Budapest Business Journal 2914 by Business Publishing Services Kft.

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

HUF 1,850 | €5 | $6 | £4

BUSINESS JOURNAL BUDAPEST

VOL. 29. NUMBER 14

JULY 16 – JULY 29, 2021

SPECIAL REPORT

Magyar Multinationals

SPECIAL REPORT

Wizz Air Eyes Markets Even Further Afield With airlines globally eager to rebuild their markets post-COVID, how does Hungary’s low-cost champion see the future? The Budapest Business Journal talks to András Radó, senior communications director of Wizz Air. 12 SPECIAL REPORT

Budapest-based Graphisoft Continues to Innovate Graphisoft has long been an internationally recognized architectural software company and continues to follow its road to success. The BBJ speaks with CEO Huw Roberts. 16

Reflecting on Change

SOCIALITE

Lasting Impact of 2004 Budapest Poetry Festival The 2004 Converging Lines poetry festival, organized by the then highly popular Budapest English-language literary cabaret The Bardroom and the British Council, has had a remarkably long-lasting influence and continues to birth new connections, as David Holzer discovers. 17

NEWS

Inflation Justifies Hawkish Stance Two key figures have been published in the past weeks. While May’s industrial production data was a positive surprise, June’s inflation was significantly higher than expected, justifying the tightening cycle the MNB started in June. 3

IAL S PEC

R E PO

Integrated building services company DVM group is inextricably linked with its late founder, Attila Kovács, whose death this February stunned the market. But the business remains strong, and managing partner Tibor Massányi says this year will see its highest turnover to date. 13 BUSINESS

Healthcare Roadshow Highlights Innovation GE Healthcare has launched a European roadshow to raise awareness of the importance of timely medical screenings. Many of the innovations it features had Hungarian input. 7

2|1

News

www.bbj.hu

Budapest Business Journal | July 16 – July 29, 2021

BBJ

THE EDITOR SAYS

EDITOR-IN-CHIEF: Robin Marshall EDITORIAL CONTRIBUTORS: Kálmán Béres, Zsófia Czifra,

STEPPING BEYOND HUNGARY’S BORDERS

Kester Eddy, Bence Gaál, David Holzer, Christian Keszthelyi, Gary J. Morrell, Nicholas Pongratz, Gergely Sebestyén, Robert Smyth, Bálint Szőnyi, Zsófia Végh. LISTS: BBJ Research (research@bbj.hu)

Much of what we write focuses on foreign-owned multinational firms; the investments they make, the jobs they create, the contributions they provide to developing Hungary’s economy. While there are many, many examples of global firms opening up in Hungary, that isn’t to say it is entirely one-way traffic. Those companies that have stepped out beyond the narrow confines of Hungary’s landlocked borders are a diverse group, often with compelling stories to tell. There are so few of them, however, that the leading lights are all well-known. Oil and gas giant MOL, for example, is a truly world-class company. OTP isn’t just Hungary’s biggest bank (in terms of total assets and number of branches); it is also one of the largest independent financial service providers in Central and Eastern Europe. It is little surprise, then, that when we launched our first Special Report into Magyar Multinationals this time last year, we focussed on both of the above, alongside leading pharmaceutical company Gedeon Richter, navigation and auto infotainment specialists NNG, and the re-emerged Tungsram brand. This year, we did not want to cover the same ground, and so we bring you a fresh bunch of Hungarian champions. The gene pool has not grown dramatically bigger in the intervening 12 months, meaning you won’t be surprised to find the region’s biggest lowcost carrier, Wizz Air, on our pages or the architectural software firm Graphisoft (a Hungarian company with an American CEO). Family-owned plastic processing company Jász-Plasztik is less well known but very well established. We did not simply want to concentrate on the success stories of today, however; we were also interested to know what is being done to encourage the superstars of tomorrow. In one sense, the Hungarian Export Promotion Agency (HEPA) is the obverse side of the coin to the Hungarian Import Promotion Agency (HIPA). The latter seeks to draw foreign direct investment to Hungary; the former helps

NEWS AND PRESS RELEASES:

Should be submitted in English to news@bbj.hu LAYOUT: Zsolt Pataki PUBLISHER: Business Publishing Services Kft. CEO: Tamás Botka ADVERTISING: AMS Services Kft. CEO: Balázs Román SALES: sales@bbj.hu

CIRCULATION AND SUBSCRIPTIONS: circulation@bbj.hu

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

What We Stand For: The Budapest Business Journal aspires to be the most trusted newspaper in Hungary. We believe that managers should work on behalf of their shareholders. We believe that among the most important contributions a government can make to society is improving the business and investment climate so that its citizens may realize their full potential. The Budapest Business Journal, HU ISSN 1216-7304, is published bi-weekly on Friday, registration No. 0109069462. It is distributed by HungaroPress. Reproduction or use without permission of editorial or graphic content in any manner is prohibited. ©2017 BUSINESS MEDIA SERVICES LLC with all rights reserved.

BBJ-PARTNERS

VISIT US ONLINE: WWW.BBJ.HU

Hungarian businesses find new markets abroad. But while HIPA deals with many international expat CEOs, HEPA works predominantly (if not exclusively) with small- and mediumsized companies. That is no great surprise, however, when you realize such SMEs make up 99% of all registered business in Hungary, according to the Central Statistical Office. You will find our interview with the head of HEPA inside. * * * Regular readers may remember my criticism of the government when it became clear legally resident foreign nationals were having problems getting the COVID immunity cards because the IT system developed could not recognize the identification numbers given to non-Hungarians. Apart from the fact it meant you could not go to an event or a restaurant here that required the presentation of such a certificate, it also questioned the whole idea of travel abroad. I am pleased to report both those issues seem to have been resolved. Sort of. Last week I visited my local government offices in Gödöllő to register for a European Union Digital Covid Certificate. Impressively, I walked out of the office less than an hour later with two pieces of paper, one for each jab. Putting to one side the fact that, despite being called a digital certificate, I have two pieces of distinctly non-digital paper, I do now have documentation that should be accepted within the borders of the EU. At the same time, I applied for the Hungarian card, as the system can now handle my non-Hungarian identity. I have a third piece of paper that says I am registered. I am told the card itself should arrive in another one to two weeks. Robin Marshall Editor-in-chief

Why Support the BBJ?

• Value Creation. We have a nearly 30-year history of supporting the development of diversity and sustainability in Hungary’s economy. The fact that we have been a trusted business voice for so long, indeed we were the first English-language publication when we launched back on November 9, 1992, itself has value. • Crisis Management. We have all lived through a once-in-a-century pandemic. But we also face an existential threat through climate change and operate in a period where disruptive technologies offer threats and opportunities. Now, more than ever, factual business reporting is vital to good decision-making. For more information visit budapestbusinessjournal.com

Photo by MTI / Balázs Mohai

• Community Building. Whether it is the Budapest Business Journal itself, the Expat CEO award, the Expat CEO gala, the Top Expat CEOs in Hungary publication, or the new Expat CEO Boardroom meeting, we are serious about doing our part to bind this community together.

Photo by Fortepan / György Jankovszky

• Independence. The BBJ’s journalism is dedicated to reporting fact, not politics, and isn’t reliant on advertising from the government of the day, whoever that might be.

THEN & NOW

A pooch enjoys the city fountains at Szabadság tér (Freedom Square) on July 13 as Hungary enters the dog days of summer, and Chief Medical Officer Cecília Müller ordered a second-degree heat alert until midnight of July 15. In the black and white image from the Fortepan public archive, a dog enjoys some lakeside fun with its family at an undisclosed location in 1930.

www.bbj.hu

Budapest Business Journal | July 16 – July 29, 2021

News///macroscope

Inflationary Pressure Justifies Hawkish Monetary Policy

Two key figures have been published in the past weeks. While May’s industrial production data was a positive surprise, June’s inflation was significantly higher than expected. While the latter justifies the tightening cycle the Monetary Council started in June, some say that it might continue faster than previously thought. ZSÓFIA CZIFRA

The volume of industrial production in May 2021 was 39.1% above the low base level of May 2020, caused by coronavirus pandemic-related restrictions, the Central Statistical Office (KSH) said in its first look at the data. Based on working-day adjusted data, production rose

40.2%.

According to seasonally and workingday adjusted data, the industrial output was 3.4% higher than in April 2021. All manufacturing subsections contributed to the significant growth. The manufacture of transport equipment, representing the greatest weight, increased by an outstanding amount, primarily due to the low base value caused by factory shutdowns and the one-shift work schedule in May of the previous year.

Changes in Consumer Prices in Hungary, June 2020-June 2021

Compared to the same period of the previous year; percentage Foodstuff Alcoholic beverages, tobacco products

basis points

Clothing

to 1.2%. Virovácz said the easing of pandemic restrictions was hardly observable in the May inflation data but was more visible in June in the price increase of food items, restaurants, and services. For the entire year, he expects that CPI could be at 4.5%. It could be moderate in the coming months but could climb back to above 5% at the end of the year because of low base effects.

Consumer durables Household energy Other items, fuel Services Altogether

June, 2020

June, 2021

The manufacture of computer, electronic and optical products and the manufacture of food products, beverages, and tobacco also rose, but at a rate below the industrial average. In the first five months of the year, production was 18.1% higher than in the same period of the previous year. According to seasonally and working-day adjusted indices, industrial output in May was 3.4% above the level seen in April.

Positive Development

Although the sector’s expansion slowed from the annual growth of 58.8% in April, analysts still saw May data as a positive development, given the pandemic situation. Péter Virovácz of ING Bank said May’s figures were “extremely positive,” considering the “severe pressures” the economy is currently under due to recent supply chain shortages regarding raw materials and semi-finished products. According to him, the industrial output might show consistent albeit moderate growth in the coming months. As for the whole year, he calculates with double-digit annual growth. According to Századvég analyst Dániel Molnár, the shortage of microchips and the rapid growth of industrial producer prices might indeed cause some problems; however, the notable livening in foreign trade may boost industrial production, which, therefore, could contribute to economic expansion. He emphasized that industrial production nearly exceeds the pre-crisis level.

Source:

Gergely Suppan, the chief analyst at Takarékbank, expects

notable

15%

annual growth in industrial production due to low base effects and new capacities, followed by an 8% expansion in 2022. As a result, the industry could contribute more than three percentage points to the growth of the Hungarian economy, he said. While industrial production presented positive news, inflation seems to be on the loose. In June, consumer prices increased by 5.3% compared to the same month of the previous year, KSH data shows. CPI continued to spike after reaching 5.1% in both April and May. Core inflation, which excludes volatile food and fuel prices, was 3.8% in June.

Significant Rises

Significant price rises have been measured over the last 12 months for alcoholic beverages, tobacco, and motor fuels. In one month, consumer prices increased on average by 0.6%. In 12 months, compared to June 2020, food prices were up by 3.2%. Consumers paid 3.7% more for consumer durables, within which new passenger cars cost 9.2% more, and living and dining room furniture were up by 7.5% more. Motor fuel prices became 24.2% higher. Compared to May 2021, consumer prices increased by 0.6% on average over the month. Food prices fell by 0.1%. In January–June 2021, compared to the same period of the previous year, consumer prices rose by 4.2% for all households on average and by 3.8% among pensioner households.

Commenting on the fresh data, ING’s Virovácz said inflation in June was significantly higher than expected by the National Bank of Hungary (MNB). According to him, this means there is a greater chance that the MNB will raise its base rate again in July by 30 basis points to 1.2%. K&H Bank senior macro analyst Dávid Németh said core inflation shows that prices are rising for services and durable goods, and the June result is already approaching the upper end of the central bank’s tolerance band. In July and August, inflation could be around 4%, but it could rise to 5% in September. He said the MNB would continue the tightening cycle; the question is whether it would go with a 15 percentage point rise or higher.

Numbers to Watch in the Coming Weeks The Central Statistical Office (KSH) publishes labor market figures for June on July 28. At the same time, the rate-setting meeting of the National Bank of Hungary’s Monetary Council the day before, June 27, might be worth watching.

4|1

News

www.bbj.hu

Budapest Business Journal | July 16 – July 29, 2021

Hungary Continues Relaxation of its COVID-19 Restrictions The Hungarian government announced that the 5.5 million citizens vaccinated threshold had been passed in a post on Facebook late on July 2. NICHOLAS PONGRATZ

“The number of inoculated has reached 5.5 million. From Saturday [July 3], masks aren’t required,” the government said in the post. Speaking in his weekly interview on Kossuth Rádió earlier on July 2, Prime Minister Viktor Orbán said passing the threshold would trigger a further easing of pandemic restrictions. A decree published in the official Magyar Közlöny (Hungarian Gazette) mandated those changes to restrictions. For instance, it ends mandatory maskwearing in businesses and public transport and area-based limits on shopper numbers. Additionally, immunity certificates are no longer required for dining indoors, staying at hotels, or attending performances with assigned seating.

Coronavirus ///roundup

to the official government coronavirus website koronavirus.gov.hu. Szijjártó said, “If things are going well in the Western Balkans, it’s good for us. If things are going poorly in the Western Balkans, it’s bad for us.” To that end, he also donated an additional 200,000 doses of the Sinopharm coronavirus vaccine to Bosnia and Herzegovina’s neighbor, Montenegro, the same day. Back in Hungary, an additional 260,000 doses of the Pfizer/BioNTech COVID vaccine arrived in Hungary on July 8. Pfizer Gyógyszerkereskedelmi said the latest shipment raises the total deliveries of the Comirnaty vaccine to Hungary to more than 6.3 million doses. For those who are vaccinated, the Assistant András Pallag vaccinates a young man with the question of immunity certificate acceptance second dose of the German-American Comirnaty vaccine has become less of an issue domestically. developed Pfizer-BioNTech, at the Pál Réthy Hospital in International travel is a different matter. So Békéscsaba on July 13, 2021. Photo by MTI / Tibor Rosta. far, Hungary has also reached agreements on mutual recognition of domestic COVID immunity certificates with at least 19 The limit on the number of people the required social safety distance, and countries, the latest being San Marino. attending private gatherings was raised avoid direct physical contact throughout At the same time, Hungary has started from 50 to 100 people, and the limit visits. Visits are allowed once a month issuing European Union digital COVID on the number of guests at wedding for up to 30 minutes. certificates on July 1. The EU COVID receptions from 200 to 400. Finally, the certificate is valid throughout the EU, decree allowed for a return to lecture hall Vaccine Diplomacy but member states can still determine As the domestic vaccination campaign instruction at colleges and universities. for themselves which types of vaccine plateaus past the 5.5 million threshold, Meanwhile, as the outdoors open to accept among those that have not further to the rest of us, the indoors have the lending or donation of vaccines to been cleared by the European Medicines regional neighbors continues. opened further for others. Prisoners who Agency (EMA). Minister of Foreign Affairs and Trade have been double-dosed with vaccines At the time of writing, the EMA Péter Szijjártó delivered 100,000 doses are now able to receive visitors again has authorized Comirnaty (Pfizer/ of the Pfizer/BioNTech COVID vaccine at all penitentiary institutions across BioNTech), COVID-19 Vaccine Janssen, that Hungary is lending to the Czech the country, according to the National Spikevax (previously COVID-19 Vaccine Republic to Prime Minister Andrej Babis Penitentiary Command (BvOP). Moderna), and Vaxzevria (previously in Prague on July 1. Prisoners can receive a visitor from COVID-19 Vaccine AstraZeneca). He also delivered a donation of the 15th day after receiving the second In other words, an EU member state 200,000 doses of the Sinopharm dose of the vaccine, provided they may decide not to accept the Chinese coronavirus vaccine to Sarajevo, Bosnia are asymptomatic. However, it is still and Russian vaccines Hungary has been mandatory to wear a face mask, maintain and Herzegovina on July 5, according administering among its mix of jabs.

Top Healthcare Executives in Hungary 2021 A behind-the-scenes look at some of the most influential Healthcare Executives in Hungary, their leadership, philosophies and successes. Top Healtcare Executives in Hungary 2021 is a Budapest Business Journal publication Please forward your subscription request to: circulation@bbj.hu, or order your copy in the webshop at www.budapestbusinessjournal.com

• Provides an essential overview of how Hungary’s healthcare market operates. • Get an insight into the most significant developments in 2020, and a look at what is in store for 2021. • Get to know the key personalities in the Hungarian healthcare sector. • Read personal accounts from the country’s top healthcare executives detailing how they got into the business and some of their proudest achievements, among other things.

www.bbj.hu

Budapest Business Journal | July 16 – July 29, 2021

News | 5

Office Still Seen as an Attractive Workplace Option Research by one of the leading regional developers indicates that the office is still seen as an attractive workplace location, despite pandemic concerns, although changes in setup and design are required by staff. GARY J. MORRELL

According to “The Evolution of Working Condition Needs in the Face of the Pandemic,” a study by Skanska in CEE, nearly half of office workers in the Czech Republic, Hungary, Poland, and Romania go to the office every day and have specific preferences regarding their workplace. These include a quiet space and high office standards (for example, safety, relaxation, and working in the open air) as the most frequently indicated critical factors that motivate people in the region to work from the office.

and interesting than what we have at home,” says Arkadiusz Rudzki, executive vice president for leasing and sales at the Skanska commercial development business unit in CEE. “These expectations will transform the approach to managing office buildings with a growing focus on hospitality aspects. Therefore, we are heading towards high-quality spaces with maximum flexibility, as only the most outstanding buildings will be able to attract companies and fulfill their needs,” Rudzki adds.

The Skanska-built Nordic Light Trio office building in Budapest. However, office supply in Budapest for 2021-2022 remains constrained, with a projected pipeline of 426,000 sqm with a pre-let status of 45% and a vacancy rate

9%.

This in a market with close to four million sqm of stock, according to Cushman & Wakefield. Around 150,000 sqm is expected to be delivered this year. “The 2021 office market statistics continue to reflect the uncertainties and economic slowdown triggered by the COVID-19 pandemic,” comments the Budapest Research Forum, consisting of CBRE, Colliers International, Cushman & Wakefield, Eston International, JLL, and Robertson Hungary. The Skanska survey shows that the home office is not an ideal solution in the eyes of employees when it comes to CEE

in general; more people would prefer to work only from the office than those who want only to work from the home office, the developer says. However, offices need to offer more than before.

“The 2021 office market statistics continue to reflect the uncertainties and economic slowdown triggered by the COVID-19 pandemic.” The study confirms the great importance of safety issues. The results show that high sanitary standards can encourage working in offices, while lack of them causes fear of contracting the virus. Daily disinfection of the office

Evolving Needs

“The pandemic has somehow outlined the future of office spaces and the evolving needs of employees. We can see that people still prefer going to the office, as more than half of the respondents claim they would like to work in the office nearly full-time. However, in the post-pandemic era, offices will have to offer more than before; they should be better, more comfortable,

41%,

followed by lower population density (37%) and non-contact solutions (37%), are the main factors that would positively affect employees’ sense of safety in the office. The study was conducted on behalf of Skanska by the research and analytics company Zymetria. As part of the quantitative online survey, using Computer-assisted web interviewing (CAWI), responses were collected from 2,000 office workers living in the region.

Real Estate Review Property Hungary 2021

is available now! SECTOR OVERVIEWS DETAILING: ARCHITECTURE • HOTEL • INDUSTRIAL • INTERIOR FIT-OUT • INVESTMENT • OFFICE • RESIDENTIAL • RETAIL • SUSTAINABILITY • URBAN DEVELOPMENT

Order: Business Publishing Services Kft. +36/1 398-0344; circulation@bbj.hu

6|1

News

www.bbj.hu

Budapest Business Journal | July 16 – July 29, 2021

Photo of Sky Court courtesy of Budapest Airport.

News///in brief

concerns in Brussels over rule-of-law and oversight shortfalls, Varga said efforts are being made to “transform a purely economic matter into a political issue. We hope that common sense will prevail and a reasonable solution can be found,” he said. “We are constructive and cooperative, but I must say that Brussels’ shameless approach will not influence the situation of the Hungarian economy,” he added. (See also “EC Still Evaluating Hungary’s RRF.”)

Szijjártó: Low Taxes Needed to Attract Investment

Gov’t Makes Purchase Offer for Budapest Airport Hungary’s government has made a non-binding offer to buy Ferenc Liszt International operator Budapest Airport, conservative daily Magyar Nemzet (Hungarian Nation) said on its website. Magyar Nemzet learned from industry insiders that Budapest Airport’s owners said the government’s non-binding offer was “below market value.” The paper

Varga: GDP Growth Could be Above 6% This Year Hungary’s GDP growth could be more than 6% this year, even without considering funding from the European Union, Minister of Finance

said owners had “rejected outright” the sale until recently. Minister for Innovation and Technology László Palkovics declined to comment on an ongoing matter when asked by the newspaper. Hungary’s government issued a mandate for Palkovics to start talks on reacquiring a majority stake in Budapest Airport in the spring.

Mihály Varga said in an interview with origo.hu published on July 12. Varga said GDP growth could reach 6.5% this year. Responding to a question on snags in the approval process for Hungary’s Recovery and Resilience Fund (RRF) plan because of

For the sake of attracting investments, taxes need to be low, and governments must have the opportunity to support these investments, Minister of Foreign Affairs and Trade Péter Szijjártó told journalists on July 12 on the sidelines of a meeting of EU foreign ministers, according to state news agency MTI. If these conditions are not met, significant corporate investments with a high technological value that create jobs will happen outside of Europe, he added. He reiterated that Hungary does not support introducing a global minimum corporate tax rate as it would lead to a loss of competitiveness. Talking about migration, the minister said the EU needs to settle all open questions on the topic with Turkey to prevent a build-up of pressure. Szijjártó said the EU needs to expand towards the Western Balkans: Serbia and Montenegro should join the union as soon as possible, while accession talks should start with Albania and North Macedonia.

Decision to Start Tightening Cycle Explained According to the minutes from the monthly policy meeting released on the central bank’s website on July 8, the decision by the Monetary Council

of the National Bank of Hungary (MNB) to start a tightening cycle in June sent a clear message concerning policy makers’ commitment to low inflation. “With a general tightening of monetary policy conditions, the cycle of base rate hikes was a definite indication to economic agents that monetary policy was committed to low inflation,” the minutes of the meeting held on June 22 say. “The Monetary Council unanimously argued that the cycle of interest rate hikes would need to be continued until the inflation outlook stabilized around the central bank target, and inflation risks became evenly balanced on the horizon of monetary policy,” according to the minutes. “Decisionmakers agreed that the council would conduct the cycle of interest rate hikes gradually, in a data-driven manner at its monthly policy meetings,” the minutes add.

EC Still Evaluating Hungary’s RRF The European Commission has not yet completed its evaluation of Hungary’s Recovery and Resilience Fund (RRF) plan, and the commission will ask the Hungarian authorities for an extension of the evaluation deadline, EC spokesperson Arianna Podesta said on July 12, according to state news agency MTI. The EC is currently examining answers it received on July 9 to earlier questions, she added. “The evaluation of the Hungarian recovery plan may take weeks rather than days, so the European Commission will propose to the Hungarian authorities to agree to an extended deadline of two months,” she said. In a statement yesterday, the Hungarian Prime Minister’s Office said that there are continuous negotiations between Hungary and the European Commission on adopting the Hungarian recovery plan.

Top Legal

EXECUTIVES In Hungary

2021 The most influential legal executives in the Hungarian economy

The Top Legal Executives magazine is a special annual publication of the Budapest Business Journal. It forms part of our “Top” brand, and is a sister publication to Top Expat CEOs in Hungary. Like Top Expat CEOs, the magazine has a focus on people rather than policy. It presents the profiles of the most influential legal executives working in the Hungarian economy, focusing on outstanding achievements and how the Hungarian legal market is developing. Those profiles of Hungary’s top “legal eagles” are set against a review of how the Hungarian legal system operates, including the functioning of the Curia (the Supreme Court of Hungary) and the Constitutional Court, as well as the Budapest and national bar associations, among other things.

Why Should I Subscribe? • Provides an essential overview of how Hungary’s legal system operates. • Get an insight into the biggest cases of 2020, and likely legal developments in 2021. • Get to know the personalities behind the legal business. • Read personal accounts from the country’s top lawyers, detailing how they got into law in the first place and what prompted their choice of specialty.

Please forward your subscription request to: circulation@bbj.hu, or order your copy in the webshop at bbj.hu

www.bbj.hu

Budapest Business Journal | July 16 – July 29, 2021

Business

Healthcare Roadshow Highlights Innovation, Screening Awareness

GE Healthcare has launched a roadshow across Europe filled with innovations to raise awareness of the importance of timely medical screenings. The aim is to catch diseases early enough for proper treatment to start, increasing the chances of survival, especially in serious cases such as cancer. CHRISTIAN KESZTHELYI

The truck is equipped with the latest medical imaging innovations by GE Healthcare, to which its Hungarian hub has contributed significantly. With the WHXR Roadshow 2021 touring 16 countries in 29 weeks, the Budapest Business Journal talks to Endre Ascsillán, vice president at GE Global, CEE, based in Hungary. “We are proud that Hungary has been the first stop of this spectacular tour in the region. Medical professionals have had the opportunity to see the truck live first in Siófok, later in Debrecen,” Ascsillán says. One of the consequences of the disruptions caused by the coronavirus are people whose health may be compromised not directly by the disease but by the lack of attention as health care institutions are overwhelmed. Regular and timely screening exams are crucial to diagnosing diseases early, when the chances for a successful treatment are greatest. “Delaying recommended cancer screenings may result in missed earlystage cancers that are not caught until they are already more advanced and potentially more difficult to treat. That impacts both the chances of recovery and the cost of the treatment,” Ascsillán says.

Endre Ascsillán With medical staff across Europe working flat out to prioritize coronavirus patients, many tests have been missed or delayed, potentially jeopardizing the health of people whose diseases may have gone unnoticed. In women’s health, for example, breast cancer is the most common neoplasia (an abnormal and excessive growth). It affects approximately one out of nine women. Mammography screenings dropped significantly during the pandemic, although an early diagnosis could be the most critical part of effective treatment, decreasing the risk of dying considerably.

Machine Learning

“Our latest digital innovations in medical imaging enable patients to get the answers they need about their health as quickly as possible, while our use of artificial intelligence (AI) brings the power of algorithms and machine learning to imaging,” Ascsillán explains. He adds that GE Healthcare’s digital teams in Hungary play a significant role in developing innovative diagnostic solutions for the firm’s global customers. Beyond the difficulties the pandemic has created, opportunities have also started growing. “In general, we can say that COVID-19 has accelerated the pace of technological change that has never been so dynamic and pointed out several new directions for development. It has also revealed the shortcomings of healthcare systems, how healthcare providers face challenges delivering high-quality care

while managing greater capacity and workflow issues,” the vice president says. This has triggered demand for adaptable and digitalized healthcare systems that empower clinicians with next-generation tools. “Building on our innovation capabilities, available intelligent devices, access to data analytics, applications and services that are supported by the Edison platform, GE enables healthcare professionals to make faster, more informed decisions,” the vice president says. GE Healthcare’s data science team in Budapest and Szeged have recently developed two revolutionary AI algorithms for X-ray machines. The first, which is FDA-approved, is embedded on-device and helps radiologists prioritize live-threatening, critical cases with a suspected collapsed lung. The second, which works with GE’s Critical Care Suite 2.0, helps clinicians assess Endotracheal Tube (ETT) placement for intubated patients (in the case of patients on a ventilator, for example), including critical COVID-19 patients.

Predictive Analytics

Elsewhere, new predictive analytics software solutions are being developed for global markets in Hungary that will provide more efficient support for the capacity planning of healthcare professionals and the optimal use of equipment, reducing waiting lists and helping to save on costs. “AI is at the heart of GE’s strategy, and we are proud to have GE Healthcare’s

biggest European Data Science team in Hungary, working on several international products and research developments,” Ascsillán says. “Our excellent academic and clinical partners in Hungary, as well as across Europe and in the United States, are actively involved in our projects, validation, and testing processes. This extraordinary cooperation provides our multidisciplinary teams with broad access to data and clinical expertise, enabling the teams to develop revolutionary healthcare products and services in Hungary for global markets,” he adds. GE’s development of AI has made strides in Hungary. The healthcare division’s Thoracic Care Suite algorithm was the first in Europe to be used in a university environment in Budapest. The solution can detect eight abnormal chest radiograph findings that also support tuberculosis detection and can help spot pneumonia, indicative of COVID-19. This suite of AI algorithms automatically analyses chest X-ray images for the presence of abnormal radiologic findings and flags these immediately, including some that are not visible to a radiologist. “Our vision for the future of healthcare is precision health; where we use the latest technologies like AI and Additive, with data from across our portfolio to create insights for better, more targeted, more individualized patient care,” Ascsillán explains. “At GE, we believe that AI can be the new ‘superpower’ for medical professionals as healthcare delivery and related administration become more complex. It can lead to more accurate and faster diagnoses and can free up the time of healthcare professionals to deliver better patient care,” the GE vice president concludes.

GE Healthcare has a digital center in Budapest and Szeged (175 km southeast of the capital by road) and a Regional Repair Center in Páty (20 km west of Budapest) employing a staff of 700-plus. More than 400 of those are highskilled software engineers in R&D positions who work in medical imaging, workflow management, and artificial intelligence deployment. GE Healthcare Magyaroszág Kft. generated HUF 40 bln in revenue in 2020, an increase on the previous year. A total of five R&D innovation projects were certified during the last year, which will be continued in 2021 via an R&D investment of HUF 3 bln.

8|2

Business

www.bbj.hu

Budapest Business Journal | July 16 – July 29, 2021

Photo by Daniel Krason / Shutterstock.com

Company ///news

Swiss Post Acquires Majority Stake in Tresorit Swiss Post has acquired a majority stake in Swiss-Hungarian company Tresorit, which offers encrypted, cloud-based file sharing and collaboration services, PortfoLion Capital Partners, an early investor in Tresorit, said yesterday, according to Forbes.hu. The early investors have exited the company, but Tresorit’s founders remain minority owners. The firm was founded in 2011, by István Lám and Szilveszter Szebeni, computer science students at the Budapest University of Technology and Economics, and György Szilágyi, a student at Corvinus University of Budapest who brought economics, business, and product development

knowledge to the startup. Tresorit closed its first investment round in 2012 when Euroventures and nine angel investors put EUR 1.5 million into the company. LogMeIn founder Márton Anka joined investors in 2017, and the company raised EUR 11.5 mln in an investment round in 2018 led by 3TS Capital Partners, joined by PortfoLion and Day One Capital. Tresorit now offers its services to more than 10,000 corporate clients and several hundred thousand private customers. The company has offices in Budapest, Zurich, and Munich. It had revenue of EUR 8.2 mln last year, up from EUR 6.5 mln in 2019.

Ganz Spending EUR 3 mln to Upgrade Production Machinery

and the construction of crop storage silos. Group member Master Good has given an unconditional and irrevocable guarantee to fulfill the liabilities represented by the bonds, the poultry firm said. BaromfiCoop generated sales of EUR 315 million in 2020. The company earlier raised HUF 29.4 bln in proceeds from selling two corporate bonds through the BGS in 2019.

Ganz EEG, the Hungarian engineering unit of Russia’s Rosatom, is spending EUR 3 million to upgrade its production machinery in 2020-2021 and another EUR 8 mln in 2022-2023, managing director Oleg Russkikh said, according to autopro.hu. Ganz EEG, which makes highAutoWallis Plans Issuing performance pumps for nuclear power plants and turbines for hydroelectric plants, HUF 4-6.5 bln in Shares Listed car seller AutoWallis on July 12 said has EUR 130 mln of orders at present, but that amount should reach EUR 200 mln by it plans to publicly issue HUF 4 billion-6.5 bln of shares in the second half of 2021 to yearend, Russkikh said. The firm expects institutional and retail investors to finance to get orders from a nuclear power plant its expansion strategy, in line with earlier that Egypt will start building next year. It plans. CEO Gábor Ormosy said the firm also hopes to win contracts worth EUR is already working on the draft of the 50 mln related to the upgrade of the Paks prospectus, which will require approval by nuclear power plant (110 km south of the National Bank of Hungary. He noted Budapest) being carried out by Rosatom. that AutoWallis carried out a HUF 1.4 bln According to public records, the firm had capital raise in December last year with a loss of close to HUF 1 billion on revenue three institutional investors: the Széchenyi of HUF 2.4 bln in 2019. Russkikh said Funds, Generali Fund Management, and the bottom line showed no improvement Dialog Investment Management. He added in 2020 because of the pandemic, adding that this would be the first opportunity that Rosatom's machinery manufacturing for retail investors to participate in the division, Atomenergomash, had lent company's capital raise. the company EUR 20 mln to finance production in 2018-2020.

Baromfi-Coop Intends HUF 23 bln BGS Green Bond Issuance Poultry company Baromfi-Coop said that it intends to issue HUF 23 billion of green bonds under the Bond Funding for Growth Scheme (BGS) of the National Bank of Hungary (MNB). The proceeds from the issue will be used to finance 13 projects in the main group member companies, with about 75% of the total expenditures funded from the issuance itself. The projects to be undertaken in 2021-2023 include, among others, installing solar cells in 10 livestock farms and a hatchery plant, expansion of the hatchery's capacity, extension and upgrading of a feed mixing plant, and expanding its drying plant,

4iG to Acquire 100% of Telenor Montenegro

Listed IT company 4iG said on July 9 it had signed a non-binding preliminary agreement with PPF Telecom Group to acquire 100% of Telenor Montenegro, the country's leading mobile telecommunications service provider. 4iG said it aims to complete the acquisition by the end of November 2021, after it finishes due diligence and signs a sale and purchase agreement, and the deal is cleared by Montenegrin competition authorities. Telenor Montenegro has 338,000 subscribers. Its network of 150 base stations reaches 98% of the country's population, offering 4G services. The company had revenue of EUR 43 million last year.

Ask for the Budapest Business Journal’s daily English-language premium newsletters

NOW Ask for a ten-day trial! Contact: circulation@bbj.hu

and get the latest news about Hungary, the region and the energy industry direct to your email intray early each work morning

· Tel.: +36/1/398-0344

www.bbj.hu

Budapest Business Journal | July 16 – July 29, 2021

The Impact of Industry 4.0 on Your Business Industry 4.0 is sweeping Central Europe, indeed the world. But how does this affect your business? Les Nemethy and François Lesegretain investigate in their latest corporate finance column. The four industrial revolutions are usually defined as follows: • The First Industrial Revolution used water and steam power to mechanize production; • The Second used electric power to create mass production; • The Third used electronics and information technology to automate production. • Industry 4.0 is defined by Wikipedia as the “ongoing automation of traditional manufacturing and industrial practices, using modern smart technology. Large-scale machine-to-machine communication (M2M) and the internet of things [or IoT, a system of interrelated, internet-connected objects that can collect and transfer data over a wireless network without human intervention] are integrated for increased automation, improved communication and self-monitoring, and production of smart machines that can analyze and diagnose issues without the need for human intervention.” In other words, the entire chain is networked and can communicate, enabling new ways of production while analyzing large amounts of data to solve problems. Industry 4.0 offers Central European companies the potential to remain competitive in light of

The Corporate Finance Column

Readiness for Industry 4.0 in Central Europe in 2019

Source: The Past and Future of Manufacturing in Central and Eastern Europe: Ready for Industry 4.0?

increasingly scarce labor and rapidly rising wages. Whereas in 2010,

only

of companies in CEE countries, taken here to include Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Lithuania, Latvia, Poland, Romania, Slovenia, and Slovakia, reported labor shortages, this had increased to 40% by Q3 2018, according to The Conference Board website. A February 2019 report called “The Past and Future of Manufacturing in Central and Eastern Europe: Ready for Industry 4.0?” ranked Central European countries by their readiness to adopt Industry 4.0, taking into account three main criteria: Technological competencies, entrepreneurship/ innovation, and governance. We would predict that early adopters of Industry 4.0 would enjoy higher valuations, first, because more efficient and productive companies would enjoy higher margins and EBITDA, and second because buyers are generally more prepared to value a business at higher

Business | 9

multiples when a business is competitive. To provide an oversimplified example, let’s assume that pre-Industry 4.0, a company makes an EBITDA of EUR 1 million, and a buyer is prepared to give a seven-times multiple, the enterprise value would be in the range of EUR 7 mln. Now, let’s assume that post Industry 4.0, EBITDA goes to EUR 1.5 mln on similar revenues, and buyers are prepared to pay a ten-times multiple. Enterprise value would be in the range of EUR 15 mln, more than a doubling in value. (Of course, it may take several million euros of equipment costs, design, consultancy, etc., to implement Industry 4.0.). But for those companies early-to-adopt and early-to-exit, the valuation premium can be pretty substantial. Late adopters, however, will see their margins squeezed and valuation fall. For example, due to high labor costs, and labor shortages (possibly even missing out on orders), let’s assume EBITDA falls to EUR 0.6 mln. A buyer might only pay a 5X multiple. In these circumstances, the enterprise value would drop to EUR 3 mln. (Assumptions as to EBITDA and multiples are purely arbitrary, merely to illustrate the point.)

New Normal

In the longer term, however, one would expect businesses with shrinking EBITDA to be driven out of business, and for Industry 4.0 to become the new normal, at which point, Industry 4.0 companies would no longer enjoy a premium, as competitors would have similar levels of technology. We are not aware of any studies comprehensively comparing the value of businesses that have adopted Industry 4.0 compared to those that have not. There is, however, some weaker evidence supporting our hypothesis. A report by William Blair studied a universe of industrial technology companies that in 2015 had gross profit margins in the range

40%,

EBITDA margins in the field of 20%, and enterprise values at 8-12 times EBITDA; by 2019, companies that had introduced Industry 4.0 saw gross profit margins increased to more than 50%, and EBITDA to over 25% on average, with enterprise values augmented to 12-14X EBITDA. In conclusion, we believe that those companies that adopt Industry 4.0 will tend to be the consolidators while the non-adopters will, in many cases, be driven out of business. A company owner who has not yet begun implementation of Industry 4.0 has three choices: Do nothing and risk that the company may see a substantial decline in value or be driven out of business; Sell the company before the effects of industry 4.0 become too pronounced; or Go full speed ahead to implement Industry 4.0. Les Nemethy is CEO of Euro-Phoenix Financial Advisers Ltd. (www.europhoenix.com), a Central European corporate finance firm. He is a former World Banker, author of Business Exit Planning (www.businessexitplanningbook.com) and a past president of the American Chamber of Commerce in Hungary.

Your essential Guide to Investing in Hungary including articles looking at the benefits available, case studies, EU funding, and commercial property investment.

AVAILABLE TO ORDER NOW Order: Business Publishing Services Kft. +36/1 398-0344; circulation@bbj.hu

Business

WHO’S NEWS

www.bbj.hu

Budapest Business Journal | July 16 – July 29, 2021

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

Balázs Karsai

Nagy és Trócsányi Announces Partner Promotions

From July 1 of this year, Balázs Karsai has been a partner at Nagy és Trócsányi. Viktor Jéger will join the independent law firm’s partnership as of January 1, 2022. Karsai primarily deals with energy and competition matters. He gained experience working on cases of historical significance in Hungary, such as the repatriation of the Sevso treasure and the country’s largest-ever energy project. He currently focuses on cartel and state aid cases. He joined Nagy és Trócsányi as a trainee in 2007 and has been admitted to the Budapest Bar since 2014.

Viktor Jéger Jéger joined Nagy és Trócsányi as a trainee in 2013. He focuses on litigation, arbitration, and administrative law matters. Besides working on complex cross-border dispute resolution and competition law cases, he also advises and represents prominent clients in energy, construction, and property law cases.

Fresh CEO at Helm of DUIHK Barbara Zollmann officially took over as the CEO of the German-Hungarian Chamber of Industry and Commerce (DUIHK) On July 1, replacing the retiring

Gabriel A. Brennauer, who had acted as the CEO of the chamber since 2006. “I am very happy to be working in Europe, in beautiful Budapest, after my recent assignments abroad in the USA and Korea, and to be able to use my experience in the global network of German Chambers of Commerce in Europe,” said Zollmann. “With its more than 900 members, the DUIHK has made a significant contribution to the fact that GermanHungarian economic relations are so intensive and dynamic today. As the CEO of DUIHK, I would like to continue this development by strengthening bilateral relations. I would like to support the foreign market activities of our members and other companies with new initiatives, offers, and formats,” she added.

Krisztina Kőmíves

Partner Appointments at PwC Hungary Photo by DUIHK/Pelsőczy

10 | 2

Barbara Zollmann Prior to her new position in Hungary, she was the CEO of the German-Korean Chamber of Commerce and Industry in Seoul and its subsidiary KGCCI DE International Ltd. since 2014. Besides education and energy issues, she has focused on innovation, startups, and CSR. From 2009 to 2013, Zollmann gained cross-country and cross-continental experience at the Association of German Chambers of Industry and Commerce as Head of the AHK Coordination Department for North, Central and South America and Western Europe. Prior to that, from 2001 to 2008, she worked for the Chicago-based German American Chamber of Commerce of the Midwest (AHK USA), reaching the position of deputy CEO for Business Consulting, Human Resources, and Economic Affairs. Before joining the AHK network, Zollmann worked for the Koblenz Chamber of Commerce and Industry and the German Association of Chambers of Commerce and Industry (DIHT) in Bonn. After training as a commercial administrator, Zollmann obtained a degree in economics at the University of Paderborn and gained a master’s in business consulting by distance learning at the University of Wismar.

PwC Hungary has announced the promotion of Krisztina Kőmíves and Szabolcs Mezei to partners. In their new roles, Kőmíves will bolster the firm’s tax advisory practice, while Mezei will be in charge of public sector consulting. Kőmíves left the National Tax and Customs Administration (NAV) to join PwC Hungary’s tax advisory practice in 2006. Her primary role is leading the team that handles bookkeeping, tax filing, and payroll functions outsourced to PwC by Hungarian and foreign clients. She has also advised clients extensively on value-added taxation, tax administration proceedings, tax strategy, and establishing control functions. She has been responsible for Paying Taxes, a joint publication of PwC and the World Bank, for several years. Kőmívesis is also in charge of PwC Hungary’s temporary staffing services. She graduated from Eötvös Loránd University’s Faculty of Law; she is licensed to practice law and is a certified public accountant and tax advisor. She has two children; her hobbies include hiking and playing soccer with PwC Hungary’s women’s soccer team.

Ministry of the Interior as an accounting manager, and during his career as a consultant, spanning over 10 years, he has led projects at several public institutions on organizational development, business and IT consulting. Over the past three years, Mezei has built up PwC’s team specializing in public sector institutions, with a track record of central administration, healthcare, and education projects. He earned his business degree from the University of Pécs. He is also a Certified Management Consultant (CMC) and holds a Public Administration certificate.

Dentons Rehires Banking, Finance Partner Dentons has rehired banking and finance lawyer Gábor Király as a partner in the Budapest office. Király had been a counsel at Dentons from 2015 to 2020, before serving for a short period as director of portfolio management at GB & Partners in Hungary.

Gábor Király

“We are extremely pleased to welcome Gábor back to our team. He is a highly respected lawyer, and his experience as senior legal counsel at the National Bank of Hungary, deputy CEO at CIB Bank, and director of Portfolio Management at GB & Partners gives him unrivaled firsthand knowledge of both the public and private sectors,” said Gergely Horváth, partner and head of Dentons’ banking and finance group in Budapest. Király advises governmental agencies, lenders, borrowers, and sponsors on debt, equity, and distressed debt transactions. He also advises on a wide range of banking, project finance, regulatory, and derivative/treasury matters. He is listed as a leading lawyer by independent legal directories such as The Legal 500 EMEA and IFLR1000. Szabolcs Mezei “Gábor is a strong addition to our capabilities [...] in Hungary and across the region,” said István Réczicza, Szabolcs Mezei joined PwC Hungary managing partner at Dentons. Hungary’s Advisory services practice “He is a very experienced and seasoned in 2018. Before that, he gained lawyer, both as an in-house counsel extensive experience improving and as a legal advisor. Gábor will help the performance of public sector us serve our clients better and grow the institutions: he served at Hungary’s practice across the CEE/SEE region.”

www.bbj.hu

Budapest Business Journal | July 16 – July 29, 2021

Special Report

Photo by StockPhotoAstur / Shutterstock.com

Magyar Multinationals

A Special Report dedicated to that lesserspotted beast, the Magyar Multinational. Who are they, what do they do, and how will the next generation be identified?

Wizz Air Eyes Markets Even Further Afield

12

Building on the Soundest of Foundations

13

Diversification key to Jász-Plasztik’s Success

14

Paving the way for Future Hungarian Multinationals

15

Graphisoft: Budapest-based Company Continues to Innovate

16

12 | 3

Special Report

www.bbj.hu

Budapest Business Journal | July 16 – July 29, 2021

BBJ: As with all airlines, the COVID pandemic was a disaster. Wizz Air won some traffic from the Hungarian government bringing medical goods from China; maybe you got some similar freight work elsewhere. Could you give a summary of how the coronavirus ruined your business? And how many employees did you have to lay off because of the downturn? András Radó: Wizz Air wasn’t immune to the crisis, and on the worst day of the pandemic, the airline only operated 3% of its entire capacity. However, due to the airline’s agility, ultra-low-cost structure, and forward-thinking, it operated at over 80% of its capacity during the summer peak of 2020. Wizz Air expects to operate a similar or higher capacity of its flights this summer than last year. Wizz had to lay off 19% of our employees in 2020 but started a strong recruitment campaign in 2021 to make sure it can offer as many flights to its customers as possible.

András Radó Courses might last as long as six weeks, so the airline needed to be mindful to make sure that, by the time there is significant demand, Wizz Air is ready to meet it and fly passengers to their destinations. There is also a strict maintenance protocol for parked aircraft. The airline worked closely with Airbus and our maintenance partners to make sure that our aircraft were always parked properly and kept under safe and controlled environments. Knowing that the situation would require extra care and attention, we began taking our aircraft out of parking before we really needed them commercially to start the processes early. Further, Wizz Air has decided to not only perform all Airbus recommendations but has also implemented extra measures during and after parking to keep our fleet in healthy condition.

BBJ: I’m sure there are a lot of preplanning issues involved in the restart. I can imagine, for example, that if pilots and cabin crew don’t work an airplane type for, say, six months, they have to do refresher courses. And I’m sure you can’t just park a plane, leave BBJ: Looking at your press releases, it outside for 12 months, then restart it you seem very optimistic in terms one morning and fly off on a 5,000 km of restarting. Could you outline your tour of duty. Could you outline some “best realistic scenarios” for traffic of the “hidden” issues (and costs) of developments over the next preparing for the restart? 12 months? Could you say, for AR: The aviation industry is one of the example, how many employees you most regulated industries [globally], currently have and how many you where safety is the top priority. The expect to have this time next year? safety of the passengers, crews, and How many planes today, and what aircraft. Pilots and cabin crews had you expect in 12 months? to participate in recurrent training AR: Wizz Air is optimistic and confident courses, and those who did not fly for a that it will be the structural winner of long period of time had to take part in this pandemic. Besides managing the training courses, which are mandatory current situation, the airline is preparing by law, and there is no exception to them. for the post-COVID world. The airline Wizz Air has a state-of-the-art currently has over 4,000 employees training center in Budapest, where and a 15% larger fleet (141 aircraft) than all crews are trained and examined. at the beginning of the pandemic.

We continue to take aircraft deliveries from the Airbus factory and grow our fleet to be able to offer more travel options. Although it highly depends on the restrictions imposed by the different states, we hope that we’ll be able to operate 100% of our capacity next summer. This also will mean that we’ll have significantly more colleagues since 100% of our 2022 capacity will be higher than our current one. BBJ; Your answer begs the question, how many is “significantly more” colleagues, and how much higher capacity are you planning in 2022 versus 2021? AR: Wizz Air plans to take delivery of more than 20 aircraft by the summer of 2022, which also means that we should have approximately 600 more crew members than today. BBJ: You have jumped on some of the opportunities that have opened up in the past 18 months, despite COVID. For example, you now fly from Abu Dhabi to a variety of destinations, including even Israel. Such routes are (or were) outside the “classical” Wizz Air routes, which focused on flying from Central Europe to western Europe. Is the next stage to be Pakistan, India, and Sri Lanka? Or the former Soviet Republics? And if so, what routes? AR: The airline will need to allocate its capacity growth (as it has in the past 17 years) and, therefore, Wizz Air remains open to starting brand new routes. From Abu Dhabi, the airline can reach five billion people within an eighthour radius, so there are a number of

opportunities to grow the network. With the arrival of the A321neo XLR aircraft, there will be further opportunities to connect the furthest dots in the current network and/or add new stations and new routes to Wizz’s network. We’ll announce any plans in due course. BBJ: The A321neo XLR has a range of 4,700 nautical miles (8,700 km), according to the Airbus website. How many of these airplanes does Wizz have on order, and for when? AR: Twenty planes as per our current order book and deliveries will start in 2023. BBJ: The United Kingdom was a very important market for Wizz. As I remember, London was the single most important destination for the airline. With Brexit, do you expect to see less passenger demand from Hungary, Poland, and Romania, if guest-worker numbers are dropping? AR: Wizz Air does not expect less demand for its U.K. routes; on the contrary, Wizz Air U.K. has established three new bases in the United Kingdom over the past 18 months (London Gatwick, Doncaster Sheffield, and Cardiff). The airline remains dedicated to the U.K. and to developing its offer from the country. BBJ: Do you expect London to remain your number one traffic generator post-COVID, at least in the next two to three years? AR: The U.K. will remain a stronghold for Wizz Air, but there are other big and important markets in the Wizz Air network, such as Italy. Abu Dhabi also has huge growth potential.

www.bbj.hu

Budapest Business Journal | July 16 – July 29, 2021

PRESENTED CONTENT

Building on the Soundest of Foundations

Indeed, the group is growing organically. The decision was taken to create a dedicated architectural visualization division this April, adding a sixth business line to DVM’s mix. Massányi says the quality of renders and movies the archviz team was already doing as part of the design line of business made this the next logical step, albeit an expensive one. “We will be investing HUF 900 mln in offices, hardware, and software this year,” he says. Likely markets will include Western Europe (where DVM will offer a cost-saving on London prices), Asia, and the Gulf region.

“We were, and still are, very much focussed on the clients’ needs. We believe that, if you are to serve them at a premium level, you have to understand the organization, even the internal tensions between individual departments.”

ROBIN MARSHALL

700 projects

financially, we are more than OK. There is neither the need nor the desire to sell or take on outside partners.”

Organic Growth

Integrated building services company DVM group is inextricably linked with its late founder, Attila Kovács, whose sudden death this February stunned the market. But he and his co-owners built the business to survive him, and managing partner Tibor Massányi says this year will see its highest turnover to date.

“That was already known at the time Atilla passed away. Since then, the figures have got even better, with new contracts signed,” Massányi tells the Budapest Business Journal in an exclusive interview. “Last year, we had a turnover of HUF 28 billion; this is a big business. Given our size and the nature of what we do, we can always see our turnover for the next two or three years ahead.” According to its website, the DVM group has designed and built 750,000 sqm in more than

Special Report | 13

Tibor Massányi such as retail and, especially, industrial, which he describes as an “exciting area.” “The company is diverse, has a lot of energy, but 90-95% of our turnover comes from office,” he says. Does he think that might change?

Industrial Booming

Development, Massányi says, although he was still involved in the bigger picture stuff and helped create the strategic plan that will see DVM through the next couple of years. “Of course, strategy always needs to be amended to the circumstances of the time, but the basis is there.” Kovács’ share in DVM has passed to his daughter, meaning the firm remains in

The managing partner says industrial is booming, with the pandemic accelerating since its foundation in 1995. a trend that goes back at least five years. For the first couple of years, the then He also points to the hotel sector, where private embryonic company focussed exclusively DVM is renovating and redeveloping the Hungarian ownership. Has there ever on design work, especially office interiors. Drechsler Palace, the one-time home of the been an intention to involve a foreign The company was not unique in the Hungarian State Ballet Institute, which will investor or take the company public? Budapest market, but Massányi says the become the five-star W Hotel Budapest. “It’s a very interesting question. In work ethic Kovács instilled, which was “The Drechsler Palace is one of the the last five to eight years, there have much closer to what Western multinationals biggest GC [general contractor] contracts been talks with big international were used to and expected, was. for us ever,” he explains. But with the “We were, and still are, very much question marks around offices being about players. I remember at least three times when we had serious discussions focussed on the clients’ needs. We how they are used, rather than the need in London or Berlin.” believe that, if you are to serve them at a for them per se, it is not a sector about to In the end, the four owners, none premium level, you have to understand wither on the vine. “Our core business will the organization, even the internal always be 75-80% office-based,” he insists. of whom had ever worked for a multinational, decided they would rather tensions between individual departments.” Massányi and his fellow managing 1995 was pretty much the birth of the partners Balázs Czár, who joined the firm control their own destiny. Like any prudent businessman, Massányi would modern office market in Hungary. DVM’s in 2000, and Péter Haberl, who followed “never say never,” but he doesn’t think attention to detail saw it win more clients in 2004, had known about Kovács’ that is likely to change. and become increasingly well known health issues for a couple of years. Even “Attila once set a price at which he among multinational circles, who began so, Massányi describes hearing of the thought we would have to consider to ask if the group could also handle death from the family as “a punch to the an offer, but I do not think that is project management. Fit-out requests stomach. He was my mentor and also a realistically achievable in today’s soon followed that. very good friend for 15 years.” Massányi says DVM is building its Much of Kovács’ day-to-day focus had market. We have plenty of work for the next two to three years; knowledge base and reputation in sectors moved to his other business, Horizon

100%

DVM is a member of the international fit-out organization alliance Studio Alliance and already has some potential archviz projects bubbling away through that. The vast majority of last year’s HUF 28 bln turnover came from construction and fit-out. Elsewhere, the design department was responsible for

about

HUF 2 bln.

“In terms of the big architectural firms in Hungary, we would be in the top five,” Massányi estimates. Project management brought in another HUF 1 bln. Expectations for archviz are “realistic” but low for the first years. “All departments and directors have a very strong rule [to follow] that 50% of turnover must be from third parties, and 50% internal. This gives them a connection to the market they must serve, rather than being dependant on us.” Sustainability consultancy also makes a relatively modest contribution to the overall business, but this is a service line that is growing in significance. Hungarian and EU legislative requirements partly drive that, but it is also increasingly important for tenants. Another new service, though for now part of the design division, rather than a standalone business area, is Discovery, DVM’s workplace consultancy service. In part inspired by the conversations the pandemic has launched over the role of the office, Discovery investigates what kind of layout and provision will best suit each client and how to deliver it sustainably. “I believe this is going to be a separate service line, and that could happen next year. In mature markets like Britain, most design companies that deliver premium services have something like this.”

14 | 3

Special Report

www.bbj.hu

Budapest Business Journal | July 16 – July 29, 2021

Diversification key to Jász-Plasztik’s Success Combining the agility of a familyrun company with the leverage of a large corporation, Jász-Plasztik Kft. is present in many markets and industries, which is one key to its success. ZSÓFIA VÉGH

Family-owned businesses are a special breed in Hungary. Most started in the last days of socialism in the late 1980s and took off after the change of the regime when markets opened. Despite being run by families, they are among the top earners in the domestic market, with several having solid foreign traction. Jász-Plasztik Kft. is one of these. Established three and a half decades ago, the small cooperative has grown into one of the wealthiest firms in the country and has been in the

top

list of Hungarian businesses for many years. Lajos Kasza, founder and owner of Jász-Plasztik Kft., was ninth on Forbes’ list of the 50 richest Hungarians last year, with an estimated wealth of HUF 116.9 billion. The list of activities the group deals with is rather long: from electrical equipment and battery manufacturing to plastic processing, recycling, and customs clearance. It is also a motor vehicle supplier and new parts merchant wholesaler. Still run by the family, Jász Plasztik started from a “stable.” Kasza worked at the industrial branch of the local producers’ cooperative at Jászberény until 1986, when he left and founded a small cooperative with his cousin. Already dealing with a number of activities, they produced trailers, carried freight, renovated houses, and undertook several tasks involved in plastic production.

Self-designed

“We didn’t have the money to buy a new injection molder, so we designed one,” he said in an interview. They supplied units for a furniture factory at Zalaegerszeg (225 km southwest of Budapest by road) and had orders from a glass factory at Salgótarján (111 km northeast).

Close up of plastic granules used for molding. Photo by DJ Srki / Shutterstock.com They also started to manufacture plastic parts for motorbikes. Pooling all the resources from all these efforts, by 1990, they had the finances to purchase the premises of the agricultural producers’ cooperatives at Necső (90 km east of the capital), where Jász Plasztik Kft. operated. Following this build-up process, the company took off in the mid-’90s with the arrival of multinational firms. Among the company’s clients were Samsung, Electrolux, and Sony. In 1996, the company bought the battery factory at Sülysáp (46 km east of Budapest) and started manufacturing entire batteries. It was producing other items too, for example, the materials needed for the packaging of TVs and refrigerators (EPS production). Gradually, the firm expanded into other business lines, such as building insulation. Indeed, the production of thermal insulation and plaster has become a significant business among the activities of Jász-Plasztik. The continued expansion of large multinational companies (MNCs) brought some challenges for the firm. MNCs move fast, looking for the most cost-effective solutions, and the company had to keep up with them. At the request of its customers, it established a plant in Galanta, Slovakia in 2001, and, back in Hungary, in Nyíregyháza (237 km to the east) in 2006, through a partnership with Electrolux. It also expanded into Romania. In addition to producing and processing plastic and other tools, a subsidiary founded in 1996 sells and

services cars. Initially, it dealt with the Mercedes and KIA brands; later, it added Suzuki and Mazda to the repertoire.

Standing on Many Legs

Selling different category autos paid off as with the global financial crisis, demand for lower-priced makes dropped, but sales of higher category ones increased. The plastics business also began to manufacture automotive components. It has always been a critical aspect of the company’s strategy to stand on its own two feet to avoid indebtedness.

“What takes a multinational a year, we decide on in three days. It is like driving. We must look further ahead than what is right in front of us. We plan 3-5 years ahead; still, if we have to change direction, we are quick to react.” The majority of the profits generated are plowed back into the business. It was no different last year either. The pandemic did not seem to shake the company, which ended 2020 with a HUF 14.2 billion profit, of which some HUF 1 billion was free for dividend, while the majority was reinvested, Forbes.com writes.

The main idea behind all these moves is diversification, avoiding dependence on one industry or activity. The company has also been careful not to have too much exposure to MNCs. Besides all of the above, what makes Jász-Plasztik efficient is the way it operates. The family and the management can make a decision relatively quickly compared to similar size multinationals where the “chain of command” is usually more rigid and can be more distant. “What takes a multinational a year, we decide on in three days,” Kasza said in an interview with the Budapest Stock Exchange last year. To be able to do that, it needs reserves, he adds. “It is like driving. We must look further ahead than what is right in front of us. We plan 3-5 years ahead; still, if we have to change direction, we are quick to react.” Since workforce and energy will likely be tight (and possibly not as cost-effective), the company has started introducing automation and robotization into the manufacturing process, like many of its peers. It has also become greener; it has installed and now covers part of its energy needs through solar panels. The next generation of the family has been introduced successfully into the business, with the “youngsters” managing separate factories and production centers. Looking to the future, they will also have a big say in the future of Jász-Plasztik. “It is up to them, whether or not the company is going public,” Kasza says.

www.bbj.hu

Budapest Business Journal | July 16 – July 29, 2021

Special Report | 15

Paving the way for Future Hungarian Multinationals initiatives to lift the added value of the SME sector, such as the ZalaZONE automotive industry test track in Zalaegerszeg (some 230 km northeast to Budapest) and the M76 test track-type expressway. The military industry is also a similarly emerging, high-volume sector with a stable added value.” When it comes to potential export target markets, Szabó emphasized that Hungarian SMEs usually target bordering countries and the Balkan region. According to HEPA, further dynamic growth opportunities are hidden in the territories of the former CIS countries, and there is still untapped potential in the Gulf countries, with their significant need for high value-added products. However, it should be reiterated that these targets require specialized market insights and in-depth knowledge, Szabó says.

Some 99% of the registered businesses in Hungary are smalland medium-sized. These companies are considered one of the main drivers of the domestic market, acting as suppliers to giant multinationals. What are the biggest challenges for Hungarian SMEs who want to become the next Magyar Multis? Hungarian Export Promotion Agency (HEPA) CEO Kristóf Szabó shares his view with the Budapest Business Journal. ÉVA KASZAP

Swedish researchers from Uppsala University had developed a sequential model to describe the steps followed by a small domestic company wanting to enter an international market. Companies typically start their expansion in a knowledge,” HEPA CEO Kristóf Szabó geographically nearby market. After tells the Budapest Business Journal. gaining experience, they expand to more “Due to this, they often encounter distant territories. Entry to a new market unexpected obstacles and hidden cost is usually through exports, followed by factors in their export process. They establishing a foreign sales subsidiary or are deterred from further attempts by foreign production. their failure, although many successful According to recent international businessmen have already pointed studies, two significant trends shape out that failure is only a step towards this model: the growing importance success,” Szabó notes. of networking technologies and the Active Contact increasing cultural tolerance for foreign “HEPA can provide SMEs with an array business practices, even in countries far of services that can successfully prevent away from the global mainstream. In Hungary, some 99% of the registered initial export barriers, such as insights to local rules and legal frameworks, advice on enterprises SMEs, according to a study appropriate sales channels, as well as active by the Central Statistical Office of contact with local customers,” he explains. Hungary (KSH). These firms employed “Hungary’s export performance has nearly two-thirds of those working in the exceeded EUR 100 billion since 2016, private business sector, contributing ranking Hungary as the 35th largest exporter in the world. In Hungary, the declaration of export sales is voluntary, of added value, 42% of net revenues, making it is difficult to draw related and 34% of investments of the total statistics,” he says. performance of firms operating in the “According to estimates based on customs country in 2018, according to KSH. statements, the role of the SME sector in Yet even in this stage of globalization, total Hungarian exports can be somewhere between Hungarian SMEs are regarded as mainly effective in their domestic market, acting merely as suppliers to multinationals. The government aims to increase this “In many cases, Hungarian SMEs lack rate by boosting the competitiveness specific export ideas and strategy; thus, and productivity of the Hungarian they do not have sufficient in-depth

43%

18-25%.

Kristóf Szabó SME sector with various measures and initiatives,” Szabó adds. He says three sectors are clearly identifiable among exporting SMEs: agriculture, health, and the environmental and water industries. “When it comes to traditional products and services, there is a fundamental correlation between the size of the firm and the geographical distances it is willing to bridge. The larger a business, the more it is willing to sacrifice to enter distant markets, as with larger sales volumes it can cut its export unit costs more effectively,” Szabó explains to the BBJ. Companies trading in niche markets with high demand are typically from the ICT sector and less likely to turn to HEPA for help. According to Szabó, there are various types of value chains for future Hungarian multinationals. “Value chains in food trade are more open than those in the automotive and IT industries. Networking starts at international trade fairs,” he explains.

Investment Needs

“Hungarian companies must comply with strict international production and supply standards and regulations, which can lead to increased investment needs. In recent years, the Hungarian government has launched various

“In many cases, Hungarian SMEs lack specific export ideas and strategy; thus, they do not have sufficient in-depth knowledge. Due to this, they often encounter unexpected obstacles and hidden cost factors in their export process. They are deterred from further attempts by their failure, although many successful businessmen have already pointed out that failure is only a step towards success.” “The pandemic opened new financial opportunities for Hungary. The government rolled out a subsidy program where SMEs can apply for co-financed aid to enter foreign markets and establish networks abroad. Hungarian authorities expect most of the profit to return to the country,” Szabó added. As part of the new SME Strategy of the government, the so-called “Magyar Multi Program” for future Hungarian multinationals is also targeting domestic SMEs developing the potential to grow to the next level and become a regional multinational, according to the website of the government, kormany.hu. Some HUF 14.4 bln has been allocated to 59 Hungarian SMEs in the first two phases of the program. The budget of the next round will come to HUF 100 bln, businesses invited to apply for aid ranging from HUF 30 million to HUF 2.5 bln. Under certain conditions, the support will become non-refundable, kormany.hu says.

16 | 3

Special Report

www.bbj.hu

Budapest Business Journal | July 16 – July 29, 2021

Graphisoft: Budapest-based Company Continues to Innovate

that we can make better visualizations of designs, better collaborations among teams, and better documentation and communication of the results of that design process. Last week we also announced a new program, called Graphisoft Forward, a service relationship with our customers. Architects, customers, and users of our software subscribe to Graphisoft Forward, and in that, they get upgrades, technical support, access to learning, content libraries and addons, and all sorts of other benefits. This is a global program that will help our customers get the most from our software, which is good for them and good for our business.

Graphisoft has long been an internationally recognized architectural software company and continues to follow its road to success. The Budapest Business Journal speaks with CEO Huw Roberts about the firm’s past, present, and future plans.

“We are a company founded in innovation, and we continue to deliver innovation that keeps us a step ahead of the competition, and that’s what’s driving our business to grow.” However, our true goal and mantra are that ArchiCad just keeps getting better. Our goal is to keep adding more value and more capabilities into the software so it is more useful to people and they buy more of it. We are a company founded in innovation, and we continue to deliver innovation that keeps us a step ahead of the competition, and that’s what’s driving our business to grow.

GERGELY SEBESTYÉN

BBJ: Graphisoft has a long history in Hungary and internationally as well. How do you position yourself on the market? What is your market share, and who are your competitors? Huw Roberts: Graphisoft, founded in 1982, is a genuine Hungarian multinational company, and we are really proud of that fact. We are based here in Budapest, and we are now a global company. We are present in more than 110 markets; we have offices all over the world, we have a global network of sales number two in pretty much every other and business partners worldwide. Our market, including major markets, like the software is also available in 21 different USA, Australia, Canada, South Africa, language localized versions. and many others, like the rest of the In terms of market share, we are European countries. obviously a very dominant leader here We benefit from that global market in Hungary, but we are also leading in presence and from being in that many markets internationally. Besides leadership position because we Hungary, we are number one in Germany, can take lessons and best practices Austria, Czech Republic, Finland, Japan, from different countries and share New Zealand, Norway, Portugal, Poland, them with other parts of the world Romania, and Switzerland. We are to help us grow everywhere.

Graphisoft’s HQ is in the eponymously named Graphisoft Park in Budapest, replete with a statue of another innovator, Steve Jobs.

Huw Roberts In terms of actual numbers of the percentage of the market share, that’s a very tough thing to measure, and it varies from country to country; I think that being in that strong number one or number two position is a better way to think about it. BBJ: What are your immediate and future goals for your market segment? HR: We are very excited that we have released the latest versions of our products. Our flagship is ArchiCad, a building information modeling tool for architects to design buildings of all sizes, types, and scales. It’s also an intelligent 3D model of the building, which helps teams work together on a shared model. Version 25 is the latest model, and this is kind of like a milestone number. We are using this as an opportunity to celebrate the great history we have, our strong position in the world, the great buildings worldwide that have been developed using our software, and the bright future that we have ahead of us. Concerning our future plans, it’s exciting to see that it continues building on responding to the feedback of architects and engineers around the world. We can focus on making sure

BBJ: Could you advise small Hungarian companies on how to be successful today in international markets? HR: Yes, the first piece of advice is kind of simple. Know what your mission is, know what you are trying to achieve and what value it has. And it’s not about how much money you want to make or how many employees you wish to have. It’s about what your purpose is and what you are trying to help someone else to do. It’s also important to listen to your customers, understand their needs and challenges, get their feedback on your ideas, and bounce your ideas off them before you do all the work to make something. Just immerse yourself in what they are looking for. Sometimes that is easy, and it’s universal or global, where everybody wants the same thing. But, more often than not, it’s different in different countries. Maybe because of the culture, the language, and the local conditions, standards, equipment, and government regulations. So you have to understand the customer where they are and in their context to succeed. Often that can be done with partnerships, so it might be appropriate to look for and develop a trusted partner in other markets as a path to grow. I think that advice is good for anybody.

www.bbj.hu

Budapest Business Journal | July 16 – July 29, 2021

Socialite

book for a long time. Now that ‘Trust’ is published, it’s time for me to continue working on my translation of her work.”

Impactful Festival

Lasting Impact of 2004 Budapest Converging Lines Poetry Festival The 2004 Converging Lines poetry festival, organized by the then highly popular Budapest English-language literary cabaret The Bardroom and the British Council, has had a remarkably long-lasting influence and continues to birth new connections. DAVID HOLZER

Lasting for several days, Converging Lines offered workshops and readings by Hungarian poets, English-speaking poets living in Hungary, and visiting poets from Britain. The name Converging Lines was also used for a similar event when Hungarian poets visited the United Kingdom. A book of translations by Hungarian and British poets of each other’s work was produced that formed the core of the longer 2010 book “New Order: Hungarian Poets of the Post 1989 Generation” from Arc Publications. This was described as “The first major gathering of the younger poets of Hungary, witnesses to the poetics of a new post-1989 Europe.” Among these poets was Anna T. Szabó. In April 2021, Arc published a selection of her work poetry called “Trust,” translated by noted British poet Clare Pollard. As David Hill, one of the driving forces behind the original Converging Lines (and a former editor of the Budapest Business Journal) told me, “‘Trust’ is a very rare thing: a collection of poems in English by a successful Hungarian poet. [….] In her preface to the book, Pollard acknowledges that her relationship with Szabó and, indeed, her entire involvement in literary translation dates back to their meeting through Converging Lines.” I spoke to Anna T. Szabó and Clare Pollard about Converging Lines, their relationship, and its latest manifestation, “Trust.”

Romanian Roots

Szabó was born in Transylvania, but her native language is Hungarian. She left Romania with her family in 1987. Ever

Clare Pollard. Photo By Justine Stoddart since attending university in Budapest, she has lived in and around the capital with her husband, the writer György Dragomán, and their two sons. Szabó has written more than 20 books and translated almost 100. Asked to describe the significance of Converging Lines, Szabó replies, “In retrospect, it’s even more evident that this event, held only a few days after Hungary was accepted into the European Union, was a truly ecstatic moment of freedom. The Hungarian and British poets spent intense times together and established long-standing and organic, mutually influential relationships. Now that the U.K. has left the EU and the world becomes more and more fragmented and introverted, most of my strength and will to go on stems from these memories and indestructible friendships.” Szabó describes “Trust” as “made up from selections from seven of my previously published volumes. Most of

the poems were chosen by Clare Pollard, selected and ordered to reflect on one or other of my recurring interests: feminine existence, especially bodily experiences, and most of all being a mother,” she explains. “As bodies, both male and female, are becoming a political battleground and trust is being replaced with blind faith or pure hate, distorting human faces into masks, I felt that there was a need to speak about trust again, how it is born between people, how it starts with the parentinfant bond and, if present, lasts until the moment of death. It is a simple yet indispensable part of our being. Without it, we are fearful and uncertain,” she adds. The relationship between Szabó and Pollard is also, of course, a fine example of trust. “I’ve loved and trusted Clare for almost 20 years,” Szabó told me. “I think her work and translations are great. She’s been planning and working on this

Pollard is just as convinced as Szabó about the importance of that 2004 festival. “I think Converging Lines was one of the most enjoyable weeks of my life,” Pollard tells me. “Travel, delicious food, late nights listening to poetry and talking about literature, drinking, and dancing. So many talented, interesting people and friendships made,” she recalls. “Going to Lake Balaton, to the translators’ house, was particularly important for me. I attempted my first ever translation, and I now edit ‘Modern Poetry in Translation,’ so it really did change the course of my life. And I was paired with Anna Szabó, who has become a dear friend and artistic collaborator.” In terms of the relationship between British and Hungarian poetry, Pollard believes, “It allowed a whole new generation in the U.K. to engage with Hungarian poetry. Apart from the ‘New Order’ anthology edited by George Szirtes, it led to ‘In a Winter City,’ the recent Hungarian issue of ‘Modern Poetry in Translation’ I edited, and even to young U.K. poets like Andrew Fentham translating Hungarian poetry. And, of course, Anna T. Szabó finally has the selection she deserves in the U.K.” For Pollard, translating Szabó’s work has been a cautious process since the two began working together on the Converging Lines tour. “She would give me a rough ‘literal’ translation of her poems (her English is very good),” Pollard explains. “I would then ask her lots of questions and set to work with a Hungarian dictionary, making sure I understood the nuance before trying to make it work as a poem in English. Her work is very musical, so I’m often trying to get that back in – rhythm or rhyme. Rather shamefully, I don’t speak Hungarian, but I would say it’s much harder to rhyme in English, so carrying her rhyme schemes over can be a real challenge.” Reading “Trust,” what struck me immediately was how well the viscerally female nature of the poems has been captured in translation. The language is evocative but never obscure, and the rhythms feel natural and unforced. I’m sure Szabó and Pollard are satisfied with this manifestation of the trust they clearly have in each other.

“Trust” and “New Order” are available from Arc Publications at arcpublications.co.uk. Photo by György Dragomán

18 | 4

Socialite

www.bbj.hu

Budapest Business Journal | July 16 – July 29, 2021

Decanter Dishes out top Awards to Hungarian Wines The sight of Eger’s Nagy-Eged hegy, a hill of pure limestone that rises majestically out of rolling landscape otherwise based on volcanic rhyolite bedrock, is made all the more remarkable by a statue of the Virgin Mary that stands on the middle of the hill. This is the birthplace of Hungary’s latest award-winning wine. ROBERT SMYTH

The St. Andrea Winery’s Nagy-Eged dűlő Egri Bikavér Grand Superior 2017 claimed a Best in Show award at the 2021 edition of the Decanter World Wine Awards (DWWA), scoring 97 points. It is one of 50 wines (or 0.28%) from the 18,094 samples tasted from 56 countries to receive a much-coveted Best in Show medal in one of the most prestigious international wine competitions. In all, wines from 17 countries made this year’s “Best in Show” list, with France dominating, taking 15 of the top 50 spots. St. Andrea’s 2017 Grand Superior Bikavér is a blend of Kékfrankos, Merlot, and Cabernet Franc, with some Cabernet Sauvignon and a touch of Blauburger; the latter helps give the wine a delightful aromatic lift. Tasted on a recent trip to St. Andrea, this vintage blew me away with its amazing structure and elegance, offering eucalyptus, earth, black pepper, graphite, and sour cherry notes, leading to a very long and balanced finish, despite its 15% alcohol. It was destemmed and fermented in stainless steel, then aged for 18 months in oak barrels. For the record, I put it at 95 points in my tasting notes, which were compiled from wines not tasted blind, though I rarely hit 90 points for Hungarian reds. This wine is a relative bargain at HUF 9,800 from the winery or Bortársaság.

being served up on Dobó István tér, in Eger from July 21-27. It is yet to be determined if this cool logo will make it onto Eger’s bottles, which have taken on a unique shape for the high-end wines.

Platinum Award

According to Eger’s classification system, Grand Superior denotes that the wine is from a single-vineyard; it can also be a single varietal wine, not just a blend.

Hard to Work

St. Andrea will soon release yet another Bikavér from Nagy-Eged hegy, called Agapé, which comes from grapes higher up the hill, towards the peak. This part of the hill is particularly hard to work, with virtually no topsoil, a lack of water retention, and very exposed to the sun’s rays. The resulting wine from the 2017 vintage is also a Grand Superior made from Kékfrankos, Kadarka, Pinot Noir, and Syrah. This is a huge wine with intense and extraordinary

Géza Ipacs aromas and flavors of red berries, blackcurrant, vanilla, rosemary, earth, dark chocolate, and tobacco. The oak and alcohol (a high 15%) are beautifully integrated and add to the wine’s

fabulous structure. This one will cost around HUF 25,000 from the winery. Another single-vineyard St. Andrea Bikavér, Hangács dűlő Egri Bikavér Grand Superior 2017, comes from a 17-hectare vineyard in the village of Demjén, where there is a thin layer of clay topsoil under which lurks volcanic rhyolite tuff. This has long been one of my favorites due to its earthy, spicy, and fruity character. It scored 93 in the DWWA 2021. Incidentally, the Eger region has just received an image makeover with the ultra-creative graphic designer Géza Ipacs, who’s behind so many labels from Eger and, indeed, across the country, designing a new logo. Unsurprisingly, given the region’s connection to Bikavér, or Bull’s Blood, the logo is based on a bull. Drawing inspiration from mythology, the animal has been given a pair of contemporarylooking, sleek wings. Ipacs told the Budapest Business Journal that the logo incorporates the ideas of elevation and lifting off to a higher plain or place and the concept that the wine is light and elegant, rather than heavy like a bull. He also said that a good logo should look nice on a T-shirt, and I have to say that I’d have been more than happy if they’d been handing out Eger T-shirts at the launch event. The winged bull will be used on communication materials and to promote wine festivals, with the next such, Vino Kóstoló Ünnep – a blend of wine, gastronomy, and culture,

Pulling in a Platinum award with a whopping 98 points at DWWA 2021, and one of only 14 wines in the entire competition to be awarded such a high score, was Patricius’ Aszú 6 Puttonyos 2017 from the Tokaj region. Estate manager Péter Molnár told the BBJ that the 2017, 2016 and 2015 vintages were great for making Aszú. This is a dynamic style of modernminded Aszú, with a focus on freshness and fruitiness. It seduces you as soon as you look at it with its bright yellow meets pale gold color, then continues on the palate with ripe apricots, fresh apricot jam, tea, white flowers, and succulent botrytis. It is soft, round, creamy, and smooth, with lively acidity bringing a very long finish that is never cloying.

“I’m even happier with a gold for a dry wine than with the Platinum we earlier got for an Aszú.” In all, Hungary won four platinum awards, all for botrytized wines from Tokaj. The others were from Juliet Viktor, with a six puttonyos Aszú 2017 and Grand Tokaj, for a five puttonyos Aszù 2014 and an Eszencia 2013; all three scored 97 points. A score of 96 points led to a gold medal for Dobogó Pinceszét’s Furmint 2017. “I’m even happier with a gold for a dry wine than with the Platinum we earlier got for an Aszú,” Dobogó winemaker Attila Domokos told the BBJ. This wine is delightfully fresh, oozing Williams Pear notes with linear, crispy acidity, and is outstanding value at HUF 3,900 a bottle from the cellar. It’s in youthful shape now, despite its four years of age, and is still as fresh as a daisy and will keep getting better, picking up complexity. The grapes for this wine weren’t crushed, just destemmed, then pressed at low pressure, with clarification carried out in stainless steel tanks, before fermenting and aging in 300-liter oak barrels, 10% of which were new, and 90% used (second-, third- and fourth-fill barrels). No insecticides or herbicides were used in its making.

www.bbj.hu

Budapest Business Journal | July 16 – July 29, 2021

Socialite | 19

Sandy Urban Beach Opens in Budapest at BudaPart The SHO Beach BudaPart, which the developer Property Market claims is Budapest’s only natural urban beach, opened on July 3 in the capital’s mixedused BudaPart neighborhood. BBJ STAFF

The beach, located in Lágymányosi Bay, boasts high water quality. Besides swimming, it will offer other sporting facilities, culinary experiences, and various entertainment activities throughout the summer. Property Market says it decided in the planning phase of the overall BudaPart project to develop the shore of Lágymányosi Bay as a sandy beach.

“Given the location, the services already available, and the unique, natural vibes of the neighborhood, we couldn’t have asked for a better place,” said Gábor Koltai, the operator of SHO Beach BudaPart. “We are delighted that we can add another exciting leisure option to BudaPart and create this truly 21st century, modern beach in this complex mini-city,” he added. Facilities at the sandy waterfront offer everything from morning coffee to midday meals and evening cocktails. The SHO Chill & Grill beach bar serves the usual beach food, while the MÁK pop-up SHO Beach brings the cuisine of Hungary’s

best restaurants to the forefront under the direction of chef János Mizsei, giving visitors a taste of fine dining. Bathers can enjoy the comfort of the guest bathrooms next to the bistro, complete with toilets and changing rooms. The catering units have been built on special modern floating platforms to cope with rising water levels. The new beach will host a range of activities during the summer season, including cultural and gastronomic events such as wine and palinka tasting and sports events.There will also be plenty of activities beyond the beach in the BudaPart neighborhood.

Dürer Kert, the iconic event venue, has moved to a new location next to the Danube. Since mid-June, it has welcomed guests who wish to enjoy music, barbecue, or films in its Dürer-style garden. At BudaPart’s public park, Kopaszi Dam, the developer says most services are back to full capacity after the lifting of pandemic restrictions. There were three venues to watch the recent European Championship matches, and several quality shops, cafés, and supermarkets have opened at the bottom of the buildings. The first foundations for the BudaPart project were laid by Property Market four years ago. Hundreds of people already live and work in the neighborhood, and the range of services and leisure opportunities is expanding, the developer says. “For those who did not believe in it, I think it’s becoming more obvious what a unique and colorful neighborhood we are creating,” said Mihály Schrancz, managing director of Property Market. “It is not only beneficial for the tenants and workers of BudaPart, but also people living in the neighborhood and, indeed, in the [whole] capital. Whether it is cultural events, culinary adventures, the beach, or musical experiences, BudaPart has everything you need to recharge and enjoy complete freedom, almost in the heart of bustling Budapest,” he said.

17-21 AUGUS T

2021 WITH

SUPERCONCERT

STARS

JÁNOS JAMES KARÁCSONY JÁNOS SOLTI GÁBOR „BIGA” HEINCZ MÓNIKA NIKA VERES MARIANN FALUSI | MISI MEZŐ IVÁN VITÁRIS | ROY ABRAKAZABRA

17. 08.

HISTÓRIA GARDEN

ZENEVONAT

18. 08.

HISTÓRIA GARDEN

19. 08.

VESZPREM ARÉNA

TOM JONES Surrounded By Time

21. 08.

HISTÓRIA GARDEN

COTTON CLUB SINGERS MENDELSSOHN CHAMBER ORCHESTRA

veszpremfest.hu

Emberi Erőforrások Minisztériuma

HUF

154 445 + VAT* / month

Be part of the new Peugeot 3008 community!

The latest automatic model with Peugeot Connect Navigation, 10" HD touchscreen (Apple carplay / Android auto) LED headlights and parking sensors. * Gross price HUF 196 145

RENT MORE