Diplomacy&Trade 2021 June by Diplomacy&Trade

JUNE 2021 HUF 1710

OPENING…

MATILD PALACE HAS UNDERGONE A STUNNING FIVE-YEAR TRANSFORMATION TO BRING THE BUILDING BACK TO ITS FORMER GLORY AND TURN IT INTO A LUXURY HOTEL.

…THE COUNTRY AS WELL AS NEW HOTELS IN ANTICIPATION OF RETURNING TOURISTS

SEE ARTICLE ON page 30

The Netherlands

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FOCUS

The Netherlands and Hungary have recently celebrated the centenary of diplomatic relations The Netherlands Ambassador in Budapest, René van Hell highlights to Diplomacy&Trade some of the milestones and also reflects on bilateral relations today. Among other things, he mentions the Dutch environmental awareness conveyed to Hungary, agriculture with high added value in the two countries and the memories he takes with him as he leaves his post soon. see compilation on pages 08-25

Siemens for Industry 4.0

Tamás Jeránek took over as the new President and CEO of Siemens Plc. as of May 1, this year, almost a decade after joining Siemens. He tells Diplomacy&Trade about how he sees the activities and position of the company on the Hungarian market as well as what it can offer to its business partners. He also highlights how Siemens Plc. helps Hungarian factories enter the era of industry 4.0. see article on page 27

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letter from the publisher

Major political consequences of an obscure explosion

Event guide to the Hungarian capital

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contents

Peter Freed PUBLISHER

AND DON’T FORGET

monthly in print - daily on the web

www.dteurope.com

03 ON THE RECORD 04-05 COMPANY BRIEFS 06 ANALYSIS

27 BUSINESS

New CEO at Siemens Hungary 28 WITTYLEAKS by the Ambassador of Canada A much bigger bang than expected 29 WHAT’S ON 08-25 DUTCH FOCUS Concerts, festivals, events and Interview with Dutch ambassador exhibitions in and out of Budapest René van Hell; Interview with Hungarian ambassador András Kocsis; 30 HOSPITALITY KLM; Philips; Heineken; Randstad; Matild Palace ÖKOINDUSTRIA2021; Dutcham; 31 WINE DAF; LeasePlan; Raben; Footprint; Egri Csillag; Reduced ecological ChainCargo; footprint in Villány

PUBLISHER: Peter Freed EDITOR: Sándor Laczkó PHOTO EDITOR: Dávid Harangozó SALES & MARKETING DIRECTOR: Tamás Varga ADMINISTRATION: Éva Madarász CONTRIBUTORS: Sándor Laczkó, Tamás Magyarics, Zalán Zubor, Caroline Charette

FRENCH FOCUS – COMING SOON

PHOTO CONTRIBUTORS: Matild Palace (Cover), Dániel Végel (Cover), Sprok/Wikimedia, Sziget, depositphotos.com, mlsz.hu, Masterplast, Róbert Baranyi/Budapest Airport, Palickap/Wikimedia, Fred Ernst, Mátyás Borsos/MFAT, Ben Kortman/Air France KLM, Embraer, Heineken Hungária, Randstad Hungary, Philips, tb-photo.hu, The Netherlands-Hungarian Chamber of Commerce in Budapest, DAF, LeasePlan, Raben, Footprint, Devon Olenroot aka KRISPI, Dániel Végel, Zoltán Hercegfalvi, Embassy of Canada, Ákos Keppel, Live Nation, Paloznaki Jazzpiknik, Night of Artworks, Matild Palace, Streit-Zagonyi Winery, MTI Photos: Noémi Bruzák, Zoltán Balogh, Zsolt Szigetváry

Diplomacy&Trade is going to present a special Focus section on relations between Hungary and the Republic of France on the occasion of the French-Hungarian Chamber of Commerce and Industry (CCIFH) celebrating its 30th anniversary. France is the 5th largest investor in Hungary. Just over 700 French-owned registered companies operate in the Hungarian market, employing more than 35,000 people. The leading article of the compilation will be an interview with the French ambassador to Hungary, Pascale Andréani about the main aspects of bilateral relations and also as allies within the European Union and NATO. Of course, we also present the anniversary activities of the CCIFH and several of the French ventures operating in Hungary.

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ATTILA BUSÁK, ÁKOS KEPPEL, PALICKAP/WIKIMEDIA, DEPOSITPHOTOS.COM

Completed in 1902, Matild Palace was a revolutionary building at the turn of the century and remains one of the most recognizable ones in Budapest. The iconic imperial palace property, which is listed as a UNESCO world heritage site and has now been transformed, offers a balance of historic charm and effortless contemporary design. With the world re-emerging from the pandemic, Matild Palace could be the symbol of the re-birth of tourism in Hungary. The Netherlands that has recently celebrated the 100th anniversary of diplomatic relations with Hungary is our focus country this month. The Dutch ambassador to Hungary, René van Hell, who is leaving his post in Budapest this summer, looks back to the age of Reformation for the first steps in Dutch-Hungarian relations. He underscores that both countries benefit from discussions within the European Union regarding the rule of law and other issues. He also highlights the two countries’ cooperation in making their economies and societies ‘greener’. Concerning the latter issue, the Netherlands was the guest of honor at this year’s Ökoindustria exhibition in Budapest and the topic of sustainability is also in the forefront of many of the Dutch companies presented in this Dutch Focus. The compilation also features an interview with the Hungarian ambassador in The Hague and covers the activities of the Netherlands-Hungarian Chamber of Commerce. Our business feature presents the new head of Siemens Hungary who stresses that Siemens has become a business-to-business firm, a hightech company that has emerged from an industrial conglomerate, which is very well known and is very much a showcase company in industry and the economy. This month, WittyLeaks is authored by the Canadian ambassador who points out that active transportation is very important to her as an environmentally conscious citizen. She enjoys exploring the cycling path network throughout Budapest and trips to the Danube Bend on her Hungarian electric bike. In addition to information on the Matild Palace, the tourism and hospitality section includes also presents ‘Egri Csillag’, a white counterpart to the iconic red wine ‘Egri Bikavér’ and takes the readers to another wine region, Villány, for a Hungarian project that might serve as an inspiration in terms of sustainability and design. Summer is upon us, and Lake Balaton is in full swing, but Budapest is still feeling the effects of a lack of tourists. Now is a great time for ‘locals’ to enjoy the city without the large crowds. Enjoy and stay safe!

A blended wine of dry local varieties page 31 proves itself with consumers

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on the record Semmelweis Prize in Hungary. In her acceptance speech, the scientist vowed to continue her research, saying that it was crucial to find cures for diseases that had to be "pushed to the side" because of the coronavirus pandemic as so many people are still suffering. The biochemist said that now that there is a vaccine against the virus, people can be liberated, they can come together and she hopes that next time they will talk about the various sporting and literary events, not about the vaccine and her. He added that it was a pleasure to be in Hungary for a month, to meet friends and colleagues.

CORONAVIRUS RESTRICTIONS EASED A decree published in the official gazette ‘Magyar Közlöny’ on May 25 outlines the rules applying to the next stage of Hungary’s reopening, including those on the attendance of outdoor and indoor events. According to the decree, cultural events, with the exception of music and dance events, sporting events, indoor events and outdoor events with more than 500 people can be attended by those with immunity certificates and accompanied minors. Only people with vaccination certificates can attend music and dance events. Professional athletes who are not immune to the virus will also be allowed to compete at outdoor events attended more than 500 people. Outdoor events not considered family, private, cultural, sporting, music or dance events with less than 500 people can also be attended by those without an immunity certificate. If more people are present, the event can only be attended by those who are immune as well as minors accompanied by immune adults. If the event is organized indoors, it can only be attended by adults with immunity certificates and accompanied minors. Unannounced gatherings remain banned.

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DÁVID HARANGOZÓ, NOÉMI BRUZÁK/MTI, ZOLTÁN BALOGH/MTI, SPROK/WIKIMEDIA, SZIGET, DEPOSITPHOTOS.COM, MLSZ.HU

HUNGARIAN POLICE UNITS TO SERBIA AND NORTH MACEDONIA New Hungarian police contingents left for northern Macedonia and Serbia this May to assist border police operations. The communication service of the Hungarian Police Headquarters (ORFK) announced that the Hungarian police is committed to preventing illegal migrants from entering Hungary and the European Union. To this end, it has offered its support to the Western Balkan countries. The statement said that the members of the 49th Hungarian police contingent to Serbia and the 61st Hungarian police contingent to Northern Macedonia were seen off at the central facility of the Hungarian Border Police (ORFK) in Budapest by Gergely Czukor, head of the ORFK's Border Police Department. Members of the Hungarian police force serving in the 30-member Northern Macedonian and 20-member Serbian contingents perform their duties with their own equipment and exercise their authority to take action under the direction and supervision of the host country's law enforcement agency. The main tasks of the Hungarian police officers are patrol duties to prevent and detect illegal border crossings and to assist in the apprehension of people smugglers and illegal migrants. Hungarian police officers are not only deployed in the immediate vicinity of the border, but also inside the country. The contingents support the protection of the border section with off-road service vehicles, night vision equipment, handheld thermal imaging cameras and mobile thermal imaging cameras. In its statement, the ORFK also pointed out that the members of the contingents returning from Northern Macedonia and Serbia are subject to the same epidemiological rules as Hungarian citizens.

BIOCHEMIST KATALIN KARIKÓ AWARDED THE SEMMELWEIS PRIZE Hungarian biochemist Katalin Karikó, whose decades of work with mRNA technology was instrumental in the development of COVID-19 vaccines, was awarded the Ignác w w w . d t e u r o p e . c o m

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BUDAPEST MILLENNIUM UNDERGROUND RAILWAY 125 YEARS OLD In Budapest, the millennium underground railway, the first underground tram on the continent, was launched on May 2, 1896. Even Emperor Franz Joseph I took a trip on the underground tram constructed for the opening of the monumental, millennial exhibition spanning across Hungary. In the course of its construction, state-of-the-art solutions in architecture were used, including industrial reinforced concrete technology. An automated, mechanical security equipment, used on the railway, prevented the cars from colliding. Undergoing several refurbishments, the original cars had remained in use for 77 years until the railway was upgraded in 1973, which had been unprecedented before in the world. Widely known as the Kisföldalatti ('small underground'), the underground railway was added to the list of world heritage sites in 2002 alongside Andrássy Avenue. Built between 1894 to 1896, the Millennium Underground Railway was the first underground line on the European mainland and the world’s first low-floor tram. This railway line was one of the main architectural features of the Hungarian capital celebrating one thousand years of the Hungarian conquest of the Carpathian Basin. Originally, the line ran from Vörösmarty Square (in downtown) to the City Park underneath Andrássy Avenue, the original terminus being the Zoo, with eleven stations (nine under the ground and two above). The original length of the line was 3.7 kilometers, extended in 1973 to the present 4.4 kilometers to Mexikói út as terminus. The world’s largest technical professional organization dedicated to advancing technology for the benefit of humanity, the Institute of Electrical and Electronics Engineers (IEEE) named the Budapest Millennium Underground line in 2020 as one of the technical milestones of the world.

SZIGET FESTIVAL 2021 CANCELED

Due to the uncertainties caused by the epidemic situation, Sziget will not take place this year just as last year. The organizers have announced that one of Europe's biggest festivals, which is Hungary's most important tourism event, is planning a big comeback in 2022. As the festival's website puts it, "due to the global pandemic, the festival industry operates in a really unpredictable environment. We believe that it is our common responsibility to get through these challenging times in a cooperative way, considering the safety of our visitors as our top priority. Therefore, we’ll now be bringing The Island of Freedom back to you in its full glory in the summer of 2022." Chief organizer Tamás Kádár told the state news agency MTI that the two festival-free years have made life very difficult for the organizers, event-related companies and workers, and made it almost impossible for many players in the industry, from musicians to caterers and technical subcontractors. The country's two other major popular music events, Telekom VOLT in Sopron and Balaton Sound in Zamárdi, will not be held this year either, as their organizers announced in mid-March. T R A D E

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NUMBER OF TOURISM NIGHTS: AN ANNUAL DECREASE OF 70%

As a result of border crossing restrictions and COVID-19 protection measures for commercial accommodation, domestic tourists spent 66% fewer tourism nights in commercial accommodation establishments (hotels, boarding houses, camping sites, bungalow complexes and community hostels) in Hungary compared to the same period of the previous year. International guests spent 74% fewer nights in this country. The decrease in the observed indicators is even more significant compared to the period before the outbreak, with 89% fewer tourism nights compared to the same period in 2019. Compared to the previous month, the number of domestic tourism nights increased by 14,000, the Central Statistical Office reports. In March 2021, compared to the same month of the previous year, 42,000 domestic guests (76% decrease) spent 136,000 tourism nights (66% decrease). 62% of nights were spent in hotels, a 71% decline. The turnover in boarding houses and community hostels was just over half (59% and 55% respectively) of the turnover in March of the previous year. The Balaton tourism region saw the largest decline. The number of foreign arrivals and tourism nights fell by 79% and 74% respectively, with 24,000 guests spending 88,000 tourism nights in accommodation establishments. Most guests stayed in hotels, however, the number of nights spent there decreased to 23% compared to March 2020. Budapest and the Balaton tourist region recorded the largest declines (95% and 82%, respectively). Total gross sales revenues were down by 70% (to HUF 4.5 billion) at current prices.

RENOWNED HUNGARIAN FOOTBALL REFEREE PASSES AWAY

Hungarian Sándor Puhl, voted four times as the world's best referee, has died at the age of 65, the Hungarian Football Federation (MLSZ) has reported. Born in 1955 in the northeastern Hungarian city of Miskolc, he obtained his license in 1970, at the age of 15, and since 1982, he has officiated hundreds of matches in the country's various leagues. His international career began in 1988 and between 1994 and 1997, he was elected four consecutive times as the best referee in the world by the International Federation of Football History and Statistics (IFFHS). The Hungarian referee officiated several legendary matches, such as the 1994 U.S. World Cup final between Brazil and Italy, as well as the 1997 Borussia DortmundJuventus Champions League final. Sándor Puhl, retired since 2000, was vice-chairman of the MLSZ Referees Committee since 2010 and worked as a commentator for several Hungarian TV channels.

company briefs FRUITFUL START TO THE YEAR AT ERSTE BANK HUNGARY

German carmaker Audi is starting a new investment in its tool factory in Győr, NW Hungary. Audi has decided to modernize the machinery park and exclusive series production of their tool factory in Győr, and to expand the floorspace for exclusive series production. In the framework of the project of more than EUR 10 million, the current production hall will be extended by 3,800 square meters for exclusive series production, and the logistics hall will increase by 2,500 square meters. While retaining nearly 700 jobs, the capacity of exclusive series production will grow by 30%. Hungarian taxpayers are to

cover about third of the amount of the new investment according to a government decision. In exclusive series production, doors, fenders, hoods, luggage compartment doors as well as roof and side components are manufactured in flexible robotic cells, which facilitate numerous changes, and by introducing digital solutions, they allow for the quick and automated switching between activities. The tool factory is currently developing press tools and bodywork manufacturing equipment on 52,000 square meters, which will later be used in mass production. Additionally, almost all bodywork elements are produced for 40,000 sports models of the Audi and Volkswagen Group in exclusive production yearly – for the Audi RS models, the Audi R8, the new Audi e-tron GT, as well as the Lamborghini and Bentley models. The expansion allows for Győr to contribute to the production of even more premium cars. Construction works for the expansion of 6,300 square meters will start soon, and the project is expected to be completed in the summer of 2022.

PANDEMIC CRISIS MANAGEMENT AT GEDEON RICHTER As the world is in the second year of the COVID-19 pandemic, the Hungarian pharmaceutical company Gedeon Richter Plc. continues to regularly provide a brief update of its impact on the health and wellbeing of its employees and its operations at large. According to OECD Statistics, global GDP declined by 4.2 % in 2020 due to the social and economic effects of the COVID-19 pandemic. The pharmaceutical industry has been also fundamentally impacted by the COVID-19 pandemic and the restrictive response measures implemented by authorities worldwide. Notwithstanding the above, Richter says it managed to service its customers on time and in full also into the first quarter 2021 despite a further rise in the case numbers of COVID-19 infections across its countries of operation. The health and well-being of the Richter team remained the focus of management, while the supply of high quality and affordable medication was successfully maintained worldwide throughout the reported period. Promotional activities did not change significantly in the first quarter 2021 when compared to previous months. In-person

promotion represented around 85% on an average of total marketing approaches in Richter's geographies of operation. With a strong balance sheet and a positive cashflow, the company says its cautious approach to receivables management further added to Richter’s resilience during the ongoing global economic turbulence. No disruption to the usual payment procedures occurred in the reported period.

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DÁVID HARANGOZÓ, ZSOLT SZIGETVÁRY/MTI, DEPOSITPHOTOS.COM

Erste Bank Hungary closed the first quarter of this year with a profit after tax of HUF 15.1 billion and higher operating income than in the same period of the previous year. Lending growth in both the retail and corporate segments slowed compared to last year, although loan balances increased thanks to the moratorium. Retail customer assets grew by 24% and corporate deposits by 34% over a year. The financial institution's operating income, as reported in accordance with International Financial Reporting Standards (IFRS), was 24.1% higher than a year earlier in the period from January to March, partly due to one-off effects. Within this, net interest income rose by 25.1%, fee and commission income by 15%, while trading and conversion income more than doubled. Operating expenses grew at a much slower pace, by 6.3% over the year, thus the financial institution's operating profit rose by 44% to HUF 25.3 billion. The cost/ income ratio also improved strongly year-on-year, falling to 45.5% at the end of March from 53.2% a year earlier. The stock of customer loans at the end of March was 6% higher than a year earlier. At the same time, new loan originations slowed, falling a third short of the performance in the first quarter of 2020. The NPL ratio rose to 2.9% at the end of March 2020 from 2.2% at the end of March, Erste Bank Hungary CEO Radovan Jelasity said. In the retail area, the value of new lending was 18% below a year earlier, as the economic impact of the COVID-19 epidemic was not yet felt much in the first quarter of last year, László Harmati, deputy CEO for the retail area at the financial institution said. In mortgage lending, the value of new loans was 5% higher than a year earlier, thanks in part to the introduction of the home renovation loan. In consumer loans, the Baby Loan largely compensated for the shortfall in personal loans due to the epidemic, but new lending was still down 29% year-on-year. For small entrepreneurs, new lending is up 39% year-on-year, showing that they are not giving up and are confident in the current period of viral crisis. In the corporate business, loans decreased by 4% to HUF 781 billion. Erste is actively participating in the national bank’s ‘NHP Hajrá’ program, having signed loan or lease agreements worth HUF 120 billion by the end of March 2021. The bank is also a major participant in the National Bond Program, with eleven subscriptions totaling more than HUF 33 billion, Richárd Szabados, head of the bank's corporate business added.

AUDI TO EXPAND ITS TOOL FACTORY IN GYŐR

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company briefs

INVITECH SUPPORT FOR NON-PROFIT ORGANIZATIONS

This year, non-profit organizations have again been given the opportunity to receive financial and professional support to implement their innovative ideas. The ICT service provider Invitech has launched its eleventh InnoMax Award, which continues to focus on sustainability, health, education and inclusion, but for the first time also includes support for digital education equipment. The prizes are decided by a prestigious jury, but this time, an NGO can win a major grant with the votes of the general public also. The call for proposals is open to project ideas in the 4+1 themes mentioned, which use innovative ICT or information technology solutions to serve a useful societal purpose, or which are environmentally beneficial, or, in the case of the new category, which are also tools for such purposes. At the end of the previous phase, prizes were awarded for an alarm system for volunteer firefighters, an online sign language training program, an online educational board game for disadvantaged children and an accessible digital examination platform. "As an ICT service provider, we have seen from the front line the challenges that this year has presented to large companies or the SME sector. We have also seen that the technical conditions and IT security of mass home working, teleworking and teamworking, and, for example, the transfer of part of commerce to the online space, have not been a problem for most operators, given the right professional partner. However, some nonprofit organizations may need financial support in addition to technical assistance. This is where the InnoMax Prize comes into play, allowing NGOs, foundations and associations to use grant funding to strengthen or even renew their activities in an innovative way, even in the midst of a global epidemic," Deputy CEO of Corporate Sales at Invitech, László Marton said.

OUTSTANDING FIRST QUARTER RESULTS AT ALTEO

DEPOSITPHOTOS.COM, MASTERPLAST, RÓBERT BARANYI/BUDAPEST AIRPORT

In the Management’s opinion, Q1 2021 results have massively confirmed ALTEO’s strategy along with the successful investment projects of the recent period. As results for 2020 also showed, the COVID pandemic still has only moderate impact on ALTEO’s profitability compared to other, more pro-cyclical sectors, thanks in part to the protective measures put in place by the company, and the arising negative effects have been far overshadowed by the outstanding results on other activities, according to the company’s first quarter report. Consolidated EBITDA increased by 98% year-on-year, primarily (i) on account of the remarkable profitability of the Control Center controlling heat and electricity generation, which was positively supported by the expansion of the center’s gas engine capacities last year with an additional 18 MW, (ii) within the subsidized electricity generation segment, the surplus profits of the 15 MW wind farm acquired last year and the reconstructed Gibárt Hydropower Plant contributed to EBITDA growth, and (iii) the profits of the Energy Retail segment (which was hit the hardest by the pandemic) exceeding the preceding year also supported the substantial increase in consolidated EBITDA. Consolidated net profit shows a 137% increase over the same period last year. Reason behind this substantial growth in profit include the strategy centering on strengthening the capabilities of the Control Center, the resulting capacity expansion implemented and rising demand for balancing energy services. The latter is the result of the spreading of renewable energy developments ongoing in Hungary, particularly the significant expansion in solar power plant capacities. In line with the 2020-2024 strategy presented in the fall of 2019, the implementation of the planned investment programs, the uncovering of potential investment and capital expenditure opportunities, restructuring serving as basis for other points of the strategy, as well as the implementation of required processes have all continued. The reports pints out that the pandemic only caused a slight deceleration in respect of the Waste Management, E-mobility and Renewable Production Management business lines launched. The rise in balancing energy prices had an unfavorable impact on the Renewable Production Management business, but for the time being this negative effect is very well compensated for by the results shown by the Control Center. We are conducting a review in order to mitigate the market risks of Renewable Production Management. ALTEO has a vested interest in the long-term stability of the regulatory market, and to this end cooperates with both the professional community and the regulator.

2021 LAUNCHED WITH SUCCESS FOR MASTERPLAST PLC.

The interim management report of the Hungarian construction materials firm Masterplast Group for the first quarter of 2021 highlights that the company achieved the highest turnover and profit so far in the seasonally weakest first quarter. In a raw material market environment plagued by continuous price increases and supply disruptions, the Group's supply chain performed well and year 2021 launched with success. The Group's sales increased by 53% in the first quarter, which was largely due to the turnover of the new German manufacturing company, sales of health protective clothing started last December continued, the core business income increased. The trade margin of the Group increased by higher rate than the turnover growth, due to the stable performance of the construction segment, as well as the development of the production of health care textiles in Germany and the sales of health protective clothing. The profitability of subsidiaries increased, the capacity utilization of the company's production units and production efficiency improved. Due to all this, the company achieved the highest turnover and profit so far in the seasonally weakest first quarter. The company's EBITDA was EUR 4,372,000, which is almost four times the result of the same period of previous year, while profit after tax was EUR 2,798,000, which is more than ten times the previous year's base. For the rest of the year, the company expects a turbulent raw materials market and an intensifying insulation industrial environment as a result of the incentives, where the Company - relying on its strong supply chain - forecasts high level of profit generation for the coming periods. Founded in 1997, the main areas of activity of Masterplastare production and sales of building industry insulation materials. With its headquarters in Hungary, the Central and Eastern European international company group has nine active subsidiary companies all over the world, where it operates five own-property production units. The Group has a presence with its main products, thermal insulation system, heat, sound and water insulation, roofing and dry construction on the construction industry market.

BUDAPEST AIRPORT: PREPARATION FOR THE RESTART

In preparation for the expected traffic increase, Budapest Airport has begun recruiting manpower to be able to provide for the safe operation of the Ferenc Liszt International Airport with an appropriate number of colleagues, as moderate traffic returns. According to the latest Airport Bulletin, 114 employees have arrived in the open positions recently; 75 of them are returning colleagues whom the company had to let go last year during the headcount reduction brought about by the pandemic. Staff are primarily being hired for roles that are indispensable for the safe handling of passenger traffic and the operation of the airport; mostly security screeners and the terminal operation and information teams. In addition, there will be more employees working in IT, and since Budapest Airport will maintain epidemiological measures intensively going forward, the sanitization team from Emergency Response has also been expanded. Recruitment is still under way; more than seventy more people will join the BUD group soon. Based on Budapest Airport's current traffic forecast, they expect that in the short term, approximately 170 Diplomacy-n-Trade.ai 27. 11:22:30 staff will be hired 1in2017. total,02.following the headcount reduction last year.

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analysis

A MUCH BIGGER BANG THAN EXPECTED

Testing resolve and unity However, the other side of the coin is that part and parcel of Russia’s grand strategy is to try to so-called soft-balance the Atlantic community, which is seen as the major adversary for the Putin regime. One of the tools in this endeavor is to repeatedly test the resolve and unity of the adversary by creating situations which may create dissents and divisions within the other side. The Czech Republic may have been seen as an ideal venue for testing given the domestic political rift between the President and the Prime Minister, as well as the more lenient Czech attitude towards Russia in questions such as Ukraine – at least as compared to Hungary’s position, or with regard to security issues, in which the Poles and the Baltics are taking a harder line on Russia than the southern tier countries of the Visegrád Four.

MAJOR POLITICAL CONSEQUENCES OF AN OBSCURE EXPLOSION

Arms to Ukraine or somewhere else The official version made public by the Czech authorities is that two Russian agents of the Russian GRU’s (military intelligence) special

Overstaffed embassy Another intriguing question was the large number of Russian officials in the Prague Embassy. More ’diplomats’ were stationed in the Czech capital before the expulsions than in any other Russian diplomatic missions around the world, including Washington, D.C. This riddle can be solved, at least logically, very easily. The Czech capital’s central position in Europe in general, and

Central Europe in particular has made the city a base for operations in the neighboring countries for the Russian intelligence services. One of their almost manifest tasks is to try to destabilize the region, to drive a wedge between countries belonging to the European Union and NATO, and – in a broader context – to use all means possible (disinformation, corruption, taking advantage of old networks in social, economic, and political circles in the region) to regain some of Moscow’s lost influence in East and Central Europe.

Larger bang than expected

Domestic rift The destabilization efforts seemed to be working to some degree with reference to Czech domestic affairs. While Prime Minister Andrej Babiš has taken a hard line in opposing Russian influence, President Miloš Zeman was reluctant to accept any evidence which was linking the GRU agents to the explosions in Vrbětice. His position is strengthened – surprise, surprise – by the official Russian denial of taking any part in the incident in 2014. The Kremlin actually claimed that the explosion was used as a pretext for reinforcing NATO’s and the EU’s flagging coherence by keeping alive the danger of Russian threat. This argument, at least partly, cannot be dismissed out of hand; in reality, it is especially the U.S. that has been consistently overestimating the Russian challenge to the Euro-Atlantic community in the spirit of the age-old rule: a plausible outside threat enhances the coherence of any alliance. J U N E

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The Russians also make use of the so-called spillover tactics, i.e., when a gain in one field can be converted to another. However, it seems that in the Vrbětice-case they may have miscalculated. One of Russia’s most potent political tools is its energy policy, namely, exporting fossil energy and nuclear technology. As for the latter, Rosatom seems to be a loser in this Czech-Russian controversy. The company, which is rather close to the Kremlin, very much like Gazprom, ’an extended hand of the Russian government’, has lost its bid to participate in the construction of a nuclear energy plant at Dukovany. In short, the minor explosion has produced a much larger bang than it should have been. The question is, whose interest was it to revive the case seven years after the event had happened. The motives look like even more obscure than the place where it happened.

PALICKAP/WIKIMEDIA

Two explosions shattered two buildings in Vrbětice, a faraway place in the Czech Republic in October 2014. Two men died, and some war material, including explosives and submachine guns, got destroyed. The event did get some attention at that time, but the Czech authorities made no serious efforts to find out at that time what had really happened – some say for good reason because of the murky background. Russian intelligence agents, a Bulgarian arms dealer, and who knows what other people from what other countries were rumored to be involved in the case. Then, almost out of the blue, the Czechs expelled more than half of the staff serving in the Russian Embassy in Prague in April 2021 – some 80 ’diplomats’ all in all from the 135-strong Russian diplomatic representation. Russia responded in kind and expelled a number of Czech diplomats from Moscow. Further expulsions followed: the Baltic states, Slovakia, and Romania ordered Russian diplomats out in solidarity with the Czechs – or for some other reasons not made public. Then, on April 29, the Polish, the Hungarian and the Slovak Prime Ministers issued a statement in which they expressed their ”full solidarity” with the Czechs.

Unit 29155 – by the way, the same ones, who are suspected to have poisoned the Russian double agent Sergei Skripal and his daughter, Yulia in England in March 2018 – blew the ammunition depots up in October 2014. Their motivation was to prevent the shipping of war material to Ukrainians, with the mediation of a Bulgarian arms dealer, in the wake of armed conflicts between Ukrainians and the Russianbacked secessionists in eastern Ukraine. Or not. Making matters a bit more complicated, the arms delivery was a business by a private Czech company – the question arises how the Czech government could have allowed arms sales to such a sensitive conflict area as Ukraine by a private company. Another explanation is that the destination of the arms was not Ukraine but Syria, specifically the rebels fighting the Bashar al-Assad regime, which, incidentally, was – and is – backed by Russia. If it was really the GRU that was behind the explosion, one potential message was: ’do not mess around Ukraine,’ or, if you do, you can only do it at your own peril.

Tamás Magyarics is a foreign policy analyst

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BY TAMÁS MAGYARICS

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INTERVIEW WITH NETHERLANDS AMBASSADOR RENÉ VAN HELL

“The centenary of bilateral diplomatic relations was something that we were also celebrating with Hungarian friends in the Netherlands like András Kocsis, the Hungarian Ambassador there,” Ambassador Van Hell tells Diplomacy&Trade. He believes that one of the highlights was one before these hundred years, and that is the cooperation during the Reformation between people in the Netherlands and Hungary. “It was about freedom of religion, freedom of belief, so that was definitely a highlight. I think it's also good to mention that, after the First World War, when Hungary became a sovereign state but had a lot of problems, we started a humanitarian project together with the Hungarians to bring

children to the Netherlands. A third highlight that I will mention is that when Hungary became a member of the Council of Europe, in 1990, the Netherlands was a fervent supporter of the integration of Hungary into the Western world, not to speak, of course, the Hungarian accession to the EU and NATO,” he adds.

Benefiting from discussions Speaking about the Council of Europe, NATO, the European Union, the Ambassador points out that all these organizations are value based. “It's about democracy and rule of law, fighting corruption, and an independent judiciary. What is interesting, of course, is that both Prime Minister Rutte and Prime Minister Orbán – after Chancellor Merkel – are the longest serving members of the European Council. We hope that

AREA country comparison to the world POPULATION country comparison to the world POPULATION GROWTH RATE country comparison to the world BIRTH RATE country comparison to the world LIFE EXPECTANCY AT BIRTH country comparison to the world NET MIGRATION RATE country comparison to the world GDP - PER CAPITA (PPP) country comparison to the world UNEMPLOYMENT RATE country comparison to the world TELEPHONES - MOBILE/CELLULAR country comparison to the world AIRPORTS country comparison to the world

HUNGARY

THE NETHERLANDS

93,028 sq km 110 9,919,128 (July 2014 est.) 90 -0.21% (2014 est.) 214 9.26 births/1,000 population 214 75.46 years 93 1.34 migrant(s)/1,000 population 55 $24,300 (2014 est.) 73 7,1% (2014 est.) 77 11,580,000 (2012) 67 41 (2013) 104

41,543 sq km 134 17,337,403 (July 2021 est.) 69 0.37% (2021 est.) 163 10.98 births/1,000 population (2021 est.) 177 81.95 years 27 1.9 migrant(s)/1,000 population (2021 est.) 48 USD 56,935 (2019 est.) 21 3.41% (2019 est.) 47 21,914,852 54 29 (2013) 117

Source: World Factbook

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BY SÁNDOR LACZKÓ

DÁVID HARANGOZÓ, DEPOSITPHOTOS.COM

FOR GREEN AND VALUE-ADDED COOPERATION

dutch focus they'd like to be having more discussions with each other. I'd also like to stress that personally, they go on perfectly well. The European Union is all about discussions and one of the subjects being discussed is the rule of law. That has nothing to do with the fact that Fidesz is a popular party but it has more to do with asking ourselves pertinent questions like the plurality of the media or checks and balances regarding the government. It is those kinds of conversations that we have, and it's not only about Hungary. The other way around: we also get questions, but I think it's very important that we do that in the European Union. I believe that at the end of the day, what unites us is that we have this pluriformity of media, that we have checks and balances in governing the country and that we have an independent judiciary. Both Hungarians benefit from that and the Dutch people benefit from that at the end of the day.”

Making societies greener The most recent event in bilateral relations was the Netherlands being the Guest of Honor at the Ökoindustria 2021 Green Expo in Budapest. The Ambassador stresses that “it was really an privilege to be a guest of honor because the patrons were President Áder and Foreign Minister Szijjártó. The main message was that we are up for a big transition from climate change to make our societies greener and we're out here to cooperate with you. We have things to offer to Hungary and Hungary also has a lot to offer. So, how can we work together on this daunting goal? We are really going to transform our societies into climate neutral societies, which is incredibly ambitious. I really think that if you look at how long it took to get rid of the combustion engine, and all the exhaust that cars and trucks are still able to emit in our cities, I think it's kind of crazy. These are places where young children live! I also sometimes see how vested interest of companies, and the interaction between governments are not always helpful to promote sustainable development. Of course, there are side effects of having battery powered cars that we need to address but just getting rid of all that exhaust in our cities, and the noise pollution that we have is amazing.” Why did it take so long? Answering that question, René Van Hell says he very much believes in competition. “But I also think that we sometimes have to ask ourselves, why do certain transitions take so long? I think that is one of the headaches that we should have tried to solve. In Hungary, e-mobility, for instance, has improved a lot and I think that it has been way overdue, because citizens want clean cities without noisy stinky cars and trucks.”

Need to become more sustainable All year long, Diplomacy&Trade has been covering the activities of the Business Council for Sustainable Development in Hungary (BCSDH) for which the Netherlands Embassy has long been an important partner and the organization has had several Dutch-related programs. Ambassador Van Hell took part at several of these events in person as well w w w . d t e u r o p e . c o m

example of that is Béla Jankovics, a HungarianDutch citizen whose father fled Hungary in 1956. What he's doing – also in nature preservation – is quite impressive. I would definitely like to highlight him, for example.”

Keeping societies going

as online. When asked how much he thinks the Dutch affinity to – and good practice of – sustainability got through to the Hungarian business community, he stresses that “it wasn't so hard to get the message through, because there's really also this realization by companies here in Hungary that we need to become more sustainable. But it was really nice to rally with the companies and I think it's a fine thing that we set up a circular economy platform. We set up the Lean and Green platform, which aims to reduce the CO2 footprint of the transport and distribution sector. Transport and distribution are super important in the Netherlands and Hungary, it’s is another example where we can go and cooperate. I also think that it has been very wise of Prime Minister Rutte and Prime Minister Orbán to cooperate in the European Council and set these very ambitious goals for the European Union as a whole, because relatively small countries like Hungary and the Netherlands cannot possibly do this on our own, we need a level playing field. And the starting point of that is always the European Union.”

Focusing more on innovation Regarding economic relations and the possibilities of further improvement, the Dutch ambassador believes that the Netherlands must try to tap into the goal of the Hungarian government to go higher on the value-added ladder: the slogan is no longer ‘Produced in Hungary’, but rather ‘Invented in Hungary’. “I think that's where possibilities for cooperation lay. I also think it's justified that Hungary wants

that because if you look at GDP per capita, it's still much lower in Hungary and we need to work on convergence. And convergence is working by exchanging all the knowledge that we have. Hungary is also clearly developing and that is where I see a possibility for further improvement, focusing more on innovation. And I also hope that there will be Hungarian companies that can invest in the Netherlands – that will be a healthy thing to happen. We're now in a pandemic – times when it's about preserving what you have, safeguarding companies from going bankrupt, etc. But I think at the end of the day, it's very important that we promote competition within the internal market. That's helpful for the Netherlands and it’s helpful for Hungary, truly promoting strong competition in all sectors of the economy in addition to having an innovation policy.”

Higher added value Agriculture is an area where both the Netherlands and Hungary have great achievements. Three years ago, Ambassador Van Hell said that the Embassy wishes to widen bilateral cooperation in this field. Now, he confirms that there is strong cooperation between Wageningen University in the Netherlands and Szent István University (Hungarian University of Agriculture and Life Sciences) in Gödöllő, east of Budapest. “I also see that farmers or agricultural entrepreneurs in the Netherlands, and also in Hungary, are increasingly producing higher added value and are thinking about nature preservation. One fine

THE NETHERLANDS AND HUNGARY: TRADE AND INVESTMENT FIGURES

In 2020, the total volume if bilateral trade of goods and services between the Netherlands and Hungary totaled almost EUR 10 billion. The total volume of bilateral trade of goods was EUR 6.7 billion (EUR 3.7 bn in Hungarian imports and EUR 3 bn in Hungarian exports) while the total bilateral volume of services was EUR 2.8 billion (EUR 1.9 bn in Hungarian imports and EUR 0.9 bn in Hungarian exports). It means that the Netherlands was the 9th biggest trade partner of Hungary in 2020, while Hungary ranked 24th on the list of the Netherlands’ biggest trade partners last year. The top three export products to Hungary from the Netherlands included electrical devices (worth EUR 791 mn), office and automatic data processors (EUR 303 mn) and devices for telecommunications (EUR 290 mn). The top three export products from Hungary to the Netherlands are office and automatic data processors (EUR 799 mn), devices for telecommunication (EUR 473 mn) and electrical devices (EUR 260 mn). As regards the annual volume of Dutch investments in Hungary, the latest available figures suggest a decreasing tendency: EUR 7.7 billion in 2016, EUR 6.4 bn in 2017 and EUR 5.1 bn in 2018. The total stock was an impressive EUR 9 billion in 2018, which made the Netherlands one of the top five investor countries in Hungary. Sources: CBS-Statistics Netherlands CBS, De Nederlandsche Bank (DNB)

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The pandemic has severely hit most areas of work in both the Netherlands and Hungary as well as at the Embassy in Budapest. “I think we are doing a lot of things. There's been way too many deaths in both countries. I think that economically, we will bounce back at some point but, let's face it, it's been really tough. In terms of a pandemic, we have made important decisions in the European Union on more funding for our economies, I think that is very important. We've been able to keep our societies going. I'm actually surprised about the resilience of the average citizen in Hungary. That is really something as people also faced loss of lives and that of the loved ones. The death rate has been high but the incredible resilience among citizens has been one of the most heartwarming experiences for me.” The Dutch Embassy had home office work since March 13, last year, and almost every one of the staff has now gotten his or her first or second vaccination jab. “So, we'll probably slowly go back to a situation where we're going back into the office. What helped was that we have a fine IT infrastructure. Thus, when people brought their tablet back home, they basically brought home their office. That worked well. We met sometimes in subgroups here in the garden of the ambassadorial residence to have some interaction. Fortunately, none of the staff members contracted COVID-19. I am very happy about that. Of course, as diplomats, you also flourish when you meet people in person, when you can have informal conversations and how informal is it to meet through a video link? But it's been quiet, very quiet.”

Hiking the country This summer, René Van Hell is leaving his post in Budapest after close to four years. When summarizing his tenure, he says that “I would first and foremost say it was really a great pleasure and a great honor to serve the Netherlands here in Hungary, in Budapest, one of the most beautiful capitals of Europe. So, it has been a daily pleasure to live in this beautiful city to work with a great team at the Embassy, and also to work with very dedicated and professional counterparts, both in the government but also in companies and civil society. That was big fun. The pandemic made me to look with another eye to Hungary. I would basically go every weekend on a hike, both on Saturday on Sunday: the Mecsek Hill in Pécs or Mátra in the northeast or the border between Slovakia and Hungary. Of course, being from the Netherlands having hills is already quite something but the beauty of nature and also the extended hiking paths network that is out there – it was really an eye opener. So even during wintertime, going out in the hills and walking there was really a fantastic experience.”

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BILATERAL TIES IN THE HEARTS AND MINDS

labor workforce in every county, we have all the necessary information at our disposal thanks to our colleagues at the Hungarian Investment Promotion Agency (HIPA). I regularly meet the CEO’s both in the Netherlands and Hungary to ask them about the current state-of-play of their operation. I am glad to report that the Dutch companies are very satisfied with the Hungarian business environment and keep reinvesting.”

Farming and agriculture Agriculture is an area where both The Netherlands and Hungary have great achievements. As to what joint benefit can the two countries gain from this cooperation, the Hungarian ambassador says “indeed, we can learn a lot from each other also when it comes to farming and agriculture. I could mention the close cooperation between Wageningen University and the Hungarian University of Agriculture and Life Sciences (MATE). Another prime example is Smartkas, an Amsterdam-based agri-tech start-up using AI and cutting-edge technologies. Its founder, the Hungarian Dávid Mészáros has recently featured on the Forbes Under 30 Europe list. The company develops greenhouses (‘kas’ means greenhouse in Dutch, hence the name) and vertical farms that are hermetically closed, with inputs automatically controlled, enabling a pesticide-free production line and stable, high yield year-around. Truly fascinating.”

INTERVIEW WITH THE HUNGARIAN AMBASSADOR TO THE NETHERLANDS, ANDRÁS KOCSIS Relations between Hungary and the Netherlands date back centuries and the two countries have recently celebrated the 100th anniversary of diplomatic relations. András Kocsis has been the Hungarian ambassador in The Hague for five years now. He tells Diplomacy&Trade about the various aspects of bilateral relations “forged through centuries of friendship and mutual respect.”

“The Netherlands is a beautiful country, I like to visit every corner as often as I can and meet the locals. It is a heartwarming experience every time when people approach me after an event to talk about their experience with Hungarians or Hungary. Mostly, it’s about the 1956 revolution but there are also descendants from the so-called children trains of the 1920s. In the framework of a large-scale charity operation after World War I more than 20,000 sick or orphan Hungarian children came to the Netherlands. They did not only find welcoming families for a couple of months but in many cases stayed for the rest of their lives. You realize through these stories that bilateral relations are not only about official meetings done by politicians but they are anchored in the citizens’ hearts and minds.”

there is good cooperation between the two embassies, András Kocsis points out that “the Dutch are very informal and easygoing in general, and René is no exception. WhatsApp, direct messages on Twitter, emails, you name it: we give each other a heads-up on relevant developments that are important in our daily work. We also try to catch up whenever we are back home. René is a great partner in strengthening our bilateral ties, once he even came from Hungary to Amsterdam to participate in a twin city conference with mayors of Hungarian and Dutch cities. And yes, once in a while we do share some private photos with each other.”

Economic partnership

One of the tasks of the Hungarian Embassy in The Hague is attracting Dutch capital to Hungary. In agreement with this, Ambassador Kocsis stresses that “focusing on trade is the number one item in the job description of every Hungarian ambassador. Economic cooperation has always been the cornerstone of our partnership since the Netherlands is among our Top10 trading partners and investors. In a post-pandemic world economy, there will be a bitter competition between countries so we don’t take anything for granted: the government works hard to keep our position as an ideal investment destination. Be it regional financial incentives or the availability of skilled

A relevant message In conclusion, Ambassador Kocsis mentions that “in the heat of the daily political fights it is sometimes easy to forget that we are friends and allies both in the European Union and NATO. Our bond is forged through centuries of friendship and mutual respect. United in diversity – reads the emblematic motto of the European Union. Its message is as relevant as ever. Our approaches might be different but our goal is the same: a strong and competitive Europe.”

Celebrations not quite as expected

FRED ERNST, MÁTYÁS BORSOS/MFAT

Of course, the Hungarian Embassy in the Hague also celebrated 100 years of diplomatic relations between the two countries. Ambassador Kocsis says they kicked off the centenary with the inauguration of the renovated embassy building in The Hague with the participation of the foreign ministers. Then, Minister Szijjártó organized a business breakfast with the CEOs of the biggest Dutch companies in Budapest. “I still remember vividly the lunch we had first in Budapest with former Hungarian ambassadors to the Netherlands, followed by a dinner at my residence with former Dutch ambassadors to Hungary spanning three decades. Then, the pandemic kicked in and our ambitious plans went up in smoke. Not all is lost, though: since the very first Hungarian envoy to the Netherlands was actually not sent in 1919 but by Gábor Bethlen, Prince of Transylvania, in 1623, we will have the chance to celebrate the 400th anniversary already in two years.”

In reaction to the words of René van Hell, the Dutch ambassador in Budapest, that

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Great cooperation FORE IGN MINI S TE RS S TE F B LO K A ND PÉ T E R S ZI J J Á RTÓ I N T H E H A GU E

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Reduce your carbon footprint by flying CO2 neutral At KLM, we are taking responsibility for making our business more sustainable. If you like, you can also take part in minimizing the impact of your journey. Our CO2ZERO service offers you a simple way to compensate the CO2 emissions of your flight. Learn more about our journey to more sustainable aviation on klm.com/flyresponsibly

Royal Dutch Airlines

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FROM FLYING MORE TO FLYING BETTER

of SAFs, optimizing flight paths and procedures, the aim for emission-free airports and the adoption of the train for short distances. With the help of KLM, the Delft University of Technology made the maiden flight of its revolutionary Flying V model aircraft. KLM contributed to the action program Hybrid Electric Flight, which was submitted to the Dutch parliament. More waste and weight reduction initiatives have been worked on with external partners like the Amsterdam University of Applied Sciences.

KLM aims at a complete sustainable transformation KLM expanded its notion of sustainability to not only encompass environmental goals, but also to include the role it has in serving society, enabling economic activity and being one of the largest private employers in the Netherlands. This deepening and broadening of KLM’s sustainability ambitions aligns well with KLM’s restructuring plan ‘Building Back Better’. Within this context, KLM developed a vision of how sustainability applies to the people-side of the business, by means of a ten-year roadmap that will improve staff engagement, diversity and inclusion, community engagement and human rights across the supply chain. Engagement for sustainability has increased in 2020. Sustainability was integrated into KLM’s Compass, which outlines the values, principles and behaviors of staff. A sustainability ecosystem of people involved in the subject was set up across the company, including Transavia, Cargo and E&M. An internal sustainability portal was built to inspire and educate staff throughout the company, the sustainability report states.

KLM PUBLISHES ITS SUSTAINABILITY REPORT 2020

Leader and pioneer, Air France-KLM has been working for many years to reduce its environmental impact and commits to work together with all stakeholders and policymakers to achieve the climate objective to reach net zero CO2 emissions by 2050 from all flights within and departing from the EU.

As KLM CEO Pieter Elbers points out, “the COVID-19 pandemic has hit us hard and has led to the drastic restructuring of our company KLM, crucial for our survival. Yet, it also strengthened calls to make the aviation industry more sustainable. At the same time, aviation has clearly demonstrated its importance: air transport connects people and takes care of the transport of necessary goods, including vaccines.” He adds that in 2019, the company launched its KLM Fly Responsibly initiative, which consists of numerous endeavors, of which upscaling the production of Sustainable Aviation Fuel is the cornerstone. “Fly Responsibly will further support our goal to make our operation sustainable, as well as to innovate and cooperate with other external parties. These important pillars of our strategy have been – and still are – the foundations on which KLM’s operation is built and they will continue to play a vital role in the reconstruction of our company and sector after the COVID-19 crisis. An important outcome is the Green Recovery Statement, which KLM has drawn up together with the Dutch business community last year,” he says.

The report stresses that compared to 2005, KLM has reduced its total CO2 emissions by an absolute 4% per passenger and 31% per kilometer as of 2019. It must be noted, of course, that KLM’s production in 2020 deviated significantly from previous years – due to the well-known pandemic circumstances – as a result of which, the year’s CO2 emission figures cannot be compared easily with other years and targets. For 2030, the goal is to reduce these levels by 15 and 50%, respectively. To this end, KLM continued to invest in more fuel-efficient aircraft with a lower noise footprint. Meanwhile, KLM’s CO2ZERO program enables passengers to compensate their CO2 emissions and in 2020, some 51,053 ton was offset this way. In 2020, Transavia partnered with KLM on CO2ZERO. KLM, which in 2011 was the world’s first airline to carry out a commercial flight partly fueled by Sustainable Aviation Fuel (SAF), committed itself to use 14% SAF of the total volume used in the Netherlands by 2030. The customer proposition was broadened by expanding the corporate biofuel program to cargo customers and Air France decided to adopt KLM’s corporate biofuel program in 2021.

high-speed trains replacing short distance flights. In early 2020, KLM replaced one of its five daily flights to Brussels with a journey on the Thalys high-speed train. KLM is actively investigating with the Dutch rail company NS, Schiphol Airport and the Dutch Government how to replace more short flights by trains.

Leading the Sustainability World Index In conclusion, CEO Pieter Elbers says they are “extremely proud and honored that KLM – together with our colleagues at Air France – is ranked again in the top of the Dow Jones Sustainability World Index 2020 for the 16th time in a row. Dedication and hard work are needed to make the sustainable transformation of our companies complete.”

Debut of the Flying V scale model KLM already worked with academic institutions, airline partners and the government on several initiatives to reduce CO2 emissions. Strategies for achieving this include fleet renewal, the use

BEN KORTMAN/AIR FRANCE KLM, EMBRAER

Restructuring for survival

For lower noise footprint

Replacing short distance flights by train KLM’s ambition is to have zero emissions from ground operations by 2030. Therefore, KLM has invested in the electrification of ground equipment. As a result, some 62% of KLM’s ground equipment is now electric. KLM started testing a Taxibot; a hybrid towing vehicle which is licensed to tow the full aircraft to near the start of the runway, without the aircraft having to start its engines. The expected fuel reduction during taxiing is 50-85%. KLM is in favor of a European network of

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Published at the beginning of June this year, the latest report on sustainability activities by the Dutch airliner KLM highlights three words – reducing, replacing and compensating – when stating its intentions how to fly responsibly. The KLM sustainability report 2020 explains what the company did last year in order to keep on playing a pioneering role in the field of sustainability and how it is transitioning from flying more to flying better.

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130 years of Philips innovation, collaboration, and social responsibility People powered progress shapes a healthier future for the planet and humanity. Our spirit of reinvention of 130 years contributes to this progress and will continue to push us forward. Since 1891, Philips has come a long way from the producer of electric light bulbs to the developer of innovative solutions that improve the health and well-being of people. 130 years of improving lives is what makes Philips unique. It emphasizes our willingness and ability to innovate, to collaborate, and to change. This is how we are living our purpose. We are celebrating the future, after 130 years of improving lives. Together, forward

philips.com/130years

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dutch focus HEINEKEN, renowned for its commitment to quality and innovation, wants to be carbon neutral in its operations by 2030. As a first step, HEINEKEN has removed all PET packaging from production, making it the first PET-free beer producer on the Hungarian market.

HEINEKEN: THE GREENER THE BETTER

packaged in PET bottles from our portfolio. This step is particularly significant for a brand that is very popular in Austria and is also identified in Hungary with affordable and premium quality beer. While we are gradually phasing out PET packaging from our portfolio, we also stopped ordering plastic beer cups for good last November. Instead, we now source biodegradable paper cups from a supplier in Debrecen. We officially introduced paper cups in May this year, which means that if you order a Heineken or Sopron beer at one of the beer terraces that are now reopening, it will now be served to you in a paper cup,” Geert Swaanenburg emphasizes.

COMPANY SETS SUSTAINABILITY GOALS TO MAKE A POSITIVE IMPACT ON THE ENVIRONMENT

HEINEKEN has been present in the global beer market for over 140 years. “What has made the Amsterdam-based brewery, which started as a family business, so big and global has been its commitment to quality and innovation. That's why it won the Grand Prix at the 1889 Paris World's Fair, a prize that still appears on the brand's labels today,” the CEO points out. HEINEKEN’s Hungarian company, Sopron Brewery, which is over 120 years old, is not far behind in tradition. Rather, HEINEKEN Hungária combines the heritage of Sopron and Amsterdam: an entrepreneurial spirit, a commitment to sustainability and renewal, and the ability to adapt to a changing world. It is thanks to these qualities that HEINEKEN Hungária is a leading brewery. The fact that Sopron Brewery is one of the few breweries in the

Developing in a sustainable way However, HEINEKEN is not only aiming to be the world's most innovative beer brand, but also the world's greenest brewery. “For us, sustainable development means that as a company, but also as ordinary citizens, as HEINEKEN employees, we want to make a positive impact on our environment by contributing in our own way to the United Nations Sustainable Development Goals (UN SDGs). As responsible corporate citizens – as one of the world's largest beer producers and as an employer –, we must face up to the consequences of our actions. I am convinced that only by developing in a sustainable way can we protect our jobs and at the same time guarantee the Better Tomorrow™ to which we have committed ourselves in our strategy,“ Geert Swaanenburg explains.

aim to achieve an approximately one-third (30%) reduction in carbon emissions across our entire value chain compared to 2018. In 2018, we set a target to source 70% of our breweries' electricity and heat from renewable energy sources by 2030. Our even more ambitious target is to be the first global beer company to achieve carbon neutrality across its entire value chain by 2040. Since we decided to switch to green energy in 2018, HEINEKEN has launched more than 130 renewable energy projects worldwide, five of which are among the top ten solar-powered breweries in the world,” the CEO highlights.

Eliminating PET bottles “One of our latest initiatives – again, one of the first in our industry – is to completely eliminate products

A SUSTAINABLE MODEL The Hungarian Ecumenical Aid Organization and HEINEKEN Hungária implemented a model in Kastélyosdombó (SW Hungary), which is commercially sustainable in the long run, and also contributes to the livelihood of disadvantaged families involved in cultivation. As Heineken Hungary CEO Geert Swaanenburg commented, “producing materials for beer production can be a path out of poverty. In every part of the world, Heineken especially values local communities and local products.”

Towards total carbon neutrality

HEINEKEN announced its new sustainability objectives last August. “Our beers sold in the Dutch market have been produced with 100% renewable energy sources since last July. As a global company, HEINEKEN has set a target of achieving total carbon neutrality in its own production by 2030. Also by 2030, we J U N E

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HEINEKEN HUNGÁRIA

Combined heritage

world to brew Heineken, the company's flagship product, is a clear testament to the company's unyielding dedication to quality,” he adds.

HEINEKEN Hungária also looks at local sourcing as a means to improve its sustainability performance. The CEO underlines that “as well as helping to strengthen the local economy, this helps us to further reduce emissions from our operations by shortening our transport routes. In Hungary, two-thirds of the raw materials we use in our production are sourced locally. Soproni, for example, is made entirely from barley grown in Hungary, and we use sour cherries and elderberries sourced from Hungarian farmers to flavor our Soproni radlers. We are in constant dialogue with our stakeholders to ensure that our goals are always in line with their expectations. That being said, I personally believe that by becoming the world's ‘greenest’ brewery, we are only making our beers more desirable to consumers.”

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Its Hungarian subsidiary is also promoting greater sustainability through its commitment to quality and innovation. HEINEKEN Hungária has been offering its draught beers exclusively in biodegradable paper cans since May this year. The company's CEO, Geert Swaanenburg, shares his thoughts with Diplomacy & Trade on sustainability and the Dutch beer giant's involvement in Hungary.

In dialogue with the stakeholders

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HOME OFFICE REMAINS A MAJOR ISSUE FOR POST-COVID TIMES CONSIDERATIONS OF EMPLOYERS AND EMPLOYEES ON THE HUNGARIAN JOB MARKET

were unreliable during COVID times: unreliable because of the epidemic, because of accidents, like the one in the Suez Canal unreliable as well as for environmental reasons that are becoming more and more important. Transporting goods from Far Eastern countries is anything but the environmental friendly. Why in the Central Eastern Europe? That is because of the salary arbitrage, of course: if you check their salaries in East Central Europe, then you'll find that we are paid much, much less than in Germany or any other Western European country.”

The most attractive employers in Hungary

How to motivate and incentivize The research has also found that two thirds of the people would like to have a balance between working at home and working in the office. “It is an interesting question, of course, what proportion will eventually stay at home to work and consequently, what the office space of the future will be like, how it will be to be changing and transforming from the actual workstations into a more cooperative work environment. We did this study in many, many – more than 30 – countries, and it turns out that in many places the employers very much insist and force people to get vaccinated. In Hungary, however, employers are not so pushy and not insisting so much on that. All in all, it is an issue of safety and this is an interesting question how to make sure that the workplace is COVID-safe if we are not challenging the employees to get the vaccinations. So, this is

The importance of the salary Considering the most important brand values for Hungarian employees, the Managing Director stresses that “whatever people might say, salary is still the most important criterion and it is increasingly so in the times of the pandemic. I was really shocked to find how important worklife balance is! I thought that it is not so important when you have to keep your job, but it seems to have an increasing importance again. So, people like to have a highly paid job but at the same time very comfortable job despite of the crisis. We have also found that employees consider very important the financial stability of the employer as well as job security at a given company. So, the conclusion is: companies that are cutting jobs also see their image damaged, which means that it will be very, very difficult for them to get back to the previous level.”

Nearshoring tendency As regards the challenges and peculiarities of the Hungarian labor market compared with the other countries of the region, Sándor Baja highlights that the situation is quite similar in the countries of East Central Europe and “you should know that all the CEE region is profiting of an economic boom, which is very simply due to the reason that supply chains, whether in the manufacturing or in the service industry, are getting shorter and shorter so there is a nearshoring tendency with Hungary and the CEE region benefiting from it. That is because everybody would like to have the manufacturing capacities, and as well as the services, including shared services, closer to the market, closer to Western Europe, because these J U N E

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RANDSTAD HUNGARY

According to latest edition of the Randstad Workmonitor survey, work-life balance remains the biggest challenge for Hungarians. Sándor Baja points out that “first of all, one should know that four out of ten Hungarian employees were able to partially or fully work from home. What is most interesting about the coronavirus pandemic is that only 10% of the people who got used to working in home office would definitely like to return to work in the office and it is interesting that twice as many, about 20% would not like to return there at all.” In brackets, he notes that most of these people returned home or moved to countryside locations, and the big question, of course, how these very efficient and very productive people will be able to continue to work. In this situation, the employers need to think twice to force them to return and thus might lose them.

a very interesting question of human rights, the private individual rights of an employee, and, of course, that of the collective rights of the society to be protected,” the Managing Director puts a question mark. The conclusion of this Workmonitor study is that the world is always changing, the question is, how it can be made sure that the people will be motivated and incentivized to work efficiently in the future, he adds.

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The Dutch multinational human resource consulting firm Randstad regularly publishes major surveys about the labor market in different countries. Diplomacy&Trade asked the Managing Director of Randstad Hungary, Sándor Baja, to highlight the major findings.

Another major survey by Randstad is the Employer Brand Research. As the Managing Director explains, information technology (IT) continues to be the highest attractive sector in Hungary. “What is surprising though, that the service industry, the business service sectors – formerly called shared services – are getting very, very popular. With the upgrade of these services, more high value added jobs are getting to Hungary and this is very attractive for beginners, the rookies because they can start in the shared service industry with some low profile jobs but you can improve, develop and promote yourself to very sophisticated controlling, analytical or IT jobs, for instance. The telecom and pharma industries have always been very popular but is very interesting to see that the car industry, the automotive industry is losing some attractiveness and this is normal as they are suffering, not just because of COVID, this phenomenon started before the pandemic.” Sándor Baja also stresses that the gap between the 11 industries surveyed in this research project is getting narrower, so, there are few employers who can afford not to treat or not to consider the interests of their employees so more and more companies are professional in this sense. All in all, the number one among the most attractive employers this year is Samsung, followed by LEGO and Mercedes-Benz. It means that the hegemony of the car industry seems to be over.

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LET’S BE GREENER TOGETHER! VIRTUAL ENVIRONMENTAL EXPO WITH THE NETHERLANDS AS THE GUEST COUNTRY The international trade fair ÖKOINDUSTRIA2021, traditionally organized by the Association of Environmental Enterprises, presented the latest results and innovations of the Hungarian environmental industry in several areas. The program of the three-day ÖKOINDUSTRIA2021 focused on circular economy, e-mobility, green economy, water management and living water protection, smart solutions and environmentally friendly products. The event featured over a hundred program elements, 150 speakers, more than 4,300 registered participants, 70 exhibition stands, 19 companies and start-ups from the Netherlands as well as 133 participants in over a hundred meetings on the EEN (European Enterprise Network) B2B platform.

A full-fledged online event According to the organizers, the state-of-theart software provided the perfect technological background, thus the virtual conference space had plenty of experiences in store for participants that a traditional, on-site expo could hardly offer.

sectors in greening the future at a time when the world is facing complex social and environmental challenges, of which climate change is a prominent one. The Netherlands firmly believes that the transition to a circular economy is key to achieving the Sustainable Development Goals (SDGs) agreed by UN member states by 2030. After all, current production and consumption patterns are unsustainable, and a linear approach means we are facing the limits of the planet. He highlighted the need of co-operation and closing the loop by transitioning to a circular economy, a necessity to reach climate neutrality by 2050. The Dutch were also protagonists at the ‘Decarbonizing logistics’ conference at Ökoindustria. Sustainability, efficiency and cooperation were the key words, highlighted in the opening speeches of the Lean&Green platform founding members. Ambassador Van Hell invited the workshop participants to visit the Netherlands pavilion and mentioned some concrete examples of Dutch companies’ commitments on decreasing their CO2 emissions.

Throughout the three days, thematic roundtables, sessions alternated meanwhile the virtual expo was open. The cream of the events and presentations was streamed and recorded by a professional team working at remote locations, and you felt as if you enjoyed the show in person, from the first row. However, the internet connection requirements did not exceed the ones needed to watch Netflix or YouTube. The three-day event, under the chief patronage of the President of Hungary, János Áder, was again an excellent opportunity for companies and green innovators to meet potential investors, partner meetings, or to organize thematic round tables, sections and conferences.

Dutch presence In his opening speech, Dutch ambassador René van Hell expressed his pleasure to see cooperation between representatives of different

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BRINGING ADDED VALUE FOR THE MEMBERS

DUTCH CHAMBER LOOKING FORWARD TO IN-PERSON EVENTS

AFTER BEING FORCED TO THE ONLINE PLATFORM

Dutcham’s goal is to bring together companies with Dutch interests operating in Hungary and provide a forum for networking and exchanging professional experience. As for the message Dutcham conveys to its members and the business community in Hungary, the organization’s Chairman Lóránt Kibédi Varga tells Diplomacy&Trade that their mission is to provide a platform for Dutch and Hungarian companies to build a valuable network that enables them to grow and prosper. “This year, we started using a new tagline that characterizes well what we stand for: ‘Building genuine connections for more successful businesses. We truly believe that we should provide opportunities for Dutcham members to build valuable networks, build business relationships. By creating tighter bonds among the managers in various ways, doing business would be a natural outcome in the long run. At Dutcham, we believe in the quality and not quantity of the contacts and aim to provide visibility for our members via sharing their news, business reports, offers via our online marketing channels and also promote their events. Some of our members are actively organizing events in their areas of expertise and providing fellow members access to these contents is bringing added value for the members.”

Open attitude

Online and in open air

Lóránt Kibédi Varga was elected Chairman of Dutcham six years ago and has been a member of the board since 2004. Looking back on the close to two-decade history of the organization, he says “it has been a great honor for me to work for the Dutcham business community over the past years with an inspiring board of directors who dedicate their time and energy to continuously develop the organization. We are proud to have the largest Dutch companies present in Hungary among our members and there are also companies with international background, having a Dutch local manager, who would like to belong to the Dutch community in Hungary. In the recent past, our membership base expanded with Hungarian companies as well, mainly due to our open attitude and the unique network we can offer. We may not be the biggest chamber in terms of membership base or lobby power, but we offer an interesting and varied agenda and support building an informal network among the members. Personally, I consider it a great achievement that despite the pandemic we have kept close contact with our members and shared valuable ideas in difficult times.

Health restriction circumstances resulting from the pandemic forced to change the work of the chamber, posing several challenges. As the chairman highlights, the pandemic had a significant effect on their activities, since all planned business events had to be organized online. “We did not have any previous experience in organizing webinars and also did not know how our members would welcome the online solutions. Despite the fact that the national lockdown made us put our activities in the virtual space overnight, thanks to our proactive members who were also ready to provide content in a new way, we could continue to keep things going during 2020 and 2021. The topics varied from social selling through emotional intelligence to electric driving, just to name a few. When it was possible, we organized opportunities for personal gatherings in the open air, either to gain practice together on the golf course or discuss the HR challenges of home office and the safe return to the workplace.”

Support for children with special needs Besides the business activities, Dutcham also put emphasis on the importance of charity. The Netherlands-Hungarian Chamber of Commerce in Budapest has been supporting the St. Miklós Primary School, EGYMI (Unified Institute for Special Pedagogical Methodology) College and Children's Home in Budapest for more than 15 years now. The institution educates children with special educational needs (learning disabilities and integrated trainable mentally handicapped and autistic) in school grades 1-8, while children above this age attend 3rd party institutions for secondary studies. Dutcham – in a joint effort with its members – supported the school with protection masks, gloves, hand & surface sanitizers moreover computers to support the digital schooling of the kids in this challenging period.

Cooperation partners The Dutcham Chairman stresses that the chamber’s greatest supporter has been the Royal Netherlands Embassy, “we have

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TB-PHOTO.HU, THE NETHERLANDS-HUNGARIAN CHAMBER OF COMMERCE IN BUDAPEST

Established in 2002, the Netherlands-Hungarian Chamber of Commerce in Budapest (Dutcham) aims to facilitate the exchange of professional expertise and provide networking possibilities for Dutch Companies operating in Hungary and also for those who wish to build a valuable business network within the Dutch business community.

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established a great partnership with the team throughout the years. We proactively promote their activities let it be business matchmaking or a sustainability conference and we also team up for joint events.” Dutcham has most recently organized two events with the Embassy in partnership with the Belgian Embassy in Hungary and BELGABIZ: one on the investment and economic effects of the COVID-19 pandemic and a second one on Green Financing and the funds available in the form of grants and loans in the next European budgetary period between 2021-27. “We also have an active contact with the Embassy of Hungary in the Hague who are ready to support Hungarian companies regarding various business issues in The Netherlands. Since the chamber’s operation is focused on Hungary, this partnership is highly valued and appreciated. The joint activities and cross-promotion of eachothers programs are tangible benefits of the great working relationship with several bilateral chambers of commerce that we have built over the years. As of 2021, we also partnered up with the Executives’ Association to expand our business network in a new direction,” he adds.

Post-pandemic plans Regarding plans for this year, Lóránt Kibédi Varga points out that after the lock down and home office period, they are very much looking forward to the in-person events. “Hopefully, we can organize networking events in the summer months and pick up business topics during the autumn season. There is always something interesting to discuss in digital business transformation, legislative changes or people management. With numerous companies from different sectors, we have a great amount of know-how to build on, exchange knowledge and best practices in the given subject.” Naturally, Dutcham’s aim is to continuously expand its network so, he concludes by calling out to the readers of Diplomacy&Trade: “if you happen to know someone whom you think could benefit from joining Dutcham, please, let us know!”.

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DAF SETS NEW STANDARDS DAF IS THE MARKET LEADER IN HUNGARY FOR THE 12TH YEAR IN A ROW

Plans for 2021 "In the light of the many uncertainties surrounding the coronavirus epidemic, it is difficult to set concrete plans for this year, but I can say that we expect the market to grow by around 15-20% compared to last year. In addition to new vehicle registrations, we expect to see a pick-up in sales of used vehicles and spare parts. The ‘Ultimate Edition’ special edition campaign, which was launched last year, continues in 2021. This represents a new sales concept by offering customers a combination of pre-packaged equipment and service packages, since DAF sees this as the future. In addition, our dealer network will be further expanded. Von-Truck Ltd. is expected to open a new DAF service center in Törökbálint, next to the M1 motorway just outside Budapest, strengthening our presence on the west side of Budapest,” Péter Szentpáli-Gavallér highlights.

More efficient trucks on the road

Even the turbulence of last year could not break the success streak of the Dutch truck manufacturing company DAF in Hungary, which closed the year as the leader in the heavy truck market for the 12th consecutive time, with an increased share. The management of DAF Hungary Ltd. expects a significant market strengthening this year, which should provide a good basis for further growth.

"We started last year with a lot of momentum and encouraging market trends," the Managing Director of DAF Hungary Ltd. and Hungarotruck Ltd. Péter Szentpáli-Gavallér points out. "Then, in March, the situation caused by the coronavirus epidemic overrode everything, with sales of both new and used vehicles slowing down. Our dealerships, however, kept operating with the necessary safety measures in place to properly serve our customers, who we kept

Opening up and developing eastwards Hungarotruck Ltd. immediately started to restructure and ramp up the truck service station in Nyíregyháza, which it took over at the end of 2019. This has gone so well that they now have fourteen mechanics instead of the original five and two shifts instead of the previous one. It has a substantial stock of used vehicles and its parts warehouse has made the supply of parts to the Eastern Hungarian region even more efficient. The new base in Nyíregyháza provides an excellent service not only to that region, but also to Romanian and Ukrainian customers thanks to strong transit traffic. To facilitate this, Hungarotruck also appointed new and used vehicle sales staff with Russian and Romanian language skills in this area. This is one of the reasons why the company's staff grew in number by 20% last year, despite the virus situation.

NEW VEHICLES PRESENTED

DAF sets a new standard with an entirely new line up of trucks. The new XF, XG and XG+ offer the highest quality, 10% improved fuel efficiency, a full suite of passive and active safety features and the next level of luxury in truck design. The New Generation DAF begins production in October. DAF is the first manufacturer to create a truck line up that takes advantage of the new European masses and dimensions regulations. Class-leading quality, efficiency, safety and driver comfort come together in the game-changing New Generation DAF. The new trucks feature an industry-leading aerodynamics and safety. DAF’s XG and XG+ create a new premium market segment and offer 330 mm of extra cab length at the rear, to provide unmatched space and comfort for the driver. With the New Generation XF, XG and XG+, a new dimension of driver comfort is introduced. Driving position, interior space, sleeping comfort, fit and finish – everything is top class. The new generation XF, XG and XG+ state-of-the-art MX-11 and MX-13 diesel engines provide excellent fuel economy and ultra-low CO2 output. The DAF line up has been designed for the latest bio and renewable e-fuels to further decarbonize road transport and the trucks are a ready platform for future zero emissions powertrains. J U N E

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Recent innovations and changes

in touch with by phone and online. Then, in the summer, the market began to recover and, with the usual low season absent, we ended these months stronger than before. Then, in the autumn and winter, our order book grew even more. As a 2020 novelty, we introduced the FAW rear tridem axle arrangement, which provides excellent maneuverability with high load capacity and favorable load distribution. And with our special ‘Unity Edition’, we paid tribute to the importance of unity in the epidemic. An important change in our sales activities was the appointment of a specialist in the field of body-on-frame vehicles. We have also added a lady to our sales team who will focus on the LF type," Péter Szentpáli-Gavallér adds.

He adds that when it comes to long- distance transport, electric power is not yet an option due to the limited range, the heavy weight and the charging times. For this purpose, the modern, efficient diesel engine continues to be the most appropriate choice. But if a truck has to drive long distances and also load and unload in the ‘zero emissions’ areas of cities, a combination of diesel power and an electric motor comes into play: hybrids. These vehicles offer maximum flexibility. DAF and its parent company PACCAR are developing numerous alternatives to move from clean to sustainable, including electric, hybrid and, for the longer term, hydrogen. At the same time, the combustion engine will also become even cleaner and more sustainable in the future as new generations of renewable fuels become accessible.

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Naturally, the Hungarian commercial vehicle market was also affected in 2020 by the coronavirus epidemic that hit the world in the spring. Registrations of new trucks of over 7.5 tons were down 38% on 2019, and the heavy goods vehicle category of over 16 tons saw a similar decline, with 2,951 new registrations instead of 4,759. DAF has been number one in the heavy truck category for twelve years now, with 822 new deliveries and a market share of 27.9% in 2020. This means it has increased its market share by more than four percentage points compared to 2019.

Dutch firms are known for their sustainable operation and it is very true for DAF as well. In the past years, significant progress has been made with regard to the impact of their trucks on the environment. Currently, DAF trucks are over 20% more efficient than the trucks the company made 20 years ago and emit 20% less CO2. This significant CO2 reduction has been achieved in parallel with huge NOx and PM reductions of over 95% since the introduction of emission standards. “Global CO2 emissions and local air quality - these are social issues that concern all of us. Which means that they also concern DAF. That is why we are researching a number of new technological solutions and continuing to developing existing technologies on the road to even cleaner and more sustainable road transport. One thing is certain: Every type of transport requires its own approach,” Executive Director of DAF Product Development, Ron Borsboom points out.

Hassle free fleet management service with LeasePlan Whether you have thousands of vehicles in your fleet or just a few, you need a partner with the right experience, services and tools to help you meet your business goals; reducing your environmental footprint, keeping your employees happy and safe on the road and controlling your costs. LeasePlan is at your service – discover the advantages of our hassle free service and built on our 50+ years of experience in fleet management.

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dutch focus plan and you can use your car differently. One of the positive side effects of COVID-19 is that more and more companies are putting sustainability into the focus. So, now, every week, we have a client approaching us how to transform their fleet into a green fleet, and most of them are starting immediately with electric vehicles. The difficulties are the charging stations. Home charging is also a challenge, and even if you manage, how can you settle that bill with your company, that's not regulated either. So, there are still open questions but we need to start somewhere, so, I'm always telling companies that they need to do it step by step. It is a big change for the company and for the car users as well,” she adds. She has been providing only green plated (that is environmentally friendly) new cars for her colleagues since 2017. “First of all, it is being a kind of role model, show a good example that we are committed and we are not just talking about it but doing it. Certainly, we want to gain experience, how it feels, how to operate, how you maintain, how you feel about these cars generally.”

FLEXIBLE SOLUTIONS FOR LEASE CLIENTS LEASEPLAN TACKLES THE CHALLENGES OF THE PANDEMIC AND OF CHANGING ENVIRONMENTAL REGULATIONS

As one of Hungary's leading fleet management companies, LeasePlan Hungária's leasing activities cover the entire lifecycle of a car, from purchase, financing and operation to full service, taking the burden of car management off its customers. The company has recently organized a webinar with an overview of the automotive industry. The CEO of LeasePlan Hungária Plc., Tímea Pesti highlights the main issues for Diplomacy&Trade.

As for the conclusions LeasePlan can draw from these developments for the near future, Tímea Pesti stresses that they keep the clients informed and try to manage expectations, “which is not easy because in many cases, the branded staff don't know when they can deliver. What we can do is supporting them with information on how to manage the fleet, how to manage these longer periods. We also have a special

The number one issue in this regard is to help companies transfer their fleets into a green fleet, which can be full electric, plug-in hybrids or a mix of full electric and traditional engines. “That's really difficult change management because how you drive, how you manage your car is very different from what you were used to. For instance, if you are running out of petrol, normally, you can fill the tank up in five minutes but if you have an electric vehicle, that's a very different story: you need to know where a charging station is located, you need to give thought to your travel

The need to go back to normal As regards LeasePlan Hungária’s plans and expectations for the years to come, she says she is always quite an optimistic and positive person. “We do our best in maneuvering through this difficult period and helping our clients to survive together as well as the suppliers to survive together. I think the coming year is still going to be difficult. First of all, we don't know what will happen in the fall, so if another Covid-19 wave is coming, we can see that many of our clients or partners or their suppliers will be in trouble, many companies are in danger of not surviving another period of lockdown. That is, of course, a big uncertainty. Also, regarding the automotive supply problems, I think the total recovery is expected around spring next year. So, we expect some improvement in the fall. Some manufacturers will get back to normal or close to normal sooner, but if we talk about the entire market, it is probably next spring. Regarding our work, myself and our management believe that the new normal is back to normal,” Tímea Pesti concludes.

Committed to sustainability Another topic of discussion at this webinar was e-mobility and Tímea Pesti notes that LeasePlan is really committed in all sustainability topics. “Since we are managing almost two million cars worldwide, including 17,600 vehicles in Hungary, that's quite a significant contribution to CO2 emission, so, we need to do different actions to offset this.” J U N E

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DÁVID HARANGOZÓ, LEASEPLAN

Flexible solution offered

fleet, which is for shorter demand between one month and 24 months, so we can bridge the gaps with this ‘FlexiPlan’ fleet. It's a flexible solution that works differently than the longterm contracts. That fleet is of over 600 cars now, which is really a big number. We started also the benchmarking activities because aside from makes and models that are running out, the CO2 emission quotas also cause problems. The market completely changed: beforehand, you wanted a car and you got it. Now, it's rather the supply side that defines how many cars, which engine they can or want to supply because they need to meet the CO2 emission quota. And for that, they need to make an optimized mixture of their product. If one engine type quota is already fulfilled, then, they are not producing any more. So, we are helping the companies to do kind of benchmarks, what the available engines and types are and how to optimize their fleet in terms of cost as well, because the cost structure has been changed too. Interest rates are going up as well. So, almost all the elements are in motion.”

Last year, LeasePlan supported the social care work – in the times of increased health risks – of local authorities with cars, fuel contributions and volunteers. The CEO says they really find that there is a need for help. “We lived through a tough situation in the pandemic in Hungary. We have cars coming back at the end of the leasing cycle, and we need to sell them. So, we took a couple of cars out of this stock, and gave it to the municipalities or hospitals. We gave them to doctors and testers who did not have enough cars to go to people’s homes and do PCR tests. Other cars helped deliver food to elderly people who couldn't get out from their homes during the lockdown. We also supporting a children's hospital. For two months, every day, one of our colleagues picks up the remaining rolls and bread at certain shops of a bakery chain after closing and delivers it to the hospital, thereby also helping hospital staff who hardly have time to go shopping during the day as well as the children to have some nice bakery stuff. So, if we can help and can give back to society, we do.”

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“This year is much more difficult than the last year. The side effects of the COVID-19 pandemic impacted the car manufacturers and is now slowing down the entire market. The other reason of the slowness is that so many companies are still struggling to regain the normal speed, efficiency, and results. Thus, they are hesitant to sign up for longer commitments. Other companies are in restructuring, rebuilding their strategies, which again delays all the decisions. Companies that are continuing their activities as before have to face different issues like price increases. There are basic models with a price increase of over 20% already. Several clients could not follow this increase, which means they cannot get the same car for the same or similar leasing fee. For us, the major difficulty is – because luckily, we have quite a large number of orders – the delivery time. So, if I'm placing an order today, next March and April is the promised delivery date, which is quite long and you have to be very patient,” she explains.

Helping in the pandemic

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RABEN GROUP: BUILDING POSITIVE RELATIONS THE DUTCH LOGISTICS GROUP OFFERS COST-EFFECTIVE AND SUSTAINABLE SOLUTIONS

The Dutch logistics operator group Raben, now operating in 13 countries, celebrates its 90th anniversary this year. The Hungarian subsidiary, Raben Trans European Hungary Ltd. was established 11 years ago. Its Head of Sales & Marketing, Zoltán Üveges tells Diplomacy&Trade about the Group’s diverse activities.

As he explains, Raben Group offers comprehensive TSL (transport, shipping and logistics) services: contract logistics, road transport (domestic, international and to the East), Fresh Logistics, FTL (full truck load) and intermodal, sea and air transport for customers operating in various branches. “Working with them on the road every day, and we not only mean delivering the goods from point A to point B, but rather reaching long-term goals, building partnerships and positive relations.” He adds that Raben puts great emphasis on groupage transport, striving to become number one player in every market where it is present. In this model, several clients share the cargo capacity of a single vehicle, making it one of the most costeffective and most sustainable solutions.

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RABEN, DÁVID HARANGOZÓ

Expanding operations and offering new services Raben appeared in the East Central European region (in Poland) 30 years ago and its Hungarian subsidiary, Raben Trans European Hungary (RTEH) Ltd. was established 11 years ago through the acquisition and integration of two major logistics service providers. Therefore, the Group entered the Hungarian market with the opportunity to build upon a stable infrastructure and professional base of its ‘predecessors’, Zoltán Üveges says. Headquartered in Dunaharaszti, south of Budapest, RTEH has three further depots in the countryside (Debrecen, Győr, Pécs), providing w w w . d t e u r o p e . c o m

tens of thousands of square meters of warehouse space, including extensive cross-dock areas. The Head of Sales & Marketing is glad to report that 2020 was an outstanding year, providing the best figures so far: largest turnover, new warehouse projects underway and new business solutions in the pipeline. This year, RTEH is launching operations in its two new warehouses in Dunaharaszti and Pécs. The former one offers approximately 30,000 sqm of temperature-controlled area (divided into three zones), while the facility in Pécs enables the company to better serve the needs of one of its most important local clients. 2021 also brings a number of new services. One of them (business-to-customer, B2C) is developed especially for the players of the e-commerce sector, providing extra features, like dedicated handling staff, evening delivery or MyDelivery option, which enables consignees not only to track their shipment, but also to modify the date of delivery in a given time frame. “Setting up decentralized routes in international groupage transportation is an important element of our strategy to further strengthen our market position and improve our competitiveness. The main idea of this solution is to find additional connections between regional depots, apart from central hubs. This enables us to deliver goods on shorter routes, with fewer operations (less loading and unloading). This option is primarily available in the East Central European countries (from the Baltic states through Poland, the Czech

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Republic, Slovakia and Hungary to Romania and Bulgaria),” Zoltán Üveges points out. Of course, expanding operations and the introduction of new services require further recruitment: the headcount of RTEH’s employees is set to reach 410 this year. Hungary is a favorite site for logistics company because of its geographical location, ensuring a gateway position. The country’s excellent transport connections make it an optimal choice for the players of the logistics sector. Since Raben Group has businesses in several surrounding countries, Hungary’s role becomes even more important, he adds.

New platforms for better service

RTEH is working on further measures (e.g. the use of POS terminals) to make cashless and contactless payments possible. The pandemic also accelerated the pace of digitization: there are more personal IT devices used, restructured work organization needing new IT solutions, etc.

Saving resources for the next generations It may come as no surprise, Raben being a Dutch company, that sustainability is a foremost issue and this is especially important in the logistics business that – by its nature – puts a burden on the environment. As the Head of Sales & Marketing puts it, “we are aware that as a transport and logistics company we have an impact on the environment – and we want this impact to be positive. Ecology is of great importance for us. By conserving natural resources, measuring, reporting and reducing greenhouse gas emissions, we act for the common good – and for the future. We want next generations to have access to the same resources we are using now. Therefore, out of concern for the environment, we gradually eliminate paper from our processes, every year we invest in more efficient and environmentally friendly solutions in transport and warehouses and we plant thousands of trees neutralizing tons of CO2. We also signed the first green energy supply contracts in 2021 in some of our markets.” In connection with the development and increasing the dynamics of Raben Group’s involvement in environmental issues, Raben has decided that all activities and solutions that they implement to support the natural environment should be carried out under the slogan ‘Eco2way’. Raben Group invests heavily in modern fleet that is more environmentally friendly. They are testing gas-powered vehicles both on short routes and in long-distance transport. “We focus on using the most effective vehicle combinations, such as double deck trailers or swap body BDF containers, all of which are designed to optimize shipments, save time and fuel, thus reducing costs per pallet as well as the level of emissions. Our CityLiner type trailers, on the other hand, can freely enter urban areas with restricted traffic, also making it possible to reduce emissions per pallet. In the meantime, we make sure that our own fleet complies with the highest environmental standards, Zoltán Üveges explains. Ecological buildings are another key element of efforts for sustainability at Raben Group, which has over 1.2 million sqm of warehouse capacity all over Europe, opening new facilities every year. As a rule, all of them are equipped better than equivalent buildings built by the developer.

Digitalization is a buzzword for many businesses and Raben is no exception. Zoltán Üveges highlights that Raben Group developed several solutions (like myRaben and PCD) that make it easier and safer to handle and track shipments, as well as to create automated data interchange with customers (EDI connection), eliminating a large amount of manual order processing. MyRaben is a client platform designed to provide fast and easy access to information, complex management of supply chain, personalized configuration of the system, etc. PCD (Picture Confirming Delivery) is a solution that makes the confirmation of delivery possible without contact, almost without the participation of the consignee. Delivery is confirmed with on-site photographs, including time stamps and data on geographical location, he explains.

dutch focus CONTRIBUTING TO A BETTER PLANET THROUGH DESIGN TRUE ENERGY NEUTRAL HOMES OFFERED BY DUTCH BUILDERS IN HUNGARY

Introducing custom-built, healthy homes featuring faster, sustainable construction, keeping in mind not just the environment but also efficiency and affordability – this is what Footprint Homes offers to its clients as explained to Diplomacy&Trade by the Dutch managing directors of the Hungarian firm, Rudolf Nanne and Johannes De Block.

The term ‘custom-built’ suggests that design and construction are done in cooperation with the customer. Regarding the phases in this process

No gas connection Sustainability is a catch word nowadays but at Footprint Homes, they mean it as one would expect from Dutch people. As to how they make sure they can maximize the opportunities to make a house sustainable, Johannes De Block stresses that “the basis of our concept is that none of our homes has a gas connection. Our homes are preferably heated and cooled by means of geothermal heat pump system, which

may not be the most cost-effective way in all cases, but in any case, it is, in fact, the ideal technical solution and also the most sustainable one. It is the only solution where you can store in summertime the overproduction of your solar panels in the ground until winter. In the summer, it's the other way around, where you use the stored cold from the winter to cool your house. Other solutions we use, which we believe are essential, are site optimization of the building plot, solar shading, insulation and CO2-controlled ventilation. The latter, in itself, saves half of the heat loss of a traditional (continuous) ventilation system such as balanced ventilation. What makes our building team unique is that we have this knowledge of sustainable construction in-house.”

conditioning system which is an energy guzzler in itself. ‘Passive’ here basically means that the same result can be achieved, but without a complex and expensive system. This way of thinking is what makes our homes affordable.”

Ongoing projects At Footprint Homes, they are currently working on three projects totaling ten homes. Rudolf Nanne says his own family home has been designed according to their zero energy home principles and construction will start later this month. “During this process, we formed our construction team of like-minded experts. In the exceptionally beautiful area of Pilisvörösvár, 30 minutes by car or train from the center of Budapest, we recently acquired a plot of 828 square meters. Our collaborating architect from Budapest is currently designing two semi-detached houses on this site. Due to the advantage of building with wooden CLT panels, we expect to be able to start construction this year. This is a great advantage for interested buyers in particular, because they will be able to view and feel this property before we can finish it to their taste in a short time. We are also working with our collaborating architects from Amsterdam on a catalog of our pre-designed and modular homes, as explained earlier. We will first use the catalog for our project, which is located a short distance inland from Lake Balaton in Balatonföldvár. We own a large plot there and we expect to be able to build a total of seven houses for our customers. As more potential home buyers become familiar with our Footprint Homes concept, we expect that more and more building plots in Hungary will be built with our houses,” he concludes.

‘Passive’ is the keyword

RUDOLF NANNE

JOHANNE S D E B LO C K

Footprint Homes offers sustainable buildings that are not only high-quality and efficient but also affordable. For an outsider, it raises several questions like ‘How do you find the balance?’; ‘How important is the location/ environment for the projects?’ or ‘What conditions does the site for a house of this sort must comply with?’ As Johannes De Block explains, “high quality in a home usually stands for a whole range of advanced systems. On the other hand, we like to keep our homes simple but clever in their design. The key lies in our method in which we believe that any location can have a home optimized for that location. For this, we use the Passive House Planning Package (PHPP) method, where ‘passive’ is the keyword. Take as an example the geothermal energy as explained earlier. In combination with excellent insulation and clever design, you can save yourself an air J U N E

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FOOTPRINT

Modular design

and how much the client is involved in it, Rudolf adds that in order to speed up the design process, they propose to their customers various predesigned floor plans. “Our designs are also modular. This way, a young couple, for instance, has the option to decide to build a single-story house first. The moment children enter their lives, they have the opportunity to expand their home by, say, building a second floor. Material use and finishes are presented by our collaborating architectdesigner as different options and built according to our customer's wishes. Our idea is to build as flexibly and efficiently as possible, but still build a home to the exact taste of the customer. Think of it as a way you would buy a new car, where you have countless options and in fact no car is the same.”

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The roots of the idea go back to 2018, when Rudolf Nanne and his wife – who have been living in Budapest since 2015 – decided to build their own family home here. “Naturally, I consulted Johannes, now my business partner, who has a multifaceted background in construction. It was also on his advice and experience that we decided to build a true energy neutral home. However, the process of turning our house plan into a real construction site took much longer than expected. When Cross Laminated Timber (CLT) came into the spotlight in the Netherlands, we realized that this way of building can greatly improve the construction process in terms of speed and sustainability. We imagined that there were many other families with the same experiences after they decided to build their own house. Such families would now benefit immensely from faster and futureproof construction. This was when Johannes and I saw the great potential and decided to start Footprint,” Rudolf Nanne highlights.

dutch focus PLATFORM FOR DEDICATED TRANSPORT CHAIN CARGO OPTIMIZES SHIPMENTS TO SAVE COSTS, ENABLE VISIBILITY AND MAKE LOGISTICS MORE SUSTAINABLE

smart people and good universities. So, for attracting talent, we thought that could be a perfect place to open an office, because we need to search for carriers who want to work with us. Since we do a lot of cross border shipments in Europe, we see that in Eastern Europe and South-Eastern Europe, most of the trucking companies go cross border and do long distance shipments. In Budapest, our subsidiary, Chain Cargo Hungária Ltd., – with a staff of five employees who are creative and collaborative people – is working on building relationships with trucking companies trying to help them to make their life easier with tools which we offer for free. With these tools, they can also manage their own business better. The team is also actively looking for new carrier companies so that we have enough carriers for the loads we get from shippers. So, what they do is relationship management with the carriers.” Giovanni Gubbels finds it important to note that they give their Hungarian employees much freedom in their work and want to give them a feeling that they can be entrepreneurial.

Developing the system

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Delivering goods all over the continent is a constantly growing business that needs to be well organized to put less burden on the environment and make the process easier, more economical, and more visible for shippers and clients alike. That is where Chain Cargo comes into the picture. As Giovanni Gubbels, Head of Business & Operations at Chain Cargo explains to Diplomacy&Trade, his firm is helping companies ship their goods when it is direct or dedicated transportation, so, when it goes directly from A to B. “We assist clients who have particular urgency, need to ship goods of high value or high volume. We have a lot of digital organizational power and the ability to give our customers more control about the status of their goods.” Chain Cargo has these operations across Europe. “The reason we do this is that we saw that there is a lot of inefficiency in matching shippers and carriers because of the lack of visibility. Of course, there are a lot of trucking companies and w w w . d t e u r o p e . c o m

it is really a fragmented market. In our belief, digitalization is the key to help us to get more visibility, to make better matches between cargo and carrier and try to be more efficient, which will eventually mean less emissions and less pressure on the road. So, that is where we are focusing,” he adds.

Building relationships in Budapest As regards Chain Cargo’s Hungarian subsidiary, the Head of Business & Operations points out that they did research and officially opened their office in the Hungarian capital in September last year. Why Hungary and why Budapest? “We think Budapest is a really beautiful international city with a lot of cultures, with a lot of languages,

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The latest news about Chain Cargo says they realized as much revenue in the first third of 2021 that in the entire year of 2020. As to what he attributes this development, the Head of Business & Operations highlights that they made further developments to their system, which made it better and easier to scale. “We also, of course, added full truck loads service to our platform. Previously, we only handled courier shipments with smaller vehicles. Also, we generated trust with current and new customers. For example, Brexit had, and still has, a big impact in the market. Many carrier companies were active on the east–west European lanes. Since shipping from and to UK became harder, carrier companies seek their opportunities in other areas of Europe. Thus, there is less instant availability of trucks and more loads than carriers. Countries are slowly opening, shops are slowly opening, and you see everything going back to normal again, however the instant visible capacity is still too little. With our system, we have quite a good feeling where carriers are. Through this digitalization we can arrange a lot of shipments. So, that’s what really contributes to the quick growth we have.”

Processes go digital and drive businesses Digitalization is a buzzword for many businesses. Explaining how much of a necessity it is at Chain Cargo and what it means in practice for their staff and their customers, Giovanni Gubbels stresses that “it is indeed a buzz word – but for us, it is within our DNA. We really are a logistics tech company, we have a lot of logistics knowledge, but we are also really in depth with engineering, we use software development and IT solutions to really come up with efficient supply chains. We believe we can move from legacy to state-of-the-art software, which needs to be scalable. Every day, we are looking into manual processes, going about the needs of carriers and shippers, look at

the current situation and try to optimize and digitalize as much as possible. So, what does it mean for our staff, who are doing operational things? Their job is to make their own lives as easy as possible and sit with engineers to come up with algorithms with processes, to, at the end, only be busy with exception management, so all the regular manual flow should be out.” From the shipper perspective, the customers, it means that they save a lot of time in the hidden processes like ‘where is my order?’ or ‘where is the truck staying?’, ‘has it already arrived?’, ‘is it already loading?’. “All the communication, which went via emails, via phone – that's now real time visible within our platform. We can also share that information with the customers’ and its customer, so that there is way less communication and time-consuming questions, compared to when they didn't have visibility. That focus is unique to help our customers thrive their business instead. Also, the booking process gets a lot easier. That's where digitalization can do a lot on both sides.”

Unnecessary kilometers Another term that comes to mind when talking to a Dutch company is sustainability. This is especially important in logistics, which, by nature, puts a burden on the environment, although it is not Chain Cargo’s own vehicles that hit the road. “What we do is reduce unnecessary kilometers. In the Netherlands only, there are something like six and a half thousand courier companies, of which five and a half thousand are selfemployed. That is a single driver, single person firms who have local customers but when they deliver a shipment from, for example, Amsterdam to Düsseldorf, they don't have a customer in Düsseldorf, which means that they ride back empty. What we try to do in general, is help those carriers with their back loads, to fill them up with goods. On the other side, we believe that with our enhanced carrier visibility, we can also reduce the distance between the delivery, and the new pick-up. Because we are sure that, the better the density, the lower the number of unnecessary and empty kilometers will be at the end. So, that is what we focus on with our system. Because only then, we can move more goods with less capacity, which means less unnecessary emissions,” Giovanni Gubbels explains.

Revenue multiplication expected As Chain Cargo’s turnover in the first four months of this year suggests, life is getting back to normal sooner than later. “If we look at last year, that was Chain Cargo’s first full operational year. We did a turnover in 2020 of around EUR one million. For 2021, we forecast – and we are on track to accomplish – EUR six million in turnover. In the coming years, we want to double or triple that. For our sustainability motive, it reflects that if we can make those figures, in three years’ time, we will have a really big impact on unnecessary kilometers. Where we think we can at least save 25% unnecessary kilometers driven right now,” he concludes.

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business

COMPETITIVENESS BUILT ON TRADITIONS SIEMENS PLC HELPS HUNGARIAN FACTORIES ENTER THE ERA OF INDUSTRY 4.0

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DÁNIEL VÉGEL, DEPOSITPHOTOS.COM, ZOLTÁN HERCEGFALVI

“In the last few years, the Hungarian economy and the Hungarian market have been very active with new investments, new users, even greenfield projects, in which we were able to participate, and, of course, there were many brownfield projects, where we also implemented the solutions of the fourth industrial revolution. Many of this is directly with the end users or through their partners. We get to the end users through, for example, our system integrators, machine manufacturers or electrical contractor partners,” explains Tamás Jeránek as he continues to be responsible for the Digital Industries area, which is one of the flagships at Siemens Plc. in Hungary.

Project partners He adds that it is mainly the automotive industry that has recently brought new investments to the Hungarian economy with the construction or expansion of quite a few car factories. “These not only need to be built, but also to be operated afterwards, and Siemens has been – and is – playing a very important role in this, as we are enabling factories to operate more w w w . d t e u r o p e . c o m

efficiently.” According to the CEO, they have largescale and growing number of references from almost all industries, such as manufacturing, rubber, cement, process and food&beverage sectors, as customers want to connect their virtual and real world through solutions and services Siemens can provide. Siemens Plc. is also involved in global R&D processes where the work is aimed at further digitalization of the automotive industry.

which is very well known and is very much a showcase company for the players in industry and the economy, he adds. “We are much stronger now, we leave a much bigger mark on everyday life. Another example of this is our Smart Infrastructure area, which takes energy infrastructure where it has not been before, upgrades existing infrastructure and makes buildings more energy efficient and ‘smart’ with building automation solutions. Globally, Siemens has become one of the world's biggest

Competitiveness built on traditions

A DECADE WITH SIEMENS

“Siemens has been in Hungary for more than 135 years, which is an incredibly long time and we are very proud of that. We want to build on that, continue to be competitive and help our customers to digitalize, modernize,” the CEO says. The Hungarian population may have known Siemens from telecommunications, mobile devices, household appliances but the company has withdrawn from those areas. So, from the point of view of the general public, Siemens has become a business-to-business firm, a high-tech company has emerged from an industrial conglomerate,

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software companies in recent years, and this area is also represented in Hungary: for example, evosoft – part of the Siemens Group –, is Hungary's largest software house, contributing to industry 4.0 developments as well. As Tamás Jeránek points out, “at Siemens, we have the same goal in as in any other country: to serve our customers with the utmost care. We are not looking to sell a product or a service, but solutions and systems. We have a long tradition of doing this.”

Education and sustainability Thanks to its uniquely broad portfolio, Siemens can assist its clients to become companies of the industry 4.0 era, from designing a product with the concept of digital twins and production support to maintenance or data analysis, to name a few. Siemens is also contributing to the take-up of Industry 4.0 from the education perspective. “Whether it's through training or workshops, we transfer the knowledge through live demonstrations, seeing, touching, connecting and programming the tools together. It is not uncommon that maintenance staff who have been there for several decades are now being given the task of gaining a better understanding of the latest controls or technologies needed to move or automatize a production line, for example. Our SITRAIN training center has been training professionals in the latest Siemens technologies for over 15 years. We train close to a thousand people a year at our center, and provide on-demand training on-site,” the CEO&President explains. The other big initiative is participation in public education. Higher education has a very long tradition of cooperation between Siemens and various universities, be it the Budapest University of Technology or universities in the countryside. “We often have joint research development projects with large laboratory facilities, providing equipment support or simply interacting with future engineers about an internship cooperation where university students work with us, supplementing their studies before graduation. Then, if all goes well, they might continue their careers with us,” he adds. Perhaps one of the most important flagships of sustainability today is energy efficiency. With its tools, Siemens can collect usable data from the equipment installed on production lines providing smarter, more transparent information to the client. This can lead to informed decisions about the next investment or to use less energy or to produce more products with the same investment of time and energy. “If those machines are equipped with the right sensors – and the good news is that you can do this retroactively on any older machine – you can collect, analyze that data through Siemens systems, you can evaluate their operation and optimize the existing manufacturing processes as well.”

Tamás Jeránek graduated as an engineer and he says he still makes good use of that knowledge as he is able to voice a professional opinion in various issues that come up at business meetings at Siemens. During his career, Jeránek worked in an engineering design office, then moved to another multinational company. After setting up an own company and operating it successfully, he missed the atmosphere that one is surrounded by at a multinational company in a responsible leading position. “That is when Siemens and myself found each other ten years ago. In fact, I have been responsible for industrial automation, drive technology in almost the same position since then and now this has been complemented by the management of Siemens Plc.,” he highlights.

witty leaks WITTY

IN THIS SERIES, DIPLOMATS SHARE PERSONAL ACCOUNTS OF THEIR EXPERIENCES ON “EXCURSIONS” into Hungarian culture, art, gastronomy & scenery.

LE A K S GET ON THE BIKE AND EXPLORE MORE OF HUNGARY! AMBASSADOR FAVORS USING ACTIVE TRANSPORTATION BY THE AMBASSADOR OF CANADA, CAROLINE CHARETTE

As an environmentally conscious citizen, active transportation is very important to me. It is a way to reduce our impact on the environment while maintaining an active lifestyle that integrates physical exercise in our daily activity. These modes of transportation also bring important economic and social benefits, from infrastructure investment to sustainable urban planning, to supporting public health.

Active transportation abroad Throughout my postings abroad, I’ve always tried to favor using active transportation. I began focusing on active transportation during my first posting over 20 years ago in Tokyo. Having a car was not practical, so I got a scooter which I used to go to all my meetings. I also discovered what a real public transportation network can bring to an urban area like Tokyo, where you’re never further than five minutes walk from a metro or bus stop. Later on, I was posted in India, where options were limited; active transportation in Delhi is a bit different and often involves rickshaws and tuk-tuks. There is now, however, a subway in Delhi which offers a great way to discover Old Delhi without having to go through traffic jams. On my next posting in Paris, I discovered electrical assisted bikes through a program supported by the municipality. E-bikes are a fantastic way to move quickly around a city without adding to the air pollution caused by cars, while giving you enough speed to fight with buses for a spot in the right lane!

North to South. It becomes the longest ice-skating surface in the world with its seven-kilometer length. You can skate from the University of Ottawa to the Parliament in just ten minutes. This is a lot faster than taking a car or public transportation, where the trip would take up to 30 minutes!

In Canada, we have a different approach to active transportation, reflecting an environment where distances can be significant, and concentration of population very low. As it can be difficult to cover an entire region with public transportation, people tend to combine modes of transportation to get to their workplaces. For example, they walk or drive to a central point from where there is a rapid transit system to downtown and finish the journey by walking to their offices. Modes of transportation also change based on the season. In Ottawa, where I live when I’m back home, the cycling paths around the city become ski trails during the winter. We also have the Rideau Canal, which is a waterway that crosses the city from

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Upon my arrival in Budapest, I was not sure that I could easily get around the city on my bike as I had heard that the hills of Buda can be challenging for a cyclist. I soon discovered, however, that the city of Budapest has a fantastic transportation network that is affordable, very efficient and free flowing. I enjoy the cycling path network throughout the city as I explore on my electric bike, which I recently changed to a new Hungarian model. My husband and I have had the chance to discover a fair bit of Hungary this way; we recently spent a few days in the wonderful region of lake Balaton. We have also made numerous weekend trips outside the city, including to Visegrád, to cycle along the Danube, and to Pest County to discover its hidden gems. I look forward to exploring more of Hungary by bike or other active transportation mode.

Skate to Parliament!

EMBASSY OF CANADA, BUDAPEST

Biking in Hungary

PALOZNAK JAZZ PICNIC

JULY 29-31, IN PALOZNAK AT BALATON

Mario Biondi, Al McKay's Earth, Wind and Fire Experience, Candy Dulfer, De Phazz and Magdi Rúzsa will be joined by a number of international and Hungarian jazz, funk and soul artists and groups at the 9th Paloznak Jazz Picnic. According to festival director Orsolya Valde, most of this year's performers have been to Jazzpiknik before, which is why they managed to put together such a strong line-up despite the still difficult travel conditions. The ‘Italian Barry White’, Mario Biondi will be the first international act on the first day, followed by Al McKay's Earth, Wind and Fire Experience, one of the world's most famous funky bands, playing with old and new members, The following day, one of the most popular artists on the Hungarian music scene, Magdi Rúzsa, will perform a special show, with the closing concert on Friday played by MF Robots. On the closing day, the German band De Phazz will play unique downtempo jazz, followed by the Dutch "saxophone queen" Candy Dulfer and finally the Dutch Kraak&Smaak Live Band. Every year, Jazzpiknik uses a part of its proceeds to support people in need, and this year the organizers plan to cooperate with the ‘Together for Autistic People Foundation’. At the Jazzpiknik, the festival organizers and MOL Zrt. are raising funds for the Auttalent 2021 talent education program.

TAMÁS PÉLI: BIRTH

JUNE 09-SEPTEMBER 26 BUDAPEST HISTORY MUSEUM

In the framework of the cooperation between the Budapest History Museum (BTM) and OFF-Biennale Budapest, an unprecedented work of Roma contemporary art, which has not been shown to the public until now, is on view in the Baroque Hall of the BTM Castle Museum. The aim of the exhibition is to make Tamás Péli's Birth (a panel painting on wood) visible to the public and to include the painting in the public ‘community space’ created through discussions and interpretations. The monumental work, which brings together the Roma creation myth, HungarianRoma history and the formation of Hungarian-Roma intellectuals, and represents a community of Roma and Hungarians, arrived at the BTM Castle Museum in April 2021. After a week of acclimatization, its panels were unpacked and partially restored by the museum's restorers. At the same time, the huge installation, designed by artist Tamás Kaszás on which the painting is mounted, was built. Tamás Péli’s enormous piece is a work of art of unparalleled significance in many respects. Painted on fiberboard, the panel painting of nearly 41 square meters was completed in 1983 by Tamás Péli with the contribution of his disciples – including István Szentandrássy. ‘Birth’ was made on the Szabolcs-Szatmár-Bereg County Council’s commission and it was installed on the wall of the refectory of the children’s home in the Andrássy mansion of Tiszadob, also known as the City of Children. When the mansion was reconstructed into a hotel in 2011, the panneau was removed and hauled in four pieces to the András Jósa Museum in Nyíregyháza. It was stored in the museum’s corridor, covered – safe, but unseen.

jazzpiknik.hu

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ALANIS MORISSETTE RETURNS TO BUDAPEST IN 2021!

NOVEMBER 03 BUDAPEST ARENA

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ÁKOS KEPPEL, LIVE NATION, PALOZNAKI JAZZPIKNIK, NIGHT OF ARTWORKS

In response to popular demand, seven-time GRAMMY® Awardwinning singer Alanis Morissette has announced new dates for her 2021 and 2022 world tour, celebrating the 25th anniversary of the release of her album Jagged Little Pill. The 35-stop US leg of the tour kicks off in Austin in August this year and will end at the legendary Hollywood Bowl in Los Angeles with a double bill in October. On this special concert tour, Alanis will perform all the songs from the ‘Jagged Little Pill album’, as well as a compilation of her biggest hits and songs from her latest album, ‘Such Pretty Forks in the Road’. The tour will continue in Europe in the fall with stops in Germany, Denmark, the Netherlands, Italy and Spain, as well as Hungary. To close the tour, Alanis Morissette will perform two consecutive nights at London's O2 Arena. The concerts in Australia, New Zealand and the Philippines are postponed until 2022. Alanis Morissette will perform in Hungary for the first time in 13 years on November 3, 2021 at the Budapest Arena. The concert will be presented in a small, theater-style auditorium design, with seating only. Opening act: Liz Phair. Since her debut in 1995, Alanis Morissette has become one of the most influential singer-songwriters in popular music. Her highly expressive music and performance style have brought her enormous fame and recognition. Her debut album, Jagged Little Pill, was followed by nine more diverse and successful albums. She has performed in and written music for numerous theatre, television and film productions.

NIGHT OF ARTWORKS

JUNE 17–19 VARIOUS VENUES IN BUDAPEST

Fifty venues in Budapest will host more than a hundred events - exhibitions, professional lectures, studio and workshop visits, thematic walks, workshops, talks and film screenings - for visitors to the 5th Night of Artworks between 17 and 19 June. Organizers say the aim of the event is to bring the world of artworks closer to the public. The festival will not only focus on traditional genres: in addition to paintings, sculptures, archaeological finds, photographs and ceramics, it will also evoke the object culture of the communist era, the mysteries of blue painting, the industrial history and craftsmanship of Unicum and the secrets of folk crafts. New venues will include the Gül Baba's tomb, while the BTM Aquincum Museum and Archaeological Park will offer a behind-the-scenes look at archaeological excavations, one of Europe's largest stone archaeological treasures and the everyday life of the Romans. Visitors to the Hungarian Circus Art Museum can see works by contemporary artists reflecting on circus art and enjoy an interactive guided tour about the 130 years of the Budapest Circus. The recently inaugurated National Museum Restoration and Storage Center is open to visitors interested in restoration and the masterpieces of Hungarian painting, and is currently working on works by Mihály Munkácsy, Béla Czóbel and Pál Merse Szinyei, among others. In the Kiskép Gallery, visitors can see contemporary Hungarian glass art, while in Memento Park the focus is on political propaganda and the object culture of socialism, to name just a few of the venues. mutargyakejszakaja.hu

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hospitality individual porcelain pieces in a homage to traditional Zsolnay Hungarian art. Throughout the property, a thoughtful color palette of teal, gold, and copper reflects the hues of iconic Budapest buildings and their signature roofscapes. The main lobby and reception offer a sense of serenity and escapism from the city with intricate design and detailing across the windows shielding the view of the city’s busy streets as guests check-in. In the lobby you will find a collection of historic photos, offering insight into Budapest’s history and the original palace, displayed on a wall around a specially commissioned portrait of The Duchess. In the center of the space, a bespoke elegant chandelier plays tribute to a fine piece of jewellery once handed down to The Duchess through many generations of the Habsburg family.

of the city. The unique design of the tower in which the room resides is inspired by the crown of Archduke Joseph Karl of Austria, offering 92 square meters of space and comes complete with a stunning marble bathroom. The one-of-a-kind Maria Klotid Royal Suite is imagined as the Duchess’s private apartment. It features a spacious master bedroom, bathroom, living room and separate study, decorated with a mix of modern and historical furniture. Donned with elegant chandeliers, handmade glass mosaics, and parquet floors, the space is a celebration of craftsmanship in the region. For those requiring extra space, two additional rooms can be connected to create a three-bedroom apartment.

Signature guestrooms and suites

A true epicurean destination A celebration of the local past and the hotel's bright future, Matild Palace introduces a new era of entertainment and gastronomy to the city with its offering of world-class dining venues. Spago by Wolfgang Puck Budapest will offer a contemporary design complete with a stunning lounge, and Matild Café & Cabaret - scheduled to open in September – will be the reimagination of one of the finest and most historic European Coffee houses, the Belvárosi Kávéház, which has been a much-loved institution of Budapest’s urban history, established in 1901. Hidden amongst Budapest’s famed roofscape, with a view towards the Elisabeth Bridge, Danube River, and Gellért Hill, The Duchess will be a secret liquor library. Its design is inspired by the Archduchess Maria Klotild, who in 1884 commissioned the Matild Palace to include a clandestine rooftop section as a rendezvous for the Decadence Movement. The chic bar is accessed through a hidden entrance of private elevators and transports guests to another world through its decadent story of glamour and gastronomy.

BUDAPEST UNVEILS CAPTIVATING INTERIORS BY MKV DESIGN

World-renowned interior designer Maria Vafiadis and her team at MKV Design have transformed the iconic imperial palace, offering a balance of historic charm and effortless contemporary design.

Merging tradition and modernity “Matild Palace represents the spirit of Budapest, as framed by the narrative of its storied history, culture, architecture and cuisine,” according to Candice D’Cruz, Vice President – Luxury Brands, Europe, Middle East & Africa, Marriott International. “The property’s thoughtfully crafted design has seen the merging of tradition and modernity across all aspects of the hotel, culinary offerings and service. Matild Palace is set to become a destination in the city once again and we look forward to welcoming guests to enjoy unparalleled luxury in this charming destination.” Completed in 1902, the palace was

a revolutionary building at the turn of the century and remains one of the most recognizable buildings in Budapest. The property is listed as a UNESCO world heritage site and is one of two buildings commissioned by Her Imperial and Royal Highness Maria Klotild of Saxe-Coburg and Gotha. Standing as a gateway to the famous Elisabeth Bridge, the ornate structure originally housed cafes, shops, and galleries along with residential apartments on the floors above.

Iconic building The hotel's truly unique design communicates a strong narrative taking guests on an enchanting journey through time, beginning at the palace doors. The historical entrance passage has been further enhanced with magnificent pendant lights made up of

handcrafted headboards, Hungarian style fishbone design parquet floors, embroidered cushions, and elegant crystal lamps. Lavish spa-style bathrooms inspired by the traditional thermal baths of Hungary feature exclusively designed Italian cast bathtubs and rain showers, clad in turquoise glass mosaic complete with gold accents. Rich white marble slabs cover the walls and floors around the vanity area which comprise double sinks, gold detailing and heated flooring offering a divine bathing experience.

Loft guestrooms and palatial suites Located at the rooftop of the property, the Loft Guestrooms provide endless views either across the city or the Danube River through large, sloping windows. The eclectic mix of both a contemporary modern design with colorful vintage furnishings and art embodies the eye of a creative and is a nod to The Duchess’s artisan friends who used to frequent the palace. Crowning the palace with its fifth-floor location, The Crown Tower Suite is split across three floors and is the first suite in Hungary to come with a 48-metre-high dedicated tower boasting 360-degree views J U N E

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Wellness and relaxation Swan Spa at Matild Palace features a Hungarian-influenced spa experience with traditional thermal therapy and Hammam rituals designed to awaken the senses. Inspired by the Danube River swan, the spa’s design offers a tranquil oasis with soft white walls, gold detailing and white marble floors. For those looking to keep active, there is a fully equipped state-of-the-art gym to enjoy.

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MATILD PALACE

Matild Palace, a Luxury Collection Hotel, Budapest, due to open in June, has undergone a stunning five-year transformation to bring the palace back to its former glory and reinvent the building to become a luxury hotel. Elevated through interiors designed by the award-winning MKV Design, led by studio founder Maria Katsarou Vafiadis, the property’s interior aesthetics celebrate the building’s rich heritage, rooted in the culture and high society of Budapest, while crafting a new, modern destination for locals and global explorers alike.

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MATILD PALACE, A LUXURY COLLECTION HOTEL

The hotel will offer an exceptional choice of 111 guestrooms and 19 suites, the majority of which provide stunning views across the entire city. The property has a choice of four guestroom categories, with each taking inspiration from The Duchess’ interests and exuberant lifestyle and early 20th century Budapest, allowing the design and interiors to remain authentic to the building’s history. Most guestrooms display soaring ceilings and feature unique detailing and craftsmanship with hints of Art Nouveau. Nods to traditional Hungarian culture can be seen throughout with delicately

wine

TEN YEARS OF THE EGRI CSILLAG A BLENDED WINE OF DRY LOCAL VARIETIES PROVES ITSELF WITH CONSUMERS

improve cohesion among Csillag wines,” winemaker Tibor Gál says. “We have to identify the most successful wines and find out what makes them successful. Is it the aromatics, the structure or the communications? Then, use these findings as guidelines for all the others,” he adds.

Eger as a wine region is characterized by a rich diversity of varieties and the tradition of blending goes back for centuries. There is no single white variety that could be considered dominant either in terms of acreage or production volume, nevertheless almost 45% of the area under vine is dedicated to white varieties. With this in mind it was clear that local winemakers should create a white counterpart to the iconic Egri Bikavér, a white blend marketed under a common brand name. A decade ago, the Eger wine region (NE Hungary) was looking for new ways to express its identity. Egri Bikavér (Bull’s Blood of Eger) has long been established as a leading brand among Hungarian reds but its white counterpart was missing. The first vintage of Egri Csillag (Star of Eger) was made in 2011 to the delight of wine lovers who until then considered Eger as a predominantly red wine region. Initially, ten wineries launched whites with the name Egri Csillag. Since then, the number of

Popular and widely available

participating wineries has steadily increased and today, there are more than 25 different Egri Csillags available.

A dry blend Egri csillag is a blend of at least four varieties, and at least half of the varieties must be indigenous to the Carpathian Basin. There are three categories: classicus, superior and grand superior, all of them dry. Classicus is a light, crispy wine with intense fruit and floral aromas. Wines in the superior category show more concentration and receive barrel ageing. With

grand superior wines, there is an exciting extra dimension: all the grapes come from a single vineyard. A decade has passed, customers have learnt to love the wines and today, Egri Csillag is one of the most successful regional brands. “The next challenge lying ahead is to refine the style and to

With an annual production of one million bottles, Egri Csillag is one of the market leaders today. Thanks to the volume and the three categories, a wide range of customers buy these wines. You can find them in supermarkets, but also in wine bars and top restaurants frequented by wine connoisseurs. Egri Csillag classicus is a perfect everyday wine, one that you can also enjoy in a party or at a festival, the superior and grand superior bottlings will give you a more profound experience either consumed on their own or as an accompaniment to selected dishes. Spring is has arrived and the new vintage of Egri Csillags is here to lighten up the days.

REDUCED ECOLOGICAL FOOTPRINT IN VILLÁNY HUNGARIAN PROJECT MIGHT SERVE AS AN INSPIRATION IN

TERMS OF SUSTAINABILITY AND DESIGN The Streit-Zagonyi Winery in Villány aims to bring joy to wine consumption through a constant focus on innovation, imagination and value creation. Their planned winery complex will embody this philosophy by being an active building that produces more energy than it consumes over its lifespan. A few years ago, plans for an extraordinary building were revealed to the public. This year, the shared vision of the winery’s owner György Streit and the architect István Kistelegdi will make the transition from blueprint to reality. According to the plans, the first phase of the construction will be completed by this fall.

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ATTILA BUSÁK, STREIT-ZAGONYI WINERY

An active building The construction of the active building, one of the very few examples in the world, will enable the winery to achieve responsible and sustainable farming. The mastermind behind the building complex of the Streit-Zagonyi Winery, István Kistelegdi was inspired by the ideas of sustainability, energy efficiency and the vision to create a building that produces more than what it consumes in the long run. When it came to selecting the site, the major consideration was to find a spot with the right climatic conditions, that is ideal to harness the forces of nature: wind and solar power. Surely, many people have heard about cars, boats and airplanes being tested in wind tunnels. But has anyone heard of a winery building tested in a wind tunnel? w w w . d t e u r o p e . c o m

István Kistelegdi, the architect spent many hours putting a small-scale replica of the winery to test in a wind tunnel modelling local conditions with variables like orientation and seasons given careful consideration.

Shapes and solutions inspired by energy design The final shape of the building was completed with the principles of the so-called energy design in mind. The lower part of the building resembles a curved boat shape which is conducive to reduce heat loss, while the upper parts are shaped like pyramids to achieve favorable aerodynamic properties. The construction is to be executed in phases. As a first step, the exhibition winery will be completed, followed by a design hotel and an exclusive restaurant and events center with a rooftop terrace providing excellent views of Villány’s iconic mountain, Szársomlyó.

What about return on investment? Innovative solutions never come cheap. You might ask: is there a way to make such a project financially sound? It’s a well-known fact that growing vines and running a winery is not

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the kind of business that offers fast return on investment. If this is the line of business you’re interested, then you must plan for the long haul. With this kind of extra expenditure, it may take 6-10 years to break even. However, from then, on you can expect real savings.

Exhibition winery The main visual attraction is going to be the exhibition winery separated from the wine

bar by a glass wall. You can watch the work going on in the cellar while sipping a glass of wine. The somewhat stark and utilitarian bare concrete and steel will be juxtaposed against a warm and eco-friendly interior to strike the right balance in design. There are very few similar projects in the world of wine, so the building complex of the Streit-Zagonyi Winery might serve as an inspiration for future wineries both in terms of sustainability and design.

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Diplomacy&Trade 2021 June

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Event guide to the Hungarian capital