Budapest Business Journal 3217

Hungary’s Role in the AI Revolution

The AI Summit 2024 Budapest drew leaders from industry, government, and academia, highlighting Hungary’s determination to use AI as a catalyst for transformative change across multiple sectors.   13

Gen Z Finding Real Value on Social Media

Amid ongoing criticism about the digital habits of younger generations, a new initiative, the Future-proof Academy, has emerged with a different narrative. Research commissioned by Samsung shows a significant portion of Gen Z actively seek educational content on social media.   16

Groundbreaking Qatsi Films and Music at Müpa

Summer-end Inflation Data Surprises Analysts IT & System Integration

Elements of the Qatsi Trilogy of films by U.S. director Godfrey Reggio will be shown at Müpa Budapest, accompanied by the Philip Glass Ensemble, the Budapest Academic Choir Society and the Budafok Dohnányi Orchestra.   21

‘

You Are Important to Us

That was the message delivered to the latest CEO Breakfast by Gergely Németh, CEO of the Defense Innovation Research Institute of Hungary, on behalf of the Ministry of Defense. It is just the latest stage in attempts to bring the military and commercial spheres together. 10

In August, inflation in Hungary fell to 3.4%, much lower than the 4.1% level measured in July. The pace of monetary deterioration has slowed more than analysts had expected. However, they warn that inflationary pressure has not entirely disappeared from the economy.   3

No Light yet at the end of Automotive Tunnel

The automotive sector in Hungary, so long the engine of the local economy, is struggling against the backdrop of sluggish global demand, the stalling electrification transformation and market-distorting Chinese supplies.   8

EDITOR-IN-CHIEF: Robin Marshall

EDITORIAL CONTRIBUTORS: Luca Albert, Balázs Barabás, Zsófia Czifra, Kester Eddy, Bence Gaál, Gergely Herpai, David Holzer, Gary J. Morrell, Nicholas Pongratz, Gergő Rácz.

LISTS: BBJ Research (research@bbj.hu)

NEWS AND PRESS RELEASES: Should be submitted in English to news@bbj.hu

LAYOUT: Zsolt Pataki

PUBLISHER: Business Publishing Services Kft.

CEO: Tamás Botka

ADVERTISING: AMS Services Kft.

CEO: Balázs Román

SALES: sales@bbj.hu

CIRCULATION AND SUBSCRIPTIONS: circulation@bbj.hu

Address: Madách Trade Center 1075 Budapest, Madách Imre út 13-14, Building B, 7th floor. Telephone +36 (1) 398-0344, Fax +36 (1) 398-0345, www.bbj.hu

Why Support the BBJ?

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

• 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

THE EDITOR SAYS

THE CONFLUENCE OF BUSINESS AND DEFENSE

You would have to be exceptionally unobservant not to notice the attention the Hungarian state has lavished on the defense industry over the past few years, whether buying new kit for the army and air force or the very conscious drive to create development clusters around multinational investors such as Rheinmetall and Airbus. The confluence between the defense and commercial spheres is undoubtedly a relationship that is gaining strength in Hungary.

Back in February, we organized a CEO Breakfast with our partners, the German-Hungarian Chamber of Commerce and Industry and Budapest Security Dialogue. It is common enough after such an event to witness small groups of people gathering around the panelists, exchanging cards and asking questions. What was remarkable here were the lines that formed behind each speaker as guests patiently waited to swap details or make inquiries.

Inspired by the evident demand from the business community, we expanded and repeated the exercise this week. The Canadian, Swedish and Swiss chambers joined the German, and we had two keynote speeches and two roundtables, one dealing with digitization, the other with drones. It made for a fascinating morning.

There were so many messages and memorable phrases, starting from the first keynote: Gergely Németh, CEO of the Defense Innovation Research Institute of Hungary, told the audience he had asked the Ministry of Defense if it had a message to pass on to the businessfolk attending the breakfast. The answer was unequivocal: “You are important to us.” It was a theme often repeated. 4iG, for example, said it wants to work with Hungarian SMEs and foreign multinationals; Pro Patria aims to be an integrator, cooperating with innovative startups.

“Information is the God of War,” we were told, but there is now too much data to process, for which AI may be the only answer. Data must become information before that information can become knowledge.

Time is driving technology, one panelist said. Tech companies know the moment they launch a product, it is effectively outdated. The science lies in making it futureproof for five or 10 years to keep up with continuous development and ensuring no single point of absolute failure by building in levels of redundancy. While the tech-bros of Silicone Valley may dream of monopolies, the actual battlefields cannot be allowed to become a tech monoculture, our speakers insisted. Network resilience, common standards, better utilization of existing tools and proper skills training for all potential users are vital.

Drones have gone from being a toy for a rich few to a relatively cheap weapon of war in just a couple of decades. If timelines have been condensed (both for development and years in service), the pull and push of commissioning has also changed. It used to be the military would request that the commercial world build something to its specifications. Today, digital commercialization is driving defense.

One fact, above all others, stuck with me. It is an old story now that there is the same computing power in a smartphone as was used to take humanity to the moon. According to one of our speakers, just one modern main battle tank contains about 25 computers. We have come a long way since the British were the first to deploy tanks in combat on Sep. 15, 1916.

Robin Marshall Editor-in-chief

THEN & NOW

The black-and-white photo from the Fortepan public archive, taken in 1954, captures flood defense efforts in Budapest’s District XI, with workers filling sandbags between Hunyadi János út and Árasztó utca. In the color image from state news agency MTI, captured on Sep. 17, 2024, workers are seen reinforcing the flood barrier along the Római embankment in Budapest’s District III in preparation for an approaching flood wave on the Danube.

Photo by FŐMTERV / Fortepan

Photo by Tamás Kovács / MTI

1News •

macroscope

Summer-end Inflation Data Pleasantly Surprises Analysts

In August, inflation in Hungary fell to 3.4%, much lower than the 4.1% level measured in July. The pace of monetary deterioration has slowed more than analysts had expected. However, they warn that inflationary pressure has not entirely disappeared from the economy.

and last year’s high base,” ING Bank head analyst Péter Virovácz said. According to him, the monthly repricing, which slowed significantly compared to the previous month, can be traced back to several components.

In the case of food, following a jump in July, the price increase did not continue in August. It seems that lifting price caps and mandatory store promotions resulted only in a one-time price hike rather than a permanent, trend-like increase.

Inflation in Hungary, January 1991-August 2024

Price index, consumer prices; change compared to the same period of the previous year, %

In August 2024, inflation returned to the 2-4% tolerance band of the National Bank of Hungary (MNB): consumer prices rose 3.4% year-on-year. The annual inflation rate was 0.7 percentage points lower than in July, the MNB writes in its latest assessment. In July, the annual inflation rate was put at 4.1%. The last time inflation was as low as this was before at the beginning of 2021.

Compared to August 2023, a price increase of 2.4% was recorded over the past 12 months for food, while services became 9.5% more expensive. On the other hand, electricity, gas and other fuels became 4.3% cheaper. In one month, compared to July 2024, consumer prices were unchanged on average.

“As expected, inflation slowed in Hungary in August. However, the recent data caused a downward surprise compared to the market consensus. Annual inflation fell from 4.1 to 3.4%

in August. The repeated decrease in inflation was partly due to the monthly stagnation of the average price level

In addition, a substantial price drop was observed in the case of fuels, which followed a serious price increase, meaning that this too significantly contributed to the inflationary turn. The price of household energy also fell further, contributing to the favorable inflation rate.

Last but not least, services should also be included among the items that improve the inflation picture, Virovácz says. On a monthly basis, the price increase was only 0.4%. Compared to the usual seasonal repricing, we saw more moderate price increases in many areas, including holiday and transport services.

Positive Turn

Based on the details, it can be said that, while in recent months, the favorable development of items outside the core inflation basket mainly curbed inflation, the more significant core inflation items also took a more positive inflation turn last month.

“It is still questionable how long this will last, but we can definitely talk about an improving inflation picture. Contrary to expectations, the core inflation indicator did not

Source:

increase but rather decreased somewhat compared to July. It’s just that the rounding to one decimal place helped the indicator decrease,” says Virovácz.

“Looking ahead, next month, we expect an inflation indicator roughly similar to what we saw today, perhaps with a minimal slowdown. However, after that, the year-on-year indicator may jump more significantly due to the low base,” Virovácz warns. According to him, starting in October, the figure could rise above 4% again.

“Observing the current basic inflation processes, we see that the rate of price increase may rise again to 4.8%

in the second half of this year. All this significantly limits the ability of companies to reprice, even in an environment where they face a significant increase in costs,” predicts Virovácz.

Dávid Németh, senior analyst at K&H, says: “Compared to our expectations, monthly inflation was driven down by manufactured goods, alcoholic beverages and tobacco products, which showed stagnation compared to July. Food also stagnated in line with our forecast.”

He agrees that the inflation of market services has slowed but notes that it is still above the multi-year average.

Inflationary Pressure

Regarding annual core inflation, he says that it slowed to 4.6% in August from 4.7% in July. In the coming months, it may remain in the range of 4.5-5%, which still indicates inflationary pressures.

According to the analyst, inflation in September may be around 3.5%, but it could be closer to core inflation by the end of the year, at around 4.8% in December. Németh expects an annual average of 3.9% and a pace of 4% for 2025.

“Based on the current data, the MNB is expected to cut interest rates by 25 basis points in September. By the end of the year, based on the current prospects, we can expect another similar reduction,” Németh predicts.

Gábor Regős, senior analyst at Gránit Alapkezelő, says the latest inflation data is significant from the point of view of the interest rate decision in September; the Monetary Council of the MNB will hold its policy meeting on Sep. 24.

“This clearly supports an interest rate cut (and thus weakens the forint), similar to the interest rate cut expected from the major central banks. However, in relation to the evaluation of inflation, it is also worth highlighting that core inflation is higher than total inflation, as it stands at 4.6%, and this shows that the inflationary pressure has not completely disappeared from the economy. Services play a big role in this, but due to retrospective pricing, a lower price increase is expected next year,” Regős believes.

At the same time, the weak exchange rate and budget data could be an obstacle in terms of interest rate cuts; the latter, in particular, dramatically worsens risk perception.

ZSÓFIA CZIFRA

Ukraine

Tension Around Sale of Frozen Assets and Gas Supplies Roundup Crisis

The European Union has started working to provide Ukraine with between EUR 20 billion -40 bln in unilateral support in case the United States cannot account for its share in an earlier agreement due to the potential interference of Hungary.

In June, the G7 agreed to provide Ukraine with a USD 50 bln loan, in which the EU and America would each provide USD 20 bln, with Great Britain, Japan, and Canada splitting the remaining USD 10 bln. The loan was to be repaid with future revenue from the sale of roughly EUR 260 bln in frozen Russian gold and currency reserves, most of which are held at Euroclear, the Belgian central security depository.

As a condition of the agreement, the United States demanded assurance the assets would remain frozen to ensure a steady flow of income to service the loan. To that end, the European Commission proposed extending the sanctions, freezing the assets from the current sixmonth period to 36 months. However, Prime Minister Viktor Orbán is currently blocking such an extension,

It was appropriate that Czech Industry and Trade Minister Jozef Síkela was speaking on the gas transit issue, as he had long been tipped to become the European Union’s next Energy Commissioner. He was, in fact, nominated on Sep. 17 by European Commission President Ursula von der Leyen for the International Partnerships portfolio, a role that oversees the EU’s development policy

run featuring everyone from ultra-runners to children, in Ballószög (95 km southeast of Budapest by road, in Bács-Kiskun County), on Sep. 4. The tenth edition of the charity run, established by Gui, saw participants run 400 kilometers over four days, finishing at a children’s home in Velyka Dobron (known to Hungarians as Nagydobrony), just across the border in Ukraine.

wanting to delay a decision until after the U.S. presidential election on Nov. 5.

Because the EU’s alternative plan relies on provisions that expire at the end of the year, the bloc is now scrambling to provide Ukraine with this support in 2024. By 2025, the continued functioning of Ukraine will face a shortfall of

USD 38 bln,

according to the IMF. Meanwhile, Hungary has proceeded with its workaround to ensure a continuous supply of crude from Russia. On Sep. 9, oil and gas company MOL announced that it had concluded agreements to take over ownership of the crude supply from Russia’s Lukoil at the Belarus-Ukraine border as it passes through the Druzhba pipeline.

and international cooperation. At the same time, Hungary’s Olivér Várhelyi was named as the pick for Commissioner for Health and Animal Welfare. The new EU Commission College of Commissioners (effectively von der Leyen’s cabinet) is expected to take office by the end of the year, following a series of European Parliament hearings for the candidates and a vote of approval.

“The MOL company announced that they are currently the owners of the product transiting through Ukraine, and we are happy with that.”

“The MOL company announced that they are currently the owners of the product transiting through Ukraine, and we are happy with that,” Ukrainian Prime Minister Denys Shmyhal told the website Politico. According to MOL Group’s downstream VP Gabriel Szabó, the new arrangement provides a “sustainable solution” that would contribute to the security of supply in Hungary and Slovakia.

Temporary Exemption

Being landlocked, the two countries were granted a temporary exemption to an EU-wide ban on Russian oil arriving via pipeline. While it was supposed to seek alternatives in the interim period, Hungary has actually increased oil imports via the Ukrainian pipeline by 50% since 2021. Since MOL’s record profits have contributed more significant tax revenue to Orbán’s government, some analysts and EU officials

have accused Budapest of effectively war profiteering off the cheap crude. Hungary has also been insistent about maintaining its supply of gas from Russia, even striking new deals since the invasion of Ukraine began. Yet, a gas transit agreement between Russia’s Gazprom and Ukraine is set to expire at the end of the year.

“In case gas transit from Russia via Ukraine is halted, replacement supplies must be found primarily with alternative suppliers,” Czech Industry and Trade Minister Jozef Síkela said in a statement on

September 5.

Síkela urged his counterparts in Hungary, Slovakia, and Austria, alongside Estonia’s Kadri Simson, the EC’s current Energy Commissioner, to seek alternatives once the gas transit agreement expires. He suggested that reverse gas flows through his country could replace the 40-42 million cubic meters of Russian gas flowing daily through Ukraine. He emphasized that Russian gas must not be allowed into Europe through the back door. “Russia repeatedly demonstrated that it is an unreliable trading partner willing to use energy supplies as a weapon to disrupt and destabilize our energy market and the entire economy,” Sikela said in his statement. “It is clear that nothing will change for the duration of its aggression against Ukraine.”

NICHOLAS PONGRATZ

Photo by Csaba Bús / MTI.

Balázs Hankó, Minister of Culture and Innovation (right) and Angéla Gui, founder of the We Are One Blood Foundation and (either side of the Hungarian flag), lead the start of the We Are One Blood charity

High Vacancy, Potentially Low Availability of

ESG-compliant

Offices

Development in the Budapest office market is low, with developers exercising caution and new projects not being initiated in an uncertain and demanding financial environment. With overall vacancy rates rising and the development pipeline falling, concerns are being expressed over the longer-term availability of larger, contiguous, quality, well-located, ESG-compliant office space.

sub-markets such as the Váci Corridor, the Central Business District or inner Buda.

“It is a complicated question as to what would need to be in place for a new Budapest office development to be initiated. Financing is crucial, and most banks require a 45-50% prelease for an office development,” comments Valter Kalaus, managing partner of Newmark VLK Hungary. His firm has acted as tenant representatives and consultants in the office market since 2002 and subsequently became active in the industrial, retail, hotel and leisure sectors. He sees overall vacancy in the Budapest office at 14%, which could rise to 18% if owner-occupied stock is not included in the figure. The highest vacancy rate is in the periphery, while it is significantly lower in the most popular

Concerning the initiation of new projects, Skanska, for example, could undertake the second and third phases of H2Offices and the Hold utca office project if preleases are concluded; development will not start on a speculative basis. Few new office developments are expected to be undertaken in the next two to three years.

An average letting size in the current market is

700-800 sqm of modern space in a good location.

“Location is still key: the office should be easily accessible, and its design should be tailored to the needs of the people working there, providing the right conditions for efficient working.

Today, it is also a natural expectation that you should not have to travel long distances to reach services such as restaurants, cafés and shopping facilities during a break or after work. Proximity to a gym or beauty or barber shop can be an added advantage,” adds Kalaus.

The Upgrade Option

One development option is upgrading an older office space to meet current ESG requirements from tenants. However, in many cases, mechanical systems can only be updated if the property is vacant and therefore, the tenant would be forced to transfer to a different building. The landlord

Signs of Activity in CEE Investment for H1

The first half of 2024 saw CEE investment volumes increase by about 29% year-onyear, bucking the global trend, according to commercial real estate services firm Colliers.

“According to preliminary results, this is contrary to European and global results, where activity is still subdued. Given the current conditions, we expect 2024 volumes could reach up to circa EUR 5.5 billion, around half of the 10-year average,” comments Kevin Turpin, director of CEE capital markets at Colliers. It has been a question as to when investment activity in the CEE region will pick up following a subdued period due to concerns over the cost of finance, longer-term demand in some sectors and the uncertain economic and geopolitical environment.

It had been expected that an upturn in investment activity in Western Europe would be followed by Poland, the Czech Republic and then other markets like Hungary, Romania and Southeastern Europe in the view of analysts. Poland was the standout market in the first half of the year regarding investment activity. A period of price discovery is expected to continue throughout this year. At the same time, an ever more stringent and all-embracing imposition of ESG requirements on buyers and sellers dictated by EU Taxonomy is influencing all stakeholders in real estate projects.

Investment Potential

Despite these issues, the CEE region is seen as having significant investment potential with strong assets, pipelines, demand and development possibilities in many sectors and countries. Further, in the view of Colliers, the region provides a significant yield premium and the various CEE countries have a yield spread compared to Western European markets to suit investors. CBRE has recorded investment activity worth EUR 2.4 bln in the CEE-5 (the Czech Republic,

This article is supported by:

Real Estate Matters

A biweekly look at real estate issues in

is caught between keeping the tenant and undertaking a significant upgrade.

The conversion of an office complex to a hotel or residential block is also possible. A building owner needs to consider the physical viability of the conversion and its viability from a financial perspective. A three- or fourstar hotel conversion is seen as a possibility, depending on the size and location.

Despite the latest news from Amazon, the hybrid work model is seen as here to stay, with three to four days a week in the office seen as reasonable and well-balanced for team members. This encourages loyalty, brand awareness and teamwork, according to Kalaus.

He sees tenant requirements as related to elements such as mechanical systems, lighting, fresh air, and electric car charging systems. Offices must provide lounges, brainstorming and meeting rooms, as well as a large kitchen for internal gatherings. Many employers offer quality food, a free bar or café, breakfast, quiet areas and a nursery to provide their employees with a more enjoyable work environment. Leases now need to be flexible in terms of size and length.

“ESG is now the hot topic, and the ‘E’ is the easiest to provide in offices with accredited space. ESG requirements apply to all market players, including landlords, tenants, lenders and facility managers,” Kalaus concludes.

Hungary, Poland, Romania and Slovakia), representing a year-on-year increase of 22%.

Poland and Romania recorded the most substantial year-on-year rises in activity for the period.

“Several significant transactions are currently in the closing process and are expected to be finalized during the latter part of the year,” says the consultancy. Prague has the lowest yields in the region, with office standing at 5.5%, industrial at 5.25% and shopping centers at 6%, according to estimates by Colliers. Looking at Warsaw alone, yields stand at 5.75% for office, 6% for industrial and 6.25% for shopping centers. Budapest yields are further out, with office at 6.25%, industrial at 6.75% and shopping centers at 8%. Romania provides still higher yields with offices and industrial at 7.5% and shopping centers at 7.25%. Compared with the markets in Western Europe, such as Germany, CEE has recorded a lower pricing correction over the past 12 to 18 months.

“Our outlook anticipates either a similar investment volume or potentially higher compared to the first half of 2024. Some significant transactions are currently in the closing process and are expected to be finalized during the latter part of the year, and the actual volume in the second half of 2024 will depend on whether or not these transactions can close before year-end,” concludes CBRE.

GARY J. MORRELL

GARY J. MORRELL

Source: Colliers

Valter Kalaus

WHO’S NEWS Do you know someone on the move? Send information to news@bbj.hu

Special Effects Ltd. Appoints Fresh CEO

The event service provider Special Effects Ltd. has appointed a former global FMCG executive as CEO. With the arrival of András Palkó, the 42-yearold firm, a key player in domestic and international business tourism, says it has reached an exciting milestone.

Palkó has built his career over nearly two decades at major corporations like British American Tobacco, Carlsberg, Heineken, and Coca-Cola HBC. He has held primarily sales, marketing, and strategic positions, giving him a deep understanding of organizational operations. As a leader, he has managed teams of more than 100 people and gained nearly 10 years of experience as a board member.

“It is an incredible honor to continue my career at a globally recognized, Hungarian-owned company that has been operating excellently, growing consistently and adapting even in the toughest times for decades,” says Palkó.

Founded as a family business in 1982, Special Effects now serves more than 3,000 events worldwide annually, primarily providing audiovisual solutions (lighting, sound, and video technology). Some 90% of the company’s clientele are returning customers, a testament to the high quality of its services and its first-class client management.

With a presence on six continents, the company is supported by a team of nearly 150 industry experts based in offices in Budapest and Debrecen and a modern equipment park of 9,000 units housed in a 2,800 sqm warehouse.

As a continuously growing organization, Special Effects Ltd. has been strategically preparing to transition from a medium-sized business to a large company for several years. One of Palkó’s primary missions as CEO will be to guide the company through this transformation.

“I aim to preserve the valuable culture that has driven the company’s

success for years while opening up new opportunities for growth and innovation,” the new CEO says. “Through open and honest communication, supportive decision-making, and ensuring freedom for my colleagues, I hope to foster further development,” he adds.

András Palkó steps into the role previously held by Zsolt Kassai , who led Special Effects Zrt. for six years. Kassai will continue supporting the company as a board member and vice president for strategy and innovation, aiding the company and the recently established Special Effects Group, which now consists of 12 subsidiary firms.

Tetra Pak Names Managing Director for Eastern Europe

Tetra Pak announced the appointment of Alex Henriksen as its managing director for the Eastern European region, effective August 1.

Henriksen succeeded Lyndsey Loyden-Edwards, who remains at the company in a new position. Henriksen will be responsible for Tetra Pak operations in 16 countries, including seven sales offices.

The new managing director joined Tetra Pak in 1998 and held various European and global leadership positions before he was appointed managing director for Northern Europe four years ago, where he was responsible for 13 countries across Scandinavia, the Baltics, the United Kingdom and Ireland.

“I am very much looking forward to working with the Eastern Europe team to further grow the business of our customers in the region. At the same time, I would like to thank Lyndsey Loyden-Edwards for her outstanding contribution in strengthening Tetra Pak’s position on the Eastern European market over the past years,” Henriksen says.

Loyden-Edwards notes, “It has been an honor for me to lead this great team over three-and-a-half-years in a growing and dynamic Eastern European market and to develop growth opportunities

for our customers. I am convinced that with his profound operational and engineering expertise, Alex will further grow the position of Tetra Pak and our customers in the region.”

U.K. Expert Takes Over at Dreher Breweries

Dreher Breweries is now being run by a managing director from the United Kingdom, a market with a rich history in beer. Mike James was selected for the position from within the Asahi Europe & International organization based on his previous successes and extensive career experience.

James’ primary responsibilities for Dreher Breweries will include overseeing the largest ever investment, of HUF 100 billion, in the Hungarian beer industry and maintaining the company’s growth trajectory. He succeeded former managing director Gábor Békefi , who retired after seven years in the role, on Aug. 1.

James joined Asahi in 2018, holding various senior positions in finance, firstly for the EMEAA business (previously Asahi Premium Brands Ltd.) and most recently as finance director for Asahi U.K. Ltd. for the past three-and-a-half-years. He also has extensive business partner experience in various global FMCG organizations in Australia, the United Kingdom, and emerging markets.

He has successfully led enterprisewide, cross-functional projects and has actively supported people’s development and engagement, according to Dreher.

“Following the change of ownership, Dreher Breweries has made an amazing journey in product development and efficiency improvements over the past seven years,” James noted. “This has made it possible to launch a HUF 100 billion investment in Kőbánya in 2024, which is unique in the Hungarian beer industry and is entirely selffinanced. This achievement is thanks to a well-prepared and motivated team, with whom I am confident that together we will secure the successful

future of this 170-year-old company for many decades to come,” he said.

“It will be my personal mission, together with the team, to maintain the company’s growth trajectory, as this will allow the investment to continue,” James added.

Besides his management experience, the new Dreher head is a qualified Padi dive instructor and is passionate about skiing, field hockey, and mountain biking. He moved to Budapest with his wife Jen, their three children and their dog Maggie.

Under the leadership of Békefi leadership, the brewery’s corporate strategy has changed fundamentally, focusing on premium products, increased efficiency, greater market share in key segments, and improved employer engagement. He will continue to support the international strategic build-up of Asahi Europe & International as an expert consultant until next summer.

Matild Palace Appoints

Bálint Bakó as

Director of Sales

Matild Palace, a Luxury Collection Hotel Budapest, has announced the appointment of Bálint Bakó as its new director of sales, effective from the summer of 2024.

Bakó brings a remarkable background in the hospitality industry, with more than 15 years of international experience, including sales manager and director of sales roles at four- and five-star properties of renowned international hotel brands in Budapest.

He also worked at luxury hotels in the south of France and for multiple Marriott International hotels in Budapest and Germany.

Over these years, Bakó has gained results-oriented leadership skills and is committed to supporting the Matild Palace team in achieving their goals by applying innovative sales and marketing strategies. He has won several awards, including Marriott International’s Special Achievement Award and the Outstanding Individual Performance Award.

András Palkó

Mike James

Alex Henriksen

Bálint Bakó

Opening a business doesn’t make you a businessman.

2 Business

No Light yet at the end of Automotive Tunnel

The automotive sector in Hungary, so long the engine of the local economy, is struggling against the backdrop of sluggish global demand, the stalling electrification transformation and market-distorting Chinese supplies. Will the glory days return soon?

The Hungarian economy shrank in the second quarter of 2024, and it seems ever more likely that the dynamic bounce-back to 4% growth predicted by the government will not happen this year. The Hungarian Statistical Office’s latest report tells a tale of GDP falling by 0.2% compared to Q1 (see “Industry and Consumption: Two Hindering Factors Behind Latest Central Statistical Office GDP Data” in our Sep. 6 issue).

Much of the blame for this falls on the poor performance of the industrial sector, which contracted by 2.4%. More specifically, automotive and related battery manufacturing have lost ground. Automotive alone accounts for 28% of the production volume in the processing industry; if something is not OK in that department, it certainly has an overall impact. Given the sector has been on a slow decline for the past one and a half years, stakeholders just can’t wait for the turn of the tide.

The negative trajectory has much to do with the fact that the adoption rate of electric vehicles has slowed in Europe. In several crucial markets, subsidies are no longer available, and many potential buyers appear unconvinced by driving range or charging station density. OEMs are being forced to operate at lower capacities, meaning suppliers struggle to cope with fluctuating orders.

Some analysts believe the EU moved to phase out the internal

Automotive Matters

A monthly look at automotive issues in Hungary and the region

is, to a large extent, dependent on German economic activity. Never mind the rest of the EU; up to 26% of total exports end up in Germany.

Alarming German News

And news from the German HQs couldn’t be more alarming. Markline’s statistics show that, in 2023, only two-thirds of total auto manufacturing capacity was used by German OEMs. The primary factories of VW in Wolfsburg and Mercedes in Sindelfingen were down to 50%. Audi is considering layoffs.

In Hungary, automotive companies aim to handle sluggish demand by not hiring new staff, renewing fixed-term contracts, and letting temporary workers go. Wage increases are also expected to be below the national average this year. Mercedes envisages a raise of 8% compared to last year’s 23%,

while Audi is planning the same wage hike. As stakeholders experience growing interest in ICE vehicles, they are readjusting their operations. Mercedes, for instance, has recently decided to delay its previous commitment to produce only EVs by 2030.

Attila Szincsák, technical vice president of Denso Hungary (second right), believes the EU shot itself in the foot and then the lung in its rush to move on from the internal combustion engine. Szincsák is with, from left, Hanaki Judzsi, senior manager; Josida Micuteru, administrative vice president; Kitano Masayuki, president; Micheal Ries, project manager; and Mukaj Yaszusi, president of Denso Europe. They were pictured at the inauguration of the then newly completed inverter production line of Denso Gyártó Magyarország Kft. in Székesfehérvár, on Nov. 10, 2023. The EUR 30 million (HUF 11.5 billion) investment manufactures one of the most important units for electric cars.

combustion engine too fast.

As Attila Szincsák, vice president of Denso Gyártó Magyarország Kft., said pithily at an automotive gathering organized by Videoton, “The European Union shot itself in the foot, then got so scared of that, it shot itself in the lung.”

Some Reasons to Be Cheerful

Although the European EV market is suffering, Hungarian buyers don’t seem to have lost interest. June sales saw the third-quickest climb in Hungary across the European Union, the Ministry of Energy Affairs said. Only sales in Croatia and the Czech Republic rose at a faster clip. Local demand for EVs was supported by a HUF 30 billion subsidy scheme to green the fleets of businesses and sole proprietors, the ministry noted. The biggest winner was Chinese manufacturer Build Your Dream, which launched local sales in

Assembling an EV requires just three persons as opposed to the 10 needed in the case of an ICE. Unsurprisingly, in Germany, giants like Bosch and ZF have announced large-scale layoffs. Bad news, indeed, since the Hungarian automotive sector (and the country as a whole)

October 2023. So far this year, BYD has a 12.7% share of the batteryonly EV market, making it runner-up.

“We’re very happy about the positive reaction of our Hungarian customers,” says BYD Hungary country director Annelies Reiss. The leading global EV manufacturer increased its EV market share for July even further, to more than 25%, having sold 148 vehicles in Hungary.

The zero-emission transformation on Hungarian roads is clearly gaining ground. According to the latest data released by the Future Mobility Association in June, the number of extended-range plug-in hybrid

Pundits agree, though, that it is not a trend shift so much as a bump in the road. As Gábor Túry, on behalf of the HUN-REN Institute, told the online business portal G7, the real issue here is the competitiveness of European manufacturers. The biggest threat comes from Chinese manufacturers that can keep prices low, thanks to lavish state subsidies, yet deliver world-class quality.

The EU has switched into selfdefense mode to protect its markets against what it maintains is “unfair subsidization.” It has raised tariffs on Chinese EVs that range from 16.4% to 37.6%, on top of a 10% duty that was already in place for all-electric cars from China. The EU is not alone: The United States and Canada have imposed a 100% tariff on EVs from the Eastern giant.

The actual impact of all those measures remains to be seen. But it seems inevitable that a significant boost in demand will be needed for Hungarian automotive to thrive again.

EVs had increased from 21,874 to 29,646; registrations for plug-in hybrid electric vehicles grew from 10,829 to 12,358. The number of cars with some form of electric drive has thus jumped from 74,089 to 101,213 in Hungary in one year. Updated July figures indicate that this is an unbroken trend. Thenumber of battery-only EVs rose close to 61,000, up from 42,266 a year earlier. Given the combined Hungarian national vehicle fleet is around 4.2 million autos, their total weight is around 1.4% of all passenger cars on the road. As of 2023, that rate for the EU was 1.7%.

Photo by Tamás Vasvári / MTI.

Hydro’s Aluminum Recycling Plant Starts Operations in Hungary

Norway’s Hydro officially opened its new aluminum recycling plant in Székesfehérvár (64 km southwest of Budapest by road) on Sep. 10. The facility will have an eventual annual capacity of 90,000 tonnes but will initially process 15,000 tonnes of post-consumer scrap a year, increasing in line with the expected growing customer demand.

The new recycling plant has been built next to Hydro’s existing aluminum extrusion plant, which the company describes as the most advanced of its kind in Europe, with six presses and extensive fabrication and surface treatment capabilities.

managing director of Hydro Extrusion Hungary Kft., and a former shortlisted candidate for the Budapest Business Journal ’s Expat CEO of the year award.

Signing an extrusion billet (a bar of recycled aluminum) to mark the opening of the new recycling unit in Székesfehérvár. From left: Mauro Spizzo (head of Hydro Extrusion Europe, East), Anikó Raisz (Secretary of State for Environmental Affairs and the Circular Economy), Székesfehérvár MP Tamás Vargha, Hydro president and CEO Eivind Kallevik, Mayor of Székesfehérvár András CserPalkovics and Frank Iepema, managing director of Hydro Extrusions Hungary.

“Our most ambitious customers in key industries like automotive are pushing demand for low-carbon and recycled aluminum upwards,” said president and CEO Eivind Kallevik. “To serve this growing market and strengthen Hydro’s position as the leading provider of lowcarbon and recycled aluminum solutions in Europe, we are set to grow our capacity for recycling towards 2030. This plant will strengthen Hydro’s capacity to provide our customers with advanced components in recycled aluminum,” he said.

“Our customers are not only asking for recycled and low-carbon aluminum; they also need us to recycle their process scrap so we

can create closed loops,” said Paul Warton, executive VP of Hydro Extrusions.

“With our new and modern recycling facility in Hungary, we can now offer that. The project team has worked extremely hard since we announced the investment decision in December 2021. They have kept the highest quality and safety standards, so they should be proud,” Warton added.

State-of-the-art

“The recycling plant creates about 80 new direct jobs and was built in collaboration with national and international suppliers, resulting in a state-of-the-art facility that will be one of the largest and most modern in Europe,” said Frank Iepema,

EU Getting Serious About Fighting Deforestation

The Deforestation Regulation of the EU (EUDR), which entered into force on June 29, 2023, is one of the EU’s latest trade measures, regulating the marketing (including import) and export from the EU market of certain goods and products related to deforestation and forest degradation. According to Andersen Adótanácsadó, the regulation imposes new obligations on companies and severe penalties for non-compliance.

The main objectives of the EUDR are to curb deforestation and forest degradation caused by EU consumption and production, reduce greenhouse gas emissions and halt global biodiversity loss. An impact assessment that was part of the legislative process estimated that in the absence of appropriate intervention, production and consumption in the EU of the products covered by the regulation would result in the loss of around 2,480 sqkm of forest (more than twice the size of Rio de Janeiro) per year by 2030.

Under EUDR, from Dec. 30, 2024, traders of so-called relevant commodities and products containing, fed or produced using them will face new obligations for goods and products produced after June 29, 2023.

The regulation defines relevant commodities as cattle, cocoa, coffee, oil palm, rubber, soy, and wood. Products include beef (and the hides and skins of cattle), chocolate, natural, vulcanized, or unvulcanized rubber, ebonite, charcoal, paper, printed matters, furniture, prefabricated buildings, chemically pure glycerine, palmitic acid, stearic acid, or any animal fed with soya.

The following persons are subject to the obligations set out in the EUDR: So-called operators (any natural or legal person who places on the market

or exports relevant products in the course of a commercial activity);

• Traders who make relevant products available on the market; Operators established in a third country (a country or territory outside the customs territory of the EU); and

• Operators who are SMEs (although these are subject to lighter obligations).

Due Diligence Requirement

Operators and traders are not allowed to place relevant products on the EU customs territory or export them without submitting a due diligence statement. A three-step due diligence procedure should be followed.

(1) Collect information and documents or data (on the trade name, type, quantity of the product, or the country

“We are grateful for the support of HIPA [the Hungarian Investment Promotion Agency], which provided a EUR 6 million cash grant and a EUR 17 mln tax grant. With this support, we could bring this strategic investment to Hungary, reduce imports, and expand exports,” Iepema added.

The Hungarian extrusion plant primarily serves automotive customers. The ability to offer “closed loops” helps carmakers and customers from other industries reduce the carbon footprint of their products. Closedloop recycling continuously uses and reuses materials without any loss of quality while consuming less energy and resources. According to Hydro Extrusion Hungary, recycling aluminum requires only 5% of the energy originally needed to produce the metal.

The automotive components Hydro manufactures in Székesfehérvár include bumper beams and crash boxes, the structural elements of car bodies and battery housings. Alloy properties are crucial for these complex components, and the new cast house will enable Hydro to develop and optimize advanced alloys locally in Hungary.

Hydro Extrusion Hungary is also building a new extrusion press for automotive products, which is planned to start production in 2025.

or part of the country of production, as well as the geographical definition of each territorial unit in the supply chain).

(2) Assess risk: relevant products may only be placed on the market or exported if there is no or negligible risk of non-compliance.

(3) Take risk mitigation measures where necessary.

The EUDR also requires operators to establish and keep up-to-date a framework of procedures and measures. The aim is to ensure that relevant products continue to comply with the due diligence principle. The system must be reviewed annually, and all due diligence documentation and information must be kept for at least five years.

Non-compliance can have severe consequences in terms of corrective action and fines. Sanctions for breaches may include:

• A ban on placing on the market or exporting the relevant products; Confiscation of the product and the proceeds;

• Products can be recalled, donated to charity or disposed of.

The maximum fine can be up to 4% of the previous year’s total annual EU-wide turnover of the operator or trader. However, the maximum will be increased, where necessary, to exceed the potential economic benefit gained.

Aerial view of illegal deforestation in the Amazon rainforest, with trees cut and burned to make way for farmland and cattle pasture in Brazil.

Photo by

Paralaxis / Shutterstock.com

CEO Breakfast Explores Bridging the Gap Between Military, Civilian Innovations

The latest CEO Breakfast, hosted by the GermanHungarian Chamber of Industry and Commerce (DUIHK) in partnership with the Budapest Business Journal and Budapest Security Dialogue, focussed on the digital transformation of the defense industry, drone technology and how civilian innovations can be utilized for defense purposes and vice versa.

Center, titled “Strategic Approaches to Digital Protection in Complex Environments.” Németh emphasized the growing importance of embracing digitalization and innovation to safeguard national security in a rapidly evolving technological landscape.

The event also featured two roundtable discussions, offering insights into integrating digital and drone technologies into military operations and how these innovations influence civil society.

Maximizing New Technologies

Experts from various sectors gathered in Hotel Dorothea early on Sep. 17 to discuss how advancements in digitalization and drone technologies are shaping the future.

After DUIHK CEO Barbara Zollmann greeted the audience, the event opened with short introductions from BBJ editor-in-chief Robin Marshall and Budapest Security Dialogue managing director Wolf Illner. They were followed by a keynote address from Gergely Németh, CEO of the Defense Innovation and Research

The first panel, moderated by Antal Kerekes, a partner at PwC Technology Advisory Services, examined the challenges digitalization presents for military and civilian infrastructures and emphasized the need for collaboration across sectors. Panelists unanimously agreed that future development must occur in tandem between military and civilian industries to maximize the potential of new technologies while ensuring robust security frameworks.

One key point of discussion was the role of civilian technologies in enhancing military capabilities.

The roundtable highlighted success stories where civilian innovations were adapted for defense purposes, stressing that this cross-sector collaboration is essential for creating a secure digital future. If, as one panelist said, “information is the God of War,” then converting data to information and information to knowledge is crucial, as is network integrity and built-in redundancy of systems.

In between the roundtables, István Sárhegyi, acting CEO at 4iG Space and Defense Technologies, delivered another keynote address, highlighting the pivotal role of UAVs in the future of defense while also noting how 4iG is planning to take on the challenges of this exciting sector.

The second panel, chaired by Illner of BSD, addressed the broad spectrum of drone applications, charting the progress of the technology from a toy to a weapon of war. Participants agreed that while drones present significant opportunities for surveillance and defense, they also come with challenges, particularly in terms of regulation and protection against potential threats. The discussion underlined the importance of developing a resilient drone ecosystem, integrating both civilian and military expertise.

The event was made possible with the support of three other business organizations, the Canadian Chamber of Commerce in Hungary, the Swedish Chamber of Commerce in Hungary and the SwissHungarian Chamber of Commerce and the participation of 4iG, Airbus Hungary, CAE, DND, Elbit Systems, PwC and Pro Patria.

Editor’s Note: The BBJ will cover this event in much greater detail digitally and in print in future issues and publications.

BENCE GAÁL

Wolf Illner

Dr. Gergely Németh

Barbara Zollmann

The Future of Drone Innovation: Trends and Predictions

Dr. István Sárhegyi

Digital Security, Innovations and Defence

Building a Culture of Excellence at Hotel Clark

As general manager of the Hotel Clark Budapest, András Lakézi brings a wealth of international experience and a passion for hospitality. He reflects on his career journey, the importance of a strong team culture, and his vision for the future of the hotel, which has already garnered numerous international accolades.

BENCE GAÁL

BBJ: Can you share some highlights from your career?

András Lakézi: Being a hotelier is one of the most rewarding jobs. It opens up the world, provides endless opportunities to meet new cultures, and grants experiences that provide lifelong memories. Early on, I gained thorough training in a hotel chain of top resorts across Cyprus and Greece. Following graduation, I was offered a promotion with the same company to get my first taste of five-star hotel management.

Fast forward a few years, and I experienced opening and operating a stunning hotel in Budapest. My ambition to develop in an industryleading setting brought me to the United Kingdom and one of the most prestigious addresses for a Hotelier: Park Lane, London. Then, I grabbed a huge opportunity and moved on to tick off another career dream, opening a stunning five-star property in London.

Highlights from this period include being selected for a diploma program, then to an ultra-prestigious scholarship program by the U.K. Master Innholders Association, to attend a development program at Cranfield University. I was also honored to receive the President’s Award from the U.K. Gastronomes Association.

In recent years, under the umbrella of a U.K.-based ultra-luxury members club, I operated several luxury properties across Europe, working with some incredibly talented people. Joining Unione Hotel Management and taking

on operating Hotel Clark, alongside some unique pipeline projects, was a dream come true. I believe that Hotel Clark has the potential to become an industry-leading luxury boutique hotel known across Europe.

BBJ: What qualities make for an effective hotel manager, especially in a boutique setting like Hotel Clark?

AL: In my view, our’s is a people industry. This is equally true of the relationships, communication and shared values within our team and how we anticipate guests’ needs. Our team is built from exceptionally talented people, whom I need to be able to motivate, challenge and develop them to continue striving for the best guest experience and also for them to have a clear path for the long term. As a hotel GM, you need to be able to oversee and control the overall functionality of the hotel and remain one step ahead in terms of planning and executing the overall strategy whilst actively being present for the team and guests alike. To get the best out of the hotel, we need to treat each guest as an opportunity to show them the best hospitality they ever encountered.

in special venues. One of the essential brand essences of Hotel Clark Budapest is actively preserving traditions while combining modernity and historical values of urban life. We believe that contemporary art has the power to form society; it can create bonds between people of different ages, backgrounds and nationalities, and it inspires cultural development and acceptance of cultural diversity. The biannual event organized in the hotel is part of a tradition, as the legendary Lánchíd Café, a meeting place for intellectuals, once stood in the location of Hotel Clark.

“I believe the most important element for every organization is its people. The main thing that truly sets Hotel Clark apart is a shared culture that puts our guests at the center of attention.”

BBJ: What are some examples of how the hotel engages in social responsibility?

AL: We take great pride in developing the next generations of hoteliers and have a close relationship with several hospitality schools. I also believe that we provide an industry-leading training platform for all our interns, many of whom we had a chance to employ and thus launch their careers. We also work with a number of local contractors at every level, believing that their products and services can match or even surpass the international competition.

BBJ: The hotel has earned the TripAdvisor Best of the Best accolade. It is also listed in the Michelin Guide. What do you think sets Hotel Clark apart in terms of providing a truly five-star experience?

AL: I believe the most important element for every organization is its people. The main thing that truly sets Hotel Clark apart is a shared culture that puts our guests at the center of attention. The team has hospitality in their hearts, combined, of course, with very detailed ways of working, communication flow, and personalized service. This mirrors the ambition of our owners and wouldn’t be possible to achieve without their support in our day-to-day operation, as well as to have a clear vision ahead of us, bringing the group and Hotel Clark to a level that is recognized as industry-leading across the region.

BBJ: Hotel Clark is known for its Art Corner initiative, which supports local culture and arts. Could you tell us more about this program?

AL: We brought to life our unique Art Corner by Clark & Leo cultural event series in 2021 to promote contemporary art by bringing it closer to the audience

BBJ: What are your goals for the future of Hotel Clark, and how do you plan to continue evolving the guest experience while staying true to the hotel’s values?

AL: The ethos will always be the same: what can we do to enhance our guest experience further? What can we do to better anticipate their needs? What can we do to personalize their stay? No day passes without us trying to find ways to make small but meaningful marginal improvements. Our core value is that we start all actions by looking at the guest experience, which serves as the basis of all future planning. On a more strategic level, we have a firm plan to install an array of technical improvements that not only provide cutting-edge tech for guests but also bring improvements that will enable our team to work more effectively. Regarding the asset, we treat the hotel as a living and breathing unit; we take utmost care of the continued maintenance and improvement of the hotel and all its facilities and have tremendous support from our owners for doing so. The various new projects of Unione Hotel Management and the upcoming opening of a new hotel that we are all heavily involved in with my team will also open doors to Hotel Clark to further enhance our guest experience and be able to offer more options and facilities.

András Lakézi, general manager of the Hotel Clark Budapest.

News Company

Hungarian Floods Prompt BDPST Group’s Largest Coordinated Relief Effort

In what it says is the most extensive coordinated relief effort in its history, the BDPST Group is participating in the national response to the floods by providing on-site assistance, financial support, fundraising, trucks and logistical capacity, among other things. Since Tuesday, Sep. 17, the group’s staff have been working in rotation at various locations to help with the flood response, coordinated by the Hungarian Interchurch Aid organization. While BDPST’s F&B units and its gastronomic partners have been providing food to flood victims, it says Waberer’s has donated part of its capacity for transport, storage or other logistical tasks, and Gránit Bank is helping by donating several million forints and setting up a fundraising account to collect donations for the victims supported by HIA.

CE Glass Expanding Capacity for HUF 5 bln

Hungary’s CE Glass 1989 has invested HUF 5 billion in expanding production capacity at its base on the outskirts of Szeged (170 km southeast of Budapest), managing director Gusztáv Varga said. The project had received HUF 2.4 bln in European Union and state funding, Varga noted. The expansion, which involved the construction of an 8,000 sqm production hall, has improved automation at the plant, helped lower costs, reduced the ratio of faulty products and raised production volume and headcount, he said. The MD added that the company wants to expand sales abroad due to declining demand in the domestic

construction industry. Exports already account for more than half of sales. Traditionally, Romania is the most significant foreign market for CE Glass, with Slovakia, Austria, and the ex-Yugoslav countries also important destinations. According to public records, CE Glass 1989 had a net sales revenue of HUF 5 bln last year.

Richter Inaugurates Facility in Bovenau, Germany

Hungarian pharmaceutical company Gedeon Richter announced the inauguration of a biopharmaceutical facility in Bovenau, Germany, on Sep. 16, according to an announcement on the website of the Budapest Stock Exchange. The multi-purpose facility raises Richter BioLogics GmbH’s total manufacturing area in Bovenau to around 10,000 sqm, Richter said. The new production lines provide further flexibility to manufacture various products simultaneously, allowing up to 120 batches per year, it added. Headcount at the base will double to more than 400 by yearend, Richter said.

Hell Energy H1 Revenue up 22%

The first-half consolidated net sales revenue of listed soft drink maker Hell Energy rose 22% year-onyear to HUF 94 billion, according to an earnings report posted on the Budapest Stock Exchange website on Sep. 4. Material costs increased at a slower pace, growing by 15.5% to HUF 65.1 bln. Operating income was up 30.7% at HUF 14.3 bln. The after-tax profit improved to HUF 13.8 bln from HUF 5.3 bln in the base period when a financial loss impacted performance.

Thai President Foods Investing HUF 18 bln in Esztergom

Thai President Foods Plc. will invest around HUF 18 billion to expand capacity at its noodle plant in Esztergom (45 km northwest of Budapest), Minister of Foreign Affairs and Trade Péter Szijjártó announced on Sep. 15, according to origo.hu. The state is supporting the investment, which will create 80 jobs, with HUF 2 bln, Szijjártó said. He added that local suppliers’ share of Thai President Foods’ feedstock was rising. Approximately 100% of the plant’s output is exported, primarily to European markets. European countries open to investments by Asian companies can profit much in the new era of the global economy, Szijjártó said, adding that Hungary was the "best example” of that. The investment in Esztergom by the Thai-owned company clearly shows the success of the government’s Eastern Opening policy, he said, adding that Asian companies were dictating the pace in a number of sectors, taking the place of their Western competitors.

Company director Pojjana Paniangvait, at the announcement that Thai President Foods will expand the capacity of its pasta production plant in Esztergom at the Ministry of Foreign Affairs and Trade on Sep. 13, 2024.

Hell Energy noted that sales volume climbed 14% to 721 million units during the period, helped by inventory stocking in preparation for introducing a nationwide mandatory deposit fee system for recycling designated bottles.

MNB Fines Alfa VIG HUF 97 mln

The National Bank of Hungary (MNB) has fined insurance company Alfa VIG Biztosító HUF 97 million for regulatory and consumer protection

violations, the central bank and financial market watchdog said in a release on its website on Sep. 20. The MNB found shortcomings related to records on vehicle and home insurance claim payouts, as well yields on some pension products. It also found the insurer had offered “extended” warranties with the same coverage as warranties mandated by law. The MNB fined Alfa VIG HUF 49 mln for the regulatory shortfalls and HUF 48 mln for the consumer protection violations.

Szijjártó: Corporate World Continues to Trust Hungary

Continuous investment records prove that the players in the international corporate world continue to trust Hungary, Minister of Foreign Affairs and Trade Péter Szijjártó said in Budapest when announcing a HUF 9 billion investment by Dutch-owned Aalberts Surface Technologies on Sep. 12. According to origo.hu, the minister said the metal surface treatment company is expanding capacity at its base in Tatabánya (55 km northeast of Budapest), increasing headcount to nearly 200, with a HUF 1.1 bln grant from the government. Szijjártó noted the need for similar investments; the continuously growing Hungarian automotive and battery production capacities require local suppliers so that the supply chains can be as short as possible. Dutch companies represent the 12th largest investment community in Hungary, and bilateral trade was close to EUR 12 bln last year, he said. Mutual respect characterizes the cooperation between the two countries, with a few exceptions, and Hungary is constantly looking for cooperation opportunities, he added.

Photo by Noémi Bruzák / MTI

Oliver Jäger, managing director of Aalberts Surface Technologies (left) and Minister of Foreign Affairs and Trade Péter Szijjártó at the press conference announcing the investment of Aalberts Surface Technologies at the Ministry of Foreign Affairs and Trade in Budapest. With the capacity expansion, the Tatabánya site of the Dutch-owned metal surface treatment company will become Hungary's largest contract painting plant.

Photo by Zsolt Szigetváry / MTI

3 Special Report

IT, System Integration

AI Summit 2024: Hungary’s Role in the Artificial Intelligence Revolution

The AI Summit 2024 Budapest drew leaders from industry, government,and academia, highlighting Hungary’s determination to use AI as a catalyst for transformative change across multiple sectors.

The summit was held from Sep. 9-10 at the Hungarian House of Music, the Museum of Ethnography, and their immediate surroundings. The organizers described it as “one of the most important and defining AI and innovation conferences in the CEE region.” It brought together hundreds of experts, business leaders, and researchers to share their insights on the future of artificial intelligence.

Key topics included the role of AI in healthcare, the transformation of the creative industries, and opportunities within the corporate sector. Special attention was given to the EU AI Act and its potential impact on various sectors.

Significant government figures such as Minister for Public Administration and Regional Development Tibor Navracsics, Minister of Defense Kristóf Szalay-Bobrovniczky and Balázs Orbán, the political director for the Prime Minister, all spoke in person.

Navracsics unveiled an ambitious initiative to leverage artificial intelligence to develop the South Transdanubia region. This pioneering program aims to explore AI’s potential across multiple domains, including boosting investment, tourism, and environmental sustainability.

In his speech, Navracsics emphasized the necessity of integrating AI technologies into regional development strategies.

“When we think about development policy, we must discuss societal developments and education, which then pave the way for industrial policy,”

he remarked. Navracsics highlighted that Hungary has ground to make up in the digital revolution.

“Hungary ranks below the EU average in terms of digital public services and digital integration. Only in terms of internet access do we approach EU standards.”

4 Points of Focus

To tackle these challenges, the government is focusing on four areas where AI can significantly contribute, the minister said. Firstly, smart city programs will aim to enhance urban living.

“Digital solutions will make towns smarter by considering citizens’ habits and movements, thus creating more intelligent urban environments,” Navracsics promised.

Secondly, AI will support public health by collecting and analyzing extensive data to improve healthcare outcomes.

“Through big data, we gather information from countless areas to advance public health,” Navracsics noted, Under the third heading, AI-driven insights will improve sustainability, enabling more environmentally friendly investments. As Navracsics put it, “We aim to create more sustainable investments with the knowledge provided by data.”

Finally, the economic development strategy will use AI to integrate data better, fostering growth. Navracsics emphasized that these initiatives are designed to enhance the effectiveness of government policies.

“AI will make government policy smarter, more efficient, and more targeted in its responses,” he

insisted. “AI is already present in tax administration, local government planning through the IKIR system, and is also utilized in tourism and healthcare,” Navracsics concluded.

Orbán, the PM’s political director, addressed the complex relationship between politics and artificial intelligence. He expressed skepticism about AI’s ability to create a genuinely Hungarian approach. While AI can assist in brainstorming and drafting documents, it falls short in developing nuanced national strategies, he argued.

“Artificial intelligence can assist in the ideation phase and write statements. In some cases, there’s suspicion that some politicians might even rely on it for this purpose,” he noted archly. However, he pointed out that an AI-generated strategy for Hungary was essentially applicable to any country, lacking the specificity needed for true national relevance.

“A strategy that works for any country essentially works for none,” Orbán commented. He emphasized instead the need for a unique approach to crafting strategies that reflect Hungary’s distinct identity.

Unique Cultural Context

“We need an extra layer of specificity to create a genuinely Hungarian strategy, and this fundamentally involves the expertise of human politicians,” Orbán noted. He argued that AI’s limitations become apparent when tailoring strategies that resonate with a particular nation’s unique cultural and historical context.

“AI cannot determine what being Hungarian means, what binds us together, or why we are willing to unite. Only the Hungarian population can provide these insights,” he said.

Orbán also discussed the broader implications of relying on AI for governance. He contrasted the Hungarian’s approach with the automated “robotic” modes of governance that he claimed were found in liberal democracies.

“The Hungarian government does not rely on autopilot mode to steer the country but rather depends on the capabilities and experience of its leaders,” he asserted. Orbán described this as a matter of sovereignty, highlighting the limitations of AI in unpredictable and challenging situations. “Autopilot governance has its limits. It works well when things are predictable, but in turbulent times, you cannot rely solely on calculations,” he elaborated.

The political director further emphasized that AI models like ChatGPT are inherently limited by their inability to transcend their programming constraints.

“AI models cannot generate strategies that go beyond probable outcomes. They cannot suggest bold moves like those undertaken by Singapore, Israel, or Switzerland,” he said. According to Orbán, such models are confined to providing the most likely solutions, lacking the ability to offer innovative or unconventional strategies.

“AI cannot determine what being Hungarian means, what binds us together, or why we are willing to unite. Only the Hungarian population can provide these insights.”

“To create a strategy that truly stands out, one must step outside the confines of standard rules to develop a strategy that is more than just average,” he concluded.

For his part, defense minister SzalayBobrovniczky told the summit the special knowledge provided by AI is needed for the country’s protection, but the human factor remains indispensable. Szalay-Bobrovniczky noted that a deteriorating environment had developed due to epidemics and wars worldwide, even while a technological revolution is taking place that holds both dangers and opportunities.

The minister said the developments provided by AI should be used in the defense industry and called for cooperation with Hungarian businesses as this would also offer them multiple opportunities.

GERGELY HERPAI

Photo by Lajos Soós / MTI

Minister of Defense Kristóf Szalay-Bobrovniczky gives a presentation on the relationship between the Hungarian Armed Forces and AI at the Hungarian House of Music on Sep. 10.

ITware: Building on the AI Edge

ITware has been running a successful business for two decades now, with its thriving Japanese partnership helping it stand out from the crowd. A strong focus on AI has given it an edge on which it can also build long-term growth.

LEVENTE HÖRÖMPÖLI-TÓTH

Japan has long been one of the world’s IT strongholds; if your company prevails there in that field, that holds some meaning. Itware is a Hungarian example of just that, whose connection with the Land of the Rising Sun dates back to 2008. Searching for new partners, the Japanese followed a simple rule: they looked at the number of Nobel Prize laureates for science per capita . Hungary tops the charts in that department, and since Itware already had an excellent track record by then, the partnership was a match made in heaven.

“You can make a mistake only once if you are in business with the Japanese,” senior sales manager Beáta Belovai tells the Budapest Business Journal Evidently, their cooperation has been flawless, reaching a new level in 2021 with the first OCR and machine vision artificial intelligence-related order.

Today, ITware has built a remarkable portfolio of AI solutions, from large language models to machine translation to special training for software developers (ai4dev.net). Even so, Belovai believes that the lack of large-volume, cleansed data is still an issue that prevents many from joining the game.

“This is when you need to take two steps back to ensure that an appropriate amount of data is available that can actually be used for training purposes. Its origin also needs to be validated,” she explains. The availability of computing power is another bottleneck. More importantly, the Cloud just won’t cut it when it comes to the kind of activities ITware pursues. The third factor that keeps executives from launching AI projects is uncertainty. ITware’s consultative training and consulting training (AI4DEV, AIClinic) are tailor-made for that very purpose help eliminate that bottleneck.

Scratching the Surface “It would make everything way too long; luckily, we can rely on the capacities of the HPC Competence Center established by the Governmental Agency for IT Development,”

the expert says. She also stresses that AI is still in its infancy. “We are just scratching the surface; there is so much more to it.”

The market remains volatile, with high entry barriers. Furthermore, on the local level, only a few have the resources to invest. ITware’s Japanese connection gives them an edge. For instance, they can develop machine vision solutions with them.

Another source of pride is that the Japanese Ice Hockey Association has chosen the Sunbears application to provide training support, which contains AI components as well. The Sunbears Cloud Campus platform helps athletes and coaches alike by analyzing data gained during practice sessions and games.

The performance of companies like ITware couldn’t be more critical for a Hungarian economy that is currently stalling. One of the segments with the largest value-added, the ICT sector accounts for

5.4%

of national GDP. According to a study by IVSz, the ICT Association of Hungary, a favorable government approach to cloud

Not Immune

ICT might well be among the most crisis-proof sectors, but the recent past, overshadowed by the pandemic, the energy crisis, geopolitical conflicts and rampant inflation took its toll even here.

“Around 2020, there was a backlash. But the projects that were put on hold still exist. And they must be implemented; otherwise, we will lag behind in the global race,” Belovai notes.

“AI may be the very thing that can give new impetus to the economy. Technology is improving rapidly, and demand is on the rise. Everyone can benefit if they get onboard, and only those that refuse to apply it and acknowledge this development have something to fear.”

The power of ecosystems can help if appropriately harnessed. ITware is a member of the Hungarian AI Coalition, the stakeholder platform for the local AI community.

The firm uses its membership to share knowledge and learn from others. As Belovai explains, the company really wants to know about the success stories of competitors and how they get projects started.

“What distinguishes us is that we regard our competitors as partners. We believe that together we are stronger.”

technology alone could result in GDP growth worth HUF 7 trillion (EUR 17.5 billion) in 10 years.

To be fair, Hungary’s competitiveness strategy does treat ICT as a priority. Objectives to be reached through 2030 include ensuring that Hungary is among the frontrunners in Europe in terms of value added by ICT manufacturing and that the investment ratio of industry 4.0 solutions exceeds 50%.

Amidst the economic slowdown, this approach could be a game changer. ITware also continues to search for new opportunities.

“AI may be the very thing that can give new impetus to the economy. Technology is improving rapidly, and demand is on the rise. Everyone can benefit if they get onboard, and only those that refuse to apply it and acknowledge this development have something to fear,” the sales manager says.

Room for Digital Improvement

The Digital Decade report of the European Commission found that, although the digital infrastructure in Hungary is considered above average for the EU, just 3.7% of local SMEs use AI-driven solutions. And that indeed calls for action. ITware is aware of the issue and has launched

two courses to address it. The AI Clinic helps CEOs exploit the company’s data assets, which is crucial in taking any company’s operation to the next level. Another course targets coders, who are given the opportunity to learn how to use AI tools in their daily work to boost efficiency.

Beáta Belovai, ITware’s senior sales manager.

AI-based Solutions to ‘Super Power’ Work in Daily Professional Life

Employing advanced Artificial Intelligence will reduce the workload of back-office staff by up to 50%, according to KPMG studies.

“It’s not hype anymore, it [AI] is really a game-changer, [and] it will change our lives nowadays and in the next some years,” Tamás Kórász, a KPMG Hungary partner for management consulting, declared opening a joint forum with the British Chamber of Commerce in Hungary on Sep. 11.

Estimates by the professional services firm conclude that back-office workers employed, for example, in HR payments or procurement administration, if equipped with AI solutions, may save between “40-50% of their time in the next years,” Kórász said. “This is an absolute game changer […], so you have to think how you can change the different job descriptions because it [will be] absolutely different from nowadays.”

However, AI appears in many guises, from controlling drones and self-driving cars to ChatGPT helping half-literate students write impressive (and often exaggeratedly literate) CVs. Such are all seemingly far removed from the hum-drum, daily processes of the business world.

Ágnes Rakó, KPMG Hungary’s partner in risk consulting, offered some historical context to illustrate the background. Starting as an auditor with KPMG

years

ago, Rakó steadily expanded her experience across boundaries into finance, modeling and mathematical skills.

“About seven or eight years ago, we started to see that these areas are very nice and very useful, and there is a need for these services, but the kind of mindset and requirements of our clients were changing,” she said.

Usable Solutions

Clients still needed well-written advice but increasingly needed and valued solutions capable of being immediately usable in their operations.

“Where we started, based on our very basic service, which is outsourcing, we started to experiment with data and automation tools, and based on that, we built a data and automation team,” she recalled. This step-by-step approach led, in turn, to experiment with AI from about three years ago.

“We started to set up our AI team. It was easy in the sense that we had lots of people with multiple skills, so we had a base, and we recruited many people over time, and now we have a very sizeable team of AI machinelearning, data scientist people,” she said.

However, for Rakó, the crucial point is not to have separate AI “experts” underpinning progress in the new age of digitalization but to spread the knowledge and use of AI into all

the traditional business professions to become part of the standard skill set.

“What we believe is useful for the future [is to] have this kind of natural approach to AI, [...] to have that kind of mindset within our teams and colleagues, regardless of our basic fields […] to bring forth smarter solutions with savings in time, efficiency and also creating new products and new services,” she argued.

Péter Ignácz, KPMG’s manager for data analytics and modeling, reinforced the message that, despite the massive progress attained so far, the use of AI is still in its formation stage; even “experts” are still exploring systems for their potential and limitations. If this applies to the “experts,” it certainly applies to businesses seeking to adopt AI in everyday life.

Find Your Upside

“What’s important is that without actually trying these tools, you won’t be able to comprehend what the upside is for you, so as Agi [Rakó] mentioned, you have to start experimenting on a small scale, […] otherwise you will know the cost because they are going to tell you, but, the benefit that you are going to get out of these tools or models or applications, that’s for you to figure out because it varies from client to client and use case to use case,” Ignácz stressed.

It’s also important not to get caught up in the stampede, seeking to use AI when it’s not necessary. “If there is a problem that can be solved by automation or simple applications, please do that because then you don’t need machine learning. [But], if you are unable to define or solve your problems with rules or simple applications, that’s where you need examples, and on those examples, you will train your machine-learning model up to 95%,

90% or 85%. You will see what the end result is,” he said.

Ignácz admitted that the results from employing predictive AI are often still imperfect, with systems capable of producing “hallucinations,” that is, false results. However, even with these glitches, teams can still use AI applications to make extensive progress quickly into complex data fields and reports. As for less complex tasks, many solutions already exist.

“For example, if you get an email, you can automate the whole process, asking the status and the next payment installment and everything, and generate an answer letter for that client inquiry so that almost all of the process is automatic, and probably there will be a human in the loop to check whether this is factually correct and send the email,” he said. “This is not science fiction; this is a viable solution today.”

The KPMG AI Experience: Universities ‘Not up to Speed’

Working to develop AI for business solutions has led Ágnes Rakó, KPMG partner for risk consulting, to conclude that Hungarian universities are “not up to speed,” she told the KPMG-BCCH forum in post-presentation question time.

“What I’m honestly a bit worried about, looking ahead [... is that] overall, the education system is definitely not up to speed. We hire many graduates, but honestly, it doesn’t really matter what they learned at university because we have to start from scratch,” she said.

Reacting to an audience suggestion that better soft skills were needed, Rakó remained adamant, quickly stressing that the issues begin at an even more basic level.

“Not just soft skills, but also technical ones, because […] whatever they learned is outdated, very much outdated and, basically, we have to start from zero,” she underlined.

As for recruitment, she said:

“Whenever we hire someone new, we rather hire [based on] the personality, the potential capabilities, and of course,

the way of thinking, but we have to accept that we start from zero.”

Expanding on this issue, marketing and communication director Gabriella Liptay noted that KPMG Hungary had recently signed a strategic agreement with the Budapest University of Economics (BGE) to alleviate this problem.

“We have experienced that [with] the knowledge we create here, not only us at KPMG, but the companies and us together have the wish and opportunity to go further with this education and knowledge sharing,” she said.

Tamás Kórász

Ágnes Rakó

Péter Ignácz

Gabriella Liptay

Gen Z Finding Value Beyond Entertainment on Social Media

Amid ongoing criticism about the digital habits of younger generations, a new initiative, the Future-proof Academy, has emerged with a different narrative. Contrary to the stereotype that Generation Z is hopelessly addicted to social media, research commissioned by Samsung shows a significant portion of these young people actively seek educational content.

provocative topics such as monogamy, wealth as a measure of success, and the impact of social media on human relationships. The event also emphasized the power and challenges of giving voice to these critical conversations.

Another standout feature of the event was “Disputa,” a debate program designed to showcase and develop strong debating skills. In each episode, participants engaged in structured verbal “showdowns,” where consciousness, balanced arguments, and objectivity took center stage.

During the “Future-Proof Sound” event, this format sparked intense engagement from a young audience who voted for the most convincing argument, embracing the notion that selfexpression can outweigh societal norms.

Workshops focusing on everyday knowledge and practical skills, ranging from argumentation techniques to job interview preparation, also received high interest. Attendees had the opportunity to develop vital skills while engaging in hands-on experiences with Samsung’s smart devices.

The study, which serves as one of the foundational pillars of the FutureProof Academy, indicates that Gen Z’s appetite for knowledge and helpful information often surpasses their interest in humor and entertainment.

The research dives deep into the desires, motivations, and social media habits of today’s youth. One of its primary goals was to understand what drives Gen Z to follow particular individuals or pages on social media platforms. The findings reveal a marked difference between segments within this demographic.

While younger Gen Z members, such as middle school students, are most inclined to follow humorous content, older members of the generation prioritize utility. For 44% of them, content that offers practical knowledge, be it study material, sports tips, or fashion advice, is more appealing than mere entertainment. They are less concerned about whether their friends are following a particular page or missing out on popular trends.

Older Gen Z individuals also cite loss of authenticity, aggressive advertising, and diverging viewpoints as their top reasons for unfollowing content creators or brands. These findings underscore their growing awareness and desire for content that adds real value to their lives.

The increasing popularity of both online and offline programs organized by the Future-proof Academy speaks to this generation’s eagerness to acquire new skills and adopt forward-thinking attitudes.

Exploring the Provocative

The Future-proof Academy’s second offline event, “Future-proof Sound,” took these insights further by tackling complex societal issues. Hosted by Marci Miskovits and featuring influencers like Tomi Trunk, Fanni Gyarmati, and Milán Valkusz, the K-Osz Podcast explored

The success of the Future-proof Academy and its “Future-proof Sound” initiative, bolstered by positive feedback from participants, reflects a growing openness among young people to embrace future-oriented values and tools. The academy’s mission extends beyond digital interactions, fostering in-person discussions and activities that empower the next generation to build a more sustainable and equitable future.

GERGELY HERPAI

The Disputa format sparked intense engagement from a young audience. The audience was asked to vote for the most convincing arguments.

The K-Osz Podcast featured (from left) Gen Z influencers Milán Valkusz, Fanni Gyarmati and Tomi Trunk and was hosted by Marci Miskovits.

The “Future-Proof Sound” Disputa debate event invited the audience to embrace the idea that, as it says on the screen behind the presenters, “Expressing yourself is more important than following social norms.”

4iG Group Reports Record Revenue, EBITDA in H1

The 4iG Group says it continued its growth trajectory in the first half of 2024, setting a new record for the group in terms of revenue and profitability. The telecoms division generated nearly 88% of net revenues and the IT division 12%.

Despite dynamic growth, however, the group’s IFRS result was negative, driven by items with no actual cash outflow, such as accrued interest expenses, unrealized foreign exchange losses and excess depreciation charges related to previous acquisitions due to purchase price allocation effects applied for international standards, in the first half of the year.

The 4iG Group says it has continued to implement its transformation program in line with the original roadmap; the group’s board expects this to deliver economies of scale, significantly improve sales performance and increase enterprise value by around

400 bln.

The company says it has made significant efforts in domestic and international markets to ensure the group’s long-term technological development and maintain its dynamic growth.

In addition to its IT and telecom services, 4iG is entering the international manufacturing market with the acquisition

amortization of HUF 110.5 bln, up 16% year-on-year, with an EBITDA margin of 34%.

This significant increase was mainly due to the inorganic growth of Vodafone Hungary and the outstanding operating results of the subsidiaries compared to the previous period.

Normalized profit after tax amounted to a loss of HUF 1.5 bln in H1 2024. The result was negatively impacted by non-cash outflow items, typically accrued interest expenses, unrealized foreign exchange losses and depreciation charges related to previous acquisitions due to purchase price allocation effects applied for international standards.

The purchase price allocation effects of the assets acquired by the group through purchases will have a negative impact on profitability until the end of the useful life of the assets or their disposal, but they do not represent a real cash outflow, the company said.

4iG Group Background Information

of a minority (45%) stake in Remred and investments in its space technology manufacturing center in Martonvár (32 km southwest of central Budapest by road). In a bid to make its aerospace and defense industrial companies more dynamic, the management has started to organize them into holding companies and to develop international partnerships in the field.

The group has also partnered with Huawei to expand its existing data center and cloud services and create joint innovation centers for artificial intelligence research. (Editor’s note: see photo.)

5.5G Technology Demonstration

In Hungary, 4iG claims to have been the first to demonstrate 5.5G technology,

Most Hungarians Open to Using AI

The majority of Hungarians are open to using artificial intelligence, but relatively few use it every day, according to a representative survey by Publicis Groupe Hungary and GKID Research and Consulting. Based on the survey responses, Hungarians scored 3.9 out of 10 on the “AI Readiness Index,” a gauge of awareness and frequency of use both in and outside the workplace. Around 26% of respondents said they used AI regularly, most frequently (53%) for translation, general searches (45%) and

personal questions (35%). Among students in the more than 2,000-person sample, 78% said they used AI for schoolwork.

EY Hungary Establishing AI Consulting Center in Budapest

EY Hungary is establishing an artificial intelligence consulting center in Budapest, according to the online business daily Világgazdaság [Global Economy]. EY AI Confidence will provide an integrated approach to ensure that Hungarian and Central and Eastern European companies receive full support in their various AI solutions, from strategy development to implementing completed applications. György Tilesch, a global expert in

which could offer users up to 10 times faster download speeds in the future.

In addition to a submarine data cable investment linking North Africa to the Western Balkans, 4iG has formed a new partnership with Telecom Egypt to establish a joint venture to operate and market services on the fastest data transmission optical fiber cable infrastructure in Egypt today.

4iG says it achieved a new record regarding group revenue and profitability in H1 2024. In its IFRS consolidated financial statements for the first half of the year, it reported net sales of HUF 328.4 bln, up 23%

year-on-year, and consolidated earnings before interest, tax, depreciation and

corporate and government AI strategy and ethical AI, will lead the AI consulting center in Budapest together with Erik Slooten, who has extensive experience in leading enterprise-level digital transformation and is a former Budapest Business Journal Expat CEO of the Year.

EU Joins CoE Framework Convention on AI and Human Rights

The European Union has joined the Council of Europe Framework Convention on Artificial Intelligence and Human Rights, following a compromise proposal presented by the Hungarian presidency of the Council of the European Union, the Ministry of National Economy said in

The Budapest-based, majority Hungarian-owned 4iG Plc. describes itself as the leading telecommunications and IT group in Hungary and the Western Balkan regions, and it is one of the leading companies in the knowledgebased digital economy. It is listed on the Budapest Stock Exchange and says its fresh and innovative approach and its position as Hungary’s leading IT systems integrator make it a crucial business services provider in the region’s digital transformation. The group says it is continuously expanding its services, expertise, and portfolio to meet the changing needs and demands of the telecom and IT markets. It currently employs more than 8,000 people.

a release on its website on Sep. 5. The EU was among the first signatories after the Council of the European Union decided on the matter on Aug. 28. Hungary, holding the rotating presidency of the Council of the EU, suggested a compromise proposal according to which, in the first phase, the EU would sign the agreement representing member states and, if necessary, members could sign separately in a second phase. With the signing by the EU, the convention becomes binding on all members, the ministry said. The convention is the first international legally binding treaty aimed at ensuring that the use of AI systems is fully consistent with human rights, democracy, and the rule of law. Other signatories include the United Kingdom, Israel, and the United States.

Gao Weijie, CEO of Huawei Technologies for Hungary and the Western Balkans (left) and Péter Fekete, CEO of 4iG Group, pictured signing a cooperation agreement at the Ministry of National Economy on May 10, 2024.

Photo by Róbert Hegedüs / MTI.

Software Developers

3

1

NEXONhr

19 USA, Poland, Nigeria, Singapore FusionR, VERK and cDMS product lines 4iG Nyrt., Lexalytics, Inc., OTP Bank Nyrt., Magyar Export-Import Bank Zrt., Invitech ICT Services Kft., AutoWallis Nyrt., Porsche Lízing és Szolgáltató Kft.

4 SHIWAFORCE.COM ZRT. www.shiwaforce.com 3,159 5,265 3,274 5 Slovenia, Albania, Ukraine, Croatia Shiwa ECMS, Octant, Carbon Footprint Indicator, Statusapp OTP Bank, Magyar Telekom, MBH Bank, Magyar Nemzeti Bank

5

6

7

8

developed custom software, AI solutions

Technology Magyarország Kft., Magyar Telekom Nyrt., KITE Zrt., Magyar Suzuki Zrt., FBTriangle Co. Ltd.

Szilárd Ocskay, Katalin Sass (100)

✓ 139 71 R&R Partners Holding Kft. (100)

Kft. (100)

Szilárd Ocskay, Katalin Sass

Csaba Rozenberszki Judit Andráskó Zsolt Rozenberszki

Béla Bodnár Noémi Horváth Dániel Dojcsák

Hradek Ildikó Kropok

Róbert Sövegjártó

Gusztáv Turschl

Ákos Szekendy Eszter Ábrahám

Zsolt József Koltai (90) Piroska KoltaiBékei (10)

(100)

Zsolt József Koltai

Diána Wágner

Sándor Dankó Erzsébet Papanek Nándor Nagybalyi

1138 Budapest, Váci út 185. (1) 465-5100 nexon@nexon.hu

1038 Budapest, Ráby Mátyás utca 7. (1) 436-7850 info@rrsoftware.hu

1123 Budapest, Alkotás utca 17–19. (1) 392-4000 hello@shiwaforce.com

1134 Budapest, Váci út 23–27. (1) 266-2420 info@bluebird.hu

1027 Budapest, Ganz utca 16. (1) 611-0462 info@blackbelt.hu

1038 Budapest, Fürdő utca 2. (1) 453-4100 contact@p92.hu

1143 Budapest, Gizella út 51–57. (1) 780-5000 contact@ sysdata-pse.com

1149 Budapest, Nagy Lajos király útja 117. (1) 220-6458 sales@trilobita.hu

1117 Budapest, Budafoki út 209. (1) 463-0620 infomail@itware.hu

11 INFOCONSULTING HUNGARY KFT. www.infoconsulting.com/hu 500 1,055

IFS Cloud ERP/ EAM/ESM system

BioTech USA Kft., Wellis Magyarország Zrt., ANY Biztonsági Nyomda Nyrt., Vajda-Papír Kft., Fémalk Zrt., Inno-Comp Kft.

Austria, United Kingdom, Switzerland, Belgium, France, Spain

MobileNAV, WMS MobileNAV, Servotion, Hungarian Extension Pack (HEP), Automated Invoice Processor (AIP), Recurring Billing Scheduler (ReBilS)

Kertimag Zrt. , Speech Processing

InfoConsulting Group (100)

Gábor Kelemen, Judit Gyenes Kelemenné (100)

Imre Sturcz, Krisztina Terbe, Bálint Vrábel Cecília Léber –

Gábor Kelemen Zsuzsanna Pauló Tamás Varga

Cseresnyés (100)

Róbert Szücs-Winkler, Roland Busa, Zsombor Ferjancsik (A) Sofia Angels ventures (A)

Gábor Cseresnyés

Róbert Szücs-Winkler

Csaba Fehér

Fekete Csaba Thurzó

1132 Budapest, Váci út 22–24. (1) 236-3700 infohu@ infoconsulting.com

1115 Budapest, Bartók Béla út 105–113. (20) 330-0220 sales@multisoft.hu

2040 Budaörs, Ibolya utca 65. (30) 600-1400 info@calltec.hu

1037 Budapest, Seregély utca 6. (30) 626-5453 office@denxpert.hu

1013 Budapest, Krisztina körút 39. (1) 270-7600 info@4ig.hu

(100)

NR

Individuals (89), Volán Elektronika Zrt. (11)

Daniel Alexander Csillag Gábor Svéd

Zoltán Madár Tamás Koppány

Pikéthy

Ervin Szabó

Kálmán Faur

Sándor Tibor Lencsés Mariann Novák Krisztina Bakó

Budapest, Fehér Hajó utca 8–10. (1) 933-3744 kapcsolat@erp2u.hu

Budapest, Rákóczi út 1–3. (1) 413-3780

1031 Budapest, Záhony utca 7. (1) 437-3000 gsinfo@graphisoft.hu

1087 Budapest, Könyves Kálmán körút 48–52. (1) 204-7730 mail@grepton.hu

1083 Budapest, Szigony utca 26–32. (1) 382-5500 info@hu.ibm.com

1016 Budapest, Mészáros utca 13. (1) 336-5300 info@kulcs-soft.hu

1113 Budapest, Karolina út 65. (1) 209-1111 info@libra.hu

4400 Nyíregyháza, Dózsa György út 41. (42) 503-000 ertekesites@os.lsoft.hu NR MICROSOFT MAGYARORSZÁG KFT. www.microsoft.hu

Corp. (100)

Benjamin Orndorff, Péter Szabó

Greentree

Titusz Csaba Puskár

1031 Budapest, Graphisoft park 3. (1) 437-2800

1037 Budapest, Szépvölgyi út 35–37. (1) 872-0000 legal@nng.com

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

Budapest, Rétköz utca 5. (1) 889-9800 office@qualysoft.com

Systems Integrators

3

4

5

6

7

8 DELTA SYSTEMS KFT. https://deltatechnologies.hu/

9

Bravogroup Holding Kft. (100)

Péter Szabó Sándor Kulcsár Tímea Soós

Zoltán Czibók

Árpád Kucska

Products Holdings B.V. (100) Árpád Pikéthy

Technologies Nyrt. (100)

International B.V. (100)

István Bánlaki (52.50)Tibor Gombos (47.50)

Rebecca

(10)

Zoltán Csontos Gergely Bodzási László Kóté

Miklós Fábri, Zsolt Koszti János Bence Bajzáth

Tomas Volek

Tibor Gombos Krisztina Mikusik Kissné Helga Szántó

Pál Fried János Kóti

1013 Budapest, Krisztina körút 39. (1) 270-7600 info@4ig.hu

2040 Budaörs, Puskás Tivadar út 14. (1) 371-8000 kontron@kontron.hu

1013 Budapest, Krisztina körút 39. (1) 888-3888 vip@invitech.hu

1114 Budapest, Bartók Béla út 43–47. (1) 279-8000 cegugyek@hp.com

1145 Budapest, Újvilág utca 50–52. (1) 358-6350 info@euroone.hu

1083 Budapest, Szigony utca 26–32. (1) 382-5500 info@hu.ibm.com

1134 Budapest, Róbert Károly körút 70–74. (1) 437-5200 info@delta.hu

1118 Budapest, Gombócz Z. utca 12. (1) 411-3720 info@intercomputer.hu

1138 Budapest, Bence utca 1. (1) 327-3700 info.budapest@ accenture.com

1152 Budapest, Telek utca 7–9. (1) 470-5000 info@nador.hu

1183 Budapest, Gyömrői út 99. (1) 666-1600 sales@dunaelektronika.com

1118 Budapest, Rétköz utca 5. (1) 889-9800 office@qualysoft.com

4 Socialite Groundbreaking Qatsi Films and Music at Müpa

Split across Sep. 23-24, the first and last installments of the Qatsi Trilogy of films by U.S. director Godfrey Reggio will be shown at Müpa Budapest, accompanied by the original scores played by the Philip Glass Ensemble with the Budapest Academic Choir Society and the Budafok Dohnányi Orchestra.

DAVID HOLZER

The Qatsi Trilogy consists of the 1982 film “Koyaanisqatsi,” which means “Life out of Balance” in the language of the Hopi tribe of Native Americans. It is scheduled for Sep. 23. “Naqoyqatsi” (“Life as War,” 2002) will be screened on Sep. 24. Curiously, the middle installment, “Powaqqatsi” (“Life in Transformation,” 1988), does not appear due for an airing.

Directed and produced by Godfrey Reggio, a former monk turned social activist, the film is mainly composed of time-lapse and slow-motion footage of natural landscapes and cities across the United States. There is no dialogue or narration. This is because, as Reggio explained, “From my point of view, our language is in a state of vast humiliation. It no longer describes the world in which we live.”

Humanity, Buildings and Nature

The accompanying music will be a new arrangement of the original by Philip Glass, which was created especially for this occasion and commissioned by the Ravenna Festival, Ireland’s National Concert Hall, the Barbican Center and Müpa Budapest. The cello soloist will be Dániel Helecz of the Dohnányi Orchestra. Looking back from the vantage point of 2024, it’s easy to forget just how influential “Koyaanisqatsi” was on the culture. Its influence certainly seeped into advertising, and that is always a good barometer of these things.

The other day, I talked with a friend who had been a creative director at a bigname London ad agency for many years. He said he’d found a commercial he made in 1987 on YouTube, which prompted him to recall, “I think nearly every creative person had some kind of reference to ‘Koyaanisqatsi’ or script in the draw that was an idea in the style of the film.”

Beginning with footage of an ancient cave painting, the film goes on to show images of humanity, buildings and nature. One sequence shows sunbathers on a beach next to a power plant. Others show large buildings being demolished. Towards the end, we see a rocket in flight exploding, and the camera follows one of its engines as it drifts back to Earth.

Just before the closing credits, the titles show five translations of the word koyaanisqatsi, including “crazy life,” “life disintegrating,” and “a state of life that calls for another way of living.”

The next screen shows a translation of three Hopi prophecies, the last being “A container of ashes might one day be thrown from the sky, which could burn the land and boil the oceans.”

The idea for the film, which took seven years to make, came about when Reggio was working for the U.S. Institute for Regional Education (IRE) on a media campaign in Albuquerque, New Mexico, sponsored by the American Civil Liberties Union. When the campaign finished, the cinematographer

of its TV commercials, Ron Fricke, suggested that Reggio use what was left in the budget (USD 40,000) to make a film. This became “Koyaanisqatsi.”

When the IRE’s budget was exhausted, Fricke, who had been doing the filming, realized that the footage he’d shot was “boring as hell.” He edited it into a 20-minute reel “without regard for message or political content,” according to an interview he gave to American Cinematographer magazine.

In 1976, the IRE decided to continue with the film. They rehired Fricke, who’d been working as a waiter in Los Angeles, to shoot more footage.

The Coppola Effect

When Reggio began working on the film’s post-production at the Samuel Goldwyn Studio in 1981, he met director Francis Ford Coppola. Coppola saw “Koyaanisqatsi” at a private screening before he shot 1983’s thematically paired movies “The Outsiders” and “Rumble Fish.” Telling Reggio that it was “important for people to see” the film, he added his name to the credits and helped distribute and present it to a much wider audience than it would otherwise have received, including eagle-eyed advertising creatives.

“Rumble Fish” shows the influence of “Koyaanisqatsi” in its use of timelapse photography.

Coppola’s championing of the movie also resulted in its music by minimalist composer Philip Glass becoming so popular, although it is a superb piece in its own right. The score has been released three times. Island Records put out a version in 1983 that only featured some of the music. Glass re-recorded

the score for Nonesuch Records in 1998 for a 73-minute version. “Koyaanisqatsi: Complete Original Soundtrack,” a remastered version, was released in 2009. Since then, the Philip Glass Ensemble has toured the world, playing the score in front of the screen while the movie is being shown.

Today, “Koyaanisqatsi” is a cult movie, helped by the fact that it was out of print and impossible to see throughout the 1980s because of copyright issues. I remember watching a bootleg of the movie on video cassette sometime towards the end of that decade. Probably in a room filled with fragrant smoke.

The accompanying music will be a new arrangement of the original by Philip Glass created especially for this occasion and commissioned by the Ravenna Festival, Ireland’s National Concert Hall, the Barbican Center and Müpa Budapest. The cello soloist will be Dániel Helecz of the Dohnányi Orchestra.

It’s also regarded by many as what arts website The Quietus calls “The first example of environmentalist cinema.” In 2000, the Library of Congress selected the film for preservation in the U.S. National Film Registry for being “culturally, aesthetically, or historically significant.”

It’s unsurprising but still richly ironic that the advertising industry, which values style way over substance, co-opted “Koyaanisqatsi.” The film’s message is that life is out of balance because modern society has turned away from nature and the ancient order of things. Advertising is a prime cause or reflection of that imbalance.

As The Quietus put it, the film is “An exercise in cinematic expression above all else. Despite this, the climate crisis reveals in greater clarity just how vital such an expression was, and still remains.”

You can learn more about the screenings and all the other shows at Müpa Budapest via its Hungarian and Englishlanguage website: mupa.hu

Photo courtesy of

The Philip Glass Ensemble.

12 European Galleries Show Artwork Worth EUR 1 mln in Budapest

The organizers of this year’s Budapest Contemporary Art Fair (BCT) have announced that 42 works by 21 artists from 12 foreign galleries will be on display and available for purchase at the international stand of the BCT, to be at the Bálna (Whale) building from Sep. 26-29.

This year, the exhibitions of the bestknown Hungarian galleries will be placed in an international context by a dozen highly renowned foreign invitees. Galleries from Austria, the Czech Republic, France, Germany, the Netherlands, Switzerland, Serbia and Slovakia will send works to be presented at a joint stand curated by artist Márton Nemes. The combined value of the foreign works will be around EUR 1 million (HUF 400 mln).

Nemes was the exhibiting artist of the Hungarian Pavilion of the Venice Biennale this year, and will make his curatorial debut at the request of BCT.

One of the most exciting pieces of the international exhibition is Wim Delvoye’s “Caterpillar” (2004), a tracked machine that the artist transformed into a Gothic cathedral. The artwork is valued at HUF 50 million-HUF 100 mln.

Amélie Bertrand’s work “I’ll Face Each Day With a Smile” (2024) will also be on show at BCT. Her latest paintings will be exhibited at the Musée de l’’Orangerie in Paris from October, surrounded by Monet’s paintings.

The curatorial selection includes renowned foreign artists such as Adel Abdessemed, Omar Ba, Igor Hosnedl, Gerold Miller, and Jonny Niesche.

Culture Matters

A regular look at culture issues in Hungary and the region

Navracsics: ECofC Title Opportunity to ‘Reposition’ Veszprém

The title of European Capital of Culture, which the town of Veszprém (110 km southwest of Budapest) and the Lake Balaton region held last year, presented an excellent opportunity to “reposition” the area, Minister of Public Administration and Regional Development Tibor Navracsics told an international conference assessing the experiences of the program and the opportunities for the region. According to the conservative daily newspaper Magyar Nemzet [Hungarian Nation], Navracsics praised the region’s richness in historical landmarks, natural beauty, culture and traditions, saying it was on par with “other, more popular touristic regions in Western Europe.” The program aimed to strengthen local communities and “showcase Hungarian elements in European culture and European traits in Hungary’s culture,” Navracsics said. The organizers had emphasized the reconstruction of buildings rather than infrastructure, as is habitual during the ECofC year, and focused on sustainability, he added.

“I’ll Face Each Day With a Smile” by Amélie Bertrand.

The fair has become a defining event of the Hungarian contemporary art scene. Some 30 Hungarian galleries will be represented, and high quality is ensured by a professional committee.

“In addition to paintings, sculptures, photos and installations worth millions of forints, those interested can also find quality works of art of modest value,” the organizers say of the event. “The aim of BCT is to give serious attention to the actors of the Hungarian contemporary scene at the European level, so that representatives of the profession, artists, galleries, art collectors and the audience can meet each other.”

Among the highlights from the Hungarian galleries is the oil painting “Langyos Víz” by László Méhes of the Nemes Gallery. The painting from 1973 is described as “one of the outstanding works of Hungarian hyperrealism.”

Kálmán Makláry Fine Arts will bring the works of South Korean contemporary artists, and is preparing a special selection for this year’s fair.

The Vintage Gallery presents one of the works of Vera Molnar, who passed away last year. The public will be able to see one of Zsófi Barabás’ pieces among the offering of the Erika Deák Gallery, and Einspach & Czapolai Fine Art will enrich the repertoire with a painting by István Nádler.

This year’s BCT program will be accompanied by a two-day conference on the relationship between art and business, exclusive guided tours and educational programs for children and adults.

The Budapest Contemporary Art Fair will be complemented by a charity online auction with objects donated by the exhibiting galleries. Bidding will be possible on the Axioart platform, and the organizers will donate the proceeds to the Autistic Art Foundation, which aims to support people with autism.

A Hungarian-language teaser video is available on YouTube (search for Budapest Contemporary), or you can check out the fair’s website (in Hungarian and English) at budapestcontemporary.com.

05 OCTOBER 2024 – 02 FEBRUARY 2025

Main sponsor: Corporate partners:

In collaboration with MTA-ELTE Momentum Assyrian and Babylonian Divine World Research Group. Exposition realized with the exceptional collaboration of the Bibliothèque nationale de France.

Striding lion from the Processional Way of Babylon | Kunsthistorisches Museum, Vienna

Canadian Chamber of Commerce in Hungary (CCCH)

At the start of October, the CCCH will host its latest Business Breakfast, focusing on one of the most pressing concerns for businesses today: cybersecurity. With cybercrime on the rise, business leaders are increasingly concerned about how to safeguard their organizations. Attendees will hear from cybersecurity experts such as Nicholas Sarvari from CNS Risk and Adam Enterkin from BlackBerry, who will address the current threat landscape in Central and Eastern Europe, the growing role of AI in cybercrime, and effective risk mitigation strategies. The event will feature a panel discussion and an interactive workshop, providing practical tools for SMEs to strengthen cybersecurity defenses. Breakfast, lunch and networking are included. • When: Tuesday, Oct. 1, 8:30 a.m.-1:30 p.m. • Where: Académia Irodaház, Académia utca 6 Budapest 1054 • Fee: Members HUF 9.900 (+ VAT); non-members HUF 29,900 (+ VAT)

Hungarian-French Chamber of Commerce and Industry (CCIFH)

Is it better to work in a French company in Hungary? Join the CCIFH Business Breakfast and discover the employer branding perception of French companies in Hungary.

• When: Tuesday Sep. 24, 9-11 a.m.

• Where: Randstad Budapest, Dózsa György út 146-148, Budapest 1134. • Fee: Members HUF 8,900 (+ VAT); non-members HUF 13,400 (+ VAT).

The next CCIFH Businesswomen’s Lunch will feature Krisztina Kovács, the Rector’s chief of staff at MOME (Moholy-Nagy Művészeti Egyetem). She will talk about the subject “See and be Seen,” with a discussion about creative thinking and value creation in contemporary art and art education.

• When: Wednesday Oct. 2, noon-2 p.m.

• Where: Andrássy Garden Andrássy út 111, Budapest 1063 • Fee: Members HUF 18,900 (+ VAT); non-members HUF 28,900 (+ VAT)

The next CCIFH HR Club presents Yogist: Well at Work. Yogist has already trained more than 500,000 leaders, managers and employees in techniques that prevent work-related illnesses in the office or remote work. The special guest will be the French founder, AnneCharlotte Vuccino. • When: Tuesday, Oct. 22, 9-11 a.m.

• Where: Europa Design-Well Point, Törökvész út 71-75, Budapest 1025. • Fee: Members HUF 9,900 (+ VAT); non-members HUF 14,900 (+ VAT).

German-Hungarian

Chamber of Commerce Corner

This regular section of the Budapest Business Journal features news and events from various international business chambers. For further information and to register for specific events, visit the organizing chamber’s website. If you have information for inclusion on this page, send an email in English to Annamária Bálint at annamaria.balint@bbj.hu

Swiss-Hungarian Chamber of Commerce (Swisscham)

The Swiss-Hungarian Business Forum was held on Sep. 11 at the Neumann János University in Kecskemét, Hungary, in cooperation with the Embassy of Switzerland. The main topics were innovation, institutional collaboration, Swiss best practices, cooperation programs, and training opportunities. Speakers and panel discussion participants

included representatives of the Swiss and Hungarian governments, institutions and companies. The audience was drawn from the regional corporate and institutional spheres and the chamber’s membership. After the event, there was a visit to the Fornetti factory. Swisscham’s next event in October is its HR café, a successful series organized in partnership

British Chamber of Commerce in Hungary (BCCH)

The sixth BCCH CEO Dinner of 2024 will be held at the W Hotel Budapest and features James Nelson, general manager and head of finance shared services at Computacenter, a leading independent technology and services provider. The firm’s center in Hungary employs 560-plus staff to manage internal business functions and provide direct customer support and services. Budapest is Computacenter’s primary global GBS location. The company is building out multiple roles as part of several functional transformations to enable Computacenter to grow internationally and serve its customers more effectively. The event lets guests enjoy a three-course dinner with wine and welcome drinks while hearing a leading professional’s views on recent developments and current industry affairs. BCCH chairman Duncan Graham will give the opening remarks.

• When:  Tuesday, Oct. 15, 2024, from 5:30 p.m. • Where: W Hotel Budapest, Andrássy út 25, Budapest 1061

• Fee: Members HUF 28,000 (plus VAT); non-members HUF 38,000 (plus VAT)

Chamber of Industry and Commerce (DUIHK)

Since 2017, the DUIHK has honored 37 member companies with the title “Reliable Employer.” The awards were handed out for the eighth time this year at a dedicated event where the winning companies presented their best practices for increasing employee engagement and reducing staff turnover.

Zsuzsa Mészáros-Schaffer, marketing manager at Work Force Hungary Kft.,

said that the primary concern of every employee is the monthly salary, so the firm regularly checks the competitive wage for a job. For blue-collar employees, there are performance or attendance bonuses and transparency of career opportunities to encourage engagement, while for white-collar employees, health benefits, cafeteria and home office are also important. Mészáros-Schaffer highlighted

the importance of onboarding processes, applicant support, personalized training, and internal communication.

Anna Kaposvári, HR manager of Class Hungária Kft., emphasized the power and role of internal communication and the importance of first impressions during onboarding. New colleagues are welcomed with their own branded workwear and other useful gifts, and the entire employee family is integrated into the corporate culture through various programs under the slogan “Not just colleagues, but family.”

Anna Varga, HR director of Bay Zoltán Közhasznú Nonprofit Kft., says that the Institute of Natural Sciences mainly employs researchers and is a bridge between basic research and industrial realization. In addition to competitive salaries, employees are motivated by anniversary bonuses, a cafeteria, lifetime benefits, anonymization of the annual satisfaction survey, transparent management

with Business Drive, where current HR topics are discussed with renowned experts. The central theme will be “How to Make Your Public Presence Effective and Efficient: The Secret of Successful Communication in the Age of the Attention Economy.” The guest will be presenter and communication expert Csaba Azurák. HR professionals, managers and anyone who wants to improve their public speaking skills are welcome to join this event.

• When: Wednesday, Oct. 16, 2024, from 2-4:30 p.m. • Where: Hageni Távegyetem Budapesti központja, Madách Imre utca 13-14, A épület 4. Emelet, Budapest 1075 • Fee: Members HUF 5,000 (0% VAT); non-members HUF 12,000 (plus VAT). Register by Oct. 14.

Netherlands-Hungarian Chamber of Commerce (Dutcham)

Dutcham’s first networking lunch event this fall features a chance to meet the Budapest Marriott Hotel’s new general manager, Angela Saliba.

• When: Sep. 26, noon-2 p.m.

• Where: DNB Restaurant, Budapest Marriott Hotel, Apáczai Csere János u. 4, Budapest 1052

• Fee: Members: HUF 10,000 HUF (incl. VAT); non-members: HUF 13,000 HUF (incl. VAT), includes two courses, mineral water and coffee. More information: dutcham.hu

of results and even participation in designing solutions and updating policies.

Judit Kiss, HR manager of Rossmann Magyarország Kft., says that, as a family business, it has opted for supportive practices and programs. According to the employee engagement measurement, this has paid off for the employees, more than 80% of whom have been engaged this year. As a caring employer, Rossmann has a social safety net for colleagues. The company offers free counseling for colleagues and family members and helps with various welfare packages, including rapid assistance following an anonymous application. In the panel discussion moderated by Zoltán Karácsony of HR Portal, all four managers confirmed that, although an attractive basic salary is the most important aspect for Hungarian employees and, therefore, regular salary increases are the most significant retention factor, the added value offered by a company is also increasingly appreciated.