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Survival of the

SPECIAL REPORT:

cheapest?

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 17

 14

TRANSLATION BUDAPEST

TRANSLATION

regarded as and quality is often but there’s market is very price−driven realm of translation, Hungary’s translation look rosy in the industry is Meanwhile, the Conditions don’t secondary by clients. among the largest market players.to embrace new technology. trying little sign of desperation

FEB 28, 2014 – MARCH 13, 2014

VOL. 22. NUMBER 04

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INNOVATION ON THE HORIZON The European money pots for R&D and innovation have been refilled for the next seven years. With more self−confidence and proactivity on the part of the economic operators, Hungary could advance into the fast lane, says Endre Spaller, new head of the Hungarian Innovation Office.  08-09

NEWS

SPECIAL REPORT

SOCIALITE

On the edge of the turmoil

Survival of the cheapest?

Private city tour by BKV

Hungary’s economy outshone its regional competitors with its fourth quarter growth thanks to a good farm year and the industriousness of its exporters. All that was quickly forgotten, however, when Ukrainian hostilities sparked an emerging markets selloff. 03

Rates stuck for a decade, bitter competition, automated translation developing at a frightening pace: the picture is not rosy and Darwin’s law gains a brand new meaning in the evolution of the Hungarian translation market. 14

Up for a private city tour or a country ride? Choose tried−and−tested public transport carriers like BKV or MÁV. Their guided tours and private bus services may not improve the balance sheet significantly, but they do help raise prestige. 20-21


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Budapest Business Journal | Feb 28 – March 13

BBJ

3Special Survival of the

cheapest?

SPECIAL REPORT:

Report From Indian English

to Hungarian

 17

 14

TRANSLATION B BUDAPEST

TRANSLATION

regarded as and quality is often but there’s market is very price−driven realm of translation, Hungary’s translation look rosy in the industry is Meanwhile, the Conditions don’t secondary by clients. among the largest market players.to embrace new technology. trying little sign of desperation

FEB 28, 2014 – MARCH 13, 2014

VOL. 22. NUMBER 04

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

HUNGARY’S PRACTICAL BUSINESS BI-WEEKLY SINCE 1992 | WWW.BBJ.HU

INNOVATION ON THE HORIZON The European money pots for R&D and innovation have been refilled for the next seven years. With more self−confidence and proactivity on the part of the economic operators, Hungary could advance into the fast lane, says Endre Spaller, new head of the Hungarian Innovation Office.  08-09

NEWS

SPECIAL REPORT

SOCIALITE

On the edge of the turmoil

Survival of the cheapest?

Private city tour by BKV

Hungary’s economy outshone its regional competitors with its fourth quarter growth thanks to a good farm year and the industriousness of its exporters. All that was quickly forgotten, however, when Ukrainian hostilities sparked an emerging markets selloff. 03

Rates stuck for a decade, bitter competition, automated translation developing at a frightening pace: the picture is not rosy and Darwin’s law gains a brand new meaning in the evolution of the Hungarian translation market. 14

Up for a private city tour or a country ride? Choose tried−and−tested public transport carriers like BKV or MÁV. Their guided tours and private bus services may not improve the balance sheet significantly, but they do help raise prestige. 20-21

SUBSCRIPTIONS

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REVOLTING COMPLEXITY Many in the world are celebrating the overthrow of the political regime in Ukraine and see the events as a clear− cut, heartwarming revolutionary story about the under trodden, oppressed population rising up against its corrupt masters in demand for democracy and basic liberties. As always, the matter is far from being as simple as that. We tend to have a need for a clear distinction in any narrative between good and evil, the oppressor and the oppressed, to know who the good guys are. The pictures we saw are of the dead and injured protestors, the young woman who tells the world through a conspicuously high production value video that all the Ukrainian protesters want are an end to corruption and the same freedoms that are given to others. Even worse, we like to think that the sole driver behind the events was the Ukrainians’ collective desire to join Europe and distance themselves from the oppressive grasp of Russia. But after even cursory research, it becomes clear that the story is by no means as clear−cut. There are several allegiances, multiple groups with multiple loyalties and even when we accept that, we haven’t even begun to actually fathom what living in Ukraine is like, since it is a far away country about which we know, well if not nothing, then definitely not enough. When then British Prime Minister Neville Chamberlain made a statement along those same lines regarding Czechoslovakia, he created the perfect definition of elitist ignorance and the kind of aloofness that had horrible circumstances. Unfortunately, the gist of the notion, the lack of knowledge, was as true then as it is now, even though distances have reduced or in many ways become irrelevant thanks to the media and the myriad of ways in which people connect.

While we ridicule the overthrown regime’s ludicrous creature comforts, we should also ask a few questions. Does the fact that right−wing radicals did the lion’s share of the fighting diminish the value of the end result? How do we feel about the fact that foreign powers surely had a hand in the developments given the country’s key geopolitical aspect? Do we have a firm grasp of what the various factions among the protestors are looking for, seeing that the political opposition had seemingly little control when the violence escalated? We can’t give a definitive answer to any of these questions; perhaps those answers don’t even exist. But they are all factors that we have to keep in mind when we form opinions and when we look at the developments now that there isn’t any more gunfire on the Maidan. Yulia Tymoshenko may be hailed as a symbol for some upon her release from a politically motivated prison sentence, but it is also no wonder that everyone didn’t cheer her. She is an integral part of the new Ukrainian political system and although she lost out to Viktor Yanukovich, she is still very much a part of the overall establishment that many of those protesting want to abolish altogether. The story is far from being over and still carries the troubling prospect of turning ugly again. One of the first measures of the new regime was to pass a language law targeted against the Russian community in the country, who make up nearly half of the population and this measure is also hostile towards the Hungarian minority living there, even though they appear to be only residual casualties at this point. Tensions are still very much alive and there are many strings being pulled on stage as well as off. If there was ever a time in Brussels, Washington and Moscow for circumspection, tact and caution in picking their approach and the sides they are going to back, it is now.

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UPHILL DIGITAL ROLLOUT Hungary is once more embarking on the seemingly straightforward – but as experience tells us actually rather arduous – quest of eradicating digital illiteracy, while moving public administration to the virtual domain and drastically reducing operating costs in the process. It isn’t the first time that a Hungarian government has wanted to exploit the benefits of digital technology. Left− wing governments had an entire ministry dedicated to the purpose and they were also the first to appoint a senior−level official whose exclusive job was to oversee the online switch. Still, that period will probably best be remembered for “cocoa− proof” computers bought for daycare centers at astronomical prices and various other suspicious contracts that got the authorities involved. Nonetheless there are positive examples from that time. There is a good chance that your local hospital or doctor’s office already allows you to make appointments online – the fact that you probably have to wait a while anyway is beside the point. You can now basically register a company through filling out an online form, and even the public transport system has a Twitter account to keep passengers up−to−date. As the years have passed, the state seems to have developed a better understanding of how digital technologies work, how they can genuinely help the operation of state infrastructure and thus is perhaps in a better position to throw money at the project, something that wasn’t always true in the past.

Where there is a will and the funding, building server parks and writing code won’t be an issue. This is all the more true since the government seems to have made up with the telecommunications sector and even Magyar Telekom, the fiercest critic of the Orbán government’s sectoral taxes has fallen in line, signed a strategic cooperation agreement and pledged to play a major part in the effort. The biggest problem will be the priority contained within the newly passed infocomuncations strategy, which aims to greatly reduce digital illiteracy. The strategy lays out goals to reduce the adult illiteracy rate to below 40% by 2016, 30% by 2020 and to make regular Internet use reach 65% by 2016. Commendable as this may be, the flipside of those goals is that the lack of computer skills within the Hungarian society is astounding. Just as with the widespread availability of affordable Internet that seems to have happened practically overnight little more than 10 years ago, hopes lie with the market, as the providers are locked in fierce competition to acquire new frequencies, develop new networks and poach each other’s clients with better services. The next Angry Birds game running on new smart phones showing off services distributed through fourth−generation networks could also be the conduit to the population finally learning that it doesn’t have to run from office to office and wait in line for hours on end when a formal document is needed.

WHERE THERE IS A WILL AND THE FUNDING, BUILDING SERVER PARKS AND WRITING CODE WON’T BE AN ISSUE


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EC ups GDP growt

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Speaking of figures07

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HUNGARY ON THE EDGE OF THE TURMOIL

GERGŐ RÁCZ

Hungary’s gross domestic product benefited from favorable conditions in the farming industry as well as the performance of its major exporters and grew by 2.7% in the fourth quarter of 2013, compared to a third− quarter increase of 1.8%. The rate came in higher than the 2.4% market estimate and showed Hungary’s economy growing at the fastest rate since the last three months of 2006. The reading puts 2013 annual GDP growth at 1.1%. “Hungary’s economy said thank you, it is doing fine and is performing better in all indicators than before,” Economy Minister Mihály Varga said, commenting on the figures. The same day, the Central Statistics Office also published consumer price inflation figures for December, with a headline figure of 0%. Markets received the reading favorably, several investment banks and analysts raising their 2014 forecasts for growth from around 2% to closer to 2.5%. Hungarian assets rallied, only to take a slide as the protests in the Ukraine turned violent and investors started divesting their emerging market portfolios FORINT STUCK IN THE DOLDRUMS The tentative peace reached in Kiev has put markets at ease for the time being and favorable macroeconomic releases from major economies also helped foreign investors to regain some of their confidence towards Hungarian government bonds, as evidenced by successful auctions and a halt in the rise in yields. However, the forint appears to have benefited little from this turn in sentiment and is still hovering at levels around 310 against the euro, meaning it hasn’t made a notable recovery from the lows of 314 it hit when the Ukraine hostilities reached their peak. The escalation of violence in Ukraine and the widespread expectation that the room for cutting the base rate was diminishing didn’t discourage rate− setters at the National Bank of Hungary, who went ahead and decided on another

STORY HIGHLIGHTS ■

Hungary’s economy grew 2.7% in the fourth quarter, 1.1% in all of 2013 ■ Assets took a hit from the developments in Ukraine, but rate-setters seem unconcerned

15−point cut at their February meeting; the consensus had been that the pace would slow to 10 points. The key indicator is now at 2.7%. Even the government has started to communicate that it is unhappy with the weakness of the forint, since the 2014 general budget was drafted with an exchange rate of 298 against the euro in mind. Varga urged rate setters to aim for an exchange rate that is “bearable for the budget and good for exports and foreign− currency borrowers.” Still, officials are quick to note that there aren’t any serious concerns and that the ministry anticipated such eventualities and incorporated adequate safeguards in the system. “The budget contains a significant, HUF 230 billion buffer. We are confident that the average annual exchange rate will be lower than the current and that investors will see that the fundamentals of the Hungarian economy are stable,” Economy Ministry deputy state secretary Péter Benő Banai said. DETERMINED TO CUT There is some market speculation that the central bank is deliberately pursuing a monetary policy that will weaken the forint with the aim of supporting exporters. The argument here is that the central bank’s

COMMEMORATION FOR THE VICTIMS OF THE UKRAINE HOSTILITIES

determination to support economic growth has only produced muted results so far through the launch of its extensive stimulus program. In contrast, the favorable fourth quarter GDP figures demonstrate that the economy’s overall performance is still determined by exporters, who can benefit from a weaker currency. Although there has been no confirmation for obvious reasons, a weaker currency is something that the business sector has encouraged for quite a while. For instance, business magnate Sándor Demján said in 2012 that an ideal exchange rate would be around 315 against the euro.

Whether supporting exporters is indeed something rate−setters are focusing on is up for debate, but the expectation is that the rate cuts won’t stop. “We expect the MPC to cut rates at the next two meetings, though getting from 2.7% to 2.5% will be a challenge to map – it could be 2x10 bp but a shift to a smaller cut next meeting might worry it that it is sending the wrong signal, or it could be 15 bp then 5 bp but the last one would look odd. Such issues should not distract from the MPC’s desire to keep cutting, however,” Nomura analyst Peter Attard Montalto said in a research note.

EVEN THE GOVERNMENT HAS STARTED TO COMMUNICATE THAT IT IS UNHAPPY WITH THE WEAKNESS OF THE FORINT

Photo: László Beliczay / MTI

Hungary’s economy exceeded expectations with impressive growth in the fourth quarter. The result quickly took the back seat to a serious slide in Hungarian assets as violence escalated in Kiev, however, while the forint remains much weaker than the government had hoped and political uncertainties in Ukraine persist.


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IN BRIEF

Budapest Business Journal | Feb 28 – March 13

What should we do 50 days before the elections? Sound the horns and saddle up, ’cause we’re off? Prime Minister Viktor Orbán in his ‘state of the nation’ speech

POLITICIANS RALLY SUPPORT TO ENTER CONTENTION

photo: Attila Kovács/MTI

Political candidates have begun raising the necessary 500 signatures needed to have their names added to the registry of contenders at the April general elections. Politicians have until March 3 to raise the necessary support to run for one of the seats in parliament that will only number 199 as a result of the new electoral system. The benches for the reduced headcount have been completed and are being installed.

ECONOMY GROSS WAGES FALL 1.1% IN DECEMBER AS NUMBER OF FOSTERED WORKERS SWELLS Average gross wages in Hungary fell 1.1% year−on−year in December as the number of fostered workers, who earn less than the minimum wage, more than doubled, data published by the Central Statistics Office (KSH) shows. The number of fostered workers rose to 203,000 in December from 87,300 in the same month a year earlier. Excluding fostered workers, the average gross wage rose 1.6% in December. In absolute terms, the average gross wage was HUF 241,030 in December. Excluding premiums, the average gross wage rose 1.4% to HUF 216,719. The average net wage edged up 0.4% to HUF 157,875. Calculating with 0.4% CPI in December, real wages were flat. The average gross wage in the business sector increased 0.5% HUF 262,026. The average gross wage in the budget sector fell 2.1% to HUF 201,441. For the full year, gross wages rose 3.4%. Excluding fostered workers, the increase was 4.2%. CONSUMER, BUSINESS CONFIDENCE WORSENS IN FEBRUARY GKI−Erste’s combined gauge of consumer and business confidence fell in February, dropping for the first time in nine months as outlooks worsened. Expectations deteriorated among both businesses (with the exception of the industrial sector) and households. Industrial companies’ assessment of production improved and order stock increased. The measure of sentiment in the

construction sector fell for the first time in many months in February, albeit slightly. The gauge of the trade sector fell significantly after rising for seven months. Expectations for orders deteriorated noticeably. In the service sector, the assessment of business trends worsened, but companies reported improving turnover. The gauge of consumer confidence fell after climbing for more than a year. Households’ assessments of their own financial positions and their ability to make savings worsened. The GKI−Erste survey is supported by European Union funding. MANUFACTURING INDUSTRY CONFIDENCE IMPROVES Economic research institute Kopint− Tárki’s gauge of manufacturing industry confidence rose to 58 points in the fourth quarter from 50 points in the previous quarter. Assessments of production and sales improved, but companies are using only about 70% of capacity at present and their outlook for order stock and headcount is no better, Kopint−Tárki said. SALES OF CONSUMER ELECTRONICS, APPLIANCES UP IN Q4 Sales of durable consumer electronics and appliances rose 13.2% year−on− year to HUF 157 bln in Q4 2013, market researcher GfK Hungária said. According to GfK, sales of entertainment electronics rose 31.2%, lifted by purchases of LCD TVs; small household appliance sales increased 29.7% to HUF 12.7 bln; IT equipment sales were up 16.7%; large household appliance sales climbed 8.4%; telecommunications equipment

Numbers in the news

7,536

sales were up 2%, though within this, smartphone sales jumped almost 20%; and finally, camera sales were up about 1%.

DOMESTIC

home building permits for new homes were issued last year, down by 29% from a year before, data published by the Central Statistics Office shows.

HUNGARIAN PAPRIKA GETS ‘PROTECTED GEOGRAPHICAL INDICATION’ STATUS The European Commission has granted ‘protected geographical indication’ status to Szentesi paprika from the region of Szentes. The paprika of Szentes, which can be hot, sweet or spicy, is the best known paprika in Hungary. Paprika is an integral element of Hungarian cuisine.

26%

TOBACCO MARKET CONTRACTS TO SMALLEST ON RECORD Nearly 25% of Hungary’s legal tobacco market disappeared last year, according to business daily Világgazdaság. The paper cites figures from the tax authority NAV showing consumption of 9.3 bln cigarettes in 2013, down from 12.5 bln in 2012 and 13 bln in 2011. Legal trade is held down by the fact that the government limited the points of sale to licensed tobacco shops, while the costs of tobacco goods also increased by 20% last year.

of Hungarian companies have experienced economic crime in the past two years, according to a fresh survey by consultancy PwC. The percentage was well under the 37% reported globally, but PwC said, “The actual numbers are probably even higher.” .

POLITICS CONSTITUTIONAL COURT SCRAPS 98% SUPER TAX ON SEVERANCE PAYMENTS The Constitutional Court prohibited further application of Hungary’s 98% super tax on big public sector severance payments,

saying that the legislation violated the constitution as well as international agreements. In the ruling, published on the top court’s website, the body said that the contested law, which was in force until December 30 last year, also ran against regulations aimed at protecting private property. On January 1, parliament reduced the super tax from 98% to 75%. The tax is paid on severance pay over HUF 2 mln for state and local council leaders and managers of state− or local council−owned companies. The threshold is HUF 3.5 mln for ordinary public sector employees. TRADE HOUSES COULD HELP RAISE EXPORTS BY HUF 100 BLN The Hungarian National Trade House Company’s (MNKH) presence in Asia can support a HUF 100 bln increase in exports to the region within a year, the company’s CEO said in business daily Világgazdaság. György Kerekes said demand was strong for health industry equipment as well as frozen vegetables. MNKH’s trade houses have also placed an emphasis on the export of services in the areas of environmental and water management, intelligent city development, and engineering and IT, he added. The MNKH, which was established by the state and is minority−owned by the Hungarian Chamber of Commerce and Industry (MKIK), has set up trade houses in Astana, Baku, Moscow, Beijing and Abu Dhabi. Kerekes told the paper that at least eight trade houses will be opened this year. The expansion in Asia will continue, but MNKH will also turn to South America and Africa, he added.


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News 05

Budapest Business Journal | Feb 28 – March 13

COMPANY NEWS

Hungary’s banking sector had combined pre−tax profit of HUF 155.2 bln in 2013, helped by higher revenue from commissions and fees as well as one−off items, preliminary data published by the National Bank of Hungary (MNB) shows. The profit was a sharp improvement over HUF 91 bln pre−tax losses registered in 2012.

GRAND OPENING FOR GE SHARED SERVICE CENTER Lufthansa group carried 1.01 mln passengers on Hungarian flights in 2013, up 4.4% from the previous year, country director Gábor Antal announced at a press conference. Ticket sales were up 4% for Lufthansa flights, 16% for Swiss Air flights and 6% for Brussels Airlines flights, Antal said. The group’s share of the conventional air travel market in Hungary grew 2.3 percentage points to 36.8% last year, he added. In late January 2014, official figures for Liszt Ferenc International Airport for 2013 were released, showing 0.2% growth in passenger count to a little more than 8.52 mln despite a 4.3% year-on-year decrease in flights. Full-service carriers such as Lufthansa accounted for 42% of traffic at the airport, with budget airlines accounting for 53%.

Photo: László Beliczay / MTI

LUFTHANSA PASSENGER COUNT UP 4.4% IN 2013

NANI F. BECCALLI, PRESIDENT-CEO OF GE IN EUROPE, AT THE OPENING CEREMONY OF THE SERVICE CENTER IN VÁCI GREENS OFFICE BUILDING

General Electric has opened its shared service center on Váci út in Budapest, with Prime Minister Viktor Orbán, GE Global Operations vice president Shane Fitzsimmons, GE Europe chairman/CEO Ferdinando Beccalli-Falco and Joerg Bauer among the attendees. The center will create some 1,300 new jobs over the next few years. Bauer stated that 200 hires had already been made. GE is the largest U.S.-based investor in Hungary with 12,700 employees, 12 plants, three R&D centers and three regional business hubs.

The third-generation Audi TT will have its world premiere at the Geneva International Motor Show, Audi Hungaria Motor said. The model is being made in its entirety at a plant inaugurated last year at Audi’s base in Győr. Eissmann Automotive Hungária has completed a HUF 227 mln technology investment at its car interior factory in Nyíregyháza, the company told state newswire MTI. The investment was supported by a HUF 102 mln European Union grant.

Hungarian geothermal-energy company PannErgy sustained after-tax losses of HUF 312 mln in Q4 2013, up from losses of HUF 269 mln in Q4 of 2012 on rising costs, PannErgy’s consolidated, unaudited IFRS report for the period showed. The company had after-tax losses of HUF 903 mln for the whole of 2013, compared to after-tax losses of HUF 463 mln in 2012.

Plastic packaging maker Material Plastik has inaugurated a more than HUF 900 mln expansion at its base in Soltvadkert (130 km south of Budapest). The firm spent HUF 220 mln on expanding its production hall and almost HUF 700 mln on an industrial printer.

Hungarian automotive-industry company Rába had after-tax profit of HUF 720.3 mln in the fourth quarter of 2013, up 84.2% from a year earlier on rising financial and other revenues, Rába’s consolidated IFRS report shows. For the whole of 2013, Raba had after-tax profit of HUF 2.69 bln, up from after-tax profit of HUF 569 mln in 2012.

U.S. medical supplies company Becton Dickinson has completed a HUF 3 bln expansion at its plant in Tatabánya, business daily Napi Gazdaság said. Headcount at the plant could rise by 200 to 700 this year, the paper added. Last year, the unit made 200 new hires, too.

K&H Bank had after-tax profit of HUF 17.4 bln in 2013, down 15.2% as a result of restructuring of the bank’s loan portfolio, the bank’s unaudited, consolidated IFRS report shows. The overall percentage of non-performing loans rose to 12.9% from 12% at the end of 2012. Loan cost ratio increased to 1.48% from 0.78%.

Strabag has won a tender to build five park and ride facilities with a bid of net HUF 1.8 bln, a spokesman for the National Infrastructure Development Company said. Strabag is building the P+Rs near rail stations in Győr, Hatvan, Kecskemét, Szolnok and Vác.

Swiss IT company Elastoffice has ended its strategic cooperation with Hungary’s Business Telecom and is selling its shares in the company, Elastoffice’s lawyers in Hungary said in a statement. Elastoffice is ending its cooperation because of business problems, “limits on the ability to create value” and a lack of commitment to new business solutions, said Illés and Company Law Office.

Hungarian road haulage company Waberer’s-Szemerey Logisztika has inaugurated a HUF 3 bln headquarters in Miskolc (185 km northeast of Budapest). The investment will create 100 new jobs. ADVERTISEMENT Waberer’s Logisztika and Szemerey Transport merged their companies in an exchange of shares and stakes a little more than a year ago. Hungary’s OTP Bank is looking for the right time and conditions to make its next acquisition in Croatia, the head of the lender’s Croatian unit said in local daily Vecernji List. This year, the biggest task for OTP banka Hrvatska will be the integration of Banco Popolare, Balázs Békeffy told the paper. Hungary’s Locargo has completed a HUF 470 mln expansion at its logistics base in Veszprém (125 km southwest of Budapest), the haulage company told MTI. The investment raised warehouse capacity at the base to 15,000 sqm. The investment was supported with a HUF 188 mln grant. Graphisoft Park had after-tax profit of €855,000 in the fourth-quarter of 2013, up from €429,000 in Q4 of 2012 as a result of rising revenue and falling interest expenses, Graphisoft Park’s consolidated IFRS report for the period show. Graphisoft Park generated revenue of €2.05 mln in Q4, up 3.6%.


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06 News

Budapest Business Journal | Feb 28 – March 13

ENERGY

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

HUNGARY ELECTRICITY MARKET TO COUPLE WITH NEIGHBORS IN Q4 Day−ahead electricity markets in Hungary, the Czech Republic, Slovakia and Romania could be coupled in the fourth quarter of this year, the Hungarian Power Exchange (HUPX)

said. The steering committee for the market− coupling project recently “acknowledged the progress achieved by the project team and appreciated that all parties had advanced significantly in assessment of the required technical solutions and common interfaces and started the preparation for implementation of all systems,” HUPX said. Turnover of HUPX’s day−ahead auctions reached 9 TWh last year, or about one−fifth of the total consumed in Hungary, data on the bourse’s website shows. WEAK DEMAND WEIGHS ON SLOVNAFT EARNINGS Slovnaft, the Slovakian unit of Hungarian oil and gas company MOL, had an after−tax loss of €5.4 mln in the fourth quarter because of an unfavorable external environment, weak demand and shutdowns. Slovnaft booked after−tax profit of €11.3 mln in the base period. Revenue fell 11% to €1.137 bln. Operating costs dropped at a slower pace, declining 9% to €1.150 bln and putting Slovnaft €12.7 mln in the red at operating level. For the full year, Slovnaft booked after− tax profit of €37.6 mln, down 28%. Revenue rose 2% to €4.738 bln but operating costs increased even more, by 3% to €4.699 bln.

Photo: lobzik / www.magyarorszag.hu

MOL PRODUCTION SET TO REACH AS HIGH AS 96,000 BOEPD IN 2014 Hungarian oil and gas company MOL expects production of 91,000−96,000 barrels of oil equivalent a day (boepd) in 2014 and 105,000−110,000 in 2015. Highlighting key data from an update on its exploration and production activity for investors, MOL said its current portfolio would deliver around 125,000−135,000 boepd at peak with improving unit EBITDA. It noted that the estimates were made calculating the effects of announced transactions in the North Sea and in Russia. MOL said days earlier that it was close to finalizing a deal to sell a 49% stake in BaiTex, which holds licenses in Russia’s Volga−Ural region, to the Turkish Petroleum Corporation (TPAO). MOL announced last December that it had acquired upstream assets in the North Sea from Wintershall for a base consideration of $375 mln.

MVM IN TALKS ON BOOSTING STAKE IN MÁTRAI ERŐMŰ POWER PLANT The state−owned Hungarian energy group MVM is in talks on boosting its stake in power plant Mátrai Erőmű, National Development Minister Zsuzsa Németh said. The talks concern giving MVM a more active role in Mátrai Erőmű, not just as a minority stakeholder or a contracted business partner, Németh said. Mátrai Erőmű is the largest coal−fired power plant in Hungary, and supplies 10−13% of Hungary’s electricity, according to its website. Germany’s RWE holds 50.9% of Mátrai Erőmű and German peer ENBW owns 21.7%. MVM holds 25.5%, according to data on the website.

PROMOTIONAL FEATURE

A GLOCAL PLAYER ON THE MARKET Bad call center experiences have become a cliché of our times. It seems that for many companies, if it can go wrong, it will. Callers complain about long waiting times, endless transfers to various people at different departments, convoluted menu choices, ill-informed advisors and technical issues. In recent years, those contacting call centers for information, advice and support have discovered a brand new tool to fight bad service: social media. Bloggers, tweeters and furious Facebook users have all vented their fury online, in the most public way possible. What can you do to fight such stereotypes? We at Transcom put special emphasis on getting mother tongue agents, and we train them to the highest level. We also make a massive investment in IT, this way we can offer the best customer experience to our clients. Transcom is a global customer experience specialist, providing customer care, sales, technical support and credit management services through our extensive network of contact centers. Clients increasingly see Transcom as a reliable partner on whom they can rely to drive sales and growth. Our company’s organic growth revenue is a testimony in itself. How do you see the role of the Budapest office? Our office here in Budapest was founded in 2005. Today there are 400 talented people answering incoming phone calls. We consider this as a strategic hub, not only a regional one. We can offer the highest level of multi-lingual technical support from this office, and believe me, not many companies can genuinely say that. Since Transcom globally offers customer service center solutions, one of the biggest competitive advantages we have as a

company is the we can offer 100% throughthe-line solutions to those clients who want to outsource their call center activities. In practice this means that we can manage everything from inbound calls, to back office service, to outbound calls, including administration. What are the objectives of Transcom’s Budapest office? This year too we are about to increase the number of our employees. Our company, which operates in 62 countries worldwide, wants to strengthen its local presence in Hungary. We want to serve an increasing number of local clients; this way we can become a truly ‘glocal’ player on the market. Another competitive advantage is that we are operating in a multi-cultural environment. We employ 400 agents in our Budapest office; they come from 34 different countries and speak 21 languages. I believe that such a multicultural approach to doing business here in Budapest makes Transcom very attractive not only to our employees, but also to our clients. You mentioned that you look at the firm as a ‘glocal’ company. How do you benefit from local knowledge and a global presence?

Gorana Krizmanic CALL CENTER DIRECTOR Call center director Krizmanic has been with Transcom for nine years. Earlier, she worked as a member of the management team in Croatia, and was in charge of the largest client of the company. Later she held a regional interim position at the Dutch subsidiary of the firm. She was appointed call center manager of the Budapest center in 2012.

Our 62 customer service centers with 30,000 employees worldwide offer a great opportunity for knowledge transfer and support. Our geographic coverage is wide, yet we are not isolated from one another; we support each other internally as a true network. Say there is a center where a special language agent is needed, or some special know-how, and another center has that kind of person; we can solve this within a short period of time. What are the services you offer in the Budapest center? As I have mentioned before, we offer classical technical outsourcing services in Budapest. But we offer many different types of customer service solutions: administration, market research, and we even have vast experience in tele-sales services. We have grown together with one of our key accounts – its growth

NOTE: ALL ARTICLES MARKED PROMOTIONAL FE ATURES ARE PAID PROMOTIONAL CONTENT FOR WHICH THE BUDAPEST BUSINESS JOURNAL DOES NOT TAKE RESPONSIBILIT Y

has resulted in a rapid expansion of 200 people in our office here in Budapest. It was a challenge to ramp up these 200 talents, who have language skills, technical knowledge, and are able to pass the Transcom test, which is a very high-level exam. Looking at last years’ results, especially the satisfaction of our clients, we did prove up to the challenge. We were very successful. What are the plans for the future? We will open a brand new call center at Szeged, creating 150 jobs for the locals there. The center will serve a large local client in the telecom segment. Our strategy over the past few years meant that we were focusing on our global clients, so creating awareness about Transcom was less of a priority since they were fully aware of who we are, and what we can offer them. With ever more local clients on board, the Transcom brand is getting better known in Budapest too, but we need to make efforts to get to the level of brand awareness where everybody in business knows that Transcom equals excellence in customer experience management. Our customers are our business, so it makes sense to look after them. So anytime you have a question, a technical enquiry, or just an idea for how we might improve things, we’d really love you to give us a call.

www.transcom.com


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News 07

Budapest Business Journal | Feb 28 – March 13

EC UPS HUNGARY GDP GROWTH FORECAST

MACRO Speaking X of figures The Budapest Business Journal presents the most important macro data of the past fortnight.

The European Commission has raised its projection for GDP growth in Hungary this year to 2.1% in a fresh forecast.

2.7%

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the new, record−low base rate set by the Monetary Council of the National Bank of Hungary (MNB) on February 18.

would not be spent. The 2015 deficit is set to fall to 2.9% of GDP, according to the winter forecast. Changes to the method for calculating national co−financing of EU−funded projects represents a positive risk to the 2014 deficit, but a further slowdown in inflation and an increase in government securities yields could raise the deficit, the EC said. The EC forecast Hungary’s state debt as a proportion of GDP

RECOVERY IS GAINING GROUND IN EUROPE, FOLLOWING THE RETURN TO GROWTH IN THE MIDDLE OF LAST YEAR stimulus measures on investment present an upside risk to the forecast, it added. The EC said the general government deficit likely reached 2.4% of GDP last year, lowering its projection from 2.9% in the autumn forecast. But it said the deficit would rise to 3% in 2014, a hair over the 2.9% government target. It projected a tax revenue shortfall equivalent to 0.3% of GDP because of lower−than−expected inflation and a more cautious assessment of measures aimed to improve tax administration. It noted the forecast assumed a special fiscal reserve equivalent to 0.3% of GDP

would rise from 77.8% in 2013 to 79.1% in 2014, then fall to 78.9% in 2015. All three projections were still lower than those in the fall forecast: 80.7% for 2013, 79.9% for 2014 and 79.4% for 2015. The EC noted that the two−percentage point drop in state debt from 2012 to 2013 was entirely the result of a year− end reduction of state cash deposits and said the level would rise because of the revaluation of FX state debt. Preliminary National Bank of Hungary data shows state debt reached 79% of GDP at the end of 2013. The EC lowered its estimate for

Hungary’s structural budget deficit for 2013 but raised its projections both for this year and next, further up from the 1.7% structural deficit set as the mid− term objective (MTO) for Hungary by the European Commission in its latest country−specific recommendations in late spring 2013. Under the new forecast, the structural deficit, which excludes cyclical and one−off effects, was 1.1% of GDP last year, better than the 1.4% projected in the autumn, dropping below the MTO now for the second year in a row. The structural deficit is set to grow, however, to 2.4% of GDP in 2014 before dropping slightly to 2.3% of GDP in 2015 under the fresh forecast. The EC slightly worsened its projections from 2.3% and 2.1%, respectively, in the fall forecast. “Recovery is gaining ground in Europe, following the return to growth in the middle of last year. The strengthening of domestic demand this year should help us to achieve more balanced and sustainable growth. Rebalancing of the European economy has been progressing and external competitiveness is improving, particularly in the most vulnerable countries,” Commission Vice−President for Economic and Monetary Affairs and the Euro Olli Rehn said after the publication of the winter forecast Both Dávid Németh of K&H Bank and András Balatoni of ING told state newswire MTI that they consider the European Commission’s upwardly revised 2014 GDP forecast to be realistic. Nemeth noted that the EC’s new forecast corresponds to both the government’s forecast and market consensus regarding Hungary’s 2014 GDP growth. Balatoni commented that 2015 GDP growth might be somewhat lower than the European Commission’s confirmed forecast of 2.1% as a result of closing of the output gap.

0.0% inflation rate recorded in January. The MNB’s medium−term target is 3%.

HUF 75.4 bln Hungary’s cashflow−based general government deficit (excluding local councils) in January, which equals 7.7% of the full−year target.

8.9% unemployment rate in January, down 2.3 percentage points from the same period of the previous year.

1.8% year−on−year increase in retail sales in December, 2013.

Sources: National Bank of Hungary, Central Statistical Office

OLLI REHN, COMMISSION VICE-PRESIDENT FOR ECONOMIC AND MONETARY AFFAIRS AND THE EURO

Photo: European Commission

The projection in the winter economic forecast was raised from 1.8% in the EC’s fall forecast published in November. The new projection is slightly over the government’s forecast for 2% growth. The EC put GDP growth in 2015 at 2.1%, too, in line with its earlier forecast. The EC said growth would be supported by a further pick−up in domestic demand as net exports have a neutral effect. Household consumption is expected to start growing again from 2014 because of higher real disposable income, lifted by regulated price cuts, public sector wage rises and looser lending conditions, it added. The forecast projects private consumption will grow 1.5% in 2014 and 1.6% in 2015. Public consumption is set to rise 1.5% and 2% in 2014 and 2015, respectively. The EC said a high absorption of European Union funds would contribute to a pick−up in investment activity as well as a slight growth in net borrowing by companies. It noted a possible tightening of global monetary conditions as well as the domestic adoption of a new relief scheme for borrowers with foreign currency−denominated loans as downside risks to the GDP forecast. A bigger−than−expected effect of


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2Business Q&A

THE RAINBOW OF INNOVATION ON THE HORIZON The newly appointed president of the Hungarian Innovation Office (NIH), Endre Spaller, is counting on the seven− year R&D program of the European Union and the entrepreneurial spirit within Hungary. He promises to do whatever it takes to help innovation thrive here. LEVENTE HÖRÖMPÖLI-TÓTH

You took up your duties on February 1 and the next thing you were on your way to China as a member of a rank−and−file government delegation. A: With the assistance of a central authority there, Hungarian experts are deployed to work and carry out research at big Chinese corporations. The jointly financed cooperation concerns industrial projects that have a long tradition in the Asian country. They developed a model that focuses on the practical gains of research and our professionals get first− hand experience of how knowledge is transformed into high−tech results.

Does this partnership fit with your leadership agenda? A: We are open−minded and ready to adopt best practices. We would also like to see local success stories receive more publicity. Hungary should become a place that looks forward. Innovation is the tool that could build the basis for economic upswing, and people can gather inspiration from it.

The timing could hardly be better as Horizon2020, the EU’s R&D program, has just begun for the period 2014−2020, and other types of financing are abundant too. A: There has never been a more ideal situation to call on R&D resources. Some HUF 700 billion are available for this purpose from the EU structural funds alone, and private capital is also getting engaged. In addition, the government has launched a business incubation program. The Hungarian startup world is about reach a critical mass; that can be sensed in the daily operation of the office. The largest proportion of cash is certainly expected from Horizon2020, and if at the end

STORY HIGHLIGHTS ■

Innovation is key in Hungary’s effort to gain long-term competitiveness ■ The Innovation Office encourages stakeholders to be ever more active in applying for funding

of the day €350 million could actually be used in Hungary we would be satisfied.

One of the novelties in Horizon 2020 is the direct involvement of venture capital. A: It surely won’t save the day by itself. The idea behind it is rather a change of approach. The problem with R&D projects financed from European funds has been that neither GDP growth, nor competitive products have followed as a result. That had to be addressed.

Which pillars of the development scheme do you think most of the money could be called from?

Prior to his position as head of the NIH, Endre Spaller was an MP representing the Christian Democratic People’s Party (KDNP) and gained experience in the Committee for Innovation and Employment in the current parliamentary term. But his involvement in public life dates back to 2002 when he became a representative in the municipality of Budapest’s District XIII. He has also worked as a research fellow and a career consultant. Spaller holds a degree in sociology and has studied in Belgium and the States with a scholarship. He speaks English and Romanian.

CV

A: The structure for using the money matters most. Up till now, predominantly universities and scientific consortia have gained access to funding. They are important, but other actors, primarily SMEs, should gain influence as well. The money available for such entities from the European pot amounts to €8.6 billion. It is essential that the chronically undercapitalized Hungarian SMEs

seize as much as possible from those funds and fight their way into key business teams. But that is what we are there for: to assist them in this effort.

If somebody calls you seeking such help, saying they have a great idea and a company, how do you guide them? A: Our horizont2020.gov.hu website will be launched by the end of February,


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2 Business

Budapest Business Journal | Feb 28 – March 13

where all the necessary information will be available. In addition, a network of national contact points is run by our office. It seems, though, as if there was a lack of self−confidence, and capital was needed to bring the proposals into life.

Q 

NIH also is promoting its ‘toolkit’ in a country−wide road show. A: The bulk of the EU money has been channeled to Budapest and the central region of the country. Our goal is to widen the scope of target areas. By reaching out to other regions, people will obtain information from us directly on how to apply. Many are interested, and word−of−mouth is also on our side to draw an ever larger audience as the tour goes on.

Q 

That tour enables you to promote the government− backed incubator program that may be another gateway for success. A: The business incubation accreditation will reach its second phase soon and at least four more centers are foreseen to be funded by the government. Such ecosystems have enormous potential. To give you an idea of the extent to which it is worth investing in such schemes, global startup star Prezi now pays so much tax that it alone would cover half of the budget of the first four incubators selected in phase 1.

PREZI NOW PAYS SO MUCH TAX THAT IT ALONE WOULD COVER HALF OF THE BUDGET OF THE FIRST FOUR INCUBATORS

Q 

Accelerators, also known as startup schools, provide a platform for new businesses to go global, and are closely connected to incubators. A: The development of entrepreneurial training is granted priority. The biggest working group within the BudapestHub Forum deals specifically with this area. Startup courses, contests and publications will be promoted by our office, and last year even a video series was made on the topic.

Q 

University students are being encouraged to walk their own path upon completing their studies. In America, however, youngsters start their first business at age of 15. People like Vimeo founder Zach Klein had become veterans by their mid−20s. Do you have any plans to reach out to teenagers? A: The phenomenon exists here too. Maybe at a bit older age, but a significant share of first−year IT students do work on real projects. There are numerous

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programs meant to encourage founding businesses. We believe that one of the edges our country has is its quality IT education, so our goal is not to discourage high−school kids from going to university.

Q 

Hungarian success at the Tech−Match startup contest in California in early February is another manifestation of young talent delivering results. A: From amongst 100 applicants, the number of Hungarians was 47, which is positive. The two companies selected for the presentations in the United States forged important business ties, concrete user tests have begun, and specific deals have been struck.

Q 

How does Hungary fair in the innovation race from the European or the regional perspective? A: In terms of R&D spending of GDP as a percentage, we are at the top of the lower third of EU countries, but the target of 1.8% set for 2020 should propel us ahead several places in the ranking. Spending has been continuously soaring in the last three years. But that’s for measuring input. What matters more is measuring output, and for that purpose a new European Innovation Index has been developed. According to that, Hungary clearly scores higher and is now ranked in the middle section. And we are making every effort to do better.

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10 2Business

Budapest Business Journal | Feb 28 – March 13

CEOS’ OPTIMISM UNDERP It seems that after long years of crisis gloom, there is a substantial change in the economic outlook of business leaders – both CEOs of global companies and their Hungarian counterparts. While the keywords of the last CEO survey by PwC were uncertainty and unpredictability, this year’s respondents now believe the global economy to be in better shape than at any time in the last five years. Although CEOs are still concerned about the impact of economic policy factors, and it may be too early to definitively celebrate the end of the crisis as global growth may still be slow and fragile, global and Hungarian CEOs are turning to customers and markets with renewed energy. Which means that the current optimism is driven by the CEOs’ confidence.

IMPROVED EXPECTATIONS The number of CEOs who believe that the global economy will improve over the next 12 months grew significantly from the previous year, while increasingly fewer leaders think that things will get worse in the year ahead. However, CEOs have very mixed views about the global economy. Only a quarter of CEOs surveyed in Central and Eastern Europe believe the global economy is recovering, versus half of all CEOs in Western Europe. Hungarian CEOs’ expectations about the future are improving, though. In Hungary, two−thirds of CEOs expect growth in the global economy, up from one quarter in 2013.

DO YOU BELIEVE THE GLOBAL ECONOMY WILL IMPROVE, REMAIN UNCHANGED OR DECLINE OVER THE NEXT 12 MONTHS?

THREE MAJOR TRENDS THAT TRANSFORM BUSINESS For the future, both global and Hungarian CEOs expect three major global trends – rapid technological advances, demographic changes, and shifts in economic power – to have a major impact on their businesses. Although these trends aren’t new, the pace at which they are unfolding is – and so is the way in which they are colliding to create a completely different economic and social environment. Two−thirds of Hungarian CEOs perceive technological advances to be relevant to their companies. The digital economy, social media, mobile devices and big data are expected to bring about the most significant changes in this field. The shift in global economic power and demographic changes affect half of Hungarian companies.

PLEASE RANK THE TOP THREE GLOBAL TRENDS FROM THE FOLLOWING LIST, WHICH YOU BELIEVE WILL TRANSFORM YOUR BUSINESS THE MOST OVER THE NEXT TEN YEARS.

“So both in Hungary and globally there is increased optimism. It is, however, too early to celebrate the end of the crisis because global growth is still slow and fragile and many CEOs retain concerns, for example with economic policy factors. What has changed significantly is that CEOs are turning to customers and markets with renewed energy.”

“CEOs expect that three major global trends – rapid technological advances, demographic changes, and shifts in economic power – will have a major impact on the global economic and social environment. These global trends will also affect Hungarian companies. They will create many new opportunities for innovation and growth, and the key to success for CEOs lies in capitalizing on these opportunities. ” Nick Kós, Country Managing Partner, PwC Hungary


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Business 11

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Budapest Business Journal | Feb 28 – March 13

INNED BY CONFIDENCE REVENUE INCREASE EXPECTED The Hungarian CEOs’ confidence level about their company’s short− term prospects for growth corresponds to the global average: 72% are confident about their company’s growth prospects. Of those, 29% say they are “very confident” of revenue growth prospects over the next 12 months. In the global survey, this proportion is ten percent higher (39%), and was at its lowest in 2009 at 21%. Most Hungarian CEOs are confident about their industry’s prospects for revenue growth in their primary market of operation over the next three years (70%). CEOs of automotive and retail companies are even more optimistic. In contrast, almost none of the CEOs of financial service providers, or power generation and distribution companies expect an improvement.

TAXATION REFORM NEEDED Both global and Hungarian CEOs are doubtful about the success of tax reform in the next few years. The majority of Hungarian CEOs agree that the international tax system must be improved in several areas, and needs to be reformed in order to adapt to the operation of multinational companies. Although they support reform, they do not believe it will succeed.

LOOKING AT TAX POLICY AND ADMINISTRATION, TO WHAT EXTENT DO YOU AGREE OR DISAGREE WITH THE FOLLOWING STATEMENTS?

HOW CONFIDENT ARE YOU ABOUT YOUR COMPANY’S PROSPECTS FOR REVENUE GROWTH OVER THE NEXT YEAR AND OVER THE NEXT THREE YEARS?

EFFORTS PAID OFF When talking about factors improving the competitiveness of businesses, Hungarian CEOs mentioned only elements that were the result of their own efforts. These included new market opportunities, organizational changes, marketing activities and product development. CEOs particularly focus on finding the right people, cost−effectiveness, investments and improving operational effectiveness. CEOs believe that the competitiveness of Hungarian companies has deteriorated, primarily due to external factors.

PLEASE LIST THE THREE MOST IMPORTANT FACTORS THAT IMPROVED YOUR COMPANY’S COMPETITIVENESS IN THE PAST 12 MONTHS.

“Both Hungarian and global CEOs think that there is room for improvement when it comes to competitiveness and efficiency of taxation systems. According to our local survey, two out of three queried leaders are cautious about increasing taxes – this means that they still think that the regulatory environment is unpredictable. There is an increasingly strong demand for correct, transparent and calculable execution of the existing regulations, and for rules for the long−term.”

Tamás Lőcsei, Partner, PwC Hungary

MARKET SHIFT While last year’s survey showed that the most preferred markets were the BRICS and the emerging economies, global CEOs seem to view these countries with waning enthusiasm this year, and think Germany and the UK now look more promising. In Hungary, exports to Germany are just as important as last year – 25% of Hungarian CEOs see opportunities for growth in this area, the same number as in last year’s survey. At the same time, in most cases countries bordering Hungary are perceived as twice as important with regard to Hungarian companies’ prospects for growth.

WHICH 3 COUNTRIES DO YOU CONSIDER MOST IMPORTANT FOR YOUR OVERALL GROWTH PROSPECTS OVER THE NEXT 12 MONTHS?

Based on PwC Hungary’s 3rd CEO Survey.


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12 2Business

Budapest Business Journal | Feb 28 – March 13

CUTTING RED TAPE DIGITALLY The government says it plans a fully digital Hungary with every household fitted with broadband Internet access by the end of 2018. The newly approved national digital strategy earmarks more than 1% of the country’s annual GDP for significant boosts in the digital realm.

STORY HIGHLIGHTS ■

Gov’t wants country fully digital by end of 2018 ■ Agencies earmarked HUF 350 billion to implement the project

its goals set for 2013, it occasionally decided to buy competences it didn’t

by making the operation of businesses easier through taking digital scissors to red tape. Kustánc noted that the best way the state could serve the business sector is to digitize systems within the bureaucracy that involve tedious matters like the issuance of permits.

cases. The earlier system required several stages of documentation and since these papers continue to exist, they created the grounds for abusing legal powers. The business sector would also benefit greatly from extensive use of certified digital signatures that

GERGŐ RÁCZ

ONLINE BUREAUCRACY The strategy has been given a budget of HUF 350 billion, although there are still some issues that the government is working through with Brussels. As part of the project, the cabinet is aiming to make public administration fully digital for businesses and also create the same opportunity for private citizens, while pledging that those who wish it will still have the opportunity to manage administrative affairs face− to−face. The effort involves the national infrastructure development agency NISz as well as the governmental information−technology development agency KIFÜ. NISz is involved in or has already completed projects that came with European Union funding amounting to more than HUF 50 bln, while KIFÜ’s growing portfolio now covers 18 projects amounting to more than HUF 35 bln in value. Head of NISz Attila Zoltán Szabó told reporters that during the realization of

Photo: Gábor Rusznák

The government approved its national infocommunications strategy, which lays out the priorities for the next seven years, at the start of February. The main aspects of the plan are the development of digital infrastructure, investments into broadband Internet and developing digital competences while lowering digital illiteracy. The approval is meant to trigger a supply of money and other resources to support a sector that the government has long championed verbally as a potential driver of overall economic growth. “There is no turning back now, we will be the best,” Prime Minister Viktor Orbán said after signing a strategic partnership agreement with Magyar Telekom, with the telco slated to play a major role in the ambitious project. Orbán went so far as to envision Hungary developing Europe’s best and most advanced digital infrastructure. “We have to whip the horse that’s doing the pulling. [.‥] This may not be the fairest thing, but the truth is that the world is actually propelled by those who do the pulling. The IT sector is pulling in Hungary, that’s why we have to whip it, develop it by making investments. We have to become stronger where we are already strong,” Orbán said. Head of NISz Attila Zoltán Szabó and state secretary Vilmos Vályi-Nagy (l-r)

have instead of keeping development in−house. The allocation of future funding will likely be more targeted due to the nature of the tasks involved. “IT systems used in public administration are usually specifically developed applications,” says Szabolcs Kustánc, managing director of specialist advisor MultiContact Consulting, highlighting that there are goals unique to the individual states involved, not to mention the applicable legislation. “Developing digital public administration necessitates new, unique solutions,” he added. BUSINESS BOOST One of the declared goals of the overall effort is to support businesses, on the one hand through direct funding for startups to aid product development and consequently increase Hungary’s overall software exports, on the other,

Such solutions, for instance, could mean an electronics registry of people entitled to legally represent various companies as well as commissions transferring jurisdictions for specific

verify credibility while also making administration easier. Two ministries are already using such a system and officials say the rollout will continue across other departments.

DIGITAL DISCOUNT According to the National Development Ministry, the state spent an annual HUF 100 billion on IT services in the past, which has been reduced by 30% or HUF 30 billion as a result of the government cloud venture. The system is connected to 3,000 points within the state bureaucracy and another 5,000 points in education facilities. Thanks to the rollout, the ministry calculated that it was also able to reduce the expenses of landline phones by 40%.


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3Special Report Survival of the cheapest?

 14

From Indian English to Hungarian

TRANSLATION Hungary’s translation market is very price−driven and quality is often regarded as secondary by clients. Conditions don’t look rosy in the realm of translation, but there’s little sign of desperation among the largest market players. Meanwhile, the industry is trying to embrace new technology.

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3

Budapest Business Journal | Feb 28 – March 13

BBJ Research Markets in numbers

SURVIVAL OF THE CHEAPEST? In the magic triangle of rate, deadline and quality, clients seeking a translation service tend to vote with their credit card. Conditions don’t look rosy in the realm of translation, but there’s little sign of desperation among the largest market players. LEVENTE HÖRÖMPÖLI-TÓTH

Back in the ’90s, no more than around 30 agencies operated in the translation market in Hungary. Now hundreds of firms and thousands of self−employed translators are scattered across the virtual landscape. The barrier of entry could hardly be lower: if you know a foreign language and have a phone and a laptop, you are all set. Or so it seems. “Compared to other professions, there are many out there without a relevant degree or experience, and this clearly has an impact on prices. The lowest rates top the assessment criteria of public calls for proposals and in the private sector price is given priority over quality as well,” Lehelné Veronika Mendel, CEO of Intercontact Budapest Kft told the Budapest Business Journal. Indeed, average rates have remained pretty much the same over the last ten years. DANGER ZONE SUPERCHEAP The fact that global fees for the ‘big’ languages have decreased in the same time span hardly gives comfort. Therefore, measures such as keeping costs low and

STORY HIGHLIGHTS ■

The translation market is very pricedriven; quality is often regarded as secondary by clients ■ New technology is not regarded as a threat; indeed, the industry is trying to embrace it

Revenues from translation and interpretation of the top 10 translation agencies (HUF mln)

effective use of resources have reached core status in business plans. “It often happens that at first translators giving a bargain quote are hired in spite of having no qualifications. After a disappointment, customers rather seek the right value− for−money. Normally, we need to convince them to choose us once only, as the positive experience keeps them with us,” Ferenc Jantner, CEO of FORDuna Kft said. “Those who go down with the price excessively end up in a danger zone sooner or later and will go bust,” László Végső, CEO of Multi−Lingua Kft noted. A QUESTION OF QUALITY A standard way to enhance quality is carrying out in−house checks, a service that only larger firms have the human resources for. Revising texts is a much higher level where a second professional goes through the material. “Clients expect to get a revised translation at a normal price and they are very rarely ready to pay extra for revision,” Mendel said. This phenomenon was confirmed by Márta Balázs, CEO of Translation Agency Edimart, who added: “We have the responsibility to judge whether certain documents should be delivered without revision. Clients must be informed in an appropriate manner why we think it is crucial.”

THE DEVIL IS IN THE LEGAL LINGUISTIC DETAIL The European Union functions in 24 official languages, which can give rise to legal disputes due to discrepancies between the various versions. “The Court interprets the law according to its intended purpose. It looks at how the various EU members have stated the law in their own language, searching for what resembles a majority view and teasing out ambiguities that arise in a particular language,” explained Dr Vera Nagy. She has worked as a legal counsel at the General Court of the European Union and now works as an attorney specializing in business and EU law, as well as running Levito & Vever, a legal translation agency. “The Court has a tough job as mistranslations are inherent in this vast multilingual regime. I have come across Hungarian texts too where the lack of legal knowledge was apparent. Therefore, I find it crucial that European legal texts, whether of administrative, legislative or court-based nature, should be always translated and revised by legal professionals with excellent language skills,” she added.

Range of standard net translation rates (HUF/word)

Language Pair

Rate range

Rush rate range (within 24 hours)

From main languages into Hungarian

1.6−3

2.4−4

From Hungarian into main languages

1.6−3

2.4−4.2

From main languages into main languages

2.4−4

3.6−6

For the purpose of the research, ‘main language’ means English, German, or French (per number of source text characters, spaces included; maximum 9−10,000 characters/day) Source: rates published by Hungarian translation firms on the Internet, BBJ research

NO RAGE AGAINST THE MACHINE, YET Technology does have a say in this issue as well. It affects pricing and deadlines, and has revolutionized terminology work. By applying computer−assisted translation (CAT) tools, work processes can be optimized. “With the help of such technology, we can provide the client with a personalized linguistic data base and systematize it for them,” Jantner said. CAT tools, however, also have the potential to push down revenues. Texts are analyzed by software showing the match ratio of repetitions. That leads to overall reduced rates, as

clients won’t pay the full price for the entire text.An even bigger curse is the emergence of automated translation. The industry seems to be racing against time, but players say they are up for the challenge. “The fact that automated translations are becoming widespread is a necessary change we need to prepare for. We must learn how to apply and sell this service,” Balázs said. “Only those agencies that apply technology and follow international trends will be able to develop, bearing in mind that IT localization will remain a crucial engine for growth,” she added.

The BBJ Research column reviews a given industry, gives a market round−up and analyzes the numbers behind the market tendencies. Our analysis is based on the latest edition of the Book of Lists. For the latest, updated figures, check out DigiBOL, the digital version of the Book of Lists. www.digibol.hu


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COMPETING WORD VIEWS Every translator knows Trados. Many translators use it. Most also complain about it. The drawbacks of the translation memory software lie in the fact that it occupies a monopolistic place on the translation market. Its marketing and sales strategy seems to be based less on quality upgrades than on the exploitation of its established market position. Now an emerging rival to Trados has appeared, called memoQ. ANDRÁS ZSÁMBOKI

The market of computer−aided human translation software products is still monopolistic: it is 51% dominated by Trados. MemoQ, however, is by far the most serious challenger with its 15% market share. The company behind memoQ is Kilgray, which, in spite of its Scottish−sounding name, is made up mostly of Hungarian IT experts. Three of the four owners graduated from Budapest Technical University, and gained their first work experience at MorphoLogic, the legendary computer linguistics workshop that was founded in Budapest in 1991. There is rarely a direct road, however, from a theoretical think tank like MorphoLogic to a user−oriented firm successfully operating under market conditions. In the case of Balázs Kis, the commitment to practicality stems from the fact that he knew the world of translators fairly well before launching his own firm. “I taught translation technology to humanities students at Miskolc University and Eötvös Loránd University; I myself have contributed to the translation of Microsoft Press handbooks for the publishing house owned by my parents,” Kis says, narrating the story of his early years. As opposed to literary translation, the translation of specialized texts poses a different kind of challenge: the real

achievement here lies in producing texts as time− and cost−efficiently as possible, but without sacrificing quality. “We used to work in Word and organized tasks among ourselves by e−mail. This is how the concept of the ideal translation organizer was conceived,” Kis remembers. Together with two friends who were also experienced in language technology, Kis decided to found a new company to develop the new software, and Kilgray was started by the three of them in 2004. Their memoQ translation environment supports team translation on three different principles. Firstly, it has to make the simultaneous work of individual translators possible. Secondly, cooperating translators must be able to use a common terminology. Thirdly, there has to be a supervising editor who occupies a higher position in the hierarchy than the translators, and who can edit every contributing translator’s text even while it is still in progress. “We wanted to design a software that can run both on individual translators’ personal computers and on the servers of translating teams or agencies,” Kis explains. The first commercial version of memoQ, launched in 2007, was based on the above ideas. AT THE RIGHT PLACE AT THE RIGHT TIME While memoQ was being developed in Hungary, important changes were taking place in the global market of computer− aided translation. In 2005, SDL, the world’s fifth largest translating agency, bought up Trados, a market−leading translation software. “The building of a vertical industry is never a market− friendly strategy,” Kis remarks. What is more, in this case SDL’s acquisitions triggered off a crisis of confidence among the users of Trados: “Do we, the outside users of Trados, in fact get the exact same product as SDL’s internal translators?” many independents may have mused. This lack of confidence in Trados was the dominant market sentiment at the time when memoQ was launched. It would be an exaggeration to say that memoQ sold better because of SDL’s earlier acquisition of Trados. But whoever bought memoQ was immediately enthusiastic about the

HOW BIG IS THE TRANSLATION MEMORY SOFTWARE MARKET? We can make guesses about the size of the market on the basis of SDL’s annual turnover. Since Trados dominates 75% of the market for individual translators, the $64 million revenue that comes from that market segment implies that the entire market is worth about $90 mln. The market for translation agencies and translators’ teams can be estimated to be twice as big as that of individual translators. Multinational companies that localize the translation of users’ manuals and other similar content related to their own products are estimated make up an additional $15 mln segment of the market. So the annual turnover of the market amounts almost to $300 mln.

new software. “Among customers, we were being referred to as the cheapest and most user−friendly server−based translation memory. Our additional helpdesk services were also praised by our clients.”

one−year’s turnover to the clients in case the company ever gets sold.

Reservations about SDL intensified when, in 2008, the company also acquired Idiom Inc, developer and manager of the biggest cloud−based translation management system of the time. The unique feature of Idiom’s services was that besides the usual elements of translation management it also contained confidential information such as customers’ names, company information, and invoice details. “Idiom’s customers, who till then had only harbored worries about their confidential business details being stored by a cloud−based system, were informed on February 8, 2008 by Idiom’s website about the fact that Idiom’s rival SDL had got hold of all that confidential information by acquiring Idiom Inc,” Kis points out. The confidence vacuum thus became complete. For Kilgray and its memoQ software, however, all this was only an opportunity waiting to be realized. “The Idiom group used to have a manager who liaised with translating agencies. This person, Peter Reynolds, quit his job at Idiom and was hired by us, so he became Kilgray’s fourth co−owner. Since then, strategic planning has been introduced at Kilgray as well. “We learnt from Peter how to set a target income, how to design a plan in order to reach that, and how to subordinate everything from development to helpdesk organization to one goal,” Kis says. The Idiom case became a lesson for Kilgray’s owners to learn. “We drew up a Declaration of Independence of our own, in which we stated that we would never sell Kilgray either to SDL or another big rival,” Kis declares. Besides big words, however, the legal consequences of the Declaration are just as important: Kilgray obliges itself to repay the equivalent of

it from rival products. One of these is attentiveness to customers’ needs. “We have three distinct types of customers: individual translators, translating agencies, and companies that run translating divisions of their own,” Kis says. “It is crucial for each of memoQ’s upgrades to offer novelties to all three types of clients, even if only one of the groups is really targeted by the new version.” The other distinctive policy of Kilgray is its call center support service. “A software developer always makes mistakes. We, for example, have made a mistake in memoQ’s 6.0 version that made life hard for a number of users for a while. It is a big problem if clients feel that they are left to their own means with a problem like that. A user−friendly helpdesk service is a great help in such situations. We managed to respond quickly to customers’ calls, indicating to them by what time the problem would be solved.

SUGAR SIDES Kilgray has two core policies that makes memoQ attractive, and distinguishes

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‘WE LIVE OFF THE MARKET LIKE EVERYONE ELSE’ Under socialism, the Hungarian state used to have one single translation agency called OFFI (Hungarian Office for Translation and Attestation). Even though today several private translating companies compete with each other on the free market, the state still favors its one−time only child: OFFI is the only agency which can make attested translations in Hungary. The Budapest Business Journal asked Andrea Belényi, managing director of OFFI, about the current state of the business.

market liberalization. Since 2009 it has been possible to translate company documents using authorized translators. I must add that there is a market phenomenon that can mislead consumers, namely the widely used advertisement slogan by private translation agencies of ‘official translation’, which is not, however, a legal term. The Hungarian term for ‘official translation’, however, is easy to confuse with ‘attested translation’ (hiteles/hivatalos).

Do I understand it right that you do not actually check their originality of your source documents? A: As a matter of fact, OFFI does not have the right to investigate in suspicious cases. Our expert employees, however, have a great deal of experience, and they can easily detect traits that betray falsified documents. Let me give you an example. The customer relations associate will notice if the round stamp on an Albanian driving license is different from usual. Our translators are similarly well trained to notice irregular phrasing in the texts of official documents. In such cases it is our colleagues’ duty to notify the police.

ANDRÁS ZSÁMBOKI

OFFI has a negative reputation on the translation market, as it possesses the monopoly for preparing attested translations. Paradoxically, however, OFFI is present on the market of technical translations as well. A: I would like to stress the fact that OFFI has been operating as a company since 1994. That means that we live off of what we earn in the market. It is another question that we are 100% owned by the Hungarian state, meaning that we must meet rigorous

Distribution of OFFI’s revenue (2013, %)

WE HAVE A SAFE HARBOR MARKET OF ATTESTED TRANSLATION AND FIERCE COMPETITION ON THE TECHNICAL TRANSLATIONS AND INTERPRETATIONS MARKET criteria in terms of having to report on our activities to the Hungarian National Asset Management (MNV Zrt). True, OFFI has a special status in Hungary; since its foundation in 1869 it continuously has had responsibility for attested translation. According to a government decree of 1986, three types of agencies are entitled to provide attested translations: beside OFFI, certified public notaries, and consulates.

But the world was rather different in Hungary in 1986, wasn’t it? Foreign languages were hardly in everyday use, and market conditions were practically nonexistent. A: Of course OFFI’s monopoly has eroded very much since then, which can only be welcomed. Since 2012, for example, it is possible for specialized and certified translation agencies to prepare so−called ‘responsible translations’ of companies’ documents in public procurement procedures. Since Hungary joined the EU in 2004, the organs of the Hungarian state administration have been increasingly accepting official documents in English or French. Needless to say, competition has intensified in the market of technical translation as well. Translation agencies

in neighboring countries are also our competitors. I usually say that truth stands on two legs and so does OFFI. It means that we have a safe harbor market of attested translation and fierce competition on the technical translations and interpretations market.

What is the practical difference between ‘attested’ and ‘responsible’ translations? A: An ‘attested’ translation is supposed to make it possible for a document of non− Hungarian origin to be useable in all spheres of Hungarian public administration. As the government decree of 1986 declares, “the attested translation inherits the status of the source document”. For example, if the original document was a birth certificate, the attested Hungarian translation will remain a birth certificate; if the original was a founding charter countersigned by a public notary, the translated version will obtain exactly the same character. ‘Responsible’ translations, however, can only be used in a public procurement processes. There is no definition given by the law for these cases but this solution reduces the administrative burdens of the companies. A third dimension is the consequence of the

What is the breakdown of OFFI’s revenues? What per− centage comes from attes− ted translation, how much from commissions from public adminis− tration, and how much from other spheres of the market? A: During the past decade, the percentage of attested translations’ revenue has been on the decline, while the proportion of technical translation and interpretation has been on the rise. Nonetheless, attested translations still make up about 70% of out total annual revenues. Since 2006, revenue has been slightly declining. At the moment the task is to stabilize our annual turnover at the level of HUF 1.5 billion. I think that this is a realistic and achievable goal. As for the near future, we make great efforts to win as many market assignments as possible. In the state administration there are public procurement proceedings or other tenders where we are also measured against our competitors. Surprising as it is, the rate of successful tenders in public administration and in the sector of private companies is roughly the same. Beside these activities we have a special task in the process of the so−called Simplified Naturalization Process (EHE).

And how about OFFI’s expenses? A: Salaries and honoraria make up the largest proportion of our expenses. The majority of our translators work for OFFI on a freelance contractual basis. Of the editors, we employ the key people in the translation process, while we work together with well−trained, talented freelance translators. This is a successful business model for us as with this structure we can ensure the high quality and great efficiency of work. OFFI Ltd has duties prescribed by law, and in order to meet these obligations it has to keep up a countrywide network of offices.


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FROM INDIAN ENGLISH TO HUNGARIAN Translators receive ever more texts whose source language is written by non−native speakers. But why should this be so, and what are the implications? ZSÓFIA VÉGH

Once an extra that could earn you a better wposition/salary/recognition, language command has become an essential for today. English, in particular, is so widely used that – depending on location – many versions are available of it. In Europe, the most notable version is probably the English used by the eurocrats of the European Union. Not only is it peculiar because of the terms coined and used in its legislation, institutions and documents. To an ever−growing extent non−native speakers create these texts, a fact that inevitably leaves a trace on the quality of the English text. Kornél Erdei, co−manager of translation agency Cielito Lindo works mostly with texts from the EU. The agency applies to tenders by the European Commission and its representation in Luxembourg. Like most agencies, they work with contractors, but are partly spared the pressure of the low fees, low quality circle. “Anyone can participate in these tenders, and give as low an offer as they wish,” said Erdei. Yet should the quality of the submitted work decline, the agency

is immediately ranked lower on the Commission list, lessening their chances to win the subsequent job assignments. So maintaining quality is in Cielito Lindo’s business interest. In terms of source language, the picture is more varied. “Due to the mixed nationalities working at the Commission, these texts are often written by non− natives,” Erdei explained. “In these cases, it helps if the translator speaks the mother tongue of the client, so they can better understand what they originally meant.” That’s not unfamiliar ground for those working in this trade. Anyone having tried the business is aware there is more to translation than simply giving

A LITTLE LESS COMPETITION WOULDN’T HURT Whether you are a translator or an agency, the three main issues you definitely face are quality, fees, and the lack of standardized verification. These are questions both sides have tried to solve, thus far with few results. The industry is so deeply infiltrated by personal and professional interests the players cannot set aside that it breeds unhealthy competition. Professional associations, whose job it is to deal with these problems, are often criticized. Among the claims against them are that they use their privileged position to gain an edge over their competitors or to fix prices. Another problem is that they are centered in the capital, and countryside players are hardly involved. (In part, this is the fault of those outside Budapest, some believe.) There is some progress though. Last September, the two main associations signed an agreement: the Association of Hungarian Translators and Interpreters (MFE), and the Organization of Professional Translation Service Providers (Proford), comprising

translation agencies. The agreement contained guidelines on translating and revising, and set a minimum of HUF 8/ word + VAT translation fee and HUF 3/ word + VAT revising fee. This February, another agreement followed focusing on interpreters. Among others, this defines an eight−hour working day as the optimum and advises against overtime longer than two hours per day. The initiatives are good but there is a chance they may be abused. Zoltán Ráskó, co−manager of the Cielito Lindo translation agency is afraid some agencies will likely interpret the HUF 8 rate as an upper threshold, and cite it as a reference at pay negotiations with translators. Still, there is much to handle. Translators’ working conditions are not protected in any way. Irregular working hours, and lack of fixed employment makes this group particularly exposed. An association can hardly solve this; here a bottom−up approach is needed, Ráskó suggested. ZsV

the equivalent of the text in another language, whether you are working for Brussels or a multinational company. Fruzsina Bence, a freelancer with more than a decade of experience, has worked with non−native English texts from ADVERTISEMENT

all parts of the world. “If it is an Indo− European source, it is fairly easy as it gives you a clue as to what the meaning was. If it is from Asia‥. Well, guessing and asking come into play.” Translators often use query sheets to send questions to the project manager or client to find out what was meant. Sometimes even the clients do not know, or send something too vague to be of much use. When on a deadline or when the client is impossible to contact, translators simply have to do their best to fill in the missing holes. “The straightest thing you can do is to leave a comment to the client explaining your choice,” Bence said. The reason for hiring Indians, Poles or any other non−native speakers is purely financial. For an Italian company it is more cost−effective to find an Italian translator or employee with good enough English to translate a text into English in house, and then hire an international agency/translator. English is the most− frequently used language, hence the cheapest: the company would still end up paying less than finding an Italian− Hungarian translator.


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4 Socialite CITY TOURS BY BKV, LUXURY COUNTRY RIDES BY MÁV Several public transport companies, including MÁV and BKV, offer guided tours and private bus service. They may not improve the companies’ balance sheet significantly, but they do help raise prestige. ZSÓFIA VÉGH

The Christmas party is always an event the co−workers of Filmefex Studio (an internationally acclaimed special effects outfit owned by Iván Pohárnok) greatly look forward to. It has been different every time. Model and prop makers, make−up artists and specialists have participated in a Thai cooking lessons, dipped in a pool at a garden party with trunks and towels emblazoned with the Filmefex logo, and cruised through Budapest by night in a limousine. Last December, the management opted for something classier. They took their employees on a rail journey called ‘Candlelight’ run by MÁV Nosztalgia Kft. A bow tie event invoking the rail travel of an earlier time, the journey included a three−course dinner and a mysterious crime drama acted out by

THESE SERVICES ARE ECONOMIC AND HELP RAISE THE FIRM’S PRESTIGE, WHICH IN BKV’S CASE IS AN IMPORTANT POINT professional actors. The Filmefex Studio workers were required to help solve the crime, by which time the journey had ended and the train was pulling into Nyugati pályaudvar (Western Railway station) in Budapest. An even

more thrilling trip the rail company advertised last fall was a ‘Dracula Ride’ to Transylvania. The one−day trip included mythical storytelling, pumpkin lantern making and a walk to a castle to haunt Count Dracula.

Beyond themed trips, the company also has seasonal offers. It has taken passengers to the Békéscsabai Kolbászfesztivál and the Advent Fair in Vienna, which are more about the destination and the comfort of getting there. A ticket for the ‘Candlelight’ mystery murder dinner trip was HUF 20,990 or HUF 25,990. Adult tickets for Eisenstadt on standard class this April are HUF 7,990; a Pullman Club class carriage with unlimited beverages and a two−seat table will cost HUF 10,990. In Eisenstadt, a guided tour of the castle plus coffee and a slice of cake at the fortress’ café is an additional HUF 3,990, or €12.50 on the spot. A different package for the same location includes a guided tour and wine tasting for HUF 5,990. Groups and companies can hire the whole train, if they wish. Depending on location, a train plus the requisite number of 72−person carriages costs from HUF 937,500 to HUF 1,785,000 (for 325 to 520+ people respectively.) A subsidiary of Máv Zrt, MÁV Nosztalgia Kft was set up in 1993. The Hungarian Railway Heritage Park opened seven years later. For its nostalgia trips, MÁV Nosztalgia Kft often uses renovated steam engines from the park. MÁV is not the only public transport firm to offer special

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Organ Concerts in Saint Stephen’s Basilica of Budapest The sound of the world-famous historic organ of the Basilica will only be heard at these concerts! The Cathedral Organ Concerts and the Organ Concerts will be organized in Saint Stephen’s Basilica of Budapest on Mondays . The events of the Cathedral Organ Concerts will begin at 17 p.m. on Mondays, with the exception of October when the concerts start at 19 p.m. In addition to the organists of the Basilica the concerts feature singers or instrumental musicians who will present the organ works and most famous church arias of Albinoni, Caccini, Bach, Mozart, Schubert, Gounod, Bizet, Rachmaninoff, Cesar Franck and Ferenc Liszt.

Dates of the Monday Cathedral Organ Concerts in 2014: March 3. 10.


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Budapest Business Journal | Feb 28 – March 13

rides. BKV Zrt’s Tourism Division has similar offers. In the past few weeks, advertisements for the firm’s private bus service appeared several times in Metropol, a free newspaper. In 2013, revenues from the company’s private bus service were more than HUF 26 million, a 15% increase compared to the previous year. Yet that is a drop in BKV’s HUF 100 billion annual budget. Nor will it improve the HUF 6.7 bln

debt the company has run up. (BKV will try to recover some of this by issuing bonds, the company recently announced.) But while it may not help BKV get back into the black, the activity does improves the company’s overall image, believes Péter Kende, head of the private bus and nostalgia team. “A dominant player in public transport needs to appear in other areas as well.

These services are economic and help raise the firm’s prestige, which in BKV’s case is an important point.” Private bus services have long been present in BKV’s portfolio. The fleet includes panorama buses that clients hire for domestic and foreign city tours or transfers – the most frequent services. The tariff is HUF 295/kilometer plus VAT, to which highway tolls, parking fees and the driver’s per diem are added.Driving is what they

BOOK REVIEW

THE CLINTON POLITICAL MACHINE This riveting biography reveals the strategizing, machinations and last minute decision−making that have accompanied one of the greatest political comebacks in history. Hillary Clinton’s surprising defeat in the 2008 Democratic primary brought her to the lowest point of her political career. She had been vanquished by a much younger opponent with a message of change and a cutting−edge tech team that had run circles around her stodgy campaign. And yet, six years later, she has re−emerged as an even more powerful and influential figure, a formidable stateswoman and the presumed front−runner for the 2016 Democratic presidential nomination. The story of Hillary’s phoenix−like rise is at the heart of ‘HRC’, a fascinating political biography that journeys into the heart of ‘Hillaryland’ to discover a brilliant strategist at work. Masterfully written by two White House correspondents and based on more than 200 top− access interviews with Hillary’s intimates, colleagues, supporters and enemies, ‘HRC’ portrays a seasoned operator who negotiates political and diplomatic worlds with equal savvy. Loathed by the Obama team in the wake of the primary, Hillary worked to become the president’s greatest ally as their fates intertwined in the

work of re−establishing America on the world stage after the disastrous Bush years. This book puts readers in the room with Hillary during the most intense and pivotal moments of this era, as she mulls the president−elect’s offer to join the administration, pulls the strings to build a coalition for his war against Libya, and scrambles to deal with the fallout from the terrible events in Benghazi – all while keeping one eye focused on 2016. It also offers a rare look inside the merciless Clinton political machine, as Bill Clinton handled the messy business of avenging Hillary’s primary loss while she tried to remain above the partisan fray. Exploring her friendships and alliances with Robert Gates, David Petraeus, Leon Panetta, Joe Biden and the president himself, ‘HRC’ shows how Hillary fundamentally transformed the State Department through the force of her celebrity and her unparalleled knowledge of how power works in Washington. Combining deep reporting with ‘West Wing’−esque storytelling, this remarkable biography is an essential inside−look at the woman who may be the next U.S. President. HRC: STATE SECRETS AND THE REBIRTH OF HILLARY CLINTON by Jonathan Allen and Amie Parnes Published by Hutchinson ISBN 9780091954482 Available to order through www.hungaropress.hu

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know best and BKV has more than ten years’ experience in the field. But competition is tough. Several firms specialize in private, party, hop−on/hop−off, city and guided bus tours, and surely have a bigger budget for marketing. The edge that BKV has on them, says Kende, in addition to driving experience and knowledge of the terrain, is the legal framework behind their operation that ensures there are no unpleasant surprises in store for clients.


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WHO'S NEWS

Name JÁNOS STROHMAYER Current company/position CIB BANK / DEPUTY CEO, MEMBER OF THE MANAGEMENT BOARD

Name ZOLTÁN KÉGLI Current company/position NNG / HEAD OF CONNECTED SERVICES

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Strohmayer joins CIB Bank in March as deputy CEO and member of the management board, Intesa Sanpaolo has announced. Having started his career at Central Europe Trust in London as senior manager and head of the Budapest office, Strohmayer spent the last 14 years at McKinsey & Company. A partner of the international firm since 2010, he headed its Budapest office and was engaged in several important projects, serving primarily financial institutions across EMEA.

Kégli has been appointed director of the company’s connected services department. He started his career as a programmer, and has held several leading positions in the past eight years. He worked, among others, for T-Systems Magyarország, first as head of Telekom Sales, later as head of the Telekom Practice division of the firm.

Budapest Business Journal | Feb 28 – March 13

Do you know someone on the move? Send information to research@bbj.hu

Name BŁAŻEJ CIESIELCZAK

Ciesielczak has been promoted to regional director of Goodman Group. Previously, he was head of the Polish operation. In his new post, he is responsible for the company’s activities in the Czech Republic, Slovakia and Hungary. He joined Goodman six years ago and has 12 years of experience in the real estate industry.

Current company/position GOODMAN GROUP / REGIONAL DIRECTOR, CENTRAL AND EASTERN EUROPE

Name JIM ROBNETT Current company/position NNG / HEAD OF AUTOMOTIVE RELATIONS

As of January 2014, Robnett has been hired to strengthen and lead NNG’s relations team and to further expand its automotive executive team. Based in Detroit, Robnett previously worked at various automotive companies (including Chrysler), and at Nokia. He brings extensive experience in business and strategy building, as well as in product and services management.

Current company/position LUFTHANSA GROUP / COUNTRY DIRECTOR FOR HUNGARY

Antal was appointed country director for Hungary on January 1, 2014. He is responsible for ticket sales and operation of Lufthansa, Swiss International Airlines, Austrian Airlines and Brussels Airlines. Antal joined Lufthansa 25 years ago and has held various positions ranging from reservation to key account manager covering all areas of sales activities. He was named sales director for Hungary in 2007.

Name IKEDA HEISUKE

Heisuke has more than 20 years of experience in navigation and had a major role in developing the Japanese navigation industry. He started his career with the Japanese navy. Before joining NNG, he had been managing director of a GPS company in San Francisco for six years. In his new post, he will be based in Japan.

Name GÁBOR ANTAL

Current company/position NNG / JAPAN REGIONAL HEAD FOR AUTOMOTIVE RELATIONS


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OUT OF THE OFFICE The BBJ goes personal What do you consider your greatest achievement? My four children and having been able to establish a big family that functions well.

What is the most extravagant thing you’ve done in your life? Paragliding.

What is your most marked characteristic? A calm personality that handles stress well and is able to look at things from a strategic viewpoint.

What are the activities that help you to cope with stress? Motorbike riding and kettlebell training.

Who is your favorite fictional hero? Arnold Schwarzenegger in his role as the Terminator in T2−Judgement Day.

What is your motto? I actually have two. The one I have had for a very long time is ‘life is crazier than shit’, the new one I recently added is YOLO (‘you only live once’).

What kind of job did you dream of doing when you were a child? Being a car mechanic.

What would you do with €1 million? Invest it safely for my retirement.

What is your greatest regret? Not having studied engineering.

What is your favorite gadget? I have just recently started to use an iPhone.

What is your greatest fear? Getting sick in the actual Hungarian healthcare system!

Describe your dream dinner party. It would be with my wife at the Gas Monkey Bar & Grill

At the steering wheel MY FIRST CAR... My first car was a 1981 Opel Kadett (D series) with an 1.2 liter 60 HP engine. I really loved that car. Huge space, simple and trouble-free mechanics, nice design. The only problem it had rust on some panels. TOP 3 THINGS TO CONSIDER ABOUT A CAR... High torque – to be able to pass on country roads. A comfortable driver’s seat – I am a big guy. A good, reliable brand – for the security it offers. MOST ADMIRED FEATURES OF THE TEST CAR... It is not easy to find comfortable seats for my size (188 cm – 6 ft 2 in). The XC60 D4 had optional sport seats that I found extremely comfortable. MY GENERAL IMPRESSIONS OF THE TEST CAR... The Volvo had a very rigid, massive chassis and the suspension had very good on-road characteristics (I think 95% of people never go off-road with SUVs). Fuzzy, state of the art electronics, very good speaker system and good noise insulation make the car a perfect companion for long tours. However, I found the car quite thirsty – it had equal consumption values to my XC90 D5.

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CV Győző Vidor has been CEO of Xella Building Materials since 2006. He is responsible for the Hungarian, Romanian and Bulgarian markets. He has been with Xella since 1999 and worked as CEO and managing director for sales of Xella Hungary. Before joining Xella, he was with Whirlpool Hungary, where he spent five years, first as marketing manager and later as national sales manager. From 2012, he also serves as vice president of the Society for Residential Construction, and from 2013, he is president of the Association of Hungarian Producers of Construction Products. He has an MA in management sciences and foreign trade from the Budapest University of Economic Sciences, and also has an MBA degree from the Newport School of Business Administration. He is married with four children.

in Dallas, Texas. Richard Rollins from the TV show ‘Fast ‘n Loud’ as our host, and Hank William III playing on the stage. What is it your dream to live to see? To see all my future grandchildren growing up healthy. What three things would you take with you to a deserted island? A good multifunctional tool, a telescope and sunglasses. Which people (actual or fictional) do you most despise? Harassers of children. Which persons (actual or fictional) do you most admire? Living: Barack Obama, President of the United States of America; fictional: the Iron Man.

Sponsored by: volvogaleria.hu



Budapest Business Journal 22/04