Budapest Business Journal 3221

SSCs/BSCs

BSCs Standing Strong Despite Economic Headwinds

The country’s Business Services sector is showcasing resilience and adaptability amidst shifting economic conditions, according to a survey by the Hungarian Investment Promotion Agency.  16

Services Centers Require Higher Quality Space

The CEE region is seen as attractive for business services centers based on three factors: cost, talent and quality of life, although the first of those is becoming less important.  18

Ludwig Celebrates 35th Birthday with Focus on Women Artists

Ludwig Museum of Contemporary Art presents for the first time work from its collection by women. It focuses primarily on the female artist, the role of women in art history, the female body, and societal roles and expectations.  21

A Pillar on Which to Build

Hungary’s Industry Continues Nosedive

Byung Kim explains how ExxonMobil is banking heavily on upskilling and staff wellbeing at its Budapest operation, which is also its largest European affiliate. 17

Hungarian industry performed at its poorest level in four years in September. Based on the latest data, production is decreasing across a wide range of industrial sectors. The level of output has shown a downward trend for two years. For now, it seems no sudden rebound can be expected.  3

Some 40 speakers and panelists attracted a full house of attendees at the Hungexpo Congress Center for the fourth Hungarian Battery Day conference on Nov. 6, part of the three-day Battery

which

8.  12

EDITOR-IN-CHIEF: Robin Marshall

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

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THE EDITOR SAYS

TRUMP, TARIFFS, PRESIDENCIES AND ECONOMICS

Perhaps understandably, we spent a fair chunk of our time at the latest Budapest Business Journal CEO Boardroom Meeting on Nov. 12 talking about the likely economic impact of the U.S. election results. If there was a frustration, though, it was that, even with two such excellent and knowledgable speakers as Róbert Ésik, a partner at EY, and Károly Radnai, managing partner at Andersen in Hungary, however much we think we know, nothing is cast in stone at this stage.

Donald Trump is President-elect (or, as one wag put it the other day, President-reelect). He won’t actually become the 47th President of the United States until Jan. 20, 2025. In an election that was notable for being detail-light, the Trump camp has certainly said a lot. But how much will become policy? From an international trade perspective, perhaps most worrisome is the threat to slap tariffs on anything imported to the United States. Hungary’s Prime Minister has repeatedly made clear that he thinks the EU tariffs on Chinese electric vehicles are a bad idea. It is unlikely that even he, an out-andout supporter of Trump, would be happy to see America take such a protectionist turn. Our speakers agreed that the likely result would be increased inflationary pressures in the United States and globally.

But then again, perhaps Trump was simply following the advice contained within the pages of his book, “The Art of the Deal.” His is famously transactional. Maybe this is purely the opening round of negotiations, and those within the circle of friendship, as Orbán would seem to be to judge from the number of times he has received a public Trump name-check, have nothing to worry about. Just as the Chinese may

reward Hungary for being one of just five countries to vote against the EU tariffs, perhaps Viktor and Donald have some kind of understanding. Then again, who knows? The President-elect cannot yet enact anything. Until he does, everything else is speculation, however well-informed it may be. To paraphrase myself at the CEO Boardroom Meeting, we will see what we will see; until then, we’re just guessing.

Other ground we covered included the Hungarian Presidency of the Council of the European Union. It’s almost impossible to attempt to judge this without getting political, and the color of your politics will significantly influence how you view it. But that said, our speakers thought it would probably be judged a success overall (or, as one of our speakers said, “At least, it wasn’t a failure”). The government’s laserlike focus on boosting European competitiveness, the top priority of the Hungarian presidency agenda, certainly won praise from some quarters, we were told. And what of the Hungarian economy? The Q3 GDP figures were worse than either of our guests had anticipated, but both thought GDP growth of around 3.5% next year was a realistic goal. One thing to keep an eye on will be an increase in government spending as we approach the Hungarian general election in the spring of 2026. The question will be where that money comes from, not least because the government insists that reducing the deficit remains a priority. It seems we will have much to watch out for in 2025.

Robin Marshall Editor-in-chief

THEN & NOW

Photo by Zoltán Kocsis / MTI

The black-and-white photo from the Fortepan public archive, taken in 1936 during a Hungary-Japan ice hockey match, depicts the Japanese goalkeeper making a diving save at the City Park Ice Rink. The presentday color photo from state news wire MTI shows Vilmos Galló (right) shielding the puck from his opponents during a Tamás Sárközy Memorial Tournament match between Hungary and Slovenia at Tüskecsarnok, near Infopark in Budapest’s District XI, on Nov. 9.

Photo by Sándor

Bojár / Fortepan

1News • macroscope

Hungary’s

Industry Continues its Nosedive

External Demand Required

Hungarian industry performed at its poorest level in four years in September. Based on the latest data, production is decreasing across a wide range of industrial sectors. The level of output has shown a downward trend for two years. For now, it seems no sudden rebound can be expected.

Industry continued its decline in September, and the poor performance of the sector played a significant role in Hungary falling into a technical recession once again. As discussed in the last issue’s Macroscope column, the volume of Hungary’s gross domestic product in the third quarter of 2024 was 0.8% lower (according to raw data) compared to the same period of last year.

The latest industrial output data explains part of the poor performance: the volume of industrial production dropped in September 2024 by 7.2%; based on working-day adjusted data, it declined by 5.4%, year-on-year. According to seasonally and workingday adjusted data, industrial output was 0.7% lower than in August 2024, according to the latest data released by the Central Statistical Office.

Production volume decreased in September in the great majority of the manufacturing subsections. Of those with the greatest weighting in the total, falls were observed in the manufacture of transport equipment, electrical equipment, and computer, electronic and optical products. Better news was found in the manufacture

Industrial production in Hungary, 2002-2024 (January-September) Production volume index

of food products, and in beverages and tobacco products, both of which increased.

In the first nine months of the year, industrial production was 4.3%

lower

than in the same period of 2023.

According to seasonally and workingday adjusted indices, industrial output was below August 2024 by 0.7%.

According to Péter Kiss, investment director of Amundi Fund Management, the weak preliminary GDP data had already indicated weak industrial production, although the data published on Nov. 6 fell short of the most pessimistic expectations based on this.

According to Kiss, the data suggests that the industry’s doldrums are far from over. Based on European economic indicators, a quick turnaround is not expected.

Governmental Headache

The fact that residential consumption has been extremely sensitive to adverse economic processes in the recent period and that business confidence has not been left untouched by the weak industry could cause a headache for the government, Kiss warns.

“There is nothing new under the sun: the output of domestic industry has been stagnant or slightly decreasing for about two years. For the time being, there are no factors in the field of core processes that would represent an upward risk for the rest of the year,” said Erste Bank in a press release reacting to the industrial output data.

Source:

Audi’s contract manufacturing in Győr, launched at the end of September, may bring some output expansion, but at the same time, it is a warning that it was apparently not able to offset the decline in other sectors on a monthly basis.

“The plant closures and largescale downsizing of the German manufacturers are only now coming. In the medium term, we can perhaps be optimistic: the significant capacity expansions entering production, mainly in the vehicle industry and in the field of battery production, may result in a relevant recovery of output in larger volumes starting from the second half of next year,” the bank’s analysts stated.

Industrial production still shows no signs of recovery; the most significant role in this is played by the weakening of external demand, according to Dániel Molnár, senior macroeconomics analyst at Makronóm Intézet.

Declines occurred in the vehicle manufacturing, electrical equipment manufacturing, computer, electronic, and optical product manufacturing sectors, all of which primarily produce for export. The main difficulty here is still caused by the weakness of Hungary’s most important foreign market, Germany. On the other hand, the food, beverage and tobacco manufacturing sector was able to expand. It is no coincidence that domestic demand is more important for these.

As for the further outlook, there is still significant uncertainty, which in turn has a negative impact on the economic outlook, Molnár says.

“The upswing requires the recovery of external demand, which, according to our expectations, can only start meaningfully from next year. At the same time, by turning the ongoing large investments into production, if there is demand, the industry could provide a substantial growth surplus to the economy as a whole,” he added.

The data highlights that the solution to excessive dependence on the German economy is economic neutrality, the Ministry of National Economy said in a press release.

“In addition to the West, which is struggling with competitiveness problems, our country’s economic relations must also be strengthened with the East, which is currently showing much greater growth,” the ministry said.

“The [economic] upswing requires the recovery of external demand, which, according to our expectations, can only start meaningfully from next year. At the same time, by turning the ongoing large investments into production, if there is demand, the industry could provide a substantial growth surplus to the economy as a whole.”

“Economic neutrality can contribute to the restoration of the performance of industry, and those significant giga-investments will continue to be involved in the performance of the national economy in the near future, such as CATL, BYD, BMW, Semcorp or EcoPro, which can give new impetus to Hungarian industry,” it added.

The government has drawn up a New Economic Policy Action Plan consisting of 21 measures, which will pour a significant amount of money into the Hungarian economy, further stimulate consumption, and give new impetus to investments and domestic industry, thus supporting the Hungarian economy to grow above 3% in 2025, the ministry reminded.

Not everyone shares this optimism, though: Erste Bank’s analysts expect only a slight increase in the fourth quarter and say their previous 1.4% growth forecast can no longer be maintained; they have revised this year’s forecast down to 0.5% and that for 2025 to 2%.

ZSÓFIA CZIFRA

Weerts Logistics Park Hands Over Vecsés Industrial Hall

The Belgian-owned Weerts Logistics Park (WLP) has handed over its latest 40,000 sqm industrial hall, a built-tosuit project for Canada’s Magna International Inc., one of the world’s largest automotive parts suppliers.

Real Estate Matters

A biweekly look at real estate issues in Hungary and the region

being the launch of component production for the target market, expected by the end of 2025,” WLP adds.

The collaboration dates back to November 2023, when the parties successfully worked together in Hanover, Germany, to deliver a 15,000 sqm hall.

The complex has achieved Breeam’s “Excellent” rating, recognizing sustainability solutions such as rainwater recycling and energy-efficient systems. Waste heat from the facility’s machinery is integrated into the heating system, while a solar panel system covering the entire roof surface is being installed, ensuring a complete green energy supply for the operation, says WLP.

The project, one of the largest industrial investments in Hungary, is a significant milestone for the industrial development of the region, according to Weerts.

“The modern and sustainable production plant built in Vecsés is exemplary not only in terms of its technological excellence but also in its environmentally friendly solutions,” the developer says.

schedule while at the same time taking into account the interests of the local community and sustainability,” it says.

“Once again, WLP has demonstrated its ability to deliver customized, complex industrial facilities ahead of

“With the consignment of the hall, WLP has successfully supported Magna’s development, with the next milestone

Westend City Center Celebrates 25th Anniversary

Known as the largest modern shopping center in Central Europe when it opened, the Westend City Center has reached its 25th Anniversary. The complex, with 400 plus outlets, was officially opened by the then Mayor of Budapest Gábor Demszky and a youthful Prime Minister Viktor Orbán, in November 1999 after 16 months of construction by the developer, TriGranit.

Retail and shopping center development in the established Central and Eastern European markets remains constrained, given a background of the increasing use of e-commerce and worries about demand fueled by consumer spending power. There are no significant mall projects in the pipeline. In response to changing tenant and customer expectations, owners are concentrating on redeveloping and upgrading the retail, leisure and service offerings of earlier generation centers and looking to enhance the “retail experience” to meet

more sophisticated demands from tenants and consumers. ESG and EU Taxonomy demands and requirements are also coming to the fore. All of these are reflected in changes made to the Westend since its opening.

At the end of the third quarter of 2024, there was more than nine million sqm of retail space under construction in the CEE region (Bulgaria, the Czech Republic, Hungary, Poland, Romania and Slovakia), with much of this (2.8 million sqm) located in the Poland market.

“However, this does not mean other retail formats will not develop. In addition to traditional shopping centers and retail parks, the development of mixed-use projects is also observed in the region,” says Dominika Jędrak, market insights director for Poland & CEE at Colliers.

Cushman & Wakefield Echinox has traced 180,000 sqm of retail space under construction in the booming Romanian retail development market. A notable recent delivery is the 51,000 sqm Arges Mall in Pitesti by Prime Kapital-MAS Real Estate.

The consultancy has traced as many as eight pipeline projects across Romania of 30,000 sqm plus, most of which are in regional towns and cities. The largest of these is the 130,000 sqm Transylvania Mall in Cluj-Napoca, also by Prime Kapital-MAS Real Estate.

In Hungary, retail development is dominated by smaller parks and strip malls as the retail sales are not there to support more significant developments. Looking at the existing shopping center stock in Budapest, the first-tier centers have very low vacancy rates of around

The project in Vecsés (22 km southeast of central Budapest, close to Budapest Ferenc Liszt International Airport) is divided into several units to efficiently support the manufacturing processes, while an office section with open spaces and quiet rooms provides workspaces for hundreds of employees.

The location provides direct access to the M0, M3, M4 and M5 highways and proximity to the airport. According to WLP, the new factory will create jobs in and around Vecsés.

1-2%, and there is a waiting list of existing tenants in the malls who are waiting to relocate within centers.

In the current demand environment, a number of shopping center owners have improved their F&B and food court offerings. Leed and Breeam “In-use” sustainability accreditation is seen as a necessity for owners to obtain finance while, from the tenant perspective, the demand is for lower energy and service charges, comments Anita Csörgő, head of retail at Colliers Hungary

“As the retail stock continues to age, the trend of redeveloping and modernizing shopping centers is expected to become increasingly prevalent,” says Colliers Jędrak.

“This process ensures that shopping centers remain relevant and competitive in a rapidly changing market. The focus on energy efficiency, sustainability, and enhanced customer experiences will likely drive further innovations and improvements in the sector,” she says.

“The proportion of centers requiring renovations or redevelopments is significant, and this trend is anticipated to grow as the retail landscape continues to evolve,” Jędrak adds.

Across CEE, the total stock of traditional shopping centers and retail parks exceeds 26 million sqm. According to Colliers, retail parks dominate the market, with more than 900 projects larger than 1,500 sqm.

GARY J. MORRELL

Westend City Center is marking its quarter century.

The WLP facility built for Magna International at Vecsés.

European Leaders Consider Options on Ukraine After Trump Win

European leaders gathered at the European Political Community summit in Budapest on Nov. 7 to discuss the implications of the recent U.S. presidential election. The summit, the most significant diplomatic event in Hungary’s history, brought together 42 heads of state and government (out of a potential 47), the leaders of European institutions, the Secretary General of NATO, and representatives of the OSCE to discuss the main security challenges facing Europe, in particular the ongoing conflict between Russia and Ukraine.

Roundup Crisis

victory would force European leaders to question whether Europe could continue to provide military and financial support to Ukraine without significant U.S. backing.

“I have serious doubts in that regard,” Orbán said.

The Prime Minister of Hungary, which currently holds the Presidency of the Council of the European Union, suggested that the EPC summit could serve as the platform for taking the first steps toward a revised strategy. The discussions were expected to include a reappraisal of a EUR 50 billion EU-U.S. loan package previously allocated for Ukraine under a G7 agreement.

While no formal decisions were made at the meeting, Orbán said the question arose: if America did not participate in future financing, how would Europe solve this independently, if at all?

Comprehensive Talks

among European leaders, with differing opinions on whether to push for a rapid ceasefire or continue military support to press for a more favorable resolution.

Meanwhile, Ukrainian President Volodymyr Zelensky, who also attended the EPC summit, pushed back against calls for a swift ceasefire, arguing that such a move would not restore Ukraine’s sovereignty or independence. During a press conference, Zelensky expressed concerns about the uncertainty surrounding a ceasefire and what might follow, stressing that the war would not simply end with a cessation of hostilities.

“I respect the opinion of those European leaders who urge the quickest possible ceasefire,” Zelensky said. “But under the current conditions, a ceasefire would not guarantee the end of the conflict or the restoration of our territorial integrity.”

Zelensky also stressed the importance of discussions with President-elect Trump, suggesting that Ukraine would seek clarity on how the incoming U.S. administration plans to address the conflict. He proposed that frozen Russian assets, worth an estimated USD 300 bln, could be utilized to support Ukraine’s military efforts and aid in rebuilding its devastated infrastructure.

“Russian aggression so far has caused USD 800 bln-worth of destruction,” he estimated.

The outcome of the U.S. election, which saw a convincing Republican victory with Donald Trump reclaiming the presidency with both the electoral college and the popular vote, as well as securing the Senate (53-44) and looking on course to claim the House, has introduced uncertainty regarding future Western support for Ukraine.

Prime Minister Viktor Orbán and other European leaders expressed concerns about the sustainability of the European Union’s current approach, emphasizing the need for a reassessment of its strategy.

Orbán had underscored the need for a “new European strategy” in light of the U.S. election results in his address at the summit of the Turkic States in Bishkek on Nov. 6, just prior to the EPC summit. He noted that a Republican

The caretaker Prime Minister of Belgium, Alexander De Croo, echoed the sentiment for reevaluation during a press briefing at the EPC summit. He called for comprehensive talks with the incoming U.S. administration “going beyond theatrical rhetoric” about their geopolitical goals.

He added that a few scenarios had to be clarified to bolster continued support. For instance, De Croo pointed out that over half of military assistance to Ukraine already actually comes from European nations rather than the United States.

In his closing remarks at the EPC summit, Orbán exulted that the group advocating for a negotiated peace settlement has gained momentum following Trump’s U.S. election victory. However, he was careful to note that there was no consensus on the issue

NICHOLAS POGRATZ

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In this photo released by the Press Office of the Prime Minister, Prime Minister Viktor Orbán (right) receives Ukrainian President Volodymyr Zelensky at the European Political Community meeting in the Puskás Arena in Budapest on Nov. 7.

Photo by Vivien Cher Benkő

Leading Cardiologists Get to the Heart of the Matter at Novartis Conference at Semmelweis Uni

Novartis Hungary recently hosted a major conference at Semmelweis University for leading cardiologists and pharmaceutical experts from several EU countries, including Belgium, the Czech Republic, Slovakia, as well as Hungary.

Led by Professor Dr. Béla Merkely, the university’s rector and head of its heart and vascular center, the conference aimed to align national experiences in cardiovascular prevention and care with EU policies and best practices.

Held in Budapest on Oct. 24, the event sought to strengthen public health efforts, promote equality, and foster innovation. It will contribute to developing an EU Cardiovascular Health Plan that aims to transform cardiovascular health across Europe for future generations.

The conference delved into various aspects of aligning clinical insights with EU policies, sparking an important discussion on advancing cardiovascular health. Here’s just one question the conference addressed to illustrate its depth and scope.

From my experience, effective strategies include raising awareness for primary prevention and using specialized lipid ambulances to manage cholesterol levels for secondary prevention. Timely initiation of diseasemodifying medications, optimal device therapy, and the integration of telemedicine for remote monitoring are crucial. These measures reduce hospitalizations and enable early diagnosis and treatment, decreasing mortality and economic burden.

substantial change, while scientifically, it ensures that best practices and cuttingedge research are consistently applied.

Economic factors undoubtedly influence the implementation of cardiovascular health plans. Ensuring sustainable funding and resource allocation is vital for these plans’ success.

Question: How can aligning clinical insights with EU policy and best practices drive advancements in cardiovascular health? What specific strategies or innovations from your experience can serve as exemplary models?

PROFESSOR DR. BÉLA MERKELY, rector, Semmelweis University, honorary president of the Hungarian Society of Cardiology: The high rates of cardiovascular disease in Central and Eastern Europe, especially in Hungary, require a clear strategic plan focused on prevention and treatment. Aligning clinical practices with EU guidelines helps establish standard prevention methods, utilize specialized centers, and address care disparities.

It’s also essential to recognize the value of data. Countries with up-todate, representative databases on their populations’ cardiovascular health can leverage this information to tailor their interventions more effectively.

Eliminating socio-economic and regional disparities in cardiovascular health is critical. For example, Hungary has been working on regional health programs to reduce these inequalities, which could serve as a model for other nations.

National prevention strategies, including comprehensive public awareness campaigns and preventive screenings, could be scaled up to the EU level. These initiatives have significantly reduced cardiovascular risk factors and improved early detection and intervention.

The impact of an EU-wide or nationallevel action plan on cardiovascular health would be profound, setting unified standards and facilitating better coordination of resources and policies across member states. Politically, garnering support for such a plan can drive

International collaborations can considerably enhance national action plans. Shared knowledge, joint research projects, and coordinated interventions allow countries to benefit from each other’s experiences and innovations.

Looking to the future, promising areas include research into personalized medicine and the integration of new technologies, such as artificial intelligence, in diagnostics and treatment. Expanding these areas through EU-supported initiatives could revolutionize cardiovascular care.

In summary, by leveraging a combination of innovative therapies, targeted awareness campaigns, and EU-aligned policies, we can create a robust framework to tackle the cardiovascular health crisis effectively.

PROF. ALEŠ LINHART, cardiovascular medicine department head, Charles University and General University Hospital in Prague: Aligning clinical insights with EU policy and best practices is crucial for advancing cardiovascular health. By combining these elements, we can achieve significant improvements in prevention, diagnosis, and treatment,

leading to better health outcomes. A key strategy involves adopting a preventionoriented approach that promotes hearthealthy behaviors and communitybased interventions. Expanding public screening campaigns for hypertension and cholesterol with EU funding and integrating digital health tools to track risk factors can significantly enhance patient compliance.

Digital health and telemedicine are among the most promising innovations today. The COVID-19 pandemic accelerated the adoption of remote monitoring technologies, allowing real-time tracking of vital signs and timely interventions. Better access to telehealth services and advanced diagnostic tools offers a more comprehensive understanding of cardiovascular health.

Looking ahead, personalized medicine and genomic research tailored to individual risk profiles have enormous potential to revolutionize cardiovascular care. Specialized centers for cardiomyopathies and amyloid heart disease illustrate the benefits of integrating clinical practice with cutting-edge research.

Strengthening multidisciplinary care teams and fostering ongoing education for healthcare providers are also critical steps. Collaboration among cardiologists, heart surgeons, and general practitioners ensures comprehensive care. EU-supported education programs can standardize and elevate these practices.

From left: Prof. Aleš Linhart, Prof. Eva Goncalvesová, Prof. Stefan Janssens

Innovations like heart failure management hubs, nationwide Atrial Fibrillation screening programs using wearable devices, and broad access to advanced procedural interventions like TAVR and thrombolytic therapy exemplify this approach. By aligning with EU policies and leveraging funding and research initiatives, the Czech National Cardiovascular Plan [for 2025-2035] aims to reduce the burden of cardiovascular disease significantly and could serve as a model for other EU member states.

PROF. STEFAN JANSSENS, professor of cardiology, University Hospitals Leuven, Belgium: Healthcare professionals must recognize the substantial impact of cardiovascular disease (CVD) on patients, families, and healthcare systems in the EU. CVD remains the number one killer in Europe and requires a dedicated EU cardiovascular health action plan to raise awareness among EU citizens and ensure adequate and effective policy attention from healthcare system decision-makers. The burden of cardiovascular disease includes not only heart attacks and strokes but also often unpreventable, inherited diseases such as cardiomyopathies. To improve overall cardiovascular health in Europe and reduce the non-communicable disease burden, we must identify current unmet needs throughout the patient care pathway. These include deficiencies in early or timely diagnosis, inequalities in access to care, lack of patient empowerment and holistic support, suboptimal disease management, and insufficient funding for research and innovation. The Atlas survey of the European Society of Cardiology highlights wide variations in access

to cardiology services, underscoring the urgent need for greater equity among EU policymakers. Recent estimates show that CVD accounts for around EUR 110.8 billion annually in healthcare spending in the EU, with the total societal cost almost double due to substantial indirect socio-economic costs from productivity loss.

Prioritized strategies include better public awareness campaigns, especially for non-preventable, inherited cardiovascular diseases, equal access to specialist care, disease management programs promoting guideline adherence, and support for the EU’s best practice portal. Holistic support should include promoting dedicated patient organizations to advance shared decision-making, improved treatment adherence, and effective patient empowerment via access to digital health data.

Continued and enhanced EU investment in focused cardiovascular research and innovation is indispensable for improving patient outcomes in the years to come.

PROF. EVA GONCALVESOVA, department head at the National Institute of Cardiovascular Diseases, Bratislava:

Aligning clinical insights with EU policies and best practices provides a strong foundation for significant advancements in cardiovascular health. With high cardiovascular disease rates across Slovakia and neighboring countries, we’ve recognized the need to move beyond isolated clinical practices and embrace a standardized, EU-aligned approach to both preventive and posthospitalization care. By integrating innovative solutions like AI-driven diagnostics, transitional care, and

intensive outpatient management, we can address gaps in specialized care, essential for reducing one-year mortality and enhancing patient outcomes.

In Slovakia, we are developing several exemplary projects. Transitional care post-heart failure hospitalization allows us to extend care and adjust treatments for six to eight weeks postdischarge. Another promising initiative is using artificial intelligence for early diagnosis of myocardial infarction. This technology enables rapid, accurate diagnostics in prehospital settings, ensuring that patients needing primary PCI are identified and treated promptly.

Our most advanced program, Impaks, provides intensive outpatient management for patients after acute coronary syndrome. Early results show a positive impact on reducing one-year mortality and improving control over critical risk factors like LDL cholesterol, smoking, and blood pressure. If successful, Impaks could serve as a legal model for reimbursed care plans, setting a new standard for secondary prevention across the EU.

Through these focused strategies, we aim to demonstrate measurable benefits that justify broader policy support and specialized reimbursement. Such models provide a roadmap for other EU member states, offering scalable solutions rooted in local health data and supported by EU resources.

MARIA TILMAN, country TA head of cardiovascular and innovative commercial partnerships at Novartis Hungary: I’m proud to say that Novartis Hungary, together with Semmelweis University, hosted this impactful conference. This collaboration shows our commitment to advancing cardiovascular health.

The Hungarian EU Presidency provides a unique platform for fostering meaningful dialogue among countries on significant cardiovascular programs.

Novartis Hungary is proud to support these initiatives. By working closely with local and international experts, we’re demonstrating effective strategies to overcome challenges, especially in Hungary. Our efforts, supported by the Hungarian government, aim to bring cardiovascular health to the EU agenda and turn policy into tangible action.

For instance, in the past two years, we’ve conducted screening programs in various Hungarian cities, offering comprehensive cardiovascular checks and consultations with cardiologists. Moreover, the innovative Lipid Management Center, developed in partnership with Semmelweis University, is mapping cholesterol levels across Hungary and implementing targeted interventions to improve cardiovascular disease management. The results of this project, introduced at this conference, showcase the impactful outcomes of our collaboration.

The Hungarian EU Presidency has shown exceptional leadership in advancing an EU Action Plan on cardiovascular diseases, including priorities like screening, research funding, and digital health innovations. We commend the Hungarian government for its commitment to improving cardiovascular health at the EU level.

In summary, aligning clinical insights with EU policies, supported by dedicated efforts from companies like Novartis Hungary, paves the way for a healthier Europe. By continuing to work together and adopting innovative strategies, we can significantly improve cardiovascular health across the EU.

Maria Tilman

Prof. Dr. Béla Merkely

Increasing Emphasis on Quality of Office Interiors

Reflecting increasing concerns regarding the interiors of office buildings and the perceived need to positively impact the well-being of their staff, users and visitors, the Hungarian Green Building (HuGBC) Well and environment working group, consisting of 12 property and sustainability professionals, has released the Well Report 2024.

GARY J. MORRELL

The U.S.-based International Well Building Institute’s third-party interior sustainability accreditation system entered the Hungarian market around 10 years ago, and the first buildings in the Budapest office market were certified three years ago.

This reflects the extension of ESG issues to all types of real estate interiors and their occupants, involving the well-being of occupants and the wider business environment. According to the report, the occupants of a “healthy” building are happier, more content and more productive.

The latest iteration of the standard, Well v2, is based on 10 basic themes relating to air, water,

nourishment, light, movement, thermal comfort, sound, materials, mind and community.

The first Well standard accredited buildings in Hungary were the Corvin Technology & Science Park by Futureal and the Nordic Light Trio by Skanska. Both projects now need to be re-accredited as the certification is valid for three years.

According to the research, there are currently three “Platinum” accredited office buildings (the highest in the Well standard) and seven at “Gold” (the second highest). Another nine projects are pre-certified in Hungary, and 36 are pre-registered.

Futureal’s Budapest One has achieved Well Core “Platinum” for the three phases of the development project.

The Agora Tower and the Agora Hub,

by HB Reavis, have achieved Well “Gold” in addition to Breeam “Outstanding” and “Communities” accreditation.

Earlier Generations

With regard to earlier generation buildings, CA Immo has achieved Well Core “Gold” accreditation for the renovated IP West office complex.

“The entirety of office centers need to be Well accredited, including tenant areas, rather than just common or core areas. This incorporates the whole office,” comments Regina Kurucz, manager of the HuGBC Well Working Group.

She says the advantage of investing in offices to achieve Well certifications can be traced through reduced levels of sick leave and higher productivity. It also aids positive company branding, with

HuGBC Looks to Net-zero Carbon Emissions

The Green Future Conference 2024 by the Hungarian Green Building Council (HuGBC) at the Budapest Music Center looked at the challenges facing the route to zero-carbon emissions throughout the lifecycle of the built environment.

Gábor Szarvas, president of the HuGBC, stressed that sustainability and net-zero emissions should engage all aspects of society, including the political environment and the business community.

Concerning the zero-carbon route plan for 2050, Mathew Black, climate action manager at the World Green Building Council (WGBC), stressed the need for Whole Life Carbon Roadmaps in the EU that provide “clear actions across the value chain as a guide for finance and investment.”

The WGBC is present in 75 countries with 47,000 members, including Hungary.

One of the main sponsors of the event was the Swedish Embassy of Budapest. Stefan Andersson, project development manager at Skanska Nordic, introduced the 14,000 sqm Hyllie Terrass office

project in Malmo that is based on complete circularity and re-use of materials in construction. The project, designed by Denmark’s Cobe Architects Studio, is Well and Leed “Platinum” accredited and climate neutral.

“The challenges facing developers with regard to achieving net-zero emissions in the value of all projects by

is the wide range of suppliers and contractors, that the industry is

driven by competition rather than collaboration,” Andersson said.

“[With] limited knowledge regarding the embodied carbon in buildings, developers need to see sustainable goals as cost-effective and a need to focus on embodied carbon from source to deconstruction. There is a need to identify materials with the greatest impact and the minimum use of materials.”

The construction site is fossilfree, and energy is provided in collaboration with the city of Malmo from a recycled furnace.

Green Matters

A

younger workers increasingly expecting healthy and impressive workplaces.

MSD Pharma has achieved Well certification in 11

international locations, including its 1,400 sqm Budapest office in Millennium Gardens.

The company has 40 offices worldwide, and MSD is seen as a regional leader in sustainable office interiors.

The renovated National Bank of Hungary (MNB) has achieved Well precertification for its historic, listed building headquarters in Szabadság tér, originally completed in 1905 but now restored to make it suitable for 21st-century use.

“Net-zero carbon emissions is not tunnel vision; it also includes a consideration for people. For example, with regard to damaging materials, 600,000 people in Budapest are at risk of drinking water containing lead. Further, with an aging population, persons with limited movement should be catered for,” concludes Kurucz.

Market is Moving

“Sustainability targets are clearly set as the market is moving towards a new assessment of carbon neutrality. Companies are currently hiring with regard to sustainability requirements, and there is an understanding of requirements and monitoring of technology,” comments Pál Baross, the Royal Institution of Chartered Surveyors CEE ambassador for ESG and sustainability.

With the EU Taxonomy in place, there is no way back. Logistics is the easiest to develop in line with ESG principles as the buildings are simple, and most asset managers and developers build on the basis of sustainability.

Concerning the office sector, there is a mutual benefit between the landlord/investor developing in line with ESG and the benefits and savings for tenants.

When it comes to shopping malls the Westend City Center is aiming for green energy provision for tenants. The financial sector is sensing strong market signals for a sustainable asset class and must find a way to meet the green transaction, Baross argues.

Sustainability issues are at the forefront in the real estate and related industries, as evidenced by the 150 people, mainly sustainability-related professionals, who attended the sold-out Green Future Conference.

The HuGBC Green Future Conference 2024.

Richter Celebrates Q1-Q3 Profits and 30 Years on BSE

Gedeon Richter commemorated its 30th anniversary on the Budapest Stock Exchange on Nov. 8 with its CEO, Gábor Orbán, invited to ring the ceremonial bell that opens trade on the bourse. Days later, it celebrated again by announcing a 42% jump in its Q1-Q3 consolidated after-tax profit.

As Hungary’s largest pharmaceutical company with its headquarters in the country, the firm has succeeded in domestic and international markets over the past three decades, significantly supported by its presence on the stock exchange. Today, Richter is one of the BSE’s four leading blue-chip issuers in the premium category and the third largest player in terms of market capitalization.

“Our company’s 30-year presence on the stock exchange is an excellent example of how solid fundamentals, continuous innovation and an independent capital market presence can contribute to a company’s success,” Richter’s Gábor Orbán said after the bell-ringing ceremony.

“We have faced many challenges over the past decades, but our listing on the stock exchange has continually reaffirmed our belief that we are on the right track as a global pharmaceutical company and that we must be bold in moving forward with our business vision and operational efficiency to help more patients around the world,” he said.

“We are proud that our operations represent the greatest domestic valueadded and believe that the next 30 years will be as productive and meaningful as the first 30 were,” Orbán added.

Climbing Profits

Underlining that success, the firm announced its consolidated aftertax profit had climbed 42% year-onyear to HUF 175.9 billion in Q1-Q3, boosted by wider margins and

a financial gain, according to an earnings report released on the website of the Budapest Stock Exchange on Nov. 12. Revenue increased 6% to HUF 636.4 bln. The cost of sales fell 7% to HUF 196.8 bln, lifting gross profit 12% to HUF 439.6 bln. R&D spending increased 18% to HUF 70.2 bln. Milestone income reached HUF 6.6 bln. Operating profit climbed 32% to HUF 190.2 bln.

Richter booked a net financial gain of HUF 5.8 bln, compared to a net loss of HUF 18.4 bln in the base period. Earnings per share came to HUF 959 for the period. Pharma revenue reached EUR 1.6 bln in Q1-Q3. The blue-chip affirmed its full-year guidance for pharmaceutical revenue of EUR 2.15 bln-2.25 bln and operating profit of EUR 725 million-750 mln at a constant exchange rate.

The company’s history began in 1901 when Hungarian chemist Gedeon Richter (born Sep. 23, 1872) founded his own factory in Budapest. The company became one of the leaders of the Hungarian pharmaceutical industry, pioneering the production of insulin and disinfectants, among other things. It retained its leading role in the second half of the 20th century, and after the fall of communism, its growth accelerated, particularly in Central and Eastern Europe, as it began to expand abroad.

Innovative Medicines

Today, Richter says it is the region’s leading pharmaceutical company, supplying products to around 100 countries worldwide, with a presence in 50 countries, eight production plants, 19 representative offices and 41 marketing subsidiaries. The company is a significant player in developing innovative, original medicines for neuropsychiatry, gynecology and biosimilars.

Its stock market presence, which began in 1994, has played a significant role in these successes. Richter is now one of the largest issuers, with a market capitalization of more than HUF 2 trillion.

In addition to BSE’s primary index, the BUX index, the firm is also part of the Central European Blue Chip Index (CETOP), which reflects the performance of the companies with the most significant market value and turnover in the region.

In October 2024, its shares reached a historic high on the BSE at HUF 11,260.

“It is extremely inspiring when a company of this size and importance can celebrate an anniversary on the

“We have faced many challenges over the past decades, but our listing on the stock exchange has continually reaffirmed our belief that we are on the right track as a global pharmaceutical company and that we must be bold in moving forward with our business vision and operational efficiency to help more patients around the world.”

Budapest Stock Exchange. Richter’s story is an example of the important role that capital market presence can play in the growth and international success of a company,” noted Richárd Végh, CEO of the Budapest Stock Exchange.

“Over the decades, the company has grown from a medium-sized domestic company into a major international corporation and a true national champion. Richter’s development also illustrates the strength and potential of the Hungarian stock market,” Végh said.

“We congratulate Richter on this anniversary, and we trust that the flagship of the Hungarian pharmaceutical industry will continue to contribute to the growth of the Hungarian and regional economies with outstanding results,” he added.

From left, Ilona Hardy Pintérné, deputy chairwoman of the board of Gedeon Richter, Szilveszter E. Vizi, board chairman (speaking), CEO Gábor Orbán, and Richárd Végh, CEO of the Budapest Stock Exchange

in Brief News

2025 Budget of ‘New Opportunities,’ Says Varga

The government’s 2025 budget is one of “new opportunities,” Minister of Finance Mihály Varga said on Nov. 11, ceremoniously submitting the bill to lawmakers in parliament. Varga said the “peacetime” budget reflected the government’s new economic policy. He added that outlooks were encouraging, with a “good chance” for the world to move toward peace based on the results of the United States elections. Varga said Hungary’s GDP would grow in 2024 as higher wages boosted consumption. In 2025, Hungary’s GDP growth could put the country among the frontrunners in the EU, based on forecasts from international institutions, he said. Varga added that the government aims to put the economy back on the growth path, while higher wages would leave more money with families and strengthen SMEs.

CPI Edges up 3.2% y.o.y. in October

Hungary’s annualized consumer price index reached 3.2% in October, inching up from 3% the previous month, according to data released by the

Central Statistical Office (KSH) on Nov. 12. The KSH data shows food prices rose 4.5% in October. The price of flour jumped 38.9%, milk prices rose 16.8%, and eating out increased 7.6%, but noodle prices fell 7.3%, egg prices dropped 2.1%, and sugar was 2.9% lower. Household energy prices fell 4.8%. Gas prices were 9.5% lower, and electricity prices declined 0.7%. Consumer durable prices edged down 0.3%. Motor fuel prices fell 5.2%. Spirits and tobacco products increased by 3.8%, and clothing prices rose by 3.1%. Service prices increased 7.2%. Harmonized CPI, adjusted for better comparison with other European Union member states, was 3.4%. Core inflation, which excludes volatile fuel and food prices, was 4.5%. The CPI calculated with a basket of goods and services used by pensioners was 3.2%.

General Gov’t Deficit Reaches HUF 3.051 tln in October

Hungary’s cash flow-based general government deficit reached HUF 3.051 trillion at the end of October, the Ministry of Finance said in a preliminary data release on Nov. 11. The central budget had a deficit of HUF 3.048 tln at the end of the

month, and the social security funds were HUF 199 billion in the red, but separate state funds were HUF 197 bln in the black. In October alone, the general government deficit came to HUF 427 bln. “The impact of unfavorable circumstances in the global economy can be felt in Hungary’s economic performance,” the ministry said. “After a temporary slowdown, Hungary’s economy will be on a sustained growth path and could be at the forefront in the European Union growth ranking in 2025, providing the foundation for a strengthening fiscal balance,” it added.

Wage Agreement Possible ‘Within Weeks’

An agreement on wages between employers and unions could be reached “within a few weeks,” State Secretary for Employment Policy Sándor Czomba told public media on Nov. 12, according to state news agency MTI. Czomba said talks on Monday had done much to bring the sides closer to an agreement. He noted that employers backed minimum wage rises of 8% in 2025, 10% in 2026 and 12% in 2027, while unions wanted increases of 10% in 2025, 12% in 2026 and 14% in 2027. He said the sides wanted to see the minimum wage reach 50% of the average salary by Jan. 1, 2027, a goal that could be achieved with a minimum wage rise of either 8% or 10% in 2025. If the minimum wage is to reach the equivalent of EUR 1,000/month, while the gross average salary climbs

to HUF 1 million/month, the minimum wage needs to rise by an annual 12%, on average, or 10% in 2025, 12% in 2026 and 14% in 2027, he added. Although just 210,000-220,000 people earn the minimum wage, the impact on higher earners can be “very big,” he said.

Orbán Seeking ‘Great Agreement’ Between Hungary, U.S.

Prime Minister Viktor Orbán is seeking to strike “a great agreement” between Hungary and the United States with U.S. President-elect Donald Trump, the PM said in an interview to commercial TV2 on Nov. 10. Hungary and America will need to sign an agreement to prevent double taxation, as the incumbent administration “has failed to renew the one that expired,” Orbán said, adding that he was seeking agreement with Trump “on some major economic matters. I think we will have the opportunity to do so,” he said. Referring to the recent EU summit in Budapest, Orbán said participants had realized “Europe cannot go on doing what it has done so far” and needed change. European leaders “so far giving Ukraine everything will now switch to the opposite,” he said, adding that “We will need to manage the change together. I wouldn’t want to see Europe being torn apart into opposing camps,” the prime minister said, adding that his goal was to “shift from a pro-war position to a pro-peace approach together.”

Orbán Attending COP29 in Baku

Prime Minister Viktor Orbán traveled to Baku on Nov. 11 to attend the UN’s annual conference on climate change (COP29), which he addressed on Nov. 12, the PM’s press chief Bertalan Havasi said. Minister of Agriculture István Nagy is also a member of the Hungarian government’s delegation, Havasi said. According to a statement issued by his ministry, the agriculture minister said Hungary is committed to combating climate change, but this must not put farmers at a disadvantage or jeopardize the food supply. Sustainable agriculture and forestry play an essential role in the fight against climate change, and blaming agricultural producers for climate change hurts farmers, the agriculture ministry quoted Nagy as saying. For farmers, their land guarantees their livelihood and future, so a good climate is in their primary interest. What he called “extreme green ideologies,” however, must not be allowed to harm agriculture. The safest produce derives from a short supply chain, so consumers must be convinced to choose local, seasonal produce. This helps to keep the ecological footprint small while ensuring the livelihood of Hungarian farmers and a vibrant economy, Nagy added.

Photo by

MTI/Azertac

From left, Azerbaijan President Ilham Aliyev, Hungarian Prime Minister Viktor Orbán and UN Secretary-General António Guterres at the 29th UN Conference on Climate Change (COP29) in Baku, Azerbaijan, on Nov. 12.

2 Business

Downturn in EV Sector a Temporary Setback, Industry Experts Insist

Some 40 speakers and panelists attracted a full house of attendees at the Hungexpo Congress Center for the fourth Hungarian Battery Day conference on Nov. 6, part of the threeday Battery Week, which ran until Nov. 8.

for electric vehicles is “promising,” with global numbers set to grow “from the current 43 million to

million by 2035, a 12 times increase.”

On a day when the subject matter ranged from Hungary’s drive to become a center for battery production and research via the value of batteries for grid stability to the potential impact of American import tariffs on the European industry under the forthcoming Trumpian presidency in the United States, one message was underlined by several early speakers.

None were more forceful than Thore Sekkenes, European Battery Alliance (EBA) Program Director.

“The temporary setback on sales of EVs is just that, temporary. It will happen; the fantastic achievements made mainly in China on EVs will ensure that we will be driving EVs in the future; there is no doubt about that. So, let’s not talk about slowing down; that is nonsense!” he thundered in his early keynote address.

Somewhat less stridently, Péter Kaderják, executive director of the Hungarian Battery Alliance (Huba), argued in his welcoming address that the current weaker business performance of the battery segment is part of the normal business cycle.

Citing figures from the International Energy Agency, he said the outlook

With this outlook in mind, and given that the EU is forecast to remain the second largest market for electric vehicles, Kaderják said it has become increasingly clear that Hungary intends to build further upon its current global ranking as the fourth largest battery cell-producing country.

“Of the 10 battery companies that cover about 95% of the market, six are Chinese, three are South Korean, and one is Japanese, but none are European. So, it’s clear that the East has taken over the industry on a global scale.”

Pointing to existing and planned EV and battery production facilities in cities across the country, Hungary’s “dedication to becoming climate neutral” is proven by government policies to support the green energy transition.

“We have in place a complex support team for electromobility,

years, there is “clearly significant room for improvement for Hungarian companies” in this respect.

Huba was also determined to promote improvements in the sector’s environmental performance, and supports government efforts to streamline licensing and “to establish environmental standards for the sector that meets German standards.”

In addition, the association seeks to further “the development of a wellfunctioning and sustainable endof-life battery management system in the country,” he concluded.

Swedish Struggles

István Joó, CEO of the Hungarian Investment Promotion Agency, understandably also lauded Hungary’s investment successes, although he first noted the woes of Swedish battery-maker Northvolt and ACC, a joint venture of Stellantis, Mercedes and TotalEnergies, both of which are struggling to survive.

“What is the moral of all this chaos?” he asked. “As a former Northvolt chemical engineer put it bluntly: The Chinese are better, and we are late to the party.”

China is at the heart of the revolution in electrification, and if Europe is to regain its competitiveness, “we must embrace this fact,” Joó argued. “Currently, out of the 10 battery companies that cover about 95%

including tax advantages, purchase discounts and parking fee waivers for electric passenger cars, and for cleaner heavy-duty trucks, a large discount for highway tolls is provided from this January,” he said.

As a result, EV sales have increased by more than 50% this year, and the share of electric and hybrid cars in use has risen to 12% of the total.

Rapid Growth

The rapid growth of solar energy, which could reach up to 25% of the total generation this year, the second highest rate in Europe after Greece, has created a need for battery storage to assist grid balancing, Kaderják noted.

As a response, the government launched a successful tender worth some EUR 1.1 billion for energy storage and is now concluding contracts for 56 winning projects.

“Once completed, these projects will help improve the management of the domestic electricity system by increasing battery electricity storage capacity from the current 50 MWh to about 1.3 GWh within three years,” he said.

Huba, whose membership has grown by 30%, from 79 to 103 full members in the last year, has three immediate priorities.

While the share of value-added in battery production in the country has been in the range of 16-20% in recent

of the market, six are Chinese, three are South Korean, and one is Japanese, but none are European. So, it’s clear that the East has taken over the industry on a global scale,” he said.

“We are rated number one leader both in e-mobility and energy storage [...] CATL has developed a safe, efficient and economical chemical energy storage system. Our annual investment in R&D has been steadily growing. In 2023, it was USD 2,590 mln, and our six R&D centers, with 20,000 employees, are contributing to sustainable battery [production] and life-cycle research [...] Our company, engaged in scientific and technological and in collaboration with 68 leading universities, by the end of 2023 has a total of 9,987 issued patents.”

Jason Chen general manager of operations for CATL Europe

KESTER EDDY

Péter Kaderják

“If you look beyond the early adopters of electric vehicles, many people are still not sure that they want to buy one now, or they cannot afford it, or they are waiting for better technology to come. It’s called the iPhone effect. Sometimes, you wait for the better iPhone. […] The charging infrastructure across Europe is not developing well unless you are in Germany, France or Belgium. If you go down to Spain, Italy and other countries, you see a much different situation.”

Fabrice Stassin secretary-general,

the Batteries European Partnership Association

Furthermore, these Asian companies achieved success through collaboration, he said, and if European industry is to survey, it must do the same, particularly around battery technology, if it is to catch up, once again citing an industry insider, in this case, Andy Palmer, the former CEO of Aston Martin.

It is this same business philosophy that has underpinned the government’s (and Hipa’s) efforts to attract FDI via its Eastern Opening policy, Joó said, stating that, with the agency’s support, a total of 59 projects related to battery manufacturing had received positive investment decisions since 2016.

“These projects represent approximately EUR 24 bln in investment and are expected to create close to 33,000 jobs,” he said. “In 2023, Li-iron batteries

represented 6.4% of Hungary’s exports, which means that batteries are the most significant export product of our country.”

R&D Record

As Joó noted, Samsung SDI last year launched the largest R&D project (valued at almost EUR 62 million) in the time Hipa has been operating.

“It is now beyond dispute that Hungary has become one of the global leaders of the new automotive era,” he asserted. Hipa intends to keep it that way: it is the first of five primary objectives set for the period up to 2030.

“We are committed to maintaining Hungary’s position among the top five global players in battery production throughout this decade, [with a] second goal to establish the country as the leading research and development center for battery technology in Europe by 2030,” he said.

Along the way, the intention is to make Hungary the leading country in Europe regarding registered patents in the European battery sector while simultaneously making it one of the leading European centers for battery industry-related higher education and vocational training.

“Last but not least, our vision includes Hungary being a hub for business service centers in the battery industry. Hungary aims to be the base where financial, legal and HR operations related to the battery industry are managed, further solidifying our position in the sector,” Joó declared.

“These are, of course, ambitious objectives,” the agency chief said, “but they are all attainable [...]. We invite everyone to work together towards achieving these goals.”

Thore Sekkenes, program director for the European Battery Alliance, an association of 800 companies involved in the sector, praised Hungary’s “go-go success” in battery production. However, he was more subdued than Hungarian speakers in his assessment of Europe as a whole.

Monumental Shift

Sekkenes recognized that in the past decade there has been a “monumental industrial shift in a very short time” within the European industry. Despite past achievements, however, the continent faces significant challenges in meeting targets.

The continent has “a big gap in several areas,” namely in the active,

upstream materials, skilled people across the value chain, manufacturing equipment and affordable energy.

More pertinently, today there is “an additional question which is a geopolitical layer on top of everything else, which sharpens the global competition by some regions fueling their industries with intensive subsidies” he said.

“The temporary setback on sales of EVs is just that, temporary. It will happen; the fantastic achievements made mainly in China on EVs will ensure that we will be driving EVs in the future; there is no doubt about that. So, let’s not talk about slowing down; that is nonsense!”

He illustrated his point with a slide which depicted China as having provided both direct and indirect subsidies totaling EUR 221 bln to its battery sector in 2019. The same slide indicated the United States as having allocated some EUR 179 bln in the same year.

Both figures dwarfed the EUR 13 bln-14 bln in state subsidies awarded to each of the German and French battery industries in the same period. The less-than-level playing fields implicit in the numbers clearly create a source of irritation for the EBA and the European Commission.

The European car industry employs some “14 million people, depending on how you count them, who produce, more or less by coincidence, 14

million cars annually,” Sekkenes said.

Within Europe, this is currently served by about 100 GW h of battery production installed in the past decade.However, this is one-tenth of the EBA’s estimated demand by 2030 of 1,000 GW h.

“If we continue what we’re doing, we believe that we could possibly double the current capacity by 2030,” he said, a value vastly inadequate to meet the needs of European automakers.

“This will mean that the car industry will be going down in Europe. We will lose many jobs in the car industry,” Sekkenes intoned.

Act Decisively

“However, if we act decisively and forcefully, enhancing cooperation across borders, companies and across continents [...], then we believe that we could probably quadruple the capacity that we have today, perhaps going to 400-500 GWh,” he reasoned.

Though far less than ideal, such a result would support the European car industry, and it would also meet the 40% target set in the Net Zero Industry Act, the EBA estimates. The association has

identified six key areas needing urgent action to achieve this.

“We need to accelerate and implement the new battery regulation to establish this well-discussed level playing field and set the standards [while] increasing production support for European cell manufacturers.

The

EUR 3 bln

[already earmarked] is a good symbol, but it is a symbol. It is not very much compared to [the support for Asian players],” he pointed out.

Equally, there is a desperate need for what Sekkenes termed “temporary, intelligent protection measures. Just as a young tree in your backyard needs nurturing, a temporary protection is needed, intelligently applied,” he reasoned.

And from the other direction, the EBA advocates for incentives for Europeanmade EVs and battery applications, to boost local demand and innovation.

As the fifth priority, Sekkenes spoke of the need to “secure the upstream supply chain. Ensuring access to the raw materials and the active materials for the European battery makers and OEMs is essential,” he said. However, he did not detail how this broad priority could be achieved.

“Given it’s a green environment that we want to establish in Europe, and I have two kids, I completely agree with that, they should inherit something worth living for, but obviously, there’s only 1% of the world that is thinking about this, because you have to be able to pay for that. So, I really think that capacity in recycling, re-collection and all the systems in Europe has to have some sort of additional funding [for] those players, irrespective of whether European or Asian players are coming into Europe because the capacity, technology and competencies need to be increased.”

Ákos Nagy senior counsel, Kinstellar regional law firm

As to the final point, Sekkenes identified cooperation. “We have always been talking about cooperation, and we’re doing a lot, but we need to raise that to another level to enable cross-sector collaboration,” he said. “These six actions; if we do these things, we believe that this industry can prosper,” he added. “I’m very hopeful that this will be the case.”

István Joó

Black Friday not Expected to Make Huge Waves in 2024

In 2023, the first full year after COVID, researchers and retailers were expecting weak sales on Black Friday. Inflation was still high, and retailers could not lower prices so much as to make them attractive for massive spending.

Once upon a time (that is, before the pandemic), the last month before Christmas was ideal for buying presents for loved ones, and it was not extraordinary for the major e-retailers to reach a turnover of HUF 10 billion or even more in a single Black Friday day. Those days, it seems, are over for good. The market researchers are looking for new terms to grasp the current consumption trends. Norbert Madar, lead manager at PwC Hungary Digital Commerce and Research Services (formerly GKid, but acquired and rebranded this year), says, “The market has become more balanced.” And that is an understatement. The Hungarian customer base has never been fundamentally driven by impulse shopping. Even during significant promotions, they would plan their spending ahead of time and were not impressed by the latest model of TV, computer, or some other white goods. If the old one works, why change it just because the new model has one more button? The argument went. By now, impulse shopping has disappeared almost entirely, and Black Friday this year is unlikely to unleash it. Now, retailers are looking to attract acquisitions that were already planned instead of going for extra spending, according to surveys.

For years, the consulting group GKID carried out studies before Black Friday. Under its new branding, it recently surveyed spending prospects for the upcoming Black Friday, commissioned by Publicis Groupe Hungary.

1 Day, or 1 Month?

One of the main conclusions is that customers prepare not for one specific day but for a broader period of promotions. This is confirmed by retailers MediaMarkt and Euronics,

which have rebranded Black Friday as Black November. Online retailer alza. hu still calls it Black Friday but has extended the 24-hour sales period from Oct. 30 to Dec. 2. Hardware store Praktiker went for a Black Weekend (Nov. 15-17) for registered customers.

In the United States, the major shopping holiday always takes place the day after Thanksgiving, making it the fourth Friday in November, which this year falls on Nov. 29. But even there, the event has become something of a moveable feast.

Meanwhile, back on this side of the Atlantic, another finding of the PwC Hungary survey indicates that the narrow base of 11% of shoppers who confirmed last year that they would make purchases on Black Friday has not expanded in 2024. The month-long sales period is probably a response by retailers to the trend that buyers plan their spending over a more extended period, while 60%

said they would simply buy the products they intended to anyway.

Based on this, retailers cannot afford to lose customers by limiting the promotion to only one day. Especially given that customers were not particularly satisfied with the promotions last year. On a scale from one to five, shops were rated at 3.55, the quality of products and services at 3.69, and courier companies at 3.7. However, satisfaction is not the only factor hindering massive Black Friday sales. One-quarter of respondents mentioned that low finances would prevent them from buying even at discounted prices. This may be surprising, considering that the inflation rate has dropped significantly compared to last year, at least

from a statistical point of view, and is now at 3.2%. However, the perceived inflation is 10 times higher, according to market research company GKI.

“Customers have become much more conscious. They are not making any more impulse purchases, but looking for the best offers for spending they have already budgeted for.”

According to its analysts, many are not aware of the official figures regarding inflation, but based on their day-today experience with store prices, they have a fixed perception of price growth and put that imagined figure at 20-30%, according to GKI. If shoppers genuinely believe that, discounts of 20-30% will make no difference, we might add.

‘Smart’ Purchases

Returning to the PwC survey, the estimated turnover during Black Friday is put at HUF 150 bln-160 bln, with an average spend per shopper of HUF 195,000. The most sought-after products are expected to be smartphones, tablets or smartwatches, with 48% of respondents indicating this category and planned spending of HUF 90,000 on average.

A much more significant sum is allocated on average for entertainment products, at HUF 235,000. Most respondents (62%) said they would buy home appliances like coffee machines, dishwashers and standing vacuum cleaners. PwC’s Madar notes,

“Customers have become much more conscious. They are not making any more impulse purchases, but looking for the best offers for spending they have already budgeted for.”

One retailer has been omnipresent in Black Friday marketing in Hungary in previous years: eMag. The Romanian company acquired local competitor Extreme Digital in 2019 for EUR 20 million. At the time, the new entity targeted

EUR 1 bln

sales in the next six years. In 2023, eMag Hungary reached HUF 471.8 bln in revenues, an 11% increase compared to 2022.

The company planned its Black Friday promotion for Nov. 15 but gave few details. Based on a press release, eMag is looking to keep its customer base with its “Genius” subscription program, offering lower delivery prices and other promotions for HUF 5,000 per year, returned in coupons.

The company also offered a 0% interest rate credit with specific conditions.

Contrary to the previous years, eMag did not commit to delivery deadlines for orders placed on Black Friday, nor did it mention its delivery service Sameday, possibly because of delivery delays and even lost packages, according to angry complaints posted on online forums by eMag customers.

Finally, a relatively recent development that (besides purchasing power) is also eroding local retailers’ margins is the growth of Asian e-commerce sites. So much so that Minister for National Economy Márton Nagy estimated in September that products ordered from abroad cause losses of HUF 100 bln for the Hungarian budget. He also suggested these orders were responsible for the low internal consumption impacting GDP growth.

BALÁZS BARABÁS

AutoWallis Expands in Budapest With its 1st Renault & Dacia Dealership in the Capital

AutoWallis Group has made a notable move to expand its influence in Budapest’s automotive market by opening its first dealership dedicated to Renault and Dacia vehicles. Located on Könyves Kálmán körút in Ferencváros, the new facility has been developed in partnership with the Portuguese Salvador Caetano Group.

Operational Synergy

The more than 2,000 sqm site combines a modern showroom and a 15-stall workshop, catering to both sales and service needs in one center to support the growth of these popular brands in the capital.

The Budapest expansion not only adds a significant location to the portfolio but also underlines the group’s commitment to the Hungarian market, where Renault and Dacia models are in high demand. Budapest represents a substantial share of the national market for these brands; nearly half of all Renault and Dacia vehicles in the country are sold in the capital.

Alongside the dealership’s opening, the listed auto retailer announced one of its first significant deals, providing 200

new Renault Clio vehicles to Wigo, its carsharing service. The Clios are expected to be available to Wigo users in Budapest by the end of October.

Péter Antal, retail business unit director at AutoWallis, emphasized that the new dealership marks a significant step for the group’s growth in Budapest. He noted that AutoWallis’ focus on Budapest reflects the unique dynamics of the urban market, with a high concentration of fleet and individual customers.

Integrating Wigo’s fleet expansion through the dealership strengthens the group’s broader goals of achieving operational synergy and enhancing cross-functional support. This collaboration, Antal explained, optimizes the company’s resources and ensures a more seamless flow of services between AutoWallis’ retail and mobility units.

Present in 16 countries in Central and Eastern Europe, AutoWallis expects 2024 sales to exceed last year’s figures significantly. The group had sold 36,346 new and used vehicles between January and the end of September, 4.1% higher than last year’s figures for the same period. The retail business unit saw the greatest increase after new vehicle sales grew by 19.7% to reach 7,196 vehicles and used vehicle sales by 31.8% for a total of 1,905 autos.

The acquisition of the Czech Stratos Auto’s three BMW dealerships, finalized at the beginning of July, contributed

6%

to the growth. The retail sales increase of almost a fifth continues to exceed the Hungarian average 7.3% increase in the number of newly registered vehicles.

The service hours booked by the retail business unit increased by 13.8% to reach 151,050 (almost half of the growth, 6.6%, is due to the Czech acquisition).

AutoWallis Group sold 0.8% fewer new vehicles compared to the same period in 2023 for a total of 27,245 units (this difference was 5.8% at the half-year mark). The primary reason for the slight

decrease was a drop in the first quarter, explained by both the base effect of exceptionally high previous sales (in Q4 2022 and Q1-Q2 2023) as well as the extended shipping deadlines in H1 2024 caused by threats to shipping in the Suez Canal and the Red Sea as a spill over from the Middle East conflict.

Budapest represents a substantial share of the national market for these brands; nearly half of all Renault and Dacia vehicles in the country are sold in the capital.

A more positive trend in the distribution business unit’s performance is shown by the fact that, following a fall in the first quarter of the year, sales figures grew from 9,277 units in Q2 2023 to 10,729 (+15.6%) in the second quarter of 2024, and from 6,966 units to 7,934 (+13.9%), comparing Q3 2023 and Q3 2024.

Mobility Services Growth

AutoWallis’ mobility services business unit (which includes the group’s short and long-term vehicle rental services as well as fleet management) saw a substantial increase in the number of rental events, topping

out at 283,639 thanks to the acquisition of the Wigo carsharing business.

The fleet sizes of Wigo fleet management (previously Nelson Flottalízing), Wigo carsharing, and Sixt, operated by AutoWallis in Hungary, decreased by 1.6% to reach 3,853 units, primarily due to rationalization projects. The number of rental days in short-term vehicle rentals (Wigo carsharing and Sixt) grew by 3.8% to 157,042 days.

Regarding the sales data for the first three quarters, AutoWallis CEO Gábor Ormosy explained that they were in line with expectations, and growth is expected to continue throughout the remainder of the year.

As AutoWallis continues to broaden its footprint in Hungary and across the Central and Eastern European region, the group remains focused on cementing its role as a provider of both automotive retail and mobility services.

The new Budapest Renault and Dacia dealership will stand as a central element of this growth strategy, allowing AutoWallis to directly engage with a substantial customer base in the capital, where demand for these brands continues to grow.

“This expansion is anticipated to generate additional opportunities as AutoWallis capitalizes on the high demand for Renault and Dacia vehicles in Budapest and the broader potential for carsharing services in Hungary’s urban centers,” Ormosy said.

GERGELY HERPAI

The new dealership already has its first customer; the group’s Wigo carsharing business is acquiring 200 Renault Clio autos.

3 Special Report

SSC / BSC

BSCs Standing Strong Despite Economic Headwinds

The country’s Business Services sector is showcasing resilience and adaptability amidst shifting economic conditions, according to a survey by the Hungarian Investment Promotion Agency.

BENCE GAÁL

According to the agency’s data, there are now 215 BSCs in Hungary (up from 201 in the previous year), employing a workforce of 110,836, a growth rate of more than 10%. This expansion is not limited to Budapest, as more centers are opening in Hungary’s regional cities, tapping into local talent pools.

University towns, in particular, are becoming hubs, allowing companies to benefit from younger, welleducated workers looking to stay in their hometowns. This geographic diversification aids business continuity while offering attractive opportunities for companies and employees.

The structure of BSCs in Hungary is also evolving. Currently, 56% operate as so-called captive centers, serving their parent companies. Hybrid models, centers offering a blend of captive and outsourced services, have risen to 33%, up from 20% in the previous year.

Fully outsourced centers, the traditional business process outsourcing model, now make up only 11% of BSCs, a decrease from 23% last year. This shift is indicative of Hungary’s role as a maturing market for BSCs, with the focus increasingly on more integrated and higher-value services.

Around 81% of centers say they plan to introduce high-value-added functions over the next one to three years, including roles in data science, analytics, and AI-driven operations. R&D positions, specifically, have doubled in the past year, accounting for 7% of the sector’s workforce.

Technology-driven

Technology is a primary driver of growth, with 57% of BSCs in Hungary having a defined AI strategy and 46% already using AI solutions. This focus on digitalization and automation reflects a

Evolution of the Hungarian BSC Market

strategic commitment to future-proofing operations and enhancing productivity. Additionally, adopting flexible work models has significantly impacted the sector.

Today, 93% of BSCs offer remote work, and 76% allow flexible hours.

This adaptability is becoming a core component of the sector’s appeal, particularly among younger employees.

A small proportion of companies still require total office attendance; however, most have adapted to hybrid models, optimizing for both productivity and employee satisfaction.

Workforce development is another priority for Hungary’s BSCs. The survey reports that 97% of centers provide onboarding training for new hires, while 89% offer technical training, underscoring the sector’s commitment to skills development. The average age of employees remains less than

showcasing a young and dynamic workforce well-suited to technological advancement and open to new challenges. Competitive compensation is also a factor: the average salary increase in the BSC sector was 11% in

2024, keeping pace with Hungary’s business sector average of 12.7%.

Hungary’s BSCs have placed a strong emphasis on educational collaboration to secure a steady pipeline of skilled professionals. The Hipa survey found that 72% of BSCs partner with universities, while 63% offer internship and fresh graduate programs. These initiatives are particularly valuable as the industry expands outside the capital, leveraging local university talent to meet increasing demand. By aligning with educational institutions, BSCs ensure access to a pool of multilingual, highly educated young professionals.

ESG Influences

Environmental, social, and governance factors are increasingly influential in the sector. Approximately 60% of BSCs report that they have or are implementing green office initiatives, while 92% have adopted selective waste collection practices. Electric vehicle chargers are present in 53% of offices, and 51% of companies promote green mobility options like bikes and scooters. These sustainability measures not only align with Hungary’s commitment to

carbon neutrality by 2050 but also reflect the sector’s goal to create a responsible and appealing work environment for employees.

The competitive advantage of Hungary’s BSCs lies in its highly skilled and multilingual workforce, favorable tax environment, and robust government incentives. Investment incentives have played a pivotal role, with 63%

of surveyed centers reporting that they have received some form of subsidy or allowance, helping to fuel sector expansion and innovation.

This strong government support, coupled with the country’s central location and solid infrastructure, has positioned Hungary as a preferred destination for BSC operations in Central and Eastern Europe, Hipa says. The favorable conditions are expected to continue, with many BSCs planning to bring more high-value functions to Hungary in the coming years, according to the survey.

Around 81% of centers say they plan to introduce high-value-added functions over the next one to three years, including roles in data science, analytics, and AI-driven operations. R&D positions, specifically, have doubled in the past year, accounting for 7% of the sector’s workforce.

Regarding operational overheads, the survey found that cost efficiency remains a priority. Many BSCs focus on reducing operational expenses by implementing AI and automation, and 43% of centers plan to decrease full-time equivalents (FTEs) through digital solutions.

This drive for cost efficiency is balanced with growth strategies; while some centers outsource lower-value tasks to other locations, others bring highvalue jobs to Hungary to bolster their competitive edge. Budapest remains a popular base for BSCs due to its broad talent pool and mature infrastructure, although rapidly developing regional cities are increasingly gaining traction as cost-effective alternatives.

Source: Hipa

Why Budapest is key to Accomplishing ExxonMobil’s Global Goals

ExxonMobil is banking heavily on upskilling and staff well-being to stay ahead. It also has a clear vision for making Europe more attractive for decarbonization investments. Its largest European affiliate is based in Budapest and is pivotal in implementing global objectives.

LEVENTE HÖRÖMPÖLI-TÓTH

“You don’t hire for skills; you hire for attitude. You can always teach skills.” This wisdom of Simon Sinek, an inspirational speaker on business leadership, is backed up by a recent KMPG survey that found it is no longer skilled, but rather skillable people companies are looking for.

Talent acquisition is also at the core of the business services sector, given that it has been witnessing a significant shift in the direction of more highcomplexity opportunities. Byung Kim, lead country manager of ExxonMobil Hungary, agrees that a combination of skills and attitude are critical to ensuring strategic and complex job roles can be covered.

“We can argue that exhibiting a growth mindset is a skill, perhaps

in a non-traditional sense,” he says. “Highly effective teams generally tend to have those that differentiate in either skills or attitude or both,” he notes. Kim is confident about successfully acquiring operational roles and talent in Budapest.

“We feel we have a competitive advantage with the capabilities our employees bring to the table.”

The company is far from sitting back and waiting for bright minds to knock on its door and recognizes that existing talent need continued upskilling and development. The launch of a digital innovation program in 2022 is just one example of how the firm invests in building capabilities for the future.

Essential Elements

As Kim explains to the Budapest Business Journal, such skills are essential for ExxonMobil Hungary to be competitive as a company, but they are also central to its employees being globally competitive in the future.

“We have delivered on our commitments to upskill our talent in the digital space through our offering of rich development programs, which is very well received by

The Power of a Physical Presence and Connection

ExxonMobil moved into a state-ofthe-art office complex two years ago. Pillar, as the office building is known, was purpose-built to cultivate a place for employees to thrive. Kim also stresses how in-person collaboration is a critical enabler for value creation.

“The power of a coffee together, a lunch conversation, or working through a complex problem next to your colleague cannot be underestimated. The power of

physical presence and connection is incredibly impactful,” he notes.

He adds that every day, he learns “something new in an unplanned and unintentional conversation in the office that confirms” why he enjoys being in the office with his colleagues. Providing workplace flexibility is far from uncharted territory, though, as there is the opportunity to have personal time off or to work from other locations through a flexibility program.

of a potentially bumpy road ahead. Kim highlights broader concerns around European competitiveness that have been well documented by the EU’s much-talked-about Draghi and Letta Reports and which impact all economies and industries. He also gets specific regarding the critical points to act upon. Firstly, policies are needed to boost European attractiveness and competitiveness. Unnecessary regulatory burdens must be reduced, and a predictable, stable tax climate is a critical consideration for future investments. Carbon leakage protection should be sustained. The necessity for cutting red tape could hardly be evidenced better than by the fact that ExxonMobil will invest USD 20 bln in low-carbon technology in the next couple of years, but none is planned to come to Europe.

our employees,” Kim says of the program that focused on four types of training: Digital skills; transformation and innovation; technology and tools; and digital development.

ExxonMobil was among the first to set up a BSC in Hungary. In fact, the firm is celebrating 20 years of operations this year. As Kim recalls, the journey covers a pretty impressive evolution from a transactional, backoffice type center with just a few hundred employees to a strategic site responsible for critical regional and global activities.

Today, the workforce is around 2,000, making ExxonMobil one of the largest global/shared service centers in the country. This rapid expansion goes hand in hand with nationwide trends. The number of SSC employees and facilities went from 10,000 and 156 to 70,000 and 201, respectively, between 2021 and 2023.

ExxonMobil is making its anniversary count with multiple memorable events. The performance of the company during the years has also been recognized at the highest levels. ExxonMobil Hungary has won first prize for the Top CSR Initiative of the Year for its exceptional community investment activities and earned the Hungarian Investment Promotion Agency’s 2020 Center of Excellence of the Year Award.

Winning Combination

The lead country manager praises a combination of exceptional talent, outstanding leadership, and a conducive environment for continued investment created by the government and trade associations as critical factors to success.

“We can argue that exhibiting a growth mindset is a skill, perhaps in a nontraditional sense. Highly effective teams generally tend to have those that differentiate in either skills or attitude or both.”

Furthermore, Kim would welcome policies to deliver a more equitable transition, such as affordable low-carbon hydrogen, Carbon Capture and Storage (CCS), and low-emission fuels critical to decarbonizing transport where electrification is not yet practical. Chemical recycling to tackle plastic waste and enhancing the circular economy would also be desirable. What is certain is that ExxonMobil is proud to contribute to the security of supply and industrial decarbonization, and its Hungarian subsidiary plays a pivotal role in making that happen.

Core Value Care

ExxonMobil is well-known for emphasizing colleagues’ well-being and mental health, which reflects one of its core values: care.

“Our policies or benefits are there because they serve a very important purpose for us: to ensure our colleagues are well, both physically and mentally. We have many initiatives, programs, and events that help this purpose,” Kim says. He cites research that shows that “healthy employees also perform at an incredibly high level, so it’s not only good for the employee, it’s critical for our company as well.”

ExxonMobil is aware

What does the near future hold, considering that the economy seems likely to recover more slowly than initially hoped?

Byung Kim, lead country manager of ExxonMobil Hungary.

SSCs and BSCs Require Higher Quality Space

The CEE region is seen as attractive for business services centers based on three factors: cost, talent and quality of life. The first of those, however, is less important than it was five or 10 years ago, according to the Hungarian Investment Promotion Agency.

GARY J. MORRELL

What were once widely called shared service centers now tend to be termed business service centers to indicate that they provide higher value-added services taking more business-related decisions, according to KPMG.

As the role of BSCs develops, their office requirements are becoming more sophisticated in line with more complex staff and ESG requirements, as is generally the direction of travel in the high-end office markets.

“The general trend in Hungary is that transactional actions are either outsourced or being automated, which in turn leads to an increased number of valueadded activities coming within the scope of BSCs,” says Hipa.

“With these tendencies, the SSC (or BSC) concept is continually expanding its palette with complex financial, sales, marketing, information technology and human resources activities being taken on,” the agency adds. Hungary has more than 200 BSCs and more than

70,000

predominantly highly skilled workers, making the country a leading global business services center in the CEE region, Hipa says.

“The figures tell a tale of rapid success and a good chance for more development as customers bring ever more high value-added functions to the country,” Hipa says in a recent report made in association with the American Chamber of Commerce and ABSL Hungary, the Association of Business Service Leaders in Hungary.

Concerning the quality of the office supply, which can meet demand, developers are going ahead with ongoing Budapest projects. This is despite geopolitical and economic concerns, as well as issues surrounding longer-term letting and demand, office working practices, rising development

and construction costs, increasing maintenance and energy costs, and more expensive debt finance.

Location is Key

According to Valter Kalaus, managing partner of Newark VLK, location is critical from the tenants’ perspective.

The office should be easily accessible, and its design tailored to the needs of the people based there, providing the right conditions for efficient working. Today, it is also a standard expectation that staff should not have to travel long distances to reach services such as restaurants, cafés and shopping facilities during a break or after work.

The Váci Corridor in District XIII is still Budapest’s most favored development destination, attracting several BSCs and SSCs. The area’s direct access to the M3 metro has been instrumental in becoming the leading Budapest business district. In addition to offices, a number of residential projects have been delivered in the area, which also provides easy access to commercial centers. The corridor has a stock of around 1.1 million sqm with a pipeline of 98,000 sqm and a vacancy rate of 12%, according to CBRE.

In a recent significant business services sector transaction, ExxonMobil established its Global Business Center by leasing the whole of the

29,000 sqm

Pillar office building close to Váci út. The Leed “Platinum” accredited complex was designed by Zoboki

Design and Architecture specifically for ExxonMobil. The multinational oil and gas major employs as many as 2,000 people in the country.

Sustainability accreditation from an independent, third-party organization such as the U.K.-based Building Research Establishment Environmental Assessment Methodology (Breeam), the U.S.-based Leadership in Energy and Environmental Design (Leed) or, increasingly, the Well Building Standard, have a range of requirements regarding interiors, are now the norm for high-end office developments and a basic expectation from international tenants and staff.

The design, development, and property management of offices align with sustainability and ESG requirements and are in response to tenant and staff demands. It considers issues such as the office environment, layout and design, the provision of amenities and the internal atmosphere regarding staff well-being and, by extension, increased productivity and retention.

Attractive Spaces

German automotive parts supplier Kostal Group has established its global business services center in Budapest, with DVM group supervising the design.

“Sustainability has become a key element of the design, with lots of plants and natural materials being the striking elements. We have created attractive spaces where colleagues feel at home, inspiring collaborative thought while also providing an opportunity

for reflection,” comments Ida Kiss, the international account executive at DVM and its former director of design.

Next year, consultancy CBRE anticipates delivery of 100,000 sqm while the 2026 pipeline is 256,000 sqm, a large proportion of which is preleased. In addition, CBRE has traced a further 13 projects with a volume of 213,000 sqm where planning is at an advanced stage.

Total stock in the Budapest office market has reached 4.3 million sqm, according to the Budapest Research Forum (which comprises CBRE, Colliers, Cushman & Wakefield, Eston International, iO Partners and Robertson Hungary), about 3.5 million sqm of which was developed on a speculative basis.

The vacancy rate in the Budapest office market is expected to rise to about 14% this year, according to CBRE. However, from a positive perspective, there is a perceived demand for quality office space, and the higher vacancy rates tend to be in older stock that does not meet more complex tenant requirements or increasingly stringent ESG and sustainability expectations.

In this way, it can be argued that there is a widening gap between new and sustainability-accredited offices and older, outdated stock. In reaction to this, some landlords are looking to upgrade earlier-generation buildings to meet the new requirements.

The Pillar Office was designed for the ExxonMobil GSC by Zoboki Design and Architecture and developed by GTC Hungary.

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1134 Budapest, Dózsa György út 61–63. (1) 987-8787 BudapestGBCCommunication@ exxonmobil.com

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1112 Budapest, Boldizsár utca 4. (20) 773-3202 bt.roc.communications@ bt.com

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4 Socialite Ludwig Celebrates 35th Birthday With Focus on Women Artists

Women’s Quota 01 at the Ludwig Museum of Contemporary Art presents for the first time work from its collection by women from several countries and runs until Jan. 12, 2025. It focuses primarily on the woman artist, the role of women in art history, the female body, and societal roles and expectations.

DAVID HOLZER

Exhibition curator Krisztina Szipőcs graduated as an art historian in 1992, training also in Vienna and New York, and has worked at the Ludwig since 1994. She began as a museologist and is now deputy director and chief curator.

“I consider the museum my home, having witnessed its development from the beginning to the present,” she tells me.

The Ludwig decided to make art by women the focus of its 35th anniversary because “contemporary art and its institutional framework are deeply connected to pressing current issues including the recurring topic of female quotes in politics, economics, and other aspects of life.”

In some respects, women were in a better position or, as Szipőcs puts it, “more emancipated” under socialism than in the West. The socialist system encouraged them to work, and nurseries and kindergartens supported this. Women could do jobs traditionally done by men.

But they also shouldered the bulk of household responsibilities

and childcare. Women were less present in fine arts education than in the study of applied arts. Since the political transition from socialism, women have been more present in the fine arts education system. But, as Szipőcs says, “Our middle class is shrinking. Art education is inadequate, with almost no focus on contemporary art. Career development is still hindered by ‘invisible labor’ and the glass ceiling; women’s need to divide their time and energy between family responsibilities and their artistic work and career.”

Although collecting contemporary art seems to me to be booming in this country, the Hungarian art scene is a Western-style, market-driven system.

Fortunate Few

“Those who have regular buyers are very fortunate, but, in my network, even this is often not enough for a secure livelihood,” Szipőcs says. “Only elderly, well-established artists can command prices high enough to not only make a living but also provide a degree of relative comfort. Currently, there are only about five or six artists in this position.”

As Szipőcs explains, “The greatest challenge is for a newly graduated artist to continue making work and living from their art. Grant and award systems enable only a few to focus only on creating art. The vast majority must find other sources of income, leaving little or no time to make art.”

Hidden Cameras

Using hidden camera footage in Budapest’s baths, Katarzyna Kozyra’s six-channel video installation investigates whether female and male behavior changes in a gender-free environment. First shown in 1997, the installation recalls the work of Ingres, Rubens and Degas and questions the ideal of the perfect female body.

Szipőcs especially admires the work of Ilona Németh, a Hungarian national from Slovakia. Her gynecological chairs evoke images of women’s illnesses, pregnancy, sexuality or female vulnerability using velvet, rabbit hair and moss as coverings.

“Only elderly, wellestablished artists can command prices high enough to not only make a living but also provide a degree of relative comfort. Currently, there are only about five or six artists in this position.”

“Németh’s work addresses questions and issues that go far beyond herself or her art,” Szipőcs says.

Women’s Quota 01 includes work by several significant women artists. Among them are Hungarians Orshi Drozdik (based in New York), Judit Kele, Zsuzsi Ujj, Beáta Veszely, Ilona Németh and Kriszta Nagy. The work included by Polish artist Katarzyna Kozyra was made in Budapest. Orshi Drozdik, the most important feminist critic in this country in the 1970s,

found it difficult to make her way in an institutional system traditionally dominated by men. Her “Medical Venus” is based on a model of Drozdik’s body and depicts her at the mercy of the medical gaze. Artist, film director and set and costume designer Judit Kele places herself in the role of the art object, questioning the position of the Eastern European woman artist, the value of the woman and the female body.

Performer Zsuzsi Ujj made a series of black and white self-portraits in the 1980s in which she strips her body and soul down to the bone, to the skeleton painted on her skin.

Beáta Veszely works with photographs of famous portraits of women from the history of art. She transforms the ideal representations of women by men as biblical, classical and Renaissance nudes by using tiny pinpricks. This turns the photographs into fragile objects similar to needlework or lace and reclaims them for the female gaze.

If you know anything about art in Hungary, the work that may be most familiar to you is that by Kriszta Nagy. For her 1998 piece

“I am a Contemporary Painter,” she posed in the style of lingerie ads on a billboard in Budapest’s Lövölde tér. Her aim, she said, was to “draw attention to contemporary art; I wanted to communicate that we exist. I also wanted to point out the prejudices that surround artists and make it impossible for us to assert ourselves.”

Nagy’s “I am a Contemporary Painter” is presented as a counterpoint to the nudes painted by men hung on the main wall in the first hall of the exhibition space. Nagy’s work critiques the traditionally passive role of women in art and their objectification.

While women artists in Hungary still face many challenges, “there’s a growing awareness of the constraints they face in this country and a growth in initiatives aimed at more equal representation and support for women,” Szipőcs tells me.

“But substantial progress will likely depend on a shift toward a more inclusive, robust art market and greater advocacy within art institutions.”

Find out more about Women’s Quota 01 at ludwigmuseum. hu. This is the first of a two-part exhibition. Part two will present exciting work by artists who are less familiar to the public.

Photo by Zsófia Szabó Ludwig Museum –Museum of Contemporary Art

Family Firms aim to Develop Breakfast Culture in HUF 280 bln Market

Two family-run firms, Caffè Vergnano of Italy and Hungary’s Félegyházi Családi Pékség, are working together to promote “reggelikultúrá” or breakfast culture and cut themselves a bigger slice of the HUF 280 billion domestic bakery market.

The premium Italian coffee brand is exclusively distributed by Coca-Cola HBC Hungary and held a joint event at Félegyházi’s BudaPart Piknikség (a portmanteau word made from the Hungarian piknik and pékség, or bakery) outlet earlier this month to showcase seasonal fall and winter pastry and coffee specialties.

Coca-Cola HBC acquired a 30% stake in the family-owned Casa del Caffè Vergnano in October 2021 and has been distributing premium Italian coffee products in Hungary since January 2022. The partnership announced a few weeks ago between Caffè Vergnano and Félegyházi Családi Pékség makes the 100% Hungarian-owned bakery the largest Caffè Vergnano catering partner within the Coca-Cola HBC Group. Operating since 1999, Félegyházi employs more than 1,400 people, has 90

of its own shops and supplies fresh bakery products daily to 400 partners, including

Culture

retail chains, catering companies and the Hungarian Defense Forces.

The bakery is implementing a HUF 10 bln greenfield investment in Kiskunfélegyháza (115 km southeast of Budapest), which will include a warehouse, a multi-line production area, an automated and robotized cold packing plant and a 5,000-pallet frozen storage warehouse. The development will create 200 new jobs in the town.

Félegyházi had revenue of HUF 30 bln in 2023, making it the largest Hungarianowned bakery chain in the fresh and frozen bakery market. Some 35,000

in Brief News

2 Christmas Markets Opening Today

The first two Christmas markets open in Budapest today, Friday, Nov. 15: the Advent Basilica on Szent István tér and the Vörösmarty Classic Xmas on Vörösmarty tér. A 12-meter-tall, decorated pine tree will stand in the area of the Advent Basilica, and on the stage, several times a week, Advent-themed cultural productions, gospel, folk, jazz and funk-style shows will add color to the atmosphere of the fair. There will

be three-dimensional light painting on the facade of the Basilica every day from 5:30 p.m. The Advent Basilica has won the title of “Europe’s Best Christmas Market” four times.

Hungary Guest of Honor at Croatia’s Largest Literary Event

Hungary is guest of honor at this year’s Interliber International Book Fair, Croatia’s largest literary event, held from Nov 12-17 in Zagreb, the Petőfi

Culture Matters

A regular look at culture issues in Hungary and the region

and feel that we can be increasingly successful by offering the best of everything to our consumers, who have quickly grown to love Caffè Vergnano’s coffee specialties,” she adds.

As part of its long-term partnership with Félegyházi, Coca-Cola HBC Hungary will support the family-owned bakery business with equipment, advice, service, professional barista training, and coffee sales. A team of coffee experts is involved in creating product pairings that will allow the Pikniksegs to renew their seasonal offerings, giving customers more reasons to make more frequent return visits.

“The collaboration between Félegyházi and Caffè Vergnano is a perfect match; two family businesses with a long history and shared values,” said Anita Partali, marketing manager of Coca-Cola HBC Hungary’s coffee business unit. The partnership makes even more sense when Partali adds that Félegyháza’s pikniksegs sell

1.5 million cups of coffee annually.

“By incorporating seasonal recipes alongside classic drinks, we can pass on expertise and a fresh approach to our customer partners by putting new flavors and ingredients into their hands that they may not have previously thought could harmonize with coffee,” says Iván Gávris, a coffee expert at Coca-Cola HBC Hungary.

tonnes of products roll off its production lines every year, and 320 million products are expected to be produced at the company’s Kisunfélegyháza factory by the end of this year.

“As a family business, we operate ‘Piknikséeg’ shops in 36 cities across the country,” says Szilvia Gulyás, marketing manager and second-generation owner of Félegyházi Családi Pékség.

Best of Everything

“We are delighted to have been approached by Coca-Cola HBC Hungary and Caffè Vergnano because we see

Cultural Agency said in a press release on Nov. 11. The event was opened by eminent Hungarian writer Péter Nádas, who is also a guest of honor, the agency said. The book fair features contemporary Hungarian authors, including Krisztina Tóth, Árpád Kollár, László Vegel and Noémi Orvos-Tóth, and the works of classic writers such as Gyula Krúdy, János Pilinszky, Éva Janikovszky and Magda Szabó. Programs for children include a quiz on Ferenc Molnár’s famed youth novel “The Paul Street Boys,” a compulsory read in schools in Croatia. Cultural events focusing on Hungary will also be held in the Liszt Hungarian Cultural Center in Zagreb, the Croatian National Theater and Zagreb University.

“In addition, flavors available for a limited time are proving to be a profitable business decision. Introducing a well-chosen seasonal coffee recipe can result in up to 15% increase in turnover for a restaurant,” he adds.

Coca-Cola HBC Hungary is one of the three largest players in the premium segment of the Hungarian HoReCa hospitality sector. It has two coffee brands, Caffè Vergnano and Costa Coffee. Together with the Félegyházi piknikségs, the former is now available in around 500 hotels, cafés and restaurants in Hungary.

György Cziffra Exhibition at House of Music

Minister of Culture and Innovation Balázs Hankó has opened an exhibition on the life of piano legend György Cziffra at the House of Music Hungary, according to a statement issued by his ministry. Hankó said Hungarians could be proud to belong to a nation “that has given us giants” and “unfading” cultural icons such as Cziffra, “a great Hungarian and a great Hungarian pianist, whose magic is still with us today.” Cziffra’s life, he added, was an example of humility, struggle and greatness. “Freedom of Music: Homage to György Cziffra,” curated in cooperation with the Hungarian Culture Foundation, the Petőfi Cultural Agency, the House of Music Hungary and the Cziffra Festival, runs until Jan. 26, 2025.

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

The American Chamber of Commerce in Hungary (AmCham)

On Nov. 5, AmCham Hungary unveiled “Hire and Higher: A Toolkit to Advance Inclusive Hiring,” a new white paper developed in collaboration with WeAreOpen. This toolkit highlights the value of building diverse organizational communities, addresses biases that limit workplace diversity, and offers practical steps for fostering inclusive teams. The event opened with remarks from Írisz Lippai-Nagy

(CEO, AmCham), Helga Sásdi (chairperson, WeAreOpen), and Mónika Pais (CEO, Diageo), who emphasized the importance of inclusive hiring. This was followed by the presentation of the white paper and an insightful discussion featuring Andrea Juhos (DEI&B Working Group lead at AmCham Hungary), Nóra Várady (CEO, WeAreOpen), Eszter Weinberger (research lead, WeAreOpen), Mónika Magasházi (founder,

Italian Chamber of Commerce for Hungary (CCIU)

As a culmination of its year-long activities, the CCIU will host its 2024 Christmas dinner for a select number of guests on Dec. 3. As per tradition, this exclusive event aims to celebrate and bring together chamber members, representatives of various institutions, international companies, and guests of honor to celebrate the successes of the year that is coming to an end. The chamber promises the program will be full of unique moments and great symbolic value. Guests will be enveloped in an atmosphere of “authentic Italianness,” made special by live music with traditional Italian songs and by the possibility of tasting a selection of “Made in Italy” products, a tribute to Italian gastronomic excellence. The Christmas Dinner is, above all, an opportunity for networking, discussing and exchanging opinions, strengthening the bond between the Italian and Hungarian business communities and opening up new possibilities for collaboration. The event represents an opportunity to celebrate together and exchange Christmas greetings, offering a moment of shared joy in the spirit of the CCIU motto: “Growing together!” Places are limited, so prior registration is essential. • When: Tuesday, Dec. 3, from 7:30 p.m. • Where: Pullman Hotel Budapest, Nagymezo Utca 38, Budapest 1065 • Fee:  members HUF 30,000 + VAT; non-members HUF 36,000 + VAT

Transzegészségközpont), Béla Rácz (president, 1Magyarország Egyesület), Ádám Kanicsár (member, WeAreOpen), Katalin Kappel (counselor, Salva Vita), and Janina Kovács (business developer, Skilly), who shared their insights on the brand-new document. The event concluded with an interactive workshop led by DEI expert Zsuzsa László from WeAreOpen, followed by a lively networking session at Diageo’s stunning Sky Bar.

Swiss-Hungarian Chamber of Commerce (Swisscham)

The Chamber of Commerce and Industry of BácsKiskun County is holding an online information and consultation session with its partners for companies preparing to enter the Swiss market or already there but wishing to expand their business relations. Júlia Lipovecz, director of Swisscham Hungary, will introduce the chamber and speak about the experiences and trends in 30 years of the Swiss-Hungarian business community. Foreign Economic Affairs Attaché Csaba Piszter of the Embassy of Hungary, Bern, will discuss market access for Hungarian companies and introduce the Swiss business environment.

Anna Wohl Gönczi, attorney at law at Advokatur Wohl Gönczi, will share methods for entering the market and setting up a company. Tamás Papp, managing director of CollabIT Switzerland AG, will give a theoretical and practical introduction to Swiss corporate culture and how to succeed in Switzerland, with useful advice for Hungarian companies entering the market. Throughout the webinar, there will be an opportunity to ask questions or submit them in advance via the online registration form. Participation in the event is free of charge for chamber members but is subject to pre-registration. • When: Nov. 26, from 10-11:30 a.m. • Where:  online

SAVE THE DATE: Swisscham Hungary’s annual Christmas reception will take place on Dec. 5 at the W Hotel Budapest, Andrássy út 25, Budapest 1061. Registration will open soon.

British Chamber of Commerce in Hungary (BCCH)

The BCCH will host its final CEO Dinner of 2024 with Ákos Garaba, managing director and engineering site lead of Jaguar Land Rover Hungary. During the event, guests can enjoy the customary three-course dinner with wine and welcome drinks while hearing the views of one of the foremost professionals on recent developments and current industry affairs. British Ambassador to Hungary Paul Fox and BCCH chairman Duncan Graham will give the opening remarks. JLR is one of the leading forces in the automotive sector, encompassing two of the most storied and iconic British brands. The Hungarian site opened in 2019, and over the past years, JLR has invested heavily in cutting-edge engineering, especially concerning electric cars. Garaba, a self-confessed petrolhead from childhood, moved to the United Kingdom to work for Jaguar Land Rover after apprenticeships on the supplier side. With two years of experience at JLR’s Coventry headquarters and a deep affection for the marques, he joined the Hungarian operation at the first opportunity as an engineer, developing highly automated driving functions and their respective simulations. After promotions to the head of the automated driving group in Hungary and then to engineering site lead and managing director, he’s as enthusiastic as ever about overseeing the site’s strategic direction.

• When: Wednesday, Nov. 27, 5:30-8 p.m.

• Where: Párisi Udvar Hotel, Petőfi Sándor u. 2-4, Budapest 1052 • Fee: Members HUF 28,000 (plus VAT); non-members HUF 38,000 (plus VAT)

German-Hungarian Chamber of Industry and Commerce (DUIHK)

Join the DUIHK in February 2025 on a unique professional trip to Bavaria, where attendees will gain first-hand insight into the latest technologies and developments in the defense industry. Visit leading companies in the Nuremberg region, get to know the latest solutions and technological innovations and talk to experts from the industry. At the Enforce Tac trade fair, there will also be an opportunity to discover the industry’s leading manufacturers and their products.

Hungarian-French Chamber of Commerce and Industry (CCIFH)

There is perhaps nothing more French than a Beaujolais Nouveau soirée. In France, it is strictly forbidden to open the doors of the wine cellars until the third Thursday of November; no tasting is allowed before this date. But on the third Thursday, the French people say, “Le Beaujolais est arrivé!” (“The Beaujolais is here”), and the celebrations begin. • When: Thursday, Nov. 21st, 6-8:30 p.m.

• Where: Le Troquet / French Institute of Budapest, Fő utca 17, Budapest 1011 • Fee: members HUF 9,900 + VAT; non-members HUF 14,900 + VAT.