĂ HU FRP

â‚Ź463.50 million1

Fuel supply system parts, system management units

1997

3,654

– Denso International Europe (100)

-LUR (ELKDUD Attila Szincsåk –

8000 SzĂŠkesfehĂŠrvĂĄr, Holland fasor 14.

(22) 552-000 (22) 552-099 dmhu@denso.hu

$WWLOD %RJiU – –

2840 OroszlĂĄny, TĂĄncsics MihĂĄly Ăşt 111.

(34) 562-300 (34) 562-301 –

www.michelin.hu

7

ROBERT BOSCH ENERGY AND BODY SYSTEMS KFT. www.bosch.hu

8

HANKOOK TIRE MAGYAROSZà G GYà RTÓ ÉS .(5(6.('ł .)7 www.hankooktire-eu.com/hu

9

LUK SAVARIA CLUTCH PRODUCTION KFT. www.luk.de

10

DENSO PRODUCTION HUNGARY KFT. www.denso-local.com/hungary

11

BORGWARNER TURBO SYSTEMS ALKATRÉSZGYà RTÓ KFT.

104,131

Âť

2000

Âť

– BorgWarner Turbo Systems Worldwide Headquarters GmbH (95), BorgWarner Germany GmbH (5)

88,6352

Vehicle parts

1996

Âť

Hammerstein RĂŠszesedĂŠsi ĂŠs Kereskedelmi Kft. (0.10) C.Rob Hammerstein GmbH & Co. KG (99.90)

'pQHV 6]pNHO\ 1DJ\ – –

8060 MĂłr, Hammerstein utca 2.

(22) 561-200 (22) 561-201 –

â‚Ź211 mln

Vehicle parts

1991

Âť

– BPW Bergische Achsen KG (100)

-y]VHI %UXPEDXHU Istvån Bånfalvi –

9701 Szombathely, KĂśrmendi Ăşt 98.

(94) 517-200 (94) 517-358 bpw@bpw.hu

www.borgwarner.com

12

HAMMERSTEIN AUTÓRÉSZEGYSÉGGYà RTÓ e6 )(-/(6=7ł %7 www.johnsoncontrols.co.hu

13

BPW-HUNGĂ RIA KFT. www.bpw-hungaria.hu

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RANK

TOTAL NET REVENUE (HUF MLN) IN 2013

COMPANY WEBSITE

14

HALLA VISTEON HUNGARY KFT.

MAIN PARTS PRODUCED

59,476

Vehicle parts

â‚Ź198 mln

Gear shifts and parts

YEAR ESTABLISHED

15

www.zf.com

16

ZF LENKSYSTEME HUNGĂ RIA KFT.

17

LINAMAR HUNGARY ZRT.

19

BOS AUTOMOTIVE PRODUCTS MAGYARORSZĂ G GYĂ RTĂ“ BT.

www.linamar.hu

20

CONTITECH RUBBER INDUSTRIAL KFT.

1990

22

1996

23

24

VIDEOTON AUTOMOTIVE KFT.

25

BOSCH REXROTH KFT.

26

RĂ BA AUTOMOTIVE COMPONENTS KFT.

www.opel.hu

www.aut.videoton.hu

www.boschrexroth.hu

CONTITECH MAGYARORSZĂ G KFT. www.contitech.hu

1= Data of business year April 1, 2013-March 31, 2014

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

3300 Eger, KistĂĄlyai Ăşt 2.

(36) 520-100 (36) 520-110 contactzfh@zf.com

Âť

– ZF Lenksysteme GmbH (100)

0DWWKLDV $XJHQVWHLQ 'DQLHO 3ULGDO – –

3300 Eger, KistĂĄlyai Ăşt 2.

(36) 520-100 (36) 511-952 matthias.augenstein@ zf-lenksysteme.com

1,926

(98.46) (1.54)

Istvån PintÊr – –

*\ĹƒU Martin Ăşt 1.

(96) 622-600 (96) 624-069 raba@raba.hu

-iQRV ,YDQLFV – –

5900 OroshĂĄza, CsorvĂĄsi Ăşt 27.

(68) 514-600 (68) 514-690 oros@linamar.com

Vehicle parts

1991

Âť

– Linamar Financial S.a.r.l. (100)

â‚Ź142 mln

Vehicle parts, metal work, tool production

–

Âť

– Baumeister + Ostler GmbH & Co. KG (95.45), B+O Holding GmbH (4.55)

Gerhard Fischbach – –

9245 Mosonszolnok, SzabadsĂĄg utca 33.

(96) 575-200 (96) 575-202 –

41,597

Rubber pipe production

1995

Âť

– ContiTech MGW GmbH (100)

Christian Michael Schneider, 0LKiO\ 1DJ\ – –

6900 MakĂł, RĂĄkosi Ăşt 3.

(62) 511-766 (62) 212-372 –

40,783

Rubber parts, plastic pipes, belt production

1993

Âť

– Phoenix Fluid Handling GmbH (100)

Tamås Katona – –

6728 Szeged, Budapesti Ăşt 10.

(62) 566-700 (62) 566-713 info@cbg.contitech.hu

Âť

– Knorr Bremse SFN GmbH (100)

Istvån LepsÊnyi – –

6000 KecskemĂŠt, Szegedi Ăşt 49.

(76) 511-100 (76) 511-100 –

Tamås Sotl Låszló Joó –

9970 SzentgotthĂĄrd, FĂźzesi Ăşt 15.

(94) 551-000 (94) 551-052 opelszentgotthard@gm.com

39,836

Brake parts

â‚Ź121 mln

Engines, cylinder heads, gearbox

1990

1,062

– General Motors (100)

28,284

Sensors, meusuring equipment

1994

Âť

Videoton Holding Zrt. (100) –

=VX]VDQQD *|QF]\ /iV]OyIDOYL – –

8000 SzÊkesfehÊrvår, BerÊnyi út 72–100.

(22) 533-985 (22) 533-986 aut@aut.videoton.hu

16,903

Production of hydraulic and pneumatic equipment

2003

Âť

– Robert Bosch Holding Nederland B.V. (99.20), Bosch Rexroth Pneumatics GmbH (0.80)

,VWYiQ *|GUL – –

3301 Eger, Bånki Donåt út 1–3.

(36) 531-600 (36) 531-761 info@boschrexroth.hu

12,466

Seat frame, seat cover, seat parts, chassis parts, engine parts

2001

700

Råba Holding Nyrt. (100) –

Låszló Urbånyi Ildokó Boros –

*\ĹƒU Martin Ăşt 1.

(22) 577-500 (22) 577-595 mor@raba.hu

10,652

Rubber parts production

1993

Âť

– ContiTech Vibration Control GmbH (100)

/iV]Oy -yND\ – –

4400 NyĂ­regyhĂĄza, Derkovits utca 137.

(42) 551-300 (42) 551-303 –

www.raba.hu/jarmualkatresz

27

&VLOOD łV]L 0DUNXV 6FKOHLHU 7LERU 1DJ\ – –

43,204

2003

1989

www.knorr-bremse.hu

OPEL SZENTGOTTHĂ RD KFT.

Âť

– ZF Friedrichshafen AG (100)

1896

www.contitech-rubber.hu

KNORR-BREMSE FÉKRENDSZEREK KFT.

8000 SzÊkesfehÊrvår, AszalvÜlgyi út 9–11.

(22) 530-300 (22) 530-157 –

47,485

www.contitech.hu

21

0LNOyV (J\ G =VROW .DULNy – –

Undercarriage, undercarriage main part, seat, seat parts, trucks, commercial vehicle chassis

www.bos.de

CONTITECH FLUID AUTOMOTIVE HUNGĂ RIA KFT.

Âť

– Halla Visteon Climate Control Corp. (100)

Vehicles, vehicle engine parts

www.raba.hu

18

ADDRESS PHONE FAX EMAIL

â‚Ź196 mln

www.zf-lenksysteme.com

RĂ BA VEHICLE INDUSTRY HOLDING NYRT.

TOP LOCAL EXECUTIVE CFO MARKETING DIRECTOR

NO. OF FULLTIME EMPLOY- OWNERSHIP (%) HUNGARIAN NON-HUNGARIAN EES ON MAY 1, 2014

–

ZF HUNGà RIA IPARI ÉS KERESKEDELMI KFT.

17

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Budapest Business Journal | June 20 – July 03, 2014

2= Data of business year October 1, 2012-September 30, 2013

7KLV OLVW ZDV FRPSLOHG IURP UHVSRQVHV WR TXHVWLRQQDLUHV UHFHLYHG E\ -XQH DQG SXEOLFO\ DYDLODEOH GDWD 7R WKH EHVW RI WKH %XGDSHVW %XVLQHVV -RXUQDO¡V NQRZOHGJH WKH LQIRUPDWLRQ LV DFFXUDWH DV RI SUHVV WLPH 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, Madåch Imre út 13–14., or faxed to (1) 398-0345. The research department can be contacted at research@bbj.hu

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Budapest Business Journal | June 06 – June 19, 2014

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Budapest Business Journal | June 20 – July 03, 2014

19

3

A Mecca of Mechatronics: NI Assumes Leading Role in Engeneers’ Education Anyone familiar with automation would recognize National Instruments (NI) as a leading power of applied information technology. Very few of them would know, however, that most of NI’s production capacity is located here in Hungary, in the country’s second city of Debrecen.

NI also has a substantial role in the training of engineers in Hungary. Not only in the sense that engineering students spend their internships there: NI also organizes programming competitions for high school students; manufactures computerized measuring equipment for scientific student experiments; and assists startups of fresh graduates by providing free laboratory capacity for them.

ANDRÁS ZSÁMBOKI

It proved hard for the Budapest Business Journal to reach László Ábrahám, the managing director of NI Hungary. After hosting a representative of CNRS, a network of research institutes affiliated with the French Academy of Sciences, he also received the director of the primary school from the nearby town of Tiszalök. Ábrahám was discussing the computerized controlling of the CERN particle accelerator with the former person; and about donating educational software and programming equipment with the latter.

“I know it would be enough to portray ourselves by mentioning that we work for CNRS, having provided 30 industrial computers to CERN. That means that NI Hungary’s industrial computers help to direct the large hadron collider, the top achievement of current European nuclear research,” Ábrahám says to the BBJ. But for NI Hungary, the LEGO MINDSTORMS programing project, called NI Mentor Program, is almost as important. Today’s adolescents who will become the engineers of the future can learn the basics of robotics through that kind of play. “If we would like to have engineers at NI Hungary in ten years, we need to start attracting young people now,” adds Ábrahám, who has even more of his time eaten up by his role as chairman of the Electronic Manufacturers’ Committee of the American Chamber of Commerce in Hungary.

The Tiszavasvári tale, however, is also a story of NI Hungary’s social responsibility.

The primary school is a nearly all−Roma institution, the pupils of which would usually have slim chances to become successful. But after they learn the basics of programing, they often begin to excel in that field: they do programing better than their own teachers.

National Instruments Hungary is playing a major role in encouraging the training of engineering. Managing director László Ábrahám (center) is pictured at the Hungarian Innovation Grand Prize giving in Parlament in 2010.

BACK TO THE BASICS Anybody familiar with robotics and mechatronics will most likely know names such as Rohde & Schwarz, Agilent, and Lacroix. National Instruments, however, occupies an important position among those companies as well: for several years, it has been counted among the three biggest. Few people in Hungary know that NI’s largest research, engineering, and production plant operates right here in Hungary. “Until 2012, the year when NI’s new center in Malaysia was constructed, 95% of the company’s hardware manufacturing capacity had been located here,” Ábrahám explains. “In the absolute sense, we have grown as well, but since 2012 our share within NI’s manufacturing profile has decreased to 80%.” As far as employees are concerned, the situation is a bit different. Of the 7,100 employees of National Instruments worldwide, 3,500 work in Austin, Texas. “NI Hungary employs 1,100 people, but out of that figure 400 employees are engineers,” Ábrahám says. “Some 250 people are employed at the production line.

But one should not imagine those employees as standing all day at the conveyor belt. Even better educated people come to work for NI’s production branch.”

NI Hungary’s HUF 127 bln annual income makes it roughly the 100th largest company in Hungary. “It says more, however, that more than 16% of that income is invested into research and development, which in fact exceeds the R&D investment rates of innovative pharmaceutical companies,” Ábrahám points out.

“Compared to other industries, the advantage of knowledge−intensive electronics industry is even more apparent. One ton of the printed circuits we manufacture is worth the value of HUF 100 mln. The majority of cars are heavier than one ton, and one can buy top quality cars for HUF 7 million,” Ábrahám offers as an unusual comparison.

“Well, our industry involves proportionally more knowledge,” he added.

OUR REAL ASSET IS EXPERTISE “It is not manufacturing I am the most proud of in this factory. It is not even R&D. What I

am the most proud of is the progress we have made in dispersing a way of thinking in the field of engineering. That is, of our educational contribution. From a utilitarian point of view, NI Hungary finds the most important those whom we could attract either as customers or as employees of the firm. Indeed, we have a program that assists small startup businesses of freshly graduated engineers. It is an open secret that by helping them we would also like to make them into our clients. We also offer internships to last−year engineering students. Our mission, however, is much larger than that. We would like to awaken the engineering way of thinking in the mindset of every Hungarian youth,” Ábrahám says enthusiastically.

“From the point of view of dispersing an engineering mentality, I am most proud of our product called ELVIS,” Ábrahám says. “This platform is comprised of several kinds of devices, more than what a physics laboratory of a high school would possess. It includes an oscilloscope, a digital multi−meter, and a function generator, among other things.

Moreover, ELVIS can be connected to a computer by a USB cable, which makes it possible for the computer to immediately evaluate measuring results recorded by ELVIS. So it can easily be used by students, who can can experience hands−on education approach and use it as a tool in their laboratory experiments.

After initial supervision by teachers, high−school students eventually end up working on their own,

performing high levels of technical creativity,” the managing director explains. “We have announced student competitions, and we have received wonderful entry projects.

There was a student who designed a humane fly catcher; another student came up with a device suitable for photographing meteors; yet another student created a human voice frequency simulator.”

Earlier legislation in Hungary used to make it possible for companies to pay the tax called “vocational/training contribution” in kind.

NI Hungary at that time donated ELVIS devices to schools in the Borsod and Hajdú− Bihar Counties. “Since 2012, that option has been crossed out. Every company must pay the vocational/training tax in money. We do not know where this money goes exactly.

But we know that several high schools we are familiar with do not get funding for our equipment, even though they would like to have them. In spite of the fact that ELVIS devices do not cost more than good−quality notebook computers,” Ábrahám points out.

NI used to send engineering teachers together with the ELVIS devices donated to public schools under the aegis of the vocational/training tax. “In the new money− based taxing system, those professional relations are broken up. We have no chance to see the generation from which the engineers of the future will come, and schools do not have a chance to see the manufacturing companies for whom they train their students.

I would like to lobby with all my power for reinstalling the former system of taxation, in order to restore the professional chain that leads from the system of education to production.”

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20 3

Budapest Business Journal | June 20 – July 03, 2014

Electronics manufacturers

682,265

www.samsung.com/hu

3

FLEXTRONICS INTERNATIONAL KFT.

511,215

1

517,689

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511,215

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–

–

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–

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CONSUMER ELECTRONICS

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1

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NET REVENUE FROM ELECTRONICS MANUFACTURING IN 2013 (HUF MLN)

COMPANY WEBSITE

TOTAL NET REVENUE (HUF MLN) IN 2013

RANK

Ranked by total net revenue

OWNERSHIP (%) HUNGARIAN NON-HUNGARIAN

TOP LOCAL EXECUTIVE CFO MARKETING DIRECTOR

ADDRESS PHONE FAX EMAIL

2003 8,589

GE Infrastructure Hungary Holding Kft. (100) –

Joerg Bauer Ian Southerland –

1044 Budapest, VĂĄciĂşt 77.

(1) 237-6800 (1) 237-6801 vacigreens.reception@ge.com

– Samsung Electronics Co. Ltd (100)

Istvån Facskó – –

1138 Budapest, DunavirĂĄg utca 2.

(1) 453-1100 (1) 453-1103 –

)OH[WURQLFV 6iUYiU Logistics Kft (0.03) )OH[WURQLFV ,QWHUQD tional GmbH (99.97)

Jånos Lang Mårk HetÊnyi –

8660 Tab, MunkĂĄs utca 28.

(84) 526-100 (84) 526-021 ]VROW UDED#Ă H[WURQLFV FRP

2900 KomĂĄrom, BĂĄnki DonĂĄt utca 1.

(22) 539-200 (22) 539-366 V]HNHVIHKHUYDU#HPHD IR[FRQQ com

1989

Âť

1992 5,652

PCE PARAGON SOLUTIONS KFT. 4

5

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329,427

321,5322

329,427

299,940

–

–

–

–

–

–

–

–

2007 700

– (100)

PÊter Låszló Tålos – –

2001 3,650

– Jabil Circuit Limited

-DELO &LUFXLW /X[ embourg S.a.r.l (49), Jabil Circuit Netherlands B.V. (49)

Richård Somogyi – –

3580 TiszaĂşjvĂĄros, HuszĂĄr AndorĂşt 1.

(49) 548-500 (49) 548-546 hr_tiszaujvaros@jabil.com

– Robert Bosch Investment Nederland B.V. (100)

Volker Schilling – –

3000 Hatvan, Robert Bosch utca 1.

(37) 549-100 (37) 549-112 info@hu.bosch.com

Âť

– Nokia Corp. (100)

Szilård GerencsÊr – –

2900KomĂĄrom, Nokia utca 1.

(34) 542-000 (34) 542-099 hr.komarom@nokia.com

1991 3,151

– (OHFWUROX[ $%

SĂĄndor GĂśnczi JĂłzsef Babucs Erika Medveczki

5100 JĂĄszberĂŠny, FĂŠmnyomĂł utca 1.

(57) 415-999 (57) 415-812 –

– Continental Automotive Holdings Netherlands B.V. (100)

Róbert Keszte, Henning DÜll – –

8200 VeszprÊm, Håzgyåri út 6–8.

(88) 540-400, (1) 881-9500 (1) 881-9585 –

– Delphi Packard Austria GmbH & CO KG (91), Delphi Technologies Holdings S.A.R.L. (9)

Alan John Leyland, Andrås Szabó – –

9700 Szombathely, Zanati út 29/A (94) 517-800 (94) 328-838 –

www.jabil.com

6

ROBERT BOSCH ELEKTRONIKA GYĂ RTĂ“ KFT.

â‚Ź1,192 mln

www.bosch.hu

7

NOKIA KOMĂ ROM KFT.

8

ELECTROLUX LEHEL KFT.

9

CONTINENTAL AUTOMOTIVE HUNGARY KFT.

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286,800

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–

–

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DELPHI HUNGARY AUTÓALKATRÉSZ GYà RTÓ KFT.

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â‚Ź469 mln

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Âť

Âť

Âť

Âť

Âť

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–

Âť

1999

2011

Âť

1990

Âť

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12

NI HUNGARY KFT.

13

VIDEOTON HOLDING ZRT.

14

www.hungary.ni.com

www.videoton.hu

ROBERT BOSCH POWER TOOL ELECTRIC TOOL PRODUCTION KFT.

IT

HOUSEHOLD ELECTRONICS

CONSUMER ELECTRONICS

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Âť

Âť

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–

–

–

–

YEAR ESTABLISHED NO. OF FULL-TIME EMPLOYEES ON MAY 1, 2014

TELECOM

www.ibm.com

ODM

Âť

SECTORS

OEM

139,256

ACTIVITY TYPE

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IBM DATA STORAGE SYSTEMS KFT.

NET REVENUE FROM ELECTRONICS MANUFACTURING IN 2013 (HUF MLN)

11

TOTAL NET REVENUE (HUF MLN) IN 2013

RANK

COMPANY WEBSITE

OWNERSHIP (%) HUNGARIAN NON-HUNGARIAN

TOP LOCAL EXECUTIVE CFO MARKETING DIRECTOR

ADDRESS PHONE FAX EMAIL

– IBM Ireland Product Distribution Ltd. (100)

PÊter Mohåcsi Tamås Kåldi –

2600 Våc, Deåkvårifasor 16–18.

(27) 500-400 (27) 517-026 horvath.balazs@hu.ibm.com

– National Instruments Corp. (100)

Låszló Csaba à brahåm Ilona Rózsa –

4031 Debrecen, HatĂĄr Ăşt 1/A (52) 515-400 (52) 515-970 erika.kun@ni.com

Gåbor SzÊles (47.05), PÊter Lakatos (26.48), Ottó Sinkó (26.48) –

PĂŠter Lakatos, OttĂł SinkĂł GyĂśngyi RĂĄcz RancznĂŠ Csaba HorvĂĄth

8000 SzÊkesfehÊrvår, BerÊnyi út 72–100.

(22) 533-421 (22) 533-429 marketing.sales@videoton.hu

Âť

– Scintilla AG (100)

Ansgar Lengeling – –

3526 Miskolc, Robert Bosch park 1.

(46) 518-300 (46) 518-399 info@hu.bosch.com

– EPCOS AG (100)

Bernhard Koch, Balåzs Takåcs, Hans Ulrich RÜder Istvån PintÊr –

9700 Szombathely, Szent LĂĄszlĂł kirĂĄly utca 6.

(94) 522-100 – szo.hu@epcos.com

2006

Âť

127,000

Âť

Âť

Âť

Âť

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2003 1,100

110,000

43,000

–

–

–

1938 8,760

â‚Ź229 mln

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–

–

–

–

Âť

–

2001

www.bosch.hu

15

EPCOS ELEKTRONIKAI KFT.

16

CLARION HUNGARY ELEKTRONIKAI KFT.

www.epcos.com

21

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Budapest Business Journal | June 20 – July 03, 2014

64,500

Âť

Âť

Âť

–

–

1994 1,580

13,2463

13,246

–

–

–

–

1997 395

– Clarion Co. Ltd (100)

Enokida Tatsuo Nakazawa Kenji –

2760 NagykĂĄta, JĂĄszberĂŠnyi Ăşt 116.

(29) 640-100 (29) 640-160 clarion@clarion.hu

9,8484

9,848

–

–

–

1997 1,052

– Sanmina-SCI Systems Holdings Inc. (100)

Dr. Kåroly Hoffmann ErzsÊbet Galgån –

2800 TatabĂĄnya, KĂłta JĂłzsef utca 2.

(34) 515-600 (34) 510-004 nikolett.monostori@sanmina.com

– Success World Holdings Ltd. (100)

PÊter Tålos – –

2900 KomĂĄrom, BĂĄnki DonĂĄt utca 1.

(30) 422-9608 (34) 886-001 –

Kåroly Kovåcs (20), KårolynÊ Kovåcs (20), Attila Kovåcs (20), Róbert Kovåcs (20), Tßnde Kovåcs (20) –

Attila KovĂĄcs, KĂĄroly KovĂĄcs Orsolya Vida TĂźnde KovĂĄcs

6725 Szeged, Cserepes sor 9/B (62) 444-007 (62) 444-181 info@procontrol.hu

– Koninklijke Philips Electronics N.V. (100)

Timothy John Semanchick, Zoltån MÊszåros – –

1117 Budapest, Aliz utca 1.

(1) 382-1700 (1) 382-1800 –

â‚Ź200 mln

1

www.clarion.com

SANMINA-SCI MAGYARORSZĂ G KFT. www.sanmina.com 17

19

FIH EUROPE KFT.

20

PROCONTROL ELEKTRONICS KFT.

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843

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–

–

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272

254

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–

–

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1989

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4= Data of business year October 1, 2012-September 30, 2013

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22 3

Budapest Business Journal | June 20 – July 03, 2014

Electronic Manufacturing Roundup Bosch to Establish HUF 170 mln Training Center German engineering giant Bosch has laid the cornerstone for a HUF 170 mln training center at its Hatvan−based unit. The center will operate under the so−called dual education system that combines apprenticeships and vocational training; it is expected to open in 2015 and train 56 students a year.

Chemium Biotechnológia Winds up R&D Project Hungary’s Chemium Biotechnológia has completed a HUF 220 mln project for the development of a device to diagnose respiratory pathogens, the company informed state news agency MTI. The company is expected to start seeking permits for the device in the fall of this year. Negotiations have already started on the sale of the technology and its possible domestic production. The development of the project was partially based on a HUF 150 mln grant. $25 mln Development at Samsung Hungary The Hungarian unit of South Korea’s Samsung inaugurated a $25 mln

production hall at its television plant in Jászfényszaru. Samsung Electronics Magyar will be producing LED televisions and monitors as well as plasma devices in the 22,000 sqm production hall. Most of the products will be exported to other European Union countries. Plant head Lee Kyu− Jin said Samsung employs almost 2,500 people in Jászfényszaru, and 3,000 in the country as a whole. The new production hall will create 75 jobs.

The factory at Jászfényszaru has been expanding since its establishment in 1989. Production started in 1990 and the plant began exporting products three years later. The past 25 years has seen the production of more than 62 million devices.

The company, meanwhile, has also announced the introduction in Hungary of its latest televisions, with the so−called “football mode”. Thanks to the AutoHighlights function, it is not a problem if the viewer misses important parts of the World Cup or other matches, because they can always review highlights. Football mode can also record matches, which means that missing a match is not a problem anymore. Gareth Lewis, the Head of Consumer Electronics

Division of Samsung Electronics Magyar Zrt., said that the function offers an “outstanding experience” and he is positive about the fans’ reception.

The AutoHighlights function analyses the actions of the game, paying particular attention to the commentators and the scoreboard, and it automatically records the key highlights. Once they are recorded the viewers can watch the most spectacular moments anytime.

Swedish AQ Group Acquires Bulgarian Carat Electronics Swedish AQ Group AB has signed an agreement with Zlaten Lev Holding AD to buy 94.6% of the shares Carat Electronics AD in Veliko Tărnovo, central Bulgaria, for €1.58 million, business site Evertiq.com reported.

The takeover will take place on July 1, 2014. Carat Electronics is a manufacturer of electronic cash registers and electronic electricity meters. It also offers subcontracting services of design, production and testing in the areas of injection molding of thermoplastics and PCB assembly. The company has a turnover of approximately €1.5 million, employs 80 people and

owns real estate with 10,000 square meter of production space. After the acquisition AQ will have close to 1000 employees in Bulgaria, Claes Mellgren chief executive of AQ Group said.

Debut of new Hungarian Startup Intelligent car service Vemoco is debuting in Hungary. The startup is offering devices with special sensors and GPS functions to help give drivers a safer and more efficient driving experience. Vemoco offers services for both commercial and private drivers. The producer promises that drivers using the devices will save a significant amount of money as the technology helps in the optimization of the car. With the device keeping a history of the driver’s style, users can learn how to drive in a way that is better for the car mechanically and also saves money. Insurance companies like Posta Biztosító and Netrisk are offering special insurance conditions for users of the technology.

The device ties in with the EU’s plan to make transportation more efficient and secure. It is also compatible with so−called ‘eCall’ systems, which would automatically let rescue teams know about a possible accident.

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What now for the ‘European Project’?

The EU’s democratic deficit can be overcome only through a common European constitution, but further integration requires more solidarity among member states, warned famed philosopher Jürgen Habermas when he spoke in Budapest.

➜ PAGES 24-25

24

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4 Socialite

Budapest Business Journal | June 20 – July 03, 2014

European Solidarity, Where are y

LEVENTE HÖRÖMPÖLI-TÖTH

At ELTE University that afternoon it felt like a state of emergency had been declared somewhere. People flocked in huge numbers to listen to a speech by one of the world’s most celebrated intellectuals, Jürgen Habermas. The crowd was so large that a big screen had to be set up in a separate room to serve the overspill audience. In cyber age fashion, the whole thing was streamed live on Ustream.

The German thinker came for a reason. He had been invited by the

STORY HIGHLIGHTS ■

Europe needs more solidarity in order to facilitate integration ■ Problems of member states are so complex that addressing them requires a supranational framework

Hungarian Representation Office of the European Commission and the Goethe Institut to share his thoughts about ‘Europe, Hungary and a Supranational Democracy Project’.

NO LACK OF CRITICISM The speaker addressed the current Hungarian political situation at first.

“It raises concerns if a national populist prime minister uses the power granted by the electorate to build out an illiberal, controlled democracy,” he said.

He also observed, “Hungary has drifted away from Europe lately”.

The phenomenon surprised him as the country fought hard for democracy in the 1956 uprising against communism and in 1989 it was among the first to demolish the Iron Curtain. “I don’t have the competence to judge Hungarian affairs from the outside, I just had second thoughts about my mixed feelings,” he added.

Photos: Europian Commission / Szabolcs Dudás

The democratic deficit of the European Union can be overcome only through a common European constitution, but further integration requires more solidarity among the member states. That was the core message of leading contemporary philosopher Jürgen Habermas when he spoke in Budapest.

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4 Socialite

Budapest Business Journal | June 20 – July 03, 2014

e you Hiding?

25

STILL TAKEN INTO ACCOUNT Sociologist and philosopher Jürgen Habermas is one of the last members of the neo-Marxist Frankfurt School. He became an idol for the young during the ’68 student movements.

At 84, he is still an influential intellectual, something clearly demonstrated by the fact that his thoughts were integrated into European Commission president José Manuel Barroso’s project aimed at reforming Europe. Barroso has also recently responded publicly to one of Habermas’ speeches on the same topic.

Habermas is best known for his theories on communicative rationality and the public sphere and his deep-rooted commitment to European values. This was the third time he has been to Hungary since 1989.

WHO'S NEWS

Anna Wessely, Chair of the Department of Sociology at ELTE and editor-in-chief of the Budapest Review of Books, and János Weiss, a specialist in German philosophy from the University of Pécs, discuss the ‘European Project’ with philosopher Jürgen Habermas at the Goethe-Institut in Budapest.

IN EACH OTHER WE DON’T TRUST Habermas went on to analyze European affairs. “What is missing very much now is mutual trust,” he said. That was severely damaged when “The member states of the eurozone were merciless to one another during the management of the 2008 crisis, which undermined even the little amount of existing trust.”

Therefore, for the ‘European project’ to enter a new stage of development, more solidarity is needed.

In addition, a common political public and cultural sphere is also required in order to make Europe work. That can be achieved “by the national media reporting on key issues concerning the EU and other nations”. On the other hand, democratic rights must be observed and enforced.

URGED TO GO SUPRANATIONAL The speaker argued for further integration. “The social−political issues of the global world can be handled only on a supranational level”, he explained.

“The crisis of the eurozone showed that a currency union without political union cannot function, but even a shrinking pro−EU majority is not willing to take steps to deepen integration.”

Key is to link the European nation states on a supranational level, but without violating their sovereignty. “The decreasing room for maneuver for nation states can

be compensated only by a supranational one,” he said. “Countries have become so complex that their basic problems cannot be dealt with on a national level.”

The political union envisaged by Habermas would certainly presuppose a shared constitution. According to that model, nation states would not cede, but only share their sovereignty with EU bodies. “During the crisis the power of the EU’s executive bodies grew at the expense of member states’ parliaments which further increased the legitimacy deficit of the EU,” he added.

HEY, IT’S JUST ELECTIONS! Habermas did not leave the European elections without passing comment, either.

“The advancement of the anti−European far right is a sign that we are in the midst of a constitution making process. For the first time such people are also in European Parliament that will urge the other MEPs to debate with them not only in Brussels, but also in their home countries,” he said.

His ultimate conclusion, however, remained. “The morale of the last EP elections is that the majority clings to the peace offered by Europe, but does not stand for deeper integration. At the same time, the shrinking room for maneuver of nation states can be counterbalanced only by a supranational cooperation. I am curious to hear an argument that can contradict this statement,” he said.

Do you know someone on the move?

Send information in English to research@bbj.hu

Name BÉLA ZAGYVA Current company/position NOKIA HUNGARY, COUNTRY DIRECTOR NSN TRAFFICOM KFT., MANAGING DIRECTOR

Name PÉTER BARTA Current company/position JALSOVSZKY LAW FIRM/TRAINEE LAWYER

Zagyva succeeded Róbert Ésik in the Country Director’s position as of June 1, 2014. Ésik has decided to pursue new challenges outside of the company. Zagya has more than 25 years of experience in the telecom industry, and has performed in key business and executive sales roles at Siemens, Nokia Solutions and Networks (NSN) and Microsoft. He then took the challenge of leading NSN Trafficom Kft. as Managing Director and as Lead Account Manager for the Customer Business Team CEE. He earned his degree at the Budapest University of Technology and Economics in the faculty of Electrical Engineering.

Barta has joined the tax law group of Jalsovszky as a trainee lawyer, having given up gave up his career at EY in order to join the law firm. “Péter is a great talent and a potential rising star. This is proved by his results at tax competitions and by the fact that he could become a respected member of an international advisory firm’s tax team within a few months’ time. His commitment and hard-working attitude is also reflected by his parallel LL.M. and PhD studies,” said managing partner Pál Jalsovszky.

Name TAMÁS FEHÉR Current company/position JALSOVSZKY LAW FIRM/ TRAINEE LAWYER

Fehér joins the firm, having worked at the Budapest office of Cameron McKenna for 12 years, as an internationally acknowledged tax lawyer. In addition to his tax advisory work he is also the author of several publications in the area of international tax law.

Fehér will play a key role in the growing tax litigation practice of the firm. He will also participate in tax structuring projects both in the field of income taxes and VAT.

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26

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4 Socialite

Budapest Business Journal | June 20 – July 03, 2014

BOOK REVIEW

The Disciplined Pursuit of Less Have you ever found yourself struggling with information overload? Have you ever felt both overworked and underutilized?

Do you ever feel busy but not productive? If you answered yes to any of these questions, the way out is to become an Essentialist.

NOTE: ALL ARTICLES MARKED PROMOTIONAL FEATURES ARE PAID PROMOTIONAL CONTENT FOR WHICH THE BUDAPEST BUSINESS JOURNAL DOES NOT TAKE RESPONSIBILITY

Greg McKeown is the CEO of THIS Inc., a leadership and strategy agency in Silicon Valley, and his clients have included Apple, Google, Facebook, Twitter and LinkedIn. The courses he runs focus on what he calls ‘the disciplined pursuit of less’. By applying more selective criteria for what is essential, he says, the pursuit of less allows us to regain control of our choices so that we can channel our time, energy and effort into the goals and activities that matter.

One of the key questions that McKeown investigates is why successful people and organizations don’t automatically become very successful. An important explanation for this is ‘the clarity paradox’: Phase 1: When we really have clarity of purpose, it leads to success.

Phase 2: When we have success, it leads to more options and opportunities.

Phase 3: When we have increased options and opportunities, it leads to diffused efforts.

Phase 4: Diffused efforts undermine the very clarity that led to our success in the first place.

The point, McKeown says, is that success can be a

catalyst for failure, and we can see this in companies that once dominated their industries but later collapsed. Jim Collins explored this idea is his book ‘How the Mighty Fall’, explaining that these companies failed because of their “undisciplined pursuit of more”. McKeown argues that this can apply to companies, to careers and to personal lives.

Being an Essentialist is about a disciplined way of thinking. It means challenging the core assumptions of ‘we can have it all’ and ‘I have to do everything’ and replacing it with the pursuit of ‘the right thing, in the right way, at the right time’.

Having worked with some of the most innovative companies and organizations in the world, McKeown draws on his experience and insight to show us how to put Essentialism into practice in our own lives.

“Essentialism is not about how to get more things done,” he writes, “it’s about how to get the RIGHT things done. It doesn’t mean just doing less for the sake of less either. It is about making the wisest possible investment of your time and energy in order to operate at your highest point of contribution by doing only what is essential.”

ESSENTIALISM: THE DISCIPLINED PURSUIT OF LESS

by Greg McKeown Published by Virgin Books ISBN 9780753555163 Available to order through www.hungaropress.hu

PROMOTION

“The particular exercises we recommend and teach our patients depends on their individual condition,” explains Mária. “It varies how much time you need to experience According to a recent study, the average office worker sits noticeable changes but generally at his or her desk for five hours and 40 minutes a day. Then after ten sessions one can feel the difference and do the exercise routine there’s more sitting in the car and in front of the TV or laptop at home. Time can’t be beaten, at home. It will take its toll in time – in a painful way. though: to achieve lasting results, you have to exercise regularly, at least “It all starts in school and goes on for are evident, to prevent the onset of three times a week for 45-50 minutes at decades, glued to the desk at work acute pain and limited movement of a time. Once in good shape, a suitable or at home for a lifetime, most likely joints later on. We should nip pain in sporting activity can maintain fitness.” in a bad posture, hunched over the the bud. Bad posture starts in school, Other than yoga for a healthy spine, keyboard. It often ends in excruciating crouching over your desk. Then it the McKenzie method is also effective pain and discomfort, although it gets worse if your job means sitting in cases when backache is caused not doesn’t have to be that way: exercise, in an office all day long: the muscles so much by inflammation as by some particularly Pilates and yoga for back in your pelvis and along your torso mechanical joint or spine problem: a problems, could effectively prevent slacken up. You start to feel pain in pinched or pressed nerve, lumbago or the unwanted consequences of a the neck, in your lumbar region and sciatica. sedentary lifestyle. It is a common in your back, often radiating into your “Herniated disks are unfortunately misconception that therapeutic yoga arms and legs.” getting more common these days but is the last resort for those medically That’s when you crawl on all fours even that can be handled, and once we diagnosed with a spine problem. to the physio, most likely. The therapy find the right exercise the patient may “Prevention is above all,” says Mária gives great relief, stopping and reversing recover and never have to come back Horváth, physiotherapist at Dr. Rose adverse physiological processes, helps for treatment. It is entirely personal how Private Hospital. “We must start correct any asymmetrical anomalies, one reacts to physio. A symptom might exercising when the first symptoms and consequently alleviates the pain. recur quite regularly or be in remission

Stand up to Pain!

for years. The main thing is that anyone can easily learn the exercises that alleviate his or her particular problems when the first pain kicks in. Best of all, with a tenacious work-out routine you can avoid having to go to surgery,” concludes the therapist.

Good to Know When a problem is aggravated to a point when conservative treatment is ineffective or neurological symptoms arise, our specialists come to the rescue with state-of-the-art neurosurgery. Physiotherapy can expedite fast and complete post-operation recovery.

TEL: (+36) 1 377-6737 WEB: www.drrose.hu ADDRESS: Széchenyi square 7/8, 1051 Budapest

WWW.BBJ.HU

Budapest Business Journal | June 20 – July 03, 2014

Restaurants FINE

4 Socialite

27

This is an extract from Fine Restaurants, the Budapest Business Journal’s Restaurant Guide 2014 (www.facebook.com/fine. restaurants). To order your copy of the publication, which costs HUF 2,990, send an email including contact details to Andrea Bognár, bognar.a@amedia.hu

Costes Several recognizable international and Hungarian effects forever inspire the chef of Costes Restaurant, Miguel Rocha Vieira. At Budapest’s first Michellin−starred restaurant, he and his team make sure that guests enjoy only the finest food compositions. The atmosphere is elegant, yet free and easy. A fine dining restaurant with stylish design, great service and an extensive wine list.

Address of restaurant: 1092 Budapest, Ráday U. 4. · Telephone number: +36 (1) 219−0696 · Telephone number For Reservations: +36 (1) 219−0696 · E−mail address: Info@Costes.Hu, · Website address: www.Costes.Hu · Name of owner: Károly Gerendai · Name of chef: Miguel Rocha Vieira · Opening hours: Wednesday−Sunday: 18:30–24:00 · Number of seating places: 40 · Year of establishment: 2008 ADVERTISEMENT

GRUPPO T.F.M. KFT. 1068 Budapest, Király u. 102.

377 SQM – 5 ROOMS, JÓZSEF ATTILA STREET

1ST DISTRICT

1ST DISTRICT

2ND DISTRICT

2ND DISTRICT

59 SQM – 2 ROOMS + HALL, KOSCIUSZKÓ T. STR.

48 SQM – 2 ROOMS, FIÁTH JÁNOS STREET

70 SQM – 2 ROOMS, TULIPÁN STREET

90 SQM – 3 ROOMS + HALL, BAKA STREET

Close to the Buda Castle, this completely renovated, very well divided apartment with balcony is situated in a nice period building with elevator.

In a cobblestone street, at the bottom of the Buda Castle, this garden facing, quiet, sunny, completely renovated apartment has separate rooms.

This very sunny and spacious, street facing, high floor apartment is situated in a small condominium with a nice common garden, close to the Millenáris Park.

In a nice, Bauhaus style building, this very bright apartment has 2 separate bedrooms, living room and balcony and it is located 5 minutes walking from the Mammut shopping mall.

19.600.000 HUF

19.900.000 HUF

29.990.000 HUF

30.900.000 HUF

+36.1.201.0403

3RD DISTRICT

+36.1.201.0403

2ND DISTRICT

179.000.000 HUF

+36.1.376.6080

4TH DISTRICT

5TH DISTRICT

62 SQM – 3 ROOMS, AMFI HOUSE

56 SQM – 2 ROOMS, IZZÓ STREET

51 SQM – 2 ROOMS, SZÉRŰSKERT STREET

114 SQM - 3 ROOMS, ST. ISTVÁN AVENUE

103 SQM – 4 ROOMS, HONVÉD STREET

This very bright apartment with private gas heating is located in a quiet, green area. Good connection to public transport.

Panorama over the Roman Amphiteatre and the Buda Hills, this spacious apartment with separate rooms and open kitchen is situated in a new built building. Garage for 3.000.000 HUF.

This sunny, garden facing, quiet apartment with private gas heating and balcony is situated in a small, well maintained condominium.

This well insulated semi-detached house has 423 sqm of lot, nice front garden, outbuilding, garage, and it is located in the quiet garden suburb area of the district.

This sunny apartment is situated within a nice period building, and benefits of a balcony and private gas heating. Only a few minutes away from the Danube.

Adjacent to the Parliament, this very spacious, bright, well divided, street facing apartment with separate rooms and balcony is situated in a nice period building with elevator.

18.000.000 HUF

24.900.000 HUF

33.900.000 HUF

+36.1.430.1403

5TH DISTRICT

31.900.000 HUF

+36.1.430.1403

6TH DISTRICT

4TH DISTRICT

+36.1.336.1706

35 SQM – 1 ROOM, RAKTÁR STREET

8.900.000 HUF

3RD DISTRICT

+36.1.336.1706

Luxury family house in Budaliget, next to the French School of Budapest. This three storey, completely renovated house has 3 separate bedrooms, living room with nice fireplace, study, mansard room, 3 bathrooms, spacious, fully fitted kitchen, terrace and balcony. Benefits of wall heating and cooling system, alarm system, security camera system, central vacuum cleaning system and 3 car garage. It has nice, well-kept garden with 30 sqm summer kitchen, barbecue oven and outdoor swimming pool.

9.900.000 HUF

+36.1.782.7275

6TH DISTRICT

+36.1.782.7275

7TH DISTRICT

5TH DISTRICT

+36.70.3156.087

8TH DISTRICT

+36.70.457.4943

9TH DISTRICT

234 SQM – 7 ROOMS + HALL, KÁROLY AVENUE

56 SQM – 2 ROOMS, RÓZSA STREET

97 SQM – 3 ROOMS, DESSEWFFY STREET

82 SQM – 2 ROOMS, KIRÁLY STREET

209 SQM – 5 ROOMS, BAROSS STREET

84 SQM – 3 ROOMS, MESTER STREET

This spacious, street facing apartment with 3 entrances, 2 bathrooms and balcony is situated in a well maintained period building with elevator, a few steps from the Deák Ferenc Square.

This very sunny, well divided, street facing apartment in good condition has separate, spacious rooms and fully fitted kitchen and it is located close to the Nyugati Square.

Meters away from St. Stephen’s Basilica you can find this apartment within a nicely renovated period building. The apartment benefits of private gas heating.

This completely renovated, bright, street facing apartment with private gas heating is situated in a renovated period building with elevator, a few minutes walk from the Erzsébet Circuit.

This completely renovated, very well divided, street facing apartment with 2 bathrooms is situated in a period building with elevator.

This very sunny, street facing apartment in good condition with private gas heating is situated in a period building with elevator.

84.900.000 HUF

14.900.000 HUF

20.990.000 HUF

22.000.000 HUF

45.000.000 HUF

16.900.000 HUF

+36.70.457.4943

10TH DISTRICT

+36.70.322.3697

10TH DISTRICT

+36.70.3156.087

11TH DISTRICT

+36.70.322.3697

11TH DISTRICT

+36.70.414.7126

11TH DISTRICT

+36.70.414.7126

11TH DISTRICT

210 SQM – 8 ROOMS, HARMAT STREET

168 SQM – 3 ROOMS, SZÁRAZ STREET

108 SQM – 4 ROOMS + HALL, BERCSÉNYI STR.

110 SQM – 3 ROOMS + HALL, KENDE STREET

74 SQM – 4 ROOMS, PAJKOS STREET

100 SQM – 3 ROOMS, KELENVÖLGY

This luxury, three storey family house has 500 sqm of lot, 3 bathrooms, terrace, air conditioning system, steam bath, nice garden and 2 car garage and it is located in a quiet area.

This luxury family house has 615 sqm of lot, separate rooms, big terrace, nice, well-kept garden with automatic sprinkler system and garage.

This very bright and quiet apartment that needs renovation has 3 separate rooms and balcony, and it is situated in a good condition building with nice courtyard garden.

This spacious and bright, street and garden facing, high floor apartment that needs renovation has 3 balconies and it is situated in a building with common garden and elevator.

This very sunny, duplex apartment with separate rooms and private gas heating is situated in a renovated building with common garden. Parking space belongs to the apartment.

Breathtaking panorama over the hills, in a new built, 6 apartments condominium, 5 apartments for sale with garage, 2 separate bedrooms, 1 living room with open kitchen and balconies.

43.000.000 HUF

55.000.000 HUF

24.000.000 HUF

24.900.000 HUF

27.900.000 HUF

from 48.900.000 HUF

+36.70.619.8733

12TH DISTRICT

+36.70.619.8733

12TH DISTRICT

+36.1.784.1929

13TH DISTRICT

+36.1.784.1929

13TH DISTRICT

+36.1.720.2433

14TH DISTRICT

+36.1.720.2433

14TH DISTRICT

77 SQM – 3 ROOMS, GYŐRI STREET

81 SQM – 3 ROOMS, BÖSZÖRMÉNYI STREET

41 SQM – 2 ROOMS, ÜTEG STREET

102 SQM – 4 ROOMS, ST. ISTVÁN PARK

79 SQM – 5 ROOMS, SZUGLÓ STREET

75 SQM – 4 ROOMS, SZUGLÓI KÖRVASÚT LINE

This very bright, well divided apartment that needs renovation, has separate rooms and it is located close to the MOM Park shopping mall and the Organic Market.

This completely renovated, sunny, street and garden facing apartment with 2 balconies and private gas heating is situated in a Bauhaus style building.

In a new built building with elevator, this top floor, very sunny, garden facing apartment has 16 sqm balcony and parking space in the garage of the building.

Nice panorama over the Danube, this completely renovated, very spacious and sunny, high floor apartment with balcony, is situated in a well maintained period building with elevator.

This very quiet, well divided, duplex apartment with 2 bathrooms, private gas heating and parking space is situated in a building with nice common garden.

In a new built building, this sunny, spacious apartment has separate rooms, open kitchen, private gas heating, 23 sqm terrace and parking space.

17.900.000 HUF

35.000.000 HUF

17.800.000 HUF

79.900.000 HUF

25.790.000 HUF

34.700.000 HUF

+36.1.789.2846

+36.1.789.2846

+36.70.414.7759

+36.70.414.7759

+36.1.430.1403

+36.1.430.1403

MEASURING IS NOT ENOUGH!

15TH DISTRICT

15TH DISTRICT

16TH DISTRICT

16TH DISTRICT

90 SQM – 4 ROOMS, RÁKOSPALOTA

72 SQM – 2 ROOMS, PESTÚJHELY

82 SQM – 3 ROOMS, CINKOTA

134 SQM – 6 ROOMS, RÁKOSSZENTMIHÁLY

In a new built building with common garden, this duplex, sunny apartment has fully fitted kitchen, balcony and parking space in the garage of the building. Good connection to public transport.

This luxury, completely renovated, park facing apartment with fully fitted kitchen, fireplace in the living room and parking space is situated in villa house with big common garden.

This spacious family house that needs renovation has 740 sqm of lot, separate rooms, 20 sqm terrace and nice garden. It is located in a quiet, green side street.

This spacious, two storey family house that needs renovation has 523 sqm of lot, two bathrooms and parking space in the garden.

It is located in a quiet side street.

23.500.000 HUF

34.000.000 HUF

17.900.000 HUF

21.900.000 HUF

+36.70.398.8754

WWW.TECNOCASA.HU

+36.70.398.8754

+36.70.337.2499

You want to know the real value of your property?

Get in contact with the nearest TECNOCASA agency for a free evaluation.

Our professionals, with an extensive knowledge of the local market, are at your service.

+36.70.337.2499

EACH AGENCY INDEPENDENTLY OWNED AND OPERATED. • THESE OFFERS ARE VALID, TILL THE APARTMENTS ARE SOLD. • THESE INFORMATION DO NOT CONSTITUTE A CONTRACTUAL ELEMENT.