The lingering effects of COVID and the outbreak of the Russo-Ukrainian war has seen struggling economies and a deepening energy crisis worldwide. There was a slowdown in Hungary, too, although a major telecoms move will likely reshape the markets.
Hungary is leading the inflation chart in Europe with 22.5% measured in November. Industry, which has been a driving force for economic growth, produced weaker-than-expected figures in October. Next year’s draft budget is expected to be amended in the coming days. 3 for the coming decades: The industrial metaverse and fulfilling the promise of industrial digitalization.
EDITOR-IN-CHIEF: Robin Marshall
EDITORIAL CONTRIBUTORS: Balázs Barabás, Zsófia Czifra, Kester Eddy, Bence Gaál, Gergely Herpai, David Holzer, Christian Keszthelyi, Gary J. Morrell, Nicholas Pongratz, Robert Smyth.
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It has been, as they say, quite the year. Christmas Eve morning will mark exactly 10 months since Vladimir Putin ordered his troops to invade Ukraine. His insistence on calling it a “special military operation,” along with his ever-changing bogus excuses for waging war, would be laughable were they not so pathetic and full of tragic consequences for so many innocent civilians. And, increasingly, for the ill-equipped, under-trained, poorly led mobiliks who make up Russia’s mobilized conscript ranks. At the start of previous wars, they used to talk about “bringing the boys home by Christmas.” In our age of instant gratification, this conflict has now lasted so long that the very idea of it almost seems normalized until you stop and think of what that means.
My mother was a schoolchild in London during World War II. She remembers trying to continue lessons inside a bomb shelter or the Underground. Her father fought in World War I, was wounded a couple of times and gassed once. From the little I remember of my grandfather (he died when I was four), he was somewhat cold, somewhat withdrawn, and may well have suffered from undiagnosed post-traumatic stress disorder, although they would have called it shell shock in his day. Today, my mother cannot fathom how anyone could even conceive sending soldiers across a neighbor’s border and bringing a full-blown conflict back to Europe. Sadly, I don’t think anyone could offer her any wisdom on that score.
The war next door has been the low point of 2022, emphasized by the rising inflation which predates it and the energy crisis that followed in its wake. For those who suffer from it, climate anxiety has not been eased by the renewed interest in oil and gas exploration and even a return to coal extraction to replace the missing energy and fuel supplies from Russia.
But even as the pandemic helped us better appreciate the value of community and personal contact, so this
year has not been without its highlights. For the staff at the Budapest Business Journal , it has been the chance to celebrate our 30th anniversary, a unique achievement for an English-language news publication in Hungary. Our first issue was published on November 9, 1992, but we marked the event, and the upcoming holiday season, at our BBJ Advent Anniversary Mixer at the Budapest Marriott Hotel on December 12, along with more than 100 guests and partners. The Journal has survived into its fourth decade because it has evolved. The media landscape today is very different from the period just after the change in regime. Back then, we were a business-to-customer outlet; now, we are much more B2B. I said at our mixer that the BBJ isn’t an empty vessel that just happens to be 30 years old; what gives it genuine value is the combined experience, professionalism, and accumulated knowledge of those who work at the publishing house. As we enter our next 30 years, we will continue to evolve our mix, with more of what we do surely being digital, alongside printed products where the demand remains for them. What won’t change is that it will all be built around content that matters, that is useful and useable, and that we will continue to look for areas where we can add value. And, of course, we very much look forward to the continued support of all our readers, subscribers, advertisers and partners. We wouldn’t be here without you.
Let me wish all of you, however you engage with the BBJ and all that we do, a very Merry Christmas and a healthy, peaceful and prosperous (well, we are a business publication, after all) New Year.
Robin Marshall Editor-in-chief• 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.
• Community Building. Whether it is the Budapest Business Journal itself, the Expat CEO award, the Expat CEO gala, the Top Expat CEOs in Hungary publication, or the new Expat CEO Boardroom meeting, we are serious about doing our part to bind this community together.
• Value Creation. We have a nearly 30-year history of supporting the development of diversity and sustainability in Hungary’s economy. The fact that we have been a trusted business voice for so long, indeed we were the first English-language publication when we launched back on November 9, 1992, itself has value.
• Crisis Management. We have all lived through a once-in-a-century pandemic. But we also face an existential threat through climate change and operate in a period where disruptive technologies offer threats and opportunities. Now, more than ever, factual business reporting is vital to good decision-making.
For more information visit budapestbusinessjournal.com
There is no doubt now that, just a couple of weeks before Christmas, winter arrived in Hungary in 2022. In the color photo from state news agency MTI, plants covered in hoarfrost are captured at Nagykanizsa (214 km southwest of Budapest, beyond the tip of Lake Balaton) at dawn on December 13. In the black-and-white image from the Fortepan public archive, winter frosts cover a broken-down farm cart in a field at an unidentified location in Hungary in 1940.
Industrial production in Hungary, 2001-October 2022 Producer volume index, same period of the previous year equals 100
Consumer prices went up by 22.5% in November on a yearly basis, the latest data from the Central Statistical Office (KSH) shows. The highest price rises were measured for electricity, gas and other fuels, as well as food, over the last 12 months.
In one month, consumer prices overall increased by 1.8%. A price rise of 43.8% was recorded for food, within which the highest price increases were 102.9% for eggs, 81.8% for bread, and 79% for milk products. On a monthly basis, food products on average became 3.6% more expensive. Inflation exceeded expectations in November, mainly due to the further acceleration in the rise in food prices. However, the price increase is still extremely broad, Gergely Suppan, head analyst at Magyar Bankholding comments. He adds that the rising price pressure was reflected in the fact that core inflation jumped sharply to 24%. Due to the expected continuation of rising price in the coming months, inflation will continue to grow. It could reach close to 26% in December, but from the beginning of 2023, due to base effects, Magyar Bankholding expects inflation to decrease, gradually at first and then more sharply from the middle of the year, says Suppan.
The inflation of 22.5% is the highest in the European Union, with Hungary ahead of Latvia (21.7%), Estonia (21.4%) and Lithuania (21.4%). Among Hungary’s Visegréd Four peers and its nearer neighbors, inflation was measured at 16.4% in Poland, 15.5% in the Czech Republic, 15.1% in Slovakia, 14.8% in Bulgaria, 13.5% in Romania, and 12.7% in Croatia.
The inflation data was not the only figure to surprise analysts. In October, the volume of industrial production was 5.9% higher than a year earlier, but it decreased by 3.5% compared to September, the KSH announced. Such a substantial slowdown in industry surprised analysts, because this year this had been the sector that performed with the greatest stability.
The performance of the Hungarian economy had already decreased in the third quarter by 0.4% compared to Q2. Industrial production had increased by 9.6% in Q3, and thus offset the decline in other sectors. From this point of view, it is bad news that the industrial performance suddenly fell in October.
While the overall picture should not be a shock, since agriculture produced an insipid performance this year, the decline of industry as a whole is a serious negative surprise, points out Péter Virovácz, senior analyst at ING Bank. In addition, the extreme drop in energy consumption has probably already affected the output of the energy sector, since the country’s gas consumption in October was only twothirds of the average of the previous four years, the analyst adds.
Source:
Despite the drop in October, analysts remain optimistic about industry’s longer-term outlook. Based on the detailed data of the previous month, the industrial order stock was 21% higher than a year earlier. If supply shocks do not affect the sector, then it could again be the engine of economic growth in 2023.
In the light of the latest macro data and the drastically changing economic environment, next year’s budget is expected to be amended in a few days. The Hungarian Parliament passed the 2023 draft in July; however, even at the moment of its adoption, it was clear that the figures would not stand the test of time, and sooner or later the government will be forced to amend it. A recent government decree makes it possible to do so by excluding the parliament and the substantive debate.
Due to the ongoing Russo-Ukrainian war, the international environment and economic conditions have changed to such an extent that the government would basically have to create an almost entirely new budget. But what will be the main numbers to amend?
For one, the 5.2% inflation rate the government calculated with in the first draft will surely be updated, most likely to more than 15%. The originally hoped-for 4.1% GDP growth will likely be downgraded to 1-1.5%.
Sticking to the original plans, expenditure cuts will likely continue, and the special taxes raised in 2022 remain. With this, a budget adjustment of around HUF 2 trillion would have been realized next year, according to the original plans. However, new adjustments to maintain the initial deficit target of 3.5%, both on the expenditure and revenue side, analysts say.
On January 3, the Q3 data on the balance of general government sector will be published by the Central Statistical Office (KSH). November labor market figures and retail trade data will be out on January 6, followed by the November industrial output from KSH on January 9.
Hungary is leading the inflation chart in Europe with 22.5% measured in November. Industry, which has been a driving force for economic growth, produced weaker-than-expected figures in October. Next year’s draft budget is expected to be amended in the coming days.ZSÓFIA CZIFRA
Martin Melecky, World Bank lead economist, on investment concerns.
“There are some other areas that might still need more support, that we still need to address somehow, and they are, for example, [the carbon footprint of] cement and steel and others. It can also happen, and that’s the danger of green bubbles, that some areas of green investment might be a little bit overheated in the short term. The other area we need to support is, for example, green innovation, a new generation of batteries; that might need to be addressed with supplement mechanisms and risk sharing from governments.”
In this regard, they have mirrored the feelings of their own public. On the one hand, some segments of their populations, notably the youth, have been increasingly frustrated with the seeming inaction of their political leaders, making “climate anxiety” a growing phenomenon.
Yet, on the other hand, these same populations, as customers, are likely to be most reluctant if asked to give up buying their new dress or their next holiday to Thailand.
For some decades, the world has been facing a dichotomy: while evidence has been mounting that human activity has been driving CO2 emissions and that, in turn, these emissions have been driving the rise in global temperatures, decision-makers have largely dithered when it comes to addressing these issues.
Julian Popov, European Climate Foundation fellow, speaking on Climate, Energy and War.
“The relationship between conflicts and climate [...] is an area we must explore. One reason is that war moves things fast. We tend to think that our renewable energy ambitions, policies, and drives are driven mostly by our climate policies. Well, the biggest driver in renewable energy [has been] war. The Israeli-Arab War of 1973 led to the Arab oil embargo, which triggered a chain reaction of what we’d now call climate policies. It, the oil embargo and the war, started the development of the wind industry in Denmark. The wind industry, which in the ’70s nobody believed would lead to anything, now takes 10% of global electricity generation, and the IEA suggests that, by 2027, that will be 15%. It’s massive! It’s overtaken nuclear energy!”
Thus did Gábor Molnár, head of renewable business development at MET, the Swiss-based, Hungarianowned energy group, summarize the energy-climate conundrum faced, knowingly or otherwise, by every person on the planet. So, what will drive the much-needed change in attitudes, he asked rhetorically?
“After many years of price stability, low volatility, and predictability, we are now entering a completely new era. I think it’s pretty evident that the skyrocketing [energy] prices have profound implications on the economy and customer choices,” he declared in his address to the Climate Summit.
Molnár had the evidence to hand. He noted that power and gas prices had been on the rise, even before the Russian invasion of Ukraine, but “the unfortunate event that happened this year triggered huge volatility and price levels that we have never seen before.”
The impact has been dramatic on both sides of the supplier-consumer divide. With the end of summer, across Europe, electricity prices began to rise, and “you could see a clear decoupling from the previous year’s patterns, starting from the heating season. This had never been seen before, and obviously, this has been caused by the huge financial incentives on the cost side,” he argued.
The results were even more dramatic in Hungary, where retail price caps had smothered the effects of the earlier price rises.
“I think solar remains a very important target, especially in Hungary, but it’s very promising to see, in the [Hungarian national] recovery plan, that the government is planning to lift the bars around wind. I see a lot of potential in that. To have a healthy mix, we need wind. And it’s on the agenda of this conference, although very late, but Geothermal is also something that needs to find its place. It’s very unrepresented at the moment, but I’m pretty sure this will not remain as it is now.”
“Even during the summer, there was a huge difference compared to the [previous] years’ figures, driven mostly by industrial customers [cutting demand]. Unfortunately, many of the
Eric Sievers, director of investments at ClonBio, on the danger of relying on official statistics, taken from his keynote address.
“Europe incessantly publishes reports about renewable technologies, not just Europe, but Hungary also, and almost nothing in those reports comes from industrial reality. For example, in Hungary, there’s lots of discussion of biomethane this year, and officials get up and say things, [yet] they don’t know that we are the largest biogas producer in Hungary. They just don’t know that our plant exists.
“More often as not, a 2022 report cites a 2018 report, which in turn took the info from a 2015 report and so on all the way back to 1990.
production systems are closing, some of them permanently, and the trend is continuing, and it’s getting worse,” Molnár said.
Indeed, the current electricity demand is close to 10% below last year’s level, which in the context of the power sector, with its high fixed costs, represents a “huge” drop.
“This is something that nobody saw in advance. And, frankly, nobody knows where this will stop,” he added.
Yet, despite this gloomy analysis, Molnár expressed optimism that the crisis would ultimately lead to innovation and a more energy-efficient future. He cited forecasts by the International Energy Agency (IEA) to bolster his case.
“The 2010 forecast by the IEA said that, by 2020, the annual installation of wind and solar capacities would be around 20 GW. Nine years later, in 2019, they said the same figure by 2020 would be around 100 GW. The reality was over 130 GW,” he said. He argued that if even an organization that is part of the energy industry cannot grasp the actual pace of renewables deployment, “I think there will be some positive surprises down the line.”
Part of the reason for this is that people just don’t get out into the real world. Pannonia Bio has issued roughly 500 invitations to policymakers and academics who write about bio-fuels to visit us over the last decade [in order] to collect actual information and see that what they are publishing is just not connected to reality. One, just one of those 500 people, accepted our invitation, and that was a private individual: no one from the Commission accepted. Without industrially relevant data, EU Climate Policy is ideology, not leadership.”
ClonBio Group owns Pannonia Bio, the largest biogas plant in Europe, based in Dunaföldvár, 100 km south of Budapest.
From expected themes such as solar and wind generation via technical limitations like grid stability to the seemingly exotic historical relationship between energy and war, participants at the third Budapest Climate Summit discussed progress to date and challenges currently faced on December 7.Eszter Zádori, partner with law firm Dentons in Budapest, on investor sentiment. Presentation by Matt Simister, Central European CEO for Tesco (left), and Andreas Beckmann, regional CEO of WWF Central and Eastern Europe, on the sustainability of the food supply chain.
Hungary’s government was forced to scrap its price cap on fuel on December 6 due to a lack of imports and panic buying that led to fuel shortages across the country, Prime Minister Viktor Orbán’s chief of staff Gergely Gulyás told a joint press briefing with MOL chairman and chief executive Zsolt Hernádi.
Although the price cap was set to expire at the end of December, Gulyás said that MOL had recommended abolishing the price cap immediately to “ensure the security of supply.”
Just prior to the announcement, MOL had faced a partial shortage of fuel stocks across almost its entire network of filling stations over the previous weekend, as many people had started stockpiling. The oil and gas company said the primary cause of the fuel shortage had been a lack of imports, as foreign players cut their fuel shipments to Hungary since the government capped petrol and diesel prices last year. One Reuters photographer had found
that some petrol stations in Budapest had run out of fuel entirely, while others still offered several types of gasoline.
Meanwhile, the managing director of MOL’s Hungarian business György Bacsa told Kossuth Rádió on December 6 that demand for motor fuel at local petrol stations had exceeded daily logistics capacity by 30%, as motor fuel imports had declined significantly.
“Pumps are running dry at practically all of our petrol stations,” Bacsa said. “Fuel at around 70 of our stations, one-quarter of the network, has been completely exhausted,” he added. The European Union introduced an oil price cap on December 5, Minister of Foreign Affairs and Trade Péter Szijjártó said in a post on his Facebook page. He emphasized that during the negotiations,
The Budapest Business Journal speaks with Balázs Sárosi, head of Doktor24 Express, the urgent care unit of the leading local private healthcare provider Doktor24. Sárosi and his professional team of doctors offer instant medical care to walk-in patients at the company’s state-of-the-art Doktor24 Multiklinika in District XI, Budapest.
BENCE GAÁLBBJ: Who should turn to Doktor24 Express?
Balázs Sárosi: We give families peace of mind by offering easy and quick access to professional urgent medical care without long waiting times. We primarily treat walk-in clients with acute health issues, but we are also prepared to assist people who are simply not sure what kind of specialist they should see for a particular problem. Our Western European-trained, Englishspeaking team of ER doctors examine, test, diagnose, and treat clients on the spot. If needed, we can also give direct referrals to 50-plus in-house consultants and specialists within Multiklinika for secondary care. We intend to serve
families, so we also treat kids over the age of one, and we can also refer them to Doktor24’s strong team of pediatric specialists. Our clinic is open beyond regular business hours, from Monday to Friday between 10 a.m. and 8 p.m. Clients can secure a parking spot in our underground car park by phone, and we can also assist those with limited mobility to access our premises from the parking area. Our English-speaking doctors boast decades of experience in ER patient care from Western Europe and maintain a comprehensive knowledge of the U.K.’s NHS protocols.
BBJ: What kinds of injuries and illnesses do you treat at the clinic?
BS: We treat a long list of non-lifethreatening medical issues from fever, colds, coughs, minor burns, urinary
problems, allergic symptoms, slight head injuries, strains, sprains, and more. In other words, we cover typical sports injuries, domestic accidents, common illnesses, and conditions that require medical attention but do not require hospitalization. The “we treat” and “we do not treat” lists are available on our website, along with our fair and transparent pricing. Our clients cannot
Hungary had secured an exemption from applying the cap. Afterward, Orbán said the measure would not result in a supply shortage in Hungary, as pipeline deliveries had been exempt from the sanction, but added that “the problem is the price.
Hungary cannot escape the impact of the sanctions on prices, and that’s why we are waiting to see the effect of the introduction of the [ban] on December 5,” he said.
Consequently, Orbán introduced a tax hike on refineries, according to a post on his Facebook page. He said the consequences of the European Union’s price cap on Russian crude, were “expected” and that the government would take windfall profits resulting from a “sanctions surcharge” on motor fuel and channel them into a fund established to protect regulated household energy prices.
The European Commission rejected subsequent accusations from Hungary that the oil price cap on Russian crude was responsible for the fuel shortage at its petrol stations. The decision by the European Union to cap Russian oil exports at a level of USD 60 per barrel “has no impact on Hungary’s ability to import oil via its pipeline, as the cap applies only to seaborne oil,” according to commission spokesman Daniel Ferrie.
Meanwhile, the EC also approved a HUF 1.23 trillion increase in fiscal support for Hungarian companies hit by the economic fallout from the war in Ukraine.
anticipate when they will need to come to us, so no appointments are necessary to visit Doktor24 Express. We guarantee medical attention within 15 minutes from arrival, and a full cycle of treatment is completed within four hours.
If the client’s condition requires emergency care in a specialized facility, we will do our best to stabilize their condition and call an ambulance or refer them to the local emergency care department.
BBJ: What kind of care do you provide on-site?
BS: Clients are treated in their order of arrival, in line with ER triage protocols. Primary care includes triage classification, medication to relieve pain or fever, a preliminary medical examination, and, if necessary, an ECG and targeted emergency ultrasound to make a full assessment. On-site lab tests are also available to rule out certain diseases and conditions such as thromboembolism, myocardial infarction, or severe organ failures. We have a whole arsenal of diagnostic equipment at hand at Multiklinika, with ultrasound, X-ray, and additional laboratory tests. We treat sports and domestic injuries with state-of-the-art bracing and gait support. If necessary, we can administer intravenous infusion treatments and obturation, offer wound management and wound closure (in the vast majority of cases with sutureless closure) and remove foreign bodies.
People exposed to all four indoor climaterelated risks are almost four times more likely to report poor health and nearly five times more likely to feel unhappy than those living in healthy homes. The survey, carried out for the seventh time this year, looked at the living conditions of people across Europe.
Mold is often referred to as the silent killer in impact headlines. While the term may sound a little dramatic, the research notes that the threat posed is genuine and wide spread: 13% of Europeans (69 million people) live in homes where walls or roofs are damp or wet, meaning that one in six homes is likely to be affected.
In Hungary, about 22% of the population live in a home where the roof leaks, walls, floors or foundations are damp, or where window frames or floors may be rotting. Not only does this affect air quality and comfort, but mold growing in corners can cause asthma and various respiratory diseases, and dampness slowly but surely damages buildings.
Good quality and well-insulated windows can make a significant difference (hence Velux’s interest in sponsoring the study), yet many people put off the work for fear that it will cause a lot of mess, upheaval and take too much time.
Fresh air is a key part of our lives: we need oxygen-rich air to feel energetic, focused and stay healthy. Still, in Europe and North America, eight out of 10
people are unaware of indoor pollution and 78% of people do not know that indoor air can be more polluted than outdoor air.
Natural ventilation, something as simple as opening windows to let in fresh air, remains a simple, cost-effective and easy-to-understand way to reduce the risk of pollution. By introducing
fresh outdoor air into an indoor space, airborne pathogens are diluted and the air is quickly refreshed.
However, air quality is only one of the more dangerous indoor climate risks, as the Velux Healthy Homes Barometer points out. Some 18% of people living in the EU (92 million people) are exposed to noise from neighbors or the street. Noise from road traffic is the most common source of noise pollution and, unsurprisingly, the lack of peace and quiet affects people living in cities more.
Across the EU, and in Switzerland, the United Kingdom and Norway, 21% of people living in cities think their household is disturbed by noise from neighbors or the street. Among those living in cities and suburbs, this figure was 14%, while for those living in rural areas it fell to 9%.
Noise pollution affects Hungarians somewhat less: 13% of people living in cities and 8% of people living in rural areas complain about street and neighborhood noise. For those who do experience it, it is more than just a minor nuisance: constant noise pollution can lead to cardiovascular disease, immunosuppressive diseases and gastrointestinal disorders, the research says.
As for the ideal temperature, warmth at home is out of reach for many:
Europeans (34 million people) cannot keep their homes warm enough, putting themselves at risk of respiratory and cardiovascular diseases. The situation is not much better in Hungary,
where 6% of the population say they cannot keep their homes warm enough.
In addition to physical health, recent research shows that indoor climate also affects our mental well-being: a lack of heating has almost twice the impact on well-being and life satisfaction as being away from a partner; noise pollution can cause sleep disturbances; and a lack of light also affects our mood, increasing the risk of depression.
Some 29 million Europeans (including 772,827 Hungarians) find their homes too dark. It is not surprising to note that the European Commission has highlighted human health and well-being as one of the most important co-benefits of energy efficiency.
Furthermore, healthy and sustainable buildings not only help to keep occupants healthy, but can also contribute to reducing carbon emissions, improving energy efficiency, energy conservation and climate protection. Buildings are responsible for nearly 40% of Europe’s energy demand. Over the last 10 years, energy consumption has fallen by
largely due to improvements in energy efficiency.
“Providing the right indoor temperature and at the same time providing a building with sunlight and fresh air has always been a challenge in architecture, but today it is a different story,” says Noémi Ritea, managing director of Velux Hungary.
“With well-insulated, energy-efficient skylights, we can create homes with better indoor climates while protecting
buildings from the heat of summer and the cold of winter without wasting energy unnecessarily,” she explains.
“We have the technology to do this, and we need to use it for the benefit of the people living in these buildings and for future generations,” Ritea adds.
Recent data from the World Health Organization shows that investing in housing would have the biggest impact on people’s health over the next two to four years, more even than direct investment in health.
Moreover, there are tangible economic benefits from upgrading public buildings, the report notes, adding that while there is not enough data available for precise economic modeling, there are figures that provide a conservative estimate of the potential benefits of reducing the four risk factors across Europe.
Based on currently available data, Europe’s economy could gain EUR 130 billion by 2050 from productivity improvements in school ventilation efficiency alone, the report finds.
According to the Velux Healthy Homes Barometer 2022, one in three Europeans, including 31% of Hungarians, have at least one indoor climaterelated risk that could prove to be a serious health problem, whether it’s dampness and mold, darkness, cold or excessive noise.A monthly look at health issues in Hungary and the region
“With well-insulated, energyefficient skylights, we can create homes with better indoor climates while protecting buildings from the heat of summer and the cold of winter without wasting energy unnecessarily.”Noémi Ritea, managing director of Velux Hungary.
The 15,500 sqm Breeam “Excellent” and Access4You “Gold” certified RoseVille, located in Óbuda, is the first standalone office building by Atenor in Budapest rather than its traditional largescale, phased campus-type projects. Veeva Systems will be the first tenant to occupy the development.
“We are delighted and honored that Veeva Systems chose RoseVille as the future home of its Hungarian operations,” comments Zoltán Borbély, country director of Atenor Hungary.
“We are confident that ESG will be increasingly important for large corporates
in the future and will be essential in keeping a highly qualified workforce. Sustainable and human-centered workplaces enhancing wellbeing are an important part of this culture, and Atenor is a partner providing exactly that to our tenants,” he adds.
The Hungarian architectural studio Artonic Design Ltd. designed RoseVille, which includes terraces, an inner garden, underground garages, and public green surfaces and atriums.
Founded in 2007, Veeva Systems is a global provider of industry-specific cloud software
solutions that address the unique operating challenges and regulatory requirements of enterprise companies in the life sciences industry. The American company is present in 15 countries worldwide and says the Budapest office is strategically important.
“We are pleased to announce that Veeva Systems will have its new headquarters for Hungary and Eastern Europe in the new
building developed by Atenor,” says Ángel Mieites, senior director of workplace and facilities for Europe at Veeva Systems.
“From the first contact, Atenor’s conversations with us have been of an excellent level of professionalism and showing an absolute commitment to the tenant, as well as offering a very high-quality building and service in an ideal location for Veeva in Budapest,” he explains.
“This has led us to decide on this new headquarters where we will design an office that will be ready for the challenge of the new ‘Work Anywhere’ way of working, and that will support us to continue our growth in this region,” Mieites adds.
The Belgian-based Atenor is present in 10 countries in Europe, including Hungary since 2008, and is a leading CEE developer. It is a leading campus developer, developing sustainable office and residential schemes that blend organically into the city landscape and enriching the communities around them with landscaped community spaces and a wide range of services, according to Atenor.
The company gained CO2-neutrality certification in 2021 and has recently achieved green financing by issuing green retail bonds for its investors. In a recent significant deal, Atenor has concluded a 16,000 sqm prelease with E.On at the now fully let first phase of the BakerStreet office project, due for completion in the first quarter of 2024.
Cushman & Wakefield have traced a potential new office supply of 300,000 sqm in the Budapest office market for 2022, with total stock at 4.17 million sqm and an overall vacancy rate of 5%.
delivery of the charging solution for the largest e-bus fleet in Hungary, the building automation solution system for the tallest office building in the capital, and the modernization of the production facilities of a baking company and a bowling factory. We also extended our contract with a car manufacturer, where we will continue to provide on-site services for the coming years.
BBJ: Are there any plans for expansion in Hungary in 2023 or beyond about which you can talk?
TJ: In the 2022 financial year, we have further improved our performance after an already strong 2021, despite circumstances like COVID and supply chain challenges: last year, orders grew by 28% and sales by 15%. We aim to maintain the results and the momentum. This is based on the continued digitalization of the economy, the increasing sustainability ambitions of economic actors, and new investments. Another area of growth could be to open toward battery manufacturers.
BBJ: Where are your facilities in Hungary?
BBJ: We were pretty proud when we reached our 30th anniversary on November 9. The same month, on November 22, Siemens celebrated 135 years in Hungary. Congratulations. To what do you put down such longevity?
Tamás Jeránek: First of all, congratulations on your 30th anniversary. Throughout the years, the BBJ has developed a great brand and is an example of quality journalism. Regarding longevity, our success may lie in continuous adaptation to the business world, which is a result of a push-pull effect. On the one hand, we are challenged by the future demands of our customers and the kind of solutions they will need. We also move forward with technologies we anticipate will contribute to a better tomorrow and bring answers to megatrends. Siemens is a master in changing itself: the company started 175 years ago with 10 people in a courtyard in Berlin to develop and market the dynamo. Today, it has become a global technology company with more than 300,000 people focused on industry, infrastructure, mobility, and healthcare. Our solutions enable organizations to achieve and accelerate their digital transformation and make their operations more sustainable.
In Hungary, Siemens was registered on November 22, 1887; six days later, Budapest’s first tram was in public use. Since our foundation, we have been contributing to the modernization of the country: the first subway in continental Europe, Hungary’s first radio station, the first telecommunication cable between Vienna and Budapest, and the first telegraph between Berlin and Budapest were all created with Siemens technology, just to name a few examples.
As a pioneer of modernization in Hungary, Siemens Zrt. has undertaken projects throughout its history that are perhaps less spectacular, but at least as significant. These include
• Introducing Industry 3.0 and 4.0 technologies;
• Supporting the creation of automotive factories that have become a mainstay of the domestic economy, and also the production process of these factories;
• Implementing industrial computers (PLCs) that enable efficiency and measurement, from power plants to water production;
• Creating efficient warehouses;
• Building automation and security systems for plants and office buildings;
• Creating smart infrastructure, achieving grid upgrades, sustainability, energy efficiency improvements; and
• Developing university cooperation enabling a more modern educational environment.
BBJ: Siemens may be “old,” but it is not old-fashioned. How do you work to keep the innovative mindset at play?
TJ: Innovation is in our DNA. In the fiscal year 2021, Siemens filed around 2,500 patents worldwide, 1,720 of them with the European Patent Office. The company’s employees reported 4,483 innovations, representing about 20 inventions per working day, making it one of the most innovative companies in Europe. Last year, our technology company spent 7.8% of its revenue on R&D, employing around 42,000 people and holding a comparable number of patents, at 43,400. In Hungary, we also pay particular attention to employee ideas and annually reward the initiatives with the greatest impact. In this area, our Kecskemét team is particularly strong, improving various aspects of maintenance work, but we also see a good number of efficiency ideas in sustainability. All are evaluated and implemented when possible. Innovation does not only happen from within, but also through co-creation with our partners, customers and academic
institutions. This is one of the reasons why we have also developed close partnerships with universities. At the same time, our job to connect the online and real worlds demands nothing less than continuous innovation and reinvention.
BBJ: Say the brand name “Siemens,” and many people automatically think of Germany. How important is the Hungarian business to the overall operation? Is there anything you do here that is unique within the firm?
TJ: In the world of Siemens, Hungary stands out in several respects: Hungary (and the Central and Eastern European region) is a hotspot for automotive manufacturing, a key industry for Siemens: apart from Germany and China, for example, Hungary is the only location where all the most important representatives of German automotive manufacturing are present. Our training center is among the top 20 units worldwide.
BBJ: What is Siemens Hungary working on currently?
TJ: The fulfillment of the promise of industrial digitalization. In other words, Industry 4.0, the creation of smart infrastructures (smart grids), the development of e-mobility infrastructure, and providing building technology solutions are the key focus areas for Siemens Zrt. With little exaggeration, Siemens solutions are a part of almost every new greenfield investment project. Among the priority projects of our recently closed business year was the
TJ: We have three locations in Hungary: Győr, Kecskemét and Budapest. In total, we employ 300 people, mainly in an office environment. Where possible, we introduced the “new normal” system, which allows working from home twoto-three days a week.
BBJ: How badly affected are you by the energy crisis or the war in Ukraine?
TJ: Implementing energy efficiency projects in the context of the energy crisis is at the top of our clients’ agenda. We support them in how they can achieve maybe even more with fewer resources. At the same time, Siemens has a long history of sustainabilityrelated developments going back decades, and we build on this foundation to serve our customers. Siemens is helping the victims of the war in Ukraine through charity campaigns, both in Hungary and globally. Following the start of the war, Siemens announced its exit from the Russian market.
BBJ: Finally, how did you celebrate the 135th anniversary?
TJ: In addition to celebrating, anniversaries for me are always a reminder of how we can continue to serve modernization, especially in industry and smart infrastructures: what is the next step? In industry, this is the implementation of the metaverse. We are proud that Siemens’ first industrial metaverse will be created for the BMW plant currently under construction in Debrecen. With the industrial metaverse concept, we combine technologies such as digital twins, AI, simulation, and big data to perfect every aspect of manufacturing, as every detail and process interaction is reproduced in the digital space. For example, in the case of lower production, we can go back to the past to see what happened at the device/robot level on the floor, but we can also “look into the future,” testing the characteristics and results of the processes. This will be the next stage of Industry 4.0.
Overall, pizza and hamburgers are the most popular warm dishes:
hot food orders in the last year were for pizza and 21% for hamburgers. Hungarian dishes accounted for 9% of orders, while American delicacies accounted for 8%.
Orders from students peaked in the exam period, when twice as many orders were placed as at other times of the year. But the biggest overall customer was from the capital, where one customer ordered 140 beers and 130 snacks worth
The delivery company’s summary also includes payment characteristics, with its data supports the findings of Mastercard’s annual Payment Experience Report, which found that the proportion of online credit card payments is steadily increasing and more people are saving their card details in the system.
The hot dishes ordered for breakfast, lunch and dinner do not greatly differ from each other: Pizza tops the list in the morning online shopping basket between 9 and 10 a.m., followed by burgers and Hungarian-styles dishes. The order is also similar for lunchtime baskets, but for dinnertime orders, Hungarian dishes lose their place to American specialties.
In Budapest, an average of HUF 300 more was spent on hot food per order than in the rest of the country, with dinner orders in the capital’s District II standing out most from the average. Residents of District XVII tended to spend more on lunch, while residents of District XXII spent the most on breakfast.
The record for the “most orders from one area” was not set in Budapest, but in the university district of Debrecen, which made a total of 11,492 orders worth HUF 47 million in one year. The students in the town of nearly 200,000 mostly ordered pizza, while McDonald’s was the best-selling restaurant food.
from Foodpanda. Beer is not the most popular product in the range offered by the delivery service, however: in the past year, the most popular items ordered were
cheese sticks, semi-skimmed milk, sugarfree cola, bananas and chicken breast fillets. Buns, milk, mineral water and energy drinks from other supermarkets available on the platform were the most frequently added to the online basket.
The number of online payments has increased steadily over the past year, up 6% from 2021 to 86% overall, with 68% of shoppers saving their card details. The number who are digitally tipping is also growing, with hundreds of thousands of users tipping at least once in October this year alone, with an average value of HUF 200. The highest single tip was HUF 20,000.
Overall, pizza and hamburgers are the most popular warm dishes: 27% of all hot food orders in the last year were for pizza and 21% for hamburgers. Hungarian dishes accounted for 9% of orders, while American delicacies accounted for 8%.
The couriers worked hard for the recognition this year, with the fastest delivery taking an unbelievable 18 seconds for a chestnut puree and a soft drink. The most active courier worked 998 shifts in the year, for a total of 4,735 hours, so spent nearly every second hour delivering.
In related if seperate news, the Wolt+ delivery service is now available in Hungary, allowing subscribers to order from an unlimited number of connected restaurants and shops without a delivery fee.
Wolt+ is a renewable, monthly subscription that allows users to order from restaurants and shops connected to the service for a monthly subscription fee of HUF 1,490, with no delivery fee. The first month is a free trial period, during which customers can test the service free of charge.
The subscription fee is recouped on average after more than two orders per month, so regular Wolt users can access thousands of restaurants and shops at a much lower price, saving hundreds of forints per order.
The subscription service currently covers just Budapest, where customers can choose from more
than 700 popular restaurants and shops. The minimum purchase value is HUF 3,000 for restaurant and retail orders and HUF 5,000 for food orders from supermarkets. The distance limit for deliveries is four kilometers. In the app, a W+ icon indicates merchants who have joined the service, making it easy to find places offering discounts.
“It’s important for us that Wolt continues to offer an affordable service in the current economic climate: with the launch of Wolt+, our aim is to ensure that our customers can continue to enjoy the convenience of Wolt while saving money on the delivery charge for each order,” says Ákos Tajta, the firm’s managing director for the Baltic States and Central Europe.
Wolt’s subscription service has already been successfully launched
in several countries, including Finland, the Baltic States, the Czech Republic and Slovakia.
“We have seen that our users are keen to switch to Wolt+ because of the savings that can be made and the number of orders from subscribers is increasing. We are excited to launch the service in Hungary, which will make the convenience of home delivery provided by Wolt even more accessible to Hungarian users,” notes Tajta.
Among the partners that have joined are popular restaurants such as Padthai Wokbár, Pizza Me, Vapiano, Wasabi, and Zing. In the grocery sector, customers can order from Wolt’s own grocery chain, Wolt Market, as well as from Auchan, Príma and Tesco, but Wolt+ partners also include other shops such as Bortársaság, Lego, Szamos Marzipán and Unipatika.
Pizza remains at the top of the Hungarian food delivery popularity list, but many people also ordered baked goods, milk, and water over the past year, according to the service provider Foodpanda’s annual summery of local consumption habits.
The Budapest Business Journal ’s corporate finance columnist Les Nemethy last wrote about the case for gold in April 2021. Now he says he sees a need to return to the subject.
In April 2021, gold was in the price range of USD 1,700; as of December 10, 2022, it was approaching USD 1,800. You may consider this a less-than-stellar performance and the author to be in an incurable gold bug. Before jumping to these conclusions, consider the following:
(a) Relative to just about every other asset class, this is not a bad performance. Debt and equities are each down 20 or so percent over the same time horizon.
(b) When you consider that over the same time, the U.S. dollar has strengthened considerably, gold’s performance is even more remarkable. Measured in every non-dollar currency, gold’s performance has been strong.
(c) While in April 2021, I talked of underlying market forces possibly pushing up the value of gold, I was never brave (or foolish) enough to forecast when such a significant upward valuation in gold might occur. It seems that underlying market forces are even stronger today, which will be the subject of this article. Let me summarize the current case for gold in five points.
Inflation remains uncontrolled and real interest rates remain strongly negative.
European Central Bank Chairwoman Christine Lagarde recently stated that even a recession wouldn’t be sufficient to cure inflation. In the United States, monetary tightening has had only a minimal effect on reducing inflation: The Consumer Price Index is down from a recent peak of
on June 22 to 8.2% in September. Negative real interest rates remain rampant throughout the world. The loss of purchasing power exceeds the interest on savings. Holding bonds or savings accounts is illogical behavior unless one believes that inflation will come down relatively soon. As it becomes increasingly apparent that this is not the case, and negative real interest rates will remain for the foreseeable future, the trickle toward gold may become a stampede.
Alan Greenspan, former chairman of the U.S. Federal Reserve, once said: “I view gold as the primary global currency. It is the only currency, along with silver, that does not require a counterparty signature.” Central banks’ accumulation of gold is a possible indication that they wish to hedge against a potential upcoming financial crisis and are less keen on the U.S. dollar as a reserve currency.
will consider holding their savings in bitcoin? Surprisingly, there remain a few die-hards. My own opinion is that bitcoin will never recover the level of confidence previously enjoyed and gold will take on a new luster. Gold may seem a little old-fashioned compared to cryptocurrencies, but it has a track record of several thousand years.
Retired U.S. Marine General Jim Mattis, the former Secretary of Defense, recently stated to a gathering of 2,700 CEOs: “We are living in a period of stability compared to what is coming.” There are so many pressure points in the world today beyond Ukraine, from Taiwan to the Middle East. Russia’s President Vladimir Putin has not finished escalating. He has recently made statements about the likelihood of nuclear war increasing and that Russia has incorporated a pre-emptive atomic strike into its military strategy. The rise of China puts it on a potential collision course with the States. Gold is a natural refuge in times of geopolitical tension and war.
Bitcoin has, in a short time, collapsed from around USD 60,000 to about USD 17,000. Many bitcoin exchanges have been hacked or collapsed, while fraud allegations abound. Who in the world
More than 50 emerging countries are facing the risk of a financial crisis, according to the UN. How will the United States service USD 32 trillion of debt at 5% when total tax revenues are USD 3 tln-4 tln? Given that high leverage equates to financial instability,
and global leverage is off the charts, people are losing confidence in the Fed’s inflation narrative and the value of fiat currencies. Having at least a percentage of one’s wealth in gold seems to be an increasingly logical choice. There is no entirely safe haven in times of crisis, but while gold may drop when the bottom falls out of financial markets, it tends to fall less far and recover quicker.
This article should not be construed as financial advice. The above underlying market forces are at play, but no economist can predict when gold will make its move. Gold as a small percentage of one’s portfolio, whether for an individual or pension fund, seems to be an increasingly logical hedge.
As George Bernard Shaw once wrote: “You have to choose between trusting to the natural stability of gold and the [….] honesty and intelligence of the members of government. And with due respect to these, gentlemen, I advise you, as long as the capitalist system lasts, to vote for gold.”
Les Nemethy is CEO of EuroPhoenix 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.
“You have to choose between trusting to the natural stability of gold and the […] honesty and intelligence of the members of government. And with due respect to these, gentlemen, I advise you, as long as the capitalist system lasts, to vote for gold.”
The MOL Campus, Budapest’s 1st True Skyscraper, Inaugurated
GERGELY HERPAI
One of the most significant changes will be that employees with young children (up to the age of eight) and employees taking care of relatives will be able to ask their employer to change their place of work or working schedule or to request part-time or teleworking. Employees may only make such a request if they have been employed for at least six months and must give written reasons.
The contemporary architecture of the office seems set to make it a dominant landmark in Budapest. Its uniqueness is also evident in the choice of location: the Buda area, surrounded by the Danube and an artificial bay, is, along with the Váci Corridor on the Pest side of the river, the most flourishing office district in the Hungarian capital.
MOL’s staff have, up to now, been working at nine different locations in the capital. The new headquarters aims to give them a harmonious working environment and to ensure efficient workflows in line with MOL’s strategy.
The MOL Campus, next to the Kopaszi Dam, on the day of the inauguration.
CEO of MOL Group, said at the official inauguration ceremony on December 8.
“MOL decided to build a new, privately owned headquarters in 2016 because
we believe and trust in the future. We built this building, not for ourselves, but for the future, for future generations and future workers,” he explained.
“We want them to own it and carry on MOL’s success for decades to come. Everything in this building is about the employees, from the lovable community spaces to the collaborative working environment and sustainable solutions,” Hernádi added.
The most comprehensive amendment to the current Hungarian Labor Code (Act I of 2012 on the Labor Code) is expected to enter into force on January 1, 2023. Most of the amendment is based on the implementation of European Union directives (2019/1152 and 2019/1158). These aim to create more transparent and predictable working conditions and a better work-life balance, especially for parents and employees caring for their relatives.
The changes will require considerable preparation on the part of the employers, for example, by updating labor law documentation and examining more carefully the circumstances that give rise to unilateral measures, such as terminations, before taking action.
The employer must provide a written answer, including proper reasoning, within 15 days. If the employee believes the refusal is unlawful or the employer does not offer a response within the time limit, the employee can go to court. The court can provide the necessary approval to change the working conditions instead of the employer.
The mandatory content of the information to be provided at the start of the employment relationship will be extended, requiring employers to update their templates. Furthermore, the deadline for providing such information will be shorter (it will have to be presented within seven days of the start of the employment).
The interior design primarily focused on creating a modern, sustainable workplace that supports collaboration. The offices follow the ABW (Activity-Based Workplace) model, which means that each employee can choose his or her own working environment, depending on the task at hand, and can change it flexibly at any time. In the tower section, triple units, called triplets, house the various departments.
Trust in the Future
The company says that the MOL Campus is one of the greenest office buildings in Budapest and represents the highest level of energy efficiency and environmental awareness. MOL’s ambition is for the new headquarters to receive “Excellent” and “Platinum” certifications from the international third-party assessment schemes Breeam and Leed.
Thanks to innovative solutions such as its 900 sqm of solar panels, geothermal cooling and heating system, and greywater recycling, the MOL Campus meets the highest sustainability standards.
A substantial change is expected in the general rule on abuse of rights. From January 1, if an employee claims that the employer committed an abuse, the burden of proof in any legal dispute will be on the employer with respect to the fact that there is no causal link between the circumstances referred to by the employee (for example, that he or she had a private dispute with his or her manager) and the harmful action caused (such as termination of employment).
This change in the burden of proof obviously puts employers in a more difficult position. One practical consequence may be that employees are more likely to bring legal actions to challenge dismissals.
A significant change in the context of terminations is that, at the request of the employee, the employer will be obliged to give reasons for the termination even in cases where the Labor Code does not otherwise oblige the employer to do so (under a probationary period, termination of an executive employee’s employment, or an employee who is retired). Such a request will only be possible in some instances, for example, if the employee claims the termination is due to their asking for flexible working conditions.
The duration of paternity leave will be increased from five to 10 working days. For the first five working days, the employee will be entitled to his full absence pay; from the sixth day onwards, 40% of it must be granted. A new legal instrument called parental leave will be introduced, under which an employee with a child under three will be entitled to 44 working days of leave (both the mother and the father can take parental leave). For this leave, 10% of the absence pay is payable, but this must be reduced by the amount of the child’s social security benefit paid to the employee.
A working time benefit for caregivers is also introduced, under which an employee is exempted from the obligation to work for up to five working days a year to provide personal care to a relative who needs care for serious health reasons or to a person living in the same household as the employee.
Although this is not a change in connection to the directives, it is worth mentioning that in the future, an employee who is unfit for work for health reasons will be exempted from their obligation to work and will not be entitled to salary during the period of exemption. With this amendment, the legislator has sought to eliminate inconsistent case law by introducing a uniform rule in the Labor Code.
Although U.S.Hungarian relations may seem at a low nowadays, last year’s reports on AmCham Hungary’s activities presented at the 34th general assembly and board elections evidenced the opposite. The outlook at the gathering, which saw senior officials elected, gave hope that things could take a positive turn at higher levels in the near future.
AmCham Hungary’s calendar was full of meaningful gatherings in the past 12 months. As President Zoltán Szabó pointed out, several ministers and ambassadors were hosted along the way, and the organization’s flagship events drew substantial attention, as always.
Cosponsored by the Hungarian Investment Promotion Agency, the Business Meets Government summit was dedicated to the energy crisis this year, which naturally attracted stakeholders in droves. But other occasions, such as the HR Dream Day and the first AmCham Sustainability Conference,
were popular, not to mention the annual networking events marking the Fourth of July and Thanksgiving.
Secretary treasurer Mike Carlson told members that the finances are in good shape. During 2022, the finance department had been “very careful” with expenses, and the number of members had grown. Reserves in the form of bonds worth HUF 125 million provide a solid base for rainy days. The year 2022 saw profits reach
with revenues totaling HUF 203.9 mln.
As far as the upcoming year is concerned, membership retention remains a key focus area, as 70% of all revenues come from membership fees. Revenues are expected to surge significantly, together with costs, and an overall positive result is projected. Just as in 2022, cash flow forecasts will be updated and monitored weekly, and the board will review the budget and actual progress monthly.
CEO Írisz Lippai-Nagy presented the annual plan for 2023, emphasizing the importance of continuous communication in advocacy despite the currently low level of U.S.-Hungarian relations, since that is the only way to help improve the competitiveness of the Hungarian economy.
She also encouraged members to be active and voice any issue they wish to be handled at the level of policy decision-making. A series of forums, including seminars, webinars, and state secretary and committee meetings, were available for that purpose, she said.
Lippai-Nagy also presented the findings of a membership satisfaction survey that reconfirmed AmCham’s core value proposition. Members highly appreciated its advocacy efforts; however, more impact was expected.
Several dedicated events provide an ideal platform for sharing insights and proposals. The compliance and healthcare conferences are just two examples; the Career Orientation program, the Board Simulation program, and the BSS Open Days serve a similar purpose, just like the various charity events in which AmCham is involved.
“Members need to deliver the content, and AmCham drives it forward and finds channels for the proposals to be processed,” Lippai-Nagy said.
Networking has the highest importance for members, the poll found, and they also would like to have more information on the work of committees and ways to contribute. On the other hand, best practice sharing through policy forums supporting the chamber’s Strategic Focus Areas should be strengthened.
Another fundamental expectation on the part of the AmCham community is that a platform should be provided to create new Working Groups to support the execution of the AmCham Policy Agenda. This readiness for action is a telling sign that committee work engagement would likely grow.
Charity support continues to gain significance at AmCham; one manifestation of the phenomenon is that, since
the AmCham Foundation (ACF) has been operating as an independent CSR organization.
As Edit Bencsik, a member of the board of trustees, noted, the ACF continues to function as a bridge between donors and those in need.
“We achieved a lot of progress in the field of talent development, corporate volunteering, and foster home care, to name but a few areas,” she said.
The annual Dr. Iván Völgyes Award was also presented for the 16th time at the general assembly for the promotion of U.S.-Hungarian trade. This time it went to Róbert Ésik, who, in his capacity first as president and then CEO of HIPA between 2014 and 2021, was deemed not just to have brought in record-breaking amounts of foreign investment, but to have performed an excellent role in helping AmCham’s policy proposals find their way to decision-makers.
The general assembly voted on the AmCham Hungary presidency as well, with incumbent Zoltán Szabó reelected for another term. István Katona, managing director of Celanese, was voted second vice president. The election of five board membersat-large was also on the agenda. The aforementioned Bencsik (Tata Consulting), Mónika Pais (Diageo Budapest), Veronika Spanarova (Citi), László Kónya (Deutsche Telekom), and Dániel Mayer (Morgan Stanley Hungary Analytics) were all elected.
Acknowledgments for outgoing board members went to Dániel Kőhegyi, Idikó Beck, Róbert Bencze, Péter Csucska, and Orsolya Ludvig.
Accordingly, the complete list of the AmCham Hungary Board for 2023 is as follows: Zoltán Szabó (president), Tímea Pesti (first vice president), István Katona (second vice president), Mike Carlson (secretary treasurer), Matt Zeller, Edit Bencsik, László Kónya, Mónika Pais, Dániel Mayer, Veronika Spanarova and Krisztián Toka (board members-at-large), Írisz Lippai-Nagy (CEO), with Andera Jádi Németh and David Young the supervisory board chair and supervisory board member, respectively.
With the lingering effects of the coronavirus pandemic and the outbreak of the Russo-Ukrainian war, 2022 has seen struggling economies and a deepening energy crisis worldwide. Thus, global M&A activity was not as lively as in 2021, when it broke records. There was a slowdown in Hungary, too, although a major telecoms move will likely reshape the market, and one of the most significant deals in the region’s tourism sector has also been signed.
2022 will undoubtedly be viewed as remarkable by history, but by no means positively. The world seemed set to recover from one of the most devastating pandemics when Russia invaded Ukraine in February. The already ongoing energy crisis has deepened since, and the global economy is now heading towards a notable slowdown, with many countries on the verge of recession.
While the global M&A market reached new highs in 2021, breaking prior records, it is understandable that it hit the pause button this year. Early 2022 saw the value of large deals (more than USD 25 million or more) fall 24% from a year earlier, on a 12% drop in deal volume, according to McKinsey & Co.’s global M&A market report released this fall.
In Hungary, 2021 had seen a mixed picture: while the number of transactions was up by 25% from 2020, the combined deal value showed a 19% drop. Altogether, 132 transactions with
a total value of USD 4.64 billion were made public in Hungary in 2021, with IT transactions dominating. So what was the story this year?
2022 started with the closure of one of the largest deals in recent years: Hungary’s 4iG completed the acquisition of cable service provider Digi. The company announced in November 2021 that it had agreed to acquire 100% of Digi for EUR 625 mln. Hungary’s government earlier declared 4iG’s acquisition of Digi of “national strategic significance,” thus exempting the transaction from the scrutiny of the competition authorities.
However, the appetite of a company seen as having close links with the government seems far from satiated: in August, 4iG chair and CEO Gellért Jászai announced that, together with the Hungarian state, it planned to purchase Hungary’s third largest mobile service provider, Vodafone Hungary.
“This will be the most significant market-shaping transaction in the telecoms industry in Hungary since the privatization of Matáv in the 1990s,” the company wrote on its website.
According to the acquisition plans, 4iG will become the owner of 51% of Vodafone Hungary, while the Hungarian State will take a 49% stake. Vodafone Hungary is being acquired for a total cash consideration equivalent to an enterprise value (EV) of HUF 715 bln.
“The acquisition will create a predominantly Hungarian-owned group of infocommunications companies and a clear number two operator in the
Hungarian market,” commented Jászai in connection with the announcement. However, things have changed a bit since the announcement. The parties promised to close the Vodafone transaction by the end of 2022. But it now seems the state might have a more prominent role in the purchase than initially planned. Both sides need to raise nearly EUR 850 mln to complete the deal.
banks for some kind of bridging solution, such as a bridge loan, Telex says.
The government has a long-held aim to increase the share of national ownership in what it deems vital sectors. In recent years, steps have been taken in the energy, banking, and media sectors to achieve this, and the Vodafone purchase also fits into this picture.
But 4iG isn’t limiting its ambitions to conquering the terrestrial infocommunications market; it is also aiming for the stars. In September, 4iG signed a contract to acquire a 51% stake in Israeli satellite company SpaceCommunication over several years.
In October, 4iG also announced that the purchase of 75% of the Honeycomb Group was completed, meaning the company became the direct and indirect owner of 75% of the Crealive Advertising Agency and its subsidiaries.
But sometimes, even the big hitters fail to connect and knock it out of the park: after a lengthy negotiation process and a signed contract, the acquisition of MVM Net fell through in September.
Despite the financial burden that was caused by the fuel cap, Hungarian oil and gas industry giant MOL managed to seal a major deal in December. It entered the Polish market by acquiring 417 Lotos gas stations from Polish oil company PKN Orlen; the value of the transaction is USD 610 mln.
The deal is one of the conditions set out by the European Commission when it gave the green light to the PKN OrlenLotos merger. PKN Orlen and MOL also signed an eight-year fuel sales deal and a branding license agreement for Lotos petrol stations.
With the transaction, MOL becomes the third-biggest player in the Polish fuel market and could have more filling stations in Poland, a country with a population of 40 million, than in Hungary.
As part of the transaction, MOL will sell 185 filling stations to PKN Orlen, worth USD 259 mln: 144 filling stations are located in Hungary and 41 in Slovakia.
According to the Hungarian news site Telex, the state part of the financing is relatively easily managed from some source or other. However, with regard to 4iG, it is questionable whether there is a better chance of forint or euro financing, in addition to the very expensive forint interest rates, the portal wrote early December.
It is now suggested the state-owned Eximbank also helps with a significant EUR 700 mln-750 mln bonds issuance. That would further increase the state’s role in the transaction, but arranging it will take longer. Until then, JP Morgan, which is organizing the financing, is looking for partners from domestic
The acquisition means MOL has already exceeded its strategic goal for 2025 and expanded its network to around 2,400 filling stations in 10 countries.
Prior to the Lotos transaction, the Hungarian oil and gas firm had agreed on the purchase of Hungarian filling stations bearing the Lukoil brand with the operator Norm Benzinkút Kft. With 79 fuel stations, the company is fourth in the Hungarian market after MOL, OMV, and Shell, according to data from the Hungarian Mineral Oil Association (Mász). The Lukoil gas stations are among the 185 MOL will sell to PKN Orlen.
The Mészáros group, another government-friendly operation that
“This [the sale of Vodafone Hungary to 4iG] will be the most significant marketshaping transaction in the telecoms industry in Hungary since the privatization of Matáv in the 1990s.”Yves Bonnefont, Stellantis chief software officer, on the left and László Kishonti, founder and CEO of aiMotive, on the right sign the acquisition agreement.
forms part of the business empire of local plumber and village mayor-turnedbillionaire investor Lőrinc Mészáros, further strengthened its energy portfolio by acquiring a majority stake in energy trading company Central Energy Trade. The deal was announced early in November, and if completed, it will join the Opus Tigáz and Opus Titász gas and electricity distributor companies in the Mészáros stable.
Stellantis, one of the world’s largest car manufacturers, announced in November that it had agreed to purchase aiMotive, a Hungarian company developing advanced artificial intelligence and autonomous driving software, to increase its technology development efforts.
Headquartered in Budapest, aiMotive has offices in Germany, the United States, and Japan, with more than 200 employees worldwide, including engineers with advanced AI and autonomous driving expertise. The Hungarian business will operate as a subsidiary of Stellantis, maintaining its operational independence and startup culture. Financial details of the transaction were not disclosed.
Elsewhere in this sector, AutoWallis Caetano Holding Zrt., founded by Hungary’s AutoWallis Group and its Portuguese partner, has gained ownership of Renault Hungária Kft., attaining the exclusive import rights for the Renault,
SUPPORTED BY YETTEL HUNGARYDacia, and Alpine brands in Hungary, the group said in a press release in October.
The AutoWallis Group did not stop with the purchase of Renault Hungária, however. The group acquired Net Mobilitás, owner of the No. 2 car portal in Hungary, JoAutok. hu, and car-bidding platform Auto-Licit.hu, from WAM Immobilia Zrt., the company announced this fall.
Mid-December brought two significant deals in the Hungarian banking sector. The first one was announced at the end of last year but only closed a year later.
Austrian-owned Erste Bank Hungary had completed the acquisition of a 100% stake in German lender Commerzbank’s local corporate banking subsidiary Commerzbank Zrt., the company announced on December 12.
Erste chairman-CEO Radovan Jelasity commented on the deal, saying Commerzbank’s activities had been merged into Erste’s corporate business, and with this, it had completed its 10th acquisition. Following the transaction, Erste Bank’s market share in corporate lending now exceeds 10%. Previously, Erste Bank acquired broker Random Capital, Aegon’s home savings bank, Citibank’s retail division, and the asset management division of BNP Paribas in Hungary.
Another big player in the financial sector announced its plans to enter the Uzbek market. OTP Bank is to acquire the Uzbek Ipoteka Bank; the two parties
signed the contract for the acquisition on December 12. The Uzbek Ministry of Finance currently owns Ipoteka Bank.
Leading Hungarian bank OTP will acquire 100% of the ministry-owned shares (nearly 97% of the total stake) in two stages: 75% now and the remaining 25% three years after the financial close of the first transaction. The financial closing of the first transaction is expected to take place in the first half of 2023.
OTP has been in talks with the Uzbek government since the end of 2020 regarding the possibility of participating in the privatization of the country’s banking system, which has been a goal for the Uzbek leadership. The sale and
purchase agreement between the two parties was ready months ago, but the Russo-Ukranian war intervened, and the deal was delayed until December.
Wirtualna Polska Holding, listed on the Polish stock exchange, will buy Szallas Group, which also operates Szallas.hu and has become an international player in recent years, the company announced in September. The Warsaw-based e-commerce and media company group is expected to pay EUR 82 mln to the ownership group. (For more details on this deal, see “Inside the EUR 82 mln Szallas Group Sale to Wirtualna Polska” on page 20.)
On top of the myriad everyday commitments, and with the purchasing power of salaries plunging, Christmas present buying can pose another challenge that makes reaching that balance even more difficult.
BÁLINT SZŐNYIChanging a brand name is a gigantic task. However, it also offers a clean slate that creates the space to start again from scratch. PPF Telecom Group saw that opportunity when it bought the Central and Southern European business units from the Norwegian owner.
According to the agreement between Telenor ASA and PPF, rather than keeping the old name, the PPF Telecom Group introduced an entirely new brand in Hungary, Serbia and Bulgaria.
“The clean slate is the highest category of rebranding as you need to rebuild the brand’s identity and story from the ground up,” Gergely Dolezsai, director of brand and marketing communication at Yettel Hungary, says.
As Dolezsai explains, a new brand can provide a fresh framework, but what matters to customers is with what that is filled. However, before that process can begin, recognition must reach a certain level. The latter criterion was ticked in Yettel’s case way ahead of schedule.
“Surveys showed that by May, people were able to name Yettel spontaneously; we had envisaged a one-year period for that to be accomplished,” Dolezsai notes.
The core theme of the rethought image is balance. Everybody has a lot of different areas in life where they need to deliver, and that pressure can be overwhelming.
“If used well, tech can help tackle the issue,” Dolezsai notes. A robust 5G connection, together with an
unlimited data plan, can work magic by enabling individuals swamped with work and family-related obligations to strike a balance between their activities through improved productivity in the office and at home. Supported by a growing 5G network, Yettel’s mobile and mobilebased Home and Office solutions for consumers and businesses have been designed to make just that happen.
Perhaps the best idea is if we just give ourselves. That is precisely what Yettel’s current “Give Yourself” ad campaign revolves around, encouraging people to let go of excessive expectations and thus aim for balance. If achieved, it could even qualify as a Christmas miracle.
The brand’s logo has a life of its own that carves out space for creativity. Given its typographic nature with a period at the end of the name, marketers have plenty of playful options to strengthen the image of freshness. The logo’s characteristics are also such that the Yettel sign works well on-screen and offline.
Any rebranding begs the question of how it might impact the Hungarian telco market. Yettel says it is confident about the future, not least because of the special emphasis on customer-oriented services that are bound to pay off in the long run.
“We focus on ourselves and our clients so that we can work on our ambition to provide the best possible service and innovation that promises a true customer experience that can help to strike a balance in lives,” Dolezsai concludes.
Telco giant Telenor Hungary morphed into Yettel less than a year ago, and all signs point in the direction that the rebranding has proved flawless. Part of the smooth transition is the strong positive messages associated with the new brand, but this is just the beginning of an exciting new journey.Gergely Dolezsai
Hungary has a strong pipeline of assetgrade commercial real estate products to meet both tenant and investor demand, particularly in the office and industrial sectors. The various market sectors are regarded as attractive investment destinations by international, regional, and domestic investors because of a significant yield premium on Western Europe and, indeed, on Poland and the Czech Republic.
GARY J. MORRELLWhile continued interest is shown in the Hungarian and Central and Eastern European markets, the current investor hesitancy reflects the geo-political uncertainty in the CEE region. Many vendors and investors are adopting a wait-and-see approach in anticipation of a more favorable political, economic, and financial environment and more predictable yields and pricing levels.
“We have sellers on the market. The lack of activity today comes from, one, the reduced number of buyers, as a significant number have decided to wait and see the market evolution for a few months before acting, and, two, the limited availability of debt and its increased cost,” comments Benjamin Perez-Ellischewitz, principal at Avison Young Hungary.
“A few months ago, the bottleneck in investment activity was the lack of product, although this is not the case anymore,” he adds.
The Hungarian investor Adventum’s acquisition of the Tesco portfolio was the largest deal in Hungary in terms of magnitude in 2022, according to Rita Tuza, head of capital markets at JLL Hungary.
“We rarely see such large ticket deals happen in Hungary and the complexity of the deal (14 multi-tenanted assets at various locations in Hungary and additional Czech properties) makes it even more significant,” she explains.
There is currently low liquidity in the retail market due to uncertainty over the level of consumer spending and
no immediate pipeline in the shopping center sector, although smaller retail formats are attracting investors.
No large-scale malls are planned in Budapest, and most retail development is as part of mixed-use projects and smaller regional retail formats. In Budapest, the refurbishment of existing shopping centers is the dominant form, as center owners strive to reposition their assets to meet current tenant and consumer expectations, with the increasing availability of e-commerce as a method of consumption.
“The pipeline is unchanged and very weak in the traditional retail formats like shopping centers and retail parks. There have not been any commencements recently; however, delayed refurbishment works dominate in existing centers, and technical and design face-lifts are becoming common practice in the retail park stock, in some cases driven by recent changes in the ownership,” comments CBRE. Currently, prime office yield stands at 5.5%, logistics at 6%, and shopping centers at 6.35%, according to JLL.
One of the most significant Budapest office transactions was the purchase of the classic Akadémia Bank Center by Europa Capital and ConvergenCE for close to EUR 50 million.
“With our investor partners, we buy under-positioned buildings in great locations, which we renovate and refurbish with state-of-theart technology and services, then reposition and re-let,” says Csaba Zeley, managing director of ConvergenCE. “We pay great attention to ensuring that all our properties have the highest environmental ratings.”
Commenting on the attractiveness of classic Central European buildings such as Akadémia for investors, JLL Hungary’s Tuza says, “Value-add and renovation can be an interesting
investment option in the case of very competitive pricing. Financing is not as easily available for such products as in the past; therefore, the potential buyer pool became relatively shallow. That being said, refurbishments or value-add options in the CBD [Central Business District] and downtown locations still fly,” she adds.
“We have sellers on the market. The lack of activity today comes from, one, the reduced number of buyers, as a significant number have decided to wait and see the market evolution for a few months before acting, and, two, the limited availability of debt and its increased cost.”
“In our opinion, in the office category, the sale of Freedom Palace has been the most significant. This prime CBD building was on the target list of many core investors for several years. Given the building’s unique location and exceptional quality, it is no surprise that it was traded at a record yield level,” Tuza notes.
The purchase by the French Groupama Can REIM from the French developer/ investor LSGI of the Freedom Palace, which dates back to 1901 and is located in Szabadság tér, indicates the confidence of institutional investors in prime property in Hungary, according to Péter Takács, investment director at Newmark VLK Hungary.
“Wing’s acquisition of two prime properties in Budapest is also significant; it shows that there are
amazing redevelopment projects in Budapest and the local knowledge to bring the value out of them,” he adds.
CBRE puts current prime office yields at 5.25%. A significant yield gap between Hungary and the Czech Republic and Poland remains. Prime offices in the CBD can command lower yields, with the highend Szervita Square Building reported to have transacted at a sub-5% yield.
Total supply in the Budapest office market has reached 4.7 million sqm according to the Budapest Research Forum (made up of CBRE, Colliers International, Cushman & Wakefield, Eston International, JLL and Robertson Hungary). The overall vacancy rate for Budapest has increased and now stands at 11%.
Cushman & Wakefield has traced a potential new office supply for 2022 of 300,000 sqm in the Budapest office market. In a significant recent deal, Atenor has concluded a 16,000 sqm prelease with E.On at the now fully let first phase of the BakerStreet office project, due to be completed in the first quarter of 2024.
In a significant new-build office transaction, Groupama Gan REIM, on behalf of SCPI Affinités Pierre, acquired the 20,000 sqm Green Court Office from Codic Hungary and Pesti Házak, The complex, consisting of two independent and interconnected buildings, is located in the Váci Corridor. It was constructed in line with Codic’s stringent ESG standards and holds a Breeam “Excellent” sustainability rating.
In a major logistics deal, the developerinvestor Wing purchased the Airport City Logistics Park, located in the neighborhood of Budapest Ferenc Liszt International Airport, from CPI. The business park contains almost 44,000 sqm of warehouse buildings and 8,000 sqm of offices in six already functioning buildings, with one more under construction.
“In line with its premium quality, the transaction was carried out at a 5.6% yield, which is the lowest ever rate in the Hungarian industrial and logistics property market,” Wing says of the deal.
The industrial and logistics sector boom continues unabated, as demand remains high and vacancy stands at a record low. Analysts see this sector as being in a favorable position in the postcoronavirus period both in Hungary and CEE, given the background of growth in e-commerce and light industrial production in major regional hubs.
“Both the significant amount of new supply arriving to the market and the high proportion of prelease transactions in take-up demonstrate the continued developer and tenant appeal to the market,” say Cushman & Wakefield. The total supply in the greater Budapest area will reach three million square meters in the coming months, with stock in the rest of Hungary standing at 1.3 million sqm. Overall vacancy stands at around 6%.
The first 25,000 sqm phase of Budapest ONE by Futureal has received Well “Platinum” certification, the highest rating available from the third-party sustainability accreditation organization, according to Futureal. This year, both phases of Advance Tower by the developer on Váci ut also received Well certification.
Hungarian money has traditionally constituted around 50%-plus of investment activity in Hungary and represented 80% of investment volume in the first three quarters of 2022, according to Colliers. The majority of the international capital in the Hungarian market comes from within the European Union (especially the Czech Republic, France, and Germany), according to Perez-Ellischewitz.
“Domestic players generally dominate the market, and we do not expect this to change in the near future,” argues Adorján Salamon, managing director of Eston International. Based on volume, the top three countries for investment in Hungary for 2022 are Germany, Austria and the United Kingdom, according to the advisory firm.
Several hotel projects are at various stages in the preparation and construction process in Budapest and across Hungary, although pipelines are difficult to estimate, with schedules slipping in the current uncertain market environment. Puro Hotels has acquired the project and land plot at Paulay 23 from Mellow Mood, and development is expected to commence in early 2023, according to RCA Analytics. The project is expected to be a 160-180-key superior hotel.
“The major bottleneck for developments going forward is the combination of the rising cost of hotel operations (energy, labor, cost of food), project financing (increasing interest rates and reluctant banks), and construction (supply chain issues, inflation, etc.) However, even under such constraints, there are still projects going ahead,” says Attila Radvánszki, director of Horwath HTL Hungary.
“Our outlook is carefully optimistic as, against all odds, we believe Budapest will continue to be a magnet for city breakers and sports enthusiasts,” he adds.
ESG investing (integrating environmental, social and governance factors into the acquisition and exit
process) is increasingly a core pillar of investment strategies due to pressure from shareholders and legislators and a broader need to be seen to invest in a sustainable way.
Investors have yields and their return on investment as a central priority, although commercially successful investment-standard buildings tend to have attained sustainability accreditation. Indeed, ESG expectations are now integral to the leasing process and asset management.
strategy with a sale to an investor at the end of the development process.
“Investors need to think of their future exit. Outdated assets are and will be more difficult to dispose of; therefore, the market is definitely shifting towards a more sustainable mindset,” commented Máté Galambos, leasing manager at Atenor Hungary.
“I see as one of the major sustainability achievements of 2022 the EU taxonomy adaptation on the European market,” says Zsombor Barta, president of the Hungarian Green Building Council (HuGBC).
“Although many local real estate stakeholders might not yet realize the importance of this, in the mid-term and on a larger scale, this is a very important framework towards a more sustainable future and aligned with the ambitious 2050 zero carbon targets as well,” the president says.
“Financial institutes need to report about their portfolio’s EU taxonomy ratio, and projects that comply with the taxonomy criteria are eligible for financial incentives. This will defiantly have a huge impact on real estate stakeholders and will also push the entire sector towards a more energy efficient and sustainable future,” Barta believes.
The argument could be made that almost all assets at the higher end of the office and industrial sector are sustainability accredited, and market pressures are therefore acting in parallel with sustainability regulations. Building owners and developers need to adopt a long-term sustainable strategy to have the option of an exit
“According to my view, this was a big step in 2022. As stated before, maybe this is not as visible, but it will become a very important issue soon,” he adds.
In the current investment environment, Perez-Ellischewitz expects around EUR 900 mln to have been invested in Hungarian commercial real estate by the end of the year. A sharp slowdown in activity is expected, with a large expectation gap between buyers and sellers.
“In our opinion, in the office category, the sale of Freedom Palace has been the most significant. This prime CBD building was on the target list of many core investors for several years. Given the building’s unique location and exceptional quality, it is no surprise that it was traded at a record yield level.”Budapest One by Futureal.
Magyar Suzuki closed a busy year that saw the plant’s employees, suppliers, and partners in Esztergom spend the 12 months in continuous replanning. As the only European manufacturer of the Suzuki Motor Corporation, the Hungarian factory further strengthened its position within the company group.
As Suzuki Toshihiro, the president and managing director of Suzuki Motor Corporation, and senior consultant Suzuki Osamu highlighted during their visit to Esztergom in June, they highly appreciate the understanding and cooperation of Magyar Suzuki employees in terms of anti-coronavirus actions and shift changes due to the lack of spare parts, which enabled the continuity of production.
At the same time, they indicated that the Hungarian plant could play a leading role within the Suzuki Group in implementing plans supporting carbon neutrality.
For decades, Magyar Suzuki has been a stable pillar of the Suzuki Group; indeed, it is the third largest manufacturing unit after Japan and India. During its 30 years of operation in Hungary, it has accumulated a very high level of competencies and knowledge, primarily in engineering, logistics and IT.
Since April 1, 2019, Magyar Suzuki has also been the pan-European logistics center of the parent company: the supply of spare parts in all European countries is coordinated from Esztergom via seven regional warehouses. Magyar Suzuki also provides IT services and developments to all the European units of the Suzuki Group.
Thanks to the expertise of its Hungarian engineers, the Esztergom plant has more opportunities in developing new models. Previously, the experimental innovation of new series and series updates belonged to the local subsidiary, but in the case of the latest S-Cross model, presented in November last year, the design prototype was also made in Hungary.
It proved a successful project: the Suzuki S-Cross won the audience award in the Hungarian Car of the Year competition, and it finished second in the overall Hungarian Car of the Year 2022 category. This year, the hybrid
range manufactured in Esztergom has been further expanded: The Vitara has been available since the beginning of 2022, and the new S-Cross Strong hybrid version for the last six months.
Among the challenges for Magyar Suzuki this year, the lack of chips played the most prominent role. The company constantly analyzed the market situation with its electronic component suppliers and worked to ensure continuous product supply. Production and planning were also affected this year by the RussoUkrainian war.
In the current economic situation, the priorities of Magyar Suzuki have not changed. The company has continuously optimized costs, developed its operations and processes and is developing production in line with consumer needs and the regulatory environment. The firm’s employees have saved Magyar Suzuki more than HUF 3 billion with their development ideas and innovations over the past 13 years.
In terms of CSR, Magyar Suzuki primarily supports regional organizations and institutions because this is how it wants to help the local community. This year, however, the
support of Ukrainian refugees was given a prominent role in its activities. The Suzuki Group aided refugees from Ukraine with a donation of EUR 1 million through the Office of the United Nations High Commissioner for Refugees (UNHCR). Of this, EUR 150,000 were donated by Magyar Suzuki to three aid organizations: UNICEF Hungary, the Hungarian Red Cross, and the Hungarian Maltese Charity Service.
The company also offered six Suzuki Vitara passenger cars for use by aid organizations involved in helping refugees near the Hungary-Ukraine border. It also supported the work of the Esztergom Police Headquarters, a cooperation that has lasted for more than seven years: In May, the law enforcement body received a new Suzuki Vitara.
In addition to humanitarian assistance, the Esztergom manufacturer also drew attention to protecting the purity of natural waters with an outdoor installation, and campaigned for safe and courteous traffic in the fall. The “Together on the Roads” program, launched this year with experts and opinion leaders, aims to improve Hungarian traffic culture by emphasizing the responsibility of all of us.
In addition, the traditional cooperation with UNICEF Hungary continued this year, with Magyar Suzuki helping the organization’s child protection work in several projects.
The Budapest Business Journal talks with Szallas Group CEO Józsf Szigetvári and BLS-CEE partner Erzsébet Szalay about the group’s recent acquisition by Wirtualna Polska Holding S.A. for EUR 82 million.
tourism product in the local [Polish] market, and it expects this to be further strengthened following the integration of the well-established Hungarian system. As they are currently not yet working in a commission-based system, there is plenty of untapped potential in digitalization, which Szallas.hu and the Szallas Group has already proven on several occasions. If they had to make this technological transition on their own, it would take at least five or six years; with us, this will be significantly accelerated, and the operation of the other markets will increase the total revenue during the development.
BBJ: Szallas.hu is one of the few companies that has been able to compete with international giants in the tourism sector since 2007. What attracted the attention of Wirtualna Polska to the company?
József Szigetvári: The key to the group’s success is its expansion in the CEE region, its strong regional technology background and the work of its local customer service and marketing teams. This is why, for example, Szallas.hu is the market leader among Hungarian accommodation booking platforms in domestic travel, outperforming even prominent international players. In many cases, it is advantageous that Hungarianspeaking customer service is readily available to help travelers. Alongside this, the marketing team is data-driven, using databases to understand guests’ interests and preferences and plan their activities accordingly so supply and demand match at the end of the day. An advantage at home can also be a competitive advantage for Hungarians traveling abroad, especially in neighboring countries that are relatively easy to reach by car or public transport and where we have accommodation. Alternatively, the domestic travel market has untapped potential in neighboring countries.
This is how, together with former owner PortfoLion, we defined our growth path in CEE, which we achieved through acquisitions in addition to natural growth. Overall, our strength lies in cross-border synergies; we are more competitive together and share the motivation to remain so. That, in itself, is an attractive investment. Add to this the fact that the new owner, Wirtualna Polska, also operates a
Erzsébet Szalay: Szallas Group can compete successfully with global players because it has built a system that is efficient in its internal operations and can easily be integrated into other markets. The legal processes are also integral to this and show why this company could be a successful acquisition target. The legal function was outsourced by the management several years ago to an external strategic partner, BLS-CEE Law Firm. This acquisition has shown that they made the right decision. A regional presence and crossdisciplinary expertise are challenging to build up locally within a firm, so it is essential to have the support of partners with such competencies.
BBJ: Aside from this acquisition, what do you consider the most significant milestone Szallas.hu has achieved in the past 15 years?
and the strength of our regional expansion, which is essential to achieve our goal of becoming the leading tourism player in the Central and Eastern European region.
BBJ: BLS-CEE Law Firm has worked with Szallas.hu for several years. What is the secret of your successful cooperation?
ESz: We support Szallas Group with a full spectrum of legal services in all areas, from data protection and human resources to IT. The cooperation is supported by good client-consultant communication: if, for example, a development is started, we are involved immediately, even in the planning phase, so that we do not have to come up with a legal solution afterward, but we can support each other’s work as real strategic partners.
BBJ: What have been the biggest challenges you have tackled together? ESz: The rapid growth of Szallas.hu has also brought a variety of new challenges, and the fact that we provide seamless legal support for its development in five countries has been a great help. Data protection is a serious challenge these days, and we have managed to find a solution that works well. We provide an outsourced data protection officer to ensure that we comply with data protection legislation.
As a strategic legal partner covering five countries, BLS-CEE has been supporting the portal since 2019, and we have been able to assist the sales team as consultants, working almost in-house with management daily.
I am convinced that close clientconsultant relationships working in a similar way significantly increase the value of the firm for potential customers.
JSz: Everything is based on a good idea and identifying the target group: we focused on the lower-spending domestic travel planners, so we defined our market position without investor support. Central Media Group first recognized the viability of the model. Then, in 2015, PortfoLion acquired the company with funding from EXIM and OTP. This was perhaps the first significant milestone that paved the way for the others, as it was then that we had a capital-strong background, and the decision was made to create the largest operator in the CEE region in terms of bookings. Through subsequent acquisitions and organic growth, Szallas Group offers its customers accommodation booking services in Hungary, the Czech Republic, Romania, Poland, and Croatia through four major brands (szallas.hu, noclegi. pl, hotel.cz, and travelminit.ro,). The group also operates websites offering spa packages (spa.cz), hotel discount vouchers (maiutazas.hu and szallasguru.hu), tour operator services, tourist attraction vouchers and B2B services. In the five markets covered by our activities, Szallas Group offers accommodation in a total of 87,000 establishments in 2022, operates 16 products in five countries, has six offices and 330 colleagues.
BBJ: What new opportunities will the acquisition open up for the company in the region? What are the main target markets for expansion?
JSz: We believe in strengthening our Polish portfolio in the Polish market, expanding our accommodation offer,
“Central Media Group first recognized the viability of the model. Then, in 2015, PortfoLion acquired the company with funding from EXIM and OTP. This was perhaps the first significant milestone that paved the way for the others, as it was then that we had a capital-strong background, and the decision was made to create the largest operator in the CEE region in terms of bookings.”
BBJ: What other services does the law firm provide in the region?
ESz: We cover the full spectrum of business law, from corporate law to transactions and financing to litigation, with a strong focus on regulated industries and innovative players. For BLS-CEE Law Firm, the business focus is essential in all cases: with our regional expertise, we do not approach a particular area from a theoretical perspective, we do not pile up unnecessary paperwork, but we strive to provide solutions that work in practice.
“War
I had wanted to cover the exhibition anyway, but the mixed reports made me even more determined to write about it. So, on a cold, rainy Budapest Friday, I tap danced around the puddles to the museum.
“War Is Over! If You Want It: Tribute to Yoko Ono,” the exhibition title, is a nod to a two-year multimedia campaign culminating in the song she recorded with her late husband John Lennon, “Happy Christmas (War Is Over).” This made the upper reaches of the worldwide singles charts when it was first released in 1971.
Like much of Ono’s work, the campaign was somewhat more subtle than it seemed. “War Is Over! If You Want It” is both a statement and a question thrown back at us. We have the power to end war, despite what we’re encouraged to believe, but do we really want to use it?
Speaking at the time, Lennon explained, “We decided to work for world peace […]. We’re selling it like soap, you know. And you’ve got to sell and sell until the housewife thinks, ‘Oh well, there’s peace or war; that’s the two products.’”
Yoko Ono was born in Tokyo City, Japan, in 1933. Her mother was highly musical. Her father’s ancestors were samurai warrior-scholars. Ono’s early years were shaped by the impact of World War II on Japan. Her aristocratic family was reduced to poverty and forced to beg for food. She has said that this helped make her aggressive enough to survive and conscious of what it means to be an outsider. Those are qualities that must have come in handy when she hooked up with Lennon.
Moving to the United States in 1953, Ono enrolled at the liberal arts college Sara Lawrence but eloped with Japanese experimental composer Toshi Ichiyanagi in 1956. Far from being the preposterous non-musical screamer of legend, she was schooled in avant-garde music such as that made by John Cage.
In 1957, Ono moved to New York, where she became associated with the Fluxus group of experimental artists. Although she was never an official member, the group’s Dada-inspired approach to art profoundly influenced her.
It was art that brought Ono and Lennon together. They first met at the hip London Indica Gallery in November 1966. Ono was preparing her conceptual show Unfinished Paintings. One piece intrigued Lennon.
“Ceiling Painting/Yes Painting” consisted of a stepladder painted white underneath a square white canvas with a magnifying glass
hanging from it. When Lennon climbed the ladder and squinted through the magnifying glass at the canvas, he saw the word “Yes” in tiny writing. Characteristically for Ono, “Ceiling Painting/Yes Painting” is at once simple and tricky. It takes effort to read that “Yes.”
Ono appears to have set her sights on Lennon. It’s believed they became lovers in early 1968. They were married in 1969. Apart from Lennon’s notorious Lost Weekend, almost two years in which he lived with his personal assistant May Pang, Ono and Lennon were together until his death on December 8, 1980.
Ono has said that “Art is like breathing for me. If I don’t do it, I start to choke.”
Since Lennon’s death, she has made countless artworks and steadily released music that has sold respectably and received favorable reviews. Between 2003, when her songs began being remixed for clubs, and 2021, when she retired from public life, Ono had 12 number-one hits on the U.S. dance charts.
It’s impossible to say what Ono’s stature as an artist would be if she hadn’t been Lennon’s wife. But, today, her work is perfectly in tune with the sloganeering, aphoristic, meme (or “me-me”) world of social media.
As a filmmaker friend of mine who worked with her and Lennon on the short film “Erection” (1971) told me, “She was a strange girl who’d suddenly hit you with something really precious and the next moment something that,
however much you thought about it, was profoundly stupid. But you had to give her the time because it might be worth it.”
Ono’s work also aligns with the fuzzy notion that posting platitudes online constitutes activism. But it’s important to remember that she has practiced art and real-world activism since the 1960s.
In March 1969, after their marriage, she and Lennon held a “Bed-in for Peace.” She paid for billboards featuring Lennon’s blood-spattered glasses to be erected in New York and Los Angeles in 1999 after the Columbine High School massacre. Since 2002, the annual LennonOno Grant for Peace has given USD 50,000 in prize money to artists living “in regions of conflict.”
When art seems powerless against military might, government repression, the threat from climate change, rampaging viruses, economic collapse, and asteroids hurtling towards us, Ono’s message of optimism in action is positively revolutionary.
“She was a strange girl who’d suddenly hit you with something really precious and the next moment something that, however much you thought about it, was profoundly stupid. But you had to give her the time because it might be worth it.”
For this reason, I would say that while the exhibition at the Hungarian National Museum might deserve the criticisms leveled at it, they relate to the context, not the art itself.
If the money from the entrance fee gets to the people who need it, Yoko Ono’s art has had a tangible impact. That’s good enough for me.
Proceeds from ticket sales will go to support Transcarpathian victims of the Russo-Ukraine war raging on Hungary’s northeastern border. According to the 2021 Ukrainian census, there were 156,000 ethnic Hungarians in Ukraine, making them the third largest minority in the country.
“War Is Over! If
Want
Tribute to Yoko Ono” will run until February 18, 2023, which is Ono’s 90th birthday. You can find out more about the exhibition at www.mnm.hu
Grammy- and Oscar-winning singersongwriter Billie Eilish will headline next year’s Sziget, along with David Guetta, Florence + the Machine, and Imagine Dragons, the organizers of Hungary’s biggest music festival have announced, according to origo.hu. “When the chance arose to invite Billie Eilish to next year’s
festival, we had to take a decision that we rarely do: we pushed it back a day,” chief organizer Tamás Kádár said. Next year’s festival is now slated for August 10-15. The 2022 Sziget, held after a two-year hiatus because of the pandemic, drew around 450,000 festivalgoers over six days.
more than one-third of the wine from Tokaj. Exports account for around half of its net sales. The formerly stateowned company was transferred to the University of Tokaj-Hegyalja a little more than a year ago.
Due to the level of interest, there will be two MVM Christmas Concerts on December 18 in the Great Hall of the Academy of Music, according to profitline.hu. The tickets for the evening concert sold out in mid-November, so the organizers announced another performance at 11 a.m., with a slightly changed program, that will be held without a break. The morning music program includes, among others, Ibert’s “Entr’acte,” Gluck’s “Dance of the Happy Souls,” Tchaikovsky’s “Melody,” Ferenc Liszt’s “Ave Maria” (“The Bells of Rome”), Roland Szentpáli’s “Carmen Fantasy,” and Saint-Saëns’ “Fantasy.” The evening performance includes Dvorak’s “G minor,” PucciniBalázs’ “Lauretta aria,” and Ravel’s “Introduction and Allegro.” The complete program of the two concerts is available on the website azongora.hu.
Google has published its list of the most popular topics in Hungary in 2022, according to profitline.hu. The overall Hungarian Google list of 2022 was shaped most by searches related to the Russo-Ukrainian war: users wanted to be informed about the places and people involved, in addition to monitoring the most critical events. Among Hungarian happenings, the search terms for the census and election achieved top ranking. Among popular searches for films, series and television programs, there were both Hungarian and international hits, such as “Uncharted,” “House of the Dragon,” and also “X-Faktor.” The most popular sports event proved to be the 2022 Nations League, in connection with which users were most curious about the HungarianItalian and Hungarian-English matches.
Grand Tokaj, the most significant producer in Hungary’s Tokaj winegrowing region, expects this year’s turnover to reach or exceed HUF 3 billion, climbing from HUF 2.7 bln in 2021, CEO László Rábai told state news agency MTI. Grand Tokaj’s losses are narrowing; it targets positive EBITDA
in 2023 and an after-tax profit after three years, Rábai said. He added that boosting output from an annual 4.5 million bottles to 6.5 million-7 million would allow the company to operate more efficiently, reducing the burden of fixed costs. He said that Grand Tokaj needs to find new markets and sales channels, no easy task when global demand for sweet wines is stagnating or falling. Grand Tokaj produces
A decades-old tradition has been broken by the fact that no illuminated trams will run in the capital this year, according to business daily Világgazdaság [Global Economy]. In 2008, 14 years ago, BKV’s lighted tram rolled out of the depot for the first time. Since then, the company has decorated some of its vehicles, including trolleys and hangers, with lights every Christmas season. These routes had separate schedules and proved extremely popular, especially among children. However, this year the decision was made that BKV will not put up the light garlands on any of its vehicles in Zugló car park, the home of illuminated trams.
If you are worried by the price of food and drink at this year’s Budapest Christmas markets (see the last issue of the Budapest Business Journal for more on this), you can find one of Hungary’s cheapest Christmas fairs (at least in terms of refreshments) in Szentes (about 131 km southeast of Budapest), according to Telex.hu. According to the report, a 0.1-liter portion of mulled wine costs from HUF 150 to HUF 250. One can get a coffee for HUF 300 at the fair, and 0.1 liter of tea costs about HUF 100. Hot chocolate costs HUF 350/0.1l, and punch, depending on whether it’s alcoholic or non-alcoholic, hovers between HUF 300 and HUF 400/0.1l. Visitors can get a slice of milk loaf for between HUF 900 and HUF 1,200, with an extra HUF 300 for an additional topping, and a hamburger is between HUF 1,000 and HUF 1,400, and a hot dog between HUF 500 and HUF 850.
this will not be the case in 2023 either. We expanded our dragée products [chocolate-covered fruits and nuts] a relatively long time ago, and I have a unique idea, though it is possible that it will be a divisive taste,” he hints.
The Hungarian manufactory chocoMe introduces a new mouth-watering product made from a raw material that has only been recently discovered. This heavenly component is paired with crunchy French dark chocolate for its latest creation. Bite-sized dark chocolate squares filled with cocoa pulp juice are both an innovative chocolate product and a dessert specialty with an explosion of flavors. The moist pulp surrounding the cocoa fruit seeds has long been known to be a delicacy, but due to its high water content, it goes off very quickly in its native tropical climate. However,
a Swiss-Ghanaian venture has come up with a solution to this problem, engineering a solar-powered mobile processing unit to press the juice from the pulp right after the harvest, and transport it to a pasteurization plant within three hours, so all the exquisite flavors and valuable vitamin content can be retained.
Moreover, it provides income for the plantation workers, and something previously regarded as waste becomes valuable food. The pulp juice has a highly unique aroma profile. It is sweet, containing three kinds of sugars, but also sour. It does not taste like chocolate at all. Its flavors are more
acidic and fruity. It combines traits reminiscent of lychee, passion fruit, mango, currant, and dried fruit, while its sweetness recalls the taste of honey.
In many cases, chocolate is paired with wine in gastronomy, but Gábor Mészáros, owner of chocoMe, wouldn’t do that.
“I think cocoa juice itself is best paired with duck liver or foie gras,” he suggests. “There is no year in which we do not come up with something new and improved, and of course,
“It seems that a new chocolate ingredient is also coming from Valrhona [a French premium chocolate manufacturer] for a new dragée product, and we also have an exciting idea in the form of filled chocolate with one of the world’s finest white chocolates from
Mihály Figula from the Balatonfüred-Csopak wine region saw off intense competition to be voted the Hungarian Wine Academy’s Winemaker of the Year for 2022. Figula has followed in the footsteps of his late father (also Mihály Figula), Winemaker of the Year back in 2000, and built on his work.
Top of Junior’s achievements is showing how the Olaszrizling grape variety can be a fine articulator of terroir and make rich, complex wines that can be every bit as good as the more highly esteemed Furmint, for example. Figula has done this with a number of spontaneously fermented single-vineyard bottlings that have helped raise the profile of what, for many, was considered a journeyman of a grape variety.
Among these wines, Sáfránkert Olaszrizling has the warmest character, coming from 37-year-old vines from Csopak’s Sáfránykert vineyard, which is located between Csopak and Paloznak and is the closest site to Lake Balaton (just 800 meters away), capturing reflected rays from the lake. You can feel the warmth of the lake in the wine.
“Lake Balaton reflects back the sun, and unlike most other lakes in the winemaking world, the comparative shallowness of the water creates a warming and not a cooling effect,” says Figula’s brother János, who is in charge of the vineyards. The siblings take all the essential winemaking and grape-growing decisions together.
The 2021 Sáfránkert Olaszrizling was spontaneously fermented in stainless steel tank and then aged in 25-year-old 10-hectoliter barrels. The result is a ripe, tropical, round, and full-bodied take on this pan-Central European grape. It is a wonderful wine for cold winter days as it can transport one back to summer at Balaton with its warm character. The 2021 vintage costs HUF 4,950 from Bortársaság.
The other single vineyard wine available from 2021 is from the cooler, further inland Sóskút vineyard, from 50-year-old vines that grow right under a limestone quarry. This is from Figula’s most northerly vineyard, with no reflection back from the lake. This medium-bodied wine is delightfully zesty with crisp citrus fruit, an oily texture, and salty minerality. Salty by nature and salty by name: sóskút means “salt well” in Hungarian. It costs HUF 3,990 from Bortársaság.
It’s always hard to single out a single winemaker above all others. Still, the award by the Hungarian Wine Academy provides a chance to evaluate the work of certain individual vintners. While it’s easy to be cynical regarding the selection of certain winners, a glance at the list of past title holders does give credit where it’s due. Nor does it just focus on the most esteemed regions.
The other finalists this year were Tamás Günzer (Villány), József Lamport of the Thummerer winery in the Eger wine region, Zsolt Liptai of Pannonhalmi Főapátság (the Pannonhalma Archabbey) and Csaba Vesztergombi from Szekszárd, who have all been making excellent wines.
Incidentally, Vilmos Thummerer, who passed away at the age of 78 on December 21, 2021, after a long illness, was named Winemaker of the Year in 1995, as well as the posthumous winner of the Winemakers’ Winemaker for 2022 (Borászok Borásza). Thummerer long worked in close conjunction with the skillful and dedicated Lamport.
A fine festive wine from Thummerer is Egri Kadarka Grand Superior 2015, which tasted great at the Pannon Karácsony (Christmas) tasting held on December 13. It was made from grapes picked on September 29 in a nicely shriveled state, with some botrytis, and has a pale tawny color, with complex notes of tobacco, strawberry jelly, and sun-dried tomato, and elegant fine-grained tannins. It costs HUF 5,460 from wineloverswebshop.hu.
Kadarka, which was pretty much all grubbed up in Eger during the communist years due to it being challenging to work with, is making quite a comeback in
the northeastern region. A wine like this certainly justifies Kadarka being referred to as the “Hungarian Pinot Noir.”
Meanwhile, Tokaji Aszú, a contender as the best botrytized sweet wine in the world, is indeed the ideal wine for Advent, but it need not only be for Christmas! Once opened, the wine won’t spoil for weeks, allowing for sparing seasonal sipping; just a small glass of this sweet yet structured and layered wine is packed with intensity and taste sensations.
balance between acidity and sugar, than the more luscious six puttonyos Sweet szamorodni is a great, slightly fruitier, and cheaper alternative to Tokaji aszú and is typically aged for less time. Szamorodni is actually a Polish word and reflects Poland’s significant connection with Tokaj in times past when the Polish royal court highly prized the wine.
Szamorodni is usually loosely translated as “as it comes,” meaning that botrytized grapes and regular grapes are picked together and vinified without selecting out the aszú berries. That said, Tomasz PrangeBarczynski, a Polish wine writer, once told me that it, in fact, means “as it’s born.”
For a ‘dry’ festive treat from Tokaj, the rarely made dry szamorodni can be sensationally complex when made well. French winemaker Samuel Tinon’s winery in the village of Olaszliszka has achieved considerable success with this almost-forgotten style of Tokaj wine.
Made from a centuries-old process (yet boosted and made fresher by modern technology), Tokaji Aszú is unique compared to the other botrytized sweet wines of the world. Here, the shriveled grapes are picked one by one in several sweeps of the vineyard and steeped in a base wine made of regular “healthy” late-harvest grapes that have not been hit by botrytis (the so-called “noble rot”).
Thanks to the tingling acidity of the Furmint grape, the sweetness is often cut through. I personally prefer five puttonyos Tokaji Aszú, which generally has a tauter
Dry szamorodni should be fermented to dry under a layer of yeast. It requires extensive aging to capture the full spectrum of aromas and flavors, including tobacco, dried apricot, walnuts and blue cheese. Tinon says that the alcohol drops a couple of degrees during aging due to the cellar’s humidity, temperature and ventilation. The minimum alcohol at bottling must be above or equal to 12% by volume in all szamorodni, dry or sweet.
France’s Vin Jaune, from the Jura, is perhaps the closest international comparison. Dry Szamorodni is just the wine to sip in the cold of winter, and Tinon’s is good as it gets. His 2004 vintage costs HUF 6,950 from www. csakajobor.hu. It is so good that his other wines are often (and wrongly) overlooked. “I came to Tokaj to make aszú,” he quips.
“Lake Balaton reflects back the sun, and unlike most other lakes in the winemaking world, the comparative shallowness of the water creates a warming and not a cooling effect.”Mihály Figula, Hungarian Wine Academy Winemaker of the Year 2022. Photo by Márton Mónus / Hungarian Wine Academy.
