Budapest Business Journal 3002 by Business Publishing Services Kft.

VOL. 30. NUMBER 2

JANUARY 28 – FEBRUARY 10, 2022

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SPECIAL REPORT INSIDE THIS ISSUE

Office Equipment Office Equipment Trends As vaccination rates pick up and pro-booster sentiment grows, offices are experiencing much more traffic than those haunted open spaces and hallways during the shutdowns of the early-COVID days, but office equipment needs are changing. 13

COVID Accelerates Changes in Office Design Approaches to office design and organization are changing in reaction to the pandemic, accelerating a process already underway due to changing tenant and staff demands and increasingly stringent sustainability regulations. 14

Green Money for Home Efficiency

SOCIALITE

Taking a Dive Into the Vinyl Back Catalogue David Holzer, a self-confessed obsessive crate-digger (that’s a record collector to you and me) comes in from the cold to discuss the vinyl scene in Hungary with former sociologist and consultant Kristóf Kürti, the owner of Kalóz Records.  17

NEWS

Surprise Bigger Rate Hike Responds to Soaring Inflation Although a further increase in the base rate had been expected due to accelerating inflation, the size of the step taken on Tuesday (Jan. 25) took most analysts by surprise. 3

NEWS

EIB vice president Teresa Czerwińska, in charge of European Investment Bank operations here, says that signing its first green loan in Central and Southeastern Europe with Hungary is history-making. 6 BUSINESS

Incubator House in Szeged Hosts Cutting-edge Research Science Park Szeged has been selected as home of the Hungarian Center of Excellence in Molecular Medicine, which will move to a newly inaugurated Incubator House. 8

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Budapest Business Journal | January 28 – February 10, 2022

IMPRESSUM

THE EDITOR SAYS

SUSTAINABLE OFFICES, GREEN LOANS AND INFLATION

EDITOR-IN-CHIEF: Robin Marshall EDITORIAL CONTRIBUTORS: Balázs Barabás, Zsófia

Czifra, 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)

That the pandemic has changed the way we think about where and how we work is beyond doubt. Office layouts now prioritize communal areas, while OfficeTech increasingly smoothes our way through contactless (and thus COVID-compliant) operations. But pity the office equipment manufacturers who saw the use of their machinery fall off a cliff as the Work From Home Movement took off, even as they picked up sales from those bringing their home office up-to-date. Perhaps a more interesting trend is revealed in this issue’s special report, however. While the coronavirus seems to have accelerated the move away from using printers as a paper output source, it has also shepherded in greater use of their scanner functions for digital inputs. It seems that if digitalization doesn’t get you one way, it will another! The slow demise of the paper office may not have reached warp speed yet, but it is clearly part of an intensified desire to see greater sustainability across all aspects of modern business. That’s certainly the backdrop against which we should view our cover story, the news that the European Investment Bank, one of the largest supranational lenders in the world, has signed a deal to provide Hungary with the not insignificant amount of EUR 300 million. What makes the financing really significant, however, is that this is the EIB’s first green loan anywhere in Central and Southeastern Europe. The money will go to the Ministry of Finance and be used to co-finance its

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Home Renovation Program, which offers homeowners HUF 3 mln (about EUR 8,500) to boost energy efficiency. Given that Hungarian households consume 34% of the country’s total energy (ahead of transport or industry), and approximately 75% of homes across the EU are lacking in energy efficiency, fixing that ticks important boxes at both state and bloc level on the route toward carbon-neutrality. There’s a strong sustainability theme running throughout this issue. Our regular Green Matters column looks at the increasingly important role environmental certification and ESG plays even amongst property investors. We also feature Wizz Air’s new “Fly the Greenest” campaign, as part of which CEO József Váradi has written urging people not to fly unless they need to, but to use his airline when they do so. We might be heading inexorably, if not rapidly, towards a zero-emission future, but it doesn’t appear we will be seeing zero inflation rates anytime soon. Indeed, it has proven to be both less transient and faster-paced than many experts, including central bankers, predicted. That prompted policymakers at the National Bank of Hungary to deliver a bigger than expected rate hike this week, as detailed on the page opposite. The battle against inflation seems set to run for a lot longer yet. Robin Marshall Editor-in-chief

Why Support the BBJ? • 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.

• 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

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• 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.

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THEN & NOW

In the color photo by state news agency MTI, vegetable cans are seen stored in the EKO Konzervipari Kft. factory in Nyíregyháza (235 km east of Budapest), which is going through a HUF 3.2 billion capacity expansion investment. The Hungarian canning industry’s performance has more than doubled since 2010. In the black and white image from the Fortepan public archive, people go about their work in a Hungarian canning factory in 1938.

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Budapest Business Journal | January 28 – February 10, 2022

News macroscope •

Surprise Bigger Rate Hike is a Response to Soaring Inflation

Although a further increase in the base rate had been expected due to accelerating inflation, the size of the step taken by the Monetary Council on Tuesday (Jan. 25) took most analysts by surprise. Some now expect the key interest rate to reach 4% in the coming months.

Changes in Average Earnings in Hungary, 2003-2021(January-November) Average monthly net earnings of full-time employees, HUF / month

Combined Total Private sector

Decision-makers raised the base interest rate for an eighth consecutive month on Jan. 25 after inflation failed to slow at the end of the year. However, to the surprise of most analysts, the Monetary Council of the National Bank of Hungary (MNB) raised the base rate by 50 basis points at its regular rate-setting meeting, exceeding the 30-basis-point pace that had been applied at previous rate hikes. Takarérbank’s senior analyst Gergely Suppan said most analysts were surprised by the extent of the hike. The forint reacted to the decision less strongly than might have been expected, but its exchange rate is currently driven mainly by geopolitical risks due to the possibility of a RussianUkrainian conflict and the resulting risk aversion, he emphasized. Takarékbank analysts forecast the base rate may reach 4% in the first four months of the year and may remain

Further Tightening

According to Gábor Regős, head of the macroeconomics unit of economic thinktank Századvég Gazdaságkutató Zrt, the MNB tightened more than expected due to higher-than-expected core inflation, which could have a beneficial effect on the forint exchange rate. The key interest rate may continue to catch up with the one-week deposit rate in the coming months. Still, the exact evolution of monetary conditions will be strongly influenced by incoming inflation data, especially in January. However, that catching up process also means the one-week deposit rate will rise less than the base rate. Raising the top of the interest rate corridor by

basis points

*Without family discounts Source:

at this level until the end of 2022, while the one-week deposit rate may increase

ZSÓFIA CZIFRA

and price pressures do not appear to have eased for the time being; although the headline figure may gradually decline during the year, the core inflation rate is expected to rise in the first half of the year.

4.75-5%,

depending on the inflation rate. According to fresh data from the Central Statistical Office, consumer prices increased by 7.4% in December and by 5.1% on average in 2021. According to Zoltán Varga, a senior analyst at Equilor Befektetési Zrt, the MNB may raise the current one-week deposit interest rate (which was at 4% on Tuesday) by less than 50 basis points in the one-week deposit tender due on Jan. 27, after this issue goes to print, based on central bank communications. He also pointed out that inflation reached 7,4% at the end of last year. In the coming months, we’ll find out whether it has peaked and how effective the government’s and national bank’s measures to curb the process have been.

Slowing the Pace?

Last year’s base will rise significantly from April, so this may also slow the pace of price increases in the spring. Some upside risks remain, as oil prices are rising again, but the significance of imported inflation has declined due

to the strengthening of the forint at the beginning of the year, Varga said. “The decision came as a big surprise,” Péter Kiss, investment director at Amundi Fund Management, said, commenting on the interest rate decision. “However, in the light of the higher-than-expected inflation rate in December and the increased market volatility since the beginning of the year, the MNB may have thought that it was worth taking a stronger step,” he said. Amundia expects the base rate to rise to 3.9% on a 50-basis point monthly basis by the end of the first quarter and to reach

around

4.5%

at the end of the half-year, while the current spread between the one-week deposit rate and the base rate may persist. Erste Bank’s analyst János Nagy also emphasized that the tightening cycle would continue on Jan. 27, when the interest rate on the one-week deposit tender is announced, though presumably to a lesser extent than at present, and then on a monthly schedule. The December consumer price index data has somewhat redrawn the previously projected inflation trajectory,

provides an opportunity for further tightening. The exceptionally low base rate is not likely to recover in the short term, Regős reckons. Monetary tightening will continue at a faster pace than in December last year, raising not only the base rate but also the one-week deposit rate Barnabás Virág, deputy governor of the MNB, confirmed at an online press conference following the policymakers’ meeting. According to Virág, the January data will be the starting point in the coming months. He added that the level of the base rate would gradually reach that of the one-week deposit rate, adding that the narrowing of the spread between the two rates started already in January and may end in the first half of the year, according to the current outlook. The deputy governor pointed to monthly decisions, such as changing the one-week deposit rate. At the same time, the asset will continue to be managed flexibly, and if necessary, the policymakers “will not hesitate” to intervene. He pointed out that there could be no rapid success in the fight against inflation. “You have to prepare for a prolonged fight,” he warned.

Numbers to Watch in the Coming Weeks December retail trade figures will be out on Feb. 3, followed on Feb. 4 by the first estimate of December’s industry data from the Central Statistical Office.

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Budapest Business Journal | January 28 – February 10, 2022

Orbán: Omnicron ’Spreading Like the Wind’ Coronavirus ///roundup The Omicron variant of the coronavirus presents a “new challenge,” Prime Minister Viktor Orbán said during his weekly interview with Kossuth Rádió on Jan. 21. Although experts agree that Omicron is weaker than previous variants, Orbán said it is “spreading like the wind,” and its greater contagiousness should not be taken lightly.

A girl is offered a sweet after being vaccinated with the second dose of the German-American Pfizer-BioNTech coronavirus vaccine developed for children at a vaccination station set up at the András Jósa Training Hospital on Jan. 26 in Nyíregyháza. Photo by Attila Balázs / MTI. stations have administered some 52,000 vaccinations to 32,000 people in

NICHOLAS PONGRATZ

As of Jan. 14, the National Public Health Center (NNK) determined that the Omicron variant accounted for 29% of coronavirus infections in Hungary. Within less than a week, by Jan. 19, chief medical officer Dr. Cecília Müller declared it had become responsible for 87% of new infections in Hungary, with the Delta variant accounting for the remaining 13%. Fortunately, the government has been continuing its vaccine drive from December into January; anyone can go to a registered vaccination point without a prior appointment for an inoculation. In January, these times were designated for Thursdays and Fridays, between 2 and 6 p.m., and on Saturdays between 10 a.m. and 6 p.m. In addition to the January vaccination drive, mobile vaccination

136 settlements

in 16 counties since the start of the program 10 months ago, State Secretary at the Ministry of Defense Szilárd Németh announced on Jan. 17. The government also determined that from Feb. 15, COVID immunity certificates in Hungary will only remain valid for those who are still fully vaccinated, Gergely Gulyás, the head of the Prime Minister’s Office, said at a weekly press briefing on Jan. 13, according to koronavirus.gov.hu. Gulyás clarified that immunity certificates would be valid for people who have had their second COVID jab no more than six months earlier or have had a booster jab. Prior to this, immunity certificates in Hungary had also been valid for people who had recovered from the coronavirus.

Gulyás added that the government decided to reduce the mandatory quarantine period for people infected with the coronavirus to seven days, which could be cut to five days if the infected individual lacks symptoms and produces a negative COVID test.

Accelerating Trends

While disrupting economies and supply chains, the pandemic has also accelerated the development of certain trends. For instance, the share of Hungarians who took online courses or used online learning materials has more than doubled during the pandemic, from 9% to 20%, according to data compiled by EU statistical agency Eurostat. Between 2019 and 2020, the share of e-commerce had grown by 35%, according to experts from the State Audit Office (ÁSZ). According to business daily Világgazdaság (Global

Economy), domestic e-commerce has grown by 45% and then

another

30%

in the past two years as a result of the pandemic. Their analysts believe that this growth is unlikely to abate and that 20-25% growth this year and next should not come as a surprise. This growth has, in turn, led to a proliferation of courier services, with trade market growth of around 45%, according to Ajtony Bíró Koppány, secretary-general of the Association of Hungarian Logistics Service Centers. Couriers are not only delivering food, but also clothing, toys, flowers, pet food and pharmacy products, Wolt managing director László Sabjányi told Világgazdaság. While the company was working with about 500 restaurant partners in 2019, it has since grown to more than 3,500 restaurant partners in 23 cities and around 6,500 courier partners.

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News | 5

Europa Capital Buys Akadémia Business Center The pan-European real estate investment manager Europa Capital has acquired the 12,500 sqm Akadémia Business Center, located on the Pest bank of the Danube in the historical center of Budapest, in partnership with ConvergenCE. The acquisition has been completed on behalf of Europa Capital’s latest value-add fund, Europa Fund VI. GARY J. MORRELL

The classical Central European building, refurbished and redeveloped in 2000, served as the Raiffeisen Bank headquarters. The building is now vacant as Raiffeisen has moved to a new HQ at Agora Budapest. That provides an opportunity for refurbishment and repositioning in line with current tenant demands, sustainability and ESG investment standards. “The objective is not only to create a building suitable for modern occupiers but also to transform the asset to a Net Zero Pathway, removing the reliance on greenhouse gases. The building will be targeting both BREEAM, Wiredscore and WELL certification,” said Europa Capital.

“The addition of Akadémia Business Center to our office portfolio offers another great opportunity to add value through extensive highquality refurbishment, which we are confident of delivering through our well-established partnership with ConvergenCE,” Oram insists. Working on its Hungarian investment strategy in conjunction with ConvergenCE, Europa Capital is an excellent example of how international capital can partner with a local operator to take advantage of its knowledge of the local market conditions.

The Akadémia Business Center building, purchased by Europa Property. ConvergenCE, which has acted as a local partner to Europa Capital in Hungary

since

2005,

will be responsible for the local asset management of the project. Interior works are expected to start on completion of the acquisition and will involve an extensive internal renovation, the installation of new mechanical equipment and remodeling of common areas and office spaces. “Akadémia Business Center is in a top location and is an asset with a lot of opportunity to undertake our usual high standard of refurbishment with a focus on NZC pathway, wellness and occupier requirements,” explains Robert Martin, partner and head of investments at Europa Capital. “Prime office availability in the heart of Budapest is scarce, underpinning the business case for the investment. On completion, the property will be very attractive to those companies looking

for a prestigious, downtown address with good wellness and sustainability credentials,” Martin adds.

Value-add Possibilities

Hungary is expected to attract more international investors, particularly to the office and industrial sectors. As activity in the office market is limited by a low supply of available investment-grade assets, in addition to a restrained development pipeline, investors are increasingly looking at value-add possibilities among earlier generation office stock and older historic buildings that require renovation. “This investment demonstrates our conviction in a contrarian opportunity in the cycle for well-located office assets, as the market adjusts to the impact of the pandemic,” comments Jason Oram, partner and fund manager at Europa Capital.

“The objective is not only to create a building suitable for modern occupiers but also to transform the asset to a Net Zero Pathway, removing the reliance on greenhouse gases. The building will be targeting both BREEAM, Wiredscore and WELL certification.” Europa Capital purchased the earlier generation

9,000 sqm Kálvin Square

office complex in District VIII in 2015. The complex was refurbished and repositioned by ConvergenCE, who acted as property and asset manager, and the BREEAM accredited, fully let building was sold on to KGAL in 2017. “We are pleased to be partnering with Europa Capital again following the successful development of a number of projects including Eiffel Square, Kálvin Square, B52 and CityZen, all of which have since been sold,” notes Csaba Zeley, managing director of ConvergenCE.

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EIB’s 1st Green Loan for Hungary Will Unlock EUR 300 mln for Improved Home Energy Efficiency The European Investment Bank (EIB), the bank of the European Union, is to provide EUR 300 million to the Ministry of Finance of Hungary to co-finance the Hungarian government’s national Home Renovation Program to improve the energy efficiency of homes and reduce energy costs. BBJ STAFF

The deal was signed by the parties just before Christmas. Hungary’s Home Renovation Program will use the funds for the energy efficiency retrofit of homes and the installation of domestic renewable energy generation systems. The program was launched on Jan. 1, 2021, and offers reimbursements for up to half of the renovation costs. The maximum amount of funding is HUF 3 mln (approximately EUR 8,500) per household. This is the first EIB loan under its new green loan label signed anywhere in Central and Southeastern Europe. It will seek to accelerate Hungary’s green transformation into a carbon-neutral economy, as well as plans under the

The EIB in Hungary EIB lending commitments in Hungary since the start of the bank’s activity in the country are currently close to EUR 21.6 billion. Between 2008 and 2018 alone, the EIB signed for support worth EUR 13 billion. EIB operations cover such important sectors of the Hungarian economy as transport, the environment,

support Hungary’s green ambition and its transformation into a green and sustainable society,” she adds. The operation will support investments in reducing energy demand and improving the reliability and security of supply in the country. In parallel, financing from the EU bank will help reduce greenhouse gases and alleviate air pollution. Energy efficiency investments will generate local and regional economic activity and thus increase employment, the bank argues. According to EIB data, Hungarian households

consume

34%

of the country’s total energy, which is more than transport (24%) or industry (23%), making investments in the energy efficiency of homes vital for meeting the carbon-neutral ambitions. Teresa Czerwińska European Green Deal to transform the European Union into a carbon-neutral economy

2050.

The EIB says the financing will also help achieve the goals set in the European Commission’s Renovation Wave for Europe initiative. First published in 2020, the renovation scheme focuses on three principal areas: Tackling energy poverty and the worstperforming buildings; targetting public facilities and social infrastructure; and decarbonizing heating and cooling. “This operation is our first green loan in Hungary, and a good model of cooperation between the EIB and the countries in Central Europe on decarbonization and climate action, especially relevant as all regional governments have improved energy efficiency of private homes high on their list of priorities,” EIB Media Officer Tibor Jóna tells the Budapest Business Journal. “Also, we see these kinds of investments in energy efficiency as a good way to jump-start regional

energy infrastructure, manufacturing and services. Another core component of the bank’s activity in Hungary is the promotion of small- and mediumsized enterprises (SMEs) by increasing their access to longterm financing through local financial institutions. Since 2001, the EU bank has supported 5,172 Hungarian SMEs, sustaining 263,767 jobs in the process.

economies in the wake of the pandemic and accelerate post-pandemic growth and job creation,” he adds.

Making History

EIB vice president Teresa Czerwińska, who is in charge of European Investment Bank operations in Hungary, says that signing its first green loan with Hungary is history-making.

Hungarian households consume 34% of the country’s total energy, which is more than transport (24%) or industry (23%), making investments in the energy efficiency of homes vital for meeting the carbon-neutral ambitions. “The loan is a triple win for Hungarians, the European Union and the global climate, and an important step towards delivering on the ambitious goals of the European Green Deal. It will enable Hungarians to improve their quality of life and save money thanks to lower energy bills as a result of more energy-efficient homes,” she explains. “Loans like this will help the European Union become carbon neutral faster, and in turn, contribute to the success of global climate action. Hungary was among the first EU countries to ratify the Paris Agreement as the global roadmap to address the existential threat brought by rising global temperatures. As the EU bank, we are glad we can

National Priority

On the national level, the loan accelerates the National Energy Strategy and the National Energy Efficiency Action Plan, which designate energy efficiency as a national priority and call for reduced energy imports, improved energy security and increased energy affordability. Improving energy efficiency has a crucial role in achieving carbon neutrality, both at the member state and EU level. Buildings in the European Union are responsible for 40% of the bloc’s energy consumption and 36% of greenhouse gas emissions. On top of reducing emissions of greenhouse gases, home renovations and measures to improve the energy efficiency of homes will enhance people’s quality of life, improve public health and create additional green jobs in the construction sector, the EIB says. According to the European Commission,

only

of buildings in the European Union undergo energy-efficient renovation every year. Roughly 75% of buildings in the European Union are not energy efficient. Investment in energy efficiency will also bring additional social and economic benefits to nearly 34 million Europeans who cannot afford to heat their homes properly. Renovating buildings is therefore essential and has been singled out in the European Green Deal as a critical initiative to drive energy efficiency in the sector and deliver on objectives. In 2020, the European Commission published its strategy to boost what it calls a renovation wave for Europe. It pursues a dual ambition of energy gains and economic growth and aims to double annual energy renovation rates in the next 10 years. For more environmental news, see our Green Matters column on page 9.

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Wizz Air’s Váradi: ‘Fly the Greenest’ József Váradi, CEO of the Hungary-based low-cost carrier Wizz Air Group, has taken the unusual step for an airline boss of suggesting passengers should only fly when they have, Less surprisingly, he recommends that when you do take to the air, you do so with his company. BBJ STAFF

The move comes as part of Wizz Air’s new marketing campaign, “Fly the Greenest.” The campaign took off on the afternoon of Thursday, Jan. 20, with an open letter Váradi sent to potential passengers. “When you don’t need to fly, please, don’t. But when you do, fly the greenest,” the CEO said. He went on to list seven reasons why he says “Wizz Air is your greenest choice.” The first of these is the insistance that a passenger travelling with Wizz will have a CO2 footprint of only 57.2 grams per kilometer on average, according to pre-COVID data. “If every airline would be as efficient as us, European CO2 emissions from aviation would reduce by 34% overnight,” Váradi claims. He continues that the airline won’t fly half-empty planes and does not have business class seating, meaning

it can avoid “unnecessary pollution” and “needless emissions.” He says the carrier uses world-class engines and aircraft, crucial for low emissions, and adds that it boasts “the youngest, most modern fleet among European competitor airlines with 50-plus aircraft.” He concludes that Wizz only flies direct routes (“One take-off, one landing, no connecting flights, no extra fuel-burn”) and that “None of our routes have a direct train alternative under four hours.” Earlier in January, the airline announced it had been named the the most sustainable European airline based on the classification of Sustainalytics, a Morningstar company that provides high-quality, analytical environmental, social and governance (ESG) research, ratings and data to institutional investors and companies. In 2021, the airline was also named the most sustainable company in the aviation industry by World Finance Magazine.

News | 7

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WHO’S NEWS

Gábor Király Appointed Managing Officer of Dentons Budapest Gábor Király was elected the new country managing officer of Dentons’ Budapest office and took up his new role from January.

Gábor Király Király started his career at the Hungarian National Bank at the beginning of the 1990s. After nearly 10 years, he joined the banking and finance practice group of a leading international law firm, where he was made partner after a few years. After six years, he gave up his private practice to undertake an in-house counsel role at one of Hungary’s largest banks, where he gained further in-depth understanding of the banking and financial markets as general counsel, then as a board member and deputy CEO. After five years, he returned to legal practice. Király rejoined Dentons’ banking practice group in 2015 and has been a partner since April 2021. He takes over the firm’s leading position from István Réczicza, who served as managing partner for more than 23 years. Under his leadership, Dentons has become one of the top law firms in Hungary, providing full-scale support to their clients by offering legal and business advisory services. Réczicza continues to work as a senior partner, providing excellent support to clients and strengthening the advisory business. “It is a great honor and privilege that the local and international management of the world’s largest law firm placed their trust in me not only to consolidate but also to take to a new level our market leadership,” comments Király. “I consider it essential to blend innovative ideas and existing traditions, as I strongly believe that we can build the future based only on a well-established, existing strategy. I would like our office to remain a people-centered and open community for the colleagues who work here, where everyone is able to fulfill their ambitions and support the office with their professional expertise,” he adds. “Drawing upon Dentons’ unique global coverage, we are capable of

providing unparalleled professional advice to our constantly growing clientele both in their local and global expansion,” Király concludes.

Fresh Partner at act Bán & Karika Attorneys at Law Péter Weidinger became a new partner at act Bán & Karika Attorneys at Law as of January 2022, according to a press release sent to the Budapest Business Journal. Weidinger first joined the law firm in 2017 as a junior associate. After gaining extensive experience, he passed his bar exams with excellence in 2019. He has worked in Frankfurt on several occasions, gaining significant international experience. At first, he was a scholar of the Ministry of Public Administration and Justice of Hungary. He then received a scholarship from the Foundation of the Attorneys of Hessen for his LL.M. studies at the Goethe University of Frankfurt am Main. In the summer of 2018, he worked for the German act law firm in Frankfurt. Weidinger has been collaborating as an individual attorney-at-law with act Bán & Karika Attorneys at Law since 2020. He focuses on contract law, labor law, corporate law, and the representation of clients in court and out-of-court proceedings. He is fluent in English and German, in addition to his native Hungarian.

Péter Weidinger “Péter’s promotion to the position of partner is an important milestone for us. His personality ensures that our clientele will receive the highquality service, based on our international experience, which they are used to receiving from our law firm over the past years,” emphasized Gergely Bán, founding and managing partner of the firm. “We are happy to welcome Péter as our new partner. We value his contribution to the success of our team. Above that, we can rely on him to prepare legal articles and publications and business development because he excels in these areas too,” Márton Karika, the other managing partner of the firm, added.

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Business

PRESENTED CONTENT

New Incubator House in Szeged Hosts Cutting-edge Research Center

Science Park Szeged has been selected as the home of the Hungarian Center of Excellence in Molecular Medicine (HCEMM), which will move to a newly inaugurated Incubator House on the park’s premises. The occasion opens a whole new dimension for Hungarian scientists to get engaged in international research and help the biotech service industry thrive in Hungary. BÁLINT SZŐNYI

The brain drain is still an issue in Hungary when it comes to losing scientific talent to more prosperous countries. Research spending here is two and half times less than that in Austria, to give but one relevant indicator.

Edith Heard, Director General of the European Molecular Biology Laboratory, addresses a ceremony marking the move of HCEMM to the Szeged Science Park Incubator House on Jan. 11, 2022, in Szeged. Photo by Tibor Rosta / MTI However, the past decade has showed many encouraging signs that things could be changing for the better. In 2021, R&D funds reached 1.6% of gross domestic product, amounting to some HUF 800 billion, including government subsidies of HUF 251 bln. The plan is to push that GDP ratio up to 3%. Likewise, the number of researchers has risen from 31,000 in 2010 to 60,000 last year, most of whom work in one or other of the 14 science parks established across the country. HCEMM has found a new home in a renovated Incubator House of one of those hubs in Szeged, a city 175 km southeast of Budapest, relatively close to the Serbian

Christoph Sensen, director-general of the Hungarian Center for Excellence in Molecular Medicine, gives a speech at the Incubator House opening ceremony on Jan. 11, 2022. Photo by Tibor Rosta / MTI.

border. One of the co-founders of the center is the European Molecular Biological Laboratory (EMBL), Europe’s leading life sciences lab, whose tender allowed HCEMM to make the move. Hungary has been a member of the EMBL network since 2017, and Hungarian researchers have been able to enjoy its benefits ever since by participating in pan-European project work. “EMBL and Hungary are both committed to building on the strong foundation that already exists, and to tackling the kind of global threats that require collaborative efforts across borders,” EMBL director professor Edith Heard said, as reported by the organization’s official website. “We’re delighted to participate in the opening of this valuable facility that will host excellent talent and services, and look forward to seeing the impact that it will have on Hungary’s expertise in the life sciences, as well as contributing to life science research across Europe more broadly,” she added. As her comments suggest, the inauguration marks the start of new opportunities for researchers in Hungary, as well as future collaborations with EMBL. The increased opportunities to share expertise and engage in scientific dialogue come at an exciting time, in particular because of the launch of the new EMBL “Molecules to Ecosystems” program which runs from 2022-2026.

At the official ceremony marking the move, a memorandum of understanding was signed by Hungary’s Ministry of Innovation and Technology and EMBL, which aims to intensify the already strong links between EMBL and life science researchers in Hungarian universities, research institutes, and the innovation sector. As Heard explained, the timing could hardly be better since on Jan. 1 the new five-year scientific program started, and has been endorsed and supported by Hungary as an EMBL member state. The program also sets an ambitious goal to kick-start a new era of life sciences in Europe where the whole picture can be puzzled together from molecules to entire ecosystems. It is seen as the first pan-European strategy for molecular research for human and environmental health. The idea is to provide the continent with a toolkit to tackle major societal challenges from climate change and biodiversity loss to emerging infectious diseases and cancer. The program also integrates life science research in the member states and helps their green social-economic development. “No single country or discipline can handle alone the scientific challenges that we are going to deal with, nor certain major social issues. By design, this program aims for EMBL to engage with its member states like never before in the upcoming five years,” Heard said at the ceremony. HCEMM was founded by the Biological Research Center of the Hungarian Academy of Sciences, the University of Szeged, and Semmelweis University. It received funding from the European Union’s Horizon 2020 research and innovation program. In 2020, HCEMM received an elevated status as one of the 18 Hungarian National Laboratories, at what was initially a project was transformed into a much more sophisticated program. At the end of last year, HCEMM also was designated as a Hungarian Excellent Research Infrastructure. “HCEMM summarizes the best skills and strengths of Hungarian researchers. The new base in Szeged will help HCEMM to become a regional scientific center for cutting edge molecular medicine, training, and employing highly qualified researchers,” Minister for Innovation and Technology László Palkovics said. The center’s CEO and director general, Dr. Christoph Sensen, said “HCEMMs mandate is to perform research and development on topics related to healthy ageing with our four research pillars, which include cancers, metabolic diseases, cardiovascular diseases, and infectious diseases. We are aiming at the development of new diagnostic methods and treatment options which improve the quality of life and the life expectancy of the patients and also contribute to lowering the health care costs at the same time. In the next few days, we will also begin to equip the laboratories and offices," HCEMM’s, as quoted in University of Szeged’s report.

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Budapest Business Journal | January 28 – February 10, 2022

Business | 9

As evidenced by recent Budapest and CEE commercial office transactions, ESG investing (the integration of environmental, social and governance factors into the fundamental investment process) is increasingly a concept and code of practice that investors have adopted as a core part of investment strategies in both the top end and value-add sectors of the office market. GARY J. MORRELL

While investors have yield and return on investment as a central priority, commercially successful investmentstandard buildings need sustainability accreditation, which is now an

Matolcsy Applauds Carney’s Sustainability Call National Bank of Hungary (MNB) governor György Matolcsy has reiterated a call to central banks to take an active role in addressing climate change in a piece posted on the central bank’s website. Matolcsy addressed an opinion piece by Mark Carney, a former Bank of England governor and the UN’s special envoy on climate action and finance, published earlier in the Financial Times. In the opinion piece, Carney argued that USD 100 trillion is the “minimum amount of external finance needed for the sustainable energy drive over the next three decades if it is to be effective.”

Atenor Undertakes Collaboration with CO2logic Atenor has started collaborating with CO2logic to calculate its emissions at the corporate level in all the

Photo by Ip-studio / Shutterstock.com

ESG Criteria Central to Investment Strategies

integral part of the leasing process and asset management. Further, investors need to look to a longer-term rise in the value of an asset and the prospect of new national and international sustainability regulations. ESG strategies in all investment areas are now seen as necessary to combat climate change and pandemic issues. There is also a growing recognition by investors of social inequality. At the turn of the year, the commercial component of Horizon Development’s LEED “Platinum” certified premium mixed-use Szervita Square Building was purchased by Union Investment for one of its institutional real estate funds. “The successful sale of Szervita Square Building to a German core investor with extremely high quality and sustainability standards proves our international development

countries where it operates. CO2logic offers a CO2-Neutral certification to organizations that calculate, reduce and offset their climate impact. To achieve this, every area in which the company has an effect is scrutinized, including, among other things, the climate impact from energy consumption, company cars, commuting, business travel and purchases such as paper and IT elements. Atenor says it is now taking the next step by using this input to set up a streamlined climate reduction plan and strategy until 2030.

CPI Initiates Green Bond Issue CPI Property Group has undertaken a sustainability-linked bond issue. The sustainability-linked bonds have been issued to EUR 700 million in value. “CPI PG is proud of our leadership in sustainable financing. The group was the first borrower from our region to issue benchmark green bonds in 2019 and has further strengthened our

competence and that core pricing for excellent assets is possible in CEE markets,” said Virág Bihari, partner and majority shareholder of Horizon Development and in charge of overseeing the divestment process on the deal. “Szervita Square Building was conceptualized and realized in line with principles of ESG and inclusion,” he adds.

Value-add Acquisition

ESG criteria are also central to investment strategies at the valueend of the office market. In a recent deal, the U.K.-based investor Europa Capital says it aims for a complete ESG repositioning for its latest valueadd Budapest acquisition, the Akadémia Business Center. “The objective is not only to create a building suitable for modern occupiers but also to transform the asset to a Net

Zero Pathway, removing the reliance on greenhouse gases. The building will also be targeting BREEAM, Wiredscore and WELL certification,” said Europa Capital. It plans to upgrade the property and undertake asset management in partnership with ConvergenCE. “On the investment markets, only ESG-compliant buildings will make it to the shortlist, as investors and banks will only lend money for sustainable and green building investments,” says Hubert Abt, CEO of the leading CEE serviced office space provider, New Work.

“On the investment markets, only ESG-compliant buildings will make it to the shortlist, as investors and banks will only lend money for sustainable and green building investments.” “As a result, investors and operators need to adapt to the standards for impact investments which are defined as investments made with the intention to generate positive measurable social and environmental impact alongside a financial return,” he added.

agenda and capital structure through this innovative transaction,” said CEO David Greenbaum.

116 Electric Charging Stations to be in Stop Shop Locations in Hungary

CTP Returns to Green Bond Market

The Stop Shop retail network operated by Immofinanz will be expanded with 116 highperformance electric charging stations operating at 14 Hungarian locations. The company has been emphasizing its commitment to environmentally friendly operations throughout the region. “It is this competitive advantage that Immofinanz has decided to develop further, as well as expand its existing services with electric charging stations. Customers will not only be able to shop easily, but they will also effectively use the time spent in the Stop Shop to charge their electric car. The cooperation between Immofinanz and the e-station aims to expand electromobility within regions and district towns,” said Viktor Nagy, Immofinanz country manager operations for Hungary.

The leading CEE logistics park developer and provider CTP has returned to the bond market with what it describes as a strong ESG investor demand for a further EUR 700 million tranche. “CTP decided to return to the markets early in 2022 to secure competitive pricing for our rapidly-expanding development pipeline of sustainable industrial and logistics assets and secure our funding for the rest of the year,” comments CFO Richard Wilkinson. “We saw greater demand than previously, with around 90% of investors having a green investment focus. This demand shows the attraction of CTP’s green credential as the only European industrial and logistics real estate issuer with a 100% BREEAM sustainability-certified portfolio.

10 | 2

Business

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Budapest Business Journal | January 28 – February 10, 2022

Almost half of larger SMEs have made significant investments worth at least HUF 10 million in the last two years, according to a study by Magyar Bankholding. The survey suggests that investment sentiment remains high, with more than a quarter of responding businesses saying they also plan to invest next year. BBJ STAFF

The latest market research conducted for Magyar Bankholding by NMS Hungary examined the development of realized and planned investments at SMEs with an annual turnover of at least HUF 300 million.

Photo by Wright Studio / Shutterstock.com

Investment Activity in SME, Farm Sector Continues to Grow

Some 47% of respondents said they had implemented an investment worth at least HUF 10 mln, while 14% said they had made several investments. Sixtysix percent of companies said they were implementing some form of modernization. The latest data builds on the Agricultural Economy Index survey conducted in the spring of 2021 by Budapest Bank (part of Magyar Bankholding), which found that 60% of agricultural companies had implemented developments in the past year. Magyar Bankholding says the surveys show the Ministry for Innovation and Technology’s strategy to strengthen Hungarian micro-, small, and medium-sized enterprises is leading to productivity improving rapidly. However, it is still not yet half of the EU average.

Magyar Bankholding Backstory Hungarian Bankholding Ltd. is a domestically owned financial holding company, which will implement the bringing together of Budapest Bank Zrt., MKB Bank Nyrt., and Takarék Group. The company started its effective operations on Dec. 15, 2020, after the National Bank of Hungary approved the merger. The member banks say they collectively form the second-largest market participant in terms of aggregate balance sheet total in Hungary, with the aggregate loan portfolio of Budapest Bank, MKB Bank and Takarékbank amounting to HUF 3.951 trillion. Of that, the aggregate agri-food loan portfolio comes to HUF 473 bln, covering a quarter of the market. The banking

group aims to be a market leader in areas like lending to corporate clients, the micro-, small- and medium-sized enterprise sector, and the leasing market. Through its member banks, the group currently provides state schemes to more than 322,000 corporate customers, about 41,000 of which are from the agricultural sector. The financial institutions belonging to Magyar Bankholding say they have provided HUF 355 bln to enterprises through nearly 14,000 loan transactions within the framework of the Széchenyi Card GO! program, available since July 1, 2021; while in the EXIM Compensation Program, which promotes exports, more than HUF 90 bln was allocated.

Business leaders say they are aware of the importance of increasing their competitiveness, so various technological developments have been a priority in recent years: the most popular investment goals among respondents were capacity expansion, equipment and machine replacement, building renovations and technology development. Businesses were not deterred by the pandemic either, with three-quarters of respondents saying that COVID had no effect on their investments and that 10% of them brought it forward, possibly at a higher value, and had even developed more than was previously planned.

Equity-financed

Two-thirds of the implemented investments were below the HUF 100 mln mark, which in most cases (82%) were financed with equity, but 23% also utilized statesubsidized loans and 22% tender funds. The most critical factor in deciding about borrowing was the interest rate of the loan, while the quality of service, personal contact, and fees and costs were the most important aspects when choosing a bank. “The hit product which has financed investments in recent years was the FGS Go! Program, but its budget is exhausted,” noted Levente Szabó, deputy chief business officer of individual services at Magyar Bankholding. Other products are now available to domestic SMEs, such as the Széchenyi GO! family and EXIM bank and Hungarian Development Bank (MFB) programs, and there are also significant funding opportunities in the EU’s new seven-year cycle, Szabó points out. “As the ceilings for each of them were lower than for the FGS Go!, it is important to choose a financial partner to support a development who not only offers loans, but is also an expert in finding the best combinations,” he added.

The results of the research conducted in the spring of 2021 for the Agricultural Economy Index make it clear that the agricultural sector, too, is prepared to invest: 60% of the farmers participating in the research said they implemented some development in their businesses. To preserve liquidity, the average amount invested was somewhat less than the SMEs, but more than HUF 90 mln was still spent on modernization on average.

Some 47% of respondents said they had implemented an investment worth at least HUF 10 mln, while 14% said they had made several investments. Sixty-six percent of companies said they were implementing some form of modernization. Improving the competitiveness of production was the primary goal of the agricultural investments. Half of those surveyed said they would not cut spending, and 32% planned to spend more than they did last year. Two-thirds of them would finance investments from their own resources and bank loans, while the use of state subsidies more than doubled to 15% and EU subsidies to 8%.

The Agricultural Banking Index An external research firm commissioned by Budapest Bank has been examining the expectations of SMEs in the agricultural sector since 2015. The value of the Agricultural Economy Index is set between -100 and +100, where a value of 0 is neutral, a value below it is negative, and a value above is positive. The research examines the financial expectations of agricultural enterprises, the development of their investments, the assessment of the market environment, the critical elements related to the labor market and financing possibilities. Based on these, three sub-indices are defined within the main index: success, investment, and demand. The nationally representative research is conducted by interviewing agricultural enterprises with a turnover of more than HUF 50 mln on a sample of 400. The last survey was conducted by NRC Marketing Research and Consulting Ltd. between May 11 and July 8, 2021.

Opening a business doesn’t make you a businessman.

12 | 2

Business

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Budapest Business Journal | January 28 – February 10, 2022

Photo by Chingfoto / Shutterstock.com

Is Monetary Tightening the Cure for Inflation? The U.S. Fed did not increase interest rates, just talked about doing so, and even then not by much, and global stock exchanges lost USD 4.2 trillion in a week, as Les Nemethy notes in this issue’s corporate finance column. And all this because the market seems to be anticipating that the Fed will start selling down its bond portfolio and raise interest rates four or five times this year, a quarter percent each time.

The Corporate Finance Column

move the economy into positive real interest rate territory, a prerequisite for quelling inflation, without triggering a significant recession. Remember Paul Volcker? He had to raise interest rates to 16% in 1980 to quash inflation. I remember the massive pain at the time in the business world. But the world is so much more indebted today than in 1980. In my opinion, it is unable to tolerate the pain associated with the high-interest rates that would be needed to quash inflation. The U.S. national debt at USD 30 tln (that’s USD 238,000 per taxpayer!) means a 1% rise in interest rates costs the government another USD 300 billion per annum, at a time when total tax revenues are in the range of USD 4 tln, the deficit is

near

The reason the Fed has abruptly shifted from QE (quantitative easing) to QT (quantitative tightening) is that it has suddenly woken up to the fact that inflation is not just transitory. And it is nearly impossible for a government to be re-elected in times of high inflation. Why is QT bound to fail as a tool to tame inflation? Well, for one thing, raising interest rates does not address inflationary supply-side constraints. There are at least five significant inflationary supply-side constraints where no amount of QT will remove the inflationary bottlenecks: • Energy Prices. Oil and gas have experienced incredible momentum over the past months, with considerable room to run in the coming period. There have been years of underinvestment in drilling for oil and

gas; investors are afraid of legislation that may penalize carbon fuels. Remember the 1970s energy crisis and its effect on inflation? Only this one is self-induced: in the Western world, we have not planned adequately for the shift from fossil to alternative fuels. Meanwhile, the surge in electrification puts price pressures on copper, nickel, lithium, and other materials required for electrification, further fueling inflation. • Microchips. The number of microchips required in many industries (autos, intelligent homes, robotics, appliances, Internet of Things, and so on) is growing exponentially. Do not count on microchip shortages being resolved soon. • Labor. The participation rate in the U.S. labor force is at an all-time low, giving labor negotiating power for the first time in decades. COVID causes absence from the workforce in both the short-run (illness) and long-run (people take early retirement or shun certain industries). • Logistics. The price of container shipping today is multiples of what it was a couple of years ago. It is highly uncertain when this supply bottleneck will be resolved, but probably not for a year or two.

• Agriculture. The sudden surge in fertilizer prices will, over the coming year or two, likely work its way through the value chain of most agricultural commodities, right down to the cost of vegetables and meat at your local grocery store. Will raising interest rates solve any of the above supply-side bottlenecks? While higher interest rates can diminish asset bubbles, I do not see them significantly slowing consumer price inflation. (Not unless they trigger a recession or depression that affects overall demand.)

Negative Rates

Another factor is that real interest rates will likely remain negative despite nominal interest rates rising. Nominal inflation is currently clocking over 7% per annum in the United States (many measures put inflation even higher), with 10-year treasury yields below 2%, meaning that the real interest rates are in the range of negative five percent. Even the current talk of four or five quarter-percent rate hikes (e.g., a total of 1.25%) this year was already enough to send markets into a tailspin, and that is only a tiny portion of the gap. If inflation remains constant or increases, there is no way the Fed can

USD 3 tln,

and social security payments are spiraling out of control. So what is the answer? Sad to say, there is no ideal solution. But there is a greater evil and a lesser evil. If the Fed first raises interest rates sufficiently to stifle inflation, it will crash the economy, after which further stimulus would be required. Alternatively, the government could adopt more prudent fiscal and monetary policies while harnessing the existing negative interest rate environment to help the States (and the world) inflate out of national debt. The latter strikes me as the lesser evil, although the costs would be huge: savers and pensioners always foot the bill for this type of financial repression. There is precedent: this strategy quite successfully inflated away the post World War II debt of the United States. I see no better way out of the current debt bubble and inflationary cycle.

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 previous 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.

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Budapest Business Journal | January 28 – February 10, 2022

Special Report Office Equipment

Office Equipment Trends Receive COVID Boost As vaccination rates pick up and probooster sentiment grows, offices are experiencing much more traffic than those haunted open spaces and hallways during the shutdowns of the early-COVID days. Office-attendance habits have been remolded by the pandemic and office equipment needs are also changing as a result.

Cisco’s HWI findings strike a chord with Epson Hungary’s experience. “By now, the printer and copier market has learned to live with the pandemic. On the consumer side, this translates to adapting to longer transportation times and supply disruptions,” Gáspár Tőrös, sales manager for business products at the Epson Europe B.V. Hungarian Branch Office, tells the Budapest Business Journal. Digitalization, a trend that was gaining in significance even before the CHRISTIAN KESZTHELYI pandemic’s abrupt wake-up call to slow adopters, sped up almost overnight. The When the coronavirus pandemic forced office equipment market, however, took people into working from home (WFH) something of a detour. scenarios nearly two years ago, there was “On the seller side, we had to accept great uncertainty as to what the longerthat demand for paper-based documents term implications might be. Fear of has decreased due to corporate offices efficiency taking a dent was very present. operating with smaller [or no] staff due Nevertheless, people adjusted to the new to accelerated digitalization,” Tőrös says. technological literacy demands so well “Yet, the months when the majority of our that it appears office work may never high-performing equipment leased by return fully to its pre-pandemic state. institutions and corporations operated at Hybrid models, which are not tied to often less than 50% of the usual capacity a full-time office presence but instead were simply devastating,” the Epson design the work experience around the professional adds. employee, have become an emerging Home Office Kit trend among white-collar workers, However, people forced out of the according to the first-ever Hybrid Work traditional office environment started Index (HWI) compiled in to recognize that they were short on the technology they would need to increase by their efficiency if they were to make Cisco, the U.S.-based tech giant. a success of working from the comfort Millions of aggregated, anonymized of their homes. While at the beginning customer data points globally recorded of the COVID-19 pandemic, employees in the index suggest that office could blame technological hiccups on workers expect greater flexibility the unexpected shift and lack and accessibility. In the meantime, of digital infrastructure (or skills); that businesses must grapple with the excuse does not hold anymore. How people increased technological demands. Office buy tech devices for WFH reveals growing work is adjusting to a new normal. consciousness and a positive learning curve.

2021

is being reshaped, too. But how does it affect a primary printer maker? “It is almost certain that the number of printed pages will remain at a lower level in the long run, yet it is hard to evaluate now whether it is due to the decreased office staffing or the often forced digitalization,” Tőrös says.

Reconsider and Rationalize

Gáspár Tőrös “Luckily, the shock as mentioned earlier was alleviated by the fact that the majority of employees typically started purchasing new, cost-effective equipment for their home offices, which significantly buoyed demand. Since the first rush [of sales], this effect has naturally slowed but to a certain extent is still present,” Tőrös says. At-home users of office equipment became better informed. Essentially, they started choosing equipment that could operate more efficiently over items with a lower price tag. While the boost that digitalization and technology received during the pandemic supported some economies and industries more notably than others, recent global supply chain disruptions are hindering the economic landscape and a significant cause for concern. “This might be the most significant, long-term effect of the pandemic,” Tőrös says. Although China is at the center of worldwide attention, production and export issues are not exclusive to the economic giant. Output and freight forwarding are disrupted and stuttered almost everywhere. “We continue to see basic problems with the procurement of parts and raw materials as well as international logistics, and, unfortunately, it is not clear when we will be out of the woods,” according to Tőrös. Office trends are evolving. Cisco found that

64% of

the employees surveyed for its index would consider leaving their jobs if they did not have the freedom to work in a hybrid format. In this context, office equipment and resources usage

While expectations suggest that paper-based documents will always be an integral part of doing business, according to Epson, essentially, the market is facing consolidation. Processes are being reconsidered and rationalized. “Fortunately, this brings an old endeavor of Epson to the forefront: examining the effect of office work on the environment. Users are starting to pay close attention to the energy consumption and harmful emissions of high-performance equipment, with a special emphasis on hazardous waste. This is a very positive signal,” Tőrös says. The Epson professional’s mind is on where the trends are nowadays. Businesses realize that acknowledging environmental, social, and governance (ESG) issues is no longer a matter of good PR so much as a commercial must. Both clients and employees are increasingly expectant of greater corporate ESG awareness.

“We continue to see basic problems with the procurement of parts and raw materials as well as international logistics, and, unfortunately, it is not clear when we will be out of the woods.” And while multiuse printers may be generating less output, they are being put to greater data input: the digitization of hard copy. “It is a general trend that multifunctional office equipment is increasingly being used for scanning purposes to digitize paper-based documents that arrive through postal mail,” Tőrös says. Modern docketing and case management systems already work with these files. “However, certain administrative processes will certainly remain in purely digital platforms. The banking and insurance sectors are probably the most advanced in this area, but we see major efforts in government administration as well,” Tőrös concludes.

14 | 3

Special Report

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Budapest Business Journal | January 28 – February 10, 2022

Coronavirus Accelerates Changes in Office Design Sustainability accreditation from independent, third-party sustainability organizations such as the U.K.-based BREEAM, the U.S.-based LEED and, increasingly, WELL, is now the norm for development in the office markets. These organizations create new guidance that puts hygiene and the safety of workers at the heart of planning: besides creating flexible layouts and wider spaces for fewer people, they promote the application of durable materials for heavy cleaning, increased maintenance and cleaning of mechanical systems, creating health screening spots, and applying smart technologies to make contactless offices and to collect space utilization data, according to the architectural and design firm DVM group. Access4You, which assesses assessability in the office, is also increasingly being integrated into office design. Atenor has been awarded a BREEAM “Excellent” sustainability rating for the RoseVille office project, designed by the Artonic Design GARY J. MORRELL Architect Studio. “Achieving this rating is an important Office interiors are a central element milestone in the development cycle as of the concept, design, property and well as the acknowledgement of Atenor’s Office design by Bánáti + Hartvig architects studio. sustainability efforts. In addition to the facility management of office projects. This is a response to ever more complex sustainability certification, the developer and sophisticated demands from office is paying special attention to obtaining and monitored,” explains András Adapted Designs users, more stringent sustainability and an Access4You’ Gold’ rating. The Developers and designers need to Ábrahám, project director of Skanska’s environmental regulations, and health primary aspect of the development is adapt their office designs accordingly. commercial development business and safety issues related to COVID to create a human-centered workplace,” Skanska is constructing the first unit in Hungary. and its aftermath. says Zoltán Borbély, country director phase of its latest Budapest project, “Excellent lighting conditions have With hybrid office use (a blend of of Atenor in Hungary. the 67,000 sqm H2Offices, focusing been created in the workplaces thanks working from home and in a central to the electric light glare control. The space), design priorities are now based on on the needs of its users, according offices are designed to provide a pleasant communal areas, collaborative spaces and to the developer. “The trend had already The complex has been designed to temperature all year round and create a meeting rooms, according to Zsombor started before the pandemic meet LEED and WELL “Platiunum” calm, noise-free environment for work,” Barta, president of the Hungarian Green certifications along with the WELL Ábrahám says. Building Council (HuGBC). to develop or restyle the Health & Safety Rating. “The trend had already started before office to create more Safer Offices “We adapted very quickly to the pandemic to develop or restyle the Safety and technologies in offices are the new regulations and implemented office to create more interactive and interactive and flexible now more critical than ever in the the newest health measurements flexible places, where creative ideas places, where creative pandemic environment. and we are also helping our tenants can be grown, human interactions are “The adjustment to the new reality to be able to provide secure office possible, and diverse working places ideas can be grown, human is still underway; it is a long-term space to their workers because people are integrated,” he says. interactions are possible process,” warns Katarzyna Zawodnafeel safer in the environment that “This is becoming even more important Bijoch, president and CEO of Skanska’s we created,” comments Aurelia Luca, for the future. Also, the time has passed and diverse working commercial development business executive vice-president of operations for over-crowded and fully packed offices places are integrated.” unit in CEE. for Hungary and Romania at Skanska’s places; mainly because of hygienic and “The main goal of developers should commercial development business unit. pandemic issues,” Barta adds. be the deepest possible understanding The developer’s previous office From an office provider perspective, of clients’ needs and a close dialogue, project, Nordic Light Trio, was ever more corporations are already Valter Kalaus, managing director of which allows jointly developed tailorawarded WELL “Core & Shell Gold” switching their work policies from Cresa Hungary, sees the impact of the made, safe solutions that meet their certification. Adherents argue that an office-centric to a human-centric pandemic on offices resulting in more requirements, in terms of creating WELL-certified buildings positively approach and implementing hybrid collaborative spaces, more and smaller attractive workplaces, encouraging workplace strategies, according to Hubert impact employees’ performance and, meeting rooms, indoor greenery, the employees to return to their offices as therefore, the overall performance Abt, CEO of New Work, the leading provision of access to the outdoors and well as developing future-proof projects of their employers, retaining their CEE serviced office space provider. abundant natural light. that interest investors,” she says. value for an extended period and “The headquarters of the company will Concerning anti-pandemic measures, “Moreover, innovative technological being truly future-proof investments. not be the main place of work anymore, offices will include high-level technology, solutions will undergo further There are currently two WELLit will be the place for collaboration and including sensors, temperature control development too. These include, for certified offices in Budapest and meetings. Once the companies have and air quality measuring, and touchless instance, contactless entry to an office as systems. Regarding the impact on gone through this change in culture, it well as options to check the whereabouts will lead to a significant shift in space architectural and interior design, pre-certified, of co-workers, adjusting the lighting requirements,” he explains. Kalaus argues that fewer desks will be according to the HuGBC. and temperature to the needs of users, “There is now no need to drive two required with different furniture for “The building has a highly effective or booking a room. As technology hours a day to read your emails. Offices different activities and overall interior is a crucial aspect of hybrid work, can be effectively utilized by digitilization, ventilation and air filtration system design catered more towards safe with microbe and mold control, water it has become an integral part of office such as booking space through collaboration, including fewer large quality is also constantly controlled space,” Zawodna-Bijoch adds. a smart phone application,” Abt says. spaces and more separated areas.

Approaches to office design and organization are changing in reaction to the coronavirus pandemic, accelerating a process already underway due to changing tenant and staff demands and increasingly stringent sustainability regulations and practices.

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Special Report | 15

Digital Hardware Producers Ranked by total net revenue in 2020

total net Revenue in 2020 (HuF mln)

oWneRsHiP (%) HungaRian non-HungaRian

toP loCal exeCutive CFo maRketing DiReCtoR

aDDRess PHone email

seRveR

yeaR establisHeD

tablet

bRanDs RePResenteD laPtoP

ComPany Website

Rank

PRoDuCeD ComPuteR tyPes

samsung eleCtRoniCs magyaR ZRt. www.samsung.com

998,004

–

✓

Samsung

1989

(100) –

Hyang Hee kim Sang-Woo LimWitsch Gerda –

5126 Jászfényszaru, Samsung tér 1. (80) 726-7864 –

ClouD netWoRk teCHnology kFt. www.foxconn.hu

525,160

✓

–

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2017

– Focus PC Enterprises Ltd. (100)

Péter tálos Gabriella Pistauer –

2900 Komárom, Bánki Donát utca 1. (34) 886-888 komarom@emea.foxconn.com

lg eleCtRoniCs magyaR kFt. www.lg.com

143,793

–

✓

–

1992

– LG Electronics European Holding B.V. (100)

kim Dae Hwan, kim Hyeong tae – –

1097 Budapest, Könyves Kálmán körút 3/A (1) 455-6060 –

HuaWei teCHnologies HungaRy kFt. www.huawei.hu

64,822

–

✓

–

Huawei

2005

– Huawei Technologies Cooperatief U.A. (100)

Cai lingyu – –

1138 Budapest, Népfürdő utca 22. (80) 482-934 –

ibm Data stoRage systems kFt. www.ibm.com/hu

39,916

–

✓

IBM

1995

– IBM Ireland Product Distribution Limited (100)

János andrási, katalin turza, Zoltán Zerényi – –

2600 Vác, Deákvári fasor 16–18. (27) 500-400 info@hu.ibm.com

oRaCle HungaRy kFt. www.oracle.com

27,655

–

✓

Oracle

1993

– Oracle Nederland B.V. (100)

titusz Csaba Puskár – –

1112 Budapest, Balatoni út 2. (1) 224-1700 –

HeWlett-PaCkaRD inFoRmatikai kFt. www.hp.com

23,979

✓

2008

– Gatriam Holding B.V. (100)

Ferenc erdős, tibor szpisják – –

1123 Budapest, Alkotás utca 55–61. (1) 229-9999 info@hp.com

ibm magyaRoRsZági kFt. www.ibm.com/hu

19,140

–

✓

IBM

1936

– IBM Ireland Product Distribution Limited (100)

Péter szalay – –

1117 Budapest, Neumann János utca 1. (1) 382-5500 info@hu.ibm.com

Dell magyaRoRsZág műsZaki megolDások kFt. www.dell.hu

2,056

✓

Dell

2007

– Dell International Holdings VIII B.V. (100)

Jaromir krnac, Robert linn Potts – –

1062 Budapest, Váci út 1–3. (1) 888-0550 –

asus magyaRoRsZág kFt. www.asus.hu

439

✓

ASUS

2007

– ASUS Europe B.V. (100)

Zoltán gyöngyösi – –

1075 Budapest, Wesselényi utca 16. (1) 505-4561 backoffice_hu@asus.com

aCeR sales inteRnational s.a. magyaRoRsZági keReskeDelmi kéPviselete www.acer.hu

✓

Acer

2016

– Individuals (100)

tamás József borhi – –

1023 Budapest, Árpád fejedelem útja 26–28. (1) 336-3300 info.hu@acer.com

✓

Lenovo

2005

– Individuals (100)

anita lukács – –

1037 Budapest, Montevideo utca 16. (1) 211.1402 info@lenovo.hu

–

✓

–

Panasonic

2010

– Junichi Suzuki (100)

David leslie Preece – –

1117 Budapest, Alíz utca 4. (1) 382-6060 reception.psee@eu.panasonic.com

–

✓

–

Sony

2010

– Individuals (100)

Robert lucian Radulescu – –

1138 Budapest, Váci út 144–150. (1) 777-9151 –

lenovo teCHnology b.v. NR magyaRoRsZági FióktelePe www.lenovo.com/hu/hu/

PanasoniC maRketing euRoPe gmbH soutH-east euRoPe FióktelePe www.panasonic.com

sony euRoPe limiteD NR magyaRoRsZági FióktelePe www.sony.hu

A = would not disclose,

NR = not ranked, NA = not appliacable

This list was compiled from responses to questionnaires received by January 28, 2022, and publicly available data. To the best of the Budapest Business Journal’s knowledge, the information is accurate as of press time. The list is based on companies’ voluntary data submissions. While every effort is made to ensure accuracy and thoroughness, omissions and typographical errors may occur. Additions or corrections to the list should be sent on letterhead to the research department, Budapest Business Journal, 1075 Budapest, Madách Imre út 13–14, or faxed to (1) 398-0345. The research department can be contacted at research@bbj.hu

16 | 3

Special Report

www.bbj.hu

Budapest Business Journal | January 28 – February 10, 2022

Office Equipment Manufacturers’ Branch Offices Ranked by total net revenue in 2020

kvint-R kFt. www.kvint-r.hu

BROtHER CEntRal & EastERn EuROpE gMBH NR MagyaRORszági kEREskEdElMi képvisElEtE www.brother.hu

EpsOn EuROpE B.v. MagyaRORszági FióktElEpE www.epson.hu

Oki EuROpE ltd. MagyaRORszági NR FióktElEpE www.oki.com/hu sHaRp ElECtROniCs (EuROpE) gMBH NR MagyaRORszági FióktElEpE www.sharp.hu

1,380

Fax MaCHinEs

sHREddERs

MultiFunCtiOnal MaCHinEs

visual tECHnOlOgy

sCannERs

✓

–

✓

–

✓

–

✓

–

✓

–

✓

–

✓

–

✓

–

✓

–

✓

–

✓

–

✓

–

yEaR EstaBlisHEd nO. OF Full-tiME EMplOyEEs On july 1, 2021

1,934

aCCEssORiEs

glOBal uniOn kFt. www.globalunion.hu

2,912

HOME dElivERy

RiCOH HungaRy kFt. www.ricoh.hu

5,964

COnsulting

xEROx MagyaRORszág kFt. www.xerox.hu

8,379

OWnERsHip (%) HungaRian nOnHungaRian

REntal

kOniCa MinOlta MagyaRORszág ÜzlEti MEgOldásOk kFt. www.konicaminolta.hu

8,960

paRts supply

CanOn HungaRia kFt. www.canon.hu

OtHER

BRands CaRRiEd

REpaiR

9,632

digital COpiERs

Hp inC MagyaRORszág kFt. www.hp.com/hu/hu

OptiCal iMagE COpiERs

COMpany WEBsitE

tOtal nEt REvEnuE in 2020 (HuF Mln)

sERviCEs

lasER pRintERs

Rank

pROduCts

–

2014 30

– Alpha Holding Two B.V. (100)

tibor Rovó – –

1138 Budapest, Népfürdő utca 22. (1) 485-6580 –

–

Canon, Therefore, Iris, UniFlow, Insta, Lifecake, hdbook

✓

–

✓

1994 128

– Canon Europa N.V. (100)

jacob van’t Ooster – –

1037 Budapest, Záhony utca 7. (1) 237-5900 info@canon.hu

–

Konica Minolta, Develop, KP

1990 170

– Konica Minolta Business Solutions Europe GmbH (100)

dániel székely – –

1117 Budapest, Galvani utca 4. (1) 464-9000 ugyfel@ konicaminolta.hu

1992 89

– XEROX Ltd. (100)

attila Ménesi, jános verbán Emőke Vass –

1138 Budapest, Madarász Viktor utca 47–49. (1) 436-8800 info@xerox.hu

✓

1990 57

– Ricoh Europe Holdings Plc. (100)

Michael Raberger Péter Eperjesi –

2040 Budaörs, Puskás Tivadar út 14/C (23) 806-800 info@ricoh.hu

1992 20

László Juhász (90), Anikó Szabó Juhászné (10) –

lászló juhász Orsolya Jámbor Dorottya Juhász

1172 Budapest, Rétifarkas utca16. (1) 273-0100 global@ globalunion.hu

1991 24

Individuals (100) –

zoltán schneider – –

1089 Budapest, Delej utca 41. (1) 477-4050 posta@kvint-r.hu

– Stefka Grozeva, Takashi Tomonaga (100)

toru Osawa – –

1117 Budapest, Budafoki út 209. (1) 382-7450 sales@brother.hu

– Individuals (100)

keisuke Fujii – –

1092 Budapest, Köztelek utca 6. (1) 382-7680 info@epson.hu

– Shigeru Ogasawara (100)

Miroslav tyburec – –

1016 Budapest, Aladár utca 4. building B (1) 814-8000 askoki@okihu.hu

– Individuals (100)

lászló Horváth – –

1138 Budapest, Váci út 191. (1) 815-2500 info.sehu@ sharp.eu

–

Xerox

Ricoh

✓

–

✓

MajOR CliEnts in 2020

✓

Libri Könyvkereskedelmi Kft., Continental Automotive Hungary Kft., Épkar Zrt., Weinberg '93 Építő Kft., Richter Gedeon Vegyészeti Gyár Nyrt., Hoya Lens Hungary Zrt.

✓

–

Kyocera Document Solutions

✓

3D printers, matrix and line printers, label printers, accessories

3D Systems, HP, CraftBot, Lexmark, Brother, UTAX, Tally Dascom, Printronix

✓

–

✓

Portable printers and scanners, labelling equipment

Brother

✓

Large size printing, sign and textile printing, industrial ✓ color labelling, POS retail solutions, mobile scanning and printing

Epson

–

✓

–

✓

–

Accessories

–

Interactive boards

OKI

Sharp

–

✓

–

✓

1994 A

2005 13

1992 A

2008 A

tOp lOCal ExECutivE CFO MaRkEting diRECtOR

addREss pHOnE EMail

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Budapest Business Journal | January 28 – February 10, 2022

Socialite

Crate digging at Kalóz Records in the Palace Quarter On a classic bitterly cold but bright and sunny Budapest morning, I was strolling down Bródy Sándor utca in the Palace Quarter when I discovered Kalóz Records. I’m a reasonably obsessive crate-digger (a record collector), and as it was so cold, I went inside and got talking with owner Kristóf Kürti. DAVID HOLZER

I’ve been getting more and more interested in Hungarian popular music. I can’t understand the words, and the music can be poorly recorded, but the quality of the musicianship and the inventiveness of the musicians often shine through. It seems I’m not the only nonHungarian music obsessive trying to get to grips with performers like the great Sarolta Zalatnay, Omega and Illés. Ace Records, a U.K. label specializing in reissues and compilations, has released two excellent “She Came From Hungary” collections. Andy Votel, the British Musician, DJ, record producer and co-founder of reissue label Finders Keepers, put out a compilation called “Well Hung” featuring, as the liner notes breathlessly put it, “22 stomping selections from the vaults of Eastern Europe’s best-kept secret, Hungaraton / Qualiton Records.” Hungarian music has been sampled by U.S. hip-hop producers who have exhausted their own funk and soul for samples. Among many others, Americans DJ Spinna, DJ Format, and DJ Vadim have sampled Hungarian music. Kürti is proud that legendary hip-hop act the Beatnuts checked out his store when they were performing in Budapest. A former sociologist and consultant, Kürti opened Kalóz (Hungarian for pirate) around four years ago. He’d built

up a business selling records via Discogs, with its incredible gatefold artwork, transports me back in time before I’ve an enormous online music database even heard a note of the music. and marketplace haunted by collectors One thing The Forty-Five website like me. His success on the platform doesn’t mention is that COVID bankrolled the brick-and-mortar store. also powered And for places like Kalóz, competition in the Budapest is hotting up. “There are around eight serious vinyl stores in Budapest. Two of these only wave of vinyl buying. opened in the past year. I know of two “People spent more time at home, so more being planned. Now vinyl has everything like reading books, playing come back, there’s room for more,” board games and listening to records, Kürti tells me. grew,” Kürti says. Vinyl’s Rebirth “Many people, like those who’d The Forty-Five website claims that, switched to CDs in the ’90s, came back in 2020, “sales of vinyl were the to vinyl collecting. Also, teens and highest since the glory days of the people in their early 20s who never ’90s,” attributing this to online fan bought a CD in their lives, started communities showing love for their buying vinyl because it’s seen as cool.” favorite acts, trends such as Fleetwood Most Valuable Mac’s “Dreams” track becoming Kürti himself is a fan of pretty much enormously popular on Tik-Tok, and every genre, but he’s especially what it calls the “psychology of the interested in Hungarian music, not tangible purchase.” just from inside the borders but made Kürti and I concur on this last point. As he says, “Everything that interests me by Hungarians in places as far away as the United States or Australia. In fact, about music is in records. I love looking the most valuable Hungarian record is, at the artwork. The sound of records is not flat, like when it’s digitized – different according to Kürti, actually Australian. An album by Hungarian rock band pressings sound different. Records exist Syrius recorded for the Australian record in several editions with different sleeves and track order. Some might have inserts, label Spin can go for around EUR 2,000. The second most valuable record by others not. The sound on some might be a Hungarian band was also recorded great, on others it might be wack. Vinyl outside the country. Omega’s “Red Star” is a whole world in itself. It’s just nice to album, recorded in Great Britain and collect and care about.” released on the U.K. label Decca, could As someone old enough to remember fetch EUR 500, if in excellent condition. when the only alternatives to vinyl were Other valuable records by Hungarian cassettes and eight-tracks, I agree with artists include “Az ember tervez” LP Kürti. Seeing a vinyl edition of an album like David Bowie’s 1974 “Diamond Dogs,” by Tankcsapda (also around EUR 500),

2020

László Hortobágyi’s “Transreplica Meccano” and “Private Exits” by Tibor Szemző, which can go

for

EUR 200

a pop. These are highly experimental records, so be prepared if you’re going to invest in them. But, given that most don’t buy records they can’t bear to listen to (actually, I do), where would Kürti suggest we start? “I’d suggest Kati Kovács first LP from 1970, “Suttogva és Kiabálva,” the folky psychedelia of the second Hungária album, “Tűzveszélyes,” (1971), the unmistakable jazz-rock sound of Mini on the “Vissza a Városba” LP (1978), the underrated Zalatnay disco-funk album “Minden szó egy Dal” from 1978 and the only LP by Dr. Beat, who copied Depeche Mode in the 1980s, but well.” Once a budding collector of Hungarian music has invested in these albums, it’s necessary to find something to play them. Easier than it sounds. “People come into the store and they seem to be interested in records,” says Kürti, “but their first question is ‘Where can I buy a turntable?’ You could go to Media Markt but if you want a real vintage, analog player you need to scour Budapest’s vintage stores. There are very few of these, but luckily we do have one just a few steps away from our store.”

Kalóz Records is at Bródy Sándor utca 25 and www.recordstore.hu. The physical store is open from 11 a.m. to 7 p.m.

Socialite

www.bbj.hu

Budapest Business Journal | January 28 – February 10, 2022

All photos by Zoltán Pelle (Pelle Photo)

18 | 4

25 Years of Celebrating Rabbie Burns, Supporting Sick Children The Robert Burns International Foundation celebrated 25 years of honoring the memory of Scotland’s National Bard, Robert (Rabbie) Burns, and raising funds for seriously ill Hungarian children at the annual Budapest Burns Supper at the Corinthia Hotel Budapest on Saturday.

ROBIN MARSHALL

“We had 300 guests at the event, with more than HUF 9 million raised on the night,” RBIF chairman Douglas Arnott tells the Budapest Business Journal. Arnott, who owns EDMF Language Services Kft., was awarded the British Empire Medal in the United Kingdom’s 2019 New Year’s Honors list for his services to charity and U.K.-Hungary relations. The annual Sponsor of the Year award was presented to Professor

György Fekete, the medical adviser to the RBIF, in recognition of his 54 years in the medical profession at the 2nd Department of Paediatrics at Semmelweis University and 25 years of medical advice and expertise given to the RBIF. Nevis Sponsors: BP, FirstMed, Taxually. Saltire Sponsors: AstraZeneca, Budapest Airport, and Gerrards Wealth Management. Thistle Sponsors: AVC Health, Budapest British International School, and CBRE. Special thanks for their support go to Corinthia Hotel Budapest, Arran Distillery, Aston Martin, Diageo, Good Spirit Bar, Heineken, Isle of Harris Distillery, Kovács Nimród Winery, UPS, Vylyan Bor, WhiskyNet and Zwack.

FOOD AT ITS BEST 2021 Please forward your subscription request to: circulation@bbj.hu, or order your copy in the webshop at budapestbusinessjournal.com

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Budapest Business Journal | January 28 – February 10, 2022

Socialite | 19

Reaping the Research With the University of Pécs fruity and waxy, with dried apricot notes of botrytis or “noble rot” teasing you into thinking it’s going to be sweet, but it finishes towards the dry end of the spectrum. It is undoubtedly an experience to taste and is a bargain at HUF 1,853; it makes a good partner for spicy Asian food.

Countless winemakers and grape growers who I encounter on my travels around the Hungarian wine regions mention they are working in some capacity with the Research Institute of Viticulture and Enology of the University of Pécs. With its assistance, they plant new varieties and clones or re-establish ancient ones that have faded into obscurity.

Swabian Village

Not far from Pécs, in the charming onetime Swabian village of Mecseknádasd, the Hetényi winery makes wine mainly from grapes brought in from the region of Szekszárd. Hétenyi has 40 hectares in Szekszárd and one in Pécs, from which latter it makes a creamy, herbal and complex dry Cirfandli, though not in every vintage. The 2018 costs HUF 2,590 from hetenyipince.hu. In Sárospatak in the northern end of the Tokaj wine region, far from Pécs, Tomi Vincze is an exciting, upcoming and experimental young winemaker who is working with the Pécs Research Institute to plant the Purcsin grape variety. It grew in the Tokaj region up until it was wiped out by the phylloxera louse around the turn of the 20th century. The Basilicus winery in Tarcal has already brought out several vintages of this light but vibrant and spicy wine.

“We try out things here to get ahead for the future.”

ROBERT SMYTH

The research institute has 1,800 grape varieties, one of the most significant collections globally, planted across 35 hectares at two sites. The larger of these is its Szentmiklós site on the slopes of Mecsek Hill, to the north of the city of Pécs. It also makes countless Furmint and the Pécs wine region’s experimental and other wines, with some very own Cinfandli. The institute also 10,000-15,000 bottles released each year performs cross-breeding with grape commercially. The institute’s atmospheric, varieties sourced from around the world, cavernous cellar is 300 years old and once developing new, high-quality, healthy belonged to the local bishop. and robust cultivars that are fungus“It’s very romantic, but not so resistant, particularly against the practical,” says István Ipacs Szabó, the troublesome powdery mildew, downy institute’s chief winemaker, as we stand mildew and grey rot. Another function on the cellar’s earthen floor. There are of the institute is experimentation in glass carboys and even plastic bottles preparation for upcoming problems for everywhere I look, each containing grape growers. a different wine. I sample a citrusy white wine from a grape called Tihanyi, Climate Change which comes from the grapes of just six “We try out things here to get ahead for the future,” Ipacs Szabó explains. This vines, then a lemony-nutty white from includes analyzing the effects of heat and the Tüskéspupu grape, served from a water stress on the vines in preparation plastic bottle. for climate change scenarios and finding The institute, which the University grape varieties and clones suitable in of Pécs has owned since 2008, works such conditions. according to a three-pronged approach Ipacs Szabó was chief winemaker of research, education and consultancy. at Villány’s Vylyan Szőlőbirtok és It carries out clonal selection, scouring Pincészet from 1999 until last summer, the vineyards of Hungary for rare clones of grape varieties. These are grown in its when he began up his role at the vineyards to be disease-free, so they can institute, taking over the reins from Lászlo Hevér. Ipacs Szabó also runs his be propagated elsewhere, meeting new demands from producers and consumers. own family winery in Kövesföld, Villány, as well as tending the vines and making It does this with grape varieties like the wines for a foreign neighbor on Kadarka (working a lot with producers Tenkes Hill. As I mentioned in my last in nearby Szekszárd, such as Heimann),

column, Ipacs Szabó was also shortlisted for the Hungarian Wine Academy’s Winemaker of the Year 2021 medal, so he clearly knows his stuff. The institute’s wine can be purchased from its webshop at www.pteshop. hu, with free delivery in Hungary for orders of more than HUF 25,000, or via pannonborbolt.hu. Its Summa Cabernet Sauvignon 2017, which won a gold medal at Hungary’s VinAgora International Wine Competition, is classy and balanced with fabulously integrated oak, silky tannins, juicy black fruit and a nice touch of spiciness. It is good value at HUF 4,380. The Pécs region is somewhat known for the white Cirfandli grape variety (although it can take on a reddish color), the same grape as Austria’s Zierfandler (a natural crossing of Roter Veltliner and a Traminer-like variety), from that country’s Thermenregion. However, it has nothing to do with red Zinfandel, which has been traced back to Croatia, to the Dalmatian islands where it is now called Tribidrag, rather than the almost impossible to pronounce Crljenak kaštelanski. The Institute’s Cirfandli késői szüret (Late Harvest) 2017 is richly floral,

Vincze, who currently makes just 5,000 bottles of wine a year from two hectares and expects to be certified organic later this year, showed me some of his new releases. His 2019 Orange wine is a blend of Furmint (60%) and Hárslevelű (40%). Many believe that Furmint is unsuitable for making orange wine as keeping it on the skins draws out the bitter phenolics, but there is no bitterness here, probably thanks to the generosity and soft touch of the Hárslevelű. It oozes aromas and flavors of black tea, orange peel, apricot and winter spices and is beautifully balanced and long with no rough edges. It is a bargain at HUF 2,000 from the cellar. Vincze’s pale pink Pét-Nat Kékfrankos rosé, which was kept on the skins for eight hours and was fermented for two weeks, was delightfully fizzy, fresh and fruity, with flavors of juicy raspberry and strawberry to match its color. The ultra-trendy Pét-Nat is short for Pétillant-naturel, whereby natural bubbles are retained when the stillfermenting wine is bottled using the méthode ancestrale (ancestral method). It usually contains sediment, as this one does, which renders the wine cloudy in the glass. These two Vincze wines should soon be available from Borfalu at Szondi utca 66 in Budapest’s District VI (or borfalu.hu) and the radovin.hu wineshop.