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SPECIAL REPORT:

GREEN BUSINESS

Women in Leadership and Business Conference

FOR DETAILS SEE PAGE 10 SEPT 20, 2013 – OCT 03, 2013

VOL. 21. NUMBER 18

BUDAPEST

BUSINESS JOURNAL HUF 1,250 | €5 | $6 | £3.5

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IN PLANNED BOND ISSUANCE BY THE END OF 2013

The government is slackening what has long been one of its core principles, constantly paying off debts, seeing that it would constrain its budgetary space and would also limit its options ahead of the 2014 general elections. Economy Minister Mihály Varga is calculating with a higher budget deficit target and the country is seeking a big chunk of foreing financing. 03

SPECIAL REPORT

Power drive for a hefty price

Green certificates − everyone wants one

Sleek, silent and as ‘green’ as can be, electric cars are at the focal point of automotive development and have every hope of becoming the road standard in the years to come. 16-17

Green certification and eco−friendliness are a key extra way to dazzle potential new tenants. The green certified office portfolio in Budapest was equal to 8.2% of the city’s modern office stock by the beginning of 2013. 14

Q&A

Erika Kósa, founder and chairman of Consequit 11

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Budapest Business Journal | Sept 20 – Oct 03

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THE EDITOR SAYS

CRUMBLING BEDROCK The start of the fall parliamentary season brings another modification to a cardinal law, a piece of legislation that requires a two−thirds majority to pass, amend or revoke. This time it marks a backpedaling on one of the key con− cerns Prime Minister Viktor Orbán voiced after taking office, which was the need to reduce the debt that is crip− pling the country’s economy. Orbán has made no secret of the fact that he has long− term plans for the country, which is reflected in the revised, extended mandates of his appointees to key public offices and especially when cementing his ideas in law. When it was raised that this attitude essentially ties the hands of any government for decades to come, given how rare it is for a political group to get a super majority, he responded by basically saying, “yeah, that’s the idea.” Of course, the concept of building something to last on a whim, overnight, has already proven faulty as seen by the sequence of revisions to the constitution or smaller laws, like the annual budget. History has already discredited Orbán’s concept that the stability he envisioned for the com− ing decades may be viable even with what has obviously been insufficient forethought and a reluctance, if not outright refusal, to ask the opinion of anyone else beforehand.

More interesting to see is the contradiction between his desire for his own policies to be cast in stone, while con− stantly dismissing the one thing every single private sector participant has asked for, which is some predictability in policymaking. Orbán and everyone else in his government have been very vocal whenever they assumed Hungary was treated based on double standards internationally. Yet, when businesses ask for stability, he cites the captain com− manding a ship on a tumultuous sea, who would thus be a fool to keep trudging ahead instead of navigating the water as conditions dictate. On the other hand, this is exactly the thing he wants to take away from any potential future government by those politicians who are currently in opposition. Even with Fidesz still looking good for reelection in 2014, it most likely won’t be able to retain its current superma− jority. Seeing that time and time again, the wisdom of lawmaking that was supposed to last for an eternity has been flawed, Orbán is set to find himself in a posi− tion when he will have to ask for the cooperation of the political opposition to repeal his own laws. At which point the space−time continuum will surely ripple from the shockwave of the irony.

CORRUPT NOSTALGIA The day the Budapest Business Journal goes to print, János Zuschlag is walking out of prison having served his six−year sentence and bringing back images of an almost forgotten times of almost comedic corruption. For those who may need a recap: Zuschlag was the wacky looking guy with the glasses who was nurtured as a prospective new titan of the left wing. He became one of the leaders of the socialist’ youth organiza− tion and was a represen− tative in parliament. He earned himself a name when he made fun of the holocaust on camera. Most notably, he fea− tured in the public domain for repeatedly emerging in suspicious cases, like founding fic− tive party organiza− tions that were linked to accepting bribes in return for instigating a more favorable evalua− tion of grants. The court found he altogether caused HUF 72 mil− lion in damages through fraudulent acts. Of course, Fidesz pounced on the oppor− tunity to note that Zus− chlag didn’t act alone and instead was only taking the fall for Attila Mesterházy and Gordon Bajnai, who are Fidesz’ main political challengers right now. Zuschlag as a scapegoat, being the only prominent person convicted in an organized scheme, doesn’t seem far−fetched and it’s certainly an easy political shot to take. It also reminds the public and hopefully the political left of the tarnish that piled up on their reputations and how it led to the crushing defeat of 2010 and the demise of their former liberal allies. The corruption within the ranks of the socialist government was

one of the key reasons the electorate chose to punish them. If the disastrous state of the economy wasn’t enough, the likes of György Hunvald or Miklós Hagyó of the left−liberal side end− ing up in prison didn’t exactly help to improve the public image. Of course, those were times when the corrupt, at least some of them, were taken to court and then to jail, even though they were in government. Nowadays, with Fidesz in power, the consequences seem to be altogether missing. The government is repeatedly charged of corruption by its political opponents for the same two business spheres win− ning conspicuously large volumes of public pro− curements, for people with ties to government party circles winning farmland and applicants with similar backgrounds carving out major chunks of the highly profitable tobacco monopoly deal. The authorities don’t seem to be particularly concerned with any of these matters, so the face of what the public recognizes as corrup− tion may have changed, but it’s still here, with a far stronger establish− ment in support. The bumbling and the ruthless kind of corruption are derided in the collective perception of the Hungarian public, but because of the given nature of grift, being seen as an everyday element in our lives, we have grown to accept it. A political side that had the will and the means to genuinely put an end to corruption of any kind would be the country’s big− gest benefactor. However, it would first have to make various promises to get there, and there’s a good chance we wouldn’t believe a word of it.

THE FACE OF WHAT THE PUBLIC RECOGNIZES AS CORRUPTION MAY HAVE CHANGED, BUT IT’S STILL HERE, WITH A FAR STRONGER ESTABLISHMENT IN SUPPORT

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1 News

NEWS IN BRIEF

Gov’t mulls public utilities as non−profit

NEWS

MOL−INA conflict: preparing for a battle

macroscope

GOV’T RETREATS FROM WAR ON PUBLIC DEBT The government opposes public debt as much as foreign currency loans, at least in theory. This doesn’t change the fact that the established policy of shoveling money into a seemingly bottomless pit has firmly boosted what the country owes and there are additional spending items on the list, especially with the elections next year.

STORY HIGHLIGHTS ■

Public debt higher than a year before despite one-off efforts ■ Total expected to grow further with scheduled acquisitions and elections

Realizing that the debt reduction depart− ment isn’t delivering the desired results, the Economy Ministry decided to discon− tinue an application on a government web− site that measured the level of public debt at any given time, citing the costs of maintain−

ing it. The ministry also revised its practice of issuing regular information about public debt to give the media and their audiences less information. MORE TO COME The year is far from over and the debt total is set to rise. Economy Ministry state secretary Gábor Orbán announced that the fall would be the best period to seek out additional fund− ing for the country. “I believe the state debt management agency ÁKK should hold another dol− lar bond issue on the international market

Just as the government is loosening its commitment to keeping the budget deficit at 2.7% of gross domestic product this year, Hungary’s aggregate public debt amounted to 81.4% of GDP in the second quarter, ris− ing more than 2% from the end of last year. The situation, aggravated by the govern− ment’s shopping spree – and the national system’s continued habit of hemorrhaging money – necessitated not only seven revi− sions to the annual budget, but will also require revising another “bedrock solid” law that was meant to assure the uninter− rupted reduction of the country’s debts. The so−called stability law dictates that Parliament may only ratify annual budgets that contain debt figures lower than the level of the year when they are passed until the level drops below 50% of GDP. In the− ory, this was to bind all governments in the future to reduce the level of indebtedness, something Prime Minister Viktor Orbán proudly declared as one of the principles he was happy to tie future governments to. Now, this is also going to the wind. FUTILE CAMPAIGN The only major success the government can showcase in debt reduction was when PM Orbán announced in the summer of 2011 that HUF 1.1 trillion of the nearly HUF 3 tln in nationalized private pension funds would go to debt payoffs. The move took debt down to 78.5% of GDP. After that, the level was higher in every quarter leading to criticism of the government, not only for the question− able means and reasoning behind the confiscation of the pension wealth, but also because it seemingly squandered what is almost 4% of the country’s GDP without anything to show for it or the populace in any way benefitting.

HUNGARY’S PUBLIC DEBT (% TO GDP)

Source: MNB

GERGŐ RÁCZ

within the year,” he said in an interview. ÁKK has already conducted one issuance this year, selling $3.25 billion in paper in February. The move is necessitated by the government’s zeal to repay the loan from the International Monetary Fund taken out by a previous socialist administration in 2008 and which cut into reserves. ÁKK’s deputy chief executive László Bor− bély later added that issuing bonds in the autumn is the smartest tactical move since the country can secure the most beneficial long−term financing to repay foreign cur− rency debt that matures in January. True to its plans, Hungary has sig− naled its intent to the U.S. Securities and Exchange Commission to issue $5 bln in bonds in one or more rounds. “This is a big number,” said Standard Bank analyst Timothy Ash in a comment. He noted that the move would make Hun− gary’s credit levels one of the highest in the region behind Russia and Turkey and spec− ulated that the move may be linked to gov− ernment ambitions to increase state owner− ship on the energy market. The sector is already a prominent entry on this year’s spending commitments with the government deciding to buy the natural gas interests of German utility giant E.ON in Hungary for HUF 71 bln and there is another HUF 100 bln earmarked for the Takarékbank savings cooperative. The government has also made an offer to buy troubled steelmaker ISD Dunaferr to forego thousands of layoffs and is still interested in expanding the role of the state in the economy through acquisitions as opportunities arise. The governing Fidesz party is obviously looking at political aspects at well with the coming general election in 2014. The gov− ernment has already decided on a salary boost to educators and analysts are expect− ing more measures as the 2014 annual bud− get is being drafted.

THE MINISTRY ALSO REVISED ITS PRACTICE OF ISSUING REGULAR INFORMATION ABOUT PUBLIC DEBT TO GIVE THE MEDIA AND THEIR AUDIENCES LESS INFORMATION

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NEWS

IN BRIEF

Budapest Business Journal | Sept 20 – Oct 03

Just because you’re pretty doesn’t mean you’re also smart State secretary Zoltán Illés, shrugging off opposition MP Bernadett Szél in parliament. Illés later apologized after being called out for the condescending and sexist remark.

MNB EXPANDS STIMULUS PROGRAM Hungary’s central bank will expand its Funding for Growth program through the end of 2014 in a bid to boost the economy after last year’s recession, offering a whopping additional HUF 2 trillion in interest−free funding to commercial lenders. National Bank of Hungary governor György Matolcsy said the first phase of the initiative had been highly successful and that the demand from the commercial banks indicates that the program could significantly contribute to economic growth.

ECONOMY ANALYSTS SEE MNB EASING CYCLE REACHING 3% Analysts with JP Morgan’s investment unit in London predict lower than ex− pected inflation and another round of utilities price cuts to give the National Bank of Hungary even more room for easing. The analysts said in a weekly note that the MNB’s easing cycle, start− ed a year ago in August, would bottom out at 3% in the first quarter of next year, rather than at 3.50% as expected earlier. Hungary’s inflation rate is likely to remain under the MNB’s 3% mid− term target until November 2014, the analysts said. They put annual average inflation at 2.5% for 2014, well under the 3.2% projection in the MNB’s latest quarterly Inflation Report.

detailed data shows gross output of the machinery and equipment sec− tor rose 11.9%, while automotive in− dustry companies’ output climbed 12.8%, no doubt lifted by capacity expansions at the local units of Ger− man carmakers Daimler, Audi and Opel. Output of the computer, elec− tronic and optical sector fell 7.3%.

DOMESTIC

HUNGARY CONSTRUCTION SECTOR UP 1.9% IN JULY Output of Hungary’s construction sector rose 1.9% year−on−year in July, slowing from a 12.4% increase in the previous month, the Central Statistics Office (KSH) said. Output rose for the sixth month in a row. Adjusted for the number of workdays, output also rose 1.9% in July. Output fell 1.6% month− on−month, according to seasonally and workday−adjusted ﬁgures, after edging down 0.1% in the previous month.

GOV’T TO FINANCE CONSTRUCTION OF SZOMBATHELY STADIUM The Hungarian government will ﬁ− nance the full HUF 9.6 billion cost of a new football stadium and a multi− functional sports hall in Szombathely, local MP and Defense Minister Csaba Hende said. The new stadium will seat 10,000 people. State money is avail− able for the project, Hende said, adding that the precise schedule and details of ﬁnancing has yet to be sorted out. The government recently approved a national football stadium develop− ment plan, a resolution published in the latest edition of the official gazette Magyar Közlöny shows. The resolution instructed the government commis− sioner responsible for the project to submit a proposal on the investment and feasibility model of the stadiums participating in the plan.

MACHINERY, AUTOMOTIVE SECTORS LIFT INDUSTRIAL OUTPUT IN JULY The machinery and automotive sectors lifted Hungary’s industrial output in July, a detailed reading of data published by the KSH shows. Industrial output rose an unadjusted 4.8% year−on−year in July, KSH con− ﬁrmed in the second reading. The

NEW TENDER TO BE ISSUED FOR TOBACCO SHOP LICENSES IN 876 COMMUNITIES The government−operated National Tobacco Trade Nonproﬁt will issue a third tender in 876 communities in Hungary for licenses to sell tobacco under a state monopoly, National To− bacco Trade Nonproﬁt marketing and communications director Petra Lé−

Numbers in the news

HUF

60 bln

of municipal debt was taken over by the government at the end of last year, the National Economy Ministry said

HUF

342.3 bln

collected by the National Tax and Customs Office in corporate tax last year, up 8% from 2011

grádi told MTI. In the second tender the organization awarded licenses to bidders in 549 of the 1,425 communi− ties – typically small villages – where there were no valid bids in the ﬁrst tender. The tenders in the remain− ing 876 communities were, however, again unsuccessful, she said.

markets. The modification comes into force on October 1, with PSzÁF wound up on the same day. “The integration is an underlying condition for following and controlling system−level risks that threaten the stability of the financial system as a whole,” according to the bill’s justification.

POLITICS

GOV’T MULLS PUBLIC UTILITIES AS NON-PROFITS Fidesz is considering drafting a bill on turning public utility companies that effectively have a monopoly into non−profits, the ruling party’s group leader has said. “We are now thinking in terms of a law that puts the public utility providers in Hungary under one system,” Antal Rogán told commercial news channel Hír TV. Companies in a monopoly should not be allowed to make “vast profits”, he said, adding that the companies would be required to reinvest profits into improving the standard of services. He said foreign− owned utilities were bound to object, but such a measure would “clearly serve the country’s interest, because Hungarians do not want unjustifiably high bills”.

HOUSE SPEAKER: MORE EXECUTIVE POWER FOR GOVERNMENT In an interview with Inforádió, House Speaker László Kövér stated he’d like to see an extension to the cabinet’s pow− ers in law making. Said Kövér in part, “I would ﬁnd it normal, irrespective of what government will be in power in the coming cycles, that if Parliament claimed the right only to create the most basic guarantee rules and gave [a full] mandate to the government for four years.” Kövér also hinted that his government has some tasks ahead with regard to legislative work for the agriculture sector and that the sitting cabinet has assembled a 42−point leg− islative plan for the short−term future.

PARLIAMENT APPROVES PSZÁFMNB INTEGRATION Parliament has approved legislation that integrates financial supervision into the National Bank of Hungary in the framework of the fifth amendment to the nation’s constitution. The gov− ernment submitted the bill to Parlia− ment in June, but waited for the Euro− pean Central Bank to issue an opinion on the integration before taking a vote. The changes give the central bank the consumer protection and market oversight functions of financial market watchdog PSzÁF in addition to over− sight of money, capital and insurance

HUNGARY AND SWITZERLAND SIGN NEW DOUBLE-TAXATION AGREEMENT National Economy Ministry state sec− retary Gábor Orbán of Hungary and Ambassador of Switzerland to Hun− gary Jean−Francois Paroz have signed a new agreement to avoid double taxa− tion in the two countries that conforms to international standards regarding the exchange of tax information, Orbán told MTI. After ratiﬁcation, the agree− ment will authorize from January 2014 the Hungarian tax authority to request information from its Swiss counterpart regarding income and capital ﬂows.

Photo: Lajos Soós / MTI

04 News

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News 05

Budapest Business Journal | Sept 20 – Oct 03

COMPANY NEWS

Bachar Najari, a Syrian−born businessman is looking for export markets for ZSOLNAY PORCELÁNMANUFAKTÚRA, the world famous porcelain maker that he recently acquired from the local council of Pécs. Najari counted China, Japan, the United States, the United Kingdom and Russia among markets in which the company is seeking opportunities.

DOCLER OPENS LUXURY DEPARTMENT STORE

It is a strategic goal for Coca-Cola HBC Magyarország to become a Central and Eastern European production base, sales director László Kerekes told MTI. Coca-Cola HBC Magyarország had revenue of more than HUF 80 billion last year, Kerekes added. Exports made up HUF 17 bln of the total. Kerekes noted that sales of soft drinks declined 25% in Hungary in the past 8-10 years. Responding to this change, Coca-Cola HBC Magyarország has broadened its product offer, adding fruit juices, ice teas, an energy drink, and a mineral water, he said. It also focuses more on exports, exporting its products to 22 countries in recent years. He also noted that the company buys two-thirds of its raw materials from Hungarian suppliers, in line with the strategic agreement signed with the government last year.

Photo: Noémi Bruzák / MTI

COCA-COLA HBC MAGYARORSZÁG TO TURN HUNGARY INTO REGIONAL BASE

The Sándor Demján−owned TriGranit real−estate development company will launch a lawsuit against the Saint Petersburg municipal government and its construction committee over a contract cancelled in May 2012 to build an esti− mated $600 mln cultural center in the city. A Montenegrin wood processing firm, DOO Vektra Jakic, has fi led a €80 mln compensation lawsuit against OTP Bank. The reasons behind the law− suit have not yet been released, but OTP promised details on the matter at a later time. The bank gave the wood processor a significant loan for project development in 2007. Austrian−owned paper packaging company Dunapack has started a more than HUF 1.7 bln development at its base in Nyíregyháza. The company won HUF 851 mln in European Union and state grant money for the investment. The investment, to be completed next spring, affects corrugated cardboard manu− facturing, box manufacturing, and packaging system and printing technology. Hungarian alumina maker MAL is laying off about 250 people as it ceases processing its own bauxite, liquidator Judit Kemerle Szegő said. About 72% of those being laid off are skilled workers, Kemerle Szegő said. The layoffs will take place by next May, she added. A consortium of Közgép and A−Híd Építő has won a tender to plan and build

Docler Holding has opened the Il Bacio di Stile department store in central Budapest, adding another luxury retail hub to the city’s overall picture. The complex, built by businessmen György Gattyán, who is one of Hungary’s wealthiest men thanks to his adult entertainment business Livejasmin.com, is presenting the top line of exclusive clothing brands and accessories.

a bridge over the Tisza River with a bid of HUF 32.6 bln, the latest issue of the Public Procurement Gazette shows. The companies beat another consortium led by Prague−based Subterra. Strabag Általános Építő has won a tender to reinforce the pavement along a 15 kilometer stretch of main road with a bid of HUF 3.2 bln, the latest issue of the Public Procurement Gazette shows. The National Infrastructure Develop− ment Company had originally estimated the contract to be worth HUF 2.6 bln. Austrian−owned Strabag beat the local unit of France’s Colas in the tender. A consortium of Duna Aszfalt and KE−VÍZ 21 have won a tender to build a 2.25 kilometer section of bypass around Nyíregyháza with a bid of HUF 3.5 bln. The companies beat Colas Hungaria and a consortium of the Czech Subterra bidding with Hungarian peer Dömper. Hungarian investors plan to build a €10.5 mln vegetable warehouse and pro− cessing plant in the Mala Sosnovka industrial park in Chelyabinsk Oblast, Si− beria, Russian business daily Kommersant said. The warehouse would have capacity for 20,000 tons of bulk product. Hungary’s Eximbank is prepared to cover 85% of the investment cost. The owners of troubled Hungarian steelmaker ISD Dunaferr would wel− come state aid, probably the Slovakian type, but would not sell the com− pany, corporate manager Evgeny Tankhilevich told the online news portal origo.hu. Hungary’s government said earlier it would make a buyout offer for Dunaferr after the company announced plans to lay off 1,500 of its more than 5,000 employees. The Hungarian insurer group of Italy’s Generali generated revenue from pre− miums of HUF 59.1 bln in the ﬁrst half of 2013, up 0.9% from a year earlier, chairman of Generali Providencia Mihály Erdős said. Revenue was calculated on an adjusted basis, taking only 10% of case−by−case or one−off premium revenue into account. Retailer Spar Magyarország is spending about HUF 1.5 bln to expand its meat plant in Bicske, near Budapest. The company will add 1,600 sqm to the 7,900 sqm plant by November. It will add 35 jobs at the plant as a result. Industrial packaging company Greif BSC Europe has opened a service center in Budapest. The center will operate with a staff of 17 at the start, but headcount is expected to rise to 40−50 later. Greif unit Greif Hungary Hordógyártó és Forgalmazó is one of the biggest makers of steel barrels in the region. Ukraine−based confectionary producer Roshen has opened its ﬁrst branded shop in Hungary. After acquiring a majority stake in Hungary−based Bonbonetti Choco Kft in November 2012, Roshen began producing chocolate products in the country in July of this year.

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Budapest Business Journal | Sept 20 – Oct 03

NEWS FOR THIS SECTION IS TAKEN FROM THE BUDAPEST BUSINESS JOURNAL’S DAILY BRIEFING, ENERGY TODAY NEWSLETTER AT WWW.BBJ.HU/STORE/NEWSLETTER-PACKAGE

UKRAINIAN NAFTOGAZ AND RWE SIGN NEW AGREEMENT A new agreement between German electric utilities company RWE and Ukrainian state oil and gas company Naftogaz was signed on September 5, news site rbc.ua reported, citing Eduard Stavytskyi, Ukraine’s minister of energy and coal industry. The new docu− ment regulates both gas supplies to Ukraine and gas storage in Ukrainian underground facilities, it said. The former Soviet repub− lic plans to diversify its gas imports and strengthen national and European energy security, as Ukraine is also a transit country for Russian gas traveling to Europe. RWE agreed to sell Ukraine up to 5 billion cubic meters of gas annually. Additionally, Ukraine has arranged gas supply through Poland and Hungary. Test gas deliveries from Slovakia also took place in May of this year. In Octo− ber, Ukraine plans to sign an agreement re− garding gas supply with Romania, according to Stavytskyi. Overall, in August this year, Ukraine imported more than 230 million cu− bic meter of gas from Poland and Hungary, Ukrinform reported. POLAND TO REMAIN DEPENDENT ON COAL FOR YEARS Poland will remain dependent on coal for

many years and Central Europe’s largest economy will try to reduce its carbon emis− sions by investing in new technology, the country’s Prime Minister Donald Tusk said on September 10. Poland is the largest hard coal producer in the European Union and around 90% of the country’s electricity is gen− erated in hard coal− and lignite−fired power plants. “We will develop renewable sources of energy, but coal, lignite coal and also shale gas are key,” Tusk was quoted as saying in a conference. Tusk also said Poland will invest in mining machinery to reduce its CO2 emis− sions through modern technologies. Tusk has previously said Poland will fulfill its EU 20−20−20 climate change commitments but no more as reducing the country’s emissions further would raise electricity prices and slow economic growth. GAZPROM, CNPC AGREE BASIC TERMS OF LONG-AWAITED GAS DEAL Russia’s top gas producer Gazprom and China National Petroleum Corp agreed on September 5 on basic terms for long−awaited gas supplies to China, paving the way for the final deal, which would cement Moscow’s footing in the world’s second largest econo− my, media reported. The former Soviet Union launched gas supplies to Western Europe in

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PRESIDENT TRUONG TAN SANG AND JÁNOS ÁDER

HUNGARY, VIETNAM EXPAND NUCLEAR ENERGY COOPERATION Hungary and Vietnam are expanding their cooperation in the area of nuclear energy, President János Áder said after talks with his Vietnamese counterpart Truong Tan Sang in Budapest. In the coming years, almost 2,000 Vietnamese experts will be trained with the help of Hungarian engi− neers, Áder said. Vietnam wants to put its own nuclear power plant into operation by 2020. Vietnamese President Troung Tan Sang arrived at Hungary for a four−day visit on September 16.

HIRINGS HOLDING UP IN SOME COUNTRIES BUT DECLINE IN MOST (Q4 2011 – Q4 2012)

GROWTH (> +5 %) BULGARIA, CYPRUS, DENMARK, GREECE, HUNGARY, IRELAND, LUXEMBOURG

POLISH OPPOSITION PARTY SAYS TO VOTE FOR GOVERNMENT PENSION REFORM Poland’s SLD opposition party will vote for the government’s hotly contested pen− sion reform when it comes before Parlia− ment, party leader Leszek Miller told Re− uters in an interview on September 13. Prime Minister Donald Tusk’s majority is down to 232 seats out of the 460 in par− liament after three lawmakers quit his party, and some members of parliament still in the party could abstain or even vote against. However, the support of the left−wing SLD, which has 25 members of parliament, means the measure will get through unless there is a massive revolt by government supporters. Tusk plans to transfer a big chunk of the assets held by private pension funds (OFE) into a state vehicle. Poland may ban private pension funds from investing in foreign sovereign bonds, deputy ﬁnance minister Wojciech Kowalczyk told reporters without giving further details. DEMAND FOR LABOR FORCE HAS DECLINED ACROSS EUROPE Demand for new labor force has decreased by 4% across the entire European Union from Q4 2011 to Q4 2012, according to the ﬁndings from the European Vacancy

Monitor published by the European Com− mission. The profession with the highest growth in the number of employees was personal care medical assistants, due to the aging of the population, the progress of technology and the higher expectations of the population. Other hot professions are the creators and analysts of software applications, administrative personnel, mining personnel, and supervisors in the manufacturing and constructions indus− tries, as well as teachers. In the fourth− quarter of 2012 there were 2 million job vacancies in 19 countries of the European Union, 6% less than the same quarter in 2011. Six countries showed increased job vacancies: Latvia, Lithuania, Romania, the UK and to a smaller extent the Czech Republic and Estonia. GREECE PLANS LUXURY TAX ON THE WEALTHY With the rich and politicians largely es− caping sacriﬁce during Greece’s crushing economic crisis, the Greek government said it will slap a luxury tax on those with big, fancy cars, swimming pools and air− planes in a bid to raise critically−needed cash with revenues off expectations de− spite big tax hikes, local media reported. Owners of cars with an engine capacity of 1,929 cc or more, swimming pools or

1968 and the European Union has remained Gazprom’s key market, where the company generates 55% of its profit by covering a quar− ter of the bloc’s gas needs. But cash−strapped European firms are increasingly seeking to wean off their energy dependence on the former cold war foe, looking for cheaper fuel, such as liquefied natural gas. The basic terms, signed by the heads of Gazprom and CNPC “define the volumes, start of deliver− ies, payments, ‘take−or−pay’ amendments” and other issues, Gazprom said in a state− ment. It gave no further details.

RELATIVELY STABLE (> -5 % AND ≤ +5 %) AUSTRIA, BELGIUM, ESTONIA, FINLAND, FRANCE, PORTUGAL, SWEDEN, AND THE UNITED KINGDOM

DECLINE (≤ -5 %) CZECH REPUBLIC, GERMANY, ITALY, MALTA, LATVIA, LITHUANIA, THE NETHERLANDS, POLAND, ROMANIA, SLOVAKIA, SLOVENIA, SPAIN Source: LFS – own calculations

aircraft will be expected to pay the spe− cial luxury item tax at the end of the year, probably in one installment, unless the ﬁnance minister decides otherwise. That would come at the same time they, and all other vehicle owners, have to pay an an− nual road tax that ranges between 5−10% of the value of the car. A government survey two years ago found thousands of Greeks had swimming pools but didn’t list them so they could avoid being taxed. TAX EVASION IN ROMANIA DECREASES IN 2012 Romania’s Fiscal Council, an independent think−tank, estimates that tax evasion in

Photo: Szilárd Koszticsák / MTI

ENERGY

Hungarian energy supplier and trader Alteo’s unit Soproni Erőmű has sold its gas−fueled plant. Alteo said that it had decided to sell the gas−motor plant in order to expand the company’s operations in the renewable−energy sector.

CHINA BUYS INTO GIANT KAZAKH OILFIELD Chinese President Xi Jinping struck a deal with Kazakhstan on September 7 giving China a stake in its giant Kashagan oil proj− ect, a highlight of his tour of Central Asia to secure hydrocarbons for the world’s largest energy consumer, media reported. Under the deal, Kazakhstan’s state energy company KazMunaiGas is expected sell an 8.33% stake in the project to state−owned China National Petroleum Corp (CNPC). Xinhua reported both sides had agreed on China’s purchase of the stake, but did not give further details. Kazakh government sources said it would cost China about $5 bln. CNPC will also pay

Romania stood at 13.8% of GDP last year, down from a record high of 15% in 2010, amounting to roughly RON 81 bln (€18 bln), a local news site reported. Around 60% of the tax evasion was generated by VAT fraud, which came down to 8.3% last year, after posting a record of 9.4% in 2010, when Romania hiked the VAT by ﬁve per− centage points to 24%, Business Review wrote. SERBIA’S PUBLIC DEBT TOTALS 58.3% OF GDP Serbia’s public debt increased in August by €73.2 mln and totaled €19.15 bln, or 58.3% of the gross domestic product, the country’s Public Debt Administration said. Since the beginning of the year, Ser− bia has paid its dues on grounds of public debt to the total sum of €3.1 bln, of that €2.6 bln for equity loans, it said. 100,000 CZECHS THREATENED WITH HOMELESSNESS Some 100,000 Czechs are threatened with homelessness, the Czech Minister of Labor and Social Affairs Frantisek Konicek told reporters on September 10. The current homeless population of 30,000 could rise dramatically, mainly in the most vulnerable groups such as young people leaving institutional care, handicapped people, single mothers and retired people, or those who lose their jobs shortly before retiring, Konicek said. The minister also outlined a strate− gy to curb the rising number of homeless people: the state should provide social housing to those threatened with losing their homes; increase the scope of social services, and provide better health care to people living on the streets.

WWW.BBJ.HU

News 07

Budapest Business Journal | Sept 20 – Oct 03

MOL–INA–CONFLINCT: PREPARING FOR BATTLE

Photo: INA

The first round of negotiations between the Zagreb government and the Hungarian oil and gas company MOL over its Croat oil concern INA have been satisfying, said Ivan Vrdoljak, Croatia’s minister of economy in Zagreb on September 18. BBJ

“I’m pleased with the direction negotiations are evolving in. Croatia’s goal is that INA becomes a strong company, that develops successfully, and after all, Hungary’s purpose is just the same,” Croatian daily Jutarnji List cited the politician as saying. “The parties agreed on the progress and method of the negotiations, they agreed to meet monthly and to send any negotiation materials to each other in advance,” the Croatian government said in its statement after the first talks. They also agreed to negotiate the future of the company management, the management of expenditure, the distribution and investment of revenues, research methods, development and the production of pipelines, the supply and reworking of oil and oil products, the sale of oil derivatives and the gas business. “The two parties will align their targets on INA to increase investments, efficiency of business management and the contribution of the

company to the Croatian economy,” the Croatian government stated. But representatives of the Hungarian company hadn’t released any statement by the time this issue of the Budapest Business Journal went to press on that the same evening, indicating that the negotiations are fierce under the seemingly friendly surface. In the ongoing tussle between MOL and the Croatian government over majority ownership of Croatia’s INA, the Hungarian oil−and−gas giant has just raised the stakes, threatening to sue for HRK 2 billion (€264 million/HUF 79.4 bln) for alleged breach of contract. According to Jutarnji List, MOL has informed the Croatian government of the potential lawsuit in a formal letter; the breach of contract charge stems from Croatia’s failure to assume financial control of the gas segment of INA operations, a changeover promised at a shareholders meeting in 2009.

DECOUPLED FROM THE CRISIS

Via unnamed sources, the paper also reported that MOL has already hired a U.S. law firm to handle legal proceedings, and that INA CEO Zoltán Áldott also met with American−based attorneys last week. The conflict between MOL and Zagreb may be traced back to a 2008 bribery case in which former Croatian Prime Minister Ivo Sanader was found guilty of accepting a €5 mln payoff from MOL. With the country’s entry into the European Union in July, Croatian law enforcement body USKOK reopened a case concerning then− MOL chairman/CEO Zsolt Hernádi’s involvement in the Sanader bribe. MOL currently holds a stake of about 49% in the company, while the Croatian government’s share is just under 45%. Jutanarji List followed up on the story, catching deputy prime minister Branko Grčić and finance minister Slavko Linić on the defensive in response to MOL’s threat. For his part, Linić applied that spin seen in national politics throughout the world, namely blaming the former ruling party for “failing to observe the terms of the shareholders agreement signed with MOL,” also saying that “MOL has made a serious threat to be dealt with seriously”. Meanwhile, Grčić was quoted as admitting that MOL indeed does have a proper legal basis to file suit; when asked whether said acceptance indicated that MOL would have the upper hand in negotiations beginning September 18, Grčić deferred, saying that matters “would not be judged in this way”.

Even if the Hungarian IT industry (including the software market) has experienced some decreases during the last year, the revenues of SAP from software sales increased by 40% year−on−year, Balázs Ablonczy, SAP managing director, said at the company’s annual meeting. KRISZTIÁN KUMMER

MVM TO BORROW €347 MILLION TO TAKE OVER E.ON’S GAS UNITS

BBJ

Every condition has thus been set to close the purchase of the Hungarian gas units of Ger− many’s E.ON on September 30, according to a company statement. MVM said that after the closing of the transaction, “E.ON Gas Storage and E.ON Gas Trade will, already in national own− ership, secure the safe supply of Hun− gary with natural gas, and will contribute to growth as well as to keeping prices at affordable levels.” The statement also said that the loans secure the financial coverage for the further growth of the group. In March, MVM signed an agreement to purchase the gas units of the German util−

ities company for about €870 million. The final price will depend on the inventories at the time of closing. MVM will sign a €66.7 mln loan agree− ment with ING Bank as well as a HUF 84 billion club loan with a banking syndicate comprising OTP Bank, Unicredit Bank, Raiffeisen Bank, Volksbank, K&H Bank and MKB Bank. The terms of the loans are in line with the current money market standards as well as with the conditions in MVM’s existing long−term loan contracts, and are favorably priced, according to the company state− ment, though neither maturity period or other terms of the new loans were revealed. MVM noted that its biggest share− holder, the Hungarian National Asset Management Company (MNV), recently agreed to grant it a HUF 71 bln share− holders’ loan to help the financing for MVM’s E.ON transaction until a capi− tal raise takes place. A proposed budget amendment before Parliament includes a HUF 71 bln capital raise for MVM. No statement was released on the €300 mln cooperation agreement MVM signed with the Bank of China banking group on September 9 that includes a €200 mln loan for general corporate−finance purposes.

MVM PROFITS (HUF BLN)

2008

2009

2010

2011

2012

The loan is for three plus one years, with an option year thereafter. The state gave a guarantee up to 80% of the price of the deal under an amend− ment to the 2013 budget act in March. The amendment set an absolute threshold of the guarantee – good until September 30, 2013 – at HUF 256 bln, or €851 mln at the cur− rent exchange rate.

Source: MVM

An extraordinary general meeting of 99% state−owned Hungarian energy group MVM on September 13 unanimously approved a proposal for the company to take out euro− and forint−denominated loans worth about HUF 104 billion from domestic and international institutions.

“SAP finished a good year, growth is steady in Hungary regardless of the crisis, partly due the SAP’s global strategy,” Ablonczy pointed out. In 2010, SAP announced its new innovation strategy based on the five main areas in which it operates: industry solutions, mobility, business analytics, and database management and cloud technology. The global objective of the SAP is to raise sales through its partnership network share. From this point of view, Hungarian SAP is performing well, as 40% of business goes through partners. Another factor in the increase locally is that SAP “works a little better in Hungary than competitors”. The company’s market share is above 40%. Previously, cooperation with the government was one large white area, but to promote common work, SAP started a public sector program a year ago to prepare its partners for the rules of governmental cooperation, Ablonczy explained. Talking about the medium−term vision of the company, Ablonczy said, that HANA technology would bring fundamental change in the technology world. The memory− based database management that SAP introduced a few years ago will result in a “change in the game” and on a two−five year horizon, enterprise cloud solutions will be widely adopted. SAP will negotiate with the largest Hungarian companies to convince them to hand over their SAP systems and use them on a ‘software as service’ platform, without the need for hardware maintenance expenditures for example, Ablonczy predicted.

WWW.BBJ.HU

08 News

Budapest Business Journal | Sept 20 – Oct 03

THINGS TO LOOK FOR W As the political scene moves on from a largely lethargic summer to a more active autumn, issues linked to next year’s election campaign will dominate the political agenda. Some issues have a direct bearing on the election, such as the struggle of MSzP and E14 to come up with a workable model of uniting the left−wing opposition against Fidesz. Other, seemingly unrelated issues, such as the wage hikes for certain segments of public employees and the government’s decision to help 100s of 1,000s of citizens struggling with foreign currency denominated home loans, will of course also substantially affect the election.

TEARING THEMSELVES APART? Yet for all the catcalls directed at the protagonists, this fight is not exclusively about clashing personal ambitions (though those naturally play a role as well), but also about strategic choices. Both players, and especially their respective supporters in politics and media, must make difficult assessments as to the viability of a potential Bajnai or Mesterházy candidacy, as well as the future of their respective movements under four different scenarios: electoral success or failure under Bajnai or Mesterházy. The point is that even the seemingly most important question, namely the unlikely electoral victory, is complicated by the consideration of how either E14, a new and fragile movement with virtually no social embeddedness, or MSzP, an old, well− organized but also widely rejected party (especially among youth), would fare – or even survive – in a government led by the leader of the other party. This is undoubtedly a tough question. A DIFFICULT COMPROMISE While it certainly does not result in good press, the internecine fight need not

Photo: Tamás Kovács / MTI

This being the final winter before the 2014 elections, there is clearly some legitimate anticipation of excitement. At the forefront of everyone’s attention right now is – or it seems was – the battle for the honor to lead the left in the election next spring. And the word ‘honor’ is not in the least incidental, for at the moment there seems to be little in this position apart from honor. While much of the left is distraught by the cockfight between former PM Gordon Bajnai and MSzP chair Attila Mesterházy, the right− wing media is only angling for good seats to better enjoy the show. necessarily wreck any chances the left might have. To be sure, the current impasse and the minimalistic agreement that the two parties have managed to carve out does not look very promising in terms of offering a stark alternative to Viktor Orbán as the Hungarian leader. Pursuant to the agreement, MSzP and E14 will run separately and neither will officially designate a candidate for the premiership. To avoid losing votes, they will not run candidates in single member districts against one another. MSzP will have the right to field 75 candidates without E14 opposition, and the latter party will have a monopoly on the remaining 31 constituencies. The post− election PM candidate will be whichever party’s list receives more votes, i.e. almost certainly Attila Mesterházy. Running separately could resolve the dilemma of keeping anti−MSzP opposition votes in the fold, but it raises plenty of other problems, such as: will MSzP voters vote for E14 candidates and vice versa? Will potential voters be mobilized without a clear personal alternative to Orbán? Will E14 definitely pass the threshold necessary to enter Parliament? Still, there are plenty of scenarios that could put the left back into play. For one, the current agreement is not set in stone. As things

develop, the parties may decide that another arrangement is more suitable. Moreover, in light of voter preferences it is also conceivable that two separate lists might indeed net more votes than a united list that would seek to compel those culturally disinclined to support MSzP or Bajnai to nevertheless vote for it. DON’T FORGET THE HOST Even if the battle on the left may draw much of the media attention, the real game in town continues to be Fidesz’ successful efforts at consolidating and potentially even expanding its lead. This is costing taxpayers and businesses already a lot, but look for the price tag to increase as the government is preparing to lavish more generous presents on the hopeful electorate. After years of disappointed promises, teachers and physicians are getting substantial raises, and with some luck for the governing party the optimism generated by the higher paycheck may carry over into early next year. This follows on the heels of the utility bills being decreased by government fiat, the effects of which are going to be most pronounced during the winter, when heating costs tend to upset the fiscal stability of average and

poor households (even as wealthy families, with larger homes to heat, benefit a lot more in practice, as is usually the case with the upwardly redistributive policies of Fidesz). Fidesz has worked very hard to the get rid of the EU’s excessive deficit procedure, and this is arguably its greatest policy success thus far. The real payoff could be the possibility of election spending, however. If early next year the government decided to amend the 2014 budget with some – or many, as the case may be – unplanned gifts, then it still would not have to face a renewal of the procedure in time for the election in April. It might of course elicit some derision from the opposition and Brussels, but neither would be off−putting to voters. Even though they distrust politicians in general – Fidesz’ leaders largely not excepted – Hungarian voters are hardly immune to the charms of electoral presents. PAY UP The fiscal policies of Fidesz have depended to a significant degree on taking money from mostly foreign−owned large corporations – before, after and while blaming them for many of the ills Hungarian society has experienced – or forcing them to give to

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News 09

Budapest Business Journal | Sept 20 – Oct 03

R WARD TO THIS FALL IF FIDESZ FEELS THE SLIGHTEST DOUBT ABOUT ITS RE-ELECTION PROSPECTS, FOREIGNERS ARE IN FOR A MASSIVE BASHING customers directly (i.e. decreased utility bills), with a note from the government. Collecting money through corporations this way had the added benefit of affecting citizens’ pocketbooks only indirectly, either by raising the prices or decreasing the quality of services. Moreover, it appears thus far that Fidesz has chosen its targets wisely: few of those affected have chosen to suspend their services and leave Hungary (though since the price of withdrawal is high, the more relevant measure would be ADVERTISEMENT

how many decided not to invest in Hungary in the first place, which we won’t know). Now another major coup is in process, once again afflicting the sector that has been tapped most often, namely banking. Despite some meager efforts, one major class of voters that has suffered financially from Fidesz’ policies, primarily by keeping the value of the forint low, are those with foreign currency denominated mortgages. For three years, Fidesz has not given the 100s of 1,000s suffering from vastly increased monthly

installments any genuine help apart from aggressive rhetoric. Now, with the election looming, Fidesz finally appears intent on addressing the woes of this group. The banks are hoping to pre−empt a debilitating blow by obsequiously presenting their own plan for helping those in the debt trap (and about time, too!), which the government may magnanimously accept. BIG MONEY AND FOREIGNERS Or not. Fidesz has not only the banks’ money

to thank for its popularity, but also owes some to its incessant anti−big corporation rhetoric, which resonates well with a public that feels exploited by foreign business. Viktor Orbán’s choices are notoriously difficult to predict, but he might well feel that he would benefit from dictating terms to the banks rather than accepting their offer, which many ordinary citizens probably regard as a damage− minimizing ploy in any case. Either way, if Fidesz feels the slightest doubt about its re−election prospects, foreigners are in for a massive bashing. Fidesz often oscillates between a polarizing rhetoric and the role of a national unifier with enough grandeur to be generous and forgiving to all – even foreigners – but when in doubt it always reverts to the former. For the moment, it has little reason to doubt victory, but Orbán has seen his political fortunes take an unexpected dive often enough – to wit, in the elections of 1994, 2002 and 2006 – to be wary of any notion of certainty. And unless he feels safe, his opponents, real and perceived, are in for a rough ride.

www.policysolutions.hu Political Research and Consultancy Institute

BBJ

2Business insight

Women’s career ABC

THE GENDER DILEMMA Hungary is in a state of demographic transition where women have better chances of getting a good education, building a career or trying their hands in various fields then ever before. However, this also puts off any plans they may have for a family, leaving governments with a delicate balancing act to strike between allowing for equal opportunities while creating incentives to offset the 2% drop in the country’s overall population over the course of a decade. GERGŐ RÁCZ

The government is in the process of drafting new family support measures with the admitted goal of convincing women of childbearing age to have more children, rather than spending their youth at work, and with good reason.

Experts have for a while been voicing concerns about an impending demographic disaster that is largely due to women putting off giving birth to build their careers and, as a result, ending up having fewer kids than they originally planned.

True enough, every calculation shows that the reduction in Hungary’s national headcount is unwavering. The Central Statistics Office (KSH) found that the 55,008 children born in the first seven months of 2013 marked a 3.3% drop from the corresponding period last year. The drop can be measured over a longer span as well with the 2011 census counting altogether 9.982 million people, a drop of 2.1% from the last survey in 2001. In terms of births, the past three crisis years have provided all the negative records. According to the KSH’s Demographic Research Institute, the lowest ever monthly figure was in April 2011 with 6,361 births. In contrast the peak of 1954 – aided heavily by a ban on abortion at the time – saw 20,344 new births.

The currently debated measures, expected to take effect from the start of 2014, will, it is hoped, fundamentally change attitudes through revisions to the tax and subsidy system and convince women to choose staying home with their children over going to work at a younger age. Incentives on the table include expanding the range of family tax benefits, mothers entitlement to maternity’ pay would be extended to encourage women who have recently given birth to conceive again shortly afterwards and there are also plans to waive at least part of the total student loans that now cover tuition fees as an encouragement to bear children at a younger age.

SCAN TO REGISTER NOW

PRESENT:

Women in Leadership and d Business Conference

’Women at the steering wheel’ is the FIRST conference to tackle issues such as women’s personal contribution to company management in 2014.

WOMEN AT THE “STEERING WHEEL” Why and how is a woman leader different in 2013/14 than earlier?

Date and time: Wednesday, October 2, 2013. 2 pm – 6 pm Venue: MKB Bank Székház, Bálterem (1056 Budapest, Váci utca 38.)

SPEAKERS Erika Kósa – CEO, Consequit Group Veronika Pistyur – CEO, Bridge Budapest Kinga Győrff y – storytelling consultant Szily Nóra – journalist, coach Ági Pataki - producer, Filmpartners-Partnerﬁlms Group Zsóﬁa Körmendi-Seidler – product general manager, GE Andrea Kővágó-Laky – managing director, Ford Central & Eastern European Sales LLC Katalin Ránky – businesswoman, founder of L’Oréal Magyarország Dr. Ágnes Jagicza – chief HR and organizational development officer, Invitel Beke Zsuzsa - head of public relations and public affairs, Richter Gedeon András Simon – consulting, Inspiro

Ford KKE Kft offers conference participants a week-end test drive of a Ford model equipped with innovative technology. FOR MORE INFORMATION, UPDATES AND REGISTRATION: WWW.BBJ.HU

After our successful networking events this spring – the BBJ Shaker and the Going Global - Startup and Innovation in Hungary conference –, the Budapest Business Journal continues its series of events this October. Why and how is a woman leader different in 2013/14 than earlier? ■ What does a woman leader do and what does she have to offer in 2014? ■ How does a leadership role affect a woman’s private life, personality and family? ■ Why does an organization work differently with a woman leader in 2014? ■ Based on experience, how do social roles and expectations affect performance today? ■

These and other exciting topics will be explored at our professional conference.

Moderator: Ernő Simon Language: Hungarian Participation fee (includes entry for presentations and reception): HUF 12,500 + VAT 20% discount for BBJ subscribers, AmCham, BCCH and Magyar Üzletasszonyok Egyesülete members.

E-MAIL: EVENT@BBJ.HU PHONE: +(36) 1 398 0344

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2 Business

Budapest Business Journal | Sept 20 – Oct 03

FEMALE DOMINANCE Erika Kósa, former chairman of Brókernet does not believe women leaders start with a disadvantage. The founder and chairman of Consequit, a financial consultancy and insurance broker established six months ago, puts success down to talent and good time management. ZSÓFIA VÉGH

Q Q Q

How many female colleagues do you have at Consequit Zrt? A They make up around 60% of our sales force and back office staff. How do you get on with them? A How do I get along with women? As I do with people in general.

So you aren’t often on better terms with your male co−workers? A Working in the business sector is tougher for women, being busier and more stressed with family matters as well. Collecting kids, dealing with household tasks, taking care of parents and even grandparents may cause them to have trouble organizing their time. Not every− one has a man to support them. Therefore men may participate more easily in an evening or weekend workshop or an early morning session.

Regardless of a busy schedule, women tend to compete against each other. This constant com− petition may have an impact on how women approach their female colleagues. A Precisely because of the background I detailed, women’s situation is harder. What terms they are on with each other is rather a question of personality. The same may apply to the relationship of male and female co− workers. If they are tolerant or not, assertive or not, is gender independent.

You don’t find that gender is an issue at work then. A Where gender is an issue, it has more to do with getting ahead. Some women feel blocked because of their gender and pre− vented from becoming successful in a pre− dominantly male field. But this only exists in their head. If they have the skills and knowl− edge, they are predisposed to win, no matter whether it’s a man or a woman. Especially in our financial mediation sector.

Yet there are too few women on boards or in management positions. The introduction of female quotas is still on the table. Are women to blame for that, do they hold themselves back? A There is an element of that as well. But it can also be traced back to history: banking and finance was hardly a sector for women in the past. Over time, women have become more dominant and now their representation in this field is increasing.

Once described as “definitely one of the best network-builders in Europe” by a colleague, Erika Kósa is the founder and chairman of Consequit, a financial consultancy and insurance broker established ten month ago. Although she originally trained as a teacher, she has more than 20 years’ experience in the financial sector. In 1999, she was co-founder of Brokernet, a landmark consultancy she left in 2012 to set up Consequit.

What responsibility and signifi− cance do you think female lead− ers have in Hungary today? A No matter what firm they head, women possess some special sort of social sensi− tivity. In this society, there is a real need for cooperation. When something is on the verge of collapse, they have the ability to get people to pull together. It comes from their central role in the family. And this skill doesn’t fade when they lead a firm. Using this skill and recognizing situations, she can tune in and solve a problem quickly. Health− care, education and even finance are good examples. In these fields state support has diminished in the past decades. Our goal is to get people to take better care of these issues and become self−reliant.

Is the work atmosphere differ− ent in an organization headed by a woman? A Due to their emotional intelligence, wom− en’s problem solving skills and their ability to comprehend a situation may be better than men’s. Sorting out, straightening, untangling are the essence of a women, hence they may be better at solving conflicts. Women may also offer more alternatives to a situation.

As they move higher up the career ladder, don’t women lose some of these very female traits while having to take up more mascu− line ones? Have you not lost some of your feminine skills? A A woman, if she becomes a leader, already has the dominance present in men. Learning to express it is progress, but it has always been there.

Have you ever noticed whether male leaders of a similar age and with the same skills as you have managed to get to the top earlier than you? Do you think it is easier for men? A I don’t think so. If they have the nec− essary skills and can allow sufficient time to develop them, they don’t start from a disadvantage.

I DON’T THINK I HAD TO GIVE UP ANYTHING TO GET WHERE I AM. Q

Would you think the same way if it weren’t your own company you led? A I don’t know; I have never worked for a multinational company. Obviously, getting ahead there is not up to one person. You have to work really hard if you want a posi− tion matching your skills.

List me three things you are proud of having achieved. A Giving people the chance, the tools and faith to make themselves. Mak−

ing them recognize they are responsible for their own happiness. The third is my family: that we could hold the family together and set examples for the upcoming generation.

Now list me the sacrifices you had to make along the way. A I don’t see them as sacrifice. If you set a route, you don’t make sacrifices as you do them voluntarily, at your own will. I don’t think I had to give up anything to get where I am. It is rather a question of good time management and logistics.

WWW.BBJ.HU

2 Business

Budapest Business Journal | Sept 20 – Oct 03

WOMEN’S CAREER ABC – FROM AFFIRMATIVE ACTION TO ZEITGEIST

NAME: Katalin Ránky COMPANY: Retired from L’Oreal

Magyarország, where she had been the CEO for 17 years, at the end of 2010. Now runs her own management and business solutions consultancy RIVIER POSITION: CEO PROUD OF: Very proud of my 2 children and 5 grandchildren HOBBY: travelling, playing bridge

NAME: Zsuzsa Beke COMPANY: Gedeon Richter Nyrt. POSITION: Head of Public

NAME: Ágnes Jagicza Company: Invitel Zrt. POSITION: Chief of HR and OD

Relations and Public Affairs

YEARS SPENT IN THE PROFESSION: 15

YEARS SPENT IN THE PROFESSION: 14 PROUD OF: my children HOBBY: Sport (squash, sailing),

NAME: Orsolya O. Szabó COMPANY: Egon Zehnder

International YEARS SPENT IN THE PROFESSION: 5

NAME: Ági Pataki COMPANY: Filmpartners POSITION: CEO YEARS SPENT IN THE PROFESSION: 19 PROUD OF: My son HOBBY: Jogging, Arts

circle of friends

In Europe, 93% of top corporate executives are male, and the ratio of men on executive boards is, on average, 87%. At the same time, 33% of MPs in European Parliament are women. These figures are not too glorious, but in Hungary the proportions are even worse than in the EU in general. While in the Hungarian Parliament 9% of representatives are female, on executive boards less than 4% of positions are held by women; and, according to Eurostat data, less than 1% of CEOs are women. The Budapest Business Journal asked practicing female executives what they think the reasons for this might be. ANDRÁS ZSÁMBOKI

‘The question of female participation in top management is a question of how much babysitters cost.’ Is this state− ment true? Not at all, the overwhelming majority of our respondents say. Most believe that the problem is rooted in women’s attitudes. “In Hungary, if a woman pursues a successful career she usually feels guilty about neglecting her family duties,” Ágnes Jagicza explained. “If she hires a babysit− ter to look after her half−year−old baby, she does so in bad conscience; if the child is sent into daycare at age one, this becomes a source of guilt as well. In West− ern Europe and in the United States, moth− ers feel much more at ease entrusting oth− ers with the care of their babies. Hungarian women, it seems, harbor ambivalent feelings, and external help is often not available. “The main problem is that women erroneously believe that having children is an obstacle to a career,” Katalin Ránky says, summing up her experiences.

Isn’t it the case that having children does indeed hinder careers? “One should not strive to pursue a career at any price,” Ránky says. “Those who consider making a career their exclu− sive aim usually pay a high price for that, and their family lives suffer in the end. In the long run, one should try to achieve a balance among all spheres of one’s life. Says Ági Pataki, “I work in the enter− tainment business as a film producer. In that profession, women usually choose their partners keeping their careers in mind: women choose men who would be supportive of their careers, and they raise their children in a way that the children learn to adapt to their mothers’ ambitions from the start. In the field of art, artists invent their lives for their own sakes.” Turning one’s family into a support− ive hinterland is an art in itself; it is a crucial strategy outside the world of the arts as well. “I have a terrific husband,” admits Ránky, “who has always stood by me and who has never been jealous of my success. Two parallel careers cannot be pursued simultaneously, or else the fam− ily will be damaged. My husband and I took turns adapting to each other’s career stages, which has never caused a problem between us. Once I gave up my career in research when I accompanied my hus− band to Britain when he got a new posi− tion; later he similarly accepted my new role as a top executive.” Where do you think changes should begin: in individual attitudes, at the level of companies, or in society itself? “When tending to be torn apart by their diverse ambitions, women need the support of their employers. They must feel that their management trust them and count on them, while their fami− lies stand behind them as steady hinter− lands,” Ránky says. It is possible that more things should be changed in order to create a more favor− able situation in Hungary, though “We need a deeper change in society’s atti− tudes so that women can achieve a higher social esteem than what they have now,” suggests Zsuzsa Beke. “A more support− ive, state−sponsored network should be created in order to aid working mothers;

as a result, the female executive as a phe− nomenon would become more common.” The problem is still largely rooted in individual attitudes, which Hungarian women develop on their own. “Interest− ingly enough, Western European women come to Hungary to boost their careers, as they believe building a female career is easier here than in their home mar− kets, for example in Germany,” Orsolya Oszabó believes. How about affirmative action for women? Our interviewees object to this unan− imously. “Women are not a minority,” they all say. “What is even more impor− tant, women must not be treated as a minority,” insists Beke. “At my company, Gedeon Richter, the first criterion is apti− tude, meaning one’s professional and per− sonal suitability for a given position. On the other hand, we offer several forms of assistance to our female employees with children, in order to make it easier for them to harmonize work and raising a child raising.” Ránky believes, “It is not the whole world that needs to be changed. There are only concrete situations that need to be made more humane for employees. For instance, we have allowed a female col− league in a very important position to work from home for several summers, because that was the only way she could manage her children’s summer breaks.” Part−time work is universally popu− lar among our respondents. “Part−time employment is good for both employ− ers and employees,” explains Ágnes Jagicza. “The company benefits because employees work in a more focused way, and female employees return the favor by their loyalty. At Invitel, we fully sup− port part−time employment.” It does, nevertheless, have its limitations. “It only works in the case of subordinate positions. A part−time boss is simply unimaginable.” What do you think about so−called inclusive practices? “Yes, we follow such practices at Invi− tel, too,” Beke says. “I myself have relied on this form of help when my children

were still young. As opposed to Ágnes, I think inclusive practices help female employees to a great extent, even if they work in managerial positions.” Ránky recalls that, “At L’Oreal, we often permitted unorthodox work hours and arrangements. We knew in every case that the colleagues in question would honor our efforts with their loyalty. And they did indeed; they always completed their tasks with maximum devotion.” Beke sums up her company’s approach thus: “We have always pondered every case individually, rather than applying a general rule.” The Brussels Council of Commissioners has approved a directive that prescribes a 40% female quota in non−board positions of corporations. What do you think about applying this quota in Hungary? “I do not support the idea of quotas,” Ránky says. “Being a woman or a man cannot become an advantage or a dis− advantage in the filling of a particular position. The directive is only a theo− retical principle anyway; talent should come first.” Pataki has a somewhat more nuanced view: “I generally oppose any kind of state−imposed quota, too. But in the public sphere, especially in parliamen− tary politics, such quotas are called for in Hungary. Such measures would be necessary for breaking certain solidified, unhealthy conventions.” Do you consider your own success typi− cal or untypical? “There are three prerequisites for a suc− cessful career,” Ránky enumerates: “Tal− ent, hard work and good luck. Luck is the trickiest, as one also has to have an eye for the opportunities.” Jagicza’s career serves as a good exam− ple. “From the point of view of my career, the MBA I acquired in Paris has been of crucial importance. Without the 1990 political transition in Hungary, however, pursuing this MBA would not have been possible. But in order to take advantage of this unique opportunity, I needed my two previous degrees in economics and law, and I needed the three foreign lan− guages I could speak.”

BBJ

3Special Report Green certifications: everyone wants one

GREEN BUSINESS States and companies alike in more developed economies keep the green banner held high, whether that means action towards sustainability and the resulting increases in efficiency or just lip service. Office buildings are seeking certifications, auto makers are investing in the hopes that electric cars will overcome the internal combustion engine, and scientists are hopeful that technological innovation will come with the support of new ideas.

Power drive for a hefty price

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Budapest Business Journal | Sept 20 – Oct 03

GREEN CERTIFICATIONS – EVERYONE WANTS ONE While most analysts are still very cautious about talking of a recovery on Budapest’s office market, green certification and eco−friendliness is one key extra to dazzle potential new tenants.

STORY HIGHLIGHTS ■

Every new office project in Budapest applies for green certifications ■ The proportion of green office buildings will exceed 12% by the end of 2014

KRISZTIÁN KUMMER

BY THE END OF 2014, THE PROPORTION OF GREEN OFFICE BUILDINGS IN TOTAL STOCK WILL EXCEED 12%

The office vacancy rate in Budapest stood at 19.9% at the end of 2013 Q2, indicat− ing an improvement over the same period in 2012, however showing basically no change compared to the previous quarter. The lowest vacancy rate (14.2%) was mea− sured in the South Buda submarket, whilst the highest vacancy level is still seen in the Periphery region (30.1%). 100% CERTIFIED Meanwhile, developers have found them− selves a viable niche market, where low maintenance costs meet eco−friendly and image improving solutions: green offices. The green certified office portfo− lio in Budapest – including certification acquired for new buildings and released for existing buildings – had reached 262,000 sqm by the beginning of 2013, which corresponds to 8.2% of the city’s modern office stock, according to a mar− ket analysis of Colliers International. In 2013−2014, all major office develop− ments will receive LEED or BREEAM cer− tifications, Collins predicted. Skanska’s Green House has already received the first LEED Platinum certificate in Hungary with an exceptionally high score. Váci Greens’s Building A was the first to receive an ‘Excel− lent’ mark from the BREEAM Code for Sus− tainable Buildings. Other developments are trying to keep pace. The Váci Corner Offices, Vision Tow− ers and Corvin Corner buildings have all applied for BREEAM certification, the Nor− dic Light Offices for LEED certification, and Eiffel Palace could be the first dual− certified office building in Hungary. The above development projects and existing buildings undergoing certification proce− dures total a little more than 170,000 sqm of green office space expansion by the end of 2014. Altogether the proportion of green office buildings in total stock will exceed 12% by that date. WHICH ONE SHOULD I LOVE? Eco−conscious certification schemes have been developed in many countries in the past decades. However, the two most com− mon are the BREEAM (Building Research Establishment Environmental Assessment Method) system from the United Kingdom and the American LEED (Leadership in Energy and Environmental Design). BREEAM was the first eco−building rating system, however, its international spread was initially limited by the missing criteria for projects outside the UK. Now, of course, this problem has been bypassed.

The certification for new buildings consists of two main parts: classifica− tion during the design stage and grade ratings following the completion of construction. The final rating may be obtained based on the certification after completion of the construction, because then you can make sure that statements and plans made in the design phase have materialized effectively. Experience shows that international ver− sions of BREEAM are relatively easy to adopt in the European Union countries, since the requirements for this certification are mainly included in the EU standards, and even national standards and regula− tions could be applied if they meet the min− imum requirements of the EU−standards. The LEED system was created in 1998 in the United States, and could be applied

anywhere in the world from the begin− ning. New and existing buildings can both be classified under it. For each build− ing, points are gained in the same cate− gories (sustainable land use, water use, energy usage and atmosphere, materials and use of these resources, the quality of the internal environment, innovation), but the criteria for obtaining the points are different. The points are aggregated and, based on the final results, the project can achieve a ‘Certified’, ‘Silver’, ‘Gold’ or ‘Platinum’ certificate. Compared to the above systems, the Green Building Program funded by the European Union is much more flexi− ble and focused almost exclusively on energy efficiency and renewable energy use. There is no strict requirement for the system, the objective and the method of

implementation for each project is differ− ent. However, this flexibility also means the scores achieved by each individual project are not clearly comparable. TOP SCORE BUILDINGS The two latest completed green projects in Budapest are both remarkable. Devel− oped by Skanska, Green House opened last December and occupancy had reached 93% by August 2013, which is among the best performances in the capital. During construction, special attention was paid to energy and water efficiency and to decreas− ing carbon dioxide emissions. Váci Greens is built so as to remain sus− tainable at all levels. Special attention was paid to ensure that both the development and the buildings themselves are eco− friendly every step of the way.

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Budapest Business Journal | Sept 20 – Oct 03

News EU PARLIAMENT SEEKS CAP ON CROPBASED BIOFUELS IN TRANSPORT The European Parliament voted to curb the transport industry’s consumption of bio− fuels that come from crops in a bid to ease competition with food production. The Euro− pean Union assembly fixed a 6% limit on the use of crop−based biofuels in ground transport, seeking to spur the development of clean fuels from non−food sources. The vote on September 11 in Strasbourg sets the stage for talks among EU governments on the issue. Any differences with the Parlia− ment would have to be ironed out in negoti− ations that could add months to the process for reaching a final accord. The EU wants to prevent a requirement that at least 10% of energy for road and rail transport in 2020 come from renewable sources causes side− effects that undermine the battle against global warming. Made primarily from crops such as rapeseed, wheat, corn and sugar, bio− fuels including ethanol and biodiesel are the main renewable energy for transport and offer the prospect of reducing the use of fos− sil fuels blamed for climate change.

ernment seeks to cut costs for consumers. The upper house approved the law drafted in July, Bloomberg reported on Septem− ber 13 citing the website of the Senate, the nation’s sole legislative body after the lower house was dissolved prior to a pending elec− tion. Subsidies for renewables, particularly solar, have raised prices for households and industry in the past three years as costs are passed onto consumers. That has threat− ened industry’s competitiveness, Prime Minister Jiri Rusnok said in July. Solar plants connected to the grid after Decem− ber 31 won’t get subsidies. Hydro, wind and biomass power plants that received con− struction permits this year will be eligible for support if they’re completed before the end of 2014. Hydro plants with less than 10 megawatts of capacity will remain eligible for subsidies.

VISEGRÁD FOUR: EU MUST SUPPORT BIOFUEL INDUSTRY Agricultural sector leaders from the Viseg− rád Four (V4) nations – Hungary, Czech Republic, Poland, and Slovakia – have called for the European Union to support CZECH SENATE APPROVES ENDING the development of crop−based biofuels. STATE SUPPORT TO RENEWABLES The V4 nations can reportedly supply some The Czech Senate passed a law to end 8 billion liters of biofuel to the Union per state support for most green−power proj− year, a figure representing about 1% of total ects starting up from next year as the gov− European fuel demand. ADVERTISEMENT

MOL GETS THE OIL MOL’s ‘We get the oil, you get the party!’ campaign, launched mid−August and ended on September 1, saw a record volume of used cooking oil turned in at MOL’s petrol stations. According to Domokos Szollár, director of Communica− tion MOL Hungary, people delivered nearly 13.5 tons of used cooking oil to the stations during the campaign. The first similar campaign was launched in May 2011. “Results speak for themselves. In the last two years we collected 175 tons of used cooking oil at MOL filling stations involved into the program,” Szollár said. However, in a survey that was conducted in August by MOL, results show that more than 50% of respondents had the view that pouring the used cook− ing oil into the sink or dropping it into the garbage can is a simple and effi− cient method for resolving the problem of used cooking oil. According to sta− tistics, only 14−15% of used cooking oil is collected in Hungary, of the several ten thousands of tons of cooking oil sold every year.

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Budapest Business Journal | Sept 20 – Oct 03

POWER DRIVE FOR A HEFTY PRICE The overall drive to preserve the environment and shift energy use away from fossil fuels that generate harmful emissions has an everyday reality in the options available in the cars that people drive. This includes costly, but effectively zero−emission electric cars. As with any niche technology, manufacturers face the challenge that serious demand will only come once prices reach a point that means they are competitive with an average car.

STORY HIGHLIGHTS ■

Electric vehicles boast efﬁciency, zero emissions ■ Technology is expensive, and needs market demand to exert potential global beneﬁts

because they are substantially more expen− sive than cars with an internal combustion engine and they also suffer from limited range,” Martin Winterkorn, chief executive of Volkswagen, said in an interview in July.

GERGŐ RÁCZ

Prospective customers looking for a new car have an immense variety of marques, models and extras to choose from, with the features to match any need and also any desire they may have to achieve better effi− ciency and reduce their carbon footprints. Carmakers are investing heavily in the development of cars that rely exclusively on electricity as the next generation of urban transport method, one that is appealing in its eco−friendliness, but loses traction once you look at the price tag. For the time being, the outlook isn’t par− ticularly rosy for the spread of electric vehi− cles (or vehicles in general), at least in Europe. The latest figures from the Euro− pean Automobile Manufacturers’ Associa− tion (ACEA) show that there were 653,872 new cars registered in the European Union, a 5% year−on−year drop. Up to August, 5.2 million cars were sold this year, the lowest total on the continent since 1990. In 2011, the annual sales total came to 11.6 million cars compared to more than 15 million prior to the crisis in 2008, ACEA figures show. In Hungary, current demand figures are somewhat more favorable than the EU average, but this is in many cases due to base effects, namely the drastic slump in demand seen in the past years of crisis turmoil. In the first eight months of 2013, 36,372 personal vehicles were added to the national fleet, according to information pro− vider DataHouse, a year−on−year increase of 1.61%. And while the monthly figure leaped 17.8% from August 2012, it dropped 17.2% from July 2013. ELECTRIC DREAMS Amid such market conditions, manufactur− ers are also aware of the challenges Euro− pean vehicle markets face, which is all the more true for electric cars. “Electric cars [.‥] will for now only serve as a second car or fleet vehicles. This is

FULLY CHARGED: THE 2014 TESLA MODEL S

Car manufacturer Fiat went so far as to announce in August that it wouldn’t be investing any more money in devel− oping electric technologies until it sees customer willingness to pay the markup that comes with the environmentally friendly alternative. Audi likewise announced recently that it wouldn’t be producing vehicles that run solely on electricity after canceling the develop− ment of two electronic models. But this isn’t discouraging other inter− national manufacturers that are invest−

ing heavily in developing electric car technologies and seeing a response. In the United States, 11,392 electric vehi− cles were sold in August, a notable 147% year−on−year increase. The Edmunds. com auto information site predicts that the 0.4% share of electric cars in the U.S. market will grow to 1.5% by 2017. Manufacturers can rightfully have high hopes for the American market, where, unlike Europe, the overall car market is booming, with sales having grown 17% in August from a year earlier.

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Budapest Business Journal | Sept 20 – Oct 03

Environmentally friendly, 50% less energy use, 100% less if the source of power is ‘green’ ■ Even performance, better acceleration ■ Clean and silent operation ■ No fuel use when starting up at traffic lights, energy recovery from braking ■ Tax benefits, reduced duties Cheaper to operate than internal combustion vehicles ■

PROS CONS BABY STEPS In Hungary, although there are mod− els available, the commonly known draw− backs, such as the hefty price and the lim− ited range, are expected to restrict their use to that of corporate fleet vehicles used for traveling within city limits. The ELMŰ−ÉMÁSz group currently oper− ates six electric filling stations in Budapest and offers them for use free of charge until the end of the year. However, it marks the effort as a commitment to environmental preserva− tion rather than a tangible business venture,

at least until the efficiency and output of the existing batteries are improved to a degree that they could become competitive with internal combustion engines. “For the time being, the price of these cars is significantly higher than others fitted with internal combustion engines, but the technol− ogy’s constant development and the mass pro− duction that rides on the waves of increased demand could lead to continuing drops in prices,” the company said, laying out an opti− mistic scenario.For Hungary the most com− monly discussed use of electric vehicles is for

public transportation, with regional cities hav− ing put into operation power−driven buses or having experimented with them in the recent past. Public transport is actually also a driver of domestic innovation, with models having been developed in Debrecen as well as Győr. Debrecen’s Inter Tan−Ker Zrt’s proto− type boasts energy costs of HUF 1,800 over 100 kilometers, compared to HUF 10,000 for diesel−fueled vehicles over the same distance. However, a single unit costs HUF 20 million more. The concept developed by researchers at the Széchenyi

■ Expensive

initial outlay range, mostly useful only for urban transport ■ Lengthy charging periods ■ Sensitivity to temperature ■ Silent operation is a danger to inattentive pedestrians ■ Use of heating or air conditioning reduces battery life ■ Limited

University in Győr involves an innovative answer to the limited range electric buses can travel by installing recharging capac− ities at every station, which would replen− ish the juice during each stop, adding enough to reach the next stop. Hungarian innovation faces competi− tion, of course, since Chinese manufactur− ers have already showcased and are actively looking to introduce models that can travel 250 kilometers with a single charge, models that they say can be used in Debrecen, Sze− ged, Budapest and other cities.

HOW THEY WORK The idea of powering vehicles with electricity is anything but new. In fact, history records show they were very popular in the late 19th and early 20th century, until they were swept away by rapid advances in the development of internal combustion engines, the resulting leap in performance and also the availability of cheap gasoline. A modern electric car looks exactly the same from the outside as an everyday ride, and also sports the majority of the stock features. The main difference is, naturally, the engine and how it utilizes energy. In the basic case, a controller that receives instructions from the driver pressing the accelerator pedal operates the electric motor. Over the years, as the idea of reintroducing electric vehicles reemerged in the late 20th century, the power source connected to the controller has been perhaps the most important area of development. At the dawn of electric cars, lead-acid batteries powered vehicles, followed by nickel metal hybrid batteries in the 1980s. Nowadays, the most common option is lithium-ion, the same technology used in cell phones and laptops. Of course, as an important aesthetic difference, electric cars have a voltmeter rather than a gas gauge.

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Budapest Business Journal | Sept 20 – Oct 03

INNOVATE IN CONCEPT, NOT JUST TECHNOLOGY STORY HIGHLIGHTS ■ Smart cities provide better living conditions in a sustainable and affordable way ■ No point in buying technology without knowing how it will improve everyday life

A city that is smart embraces new technologies and strategically puts them to use to improve the living conditions of its residents. What might sound as a utopia means a very different vision depending on where one goes. If you want to build something that’s new, you have to think of a new reason to make the effort, otherwise you defeat the purpose. The Budapest Business Journal spoke to Professor Jochen Kreusel, a renowned expert of the field about the smart city concept and the pitfalls it carries. GERGŐ RÁCZ

Could your summarize what you consider to be a smart city? A In general terms, it is a city where technology serves to improve the quality of living in a sustainable and affordable way. This can mean greatly different things since every city is an agglomeration of individual actors where strategies and goals may differ. Funda− mentally, a smart city is coordinated and utilizes developed technologies. This can cover synchronized public transpor− tation, efficient public administration, more effective energy services or combi− nations of all these.

How does a city go about becoming ‘smart’? A The most important part is defining what you want to achieve, since this can vary greatly between different parts of the world. The second is getting the necessary partners involved. Prefer− ably, they should bring in legal expertise, since the successful implementation of any strategy could only come from creating the necessary framework that incorporates the needed incentives as well as the penalties that push the venture along. There is also an often−underestimated element, to bring in people who know what other people want and how they behave.

So smart city development is fundamentally a political mat− ter stemming from a govern− ment decision? A Of course, there has to be political

Jochen Kreusel is a professor, teaching at several German universities and also leads or participates in the leadership of various smart grid professional organizations. He is head of ABB’s Smart Grid Sector Initiative, a member of the Steering Committee of the European Technology Platform for Electricity Networks of the Future, and is the leader of VDE, the Association for Electrical, Electronic & Information Technologies, one of the largest technical and scientific associations in Europe. drive behind it, but it also needs the other elements, since I believe no single company could successfully establish a smart city on its own. As such, since we are operating in democratic countries where there are elections, politicians are likely not necessarily going to be inter− ested in long−term projects that pay a dividend in the distant future. This is why we have to break down every strat− egy and go about its implementation so that they will have something to show for their troubles to their voters.

Tell us about some of your projects and experiences? A One of our most successful projects was in northern Italy, where local authorities targeted a significant improve− ment in the operation of public adminis− tration. Other locations have different pri− orities. In Vienna, local authorities had no interest in working on their services; they were instead more focused on achieving improvements in terms of environmental impact. I could also cite a rapidly grow− ing mining city in Latin America, which is a different world altogether, different aims, especially provided that they don’t have the developed infrastructure that is already a given in Europe.

What is the better way to reach the best results, work with the existing infrastruc− ture or start again from scratch, but incorporating smart concepts? A In the end, technically it’s probably eas− ier to build something from scratch if you have all the degrees of freedom. Still, I wouldn’t underestimate the significance

the same thing, you should just forget it. In Europe, we have developed infrastruc− tures and there are some systems, like the electricity networks, that have been here in their current shape since the 1920s. If you’ve had something for 100 years, you’ll have figured out how to organize around it by this point. If your only drive for the intro− duction of new technologies is to do the exact same thing you’re already doing, then it’s not worth the bother. You should always develop new ideas, identify new demand and most importantly, governments and authorities should lead by example.

So this is not always the case? A For example, the European Commission determined the goal of equipping every household in the European Union with smart metering technology by 2020. This has happened in Stockholm and it was used to facili− tate monthly billing just as before. The question is: why? These devices allow for a far better way of regulating and using energy use, but it also takes effort to make the users understand how they can benefit from this, to generate the neces− sary demand and for providers to react by making business decisions that best reflect the consumption habits.

In Hungary, providers, espe− cially in the energy sector, say the environment, the high level of sectoral taxes will shortly lead to sup− ply concerns since any funds allocated for developments are consumed. Do you see this as a realistic danger?

IF YOUR ONLY DRIVE FOR THE INTRODUCTION OF NEW TECHNOLOGIES IS TO DO THE EXACT SAME THING YOU’RE ALREADY DOING, THEN IT’S NOT WORTH THE BOTHER of standing infrastructure. Essentially, it all boils down to how cities approach the issue and how they craft the framework needed to support the developments. For instance, we are involved in a green− field project in Stockholm, in partner− ship with the city. Here we can see that the local officials are actually devising the legal and operating framework based on what they learn from the capacities of the technology as it is being established in the new environment. This is always an important element, to take a step away from what already exists, to take people out of their comfort zones. And this is where there are still some misguided ideas. If you want to introduce new technology for the purpose of doing

A I am not familiar with the specif− ics but I have seen similar cases. In East Germany, the lack of develop− ment in the railroad system eventu− ally led to a situation where there were malfunctions one after another that developed overnight. When some− thing like this happens, not only does it cost more, you also don’t have the option to think ahead with any form of strategy regarding the overall system since you’re busy putting out the fires. Energy infrastructures are similar in that they need constant maintenance; if that is absent, the same problems are prone to occur. If this were the case, I would advise the Hungarian authori− ties to take this into consideration.

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Budapest Business Journal | Sept 20 – Oct 03

LET’S BUILD IT GREEN! Not just individuals, but whole countries have begun to see the importance of protecting our environment. Nowadays, the leaders of big companies also understand that for the good of their future, sustainability and environmental protection are major issues, so it is in their interests to comply with green requirements as much as possible. GERGELY HERPAI

“A green office building can only be called such if it meets the requirements of an internationally recognized rating sys− tem,” Andrea Somos, executive assistant of BREEAM HB Reavis Hungary Kft told the Budapest Business Journal. “HB Rea− vis Group has chosen the BREEAM rat− ing system in relation to our Váci Corner Offices building, which is still under devel− opment, thus achieving the goal to com− ply to a complex set of requirements in regards to the conceptual design process, the construction and the operation of the building itself,” she added. “International certifications for green build− ings are based on a holistic approach,” Zsom− bor Barta, senior consultant of BREEAM

International and vice president of the Hun− gary Green Building Council (HuGBC) said. Depending on the level of certificate being sought, there are both compulsary and volun− tary requirements. HOW TO BE GREEN? Green offices are nice, but big companies are still mainly interested in profit and the lowest cost possible. It may come to a sur− prise to some, but green offices can actually be cheaper in the long run. “The investors and tenants of the property are all keeping in mind the low cost side, but fortunately the green office is also trendy today,” Edit Csizmadia, communication manager from KÖVET, an association for the sustainable economy, explained. Another fact that may be surprising is that having a green certification for an office com− plex has become a basic requirement. “The multinational, foreign companies that are generally on the Budapest market are often obliged to rent green qualified buildings wherever they are in the world. It’s actually good for their colleagues as well, since they can work in pleasant environments,” said Péter Szalma, leasing manager at CA Immo Real Estate Management Hungary Kft. NOT SO OBVIOUS How many green buildings are actually in Budapest? “In Hungary we have about 25 offices that are either already classified as green, or awaiting final classification,” Barta

IN THE MAKING

ON THE DRAWING TABLE Project: OFFICE GARDEN III. Developer: GRT Group Green certificate: under precertification, aiming for LEED Silver Type: office Location: South-Buda Area: 19,800 sqm Expected delivery date: 2015 Project: V48 (note: the project has final building permit) Developer: Codic Hungary Kft Green certificate: BREEAM Very Good, based on BREEAM Europe Commercial 2009 Type: office Location: District 13, Váci út 48/e-f Area: 13,445 sqm (gross lettable area) Expected delivery date: 2016

said. “In our portfolio, which consists of nine office buildings, we have two buildings await− ing classification but we are planning to clas− sify other buildings as well. Concerning

Project: VISION TOWERS Developer: Futureal Green certificate: filed for BREEAM, expected result: Very Good or Excellent Type: office Location: District 13 Area: North Tower: 2,699 sqm, South Tower: 6,239 sqm Expected delivery date: Q2 2014 Project: NORDIC LIGHT Developer: Skanska Property Hungary Green certificate: LEED Gold Type: office with retail units Location: District 13, Váci út 96-98 Area: 26,000 sqm Expected delivery date: 2015 Project: V17 Developer: WING Zrt Green certificate: BREEAM Very Good Type: office Location: District 13, Váci út 17 Area: 12,350 sqm Expected delivery date: 18 months after signing the project

green buildings in Hungary, our country is in the front rank as every building which is under development will be classified green,” Szalma concluded.

EXPERT OPINION

GREEN HOUSE AND NORDIC LIGHT: SUSTAINABLE DEVELOPMENT AT ITS BEST Skanska Property Hungary’s Managing Director Grzegorz Strutynski reflects on the leasing success of Hungary’s first and only LEED Platinum office building, and looks at the future of green commercial development in Budapest. The best measure of success for an office building is how well it resonates with tenants from various sectors, and Green House has proven to be a versatile solution for a very diverse, international tenant mix consisting of both headquarters (ABB, Deichmann, IDC, Isys-On) and business service centers (Avis Budget Group, MSCI). The building – only eight months after its handover – is practically fully leased (93%), which is scarce for speculative office projects in the entire CEE region. This number reas-

sures us that the healthy, inspiring, efficient and cool workspaces that we created are well received and appreciated by our clients. Green House redefines the concepts of work and collaboration, and accommodates the working style of future generations with its functional common spaces and beautifully landscaped garden, as well as its quality interior. Our next project – the LEED Gold precertified Nordic Light – will also serve as a green urban haven in the 13th district, surrounded by the dynamism of the Váci út office corridor. The 26,000 sqm office building will offer the ideal environment for various types of businesses and retail units to thrive at a popular location with high visibility and great accessibility.

Nordic Light

We believe that the rebounding market trends are in favor of quality green development, and Skanska continues to be at the forefront when it comes to adding new sustainable buildings to the Budapest urban landscape.

Nordic Light roof terrace

www.skanska.hu

NOTE: ALL ARTICLES MARKED EXPERT OPINIONS ARE PAID PROMOTIONAL CONTENT FOR WHICH THE BUDAPEST BUSINESS JOURNAL DOES NOT TAKE RESPONSIBILITY

WWW.BBJ.HU

Budapest Business Journal | Sept 20 â€“ Oct 03

Green office buildings

HALLER GARDENS www.hallergardens.hu

9 1,500

4,900 3â€“5

13 3.70

32,500 57,000

7 4,270

16,322 5

12â€“13 1000 HUF

22,500 26,200

8 3,500

26,200 5

12.95â€“ 13.5 3.70

22,000 25,000

7 1,500

1,400 5

13.27 4.27

20,050 20,500

9 2,800

â€“ 5

13 3.90

NORDIC LIGHT 3

www.skanska.hu

2008

Âť

â€“

2010

Ringier, P&G, Systemax

â€“

2008

Morgan Stanley, Lexmark, Millenium Wellness, Volksbank, GrĂĄnit Bank

â€“

Âť Âť

â€“

RESULT OF VALIDATION VALID UNTIL

CLASSIFICATION OF EXISTING BUILDING

FINAL PHASE

STAGE OF GREEN CERTIFICATION RATING â€“

PHASE PLANNING

OTHER

LOCAL SELECTIVE WASTE COLLECTION

SELF-REGULATING ILLUMINATION

NATURAL VENTILLATION

ENERGY EFFICIENCY PROGRAM â€“

2015

â€“

INDEPENDENT ENERGY SUPPLY

OWN SEWAGE MANAGEMENT

PUBLIC TRANSPORTATION

2008

Magyar Posta Zrt, AON, Samsung, Tesco, Orange, BNP Paribas

SECURE BICYCLE AREA

CURRENT MAIN TENANTS

SOLAR POWER

MONTHLY RENTAL FEE IN 2013 (EURO/SQM) MONTHLY SERVICE CHARGE IN 2013 (EURO/SQM)

35,900 50,800

GREEN SERVICES

YEAR CONSTRUCTED

www.gatewaybc.hu

CURRENT LEASABLE OFFICE SPACE (SQM) MINIMAL LEASE TERM (YEAR)

GATEWAY OFFICE PARK

NO. OF LEVELS AVERAGE LEVEL SIZE (SQM)

COMPANY WEBSITE

NET OFFICE SPACE (SQM) TOTAL GROSS BUILDING AREA (SQM)

RANK

Ranked by net office space

OWNERSHIP REAL ESTATE (%) AGENCY HUNGARIAN (AGENCIES) OR NONAGENT(S) HUNGARIAN

Âť

â€“ Ablon Group Limited (100)

1138 Budapest, DunavirĂĄg utca 2. (1) 225-6600 (1) 225-6601 sales@ablon.hu

*HUJĹƒ .RR g.koo@ LPPRĂ€QDQ] FRP (1) 451-8040

â€“ ,PPRĂ€QDQ] Group (100)

1095 Budapest, SoroksĂĄri Ăşt 32â€“34. (1) 451-8040 â€“ RIĂ€FH# LPPRĂ€QDQ] FRP

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â€“ â€“

1133 Budapest, VĂĄci Ăşt 96â€“98. (1) 382-9100 (1) 382-9129 leasing@skanska.hu

â€“

(100) â€“

1082 Budapest, FutĂł utca 35-41. (1) 266-2181 â€“ RIĂ€FH#IXWXUHDO KX

â€“

TriGrĂĄnit Holding (26) Heitman Hepp IV (74)

1095 Budapest, Lechner Ă–dĂśn fasor 8. (20) 220-5641 â€“ scsikos@trigranit.com

ConvergenCE, (1) 225-0912

â€“ Europa Fund II (100)

1062 Budapest, 7HUp] N|U~W Â˛ (1) 225-0912 (1) 375-0445 RIĂ€FH# convergen-ce.com

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â€“ IVG Funds (100)

1117 Budapest, GĂĄbor DĂŠnes utca 2. (1) 382-7560 (1) 382-7570 RIĂ€FH#LYJ KX

Robertson Hungary, (1) 327 2050 www.robertson.hu

GRT Group (100) â€“

1117 Budapest, $Ot] XWFD (1) 327-2050 (1) 327-2055 LQIR#RIĂ€FHJDUGHQ KX 1082 Budapest, FutĂł utca 47-53. (1) 266-2181 â€“ RIĂ€FH#IXWXUHDO KX

BREEAM in Use

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â€“

LEED Gold â€“

BREEAM â€“

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LEED registered project

CORVIN TOWERS www.futureal.hu 4

MILLENNIUM TOWER III www.millenniumtowers.hu

EIFFEL SQUARE OFFICE BUILDING 6

www.eiffelsquare.com

INFOPARK BUILDING D

OFFICE GARDEN III

www.infopark.hu

ZZZ RIĂ€FHJDUGHQ KX

â€“

11.50â€“ 13 3

2007

STRABAG Zrt, Lufthansa Systems, Pannontej

â€“

18,500 5

12.50â€“ 13 960 HUF

2015

â€“

1,300 5

13 4.25

â€“ 5

20 3.90

18,500

7 2,500

559 3

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8 2,300

18,000 20,000

8 2,500

â€“

Âť Âť

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2010

7 3,200

18,500

â€“

Cetelem Bank, AXN, Medicover, ESAB, Grundfos, Givaudan, Mastercard

18,500 23,700

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â€“

BREEAM

Âť

LEED Silver

â€“

LEED â€“

Very Good 2013

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(100) â€“

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â€“ â€“

Cushman & :DNHĂ€HOG 7DPDUD 6]iQWy (1) 484-1387, WDPDUD V]DQWR# eur.cushwake. com

â€“ Union Investment (100)

1123 Budapest, Nagyenyed utca 8â€“14. â€“ â€“ info.budapest@ eur.cushwake.com

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LEED registered project

Âť

CB Richard Ellis, (1) 374-3040, Cushman and :DNHĂ€HOG (1) 268-1288

TriGrĂĄnit Holding (26) Heitman Hepp IV (74)

1095 Budapest, Lechner Ă–dĂśn fasor 7. (20) 220-5641 â€“ scsikos@trigranit.com

LEED registered project

Colliers, Eston

TriGrĂĄnit Holding (26) Heitman Hepp IV (74)

1095 Budapest, Lechner Ă–dĂśn fasor 6. (20) 220-5641 â€“ scsikos@trigranit.com

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â€“ Bluehouse Capital (100)

1117 Budapest, Neumann JĂĄnos utca 1/E (1) 382-7560 (1) 382-7570 RIĂ€FH#LYJ KX

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â€“ â€“

1134 Budapest, .DVViN /DMRV XWFD 19â€“25. (1) 382-9100 (1) 382-9129 leasing@skanska.hu

CORVIN ONE www.futureal.hu 9

2010

Johnson & Johnson, Granit Agriculture, Deutsche Leasing

13â€“ 13.75 3.90

2008

. + %DQN NestlĂŠ, Prologis, JTI, Oracle

â€“

2,500 3â€“5

12.50â€“ 13.5 3.90

2006

Vodafone, Boehringer, SIA, De Lage Landen

â€“

1,943 5

11.90â€“ 12.9 2.90

1,280 5

12.95â€“ 13.5 855 HUF

KRISZTINA PALACE 10

18,000 22,600

6 3,000

10,988 5

12.75â€“ 13.5 3.59

MILLENNIUM TOWER II 11 www.milleniumtowers.hu

17,800 18,400

9 2,400

6,000 5

MILLENNIUM TOWER I

17,100

8 2,300

ZZZ NULV]WLQDSDODFH KX

www.millenniumtowers.hu

INFOPARK BUILDING E www.infopark.hu

Âť

17,000

Âť

7 2,000â€“ 2800

GREEN HOUSE www.skanska.hu 14

16,800 17,800

8 2,430

2008

Futureal, DAS, Epam

â€“

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2009

Lufthansa Systems, EIT, IVG

2012

ABB, Avis Budget Group, Deichmann, Innovative Dental Care, Isys-On, MSCI, Skanska

â€“

ADDRESS PHONE FAX EMAIL

â€“

LEED Silver

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LEED Platinum

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WWW.BBJ.HU

CURRENT LEASABLE OFFICE SPACE (SQM) MINIMAL LEASE TERM (YEAR)

MONTHLY RENTAL FEE IN 2013 (EURO/SQM) MONTHLY SERVICE CHARGE IN 2013 (EURO/SQM)

YEAR CONSTRUCTED

750 5

12.50 960 HUF

2010

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K3 - ALLIANZ OFFICE 16 BUILDING

14,350 30,000

8 2,300

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14,277 260,000

8 2,100

2,252 5

ZZZ N LURGDKD] KX

OFFICE GARDEN I 17

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11.50– 12.5

LAURUS OFFICES 18

13,973 27,000

–2 + 6-7 550– 1160

9,820 3

10.50 3.50

NEW AGE CENTER 19

13,200 20,400

8 1,600

13,200 3–5

13.50– 16 3.80

ZZZ ODXUXVRIÀFHV KX

ZZZ QHZDJHEF KX

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12,370 23,000

9 1,300

679 5

13 4

11,500 13,500

6 2,400

11,500 3–5

13–14 3.75

2010

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2008

3KLOOLSV 6LR (FNHV 03* +3

2011

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NATURAL VENTILLATION

SELF-REGULATING ILLUMINATION

LOCAL SELECTIVE WASTE COLLECTION

OTHER

PHASE PLANNING

FINAL PHASE

CLASSIFICATION OF EXISTING BUILDING

INDEPENDENT ENERGY SUPPLY

–

OWN SEWAGE MANAGEMENT

SECURE BICYCLE AREA

PUBLIC TRANSPORTATION

SOLAR POWER

OFFICE GARDEN II

GREEN SERVICES

–

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RESULT OF VALIDATION VALID UNTIL

NO. OF LEVELS AVERAGE LEVEL SIZE (SQM) 8 2,200

STAGE OF GREEN CERTIFICATION RATING

NET OFFICE SPACE (SQM) TOTAL GROSS BUILDING AREA (SQM)

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16,159 27,000

RANK

CURRENT MAIN TENANTS

COMPANY WEBSITE

Budapest Business Journal | Sept 20 – Oct 03

OWNERSHIP REAL ESTATE (%) AGENCY HUNGARIAN (AGENCIES) OR NONAGENT(S) HUNGARIAN

ADDRESS PHONE FAX EMAIL

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11,330 25,000

9 1,900

12,063 5

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10,600 22,000

8 1,800

12,350 5

9,865

8 400–900

2,186 3

11.40– 12.75 2.70

8,058 8,686

6 1,160

6,295 5

14.50 3.84

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WWW.BBJ.HU

Focus: Fleet management

Budapest Business Journal | Sept 20 – Oct 03

E-TOLL TO KILL OFF FLEET INVESTMENT? Leasing companies have experienced a serious decline in contract numbers with Hungarian fleet management enterprises in the second quarter of this year. Fleets and their owners seem to be going through some kind of consolidation due to the shrinking market and increasing costs.

STORY HIGHLIGHTS ■

Vehicle ﬂeets facing difﬁcult times, though market now bottoming out ■ E-toll system may promote the use of heavier trucks

and new regulations than their interna− tional peers. Freight tonne kilometers in national transport of goods fell by almost 7% year−on−year in 2013 Q2, while inter− national transport grew by 5% in the same period, according to the Hungarian Cen−

LOBBYING FOR LESS RED TAPE “ALD Automotive is closely following changes in the regulatory environment, which presents us with new challenges from time to time. Actually the most difficult of these to comply with is to specify detailed

KRISZTIÁN KUMMER

While the vehicle leasing market stagnated year−on−year in Q2, fleet financing pro− vided some very poor data, unsurprisingly. During the first six months, total new loans of HUF 29.63 billion were signed on the domestic market, compared with the HUF 33.92 bln in the previous year. Based on the number of items, the big picture seems even sadder: by the end of June, some 5,631 new contracts has been issued, one−fifth fewer than a year ago, according to the statistics of the Hungarian Leasing Association. MISSING REPLACEMENTS “ALD Automotive has successfully expanded its portfolio in recent years, although the impact of the crisis has been felt heavily by the sector and our company as well. We have faced the reality at fleet renewal occasions, when our partners’ fleets are decreasing due to rationalization and headcount reductions,” said Zoltán Borbély, head of sales & marketing at ALD Automotive Ltd Hungary. “Our customer base and target group did not change sig− nificantly. We continue to believe in com− panies with an international background and cooperation based on local partner− ships. Our customers still require a high− quality fleet services, but expectations strengthened for the lowest cost base pos− sible and for fleet rationalization.” Gábor Sőregi, sales manager for com− mercial vehicle tires of Continental Hun− garia Kft, added that “Despite the fact, that we carry out only a small portion of the tire management of the domestic commer− cial vehicle portfolio, we have a very good view on the market through our partners.” Continental provides a complete tire man− agement service package to its custom− ers, including tire supply, retreading, waste management and even domestic and inter− national vehicle rescue. “Our service pack− age exists since 2010 and we have more and more directly served partners, as the size and composition of the fleets they manage are also growing. While Continental’s data is not representative by any means, some conclusions can be made, even if in a condi− tional tense,” Sőregi explained. Domestic passenger bus fleets are usually in municipal or state hands, with all the advantages and disadvan−

THE RECENT INTRODUCTION OF THE E-TOLL WILL PRESUMABLY PROMOTE THE USE OF HEAVIER TRUCKS ON THE MARKET tages that suggests. In the case of aging bus fleets, necessary and optimal vehi− cle replacements don’t take place due to financial and organizational challenges and because of public procurement pro− cedures, car managers are interested in the acquisition of cheap and basic prod− ucts. “Due to this practice, the mileage is neglected, even if it’s more important than the price in itself,” Sőregi explains. REACHING THE BOTTOM Concerning the transport of goods, com− panies working on the domestic mar− ket are far more affected by the crisis

tral Statistical Office. “Since the crisis, many small companies went bankrupt and a kind of consolidation is going on over the market, where big market players can only stay on their feet,” Sőregi said. “The recent introduction of the e−toll will presumably promote the use of heavier trucks on the market. I believe that the tire demand of trucks between 3.5−7.5 tonnes will decrease in the near future, while trucks weigh more than 10 tonnes will use more. However, the overall mar− ket reaches its absolute bottom these days, so in the mid−term, I forecast a slow expanding,” he added.

information to our clients taking into account the sometimes−tight deadlines. On the other hand, progressive changes were also made in the case of reclaiming VAT content of the monthly fee,” Borbély said. “Regarding the near future, we would like to be partners with the government in the reduction of the administrative burden associated with VAT refunds. This is, of course, in the interest of the whole indus− try, so the integration and coordination of these activities with the economic ministry is dedicated to the Fleet Commission work− ing under the auspices of the Hungarian Leasing Association,” he added.

WWW.BBJ.HU

Focus: Fleet management 23

Budapest Business Journal | Sept 20 – Oct 03

SUSTAINABLE DRIVING IN BUDAPEST One car, more drivers: a more social way of motoring has been introduced in Budapest. ZSÓFIA VÉGH

Car sharing and car−pooling are not the same but they do have something in com− mon. The idea behind both is to use cars/ drive more conscientiously. Instead of allotting five−seats for one, several peo− ple use the same car. The major difference is that when pooling, they sit in the car at the same time, when sharing, they drive it at different periods. Car sharing as a service has thus far been unknown in Hungary. With 50 cars planned to put into service this year at Infopark, Mom Park, Lechner Ödön sétány and some more, Hungary−owned firm Ava− lon has introduced a more social way of driving in Budapest too. Car sharing first appeared in Switzer− land in 1948. Today, the service is avail− able in dozens of European cities includ− ing Berlin, Vienna and Amsterdam. Cars are scattered around the city where cus− tomers can collect and return them after a short online registration. What makes it popular is its flexibility: as opposed to

car rental, car sharing allows for a one− hour drive or less, usually at better rates. Global experience shows that custom− ers usually take cars for three−four hours driving 20−30 kilometers on average. Avalon set it launch date smartly: right after a new law forced all cab fares to rise to a uniform HUF 280/km scrapping all discounts, including corporate, Fuel prices have been creeping up for years, so have the service fees of the garages company fleets are compelled to use. According to data cited by Avalon managers, fleet use stands at 30% today, while 70% of company cars stay in the garage unused. If this ten− dency remains, car sharing will probably make it to next year. Also, considering that many of the trips are made from and back to the workplace, it makes sense to set up stations in the neighborhood of office hubs such as Infopark where the first 10 cars were put into service. Aside from business clients, individual drivers can use car sharing too. The HUF 649 daytime hourly rate plus a HUF 119 kilometer fee makes it a worthwhile option for housewives. Running errands after they have dropped the kids off at school is less costly if they can put aside the fees for regu− lar maintenance, parking and taxes families must pay for owning a car.

Though the tariffs are inviting in genera, surcharges and extras can be high. There is a HUF 9,900 registra− tion charge and monthly fees ranging from HUF 1,990 to HUF 8,490. The late return penalty, if it affects the next cus− tomer, is HUF 5,900. Return of the vehi− cle to the wrong point, in addition to the hourly fees, results in an additional HUF 18,990, and does irregular return. Drivers should not leave anything in the car as an extraordinary search for items left in the vehicles and collection at the customer service could cost HUF 12,900 per occasion. The carmaker that has teamed up with Avalon is Opel. The German manufac−

turer has had some rough times behind it globally, although it was the top seller in Hungary last year. From Corsa to Insig− nia to Combo, all its models are available for the service. Astra and Corsa types will probably be the most sought after, at least for non−corporate users. Driving an Astra may not be that fun much but for the more demanding there is Insignia (with higher fees according to category). Why enter into an agreement that will potentially damage Opel’s sales? Interna− tional statistics say that car sharing can replace 8−10 cars on the road. Opel Hun− gary country manager Gábor Koncz cites sustainability; the world is going that way, so Opel does too.

HUNGARY IS IN FOCUS FOR CONTINENTAL Continental has appointed Dániel Rábai – managing director of tire trade center and president of the Hungarian Tire Association – as the representative of Continental group in Hungary. We asked him about his new tasks, the latest trends and of course about the future of the heavily battered Hungarian market. Q: As a newly appointed representative of the Continental group, how do you see its presence in Hungary? A: According to the turnover of the group, we belong to the top 25 companies in Hungary. Through Continental’s five divisions (Interior, Chassis & Safety, Powertrain, ContiTech, and Tire), the group performs manufacturing, software development and commercial activities in Budapest, Veszprém, Szeged, Makó, Vác, Nyíregyháza and Budaörs. Altogether we employ nearly 6,000 people. Continen-

tal group’s subsidiaries are very active in the field of investments. For example, Continental Automotive Hungary has spent almost HUF 15 billion in investment and job creation between 2009 and 2014. The extensions granted HUF 2 bln worth of support from government and EU sources, in return the company promised to create 477 new jobs. Moreover other subsidiaries are also continuously improving and expanding every year, so we really are a major player in the Hungarian automotive industry, as an employer and an investor too. Q: What responsibilities do you have to take over with this appointment? A: First of all, I am responsible for the coordination and representation of the group’s common goals and also for supporting communications tasks. But I have other duties as well. In accordance with the strategic agreement we signed with the Hungarian government, I will support the future of the domestic education of engineers and the research and development based on future needs. Altogether, I represent the common interests of the employees and Continental Group towards the Hungarian media, external partners, professional organizations, civil society and the Hungarian government. Q: What does the strategic agreement means to Continental in practice? A: In April, we signed the strategic agreement with the government. In practice, it means reassuring guarantees for the future for both parties. We already have achievements, for

instance, the expansion of the warehouse capacity in Budapest and the development of production technology of small- and mediumsized servomotors were both implemented as part of the strategic agreement. But these are only first steps; Continental plans to create more jobs in the near future with the help of the government. However, in the past 20 years, we have already made significant investments without written commitments. Our presence in Hungary is very important and our work draws high attention on an international level too. We established our first Hungarian subsidiary in 1991 and in the last seven years €334 million worth of investments were carried out. Q: As the managing director of the tire trade subsidiary, how do you see the current state of the tire market? How did the crisis in automobile traffic affect tire consumption? A: The Hungarian car tire market fell by 5% in the first eight months of the year, while the same market in Europe deteriorated by only 4%. This doesn’t mean that the consumer side is reduced to this level, this figure shows that the manufacturer’s representatives in Hungary sold less tires to their dealer partners. The cause behind this decrease was primarily that the winter tire deliveries were scheduled earlier last year due to the volatile EUR/HUF exchange rate. But generally speaking, the tire market, just as with new car sales, could not recover from the 2009 downturn. In passenger tires, last year’s total sales

were close to two million, compared to 2.5 million five or six years ago. Q: How do you see tire development trends in the future – what will be the next generation tire? A: We are in the fortunate position that we are not only tire manufacturers, but produce other vehicle parts as well, such as brake and vehicle stability systems, steering servo and many other parts. Due to the changing needs of the automotive industry, we are able to anticipate rather than react to the latest development trends. Security will always be a central issue for the tires; think of the much-talkedabout four-palm surface a car rolls on. Also, hybrid and electric cars represent an important new direction in development. In their case, efficiency and energy saving have a greater significance and they require entirely different geometry and rubber mixtures. Another important development is the area of recycling, where ground rubber is becoming more widely used. In the spirit of environmental management goal, of course, that grind would be turned back into the production of new tires. For technological reasons it’s still an area open for improvement, but the proportion of “re-tire” in new car tires will increase by time, as its industrial use is already important.

www.continental.hu

NOTE: ALL ARTICLES MARKED PROMOTIONAL FEATURE ARE PAID CONTENT FOR WHICH THE BUDAPEST BUSINESS JOURNAL DOES NOT TAKE RESPONSIBILITY

PROMOTIONAL FEATURE

WWW.BBJ.HU

Focus: Fleet management

Budapest Business Journal | Sept 20 â€“ Oct 03

Car fleet management companies

LEASEPLAN HUNGĂ RIA ZRT

MKB-EUROLEASING FLEET ZRT

www.leaseplan.hu

17,992

13,130

www.autoparkrt.hu

ALD AUTOMOTIVE HUNGARY KFT

Âť

NELSON FLEET LEASING KFT

:$//,6 $87Ă?.g/&6g1=Ĺ‚ .)7

AVIS LEASING/ AUTĂ“FLOTTA KFT

www.nelson.hu

www.sixt.hu

MAX RENT KFT 10 www.maxrent.hu

INDIVIDUAL AUTĂ“ ZRT

PANNONIA RENT A CAR KFT

www.indrt.hu

www.budget.hu

Âť = would not disclose, NR = not ranked, NA = not applicable

OTHER

FLEET REPORTS

REPLACEMENT CAR

FUEL CARD

POLICE REGISTRATION

REGISTRATION AT MUNICIPALITY

ALL INCLUSIVE NEW VEHICLE ADMINISTRATION

FLEET OPTIMALIZATION

FLEET DEVELOPMENT

FLEET ANALYSIS

INSURANCE SERVICES

Assistance, driver service

Âť

6DQRĂ€ 1RNLD Siemens Networks, ,QYLWHO 3Ă€]HU %RVFK

Âť

1994 62

1113 Budapest, Bocskai Ăşt 134â€“146. (1) 236-3636 (1) 236-3690 ugyfelszolgalat@ leaseplan.hu

MKB-Euroleasing Financial GĂŠza Rozsnyay ErzsĂŠbet Services Zrt BienernĂŠ KĂłkai (49.90), MKB â€“ Bank Zrt (49.90) â€“

1022 Budapest, BimbĂł Ăşt 56. (1) 488-9922 (1) 488-9920 info@autoparkrt.hu

2003 34

â€“ ALD International SA (1), ALD Automotive Ko & SAS Gmbh (99)

Viktor SzĂĄntĂł Mariann Fekete ZoltĂĄn BorbĂŠly

1133 Budapest, VĂĄci Ăşt 76. (1) 802-5800 (1) 802-5830 info.hu@ aldautomotive.com

â€“ Arval Service Lease S.A (100)

KĂĄlmĂĄn Tekse â€“ â€“

1113 Budapest, Bocskai Ăşt 134â€“146. (1) 279-3300 (1) 279-3329 info@arval.hu

1999

Âť

Âť Âť

Âť

Âť Âť Âť

Assistance

Âť

2003 33

3,119

Âť

Âť Âť

Âť

Âť Âť

Assitance

BASF, AIG, AKZO Nobel, Ernst & Young, Food Express

â€“ 7

Budapest Bank Zrt (Âť) â€“

BalĂĄzs Gergely Toldi â€“ â€“

1138 Budapest, VĂĄci utca 193. (1) 450-7717 (1) 450-6876 autoparkugyfel@ge.com

1,762

Âť

Âť Âť

Assistance, service

Âť

1992 30

Individuals (Âť) â€“

Lajos Varga â€“ â€“

8000 SzĂŠkesfehĂŠrvĂĄr, MĂĄrtĂrok Ăştja 78. (22) 514-190 (22) 514-193 Ă RWWD#QHOVRQ KX

Âť

Âť Âť

Âť

1999 43

Wallis Asset Management Zrt (Âť), Zsolt MĂźllner (Âť) â€“

GĂĄbor DĂŠvai Izabella Balassa GĂĄbor DĂŠvai

1138 Budapest, VĂĄci Ăşt 141. (1) 451-4227 (1) 451-4221 sixt@sixt.hu

Âť

Âť Âť

GĂĄbor Gombos (100) â€“

Gyula Gombos â€“ â€“

2724 Ăšjlengyel, Ady Endre utca 15. (40) 200-475 (1) 814-4701 info@avislease.hu

6,177

1,200

836

www.gascar.hu

Hansman Roelof â€“ â€“

859

GAS-CAR KFT

â€“ LeasePlan Corp. N.V (100)

www.avisleasing.hu

ADDRESS PHONE FAX EMAIL

BUDAPEST FLOTTA ZRT ZZZ EXGDSHVWEDQN KX FVRSRUW Ă RWWD index.php

TOP LOCAL EXECUTIVE CFO MARKETING DIRECTOR

4,700 330

www.arval.hu

Âť Âť

Assistance, driving instruction, driver service

OWNERSHIP (%) HUNGARIAN NONHUNGARIAN

9,000

ARVAL HUNGARY FLEET MANAGEMENT KFT

Âť Âť

MAIN CLIENTS IN 2012

ALD %OXHĂ HHW ALD Offsetting Program

www.aldautomotive.hu

SIZE OF MANAGED FLEET ON JUNE 1, 2013 NO. OF CLIENTS ON JUNE 1, 2013

COMPANY WEBSITE

NET REVENUE FROM FLEET MANAGEMENT IN 2012 (HUF MLN)

TOTAL NET REVENUE (HUF MLN) IN 2012

RANK

SERVICES

YEAR ESTABLISHED NO. OF FULL-TIME EMPLOYEES ON JUNE 1, 2013

Ranked by total net revenue in 2012

521

274 50

â€“

Driver service, assistance, service

Âť

2002 5

â€“

Phoenix Pharma Zrt, TĂœV Rheinland InterCart Kft, Bridgestone 7DWDEiQ\D 7HUPHOĹƒ Kft, Ibiden Hungary Kft, Knorr-Bremse Kft, Delphi Thermal Kft, Delphi Hungary Kft

1994 46

SiĂł-CAR Kft (100) â€“

GĂĄbor Morcz Ilona GrĂłfnĂŠ HorvĂĄth GĂĄbor KĂśrmendy

8600 SiĂłfok, )Ĺƒ XWFD (84) 505-439 (84) 505-974 info@gascar.hu

Complete Ă HHW PDQD gement

Maxabo Kft, Budapest Motors Kft, RENTPONT Kft, LEO BURNETT Kft, D'Arcy Avenue Kft, Publicis Kft, ALLEGRO EVENT Kft, M & Amerika Kft, Velux Mo Kft, Lombard BĂŠrlet Kft, Juventus MĂŠdia Kft, FĂźggetlen MĂŠdia & Marketing Kft, BBO Kft.

1995 4

Attila SzabĂł (90), Norbert SzabĂł (10) â€“

Attila SzabĂł PĂŠter BorszĂŠki BĂĄlint Szluha

1037 Budapest, BĂŠcsi Ăşt 254. (20) 250-7373 (1) 367-3590 maxrent@maxabo.hu

Âť

Individuals (100) â€“

Gergely KovĂĄcs â€“ â€“

1152 Budapest, Telek utca 4. (1) 414-1069 (1) 414-1070 RIĂ€FH#LQGUW KX

â€“ â€“

Krisztina PolyĂĄk Katalin Brieger IstvĂĄn Szenohradszki

1013 Budapest, Krisztina kĂśrĂşt 41â€“43. (1) 214-0420 (1) 241-0421 budget@budget.hu

143

58 826

Âť

Âť Âť

Âť Âť Âť

Âť

Âť Âť Âť Âť Âť Âť

â€“

Âť

Âť Âť

Âť Âť Âť

Âť

Âť Âť Âť Âť Âť Âť

â€“

Âť

2002

Âť

1990

Âť

This list was compiled from responses to questionnaires received by September 16, 2013 and publicly available data. To the best of the Budapest Business Journalâ€™s knowledge, the information is accurate as of press time. While every effort is made to ensure accuracy and thoroughness, omissions and typographical errors may occur. Additions or corrections to the list should be sent on letterhead to the research department, Budapest Business Journal, 1075 Budapest, MadĂĄch Imre Ăşt 13â€“14., or faxed to (1) 398-0345. The research department can be contacted at research@bbj.hu

BBJ

5 Socialite PEOPLE ON THE MOVE

BOOK REVIEW

Richard Branson: SCREW BUSINESS AS USUAL

DR. RÉKA BEREKMÉRI-VARRÓ 30

The eventful story of the “whale” project on the shore of the Danube may finally come to an end after years of lawsuits and allegations between the developer and the Budapest municipality. The cultural and retail complex is scheduled to be opened at the end of October adding a new element to the life of Budapest.

Gide Loyrette Nouel / Senior Associate

➜ Pages 26-27

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5 Socialite

Budapest Business Journal | Sept 20 – Oct 03

ENDANGERED SPECIES: THE CULTURE MALL City dwellers and visitors have seen a huge glass creature, shaped like a whale, on the banks of the Danube for quite some time now. Although it was completed nearly two years ago, the CET building, supposed to serve as a cultural center, has been caught in a tug−of− war between City Hall and the investor. Will The Whale survive or fall victim to political fray and controversial market conditions? ANDRÁS ZSÁMBOKI

“In late October, a new cultural center known as The Whale (CET in Hungarian) will be opened in downtown Budapest. In 2007, when the investors first came up ADVERTISEMENT

with the idea, it was conceived as a the− matic shopping mall which would include a giant bookstore, art dealers’ galleries, antique shops, ground−floor restaurants and gourmet delis located in the basement. But today, a few weeks before its upcoming inauguration, less than one−quarter of the available retail space is rented out; silent spaces yawn in the place of cafés and res− taurants. At night, the laser beam which radiates from the roof of the building invites visitors into half−emptiness. How did it come to this? “Thematic shop− ping malls were the last offshoots of the pre− crisis real estate fever. The idea of The Whale coincided with the intentions of the munici− pal government as well as urban planners to place an emphasis on communal develop− ments in Budapest along the Danube,” Imre Ikvai−Szabó, deputy mayor responsible for financial affairs under the former munici− pal administration, explained to the Buda− pest Business Journal. The last truly valu− able piece of real estate owned by the City of Budapest fitted into the then current con− cepts of urban development inasmuch as it lay right on the bank of the river near the city

center. In addition, the location was ideal for a representative brownfield development project: the area included two buildings of the former Public Warehouses (Közraktárak) and the adjoining railway tracks. “The city of Budapest did not want to squander this precious piece of real estate and give it over to purely profit−oriented private developers. On the other hand, the municipal budget lacked the money for a grandiose public project of its own,” said Ikvai−Szabó. Public−private partnership (PPP) as a form of financing thus seemed the best means of channeling private funds into a showcase project for public benefit. The concept was crowned by the choice of designer: the Dutch star archi− tect Kas Oosterhuis was commissioned to design the steel−and−glass roof overarch− ing the 19th−century redbrick buildings of the former warehouses. GONE WITH THE FLOOD The insatiable hunger for upscale gourmet restaurants ebbed away right at the begin− ning of the 2008 crisis. The location of the commercial building, however, was still

so favorable that more than two−thirds of retail space had been rented out before the construction process was even completed. More than 7,000 of the 11,000 square meters had found tenants by October 2010, accord− ing to the 2010 report of Cushman & Wake− field, the real estate agency entrusted with the renting out of the building. “Per square meter rental prices, of course, had to be reduced because of the crisis. Compared to the €80/sqm/month price, quite customary in shopping malls, one could rent floor space for €30/sqm/month in The Whale,” a real estate expert familiar with rental processes in Budapest told the BBJ. Another problem was posed by the tech− nical execution of the design drawn up by Oosterhuis. “In theory, the role of the archi− tect is confined to the beginnings of the con− struction process. In this case, however, Oosterhuis insisted on a solution that could only be realized by his own construction company. This entailed the potential of driv− ing up the price, which was not an entirely honest approach,” Imre Márton, managing director of Porto Investment – the private investor entrusted with the construction as

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5 Socialite

Budapest Business Journal | Sept 20 – Oct 03

well as the operation of The Whale – told the BBJ. This argument of course explains why Porto abandoned Oosterhuis’ plan, and com− missioned a small Hungarian company to manufacture the steel−and−glass roof struc− ture of the building. This caused a storm to break lose in architectural circles: how could it be possible to violate the ideas of the cre− ator? Deviation from Oosterhuis’ scheme in the end proved fatal for the destiny of The Whale, but for much more down−to−earth reasons. The industrial plant of the Hungar− ian manufacturer responsible for the roof structure was literally washed away in an early summer flood in 2010. This in itself would have caused only a delay in the open− ing of The Whale; the municipal elections later that year, however, made the comple− tion of the building very problematic. Replac− ing the Liberal−Socialist alliance that had governed Budapest from 1990 to October 2010, a new municipal administration domi− nated by Fidesz, the governing center−right party, came into office in late 2010. DOWN WITH PPP Viktor Orbán has always been against pub− lic−private partnership schemes. In his opin− ion, there are three main arguments against PPPs: they limit the freedom of future gov− ernments; they give almighty capitalists the chance to divert public projects away from their original aims; and they can easily turn into a hotbed of corruption. The new munici− pal administration headed by István Tarlós, Mayor of Budapest, was led by less ideolog− ical considerations. The construction of the Metro 4 line ate up almost all the develop− ment funds of the City of Budapest, so the ADVERTISEMENT

municipal government grabbed every oppor− tunity to postpone the fulfillment of its PPP obligations. “Every alleged technical prob− lem served as an excuse for the postpone− ment of The Whale’s inauguration. By that strategy, the municipality saved €4.7 mln which should have been paid as service fee to Porto Investment,” an engineering expert close to the company told the BBJ. Gábor Bagdi, deputy mayor of the new municipal government, found innu− merable technical shortcomings when

inspecting The Whale. From safety problems in the electrical wires to the insulation, let alone the steel−and−glass roof that has replaced Oosterhuis’ struc− ture, he found problems everywhere. Two years went by, until finally Porto Investment had enough and decided to terminate the contract. The project’s creditor, the Hungarian Foreign Trade Bank (MKB) began to demand €30 mln from the city. The lawsuit was won (at the first level) by the Porto−MKB alli−

ance. As a result, Budapest offered an out−of−court settlement to Porto. In order to compensate for the two−year delay, the city offered the amount of one year’s service fee. All that said, the losses of the capital are considerable: during the prolonged period of uncer− tainty, all the tenants withdrew, so only a fraction of the potential rental income will be realized. In addition, Budapest may have to face further losses as a con− sequence of the lawsuit filed by MKB.

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5 Socialite

WHO'S NEWS

Name DR. RÉKA BEREKMÉRI-VARRÓ Current company/position GIDE LOYRETTE NOUEL / SENIOR ASSOCIATE

Name GÁBOR KERPER

Berekméri-Varró has joined Gide Loyrette Nouel’s Budapest office, having previously worked at Kajtár Takács Hegymegi-Barakonyi Baker&McKenzie Attorneys at Law. She has advised companies in legal issues related to the conduct of clinical trials and the authorization, distribution and promotion of medicinal products. She regularly publishes in journals and speaks at conferences on pharmaceutical regulatory issues and topics in advertising law.

Kerper, CIO of publishing house Ringier, has received the CIO of the Year award. The jury recognized Kerper’s work of the past 10 years and highlighted his achievements in the field of cloud-based IT services. The Association of the Leading IT Professionals established the award in 2002.

Budapest Business Journal | Sept 20 – Oct 03

Do you know someone on the move?

Name DR BÁLINT BASSOLA Current company/ position BPV JÁDI NÉMETH ATTORNEYS AT LAW / PARTNER

Name DÓRA SZERENCSÉS Current company/ position IPSOS ZRT / HEALTHCARE RESEARCH DIRECTOR

Current company/ position RINGIER / CIO OF THE YEAR

Supported by

Send information to research@bbj.hu

Bassola will lead as partner the EU, competition and antitrust practice areas at bpv JÁDI NÉMETH Attorneys at Law. A previous case officer at the Hungarian Competition Authority, Bassola is a highly recognized and experienced professional in competition and antitrust matters. He received his law degree from Eötvös Loránd University of Budapest and his LL.M. degree from the College of Europe (Bruges). He also holds a Diplôme Interdisciplinaire des Etudes Européennes from the Université Robert Schuman de Strasbourg. Szerencsés was named as healthcare research director of market researcher Ipsos Zrt in September. She started her professional career at healthcare market research company Szinapszis Kft in 1998, and joined Millward Brown in 2009. She has also worked as a strategic advisor for the past few years.

Name DR PÉTER GARANCSI Current company/ position BPV JÁDI NÉMETH ATTORNEYS AT LAW / PARTNER

Name GÁBOR SÓTONYI

Garancsi, heading the M&A practice at bpv JÁDI NÉMETH, has gained comprehensive experience in negotiating complex transactions and managing teams in several legal fields. His sector specific experience features industrial machinery, fuel/gas & electricity, agriculture, infrastructure, telecommunications, aviation and retail. He graduated from the University of Pécs and obtained his LL.M degree in international business law at the Central European University in Budapest.

Grid operator MAVIR has announced the appointment of Sótonyi as the company’s CEO. He previously worked as finance director of the telecom company of the MVM Group, MVM Net Zrt. He started his career in the financial service sector, later shifting to telecoms and working at Első Pesti Telefontársaság Nyrt.

Current company/ position MAVIR / CHIEF EXECUTIVE OFFICER

WORK OUT YOUR HEALTH

“T

he medical profession is once again concentrating more on preserving good health rather than treating illness,” says Dr. Erzsébet Jurás, physician at Dr. Rose Private Hospital. “We all want to live long and avoid being riddled with diseases. None the less, life expectancy in the former Eastern Bloc is way lower than in more developed countries,” the doctor warns. People in Hungary are increasingly concerned about living an active life in good physical and mental health. You can choose a suitable diet, swap your car for a bike, or go jogging. Weight-watchers and the health conscious can easily shop organic, and one can cook or

eat out well. It’s not enough to live healthy, one is expected to look the part – dishevelled is out, looking fit taut and trim is definitely in.

• Malign tumors (less likely to develop), • Depression, • Osteoporosis, • Type 2 diabetis,

“Active lifestyle is a key element in good health. Curbing your wight and regular exercise gives you seven extra years in lifespan on average, compared to couch potatoes,” says Dr. Jurás. “And don’t blame it on your age – research proves that it’s never too late to start.”

Instead, you give yourself a better chance for: • Improved sexual activity, • Fending off or improving arthritis and other joint conditions, • Avoiding senile dementia.

Being active is a chance to be happy. The fitter you are, the more confidence you gain. It’s not the number of years you live that matters really, but the quality of life that you live. By working out, you significantly reduce the risk of serious diseases, such as: • Cardiovascular diseases (cardiac arrest, and debilitating stroke),

More than that, physical activity is the most effective cure in the above conditions, because: • It improves circulation, • Maintains healthy joints • Stimulates the immune system, • Regulates digestion, • Increases ‘good’ HDL cholesterol, • Induces ‘happiness hormones’ in the body.

GOOD TO KNOW How exactly you work out should be considered according to your age, fitness, physical and mental condition. Increase the physical strain gradually, and choose ‘aerobic’ activities that provide your body with sufficient oxygen. Make sure that sports put you in a better mood and stop when you feel that it’s just getting to you without enjoyment or gratification.

For an appointment, call (+36)1-377-67-37 or go online at www.rendelo.drrose.hu Széchenyi square 7/8, 1051 Budapest

NOTE: ALL ARTICLES MARKED PROMOTION ARE PAID PROMOTIONAL CONTENT FOR WHICH THE BUDAPEST BUSINESS JOURNAL DOES NOT TAKE RESPONSIBILITY

PROMOTION

Promotion 29

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Budapest Business Journal | Sept 20 – Oct 03

SUMMERTIME IN JAPAN Nights are always bright in Japan dur− ing the summer, as there are fireworks all around the country organized by var− ious communities. Japanese use the col− orful spectacle to celebrate the arrival of the summer to the port of Yokohama in the middle of July, to cleanse the impuri− ties of the past six months in Kanagawa at the end of June or to show off the best fireworks out of the 20,000 launched into the Tokyo sky at the end of July. The festival organizers are quick to point out that the events on the calen− dar rain or shine. And rain is a definite possibility, since the summer months typically see plenty of rain during the summer in most parts of the coun− try, leading to humidity. The season starting in June called “tsuyu” usually entails overcast skies along with the rain and leaves a pleasant average tem− perature of around 20°C. The situation gradually clears as sum− mer progresses and the average tempera− ture rises to around 30°C by August. There are numerous airlines flying to Japan on a regular basis. Japan has over 50 airports. The busiest is the Haneda Airport in the capital which, according to ministry information saw passenger num− bers exceeding 64 million in 2010. Air ADVERTISEMENT

ticket search sites currently list 13 air− lines that travel to Japan from Budapest. OUTDOOR ACTIVITIES Japan also holds a vast array of out− door recreational options. Camping is increasingly becoming a popular pas− time among the Japanese leading to a growing number of campsites opening around the country. These sites called “camp−jo” or “auto camp−jo” for peo− ple who prefer to set up their tents near their cars normally also offer a range of camping gear as well for those who aren’t properly equipped. Those looking for more active rec− reational activities will also have an

easy time. Japan hosts a big number of water parks in Tokyo as well as other towns. They typically open in July and are open until September correlating with the warmer part of the summer. They are highly popular and can conse− quently be crowded. Besides the water parks, Japan also has the encompassing ocean as a lure for trav− elers. Swimming beaches that are called “kaisui−yokujo” are likewise open to the public in the warm months of the summer and are ready to accept visitors from July to August depending on location. Sea− side rest houses called “umi−no−ie” are commonly constructed on major kaisui− yokujo during the summer.

Travelers frequently come to the country to tackle the best−known challenge Japan offers, climbing Mount Fuji. Fuji−san, as it is usually referred to is Japan’s highest moun− tain with 3,776 meters. Guides for climb− ing note that the official season is from July 1 to the end of August, which is the best period to make the attempt even if the trail gets crowded at times. Although climbing Japan’s emblematic mountain is widely con− sidered an adventure that can’t be missed, caution is advised against sudden changes in attitude and possibly the weather. (x)

Sources: Japan−guide.com, Japantravelinfo.com, About.com Japan Travel

NOTE: ALL ARTICLES MARKED PROMOTION ARE PAID PROMOTIONAL CONTENT FOR WHICH THE BUDAPEST BUSINESS JOURNAL DOES NOT TAKE RESPONSIBILITY

Fireworks, festivals and nature are just some of the spectacles summertime holds for visitors heading off to Japan. The Asian country has plenty to offer, and getting there has never been more comfortable.

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Budapest Business Journal | Sept 20 – Oct 03

BOOK REVIEW

HOW TO SHIFT YOUR BUSINESS MINDSET It’s time to turn capitalism upside down – to shift our values, to switch from a just−for− profit focus to caring for people, communities and the world, and to turn our work into something we both love and are proud of. It’s time to ‘Screw Business as Usual’. Can we bring more meaning to our lives and help change the world at the same time? Richard Branson says the answer is yes. In ‘Screw Business as Usual’, he shares fasci− nating and inspiring stories about the people who are already leading the way in transforming business into a force for good. Reflecting on some of his own experiences, he also shares his new vision for the future and describes how busi− nesses can help create a more pros− perous world for everyone. Branson is founder and presi− dent of the Virgin Group, which has expanded into air and rail travel, hos− pitality and leisure, telecommunica− ADVERTISEMENT

tions, health and wellness, and clean energy, with more than 300 compa− nies in 30 countries. A leader in both product innovation and customer ser− vice, he was knighted in 1998 for his ‘services to entrepreneurship’. At the beginning of ‘Screw Busi− ness as Usual’, Branson explains what he means by this statement. Firstly, he says, it means a shift in focus from short−term financial gains to wider, long−term profit− ability. Secondly, it means making people and the environment central to business activity, so that busi− nesses create more jobs, conserve and restore natural resources, and create health and happiness as well as financial returns. “I’ve long said that there is no contradiction between social and environmen− tal aims and commercial ones. In fact, they are mutually reinforcing, and the future profitability of busi− ness depends on integrating social and environmental values into the core of our business strategies. So screwing business as usual fun− damentally recognizes that doing good is good for business.” Branson highlights a wide range of business people who are doing well by doing good. He also talks about how the Virgin Group is con−

tributing to this movement by part− nering with start−up companies, donating free airline tickets, lend− ing employees to charitable start− ups as advisers, delivering med− ical supplies to disaster victims, and helping AIDS patients, home− less teens and young inmates. He is also trying to shrink Virgin’s envi− ronmental impact – not an easy task when one of your biggest compa− nies is an airline. ‘Screw Business as Usual’ is a motivating call−to−action, and con− tains suggestions about how we can all be part of this shift in thinking. Branson summarizes it best, “The world is full of extraordinary, heroic people doing heroic, extraordinary things. I think, however, that we can make the world better just by doing things differently, in a day−to−day, more or less ordinary way. This book isn’t just about ‘doing good’. It’s about DOING BETTER – and it’s about having fun on the way.” SCREW BUSINESS AS USUAL by Richard Branson Published by Virgin Books ISBN 9780753540596 Available to order through www.hungaropress.hu

5 Promotion

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Budapest Business Journal | Sept 20 – Oct 03

PROMOTIONAL FEATURE

IBIZA INTERNATIONAL MUSIC SUMMIT – BEYOND THE BOOM BOOM Enchanting location, atmosphere, professionalism, coolness and boundless positivity marked the threeday International Music Summit in Ibiza. The IMS conference has become the world’s most important electronic musical event, and not by accident.

he Ibiza International Music Summit (IMS) not only shows the highlights of many aspects of the growing electronic music market, but also provides an excellent opportunity to build some serious business relationships. The global dance music scene, including companies and professionals, are represented at this exclusive event. This three-day event provides a perfect platform for publishers, bloggers, PR and media professionals, agents, brands, musicians, DJ’s, and audiovisual artists. They can present their new initiatives, and they introduce to the underlying strategies mysteries, brilliant pitch talks, and keynote interviews that reveal many of the secrets of this industry. These well-structured panel discussions are welcoming, inspiring and informal, so the whole atmosphere is extremely friendly. Interactivity, the specified topics and prominent members of the industry leading and shaping the dynamics of days - meanwhile something incomprehensible, indescribable and unique positive energy permeates the atmosphere. These Ibiza forums are the top meeting place for eminent representatives from all over the world to offer their unique aspects, to talk about the changes in the market and their vision of the future of electronic music which draws the world electronic music map. The conference also goes back to its roots: historical values are revealed during in-depth interviews, determining career history, personal motivation, unique artistic vision, motivation, inspiration and future vision. Music, the universal language, makes this easy for everyone to understand and the role of music appreciating. Understanding the underlying mechanisms, the history of electronic music, different routes and markets become transparent, and IMS plays a key role in shaping the future at the spot at the moment. It’s really an inspiring and captivating feeling to be part of the present and the future and IMS entails the recognition that experiencing and sharing of thoughts, feelings and common resonance is the

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ÁGNES MIHÁLY

MAYA JANE COLES

way to success. Creating long lasting ideas, feelings of giving and receiving, collaboration and working together and sharing all this at the same time with social media tools, this is what moves electronic music culture forward. The use of well-designed social media strategy is now essential. Twitter is the most popular, most important, fastest and funniest channel of all. Its significance is undeniable: beside the interactivity, it exudes energy and conveys experience. IBIZA IMAGE The current year is one of revolution in electronic music culture, not only because of the now emerging technological changes, but also due to the huge investments on the island. Ibiza’s innovative design image was outlined to us by the new investments. A new club (Booom) enters the competitive market, and the marketleading giants are expanding their already successful brands with new VIP clubs (Ushuaia Tower, Destino by Pacha). But will this huge growth be profitable by the end of the season? How will it change the current market structure? And how will this new direction affect the music, public relations and marketing communication strategies, creative ideas, and trends. Does this all lead to the appearance of a new target group? The answers will arrive in October at the end of the season, and the consequences of conscious construction will be brought to light again in the 2014 International Music Summit. We have a really exciting year, which offers many new opportunities for us, because after the decisive Ibiza summer season, the new wave of electronic music

culture infiltrates the scenes of urban life. The new music capitals are under the influence of political and global changes. The sad fact is that the ‘cult of Berlin’ has lost its former glory as one of the very dominant figures in the famous Berlin club culture, Sven Vaith, founder and creator, moved his Cocoon brand from Berlin to London after the summer season. So the new electronic music center in 2014 will, quite surely, be London. Ibiza is stable from year to year as a complex system of businesses, consciously built on the island. The image is determined by the clubs, going by what brand positioning, which club night brands can work best, or who is the owner of the club of the season – and that of the previous year –club nights operating as personal brands how to build on and what new experience they can offer for the target group. The need for renewal is constant on this market, just like the endless creativity and dictating trends. IF YOU CAN MAKE IT IBIZA YOU CAN MAKE IT EVERYWHERE That is no question for the inhabitants that MUSIC ON (Marco Carola club nights) and Enter (Richie Hawtin) surely delivers the expected numbers and success. But, for example, how Guy Gerber’s new initiatives in Pacha, or the new party series of Sven Vaith can bring a new level of experience to this market will be shown only at the end of the season. So, apparently, the music alone is too weak in this cruel war. The constant renewal, the show, the spectacle and knowing the audiences’ needs and desires play key roles in understanding all the factors that can make a top selling product in this industry. In other words, the music industry is one

ENCOUNTERS AND MERGES Pete Tong, the founder of the IMS conference, has been a key figure in the global electronic music scene for six years. The dominant figures of the past are Nile Rodgers (Daft Punk) and Jean Michael Jarre. Their work shows the most creative labor process, conceptual thinking, the depth of feelings and emotions and unique ways of expressing these, and their music also contains intellectual load. Pete Tong and the well-known Daft Punk (including Nile Rodgers) met each other at a club some 17 years ago - and admitted that from then on everything happened by itself. Daft Punk – founded in 1993, they were not yet united at that time – members did much partying together, Pete Tong was in the right place at the right time. A good working relationship still remains between them. Pete Tong picked out various ‘voices’ and characters in the Ibiza International Music Summit like Bob Lefsetz, Paul van Dyke, Idris Elba, Fatboy Slim, Nile Rodgers and Sven Vaith. Nile Rodgers’ ideas and work is characterized by simplicity, mainly RNB jazz influences, and he adds these to electronic music. He played his guitar at the IMS conversation and this created an opportunity to sense and feel the creative process, like a behind the scenes access pass. Thanks to his helping hand, almost without words, music became intelligible, and yet it also highlighted the complexity of the music that can be described as a universal common language. So we could recognize that electronic music of the 21st century can be a new communication tool, which not only has social significance in commonly lived experiences, but also that everyday lives are intrinsically affected by it.

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of the largest businesses. The outstanding new players of this year’s Ibiza season will certainly include: Hot Since 82, Eats Everything, Tensnake, La Carousel, Maya Jane Coles and Solomun. We look forward to October, and the end of the season, to learn who was the 2013 Superstar of the electronic music world. What will be the result of Usuhaia’s new ‘underground’ positioning, will it bring the expected success? What is for sure, all participants are agreed, is that hard work, a ‘positive vibe’, and a ‘music-lover’ feeling is what has been shaping Ibiza’s image for decades.