Budapest Business Journal 23/04 by Business Publishing Services Kft.

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BBJ

SPECIAL REPORT: VOL. 23. NUMBER 04

Report

TRANSLATION

MARKET OVERVIEW

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’s top−15 earning We asked Hungary about the market, and translation agencies These are the answers s. ranked their own offering a full list of firms, we received. For pages 20−21. by revenue, see

TRANSLATION FEBRUARY 27, 2015 – MARCH 12, 2015

BUDAPEST

BUSINESS JOURNAL HUF 1,250 | €5 | $6 | £3.5

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SMEs now in line for state-backed loans The decision to extend the ‘Funding for Growth’ scheme to smaller companies is expected to strengthen innovation by supporting enterprising startups with affordable credit. 03

NEWS

Putin may have given more than he got Russian analysts say their president was really interested in pulling Hungary out of the EU’s orbit. He appears to have been disappointed on that score, while Hungary picked up a promise of cheap gas. 06

BUSINESS

Selling Hungary along the French Riviera As the real estate world packs its swimming gear and prepares to head for the annual market in Cannes, people in the business say that Budapest and the CEE region are growing more attractive. 08

The government is rewriting the law covering procurement, to comply with a new EC directive. As Anna Ménes of Baker & McKenzie explains, the changes should make tenders for public contracts more open and competitive. 11

SOCIALITE

SPECIAL REPORT

Bull’s blood is drawn, without a clear victor

Translation business shifting to the East

Better professional training, standards

While the Bikavér duel included some impressive wines, it’s hard to say whether Szekszárd or Eger can lay claim to the most impressive version of the hearty red that is Hungary’s best-known cuvée. 22

With a growing amount of trade coming from Asia, and more people speaking English, translation companies are finding that the demand for non-European tongues is increasing. 17

Thanks to a certified education system and an ISO scheme, the translation business in Hungary is becoming more standardized, so that customers can look forward to a minimum level of quality. 16

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Budapest Business Journal | February 27 – March 12, 2015

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3Special

SPECIAL REPORT:

SUBSCRIPTIONS

Report

TRANSLATION

MARKET OVERVIEW

The language business

this year compared How is business seeing an areas in recent to last year? Have you been three main specialized technical, medical in work? years, those being financial document increase in 2014; our revenue remained and we No increase the same as the year before. (life science) those areas, efforts, translations. Withindiverse assignments, approximately to serious restructuring grown tender Owing encounter the most profitability has year. translation of though, espell’s to the previous including the and grant applications, considerably compared documentation and licensing for technical descriptions that the demand Do you believe Hungarian procedures. from or to of your translations on the amount someone choose or is very dependent Why should being done in Hungary? special advantages business that is market impact your company? What can you offer? How does the unusual services refer to client- business? is heavily part of the translation would primarily salient translation demand responses on the in addition to providing I as our most climate orientedness translation Domestic on the actual business industry. Therefore, do services, we strive feature. In addition to simple dependent above services, Afford in Hungary. Translation companies our clients with high-level strong, when attention to the interpretation linguistic the economy is and to dedicate great from sales to project and and provides complexfamiliarizing well when expand their operations factors in all areas, to ensure continuous also our clients, in companies are many transactions in order consultancy to management, in translation process heavy when there them with the the elaboration the market. This is when there’s Those growth and development. involve them in services. most for order to for translation service that is to that the demand of the customizedto their needs. I also demand export their services Do you believe companies that or to Hungarian tailored less dependent one of the factors foreign customers will be translations from on the amount of suitably less transparency as and therefore appealing to is very dependent done in Hungary? see on domestic revenue climate within makes our company being business that is market impact your that as well as to translators; exposed to the business espell’s global both our clients we receive, other hand, How does the the feedback Hungary. On the experience the based on schedule is very enterprise customers also markets for business? it is natural that well own transparent rate push on their To some extent, economy a our partners, as the Hungarian as the important to all of itself. a strong more efficient services. These development of and the work process industry, tougher as insight into at different faster demands do translate into affects the translation presented in why espell we are all participants of the market for us. That is need for economic opportunities corporate Since of the same process, one our Hungarian is the requirements stages an increasing Hungary, from to excellent quality is experiencing speed, which, multinational companies, in guarantees a clear view of each other’s efficiency and clients to foreign for any enterprise to have but operational create the conditions are able to invest in ability problems and questions. Last in coupled with the higher-than-average our customers and needs, a great deal which they need requirements that At the same time, least, Afford invests allocating qualityis quite a challenge. Nevertheless, translation services. is in Hungary and not innovations, have, out of line: technological industry-leading the client expectations are not how active a business with a gladly to such arises for translations choose to work how much demand necessarily directly sources as memoQ and Across. espell’s customers service provider, not not on their part is of our clients in the software premium translation agency, so it is only Director segment correlated. Many a budget translation large enterprise they expect a premium medium and markets and espell fair that in return businesses to foreign economic this year compared service. How is business you been seeing an conduct the Hungarian are affected by you do extent. We consider to last year? Have translations do kinds situation to a lesser development What kind of increase in work? and nurturing to our sustainable our clients the most common our the key and what are In addition to maintaining relations with proportion in which that your company and the and to be the of translations languages, and what very fruitful business both the foreign in the past years, are present in deal handles? What numerous clients markets. do you usually stability we enjoy, sort of documents the resulting market paradigm shifts in Hungarian do you do with? we have experiencedpast year(s) to which of translations partner for enterprise the very What kind the most common kinds of espell is a reliable covering all their the industry in must respond what are handles? translation buyers, localization needs. a translation agencyincrease its business and that your company sort of to what text translations translation and deliver high value swiftly in order and company are What languages, and deal with? can Also, espell success. General for example, do you usually challenging projects for documents for particularly banking/finance, legal a classic translation translation assignments, by the demand Afford is considered numerous areas in the field of sciences, engineering, increasingly replaced (e.g. special technical agency that is able to cover translations, life as well as services, in virtually industry specific which require is in on with our translation IT and telecommunications, Our company and medical) translations, into 60+ languages. skills and aptitude language pairs. with software localization more complex the translators and the any a regional supplier are of that partnerships as your both the part as well as a thorough translation enterprises someone choose or Why should project management,relevant technologies. global a reliable partner for assignments special advantages the the seeking company? What can you offer? texts common in knowledge of are gaining prevalence diverse types of unusual services Online documents is pushing the market with European languages. Central and Eastern that Afford has CEO over hard copy, which and innovative it must be said on Miklós Bán, emphatically towards new technologies this calls for However, focusing more experience, quick been solutions. In our awareness and excellent situation

top−15 earning We asked Hungary’s about the market, and translation agencies These are the answers their own offerings. list of firms, ranked a full we received. For pages 20−21. by revenue, see

TRANSLATION

BBJ STAFF

Afford Translations Interpreting

Andrea Téry, Operations

BUSINESS JOURNAL BUDAPEST B

VOL. 23. NUMBER 04

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Bull’s blood is drawn, without a clear victor

Translation business shifting to the East

Better professional training, standards

With a growing amount of trade coming from Asia, and more people speaking English, translation companies are finding that the demand for non-European tongues is increasing. 17

Thanks to a certified education system and an ISO scheme, the translation business in Hungary is becoming more standardized, so that customers can look forward to a minimum level of quality. 16

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Complaining is fun, but not enough By winning a February 22 by−election to fill a vacated parliamentary seat in Veszprém, an independent candidate finally put an end to Fidesz’s two−thirds Parliamentary supermajority, which the ruling party has been making the most of for the last four years. Truly undoing the damage caused by Fidesz’s rewriting of the laws can only happen after a change of government during 2018 elections. And because much of the bad legislation Fidesz passed is so−called cardinal law, requiring a two− thirds majority to amend, it may be necessary to build a coalition that includes a two−thirds majority of Parliament. While opinion polls, and the vote in Veszprém, make it clear that voters are tired of Fidesz, the popular Hungarian pastime of complaining about the current situation is not enough. If democracy is going to function, we need to do the work of establishing a viable new leadership. It is understandable that people are tired of the current leadership. Even the best−behaved party should not enjoy a supermajority for so long, but Fidesz has not been very well behaved. Almost immediately after trouncing the Socialist party in 2010 and winning two thirds of the seats in Parliament, Fidesz used its power to rewrite the Constitution with dizzying speed, chipping away at freedom of the press and the independence of the judiciary – and even tampering with our voting rights. By cutting the number of seats in Parliament, and creatively redrawing voting districts, Fidesz was able to maintain its two−thirds majority during the 2014 election, despite winning only 44% of the popular vote. Along with trampling on democratic freedom, Fidesz members also appear to be involved in rampant corruption. Clearly an alternative is needed, but the question is: Who? The second−most popular party in the country, Jobbik, has espoused a platform of hatred, of both Roma and Jews. Lately, Jobbik seems to be trying to soften its image, even dialing back its trademark Roma bashing, perhaps in the hopes of securing more mainstream voters. But anti−Semitism and

xenophobia remain core Jobbik party values. They are also Euroskeptics, a position that is allegedly encouraged by funding from the Russian government. While fear and hatred of the other always gets a few votes in any country, as a whole, the Hungarian populace seems to favor a kinder, more− inclusive approach. A center−right alternative to Jobbik would be welcome, but the only party besides Fidesz even trying to be center−right is its own longtime coalition partners, the befuddled Christian Democrats, whose main achievement thus far has been the horribly ill−considered Sunday closings law. The biggest grouping on the left is still the Socialists, a party born out of the former communist leadership that resigned in 1989. Many of their older members did suspiciously well during the process of privatization, and during years of leadership, the Socialists gained a reputation for graft that makes them unpopular. There is also a group of small parties on the left, who might coalesce together to help make a difference, though that seems unlikely, and has proved beyond them thus far. This small minority includes the LMP (Greens) who stand on principal and refuse to partner with others, relegating themselves to the role of frustrated gadflies. Clearly the most effective current political grouping is the one chosen by Zoltán Kész, the winner of the Veszprém by−election: independent, with no party affiliation. Recent anti−government demonstrations have also succeeded by eschewing political affiliations, and organizers of those demonstrations say they do not want to belong to parties – or even to run for office. But being sick of the current leadership is not enough. We can’t “vote the bums out” without voting someone else in. Hungarians have three years to get beyond complaining about the current situation and to actually coalesce behind an alternative. Let’s hope the people are up to the challenge.

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A statue called the ‘Hungarian People Grateful for the Great Stalin’ stands in front of the Exchange Palace on Budapest’s Szabadság tér in 1950, left. Built in 1907 to house the stock exchange, the structure was converted to the Lenin Institute and House of Technology in 1948, and Public Television’s headquarters in 1955. The TV headquarters moved out in 2006, when the building was sold for commercial development. In February, the Budapest Stock Exchange moved back to Szabadság tér, to the Bank Center Building, above.

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NEWS

Beleaguered banks finally get some good news

NEWS

State visit seems better for Orbán than Putin

macroscope

MNB to back loans for riskier SMEs

MACRO Speaking X of ﬁgures The Budapest Business Journal presents some of the most important macro data of the past fortnight.

6.7% Year−on−year increase in the average Hungarian worker’s salary in December. Boosted by year−end bonuses, average

MTI Photo: Bea Kallos

monthly pay rose to HUF 257,452.

A developer with his dog works at the newly renovated office of LogMeIn, in Budapest, modelled after the firm’s Boston, U.S. offices, which have won awards for being worker-friendly. Founded in Budapest as a small startup in 2003, the company, which makes software that assists in collaborative working, now has hundreds of employees and a headquarters in Boston. By targeting SMEs, the government’s new loan program could be funding more success stories like LogMeIn.

28% Increase in the number of permits issued for new homes in Hungary

GABRIELLA LOVAS

Hungary’s central bank (MNB) will launch NHP+, a new scheme to boost lending for small− and medium−sized enterprises that have not been able to participate in the “Funding for Growth” program (NHP) thus far. The program will start on March 16 and will run parallel with NHP. Both schemes will expire at the end of 2015. From the beginning of 2016, the MNB hopes that SME lending can gradually return to restored market−based conditions. Erste analysts believe that the extension of the NHP program is a positive development, as it will boost lending as well as banks’ net interest revenues. “Covering losses is good news, however, the 2.5% annual limit

does not give enough motivation to provide lending for those clients who have been left out so far,” Equilor analysts said.

HUF 500 billion available The MNB has assigned HUF 500 bln with a 0% refinancing rate to commercial banks under the new program. Banks, in turn, can give out loans at a maximum 2.5% lending rate to their clients. The

“Covering losses is good news, however, the 2.5% annual limit does not give enough motivation to provide lending for those clients who have been left out so far.” main difference between NHP and NHP+ is that the central bank will take over SME credit risk from credit institutions for a limited term and to a limited extent. The MNB takes over 50% of credit losses from the credit institutions, but only for less than five years and up to 2.5% of the entire loan portfolio held by the individual bank. In doing so, the MNB aims to ensure

that bank financing is available for customers of medium creditworthiness – who account for the majority of the SME credit market – rather than only to prime customers. The MNB claims that for businesses without access to the program, typically variable−rate loans with rates of 3.5−7% are available instead of NHP’s maximum 2.5%fixed− rate loans. Banks asked by the Budapest Business Journal said that they have already started to examine the new scheme, but it is too early for them to say whether it will live up to the MNB’s expectations. Some said that, compared to other loan guarantee products, the conditions of the NHP+ are less favorable. Others pointed out that Hungarian businesses’ willingness to invest is still uncertain. The MNB hopes that with NHP and NHP+ running simultaneously, “the operation of the entire SME credit market may recover and the efficiency of monetary policy transmission may improve significantly”. The NHP scheme was a key driver of GDP growth in 2014. By January 30, some 19,400 enterprises had received financing of more than HUF 1.3 trillion in the first and second phases of the “Funding for Growth” scheme. The agricultural sector, manufacturing as well as the trade and repair sectors accounted for nearly three quarters of the loans.

during 2014, as compared to the previous year. A total of 9,633 permits to build homes were issued in 2014.

€369.9 mln Hungary’s current account surplus in

December, according to the Hungarian National Bank. That meant that the surplus for Q4 was €1.21 billion.

6.1% Year−on−year decrease in farm gate prices last year. The prices of crops fell by 9.2% and the prices of livestock and animal products fell by 1.1%. In the previous year farm gate prices fell 7.8%.

Source: KSH, MTI

The ‘Funding for Growth’ program has been extended to SMEs, providing backing from the central bank for cheap loans to smaller, less creditworthy companies.

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Budapest Business Journal | February 27 – March 12, 2015

NEWS

Fidesz loses supermajority in by-election

IN BRIEF Hungary is against the European Union’s plan to oversee the intergovernmental energy agreements created by member states, Hungary’s Prime Minister Viktor Orbán told reporters on February 18, according to Hungarian news agency MTI. “We will have a major problem. I am expecting an escalating confl ict,” Dow Jones and Reuters quoted the Prime Minister as saying. According to Orbán, the EU’s plans to revamp energy policy, which requires preliminary notification on intergovernmental contracts, “shows that it’s heading into an energy union that hinders national sovereignty”. Orbán expressed his intention not to support such an energy union, because the EU believes that the energy sector should become non− profit rather than for−profit as it currently is, and he urged the EU to become competitive with American energy prices, MTI reported. “If the retail and wholesale profit margin is dropped from the price, energy prices could fall for the manufacturing sector,” the Prime Minister added. Orbán said that Hungary is now relying chiefly on Russia for its gas imports, however by 2018−2019 the country could be in a “different situation” with more room for “maneuvering”, given that by that time gas is expected to flow from more than just the Slovak−Hungarian gas interconnector, as reverse flows from Croatia and Romania could also be introduced. Orbán added that he agreed with Russian President Vladimir Putin that Hungary should back the successor of the failed South Stream project: A new plan to expand a Russian pipeline into Turkey and to include spurs that would take gas through Greece and the Balkans into Hungary.

Growing concerns over Paks upgrade European officials have warned that the energy agreement between Hungary and Russia regarding the upgrade of Hungary’s sole nuclear power plant at Paks faces numerous obstacles and could possibly violate European Union regulations, the Financial Times reported late on February 22. “A veto or prohibitive ﬁ ne from Brussels would be a bruising setback for Viktor Orbán, Hungary’s prime minister, who has made the project the centerpiece of his strategy to forge deeper political and economic ties with Russia, despite the ostracizing of Moscow by the West over Ukraine,” the Financial Times reported. “Although the European Commission did not raise objections to an intergovernmental agreement signed by the two countries just over a year ago, the award of contracts for the Paks plant has thrown up thorny antitrust concerns,” the paper added. Responding to Hungarian news agency MTI’s request for the Commission to comment on the FT report, EC spokesperson Ana−Kaisa Itkonen said the review of the project is “in

a very early stage” and that “no conclusion of any kind can be drawn as to whether the agreement is in harmony with EU rules on public procurements or state aid”.

Moody’s: Structural factors limit Hungary’s economic growth, but external vulnerability decreases Hungary’s economic growth in 2014 was stronger than anticipated, due to greater public sector investment and improved absorption of EU funding, in addition to its central bank funding scheme, but this is unlikely to be replicated in the coming years, according to a report from Moody’s. A weak banking system resulted in a limited ability to support credit growth, but at the same time Hungary’s non−performing loans could improve following a recent policy pertaining to the banking sector, and Hungary’s ﬂexible exchange rate support of its exporters’ price competitiveness, the report said. As far as Hungary’s sovereign debt is concerned, the burden of the debt will slowly decline to 76%, but the country’s still high level of foreign− currency−denominated debt will expose the country to potential shocks stemming from a shift in investor conﬁdence, the report said. Rigidities in the labor market and weaknesses in the business environment are key factors in Hungary’s structural problems, the report concluded.

Gov’t finalizes Sunday closure law; retailers eye loopholes The Hungarian government decided not to add any more exceptions to the restrictions on Sunday business hours, government spokesperson Zoltán Kovács said after a cabinet meeting on February 18, adding that the government currently sees no reason to expand the list of exceptions already contained by the law, therefore the government is drafting a decree that will prohibit exceptions based on tourist demand, shopping habits, employee numbers and the peculiarities of some residential areas. In order to bring the best out of the situation Hungarian supermarkets are likely to adopt a model already in use in Western Europe to work around a legislation that requires shops to remain closed on Sundays penzcentrum.hu reported on February 24. According to the ﬁ nance web portal, Hungarian National Railways operator MÁV is open to the initiative, which involves inviting retailers to set up shop in railway stations in which a different set of rules apply on Sunday closures; larger retail outlets could thereby remain open seven days a week. The initiative could have a major impact on the Hungarian retail sector and may also help the troubled railway operator, which has one of the largest property portfolios in the country. Spar and Tesco had a reserved yet positive reaction to the plan in their response to a query by penzcentrum.hu. Under legislation approved

Photo: MTI/Lajos Nagy

PM expects ‘escalating conflict’ with Brussels

Independent candidate Zoltán Kész votes during a by-election on February 22 in Veszprém. Kész won the race to fill a vacated parliamentary seat, thereby eliminating the two-thirds majority that has given the ruling Fidesz party complete control of the Parliament since 2010. He gained approximately 43% of the votes, winning nine percentage points more than Fidesz-KDNP’s Lajos Némedi. Veszprém’s current deputy mayor received 33.64% of the votes, while Jobbik’s Andrea Varga-Damm had 14.14%. The by-election was called to replace former Fidesz deputy prime minister Tibor Navracsics, who has taken a position with the European Commission.

late last year, most large retailers will be required to close on Sundays as of mid− March. Shops under 200 sqm and family− run stores will be exempted from the rule, Hungarian news agency MTI said.

KSH: Home building permits rise 28% in 2014 The number of permits issued for the construction of new homes rose by 27.8%, reaching 9,633, last year for a total area of 1.083 million sqm (up by 26.5%), fresh data from the Central Statistics Office (KSH) published on February 24 reveals. KSH noted that although the number of new home completions rose by 14.6% to 8,358 last year, the ﬁgure was still very low, remaining well below pre−crisis levels. The number of permits issued for non−residential buildings fell 5.6% from a year earlier to 5,033, representing an area of 2.441 million sqm, down by 9.1% as compared to the previous year. Industrial buildings accounted for 42% of the total area, while farm buildings made up 21% and commercial buildings accounted for just 7%.

Romania’s Hellvig: Hungary a threat to European security MEP and member of Romania’s National Liberal Party, Eduard Hellvig, addressed the “threat to the EU” posed by Hungary’s increasing ties with Moscow on his blog, online news portal EurActiv.com reported on February 20. Hellvig, who was nominated by

Romania’s President Klaus Iohannis to serve as head of the Romanian foreign intelligence service, wrote an article criticizing Hungarian Prime Minister Viktor Orbán and his “regime” and its “blatant prejudice against liberal democratic values”, according to the news portal. During German Chancellor Angela Merkel’s visit to Budapest earlier this month, concerns regarding Orbán’s use of the term “illiberal democracy” were also raised, however, Orbán sought to deflect the criticism, saying that “Hungarians welcomed illiberal democracy; the fact that in English it means something else is not my problem.” “Hungary tends to be a threat to European architecture, a Trojan horse increasingly under the influence of Moscow”, Hellvig wrote on his blog, adding that the Russian− Hungarian partnership poses a threat not only to the Romanian−Hungarian strategic partnership but also to partnerships with NATO and the EU. Hellvig believes that Romania should “take a leading role in defending democratic values and allied interests in the region” as Hungary becomes further embroiled in a “poisoned” relationship with Russia. Hellvig also warned against Russia’s offensive military doctrine, which could justify the use of nuclear weapons even in the event of a non−nuclear confl ict, and that CEE countries, formerly Eastern Bloc countries now members of NATO, could be especially targeted by Russia. To alleviate these concerns, Hellvig called for the strengthening of military capacity. The newly elected Romania President is also in favor of increased of military spending.

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News 05

Budapest Business Journal | February 27 – March 12, 2015

Bankers may finally have reason to smile Analysts say there was real progress in the government−EBRD February 9 agreement, which spelled out a host of changes that will ease pressure on the beleaguered sector. GABRIELLA LOVAS

Recent changes planned in Hungary’s banking sector are considered positive, as some of the government’s new measures and promises, especially the cut in the bank tax, have been badly needed by both the sector and the whole economy. The lower bank tax is to be adopted as part of the fall tax package, with the necessary amendments expected to be submitted to Parliament in June. Now that the government has reached its goal to increase local ownership of banks to more than 50%, it seems it has realized that there will be no sustained economic development without a strong banking sector and lending activity, BankRacio.hu chief analyst Péter Gergely told the Budapest Business Journal. The government seems to have accepted that it cannot put an already overburdened sector under more strain. Gergely believes that with the acquisition of a 15% stake in Erste, the government wanted to show that it would really deliver on its promises this time. Erste will also benefit from the acquisition through regained trust, as customers will be assured that any gossip about the bank’s potential exit are unfounded, Gergely noted. According to a memorandum of understanding signed on February 9 with the European Bank for Reconstruction and Development, the Hungarian state and the EBRD will each acquire a 15% stake in Erste. For it’s part, Erste Bank pledged to launch a €550 million lending program. The purchase price of the stake will be determined following a due diligence procedure via an independent audit company by the end of March. The government said in the memorandum that it would “refrain from implementing new laws or measures that may have a negative impact on the profitability of the banking sector, other than those the government of Hungary may be obliged to implement due to its membership in the European Union”.

Bank tax cuts The government promised that both the rate and the tax base of the bank levy would be more favorable for the banks. According to the memorandum, the rate will be reduced to 0.31% from 2016 and to 0.21% from 2017 to the end of 2018. As of 2019, the levy will be “further aligned with the prevailing European Union norms”. The tax base will be adjusted total assets as of 2014 rather than the

At the February 9 announcement of the state and EBRD buying into Erste Bank are, from left, EBRD President Suma Chakrabarti, Hungarian Prime Minister Viktor Orbán and Andreas Treichl, CEO of Austrian Erste Group Bank AG. current adjusted 2009 balance sheet total in the case of credit institutions. The current rate is 0.15% up to HUF 50 billion, and 0.53% above that. Bank tax revenues will be cut by HUF 60 bln in 2016 and by HUF 22 bln in 2017. The government expects GDP growth to exceed 2% in 2016 and as a result, fiscal revenues are seen to increase by HUF 200−250 bln. Part of that amount could be used to offset lower bank tax revenues. According to K&H Bank’s calculations based on these numbers, its bank tax obligation could decrease by 45−50%.

Is it enough to boost lending? A relatively large growth rate in lending is likely, as the banks are expected to be more willing to give out loans after the rate cut. Creditworthy customers continue to get loans as they have done before, but banks will not return to their pre−crisis practices of giving out loans to anybody, said Gergely. However, if the business environment is improving, banks’ foreign owners will be willing to allocate more capital and attention to their Hungarian affiliates. From the customers’ perspective, loans are getting safer and more transparent thanks to the fair banking act, some loans are available with interest rate subsidies or with installments fixed for ten or even for 20 years, while real estate prices are still low. K&H Bank, for instance, was already quite actively lending with HUF 315 bln in new loans in 2014, Hendrik Scheerlinck told reporters at the presentation of the bank’s annual results. He stressed that

“The government said it would “refrain from implementing new laws or measures that may have a negative impact on the profitability of the banking sector, other than those the government of Hungary may be obliged to implement due to its membership in the European Union.” the bank seeks to further increase its lending. “We have a very clear growth strategy and we want to contribute to economic growth,” he said. When asked whether K&H would be sold, he stressed that the Hungarian bank is not for sale as it is a very important element in the overall strategy of the KBC group. As an international bank, KBC has decided to concentrate on five core markets: Belgium, the Czech Republic, Hungary, Slovakia and Bulgaria in order of importance. Over 2014 the bank has increased its market share from 8.5% to 9.6%. The bank has a solid capital structure both in Hungary and at group level, which enables it to further increase its lending activity and its market share, said Scheerlinck.

Fair competition With the recent state acquisitions, the rumors about the exit of certain banks and Raiffeisen’s plans to optimize its business in Hungary, the banking sector faces big changes in the coming years. The government will likely merge its latest purchases MKB Bank and Budapest Bank to form Hungary’s second−biggest

lender, based on assets, behind OTP Bank. Erste will also be a stronger player after the deals are closed. Economy minister Mihály Varga said that the government will “transfer all direct and indirect majority ownership stakes in Hungarian banks within the next three years”. While it is definitely not the government’s task to operate banks, there aren’t many potential buyers around. Scheerlinck pointed out that an open market and fair competition is always good for the end customer and insisted K&H wants to remain a strong competitor in the Hungarian banking market. He didn’t deny that in 2014 the bank was very active in gaining more customers from other banks and its success was partly the result of the fact that a number of customers at other banks were already refinancing their loans in 2014. “Our big advantage is that we have had a quality growth strategy in place for the last five years as well as engaged colleagues.” K&H can concentrate on business, as it doesn’t have to look at internal restructurings, what its growth strategy will look like, or how the government might react.

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Budapest Business Journal | February 27 – March 12, 2015

Russian visit: Putin’s gains unclear It does not seem that the Russian leader succeeded in pulling Hungary further from the EU’s orbit. Orbán, on the other hand, did secure his stated goal – a promise of cheap natural gas.

While Western observers say that Russian President Vladimir Putin is looking at Hungary as a means of entry into the European Union, analysts in Moscow say that Putin really wants Hungary’s exit from the EU. In that sense, it would seem that, while Hungary got the cheap natural gas it was after, the Russian leader did not make much progress toward his own goals during his February 17 visit to Budapest. Since the G20 summit in Australia in November 2014, Putin has tended to avoid visits to Western countries. Conversely, Russia’s policy in Ukraine, and its annexation of Crimea, has reduced the desire by Western nations to host Russian president. Most of the Western discourse on Russia and its leader centers on sanctions aimed at stopping military intervention in the eastern states of Ukraine. This is why Putin’s visit to Budapest in February was such a remarkable event. As Orbán reiterated in an interview with the Russian press right after the meeting, Hungary is one the few EU members that does not publicly support sanctions against Russia, and the country’s leadership is relevantly tolerant towards Putin’s policy on Ukraine. Moreover, after the July speech in which Prime Minister Viktor Orbán described Hungary as an “illiberal democracy”, modeled on states like Russia and Turkey, he has been blamed by the Hungarian opposition for conducting the policy of “Putinization” of the country. Russia and Hungary have close ties in the energy sphere, strengthened by a €10 billion loan deal to expand Hungary’s only nuclear plant, located in Paks, that Orbán signed – seemingly out of the blue – last year in Moscow. For the Hungarian side, the central point of the recent visit was the natural gas deal. For about ten years, the country counted on the South Steam gas pipeline that would have created a link between Russia and Southern Europe while circumventing Ukraine. This project has now been scrapped and the Russian government is planning to build another pipeline, this time via Turkey. Orbán is looking for cheap gas to stimulate the Hungarian economy, so the visit can be considered a success for him: The Russian president agreed to continue shipping natural gas to Hungary on even more beneficial terms than those spelled out in the 1996 agreement that expires this year.

Putin offers ‘pragmatism’ Success in obtaining his own goals is harder to measure. Despite assertions of some observers that Putin is looking for a point of entry into Europe, political analysts in Russia view Putin’s policy as a search for allies inside of Europe who would prefer him instead of the EU and the United States. Russian commentators say that, as an alternative to the West, Putin offers

Photo: MTI/Márton Kovács

PAVEL SHCHELIN

Did Hungary get the upper hand? Russian President Vladimir Putin, left, shakes hands with Hungarian Foreign Minister Péter Szijjártó at the airport in Budapest on February 17. It would seem that Putin had more to offer than the Hungarian prime minister. Orbán has shown that it is still possible to do business “as usual” with Russia, “Russia can counter America as if nothing had happened last year in Ukraine. Moreover, he speaks of the with a policy of ‘new importance of the dialogue with Russia, pragmatism’ that puts an trying to give the impression that there had not been real efforts at dialogue emphasis on economic during the last year. cooperation rather than on The crucial problem with Russian− Hungarian relations is that Russia’s the export of political values.” friendship does not really come without any political concessions: Putin will only offer economic cooperation if Hungary his partners “true independence”. For accepts his policy towards Ukraine, example Anton Krylov from www.vz.ru or at least does not openly oppose writes: “By only taking into consideration it. But for other Hungarian partners, the interests of its partners, Moscow may especially the country’s biggest economic make the voice of politicians now called partner, Germany, such an approach is ‘pro−Putin’ and ‘marginal’ the official unacceptable. In fact Putin does place voice of the majority of the people of political demands on his partners, and at Europe [...] Russia can counter America some point those partners would have to with a policy of ‘new pragmatism’ that choose between Russia and the West. From the standpoint of pragmatism, so puts an emphasis on the economic cooperation rather than on the export of loudly trumpeted by Russian politicians, political values.” there are more benefits in cooperating It seems the Russian government would with the West, as the EU and the United like to use Hungary as an example of States currently have better economic the benefits that European countries can outlooks than Russia. In fact, Russia obtain from Putin’s model of partnership: is entering into the country’s biggest economic dealings without enforced recession since 1998, due to low oil political values – something that is and gas prices, as well as sanctions, unacceptable to Brussels. In Budapest, combined with the impact of 15 years

of corrupt bureaucratic management. In the long−term, the defeat of Putin in his stand against the United States and the European Union is inevitable. It is always pragmatic to be on the winner’s side. For now, Orbán is seeking to take advantage of Russian energy resources, and Putin is ready to offer easy credit and low−cost natural gas in exchange for the image of having a partner in Europe. Meanwhile, despite his anti−EU rhetoric, the Hungarian leader is strengthening ties with Germany, and has shown during the recent visit of Angela Merkel he does not have serious problems on this front. But, as a new cycle of violence threatens the cease−fire in Ukraine, and backsliding from Moscow on the truce seems inevitable, it appears that the EU will impose new sanctions on Russia. New economic sanctions could include kicking Russia out of the SWIFT electronic banking system, making cooperation with Russia very difficult. Eventually Hungary will be forced to make a definitive choice between Putin and the EU. Until the divisions between Russia and the EU grow wider, Orbán still has some room to maneuver between the Eastern and Western poles of power. But he should remember that he might run out of room soon.

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rose to 112 from 97 as a result of the merger, while the number of OTP employees in Croatia rose 11% to 1,125. The merger made layoffs necessary in administrative areas and at branches to be closed, OTP said. According to Croatian media reports, the Croatian unit could have generated HRK 33 mln proﬁts last year, which could be increased to as high as HRK 155 mln through extraordinary items.

NEWS

Stockholm-based automotive safety company Autoliv will spend HUF 11 billion on an expansion at its base in Sopronkövesd in western Hungary, the Ministry of Foreign Affairs and Trade announced on February 23. HUF 1.5 bln of the costs are to be derived from state subsidies. Autoliv has plans to build a 15,000 sqm seatbelt plant in Sopronkövesd by 2018, and the expansion is expected to create 700 jobs. The unit currently operates out of a 19,000 sqm plant. The company is committed to boosting its share of local suppliers from 5% to 20% for feedstock and from 30% to 50% for machinery, according to Foreign Minister Péter Szijjártó.

Richter, Evestra sign $5 mln loan deal Hungarian drugmaker Gedeon Richter and Texas-based biopharmaceutical company Evestra announced on February 19 that they have signed a collaboration agreement in which Richter is providing a $5 mln convertible loan to Evestra, so that it can accelerate the development of its innovative women’s health product pipeline into clinical stages. Under the terms of the agreement, after three years ,Richter has the option to determine whether the loan will be reimbursed, including earned interest, or converted into an equity stake in Evestra, the statement added. Evestra is engaged in the development of innovative women’s healthcare products, the press release said. Evestra’s products are based on two platform technologies, medicinal chemistry and vaginal drug delivery technology, and address unmet medical needs in women’s healthcare, the release added. According to the statement Richter has the largest R&D unit in CEE that focuses on CNS disorders.

Evopro to set up joint venture with Russian peer in Moscow Hungary’s Evopro group plans to launch a joint venture with Russian partner Nanotechnology Center of Composites (NCC) to produce buses in Moscow, owner and chairman Csaba Mészáros told Hungarian news agency MTI following negotiations on February 17 in the Russian capital. The chairman noted that the two companies signed a technology-sharing agreement in October. Mészáros said that the local government of Moscow will provide credit for the establishment of the joint venture and is expected to order a minimum of 200 buses over the next ten years. The chairman expressed plans to set up similar ventures in other countries, such as Kazakhstan, as well. Evopro aims to make Modulo bus chassis, designed and developed by Hungarian engineers, from composite material.

Wizz Air to open base in Kosice

Austrian chief says Spar to stay in Hungary Spar supermarket chain has no intention of pulling out of Hungary, though the company objects to some regulations in the country, Austrian daily Die Presse quoted Spar Austria head Gerhard Drexel as saying. “Business is booming for the company in Hungary, which is why it will not withdraw from the country simply because of laws that are incomprehensible and violate European Union rules,” Drexel told the paper. Drexel did complain that new rules require foreign-owned businesses to pay an oversight fee of as much as 6%, while Hungarian companies pay just 0.1%, and he also criticized the European Commission for failing to take action. With 420 stores and an annual revenue of €1.5 bln, Spar has an 11% market share in Hungary, Hungarian news agency MTI noted.

Mátrai Erőmű plans HUF 6.4 bln solar plant Hungary’s Mátrai Erőmű power plant is scheduled to begin construction of the country’s largest solar power plant to date, with an annual capacity of 15MW, for HUF 6.4 bln this spring, Béla Bardos of Mátrai Erőmű told Hungarian news agency MTI on February 18. The company expects to complete construction of the project by October. Bardos said that half of the funding will come from the power plant’s own resources, which will be supplemented by a development tax preference. The solar power plant will be supplied by a consortium of Hungarian companies including Wire-Vill, as well as Austria’s IBC Solar and Romania’s Energobit, Bardos said, adding that transformers will come from CG Electric Systems Hungary, formerly known as Ganz Villamossági. Mátrai Erőmű is 50.9% owned by Germany’s RWE, 21.7% by German peer ENBW and Hungarian stateowned MVM holds 25.5% of the shares.

Oriana, Invitel sign cooperation agreement Business app creator Oriana and telecommunications service provider Invitel signed a cooperation agreement to boost innovation, the two companies announced in a joint statement. In accordance with the agreement, Invitel expects to develop applications in a faster and more cost effective manner, while Oriana foresees more intensive growth and will offer its services through cloud technology as well. “For the development of our services, we constantly seek solutions that can efficiently support the operations of our clients,” Invitel’s ICT chief, László Marton, said. “The cooperation of Oriana and Invitel offers faster and more cost effective solutions for our clients’ challenges.” Oriana CEO Péter Kovács said: “Beyond technological innovations, the greatest emphasis for 2015 falls on expanding our partner network in both Hungary and abroad.”

Photo: MTI/Gábor Sallmayer

Autoliv to expand Hungarian base with HUF 11 bln investment

MNB seizes Buda-Cash Shown are the 11th District offices of Buda-Cash Brokers in Budapest. The Hungarian National Bank (MNB) said on February 24 it had taken over Buda-Cash brokerage, and put restrictions on four banks in the DRB Group that worked closely with Buda-Cash, on charges that the brokerage falsified reports and caused HUF 100 bln in damages. MNB said the losses could impact approximately 15,000-20,000 clients of Buda-Cash Brókerhaz and about 100,000-120,000 clients of the banks. MNB said Buda-Cash cannot account for its clients’ funds, and that the abuses go back for several decades. The restricted banks, which are closely related to Buda-Cash through their ownership, are Dél-Dunántuli Regionális Bank (DRB), Északmagyarországi Regionális Bank (ERB), Dél-Dunántuli Takarék Bank (DDB) and Buda Regionális Bank (BRB), according to MTI. The central bank has reportedly placed a ceiling of HUF 1 mln on withdrawals from those banks.

OTP eyes layoffs in Croatia after merger Hungary’s OTP Group expects to lay off 134 employees in Croatia after it merged its units there, OTP Banka Hrvatska told Hungarian news agency MTI on February 18. OTP acquired a 98.37% stake in the Croatian subsidiary of Italy’s Banco Popolare for HRK 107 mln (€14 mln) in April 2014, and merged it with its existing Croatian unit last December. The number of OTP branches in Croatia reportedly

Hungarian low-cost airline Wizz Air is scheduled to open a base in Kosice, Slovakia, on June 5, three months ahead of schedule, the company announced on February 23. Once the new base is opened, Wizz Air will launch flights to Milan Bergamo and Doncaster Sheffield, while adding more flights to London Luton, the press statement said. Currently Wizz Air has 20 bases and flies to 110 destinations in 38 countries. Last year, it carried 15.8 million passengers, Hungarian news agency MTI said.

MOL books HUF 68.6 bln loss in Q4 due to lower oil prices Hungarian oil and gas company MOL saw a net loss of HUF 68.6 bln in Q4 last year as revenue fell due to lowering oil prices, a consolidated IFRS report published on February 24 reveals. Revenue fell by a year-on-year 16% to HUF 1.173 trillion, while operating costs fell only by 10% to HUF 1.3 tln, putting MOL HUF 129.1 bln in the red at operating level. The report says that earnings per share came to negative HUF 778 for the period. The report added that positive effects of higher production and the stronger USD were offset by the lower realized oil price.

Rába Q4 after-tax profit jumps 57.8% Hungarian automotive-industry company Rába reported after-tax profit of HUF 1.106 bln in Q4 of 2014, up 57.8% from a year earlier on rising revenues, but for the entire year, profits were lower – due to the forint’s weaker exchange rate and a one-off financial payment from a year ago from sale of interest in Fehrer AutomotiveRába. The company said it generated turnover of HUF 14.01 bln in Q4, up 9.8%. ADVERTISEMENT

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Budapest Business Journal | February 27 – March 12, 2015

Real estate market to spend four days i As the world heads to southern France to talk property, and prices begin to recover, more investors are expected to consider the cheaper alternatives in Central and Southeastern Europe. DAVID LAWRENCE

This March will see more than 20,000 delegates from the fields of commercial property, investment and related industries gather at the 26th MIPIM – the World’s Property Market – at and around the Palais des Festivals et des Congrès in Cannes, probably better known as the location of the Cannes film festival. Central European countries are essentially competing for attention with Western Europe and other world centers for the attention of investors and developers at this major industry event. The four−day commercial property expo is an excellent barometer of the state of the

MIPIM in Cannes: Going to a sunny getaway to sell Hungary. real estate markets in the various countries and the flow of international property investment capital. Last year the 25th MIPIM attracted 20,500 delegates from 93 countries according to Reed Midem, the organizer of the event. This included an estimated 4,500 investors present on the Côte d’Azur.

Numbers have been increasing as the markets pick up following the economic downturn and eurozone crisis. Analysts see an increasing amount of investors looking for a home for their cash. The traditional investment destinations such as the UK and Germany are increasingly competitive and expensive,

and investors are therefore considering the cheaper alternatives in Central and Southeastern Europe. A notable recovery in commercial property investment volume for 2014 was recorded in CEE, with significant growth figures for Hungary, Romania and Slovakia, a trend that is expected to continue into this year. CBRE have recorded €7.7 billion in CEE commercial property investment activity for 2014. More developers and investors are said to be considering Hungary, despite the perceived political risk. “Core investors that are focused on prime office in Warsaw and Prague and prime retail in Poland are starting to reconsider Hungary. Budapest is regarded as attractive due to its past, its good product and low current capital values,” concluded Troy Javaher, Head of CEE Capital Markets at JLL, based on conversations with investors at MIPIM 2014. Mike Atwell, Head of CEE Capital Markets at CBRE, also echoed these sentiments. “The key change in CEE in 2014 was the marked increase in investment activity outside Poland, specifically in Hungary, Romania and Slovakia. As new investors focus their sights on the region, the more opportunistic of these are placing their capital further afield, partly to generate

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Property advisor CBRE rings in new era in cutting-edge Budapest office CBRE Hungary, the local affiliate of the world’s largest property advisor recently moved to Eiffel Palace, one of the most prestigious office buildings in Budapest. The beautiful new office, which is twice the size of its previous space, reflects the company’s dynamic growth.

CBRE Hungary’s new office was outfitted using the Workplace360 concept. The reception, the adjacent lounge area and meeting room form an organic unit with a warm and welcoming atmosphere. Activity-based working is facilitated by desk sharing open office areas, meeting rooms as well as

separate soundproofed phone booths. The office showcases the latest interior design trends, high quality furniture and finishing materials and provides a motivating and productive working

environment. The construction was coordinated by CBRE’s local Project Management team making this “stateof-the-art” office an excellent reference for further PjM commissions. “We are happy to celebrate CBRE Hungary’s 21st anniversary in a new office that reflects CBRE’s leading global position and its local lively dynamics,” says Lóránt Kibédi Varga, Managing Director of CBRE Budapest. “Last year we doubled the number of our colleagues and launched new service lines. We aim for further growth and a market-leading position in the coming years. Our inspiring and ergonomic new headquarters with its exceptional architecture, green solutions and high standard of services provide a great base for our ambitious endeavors.”

CBRE’s Workplace360 strategy provides a collaborative environment to encourage team-based work and knowledge sharing. It optimizes the use of office space to create an inspirational workplace, reinforces brand philosophy and serves as a tool to attract and retain the best talent. It’s about understanding how people really work: instead of being confined to one, static desk, Workplace360 gives employees a great deal of autonomy and flexibility. This strategy is not uniform: CBRE uses a detailed methodology in order to establish the optimum match between an organization’s needs and its accommodation to develop concepts that optimize this synergy.

Bajcsy-Zsilinszky út 78. 1055 Budapest +36 1 374 3040 www.cbre.hu

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Budapest Business Journal | February 27 – March 12, 2015

EXPERT OPINION

s in the sun Go big or go home I want to first start with full disclosure. I am presently and have been working within the gas trading industry for eight years. I am employed by a gas trading company, and proud of my profession and the work we do. We are a professional company made up of professionals who work in an ever changing, dynamic industry that really seldom sees the light-ofday in our social every day topics. Our successes are seldom praised, but our ability to provide a service is something of considerable lore. Harry Potter should be jealous In the past few weeks it seems that there has been a large-scale growth of gas and energy market experts popping up like mushrooms. These so-called experts who prior to being ordained by the Gas Market God did not even thumb through the pocket version of “Gas Trade for Dummies” now think they know the true story behind the industry. They make assumptions that are based on faulty numbers, predictions, and knowledge that all of a sudden transfers to them the knowledge of gas trade, how to use complex formulas and how the industry should be run. But because it becomes a political soapbox, or a story in which the media can paint a picture of wrongdoing and meets the number one rule “if it bleeds, it leads”, then they have all the reason in the world to take on the big bad wolves of the gas trading industry. The problem with their one-sided story finds root in their agenda: that of an “investigative” story that is “only looking for the truth.” This though leads us down a slippery slope in which we find ourselves in the Sci-Fi section of the library rather than the “non-fiction” one. And like Harry Potter who had to attend Wizard school for years to understand the complexity of the power bestowed upon him and his classmates, some would rather take the shortcut and rely on a few numbers and statements that paint them as an expert. E=mc2 Have you ever tried to talk with a physicist about this equation? In the first three minutes you would beg for them to stop because of the equations complexity. But lets talk for a minute about the gas trade industry. For starters, the industry is regulated by the government who sets the rules and regulations in which a company can and must work. Like any company the companies in the industry are there to provide a fair and marketable service for a fair and marketable price. You may be asking what is a fair market price? To answer this question is no easy task and one that would take up chalkboards that would make your math teacher proud. Simply put the gas trade industry is made up of complex mathematical formulas that rely upon several factors (at least ten) that will influence pricing at any given time. The equation is a complex formula,

because the private industry was willing to take the risk and purchase the gas. Unlike the state run agencies we have more flexibility and if we fail we have to answer to our shareholders who loose out on their profits. If the state agency fails, the dime gets passed to the average taxpayer who sees increased taxes or costs for gas to heat their dinner each evening.

Gergely Szabó, CEO of MET

including dozens of variables that are constantly changing. And what you see on your final bill is the representation of the complexity of these formulas that are the environment in which we work and executed by professionals who spent years learning and plying their trade. The same as Albert Einstein. In the gas trade industry there are no coupons or special offers. It may be worth twice as much when arriving to your mom’s house than on the border, because maybe your Mom wanted to commit to a smaller volume of usage. Maybe your Mom is a risk-taker and rather volunteered for a higher volume at lower price. Or maybe the company who is the mediator does not want to offer that kind of flexibility in pricing per volume. Maybe it is going to be a heavy winter. Or a warmer one. Or maybe good ol’ Mom will use the fireplace more. It is in the formula. So how much is the gas price of that gas formula? Go big or go home As we just discussed the industry is very complex and ever changing. The formulas used to determine pricing are not something you can solve and predict with your “Magic 8-ball” but rather a sound and accurate formula, some instincts, good judgment and understanding of the context of the situation, and on many occasions luck. Trading gas is a business full of risks, it is like being a broker on the stock exchange, you need to understand finance and take huge risks to generate business. If you don’t know the rules and environment, you fail as a business on day one. Taking the huge risk means there are big wins, but also big losses. This is no surprise. This is just the way the industry works. It is not a shame: courage and hard work are a rewarding combination. In fact having the industry led by private industry is a winning situation. For example no one can expect a state-owned company to take such high risk – only 60-70 percent of these deals are winning situations. The gas deal made with MVM is a perfect example. The truth is that the deal helped save Hungarian taxpayers billions. Period. And it was

15 minutes of fame It is hard to imagine a world where the energy industry will be the characteristic business loved by the social fabric that makes up society. Unfortunately this is not the case and quickly those of us who enter into this profession realize we quickly become lepers. It is like the police: no one wants one until they need one. The gas trade industry is complicated; it is about big volumes, big money, country interests - and high risks. And the politicians and media want to sell this concept as the next great blockbuster hit where Leonardo DiCaprio plays his “Wolf of Wall street” role stealing money from everyone so that he can buy his new Ferrari. And this makes for a good story for certain politicians and media to write about. Their interest is not about truth and facts, but rather votes and ratings. They get on their high horse preaching that they are the mouthpiece and champions of the taxpayers, yet all they care about is the cover of some magazine. At the end of the day they try to sell that they are doing this for the public’s best interest, yet they have no concept of what is truly happening, nor do most of them really care. In fact all they know is they know everything better. But doesn’t that scare you? It should. Because the person who thinks they know everything is a scary person indeed. If it bleeds, it leads So we are painted in a negative light and it becomes a good story to write about. To be the slayer of dragons, saving the burning village. To generate media attention and team up with the tax-payers by providing them a dragon. But one that was generated through embellished stories, faulty formulas, and fictitious information. They do this for more coverage, more money from clicks, or because they are courted by an opposing special interest group. But we as an industry must also learn to adapt. We all know that math is a stubborn science, one that is very hard to transfer facts and be clear to cope with genuine obstinacy. Sometimes it takes time, but finally, clear arguments that are based upon facts will shine through. And like math which always represents true facts, truth is truth, it just doesn’t make good press. Conspiracy theories are great and entertaining. But meanwhile, the gas traders just want to keep doing their jobs providing the gas needed for your and our everyday lives.

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higher income returns but also due to lack of available stock in Poland. We expect this trend to continue, with Hungary and Romania benefiting most from this investor diversification.” However, Poland and the Czech Republic continue to be the most attractive Central European countries for investors and developers. Indeed, Poland is now the fourth most attractive country in Europe for commercial property investment after the UK, Germany, and Spain, and is regarded as almost a “core” destination. As investment volumes for Central Europe are rising, investment into Russia has fallen significantly and has come to a halt with regard to Ukraine, due to the crisis there. Russia traditionally has a huge presence at MIPIM with several cities and regions promoting big commercial and residential projects. In addition Poland and the Czech Republic are represented by capital and regional cities. These stands are used to promote projects and companies in addition to hosting discussions and cocktail receptions; the floor of the Palais can seem like a huge cocktail party in the evenings. In contrast to other countries in the region, though, there will be no Hungarian stand, despite the perceived need for countries in the region to publicize themselves. Last year, in a potentially game changing development for Belgrade, the Abu Dhabi− based developer Eagle Hills (in partnership with the Serbian government) show− cased the €3 bln Belgrade Waterfront (or Belgrade on Water) urban development project along the bank of the River Sava in Old Belgrade. This is one of the biggest development projects in Europe consisting of offices, luxury apartments, hotels and retail spaces. So what is the point of companies committing what can be significant expense budgets to four days of panel discussions, company and project presentations, pre−arranged meetings, dinners and cocktail receptions in the early summer sun. Observers argue that a face− to−face meeting is still the most conducive environment in which to conduct business and to make contacts. Investors, developers, architects and city promotion organizations also hold court for meetings and hold cocktail receptions on yachts in the harbor adjacent to the Palais des Festivals, in restaurants along the adjoining beach, and in the nearby five−star hotels. The major consultancies such as JLL, DTZ, Cushman & Wakefield and Colliers International each send representatives from Hungary, providing expertise and in essence promoting the Hungarian markets. “German and Austrian investors still own stock in Hungary and some are looking to buy product. With regard to Hungary, the economy is better and the environment in Budapest has improved. In the last 1−2 years the perception of Hungary has changed. Stability depends on the economy, a functioning banking system and the perception is that product is cheap. Essentially a stable environment has been created in spite of the politics,” said Tim Helzebos, Managing Director of Colliers International Hungary, who will represent Hungary at MIPIM.

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2 Business

Budapest Business Journal | February 27 – March 12, 2015

PROMOTION

Smart solutions to access EU funds A professional approach of taking advantage of opportunities involving EU subsidies.

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

As the leading EU project development consultants in Hungary, MAPI Hungarian Development Agency Corp. has been supporting domestic businesses and NGOs in realizing their developments in the past 12 years. Zsombor Essősy, CEO of MAPI, talked about how the European Union’s new funding period lasting between 2014 and 2020 is opening up new development opportunities, both for businesses already active in Hungary and for those currently planning to invest in the country. Q: MAPI Hungarian Development Agency Corp. has been the market leader among the subsidy consultants segment for the past five years. What is the secret of MAPI? A: MAPI Corp. was established in 2003 as a family business and, thanks to our determination and to our highly skilled employees, we have grown into a company group employing 80 people. One factor of this growth has been the great emphasis we place on flexibility – being able to renew continuously and to react to the latest market trends. We organize internal and external trainings and team-building events for our staff that also proves that just like other companies within the service sector, we value people above all else. Of course, it also helps that a large percentage of our customers have been working with us for a long time. They appreciate our efforts, and trust the values we represent. Q: The EU programming period of 2014-2020 is due to kick off this March. What does this entail for the businesses? A: Brussels has just approved the submitted Hungarian operational programs that will be followed by actual calls for funding, probably around March. For domestic companies, the most important of the current programs is the Economic Development and Innovation Operational Program (GINOP) worth of HUF 2,733 billion funding. The first subsidies are expected to target investments in expanding production and creating new jobs, and will primarily be available for SMEs. Q: Will foreign companies be able to apply, or are these funds only accessible to Hungarian-owned companies? A: If they have innovative development plans and are not offshore entities and have a transparent ownership structure, then the answer, of course, is yes. These subsidies will typically be non-refundable, complemented with refundable products, mainly co-financing loans, guarantees and venture capital. Q: Am I right in assuming that this could also act as an incentive for investments? A: Yes. For an investor trying to decide between two Central European countries, this could represent a sound reason. This is because, although other countries also offer access to EU funds, it may not be to the extent that Hungary will provide over the next few years. This is a serious competitive advantage for our country.

also consultants in certain fields. As a result, businesses may also encounter us in the course of free consulting through these chambers. But I could also mention our cooperation with banks and associations, our good media relations, or the partnerships in the field of education or the nongovernmental sector. We always think in the long term, not just regarding our customers but also our partners also taking into consideration the social benefits of our activities. Q: How active is MAPI in the international scene? A: You may have heard about the Horizon2020 program, which is currently the biggest international fund with a budget of nearly €80 bln. These international subsidies are not funds dedicated to Hungary specifically; these are funds accessible to all EU countries (and more), either directly through Brussels or based on other geographical delimitations, and these funds primarily finance research and development and innovation or institutional cooperation. Most calls for tenders in the Horizon2020 fund can be realized through international cooperation, and the same goes for Erasmus Plus grants.

CV Zsombor Essősy started his career as an economist, providing efficiency growth consultation. Currently he is the CEO of MAPI, Hungarian Development Agency Corp. He has been dealing with European Union’s innovation policy in Hungary since 2003. He is also a member of numerous organizations. In 2006 he was chosen the “Young Manager of the Year”, and he was chosen the “Entrepreneur of the Year” in 2010 and 2014 by the National Association of Entrepreneurs and Employers (VOSZ). Q: How can MAPI help interested parties? A: First and foremost, by offering complex development consulting for businesses that already have specific ideas concerning their projects. For those who are currently only considering such plans, it is still a

good idea to contact us because our company has experts in virtually all subsidized areas. We can help develop the project concept and draw up financing plans and feasibility studies. We also cooperate, if necessary, in preparing and managing documents for the application concerned. Through long-term strategic partnerships, we often continue to work with a customer throughout an entire EU funding period. Let me stress one thing: subsidy consulting is no longer about the company writing an application and then handing over the reins to the customer in case the subsidy is awarded. It should be more about transferring the complex know-how we have, which the customer will need to turn the development concept into a successful project. Q: Can you give us an idea of what kinds of clients you have? A: We have been working with a big number of enterprises of all kinds, be they multinationals or SMEs. In addition to our customers, we also value the strategic partners with whom we have managed to create an ongoing and close relationship over the years. These include various foreign chambers of commerce, in which we are not only members but

Q: What kind of company can expect to do well in these international applications? A: Any organization that dares to dream big and has development concepts with European or even global addedvalue, which transcends borders, be these planned developments in the healthcare, energy, ICT or logistics fields, for these opportunities, the rate of subsidies awarded is 70% or above. Q: What chance do Hungarian companies have when applying for these funds? A: That always depends on the given development concept and on the partnerships, and of course on the quality of the application they submit, which also weighs heavily in the balance. It is still not an easy job. That is where the well-prepared professional project manager enters the scene. Q: What do you recommend to applicants for the next EU funding period? How should they prepare now? A: If anyone wants to develop, I believe the time for taking the right steps is now. This is because, over the next decade the amount of accessible funding will be decreasing steadily, while the tightening of regulations on their use is also anticipated.

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2 Business

Budapest Business Journal | February 27 – March 12, 2015

Bidding law likely to increase transparency Based on EU recommendations, the Hungarian government is rewriting the entire procurement act, in a move expected to open up the competition for state contracts. BBJ STAFF

Hungary’s rules for public procurement are being rewritten, a change that could have a broad impact on a large number of companies here, as well as the economy in general. As the government increases its ownership in a variety of firms, the state is becoming one of the most important business partners. And EU funds are vital to the country’s development, as we saw in 2014, when a large proportion of the growth in GDP was put down to spending of European Union grants. Hungarian news Agency MTI estimated on February 16 that net EU transfers in 2014 amounted to €5.44 billion. Understandably, there is much interest in the changes to the rules for procurement – changes that began at the EU level and are intended to improve transparency. “The EU issued brand new public procurement directives in February 2014,” says Anna Ménes, senior partner at Baker & McKenzie in Budapest. “Member states, including Hungary, have to implement the New Directives by April 2016 – except for the Anna Ménes. rules for electronic procurement, which must be implemented by October 2018.” Rather than simply amend its laws, Hungary has undertaken to create a whole new Public Procurement Act, which must be in place by the end of this year. The government has already shared its concept of what the law might look like, and is now using that concept to make draft of legislation.

Quality matters Among the major changes noted by Ménes is the need to consider more than prices when weighing bids. The EU directive calls for changes to ensure the “best price−quality” ratio. “Winning tenders should ultimately be chosen in accordance with what the contracting authority considers to be economically the best solution among those offered. The legislation should guarantee transparency, non−discrimination and equal treatment through various channels,” Ménes said. “The best price−quality ratio should always include a price or cost element, which is objective. Furthermore, during the evaluation process, contracting

EC approves 2014-2020 funding The European Commission approved five of Hungary’s operative programs for EU funding in 20142020, the EC announced on February 13. The EC approved funding totaling €8.8 bln for the economic development and innovation program, €3.97 bln for the regional development program, €464 million in funding for the €927 mln program supporting the competitiveness of Central Hungary, and a combined €7.7 bln in transport development, environmental and energy efficiency operative programs.

“Through the related professional bodies, powerful companies may submit their recommendations on the new evaluation criteria and even have an influence on the government’s different professional policies.” authorities should rely on professional evaluation methods. Such methods would be elaborated by the legislature in cooperation with professional bodies. These methods would be either obligatory for contracting authorities or may serve as non−binding guidelines to follow.” According to the attorney, now is the time for professionals to lobby, so that they have a chance to help determine what the quality determinants will be. “Tenderer’s lobbying activity will be vital in relation to new professional quality criteria,” she explained. “Through the related professional bodies, powerful companies may submit their recommendations on the new evaluation criteria and even have an influence on the government’s different professional policies. Therefore, in the future, the companies’ success may depend on their initial lobbying activity.” Another change is the opportunity for firms who might otherwise not be allowed to

bid to change their status by “self−cleaning” their past record, so they can participate in current tenders. “If a tenderer committed a serious breach of a previous public contract, in certain cases they must currently be excluded from future tenders. According to the new rules, however, if such a tenderer can prove their reliability despite the previous breach, they should not be excluded from a given tender. According to the concept, an independent authority would decide on reliability in these cases. This should guarantee the fairness and transparency of the procedure.” According to Ménes, decisions that eliminate tenderers have traditionally been one of the key areas of involvement for her law firm. “A considerable part of our practice consists of representing clients in remedy proceedings related to the violation of public procurement laws. We have represented clients in major remedy cases before the Hungarian Public Procurement Committee, as well as in the subsequent administrative court proceedings,” she says. “We have also gained experience regarding how a foreign client can comply with special Hungarian formal tender requirements.”

More transparency Overall, the changes bring transparency, something that will be a welcome change to many market players in Hungary. Questions about single−bid tenders and other practices have led to EU investigations here, including a probe, announced in late January by the European Union’s anti−fraud office,

OLAF, of the fifth district’s “Heart of Budapest” renewal program. “From a public procurement perspective, what we see is that the new rules aim to ensure a more effective and transparent use of EU funds which have been already granted,” Ménes said. She added that many of these rules are in direct response to problems noted by the EU. “The concept highlights the problem of contract awards where there was only one bidder, and offers certain solutions for that. The one−bidder issue takes place mostly in negotiated procedures launched without prior notification,” the senior partner explains. “This type of procedure is heavily criticized by the EU. The concept’s approach is that, in procurements the value of which exceeds a certain threshold, a summary sheet of the most important data of the given procurement procedure should be published on the website of the Public Procurement Authority at least three days prior to the initiation of the procedure. If, on the basis of such prior information, a potential bidder notifies the contracting authority of its willingness to participate, the contracting authority would have to ensure the participation of such a potential bidder under equal conditions.” Overall, the concept seems designed to improve transparency, and make it easier to compete for contracts awarded by the Hungarian government, says Ménes, but she cautions that, until a draft of the actual legislation is prepared, it is hard to be sure. “The possible positive effects can not be assessed at this early stage of the legislation process,” she explains.

BBJ

3Special Report

TRANSLATION

MARKET OVERVIEW

The language business We asked Hungary’s top−15 earning translation agencies about the market, and their own offerings. These are the answers we received. For a full list of firms, ranked by revenue, see pages 20−21. BBJ STAFF

Afford Translations and Interpreting

Andrea Téry, Operations Director How is business this year compared to last year? Have you been seeing an increase in work? In addition to maintaining and nurturing very fruitful business relations with our numerous clients in the past years, and the resulting market stability we enjoy, we have experienced paradigm shifts in the industry in the past year(s) to which a translation agency must respond very swiftly in order to increase its business success. General and company text translation assignments, for example, are increasingly replaced by the demand for industry speciﬁc (e.g. special technical and medical) translations, which require more complex skills and aptitude on both the part of the translators and the project management, as well as a thorough knowledge of the relevant technologies. Online documents are gaining prevalence over hard copy, which is pushing the market towards new technologies and innovative solutions. In our experience, this calls for excellent situation awareness and quick

responses on the part of the translation industry. Therefore, in addition to providing our clients with high-level services, we strive to dedicate great attention to the above factors in all areas, from sales to project management, in order to ensure continuous growth and development. Do you believe that the demand for translations from or to Hungarian is very dependent on the amount of business that is being done in Hungary? How does the market impact your business? To some extent, it is natural that the development of the Hungarian economy affects the translation industry, as the economic opportunities presented in Hungary, from our Hungarian corporate clients to foreign multinational companies, create the conditions for any enterprise in which they need and are able to invest in translation services. At the same time, how active a business is in Hungary and how much demand arises for translations on their part is not necessarily directly correlated. Many of our clients in the medium and large enterprise segment conduct businesses to foreign markets and are affected by the Hungarian economic situation to a lesser extent. We consider the key to our sustainable development to be the proportion in which our clients are present in both the foreign and the Hungarian markets. What kind of translations do you do and what are the most common kinds of translations that your company handles? What languages, and what sort of documents do you usually deal with? Afford is considered a classic translation agency that is able to cover numerous areas with our translation services, in virtually any language pairs. Our company is in partnerships as a regional supplier with global translation enterprises that are seeking a reliable partner for assignments with diverse types of texts common in the Central and Eastern European languages. However, it must be said that Afford has been focusing more emphatically on

three main specialized areas in recent years, those being technical, medical (life science) and ﬁnancial document translations. Within those areas, we encounter the most diverse assignments, including the translation of tender documentation and grant applications, technical descriptions and licensing procedures. Why should someone choose your company? What special advantages or unusual services can you offer? I would primarily refer to clientorientedness as our most salient feature. In addition to simple translation and interpretation services, Afford also provides complex linguistic consultancy to our clients, familiarizing them with the translation process in order to involve them in the elaboration of the customized service that is most suitably tailored to their needs. I also see transparency as one of the factors that makes our company appealing to both our clients as well as to translators; based on the feedback we receive, a transparent rate schedule is very important to all of our partners, as well as insight into the work process itself. Since we are all participants at different stages of the same process, one of the guarantees to excellent quality is the ability to have a clear view of each other’s needs, problems and questions. Last but not least, Afford invests a great deal in technological innovations, allocating sources gladly to such industry-leading software as memoQ and Across.

espell

How is business this year compared to last year? Have you been seeing an increase in work? No increase in 2014; our revenue remained approximately the same as the year before. Owing to serious restructuring efforts, though, espell’s profitability has grown considerably compared to the previous year. Do you believe that the demand for translations from or to Hungarian is very dependent on the amount of business that is being done in Hungary? How does the market impact your business? Domestic translation demand is heavily dependent on the actual business climate in Hungary. Translation companies do well when the economy is strong, when companies expand their operations and when there are many transactions in the market. This is when there’s heavy demand for translation services. Those companies that export their services to foreign customers will be less dependent on domestic revenue and therefore less exposed to the business climate within Hungary. On the other hand, espell’s global enterprise customers also experience a strong push on their own markets for faster and more efficient services. These market demands do translate into tougher requirements for us. That is why espell is experiencing an increasing need for operational efficiency and speed, which, coupled with the higher-than-average quality requirements that our customers have, is quite a challenge. Nevertheless, the client expectations are not out of line: espell’s customers choose to work with a premium translation service provider, not a budget translation agency, so it is only fair that in return they expect a premium service. What kind of translations do you do and what are the most common kinds of translations that your company handles? What languages, and what sort of documents do you usually deal with? espell is a reliable partner for enterprise translation buyers, covering all their translation and localization needs. Also, espell can deliver high value for particularly challenging projects in the field of banking/finance, legal translations, life sciences, engineering, IT and telecommunications, as well as software localization into 60+ languages.

Miklós Bán, CEO

Why should someone choose your company? What special advantages or unusual services can you offer?

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Budapest Business Journal | February 27 – March 12, 2015

Do you believe that the demand for translations from or to Hungarian is very dependent on the amount of business that is being done in Hungary? How does the market impact your business? Yes, deﬁnitely. The translation business for those companies who work for the Hungarian market highly depends on the presence and activity of foreign companies and the state of the Hungarian economy. The less foreign companies and investments in Hungary, the lower number of clients and translation jobs. Even though there was a growth in the Hungarian economy last year, we have not experienced the effects of this as yet. What kind of translations do you do and what are the most common kinds of translations that your company handles? What languages, and what sort of documents do you usually deal with? We primarily work for the banking, insurance and pharmaceutical sector in Hungary and for the European Parliament. We used to have major assignments from the public sector, but as I have said, these jobs have basically waned. The most sought after language in Hungary is English, and a smaller volume of German, French and Italian. As far as the European Parliament is concerned, we translate from almost all the languages of the European Union into Hungarian. The documents we deal with usually involve highly specialized texts requiring indepth knowledge from the translators. espell is a premium translation and software localization provider. Tasks involving complex logistics, special software technologies, exotic ﬁle formats or a high number of languages are easily single-sourced through espell. With partner offices in 18 countries on three continents and a tested vendor base covering 60+ languages, espell is positioned to serve Hungarian and regional businesses focusing on global markets, as well as large international companies active in Central and Eastern Europe.

Hunnect

Do you believe that the demand for translations from or to Hungarian is very dependent on the amount of business that is being done in Hungary? How does the market impact your business? Yes, indeed. Linguistic projects from and into Hungarian usually relate to products and services entering the markets in Hungary, so the translation industry reﬂects the state and trends of the economy very well. As Hunnect Ltd. has been offering services for several verticals, we are able to adjust to market impacts and accommodate new – and even unusual – customer requirements. What kind of translations do you do and what are the most common kinds of translations that your company handles? What languages, and what sort of documents do you usually deal with? We at Hunnect Ltd. offer linguistic services in the most known verticals: for life-sciences, business, legal, technical and IT contents and into European languages. The incoming projects deal with various subjects, but most of them are highly specialized and need expert knowledge on top of linguistic skills.

Sándor Sojnóczky, Managing Director How is business this year compared to last year? Have you been seeing an increase in work? Business has been steady for the past 1012 months. There is certain ﬂuctuation among the various verticals but overall volumes smooth out within a year’s time.

Why should someone choose your company? What special advantages or unusual services can you offer? We focus on providing high quality translations just like our colleagues in this industry, however, we may choose different ways. Based on a customer satisfaction survey conducted recently, what really stands out in Hunnect’s services is the professional and precise project management team. Our motto is simple: we have been chosen by our clients in order to do what is best for

them, for us and for generally everyone involved, without over complicating customer services.

Intercontact

Why should someone choose your company? What special advantages or unusual services can you offer? We have been on the market since 1991 and are one of the biggest translation companies as far as turnover is concerned. We strive to provide high quality and are capable of managing large volumes and dealing with short deadlines. We have major clients that have stayed with us for more than twenty years, which is some kind of a proof that they are satisﬁed with the work we perform. We try to be ﬂexible, adapt to the current situation and keep up with the constant technological changes in the industry.

ILS

Veronika Mendel, Executive Director How is business this year compared to last year? Have you been seeing an increase in work? The volume of work we have received has deﬁnitely decreased, both this year and in the previous years. We have experienced a continuous downturn in the market and the price pressure is also strong. We primarily work for the Hungarian market, where Hungarian translation companies are experiencing difficulties both in terms of volume and price. Translations from the public sector have dropped dramatically, with almost no public procurements. Overall I can say that the translation market in Hungary has experienced very difficult years.

László Reha, CEO How is business this year compared to last year? Have you been seeing an increase in work? Compared to 2013, the revenue of ILS Ltd. did not change in 2014, so it can be said that the workload was stagnant.

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Budapest Business Journal | February 27 – March 12, 2015

Do you believe that the demand for translations from or to Hungarian is very dependent on the amount of business that is being done in Hungary? How does the market impact your business? Of course, the demand for translations from or to Hungarian is very dependent on the amount of business that is being done in Hungary. The more investments are made and the more import and export operations are carried out, the bigger the demand on translations. These clearly influence our business. What kind of translations do you do and what are the most common kinds of translations that your company handles? What languages, and what sort of documents do you usually deal with? Primarily we translate technical, legal and financial texts, and we also prepare translations for the European Union. In the first place, technical and legal translations are ordered from our company. Principally we work from English or German into Hungarian, but we often translate from English or German into other EasternEuropean languages as well. Why should someone choose your company? What special advantages or unusual services can you offer? ILS Ltd. is one of the oldest translation companies, with great experience and international clients. Our company is characterized by high standards and expertise, which result in high quality services. We work according to an advanced quality assurance system. Next to translations, we also prepare company-specific termbases and translation guidelines for our clients. We offer services that also include DTP and we work with the most advanced technologies.

Language Experts Group

Zsófia Alföldy-Borus, Key Account Manager How is business this year compared to last year? Have you been seeing an increase in work? Following the recession of the early 2010s the number of projects has begun to increase significantly, mostly in the past two years. This trend is also reflected in the continuous, significant growth in the yearly revenues of Language Experts. After the first two months of 2015, we were glad to conclude that the dynamics experienced in the previous couple of

years have continued to develop. This favorable tendency can be attributed to our increased activities on our target markets.

speciﬁc documentation demands of our clients and provide reliable services, great communication and easy cooperation.

Do you believe that the demand for translations from or to Hungarian is very dependent on the amount of business that is being done in Hungary? How does the market impact your business? Due to our unique business model and the speciﬁc market segment we are serving, our projects primarily depend on the trends of the global market. The economic situation in Hungary has limited impact on our overall performance. One of the underlying reasons for that is that speciﬁc customer demands that are considered standard on the international scene – and that our company is set out to serve – have not yet evolved domestically.

MULTI-LINGUA

What kind of translations do you do and what are the most common kinds of translations that your company handles? What languages, and what sort of documents do you usually deal with? Language Experts Group offers complex multi-language documentation tasks and helps clients solve every problem related to documentation. This way, clients can entrust us with their document writing tasks, multi-language translation tasks, desktop-publishing, line drawing, printing, packaging and logistics services, among others. Why should someone choose your company? What special advantages or unusual services can you offer? Our company slogan gives the answer: “All About Translation, Terminology, Technology.” Language Experts Group takes over all documentation-related tasks listed above, so clients can freely concentrate on their business and products. We always adopt our workﬂow and quality assurance system to the

László J. Végső, CEO How is business this year compared to last year? Have you been seeing an increase in work? It is presently February 19, the very beginning of the year. Even if I see any increase or decrease in work, it is probably not relevant for the whole year. I am not the kind of entrepreneur who believes a year MUST be better than the previous one. I believe in good years: a year is good when the company has ﬁ nancial stability and when the company reaches its targets. Targets are not always ﬁ nancial; I think human and technical targets are much more important, because human and technical resources guarantee the future of the company. Do you believe that the demand for translations from or to Hungarian is very dependent on the amount of business

that is being done in Hungary? How does the market impact your business? Definitely. We provide translation services mainly to businesses, and not to private persons. This is not our business policy but a legal constraint. When the business environment is active, companies need translations. In a crisis period, companies postpone investments and introduce a smaller number of new products to the market. Translations are connected to investments and product related documents. However, it seems that information technology makes up a special section of business life. IT companies did not decrease the number of new products even during the difficult period of the recession, which means that translations connected to software localization showed greater stability. What kind of translations do you do and what are the most common kinds of translations that your company handles? What languages, and what sort of documents do you usually deal with? Our company policy declares that we work on all kinds of translations between any languages. This is in fact true; we are able to complete any translation job the market needs. However, this is a theoretical statement since reality is quite different. The market wants us to translate from English into Hungarian and into other mostly European languages, or from Hungarian and from other European languages into English. Of course we enjoy the few technical challenges when we have to solve translation between rare languages, but it is not an everyday activity. We provide translation services in several fields: construction, automotive, aviation, EU, telecommunications, cosmetics, bank, fi nancial, IT, and medical. The market needs translation in all of these fields. We also provide both simultaneous and consecutive interpreting services. In the

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Budapest Business Journal | February 27 – March 12, 2015

15 Our company is growing at a steady rate of 20% ever since its foundation ten years ago. This growth rate has been even more significant in the last 4-5 years, since we have become a dominantly export-oriented LSP. TranzPress is a language vendor supplying services to Western-European IT companies and manufacturers with complex translation demands. The globalization and localization market is expanding with an annual 6-8%, therefore I think a well-positioned Hungarian LSP can be highly competitive and successful on the European market due to its geographical proximity, skilled language experts and attractive pricing scheme. Do you believe that the demand for translations from or to Hungarian is very dependent on the amount of business that is being done in Hungary? How does the market impact your business? English and German to Hungarian are definitely our key source and target languages but we operate on a multilingual vendor scheme that diversifies our language portfolio and eases “language lock-in”. We focus on Central and Eastern language pairs and sell our services in stable, technology driven and export-led economies as Germany. This is to say, that as long as Hungary is not in a deep recession and FDI inflow does not drop back significantly, a language service provider firm such as TranzPress does not have to worry about workload.

last ten years, the market demand has been almost exclusively for simultaneous. Most of our interpreting services are connected to conferences. Why should someone choose your company? What special advantages or unusual services can you offer? I love this question. If you need a reliable, always accessible, problem-solving partner who provides quality services in time, you need Multi-Lingua. It is just that simple. If you want me to talk about the details, it is not much longer. We always answer e-mails in real time. We think about your order and give you the best solution whenever necessary. We ﬁnd the person who understands your source text and provides a technically and linguistically correct translation. We work together with native translators worldwide. Our partner company in the United States is the guarantee that we ﬁnd the native translator when you want us to translate your highly important and sensitive text from a European or Eastern language into English. Don’t forget: if we can’t do it, you don’t need it.

Napos Oldal

Alistair Binks, General Manager

How is business this year compared to last year? Have you been seeing an increase in work? Business so far this year is similar to what we experienced in 2014. This isn’t too surprising given the general economic climate in Europe. We can see a slight improvement in demand in Hungary, although domestic projects only account for around 5% of our turnover, with the remainder coming from international orders. Do you believe that the demand for translations from or to Hungarian is very dependent on the amount of business that is being done in Hungary? How does the market impact your business? In my view, the demand for translations from and to Hungarian depends only in part on the level of business activity. In many cases, translations simply have to be done in order to be able to sell goods and services in Hungary at all (whether the company concerned sells 1 or 1,000 units). Market activity is important though as there are also translations needed for speciﬁc, individual transactions only and if those don’t take place, then no relevant translation orders are made. The effect of EU and state grants is especially important in this regard. What kind of translations do you do and what are the most common kinds of translations that your company handles? What languages, and what sort of documents do you usually deal with? We mainly translate technical and medical texts, with legal and business translations following close behind. The language combinations are usually from and to English, German, Western European languages and Central and Eastern European languages. Typical documents for us are user manuals, owner manuals, clinical trial documents, specialist journal articles and tender materials.

Why should someone choose your company? What special advantages or unusual services can you offer? At Napos Oldal Translations, prospective clients can be assured of: • personal, proactive service; • a proven track record of working for the most demanding multinationals; • an outstanding team of linguistic experts across Europe; • total precision in all translations; • their own dedicated project manager. I think what most sets our company apart from the competition is that we aim to achieve genuine partnership with clients. We are there for the client at all times, regardless of deadline, complexity of text and language combination. In addition, all of this comes with our 100% quality guarantee – we only consider a project to be closed when the client is fully satisﬁed.

TranzPress

András Szalay-Berzeviczy, General Manager How is business this year compared to last year? Have you been seeing an increase in work?

What kind of translations do you do and what are the most common kinds of translations that your company handles? What languages, and what sort of documents do you usually deal with? As a language vendor we specialize on three main areas and their subdomains: IT - enterprise resource planning, business intelligence applications and e-learning software localization, technical – automotive, electrotechnical and construction – and last but not least; general business translations including banking, ﬁnance and marketing communication translation tasks. We specialize in CEE languages and obviously, German and English. As a second pillar – around four years ago – we launched our international media monitoring and analyses branch relying on our proprietary software development, PressMonitor. Our media team provides customized foreign and Hungarian language reports, analytics and summaries from local and international mainstream and social media. Why should someone choose your company? What special advantages or unusual services can you offer? We live in the era of Big Data and content explosion. In response, we have somewhat become a software company over the years exceeding the scope of a traditional translation agency. Our staff includes software developers and media professionals besides our core language experts team. I think, today’s web content boom, consumer-focused software industry and exponentially growing multilanguage social media urges LSPs to provide solutions that go beyond traditional word by word translation services. TranzPress offers its clients a series of value-added services such as the usage of our proprietary customer relationship management tool that eases administration and document handling, language testing, post-editing machine translations or summary media content translations that enhance daily PR/ communication work.

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Budapest Business Journal | February 27 – March 12, 2015

Better training, new standards to improve translation Overall quality may improve thanks to modernized education and a new ISO regime. LEVENTE HÖRÖMPÖLI-TÓTH

At around the time of Hungary’s EU accession, the Hungarian version of the European Parliament’s webpage raised some eyebrows. In the listing of the different political groups represented in the legislative body, the term “non−attached” was mentioned in the English original, referring to those members of parliament that chose not to join any party factions. That meaning, however, was misinterpreted by the Hungarian translator, who went for the Magyarul equivalent of “not enclosed”. Hopefully domestic legislative texts harmonized under EU law can remain immune to similar problems. But the example shows that even carefully checked translations in a high profile environment might feature major errors.

Hunting the skills of tomorrow One way to create better output is to provide would−be professionals with the right skills in the first place. The Training

Patrícia Beták of the Training Center for Interpreters and Translators at Budapest University of Technology and Economics. Center for Interpreters and Translators at Budapest University of Technology and Economics (BME) has decided to tackle the challenge head−on by announcing a brand−new program scheduled to start in the academic year of 2016/17. “The actual curriculum has got very little in common what’s going on in the market today,” Miklós Bán, chairman of Proford, the Association for Professional Language Service Providers told the Budapest Business Journal. Proford relies on the first−hand market experience

accumulated by its member companies, and it aims to incorporate that into the modules of the new course. “We are building it from scratch and it’s designed to cover the existing needs – or those expected to arise in the near future – of the industry. Our students will be in constant touch with the market in order to be able to do well at their first work place from day one,” Patrícia Beták, head of training at the center said. Game changing extras include regular use of computer− assisted translation (CAT) technologies, lots of teamwork, improvement of group and self−assessment, time management and mentoring. The key elements were derived from the best courses run in Europe. According to Beták, the purpose is “not to train mere translators, but rather multilingual experts whose main profile is translating, whilst they will be armored to meet the challenges of several related fields of work”. Another novelty is the promise that this form of education will be student− focused. “It’s not only about what the science or the market thinks is right. It also gives weight to students’ needs,” Bán emphasized. The organizers expect low participant numbers in the beginning, but are confident that the three−semester program will become evermore popular annually.

A standard solution, in the ISO sense Having more competent people on the job will surely raise the odds in favor of producing more precise translations. Elevating quality requirements can also help. This is of utmost importance in a market where the barrier of entry is pretty much having access to a computer and a broadband subscription. The recent introduction of the ISO 17 100 international standard represents a major milestone here. “ISO has previously had standards concerning generic services only, not one specifically regulating the translation market,” Miklós Urbán, Professional Services Manager at Kilgray Translation Technologies explained. The predecessor to the new standard, E15 038, is less detailed and limited to Europe. “ISO 17 100 reflects an approach that grants primacy to the work−flow method. Now every work phase, including preparation and post−editing, is discussed in detail, which provides a more thorough overview of expected duties,” Urbán noted. The aim of the international standard, which companies should be able to acquire from this fall onwards, is to have a quality benchmark serving as a compass for suppliers and buyers. Urbán thinks that in total around 20 firms will get the new certification: “They are the big ones that try to stick out by having an additional verification of their professionalism.”

9 Attested translation 9 Technical translation 9 Interpreting

Head Office: Telefon: e-mail:

1062 Budapest, Bajza u. 52. +36 74 512–071 budapest@offi.hu www.offi.hu

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Budapest Business Journal | February 27 – March 12, 2015

Non-European languages grow in importance As English language skills improve, the need for English translation work is decreasing. But the need for Asian language translations is advancing, with business increasing in emerging economies, and a need to localize the booming number of mobile apps. LEVENTE HÖRÖMPÖLI-TÓTH

According to Common Sense Advisory (CSA), a consulting firm, the global English language learning industry generates roughly as much turnover as the total business of translation in the world: around $37 billion. Yet, while everybody seems to be scrambling to master the lingua franca of the digital age, other languages are claiming their own spot in the sun. Demand for translation and interpreting services is growing not only in a cross− border context, but also in countries with sizeable minority populations. In the UK, the National Health Service spent £23.3 million on interpreting last year, whereas in the United States, 27% of hospitals receive at least 1,000 phone calls per month in a foreign language. Changes in the linguistic landscape speed up efforts at software localization too, because the emerging economies are on the rise and the number of mobile applications on smartphones and tablets has skyrocketed everywhere. However, don’t expect miracles from the so−called “FIGS” (French, Italian, German, and Spanish); the power most likely to undermine the dominance of English comes from the East. Chinese, Arabic and Russian top online usage charts in the non−English world and once− neglected languages such as Vietnamese and Indonesian matter more as those countries’ economies grow.

English in the danger zone The first−hand experience of leading translation firms in Hungary partially underlies the above phenomenon. A typical ratio for English−related jobs amounts to some 60−70% of total turnover. But both Napos Oldal Kft. and Turris Babel Kft. report a significant drop compared to earlier years. The constantly growing ratio at FORDuna Kft. is more due to the fact that it is a major supplier of European Union institutions, where there’s a policy in place to produce as many texts as possible in English. As to future trends, stagnation is at the epicenter of expectations at best. “Evermore people can write and speak English well and companies frequently rely on their own employees. English− related assignments will probably lose further ground,” Júlia Valki, head of office at Turris Babel expressed what is a

If you can read this, you could have a job in the translation business.

“The interest in Vietnam is growing heavily, not least because of its constant dynamic development. Hungarian businessmen stand a good chance of finding excellent opportunities there, but those chances can be improved greatly if they have learned only a few words in Vietnamese.” rather common sentiment to the Budapest Business Journal. The FIGS are partly responsible for the shift, but Chinese has gained momentum as well. “We have been getting an increasing number of requests lately with respect to Far Eastern languages. Among them, Chinese has absolute primacy. It’s worth noting that it concerns translation from or to English; Hungarian is almost never involved,” Péter Márton, finance and resource manager at Napos Oldal Kft. told the BBJ. Márta Balázs, CEO of Edimart Language Solutions sees a somewhat different pattern, however. “The Chinese−Hungarian trade is thriving in the private sphere and now there is solid need for professional language services in this segment,” she said. Turris Babel has specialized in Eastern languages; yet, it sees only a slight hike in demand for Chinese. According to Valki, such translations are “presumably done through the members of the local Chinese community”.

Betting on Vietnam The growing importance of Asian languages applies to export−driven Hungarian businesses seeking to expand in the Far East as well. Le Ha Fehér Nguyen, a Vietnamese entrepreneur couldn’t agree more. She runs a company that offers language and marketing services in Hungary. She has been living here for a long time now and strives to forge economic links between two

countries that traditionally have a good relationship. Vietnamese students have studied at Hungarian universities in large numbers and many of them have top executive positions at home. “The interest in Vietnam is growing heavily, not least because of its constant dynamic development. Hungarian businessmen stand a good chance of finding excellent opportunities there, but those chances can be improved greatly if they have learned only a few words in Vietnamese,” Nguyen said. Apparently, it does not suffice to know English if you want to be successful in that region. “Using basic local expressions can help clinch a deal, and this is true of the entire continent. English alone won’t do the trick,” Nguyen noted. This advice sounds more than useful as, according to the Hungarian Statistical Office, the total trade volume between the two countries was up by 60% in 2013 from the previous year.

False mirage to the east? The Hungarian government certainly aimed at capitalizing on Oriental dynamism in launching its “Opening to the East” policy. The plan is to massively boost trade with non−European regions. But has it translated into dramatic activity on the relevant translation request front? The leading market players report little or no progress in this respect. Instead, it is asylum seekers that have generated more work, and the number of

Size of global language services industry ($ billions) 2010 2011 2012 2013 2014 2018*

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Distribution of the language services market in 2014 REGION Europe North America Asia Latin America, Caribbean Oceania Africa

% 51.09 37.81 9.96 0.48 0.41 0.24

Source: statista.com, Common Advisory *Projection

Russian or Ukrainian assignments has gone up a bit. “The volume of interpreting and translation jobs in relation to the ‘Opening to the East’ has barely increased. Such commissions rarely come from our government administration partners,” Ferenc Jantner, CEO of FORDuna Kft., said. It would appear that exotic languages have yet to make the real breakthrough here in Hungary.

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Budapest Business Journal | February 27 – March 12, 2015

Learning ‘to learn from the customers’ The head of the professional association of translation firms in Hungary surveys the market, and outlines challenges and possibilities.

There are an increasing number of computerized translation tools, like Google Translate. Do they impact the business? A: They impact the business greatly. In the world today, more translation is being done by machines than by the people. Still, machine translation has not yet affected the Hungarian translation market very seriously. Machine translation is not really strong in language pairs that involve Hungarian. It’s important to know that Google Translate is a consumer product. It is not really used for B2B services. There are, of course, commercially available machine translation engines on the market for business users.

ZSUZSANNA SZABÓ

Miklós Bán is the chairman of Proford, the Association of Language Service Providers, which is Hungary’s largest professional association for translation companies. He is also a player in the field, with his own firm, espell. We spoke to him about issues of concern for the translation industry in Hungary.

How did the translation industry evolve in Hungary in 2014 compared to previous years? A: Although the country’s economy grew this year, the downturn in the earlier years put this market into such depths that even this increase is not taking us back to the level of 2010. Translation industry players still feel the downturn, especially those whose clientele is mostly made up of Hungarian companies. Those companies whose translation work was connected to the public sphere also experienced quite a slump. The companies, which are exclusively reliant on domestic revenues experience a lack of work and greater price pressure, though these phenomena also exist on the international market.

Miklós Bán: ‘I believe that some of the markets may be improving.’ regulated in Hungary. We are aiming to reach an industry−wide compromise that would, first of all, focus on customer interest. Obviously, each party has their own interests in this deal.

In your opinion, what are the most important changes that need to be made to improve the situation for translation agencies in Hungary? What percentage of market A: I can speak on behalf of the share do the Official association. Our interest is market Government Translation liberalization: We would like companies, Office (OFFI) and the rest of the customers and private individuals to private translation agencies have in get good quality certified translations, the segment? as quickly and as A: One of the cheaply as possible. interesting things We recognize that “Our interest is market about the translation the government liberalization: We would wants to make sure industry is that it is really hard to estimate that certain types of the actual value of the like companies, customers translations remain market because many and private individuals to under state control, of the translation but we also realize get good quality certified that certain types companies outsource jobs to one another. translations, translations as quickly and of OFFI’s market share especially those is somewhere between as cheaply as possible.” related to business 10−15%, I would say. processes, don’t have to be regulated or Proford has turned to the overseen by a single state−owned actor. government several times, This would make companies’ processes seeking legislative changes easier, swifter and more efficient. We on certified translation services, to would like a free competitive market ensure a competitive environment in that ensures the best quality, the best the market. Is there any improvement value for money, for customers and the in this issue? translation services. A: Apparently, there is improvement. As the market changes, Proford is now involved in a process, and customers demand together with OFFI and the National faster, less−expensive, Association of Translators and Interpreters (MFTE). MFTE, OFFI and more efficient work, what changes do Proford pledged at our fall conference to translation companies need to make? come up with a joint compromise version A: Companies will have to learn, will on how certified translation should be have to adapt but I think there is a

“The banking sector, the telecommunication sector, the wholesale sector and the energy sector used to be huge buyers of translation services. They are now much less profitable and more cautious, because the overall business environment is changing very rapidly.” lot to win for translation companies. Companies have to change more than processes; they need a real change of mindset, and that’s not easy. One of the things I experienced – back when I started this business in 1999 – was that many Western companies refused to work with Eastern European companies; due to bad experiences, prejudice or just lack of a tradition. Today – even in those markets that used to be very secluded and protective, where people were willing to pay very high premiums just to buy services within their own countries or regions – translation buyers are willing to outsource to Eastern European companies. The company that I run has a clientele that is 80% foreign, so this is very important for us, but we are finding that it is easier to penetrate markets that previously weren’t very open about buying services in Eastern Europe. Now they are more pressed for efficiency, competitive prices and a shorter time−to−market, so they are willing to look a little bit further East.

What trends can you identify in the translation industry for this year in Hungary? What changes do you expect in the market? A: I think customers are getting smarter. They have a better understanding of what to buy and how to buy, and that is not necessarily comfortable on the supply side, but in the long run, certainly useful. On the other hand, I always say to my colleagues that we have to learn from the customers; we really have to understand their needs. Those companies who try to push the way they work upon the customers will eventually fail. Those companies who try to get a deeper understanding of their customers will win. In terms of trends, I think in Hungary in the past few years some market segments that used to be very large translation buyers are experiencing serious difficulties. The banking sector, the telecommunication sector, the wholesale sector and the energy sector used to be huge buyers of translation services. They are now much less profitable and more cautious, because the overall business environment is changing very rapidly. That kind of caution will lead to a smaller volume, a smaller profit and stronger price pressure in the translation industry. I think translation companies will need to diversify. Niche companies that concentrate on a single industry need to either diversify to other verticals, or they will have to diversify to other markets. I don’t expect a very serious change in the government segment in 2015 and I don’t expect a serious shift in regular business translations either, although I believe that some of the markets may be improving, including pharmaceuticals, not usually strongly affected by economic fluctuations, or real estate, which used to be a huge market for the translation industry and for years was actually dead. So I can see some signs of a turn for the better, though I don’t think that 2015 will be an easy year. If the translation companies want to do good businesses this year, they will have to adapt to the current situation. They certainly have to diversify, accept and embrace changes in terms of technology, and invest in that technology – but most of all they need to invest in knowledge and in their human resources.

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Budapest Business Journal | February 27 – March 12, 2015

Machine interpretation: Will it happen here first? Google and Microsoft are battling to perfect artificial translation, and Hungarian developers are putting this country’s highly unusual language to good use in the effort. ANDRÁS ZSÁMBOKI

In mid−December 2014, the developers of Microsoft introduced Skype Translator, an application that gives real−time translation of spoken words, acting like a digital interpreter. It was the latest development in the race between Google and Microsoft to perfect machine translation, though as anyone who has used translation software knows, machines are not yet able to translate as well as people. “It is hard for me to imagine a professional relationship, let alone a friendship, in which the partners do not have a common language and can only talk to each other thanks to Skype Translator,” György Schaffler, President of the Association of Hungarian Interpreters and Translators (MFTE) said.

“In my experience, the problem with English live speech is that a lot of samples in the text corpus databases are from non-native English-speakers. My estimate is that such samples constitute over 15% of the corpus.” Still, developers are working on improving digital translation, and the effort has included the participation of MorphoLogic, a Hungarian firm that helped develop Google’s real−time translator, Word Lens. MorphoLogic is also working on new solutions to the old problem of ungrammatical speech, and it says that the fact that its developers speak Hungarian may actually help them. According to Gábor Prószéky, who is managing director of MorphoLogic and leader of the Machine Translation Program of Pázmány Péter Catholic University, the innovation by Skype is nothing new: “All parts of the process have been used before in different programs; Skype has only put them together in an effective way,” he says. As Prószéky explained, the new translator works using voice recognition software that converts the uttered sentences from speech to text. Microsoft’s translator Bing

then translates this text into another language. The new text is then read to the other partner out loud by a text−to− speech program. “Back in 2003, when MorphoLogic’s first Hungarian−English translator program was created, we introduced it at the press conference with a real− time presentation of the program,” recalls László Tihanyi, who works in development at MorphoLogic. “The program wrote down what I was saying, it translated it into English, and a text− to−speech program read it out loud. It impressed the audience, even though the reading program sounded like a machine.” Since then, voice recognition software has improved significantly, and translator programs have also become more refined, and that is why the Skype translator can look so impressive. But, as Prószéky noted, truly creating a machine interpreter that can deal with the spoken language requires much more than voice recognition. “The main challenge for real−time interpreting is the fact that live speech is syntactically much more chaotic than the written text,” Prószéky said. “In live speech, people’s sentences are full of fillers; friends tend to refer to things as ‘this’ and ‘that’. It is also a common thing for them to interrupt each other in the middle of a sentence. It is actually challenging for a human linguist to structure such conversations in a formal way.”

It helps to be Hungarian Another part of the challenge is something that Prószéky and his colleagues at MorphoLogic are working on: plain old bad grammar. If they do develop a solution, the first working sample may be an English−Hungarian translator. “In my experience, the problem with English live speech is that a lot of samples in the text corpus databases are from non−native English− speakers. My estimate is that such samples constitute over 15% of the corpus,” Prószéky says. “Theoretical linguists like Noam Chomsky call these sentences ungrammatical and ignore them. However, a software used for practical purposes has to offer a solution to this too,” added Prószéky. For statistical machine translators, those “bad” sentences make the sample “noisy”. Programmers try to filter that noise out. The perfect solution would be if the program could automatically correct it to the most likely sentence. MorphoLogic is working on such a system, according to Prószéky. “This will be a hybrid system which will merge mechanical translators’ statistical side with the traditional linguistic translators’ ability to recognize the correct words and sentences, even if the speaker makes mistakes,” he said. He added that there are good reasons to make a prototype in Hungarian. “Hungarian’s advantage over English is that it is not spoken by as many

Google’s Word Lens involved the work of Hungarian developers. people who speak it incorrectly,” Prószéky explained. So the filtering out of statistical noise does not represent such a problem. “Hungarian is a language island,” he said, noting that foreign language education here has traditionally been weak – and even TV shows here are more often dubbed than subtitled. Indeed, Hungary has been recorded as having the lowest level of second language speakers in the EU at around 33%. “These factors are unfavorable in a cultural sense. They make Hungarians closed up in their own culture. Paradoxically, however, it helps software developers like the experts at MorphoLogic, who are working on creating live−speech interpreters,” Prószéky said.

Gábor Prószéky of MorphoLogic.

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20 3

Budapest Business Journal | February 27 โ March 12, 2015

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4 Socialite Bikavér: No longer a load of old bull Neither Szekszárd nor Eger can lay claim to being the definitive home of the bull, but both are producing great versions of this deep red cuvée. ROBERT SMYTH

While many fine wines hit the bulls− eye at the Bikavér Párbaj (Bull’s Blood duel), held at the Corinthia on February 20, neither Eger nor Szekszárd have yet entirely succeeded in taking the bull by the horns to create a definitive style for this famous – and sometime infamous – red blend. Nevertheless, it must be said that real progress is being made as Bikavér is slowly shaking off its shoddy reputation that stems back to the mass production ideology of the communist regime. Indeed, the reason why the English translation of Bull’s Blood is rarely used these days is due to its not so prestigious past as a bottom shelf wine on foreign markets. Naturally, the wines between the cooler northern region of Eger and the often sweltering southern region of Szekszárd are always going to be substantially different: leaner, tighter, with livelier acidity and more finesse in Eger, while it’s richer, more robust with riper fruit in Szekszárd. Within the regions themselves, it is probably Szekszárd that has the more recognized style and stable quality across the board, where for the most part Bikavér already tends to be treated as a fairly ADVERTISEMENT

At left: The crowd at the Corinthia for the Bikavér duel. Above are some of the contestants. high−end segment by the winemakers themselves. In Eger you can still find anything from the stunning to stomach turning thanks to the remarkably lax upper limit of 100 hectoliters per hectare that Bikavér Classic can be made from, which means that Bulls Blood can run extremely thin and lame wines do make it to market. However, it is impressive how large scale Eger producers like Varsányi Pincészet and Ostorosbor are turning out some very acceptable Bikavér Classic for low prices. Another gripe is that the Egri Bikavér Superior category brings the yields limit down to a not at all low 60 hl/ha. Incidentally, a Bikavér Superior needs to be made from at least five

varieties as opposed to at least three for the classic. While Kékfrankos is usually the leading component of most Bikavérs in both regions (save for a few examples like the French grape dominated Merengő 2009, a Bikavér Superior from Eger’s St. Andrea winery that’s currently in superb form), a few percent of the airy, aromatic and spicy Kadarka grape is practically a given in Szekszárd. It gives the wine a unique feel. Only a few percent brings lots of red fruit (to supplement that of the Kékfrankos) such as raspberry, sour cherry and blood orange, plus rose hip and a plethora of spices to complement the black fruit of the Bordeaux varieties like Cabernet Franc, Cabernet Sauvignon and Merlot. Tricky to cultivate, Kadarka was once the dominant grape in Eger and its Bikavér, but was for the most part grubbed up during communism in favor of less awkward grapes. However, Eger vintners are rapidly replanting and quite a few already have it, as they know the spicy kick is just the ticket for making expressive Bikavér. Szekszárdian Adrián Bősz gave his vision of Bikavér, explaining that it should be a big wine, but one that also has liveliness and elegance. Thus, while being fairly full−bodied, it should also have good acidity and tension. It should only be made in good vintages and 2011 certainly rates as one of those. His 2011 is made of 45% Kékfankos, 30% Merlot, 20% Cabernet Franc, and 5% Kadarka and certainly lived up to his description, and also carried fabulously fresh and aromatic fruits such as pomegranate and sour cherry, as well as anise, black pepper

and a smoky finish. This wine is still in the delicious first flushes of youth but has all the components in place to pick up further complexity with age. It was aged in a combination of second− and third− fill 225 liter and 500 liter Hungarian and French oak barrels. The tables at the duel were set up so that each of the 13 wineries from both regions, who both have a claim on first creating Bikavér, were lined up alongside a counterpart from the other region. Bősz’s Eger neighbor József Hagymási’s Bikavér has had the opportunity to age, being a 2009 specimen. It was pleasantly distinctive with intense floral aromas of violets, which you may think come from the 8% Kadarka, but if you’ve ever tasted directly the source of his Kékfrankos – which all comes from bush vines of the Hempergő vineyard, then you’ll have experienced its aromatic attack. From Eger, Bolyki’s unfiltered Bikavér 2012 packs in a lot of juicy concentration for under HUF 3,000. Down in Szekszárd, Ferenc Vesztergombi’s Bikavérs, from a range of vintages dating as far back as 2000, showed ideal balance and depth of flavor, while keeping the alcohol nicely in check. Takler’s 2012 exuded the cellar’s trademark tasty intensity, but with more elegance than some earlier vintages, although the 2006 and 2007 have aged very well to become complex old timers. In the same region, Péter Vida, a newcomer to Bikavér having previously been put off by its poor reputation, dazzled with only his second ever Bikavér (2012). Heimann’s was up to its usual 90 point−plus standard, while Eszterbauer’s 2011 and 2012 were rich, layered and long.

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4 Socialite

Budapest Business Journal | February 27 – March 12, 2015

WHO'S NEWS Name ESZTER JÁKÓ Current company/position EY/MARKETING AND COMMUNICATIONS DIRECTOR

Name RICHÁRD EÖRDÖGH Current company/position EVERSHEDS HUNGARY/ HEAD OF STRATEGY

Eszter Jákó was appointed the new Marketing and Communications Director at EY in December, the company announced. Jákó’s main duties in her new position include management of marketing and communication strategies and the associated budget, the developement of the Brand, Marketing and Communications department, salesmarketing support for service lines (events, PR and marketing campaigns, etc.), brand management, corporate communications and internal communications. Prior to joining EY, Jákó worked for Sanoma Media Budapest Zrt., E.ON Hungária Zrt., UPC Magyarország Kft., Reader’s Digest Kft. and Intercom Kft.

Richárd Eördögh was appointed a Partner and Head of Strategy at the Budapest office of the law firm Eversheds. Before joining Eversheds, Eördögh was the Chief Legal Counsel of Chayton Capital LLP and its private equity real estate funds in London and acted as Managing Partner of the Hungarian Office of Bird & Bird LLP in Budapest. “We are very pleased that Richárd is joining us. Having previously worked with him on a number of interesting and challenging matters, I know first-hand that he is a brilliant and diligent lawyer, and will be a fantastic asset to the team,” said Ágnes Szent-Ivány, the Managing Partner of Sándor Szegedi Szent-Ivány Komáromi Eversheds.

Do you know someone on the move? Send information to research@bbj.hu

Name VIKTOR SZAMOSI

Viktor Szamosi was appointed Commercial Director of Ford Hungary, assuming the position vacated by Andrea KővágóLaky, who is moving to a new post at Ford Europe after receiving the “Manager of the Year” award in 2014. KővágóLaky joined Ford 21 years ago and became the CEO of the Hungarian subsidiary in 2005 at the age of 31. Szamosi joined Ford in 2003 and has been working in the fields of trade and marketing. Szamosi has worked in the automotive industry for 15 years.

Current company/position FORD HUNGARY/ COMMERCIAL DIRECTOR

Name MARIUS PERSINARU Current company/position XEROX MAGYARORSZÁG/ COUNTRY GENERAL MANAGER

Marius Persinaru was appointed country General Manager at Xerox Magyarország, the company announced. In his new role, Persinaru will oversee Xerox’s local operation, which pursues growth opportunities for document management outsourcing, managed print services and technology sales in Hungary. He will also concentrate on offering partners competitive and profitable business solutions with easy access to the company’s products and services. Persinaru (51) has been with Xerox for more than 17 years. He is joining Xerox Magyarország from Xerox CIT (CEE, Israel, Turkey), where he was Chief Commercial Officer, responsible for regional commercial strategy to ensure organizational development in marketing and sales, and previously Xerox Developing Markets East as Operations Vice President.