Issuu

3Special

BBJ

SPECIAL REPORT:

Money for the road

Report IT logistics: catching

on like wildfire

LOGISTICS

isn’t industry, the environment good for the freight factors and an The economy isn’t macroeconomic but the recovering the logistics sector the best either, trade is finally bringinggood signs for some there are uptick in international levels. Next year, back to its pre−crisis solid growth.

LOGISTICS MARCH 28, 2014 – APRIL 10, 2014

VOL. 22. NUMBER 06

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TRUCKING ALONG Road cargo saw its operating environment disturbed last year with the chaotic launch of a new toll system that raised expenses and eyebrows alike. The profession has mostly adapted but, as Zoltán Doór, president of the Hungarian Logistics Association explains, the outlook for greater growth in the segment is still far away, with 2014 likely only to see a return to 2008 levels. 14

NEWS

Banks given time before next shockwave If reelected, the Fidesz government promises to swiftly end foreign currency mortgages after a verdict in the matter that could be just the justification the government has been looking for. 03

NEWS

SPECIAL REPORT

Flawed voting system

IT logistics catching on

The 2014 election sees a record number of parties entering, but a lot of them seem to be in it only for the money, now easier than ever to get out of the system, with little danger of being caught. 06-07

The densely woven web of global supply chains is increasingly under the watchful eye of programs to help slash costs. But cyber logistics is only just getting going, and is preparing for a big leap forward. 17

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Budapest Business Journal | March 28 – April 10

BBJ

3Special

SPECIAL REPORT:

Money for the road

Report IT logistics: catching

on like wildfire

LOGISTICS

MARCH 28, 2014 – APRIL 10, 2014

VOL. 22. NUMBER 06

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Flawed voting system

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THE EASE OF FALLING FROM GRACE People loyal to any political system often get rewarded for their troubles. But if they are not yet satiated in their hunger to serve their camp, they sometimes try way too hard, to the point of causing public embarrassment and getting themselves disowned. When loyalty is the main criterion over competence, such instances are far more likely to happen, as seen most recently by Helga Wiedermann’s accolade−turned− embracement recollection of Hungary’s struggle with international financial powers. This hasn’t been the first example of the system showing it doesn’t necessarily prefer only the best and brightest and is then embarrassed when these beneficiaries of the system blunder in public. Wiedermann sought only to sing the praises of her former boss’s mental acuity and negotiating prowess when she told the tale of György Matolcsy telling Goldman Sachs executives in an offhand remark that Hungary would be seeking the help of the International Monetary Fund in 2011. While trying to portray Matolcsy as the masterful negotiator who can blow even the most seasoned investment bankers out of the water, she shows him doing something that is idiotic from a tactical perspective and, moreover, possibly illegal, since it is the perfect ammunition for some insider trading. The central bank has dismissed the book as a work of fiction despite the fact that Matolcsy himself was lauding its merits shortly before as a chronicle of the events. Wiedermann, although quickly disowned, then reiterated that her novel is factual, even though she can’t confirm much of its content, since parts of it are based on hearsay.

Ferenc Szaniszló, a television figure known for his elaborate conspiracy theories presented in sometimes only remotely coherent monologues sprinkled with plenty of racism and anti−Semitism received a prominent state award. It wasn’t until an explosion of public outrage that somebody in government actually bothered to have a look into the things a state−honored individual is saying on air and then awkwardly asked him to kindly return his decoration. Szaniszló begrudgingly complied after he was disowned, but the fiasco was such an embarrassment that the awards weren’t presented this year. Károly Kerényi, a prime ministerial commissioner who controls a multimillion cultural budget often finds it OK to make homophobic comments and even launched a magazine financed by public funds with the declared purpose of publishing the opinions and articles of intellectuals within the government camp. Kerényi mysteriously kept his job despite a sequence of similar fiascos, but even the prime minister thought a scolding was in order; he demanded that no public funds be used, and will hope that the entire story will just be forgotten and fade away before the first issue is released in May. These examples should provide a salient warning to anyone looking to make it by loitering in the gravitational pull of the political culture of Viktor Orbán’s Fidesz. Once you get your handout, count your lucky stars and soldier on. Most importantly, don’t be too eager to please by doing something you’re not specifically told to; it’s bound to backfire.

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KEEPING THE MONEY IN LINE Something is still wrong with the banking system, still reeling from the wounds of the economic crisis, bleeding out money for sectoral taxes and also getting scolded by the nurse for how it’s trying to self−administer some bandages. The central bank’s latest raid on the finance industry found that every one of the 35 banks and finance firms audited had violated the laws in their practices of calculating and charging fees. This comes after the National Bank of Hungary (MNB) has already won the first instance procedure in two court cases filed for penalties in relation to the transaction duty. To extrapolate, there is currently no provider on the finance market that can and/or will operate in observance of the law. But if there isn’t a single positive example, is it certain that the rules are even possible to follow? After all, if every single student fails a test, maybe the teacher should assume some of the blame. It has to be said that the MNB leveled the penalties for seven different categories of violations and the degree of the transgressions was also very diverse, as reflected in the differing volumes of the fines. It also has to be stated that there is no need to shed tears for a banking industry that played a central role for the state the global economy found itself in, as well as in Hungary, where banks were rolling out foreign currency loans like there was no tomorrow. However, if the only principle of the central bank (led by György Matolcsy, formerly economy minister in Viktor Orbán’s cabinet) is to keep making the banks pay while simultaneously not allowing them to earn, it is counterproductive to the government’s goals. If there is no hope of making a profit, no bank would be interested in lending, and without loans there is no growth in the economy, as István Széchenyi famously wrote in the 19th century.

So getting the money flowing is essential, but Széchenyi’s concept, despite there being available several state lending constructs named after him, apparently doesn’t work if there isn’t proper incentive. The banks initially gobbled up the sums channeled under central bank’s massive stimulus campaign, but interest has started waning for the second phase, meaning that there isn’t stable demand to fund developments and the banks aren’t going to stay interested in participating. Perhaps the central bank’s drive to formulate a new, overall structure for the operation of the finance system and the fact that it is now offering an invitation to all interested parties to contribute is an indication that the central directive will shift from stifling the banks at all costs while expecting them to strengthen economic growth. The MNB’s proposal isn’t as inclusive as it may seem at first glance, since the management has already stated that it won’t budge in certain areas, while the provisions include a ‘fair’ profit margin, not too big, not too small, which is most indicative of the current establishment’s aversion to free market mechanics. So far, the banks haven’t been flooding the public domain with their feedback and new ideas; in fact, the proposal went mostly without comment. It is clear that, in general, the banking industry will have to continue the current ‘take it or leave’ attitude, especially if the polling numbers are accurate and the current government is reelected. This has been one of the few cases when they have been invited to have their say in matters that are very pertinent to their operation. This chance they should definitely take.

IF THERE IS NO HOPE OF MAKING A PROFIT, NO BANK WOULD BE INTERESTED IN LENDING, AND WITHOUT LOANS THERE IS NO GROWTH IN THE ECONOMY

BBJ

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NEWS

Record−low base rate 04 NEWS

The new voting system 06-07

macroscope

BANKS GIVEN TIME BEFORE NEXT SHOCKWAVE

GERGŐ RÁCZ

The Constitutional Court has finally reached a verdict on the matter of foreign currency denominated mortgage loans and essentially delivered the outcome desired by the government. The panel decided that there are conditions when the state is within its rights to make changes to long−term private contracts. The jurors evaluated two queries filed by the government to determine the legality of foreign currency lending and whether the terms of the contracts can be changed. The decision states that it is not the Constitutional Court’s jurisdiction to rule on the constitutionality of policies. However, in the other matter it did give the state some allowances. According to the decision, if conditions have greatly changed from the time of signing the contract, there is a serious social impact to consider and modifications can be made so that they don’t cause either contracting party an unfair disadvantage, changing the contract is possible. This was in line with the government’s expectations, who now claims it has legal backing for completely phasing out foreign currency based mortgage loans for home purchases. However, there won’t be immediate action, with the matter surely being off the agenda until after the April general elections. NO NEED TO RUSH Representative of the governing Fidesz party Gergely Gulyás told reporters that if his party is reelected, in line with all the polling projections, it will first wait for other legal bodies to finalize their take on the matter. The European Court of Justice is currently closing in on a final resolution on a case on forex lending, which will then serve as the basis for Hungary’s top court, the Kúria to formalize its own verdict on the issue. Only once that has happened can the government take further steps, Gulyás said. The cabinet expects the legal procedure to be concluded in the spring, after which Fidesz would be ready to

STORY HIGHLIGHTS ■

Court says contracts can be amended if certain special conditions are met ■ Gov’t puts off resolving forex mortgage loan issue until after April elections

submit a bill to Parliament in four weeks. Gulyás said this could happen in May the soonest. When asked, Gulyás didn’t wish to discuss the specifics of the government’s planned legal remedy to the forex case, but hinted that the early−repayment measure launched in 2011, the ‘végtörlesztés’, is an indication of the lines of thinking in the cabinet. Gulyás also stressed that, as before, the brunt of the related burdens will have to be shouldered by the banks.

Photo: Zsolt Szigetváry/MTI

The Constitutional Court has given the government the legal means to tinker with foreign currency mortgage contracts, something that traditionally doesn’t bode well for the banking sector. It has been given a little breathing space, however, with Fidesz deciding to put the matter off until after the general election.

CONSTITUTIONAL JURORS DECLARING THE RULING

NO NEED TO PANIC However, the banks may not have to worry as much about the new situation as the government rhetoric would indicate. Most importantly, the constitutional jurors stated that any amendment to existing contracts could only come if no single contracting side is unfairly disadvantaged. Stipulating that the banks bear the costs means they could challenge any such measures on constitutional grounds. The Banking Association also said that the Constitutional Court hasn’t created a new situation with the ruling, since the Kúria’s earlier verdict that reaffirmed

foreign currency−based contracts as valid still stands. “The ruling puts the government in a stronger position for dealing with the banks, but because of the collapse in discussions last year the government is likely to proceed with only token talks with banks to show they are considering their positions,” Nomura analyst Peter Attard Montalto said. In the meanwhile, the banks received another reminder that the state is keeping its eyes on their activities and that the regulator, the central bank led

by former economy minister György Matolcsy, is ready to occasionally reaffirm the status quo. As such, 35 out of 35 banks and savings reserves covered in an audit campaign were reprimanded for illegal pricing practices. They are to pay a total of HUF 1.2 billion, while 33 are also held to repaying the unfairly calculated charges to their customers. Altercations between financial firms and the state are thus set to continue, with several of the fined banks expressing their outrage over the decision and promising to challenge the fine in court.

THE RULING PUTS THE GOVERNMENT IN A STRONGER POSITION THE GOVERNMENT IS LIKELY TO PROCEED WITH ONLY TOKEN TALKS WITH BANKS TO SHOW THEY ARE CONSIDERING THEIR POSITIONS

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NEWS

IN BRIEF

Budapest Business Journal | March 28 – April 10

We have learned the lesson: if a foreigner is bringing freedom, he’ll also take it away Prime Minister Viktor Orbán’s address on March 15

HUNGARY REACQUIRES PART OF SEVSO TREASURE FOR €15 MLN

ECONOMY CENTRAL BANK CUTS BASE RATE TO NEW LOW Hungary’s central bank is ready to end Europe’s longest−running uninterrupted monetary easing cycle if financial conditions deteriorate, policy makers said after cutting the benchmark interest rate to a new record. The National Bank of Hungary (MNB) reduced the two−week deposit rate by 10 basis points to a record− low 2.6% at its latest meeting, in line with economists’ expectations. There is “no room to continue the rate−cut cycle if the international financial− market environment deteriorates significantly,” the bank said in a statement, adding that borrowing costs “significantly approached” the level consistent with its inflation goal and the aim to boost growth. Policy makers further slowed the pace of monetary easing that reduced the main rate from 7% in 2012 in 20 consecutive monthly steps. They’ve cited record−low inflation and the need to bolster growth to justify cuts after a recession in 2012. MNB REFORECASTS INFLATION DOWN FOR 2014, UP FOR ’15 Shortly after announcing another 10 bp cut to its base rate to yet another record of 2.60%, the MNB also revealed lowered inflation forecasts for 2014 but raised the prognostication for 2015 in its newly published quarterly inflation report. Baseline projections from the report show the central bank lowered its forecast for average annual inflation in 2014 to 0.7% from 1.3% in the December report. The MNB raised the CPI forecast for 2015 to 3% from 2.8%. The MNB left its projection for 2014 GDP growth unchanged at

2.1% while raising its forecast for 2015 growth slightly, to 2.5% from the 2.4% rate projected in December. DEFICIT COULD HIT 100% BY SUMMER, 3% EU GDP THRESHOLD STILL ATTAINABLE Hungary’s cash flow−based general government deficit, excluding local councils, could reach 100% of the full− year target by the summer, as in earlier years; but, calculating with accrual− based accounting the gap will still finish the year under the 3% of GDP European Union threshold, National Economy Ministry deputy state secretary Péter Benő Banai said. Newly released data from the ministry shows the cash flow−based deficit reached 49.1% of the full−year target by the end of February. The official accrual−based deficit target for 2014 is 2.9% of GDP. IMF: GROWTH PROSPECTS IN HUNGARY ‘SUBDUED’ A mission from the International Monetary Fund (IMF) acknowledged improvements in the Hungarian economy but warned that medium− term growth prospects remained “subdued” in a statement, after regular consultations in Budapest. “The Hungarian economy emerged from the 2012 recession and posted 1.1% growth last year, mainly driven by government investment and consumption, as well as net exports,” stated mission head Costas Christou. “Moderate growth of 2% is expected this year as investment and private consumption continue to improve, while exports expand further. Notwithstanding this welcome improvement, medium−term growth prospects remain subdued [‥.]. Raising potential growth will require boosting labor demand further, enhancing the business climate and policy

Photo: Noémi Bruzák / MTI

Prime Minister Viktor Orbán has announced that Hungary had reacquired seven pieces of the Sevso Treasure, a priceless collection of Roman−era silverware to which the country has laid claim, for €15 million. Hungary’s “family silver” is coming home, Orbán said. The pieces will be on display, free of charge, in the parliament building from Saturday. The Sevso Treasure, owned by the Marquess of Northampton, was allegedly found on the outskirts of Polgárdi, near Lake Balaton, in the 1970 by József Sümegh, a Hungarian who not long afterward died under mysterious circumstances. The pieces are thought to have been made by the same craftsmen who fashioned a silver tripod found near Polgárdi a century earlier and now in the collection of the Hungarian National Museum.

Numbers in the news

2% increase in the number of employees in Hungary’s business sector in the 12 months to January, KSH data shows.

79%

of Hungarians who work in retail customer service smile when interacting with clients, but just half engage to a degree that generates a sale, according to a survey by ClientFirst Consulting. Globally, 83% of people in customer service smiled and 57% made recommendations to clients.

environment, reducing the regulatory burden, rationalizing taxes, and increasing productivity in the services sectors. Christou said Hungary had reduced its vulnerabilities, but noted “still−high public and external ﬁnancing needs, heavy reliance on nonresident funding, uncertainty regarding advanced economies’ monetary policies, and reemergence of ﬁnancial stress in emerging markets” as factors posing risks.

DOMESTIC POLL: 42% OF HUNGARIANS SAY “MORE LOSSES THAN BENEFITS” SINCE 1989 In an opinion poll undertaken in four nations (Hungary, Czech Republic, Poland, and Slovakia) by the Central European Opinion Research Group (CEORG) on the past 25 years of history, Hungarian respondents turned in some shocking results. Heading up the anomalies was the 42% of Hungarian respondents opining that there have been “more losses than benefits” since the changes wrought by the collapse of communism in 1989. Just 12% of Hungarians surveyed felt the changes were “definitely beneficial”, easily lowest among the participating countries. In comparison, some 72% of Polish respondents labeled the governmental switchover as “definitely beneficial” or “rather beneficial.”

POLITICS OPPOSITION ALLIANCE REPORTS ALLEGED MATOLCSY LEAK The leftist opposition alliance has ﬁled a criminal report against an unknown perpetrator for insider trading. Levente

Pápa said the alliance suspects former economy minister György Matolcsy told Goldman Sachs staff that Hungary had turned to the IMF for assistance before the move was announced. The business lunch with the bankers and the revelation was described in a recently published book by Matolcsy’s former cabinet chief, Helga Wiedermann. The National Bank of Hungary, which is now headed by Matolcsy, called the account “ﬁctitious”. “The economy minister could not have told investors that Hungary would approach the IMF, but he referred to that option as one among several others,” the MNB said. ‘POCKET CONTRACTS’ UNDER INVESTIGATION Some 4,600 so−called ‘pocket contracts’ in Veszprém County alone are under investigation for legality by the rural development minister. Gyula Budai informed local daily news outlet Magyar Nemzet that contracts made in Győr−Sopron, Vas and Zala counties are also being scrutinized. The ‘pocket contracts’ had been in effect since 1994, but a new land law passed by Parliament last year has had the government retroactively consider the terms on such contacts, particularly in western Hungary. The new land law has led to disputes between Hungary and Austria’s rural development ministries since its passage, with Andrä Rupprechter having appealed to EU Agriculture Commissioner Dacian Ciolos regarding the pocket contracts. About 200 Austrian farmers who have amassed a combined 200,000 hectares of land in Hungary since ’94 could be affected. The combined acreage represents a proportion of some 14.67% of arable land in Austria and 4.55% in Hungary.

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Budapest Business Journal | March 28 – April 10

COMPANY NEWS

LANDMARK BUILDING RECEIVES MAJOR FACELIFT

PREZI CEO MEETS WITH OBAMA IN D.C. Prezi co-founder/CEO Péter Árvai has been hosted at none other than the White House in Washington, D.C., to present his software before President Barack Obama and others. Árvai appeared with Adobe representatives on the occasion of Prezi and Adobe joining the U.S. school program ConnectED. Prezi has committed a free Edu Pro license, valued at $100 million, for use of the company’s presentation software in public schools. Árvai told national news agency MTI that Prezi’s pledge would support “community-funded schools that otherwise would not have the chance to obtain such technologies”. Prezi is the ﬁrst Europe-based company to contribute to the ConnectED program, with Apple, Microsoft, AT&T, Sprint, Verizon, Autodesk and O’Reilly Media already aboard. When asked whether his home country of Hungary might be implementing such a program with Prezi software, Árvai said, “We could get this far in America because there has been an initiative on behalf of the U.S. government. We are very open to establishing such contact with any other government.” According to company statistics, Prezi software currently boasts more than 35 million users in some 190 countries.

The National Bank of Hungary has leveled some HUF 1.2 billion in fines on 35 Hungary−based banks for illegally raising client fees and costs, while 33 of them will also have to compensate clients. Many of them are baffled by the move and plan to challenge the ruling in court.

Horizon Development has inaugurated the €30 million renovation of a landmark office building in central Budapest. The Eiffel Palace was built in 1894 as the headquarters and printer for the newspaper Pesti Hírlap. Letting manager István Kerekes said 65% of the building’s area had already been leased. The biggest tenant, PwC Hungary, as well as a solicitor’s office and the British Chamber of Commerce have already moved in, he added. UniCredit Bank financed more than half of the investment costs.

The board of Hungary-based pharmaceutical producer Richter Gedeon will propose payment of a HUF 57-per-share dividend to shareholders at an annual general meeting on April 24. In Q1 2013, shareholders approved payment of a HUF 660-per-share dividend prior to a 10:1 share split last summer. The board of Graphisoft Park will propose to shareholders payment of a HUF 90-per-share dividend at an annual general meeting on April 23, the agenda shows. Graphisoft raised its forecast for 2013 net profit to €3.9 mln from €1.7 mln in August. The dividend fund will come to HUF 911 mln if shareholders approve the proposal. TriGranit Management, the building management unit of Hungarian property developer TriGranit, is entering the market in the United Arab Emirates, company representatives announced. TriGranit Management is taking the step through its office in Dubai. The move would make the UAE the 15th market in which TriGranit is present. DENSO Manufacturing Hungary, a subsidiary of Japan-based automotive component manufacturer DENSO, will implement a HUF 29 bln expansion at the unit’s plant in Székesféhervár. DENSO Hungary will receive HUF 2 bln in government support for the expansion. Erste’s Hungarian fund manager saw its managed assets climb by HUF 301.7 bln to HUF 855.8 bln in 2013. The fund manager’s market share rose by 2.2 percentage points to 16.8%, placing it second. China-based BBCA will start building a $100-150 mln citric acid plant in Szolnok in Q2 this year, mayor Ferenc Szalay and BBCA chairman/CEO Li Rongjie announced. The plant is expected to be completed by the end of 2015 and to produce 60,000 tons of citric acid from 100,000 tons of maize per year. Danish toymaker Lego has inaugurated a €200 mln expansion of its production capacity in Nyíregyháza. The expansion created 250 jobs, bringing headcount at the company’s base in the city to around 1,500. The 122,000 sqm plant has 672 molding machines. Swedish-owned automotive industry supplier Sapa Proﬁles is investing HUF 814 mln (€2.6 mln) in technology at its base in Székesfehérvár, northwest Hungary. Sapa Profiles launched the project in the summer of 2012 and will wind it up in six months.

The unit won a HUF 322 mln European Union and state grant for the investment. Sapa Profiles employs more than 1,100 workers. U.S.-based Alcoa will be investing a whopping $13 mln in an expansion to its Székesfehérvár facility, the center of the company’s European operations. The expansion promises to double output in Europe of Alcoa’s Dura-Bright aluminum truck wheels by April 2015. Germany-based Daimler AG announced that its Kecskemét facility would be adding a third shift to meet rising demand and hire some 500 more to bring employee rolls to 3,500. KÉSz Holding announced it is putting forth a non-binding offer for Praktiker stores in Hungary. KÉSz unit MI-BE Alfa is making the offer. The unit owns a building in Budapest that houses a Praktiker outlet. The stores’ Germany-based parent company went bankrupt in 2013. There are 21 Praktiker stores in Hungary. Hungarian geothermal-energy company PannErgy has started the second phase of its geothermal-energy project in the city of Miskolc, PannErgy told MTI. PannErgy said that the project will entail the provision of district heating to downtown Miskolc as well as to Miskolc University. The company ﬁnished the ﬁrst phase of the project ten months ago.

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Budapest Business Journal | March 28 – April 10

VOTING SYSTEM STARTS TO SHOW ITS FLAWS STORY HIGHLIGHTS ■

New system lowers entry benchmark for running for ofﬁce ■ Lack of safeguards encourages fraud with no license to take controlling measures

difficult to run, now it’s much easier, so why is there a problem?

What is the problem? A: The issue is that the system is still built up in a way in which political parties are managing citizens’ personal data, which is a guarantee that there will be abuses. The revision had the promise of putting an end to the bad habits of the previous setup, but that isn’t what happened, far from it. One citizen may support multiple candidates entering contention, meaning one individual could support 10, 20, 30 or as many candidates as they want. This basically resulted in names and personal data being copied left and right without the signers having any idea their data is being used for such purposes. The other key aspect is that the revised system also includes the motivation to violate the rules through new campaign financing.

GERGŐ RÁCZ

What are the most important aspects stemming from the changes in the political nomination system? A: The changes are extensive. Unfortunately, they didn’t fix the biggest problems. There are two main positive directions. One is that it put an end to the previous recommendation system, which had a black market of sorts surrounding it as the various parties bought and sold the slips to raise the amounts necessary to run. The other main positive aspect is that it makes it easier to run. This is why political experts leaning towards the governing party often say that earlier everybody was upset because it was too

But the financing system was changed with the very goal of legalizing campaign spending instead of the previous unrealistically low amounts that invariably called for rigging the books afterwards. A: Yes, parties that can enter a candidate in every voting district can receive up

Photo: Political Capital

This year sees the introduction of a new election and campaign system that will also leave a profound mark. The changes have stirred up criticism and concerns amid suggestions that the system is flawed and encourages fraud and profiteering. The Budapest Business Journal asked Róbert László, election specialist at the think−tank Political Capital, to explain the issues.

A SUSPICIOUS SETUP A small political party, the MOST movement, has filed criminal charges against five parties for political fraud. The criminal claim lodged just as the BBJ goes to print says these groups have engaged in the cheating that is made all too easy by the current voting system, being put to practice for the first time in 2014. Since the limitations to entering the political race have been greatly reduced thanks to the revised voting system created by the reigning Fidesz government, there will be 18 organizations that have raised national lists, more than in any previous Hungarian election. Immediately, suspicions arose that the only reason these groups appeared on the scene, having never been part of national politics before, was because of the hefty campaign financing available from the state if they raise the necessary initial support. The government has received criticism that it only created this structure to facilitate its own political goals since it makes an already fragmented opposition split into even more, even less threatening groupings. It rebuffed this idea by noting that the revised system is actually prompting political plurality by making it easier to run for a broader group of interests.

to HUF 995 million for their campaign. This is a step in the right direction, because it is closer to the actual amounts they spend, but it’s still only half or a third of what actually gets spent on a campaign. At least this amount is a little closer to reality, but it also shows that despite the will to change, there was no real success in changing the things that are worst about the system. For instance, individual candidates aren’t allowed to handle any cash, they get their state allowance through a treasury card system, which effectively filters out any abuse. This leaves the question as to why a similar approach couldn’t have been applied in the party list system, where far bigger sums are used and disappear forever. There was the clear opportunity, there was the clear solution, but it was ignored when finalizing the system.

What authorities can someone turn to if they want to file a complaint? Forging personal data in official documentation is, after all, a criminal act.

A: The election authorities predominantly handle all matters. However, as the head of the data protection authority Attila Péterfalvi has said, the official position of the authority is that going through all the recommendation sheets to filter out transgressions and to identify any signs of foul play would be too much work. Furthermore, the controller’s jurisdiction laid out in law only extends to making sure that the personal information contained on the sheets is accurate. And since the data is copied from actual submissions, it is of course valid and there is no detectable violation. It’s a surefire deal; it’s impossible to get caught.

Is there any consensus about how many of the record number of entrants to the April vote are, let’s say, “bogus”? A: No, there isn’t but it really depends on how we define “bogus”. Basically, any party that we’ve never heard of before, that emerged recently and doesn’t have the slightest chance of reaching the 5% parliamentary threshold can’t really be taken seriously. The ‘bogusness’

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News 07

Budapest Business Journal | March 28 – April 10

MAIN CHANGES TO THE ELECTION SYSTEM ■ Parliament will only have 199 MPs, down from the 386 elected in 2010. As a result, parliament will henceforth convene in the lower house chamber, which has been refurbished to accommodate the revised number. ■ Parties entering candidates in all constituencies can have a maximum state support of HUF 995 million, compared to HUF 386 million before. ■ In several locations, residents will have to go to a new location to vote on April 6 after constituency borders were revised. ■ There will only be one round of voting for party lists and individual candidates. The earlier system had two rounds separated by two weeks. ■ Voter registration won’t yet be applied in 2014, but the governing Fidesz party says it still intends to introduce the provision despite definitely applies to the two parties linked to János Zuschlag, the Együtt 2014 who managed to raise a national list by hijacking Gordon Bajnai’s party brand, or there is this party for an active and sporting Hungary, where a look at their website shows that it is fake. If we apply stricter criteria, the parties led by Katalin Szili or Andor Schmuck, are also in the bogus category, given that they don’t have a chance of making ADVERTISEMENT

it into the parliament. The case here is somewhat different only because these are more established politicians with a measurable professional history.

If someone wants to challenge perceived or actual animosities, where can they go if the regulatory environment favors or actually encourages fraudulent behavior this way?

international protests. ■ Ethnic Hungarians have the right to vote.

A: It would require a change to the law, which is unlikely. In its current state, the abuse of the system isn’t just an accompanying occurrence; it is endemic to the system itself. The various parties can easily get the necessary support and then they don’t even have to give a proper

account of how they spent the central campaign funding. If a party gets an invoice for spending HUF 100 million on flyers when they actually only spent HUF 1 million, the State Audit Office doesn’t have any means of investigating or knowing. That is a very tempting opportunity.

BBJ

2Business

In f

IN SEARCH OF THE BEST MATCH, SOFT SKILLS ARE COMING TO FRONT In the past five years, companies have seen more changes than most do in decades. Not all of them are attributable to the recession, though it did have an effect on corporations’ mindset shift as well. A combination of technological development, changes in population – be it ageing or the rising role of minorities – and economy has left its trace on the selection of leaders. The crisis has exhausted patience too; should top−level managers fail to deliver what is expected, they are let go earlier. Tenure in certain regions such as the United States has halved in 20 years, statistics show. Some things never change, though: for all the software to test applicants, and assess their reaction, personal meetings, talks are still indispensable to find the best person to steer a company.

ZSÓFIA VÉGH

JUDIT SIMONYITÓTH managing director, Simonyi & Tóth Kft The crisis triggered a response from all firms. Some addressed it with reorganizations and job cuts, others by eliminating or merging posts. All this led to a shift of focus in tasks and competencies required. Due to relocations and the creation of regional centers, many strategic decisions are now taking place elsewhere, such as Prague or, in the case of manufacturing companies, Poland, causing Hungary enormous losses. Those CEOs who have remained here have less chance to get ahead and attain a top position more quickly. Costs have been reorganized as well, there is more spending in regional centers, which puts head hunters here at a disadvantage compared to their foreign peers. With regionalism comes the need for mobility, so top managers are expected to travel more. They are also better off being open to changes and responding rapidly. The job, the tasks are more motivating than the remuneration: professionals who have a track record in demand and high−level professional knowledge are less ready to change their jobs and to accept other responsibilities and another remuneration package. They change their jobs only if the new opportunity means a considerable improvement for them from various aspects. On the other hand, the employers are less flexible in modifying the job profile and the remuneration package offered by them in order to win the candidate with high−level professional knowledge for the position.

DAVID YOUNG managing director, Amrop Kohlmann & Young Kft The executive search market is changing in many ways, yet in many other ways remaining the same. Clearly technology and social media are having a big impact on recruitment. It is much easier to do research. Before you used to physically search business directories, now every piece of information is at your fingertips. The impact on mid− management recruitment has been stronger than on senior management. At the C−Suite level our clients still need the value−added that we can bring, which includes deep sector knowledge and an ability not just to identify outstanding candidates, but to manage the process to bring the best talent on board. If we focus on Hungary, there has been a reduction of CEOs, for example, at multinational FMCG companies this created a broader regional responsibility for someone. All the options are on the table for CEOs: to go regional, to apply for a position at a lower level and even to become consultants. For all the tremendous cost cutting, I haven’t noted a deterioration of salaries at top level. Clearly, money is important but that is not the main issue. Candidates are more aware of building a career. They also stress more the type of company they want to go to: how does it treat employees, what career opportunities are there? They also place emphasis on the role the company plays in society, its greenness, CSR, etc.

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2 Business

Budapest Business Journal | March 28 – April 10

n focus: Executive search

ÁKOS BIHACKER

BALÁZS MAJER

managing director, HR−COM Organizational and Management Consulting Kft

managing director, MP Solutions Kft

The selection process has lengthened considerably in many cases. What used to be two−three rounds of interviews, can now be five−six. More stakeholders are involved in the process yet no one is really willing to take the responsibility for making a decision, which makes selection last longer. This is a universal trend. ‘Hard’ requirements have ‘softened’, soft skills have become more relevant than before. Firms looking for executives are more open to tailor−made, creative solutions. Having recognized that talented, motivated managers try and live up to expectations more, companies tend to offer more responsibilities in comparison to someone’s experience. When it comes to executive salaries, firms have also become more ‘flexible’. They look at the person’s skills and if what they are looking for is there, they may select the candidate whom they should pay less. It doesn’t matter if they have no/little knowledge of that field, they can be trained and developed. Why pay a top, X salary if the same post can be held by someone who, based on their track record, falls in the 1/2X – 3/4X lane? The point is to have sufficiently motivated and adaptive managers around. Crossover between fields and position is another trend: execs move between industrial sectors more easily than they used to.

The past six years can be divided into three phases. In the first, salaries and headcounts were cut, outplacement was given more emphasis. The second phase was more about managing the crisis and devising strategies. The crisis brought to the front different fields, risk−taking financial institutions have been focusing more on restructuring and workout fields. Sales, which flourished pre−crisis, has seen a huge downturn, but showed a slight increase since then. The past half year has seen some growth and, parallel with it, the number of searches has steadily increased. Strategic changes based on market research have become more tangible. Personality and the shift from hard to soft skills, while preserving the importance of track record experience, are more relevant at interviews. Using the example of financial institutions, it is visible that workout positions are just as important as those of IT development were before the crisis. Candidates from this field can choose from a variety of positions and are often offered new opportunities by their current employers. This high demand can create a new basis for negotiations during interview, or persuade applicants to continue to search for new posts.

ANDRÁS LIPCSEI managing director, Dr. Pendl & Dr. Piswanger Kft The selection process has shortened considerably, and so has tenure. As a result, interim management has come more into focus: several firms, for example British executive search companies, have added this method to their portfolio. Electronic devices have supported this process, the role of social media has grown; in fact, it is now a tried−and−tested tool they use. Where it used to involve searching a company database and then making phone calls to get to potential candidates, now it is much more immediate. Today we just place an advert online and it moves masses. Electronic testing (when software assess results) has become widespread and not only at mid−manager levels. We have developed a product that assesses board dynamics – it tells you which skills are present in abundance and which are lacking within a board so it is easier to estimate with greater confidence what personality fits best the existing board. It also tells the future CEO what to expect from members. In Austria, the tool is also used for the selection of non−executive board members who are not staff members but consult the firm. Compiling a board of these ‘contributors’ is an exciting task as well. Firms tend to appreciate candidates with solid professional networks that can be used in need.

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10 2Business // In focus: Executive search

Budapest Business Journal | March 28 â€“ April 10

Executive search firms

Âť

100

Âť

SEARCH (%)

Âť

MINIMUM SEARCH FEE (FT)

Âť

RETAINER

SUCCESS-BASED

PLACEMENT FROM DATABASE

ADVERTISEMENTS

DIRECT SEARCH

OTHER

MIDDLE MANAGEMENT

TOP EXECUTIVES

NO. OF CANDIDATES PLACED IN 2013

OTHER HR SERVICES

OUTPLACEMENT

MANAGEMENT AUDIT/ASSESSMENTS

SELECTION

EXECUTIVE/DIRECT SEARCH 85

TOP LOCAL EXECUTIVE CFO MARKETING DIRECTOR

42 49

SEARCH METHODS (%)

OWNERSHIP (%) HUNGARIAN NON-HUNGARIAN

www.kienbaum.de

BREAKDOWN OF CANDIDATES PLACED IN 2013 (%)

// In focus: Executive search 11

NO. OF FULL-TIME EMPLOYEES ON MARCH 1, 2014 NO. OF OFFICES WORLDWIDE

KIENBAUM EXECUTIVE 13 CONSULTANTS KFT

NO. OF CONSULTANTS ON MARCH 1, 2014 NO. OF EMPLOYED RESEARCHERS ON MARCH 1, 2014

NET REVENUE FROM PERMANENT PLACEMENTS IN 2013 (HUF MLN) TOTAL NET REVENUE IN 2013 (HUF MLN)

RANK

COMPANY WEBSITE

SERVICE PORTFOLIO (%)

PERIOD OF GUARANTEE TO CLIENTS SEARCH PERIOD

2 Business

SUCCESS-BASED

WWW.BBJ.HU

Budapest Business Journal | March 28 â€“ April 10

100

DELTA SOURCE KFT www.deltasource.hu 14

12 months 5-6 weeks

Âť

6-12 months 4-6 weeks

100

DR. TELKES KFT www.telkes.hu 15

SYNCHRONEX 16 CONSULTING KFT www.synchronex.hu

EGON ZEHNDER NR INTERNATIONAL KFT www.egonzehnder.com

PEDERSEN & PARTNERS KFT www.pedersenandpartners.com

SPENCER STUART KFT NR www.spencerstuart.com

14 14

1 1

Âť Âť

Âť Âť Âť Âť Âť

100

Âť

3-6 months 4-6 weeks

Âť

Âť Âť

12 months 4-8 weeks

100

9-12 months 100 6-12 weeks

Âť

100

Âť

â€“ Egon Zehnder 6WHSKHQ %HQNĹƒ Finanz AG (96.7), â€“ Egon Zehnder â€“ International AG (3.3)

Âť

â€“ Pedersen & Partners BV (100)

MĂłnika .HFVNpV â€“ â€“

1052 Budapest, 6Â WĹƒ XWFD (1) 328-0277 â€“ budapest@pedersenandpartners.com

6 55

AndrĂĄs GĂĄbor (Âť) Andrea Demeter GĂĄbornĂŠ (Âť)

AndrĂĄs GĂĄbor â€“ â€“

1026 Budapest, RiadĂł utca 12. (1) 200-0850 (1) 394-1097 infobudapest@ spencerstuart.com

Âť Âť

Norbert Nagy â€“ â€“

1054 Budapest, SzabadsĂĄg tĂŠr 7. Bank Center (1) 474-8163 (1) 474-8181 budapest@ stantonchase.com

â€“ Klemens Wersonig (100)

Dominika Kelemen-Raths, â€“ â€“

1051 Budapest, VĂśrĂśsmarty tĂŠr 2. (1) 429-1020 (1) 429-1029 RIĂ€FH#WDUJHWH[HFXtivesearch.com

STANTON CHASE HUNGARY KFT NR

www.stantonchase.com

7$5*(7 +81*Ă‰5,$ .)7 www.targetexecutivesearch.com

Âť Âť

Âť

100

Âť

12 months

Âť

6-12 months 5-6 weeks

100

Âť

1055 Budapest, HonvĂŠd utca 20/A (1) 474-9740 (1) 474-9734 ezibudapest@ezi.net

Âť 70

4 7

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

This list was compiled from responses to questionnaires received by March 16, 2014 and publicly available data. To the best of the Budapest Business Journalâ€™s knowledge, the information is accurate as of press time. While every effort is made to ensure accuracy and thoroughness, omissions and typographical errors may occur. Additions or corrections to the list should be sent on letterhead to the research department, Budapest Business Journal, 1075 Budapest, MadĂĄch Imre Ăşt 13â€“14., or faxed to (1) 398-0345. The research department can be contacted at research@bbj.hu

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12 2Business

Budapest Business Journal | March 28 â€“ April 10

Commercial banks

Correction Due to technical reasons, the Budapest Business Journal published an outdated list of the commercial banks in our previous issue. Below is the updated list.

RANK

Ranked by number of bank branches

COMPANY WEBSITE

OTP BANK NYRT

K&H BANK ZRT

ERSTE BANK HUNGARY ZRT

RAIFFEISEN BANK ZRT

BUDAPEST BANK ZRT

UNICREDIT BANK HUNGARY ZRT

CIB BANK ZRT

MKB BANK ZRT

SBERBANK MAGYARORSZĂ G ZRT

FHB KERESKEDELMI BANK ZRT

DRB DĂ‰L-DUNĂ NTĂšLI REGIONĂ LIS BANK ZRT

www.otpbank.hu

www.kh.hu

www.erstebank.hu

www.raiffeisen.hu

www.budapestbank.hu

www.unicredit.hu

www.cib.hu

www.mkb.hu

www.sberbank.hu

www.fhb.hu

NO. OF BANK BRANCHES IN HUNGARY ON MARCH 1, 2014

397

219

TOTAL ASSETS IN 2012 (HUF BLN)

6,471

2,470

PRE-TAX PROFIT IN 2012 (HUF MLN)

77,830

41,053

EQUITY (HUF MLN)

1,036,484

182,674

PRIVATE BANKING

OWNERSHIP (%) HUNGARIAN NON-HUNGARIAN

TOP LOCAL EXECUTIVE

ADDRESS PHONE FAX EMAIL

Individuals and companies (29.10), Hungarian State (4.90), Own shares (1.50), Employees (1.80) Individuals and companies (52.30), Others (18.60)

SĂĄndor CsĂĄnyi

1051 Budapest, NĂĄdor utca 16. (1) 473-5000 (1) 473-5955 informacio@otpbank.hu

â€“ KBC Bank N.V (100)

Hendrik Scheerlinck

1095 Budapest, Lechner Ă–dĂśn fasor 9. (1) 328-9000 (1) 328-9696 bank@kh.hu

Jelasity RadovĂĄn

1138 Budapest, 1pSIÂ UGĹƒ XWFD Â˛ (40) 222-221 (1) 373-2499 erste@erstebank.hu

Heinz Wiedner

1054 Budapest, AkadĂŠmia utca 6. (40) 484-848, (1) 484-8484 (40) 484-4444 info@raiffeisen.hu

GyĂśrgy Zolnai

1138 Budapest, VĂĄci Ăşt 193. (1) 450-6000 (1) 450-6001 info@budapestbank.hu

135

2,761

â€“11,063

160,416

â€“ EGB Ceps Holding GmbH (100)

120

2,119

â€“60,935

110,269

â€“ Raiffeisen-RBHU Holding GmbH (100)

â€“ GE Capital (100)

MihĂĄly Patai

1054 Budapest, SzabadsĂĄg tĂŠr 5â€“6. (1) 301-1271 (1) 353-4959 info@unicreditgroup.hu

Fabrizio Centrone[1]

1027 Budapest, Medve utca 4â€“14. (1) 423-1000 (1) 489-6500 cib@cib.hu

101

908

13,592

121,459

100

1,687

37,098

169,804

â€“ UniCredit Bank Austria AG (100)

2,157

â€“127,922

175,556

â€“ Intesa Sanpaolo Holding International S.A (67.70), Intesa Sanpaolo S.p.A (32.30)

2,308

â€“88,122

118,999

â€“ Bayerische Landesbank (98.56), Other (0.05), P.S.K. Beteiligungsverwaltung GmbH (1.39)

550

â€“18,490

19,155

â€“ Sberbank Europe AG (98.93), TĂźrkise Halk Bankasi (1.07)

Axel Hummel

1088 Budapest, RĂĄkĂłczi Ăşt 7. (1) 328-6666 (1) 328-6660 info@sberbank.hu

433

-3,805

31,293

FHB JelzĂĄlogbank Nyrt (100) â€“

*iERU *HUJĹƒ 6ROWpV]

1082 Budapest, hOOĹƒL ~W (40) 344-344 (1) 329-0992 fhb@fhb.hu

Zsolt Szalai, Emese KovĂĄcs 6]HUWHWLFVQp /iV]Oy /DNDWRV

7800 SiklĂłs, FelszabadulĂĄs Ăştja 46â€“48. (72) 805-800 (72) 805-827 info@drbbank.hu

MAGNET BANK ZRT

CITIBANK EUROPE PLC HUNGARIAN BRANCH OFFICE

www.magnetbank.hu

JĂĄnos Salamon

1062 Budapest, AndrĂĄssy Ăşt98. (1) 428-8888 (1) 428-8889 info@magnetbank.hu

Aftab Ahmed

1051 Budapest, SzabadsĂĄg tĂŠr 7. (1) 374-5000 (1) 374-5100 citibankmagyarorszag@citi.com

â€“12

2,735

â€“

771

4,156

â€“

Individuals and companies (70) Caja Navarra (30)

â€“ Citibank Europe Plc (100)

Mag. Maller-WeiĂ&#x; Andrea

9400 Sopron, Kossuth L. utca 19. (99) 513-000 (99) 513-038 sopronbank@sopronbank.hu

745

13,189

6,993

www.citibank.hu

SOPRON BANK BURGENLAND ZRT

KDB BANK EURĂ“PA ZRT

AXA BANK EUROPE S.A. HUNGARY BRANCH

www.sopronbank.hu

www.kdbbank.eu

â€“326

6,329

â€“

â€“ Hypo-Bank Burgenland AG (100)

177

2,914

28,276

â€“

â€“ Korea Development Bank (100)

Chung Hun Jin

1054 Budapest, Bajcsy-Zsilinszky Ăşt 42â€“46. (40) 374-9900 (1) 374-5454 info@kdbbank.eu

â€“

â€“ AXA Bank Europe S.A (100)

Jerome Emmanuel Joseph Picon

1138 Budapest, VĂĄci Ăşt135â€“139. (1) 465-65600 (1) 465-6599 info.axa@axa.hu

,VWYiQ 6DOJy

1068 Budapest, DĂłzsa GyĂśrgy Ăşt 84/B (1) 235-8700 (1) 269-6447 communication.hu@ingbank.com

Laurent Poiron

1051 Budapest, SzĂŠchenyi IstvĂĄn tĂŠr 7â€“8. (1) 374-6300 (1) 269-3967 info.hu@bnpparibas.com

405

â€“16,309

11,145

www.axa.hu

ING BANK N.V. HUNGARY BRANCH

BNP PARIBAS HUNGARY BRANCH OFFICE

www.ingcommercialbanking.hu

www.bnpparibas.hu

1056 Budapest, VĂĄci utca 38. (1) 327-8600 (1) 327-8700 telebankar@mkb.hu

Individual (Âť), other (Âť) Other (Âť)

www.drbbank.hu

PĂĄl SimĂĄk

[1]

356

10,157

43,645

â€“

â€“ ING Bank N.V (100)

210

â€“6,754

12,043

â€“ BNP Paribas S.A (100)

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BBJ

3Special Report Money for the road

IT logistics: catching on like wildfire

LOGISTICS The economy isn’t good for the freight industry, the environment isn’t the best either, but the recovering macroeconomic factors and an uptick in international trade are finally bringing the logistics sector back to its pre−crisis levels. Next year, there are good signs for some solid growth.

WWW.BBJ.HU

Budapest Business Journal | March 28 – April 10

TRUCKING ON The past year has seen a busy period for the logistics industry with the introduction of a new road toll system and a major upset to the overall market with Russian retailer Magnit eyeing eastern Hungary for its regional hub. The Budapest Business Journal asked president of the Hungarian Logistics Association Zoltán Doór about the current state of affairs and the industry’s near−term outlook. GERGŐ RÁCZ

Haulers had a good period in the fourth quarter of 2013; the statistical office said the industry grew by 4.3% on the year. What were the drivers behind this expansion, and what are your expectations for this year? A: The nominal growth is a complex result. It is common for cargo firms to see a leap in their business in the closing period of the year when retail also typically sees an increase, which of course reflects on logistics companies. Cargo firms saw an increase in their expenses, which they passed on to their customers, and that registered as an increase in revenues. Big hauling firms conduct most of their business abroad but the revenues are booked in their balance sheets in Hungary. The expansion is also due to a minor actual growth in turnover. We will likely reach the economic levels of the 2008 crisis year in 2014, which is true for essentially all sectors so there is surely some expansion ahead. I expect real growth to come in 2015.

Many major domestic cargo companies have expressed their disapproval of the electronic road toll system, saying its puts them at a competitive disadvantage with their foreign peers. Can domestic ﬁrms expect some kind of discount? A: Nobody likes it when costs increase, so it was to be expected that some in the profession would be disgruntled. It was time that a proportional fee system was introduced in road haulage. The profession was ready for this change, the problems stemmed from the circumstances of the launch. There were two problems: one was that the system was introduced basically without a trial run, the other is that currently cargo firms don’t pay proportionally to the distance traveled, but for each road section they use. Interest groups, including the Hungarian Logistics Association are in constant contact with those involved in the operation of the system. We are striving to convey our members’ experiences while convincing the ministry to incorporate

STORY HIGHLIGHTS ■

Business slowly growing for road cargo, real expansion in 2015 the earliest ■ Haulers have mostly adapted to new toll system, but further reﬁnements are called for

these observations into the system. We have results to show, there have been refinements and also the possibility in some case for subsequent payment. There are still adjustments needed, since the current regulation doesn’t support vehicles fitted with modern, environmentally friendly engines, while cars smaller in size pay an unnecessarily high price. The government’s goal is to have as many vehicles fitted with monitoring units as possible, reducing the number of one−off payments, which is also in the best interest of the haulers. The introduction of the use− proportional toll has created a level playing field for Hungarian cargo firms. Discounts can be shaped based on budget revenues, which raises further tasks for the interest groups in the future. There has been no drop in traffic since the toll system was introduced.

How much have members of the Hungarian Logistics Association paid in toll fees so far? Is the current system sustainable? A: As a general example, I can say that a company operating 250 vehicles has to cope with around an annual HUF 200 million in extra expenses for the proportional toll system. This compels companies to reduce their costs. Perhaps they won’t be using their own shops in the future if its means traveling additional kilometers unloaded, or they will take the drivers to their trucks with shuttle buses. Smaller companies did indeed face issues with the introduction of the system, mostly from a liquidity perspective. The state offered a loan for this purpose,

although only a month after the system launch. However, it is quite unfortunate that a business has to take out a loan to meet its obligations to the state. A possible solution is to introduce subsequent payment. Small haulers can go bust if they don’t have a shipment for their return trips, which could be solved by some joining an order coordination system.

There were concerns before that the system will crush several players? Has this come to pass? A: Haulers have to pass on the costs of the fee, which of course brings an increase in the price of the products. There has been concentration in the sector, but

IT WAS TIME THAT A PROPORTIONAL FEE SYSTEM WAS INTRODUCED IN ROAD HAULAGE. THE PROFESSION WAS READY FOR THIS CHANGE, THE PROBLEMS STEMMED FROM THE CIRCUMSTANCES OF THE LAUNCH

these weren’t the result solely of the road fee, but the drive to achieve greater efficiency, better utilization of capacities and capabilities, all the while improving competitiveness.

Cargo firms in the eastern part of the country have expressed concerns that a major Russian investment is endangering their market. How is this project progressing? A: Yes, the appearance of Magnit in the region caused alarm among some of the haulers. It’s worth mentioning that this company is bigger than Tesco, it has 4,000 modern vehicles in its fleet, it has close business relations with several countries in the EU, and has a diversified product portfolio. Magnit is planning to create a Central and Eastern European hub, which will serve to expand supplies to the Russian network. They chose Hungary since it’s in a suitable location for the purpose. Eastern Hungary, the Záhony region, which is the planned site of the development, is set to undergo a major economic development, on the one hand because the area will be providing a part of the fresh produce going to Magnit’s Russians store network. Also, finishing activities (i.e. packaging, labeling) for products gathered in Central and Eastern Europe will be conducted in the hub. These will all lead to job creation and provide economic stimulus to the region and the country. As for the cargo companies, Magnit will bring new tasks that it will perform with its own fleet, meaning it won’t be taking away exiting delivery orders from domestic businesses. In fact, during the peak period between August and October they will commission about 200 Hungarian vehicles and employ 500 Hungarian drivers to cover the excess load.

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GERGŐ RÁCZ

The freight industry has shown plenty of potential for expansion in Hungary on its own, but especially so if the destination markets for goods are upping demand, or new markets are appearing on the radar. The Economy Ministry calculates that logistics providers had revenues of HUF 3.4 trillion in 2012, while employing 259,000 people, which is 6.5% of all employees. There are some

STORY HIGHLIGHTS ■ ■

Logistics segment slowly expanding Necessary infrastructural developments will have to come from EU funds

company to sign up in late 2012, being one of the longest established multinational investors in Hungary. Orbán then pledged that as a result of the precursory talks, the government would commence the extension of the M1 motorway heading northwest from Budapest, connecting Esztergom and, consequently, the Suzuki plant to the major road network. This project hasn’t started yet, though its practical preparations were announced last summer. PAYING THE TOLL Hungary will continue to rely heavily on funding from the European Union to facilitate strategic goals, which coincide with those of the past years: making Hungary develop into a regional hub for various industries. Accordingly, the country will be aiming to tap the funding available in the 2014−2020 EU

EXPERT OPINION

RAIL CARGO HUNGARIA SUPPORTS THE NEW GENERATION IN FINDING ITS WAY IN RAILFREIGHT Dr. Imre Kovács CEO and Chairman of the Board of Directors of RAIL CARGO HUNGARIA ZRT.

Railway companies have aging staff, a phenomenon observable across the whole of Europe. A career in the railways is no longer seen as attractive to fresh graduates. But could this be changing? At the latest The Future of European Rail conference held in London for the 18th time, executives of railway companies, regulators, network providers, manufacturers and service providers talked about an upswing for the railways. Ilona Dávid, President and CEO of MÁV Zrt, for example, gave a presentation entitled ‘A Bright Future: Flourishing in a New Era for Rail’. The new era of the industry, however, can only be provided by a properly trained generation of professionals. For this reason, we have to stop the gradual but continual aging of the workforce, a phenomenon also present at Rail Cargo Hungaria Zrt, which motivated us to act. We have started an internship program for new graduates. We consider it necessary to enhance our cooperation with the universities – we grasp every opportunity to use our own channels to reach to graduate students looking for a job.

40,000 businesses active in the industry, most of them small− and medium− sized enterprises. Although the Central Statistics Office found a 0.6% year−on− year contraction for the fourth quarter of 2012, the transport and storage sector recovered last year and closed the last quarter of 2013 with an expansion of 4.3% on the year. VOCAL SUPPORT The government has repeatedly expressed its support for freight firms, or at least some of them. The market leading road hauler Waberer’s is among the cluster of companies that has signed a strategic partnership with the government. Prime Minister Viktor Orbán also attended the company’s latest unveiling in Soroksár where Waberer’s presented 500 new trucks that were added to its fleet, creating 600 jobs in the process. In other cases, the government has made commitments that it couldn’t fully deliver on. One of the few specific parameters incorporated into any of the strategic pacts was made to Japanese carmaker Suzuki, which was the fifth

budgetary period to develop infrastructure, international ties and develop capacities, Economy Ministry state secretary Áron Márk Lenner said when presenting the mid−term logistics strategy in November. Businesses wanting to follow in the tracks of Waberer’s may also apply for EU funding to support their business and expand their vehicle parks. Earlier this year, the Prime Minister’s Office promised applicants to the related tenders that the involved administrative procedures will be greatly simplified. The ministry also promised a closer monitoring of the processes, since it is still fairly common to receive fraudulent applications, in the hope of receiving expense compensation based on forged invoices. In other notable logistics ventures, Hungary will likewise count on money from abroad. Up to $3 billion is expected to be coming from China to upgrade the Budapest−Belgrade rail line, while infrastructural upgrades are also meant to further facilitate the government’s eastern expansion ventures with the likes of Kazakhstan and Georgia, to name the latest negations conducted by officials.

Unfortunately, it is not a well-known fact that railways represent one of the top industries of the 21st century technologically. Rail freight, for example, unites mechanical engineering, logistics, information technology, commerce, operations and the knowledge of many more domains. Rail Cargo Hungaria considers it important to make this very exciting profession attractive to young people. Our latest effort to prove this was to join the National Case Study Competition, Hungary’s academic competition of the highest standards, at the request of Corvinus University of Budapest. By doing so, we were able to have a railway topic included in the internal rounds of the competition for the first time. We were also surprised that it was welcomed both by the organizers and the students. We are glad that the young people are aware of the opportunities in the railway industry, an innovative and progressive industry. The students did well solving the task we set them. Their presentation was high quality

and their argumentation logical. Having experienced what they are capable of, Rail Cargo Hungaria would be glad to involve several of the students in our successful internship program. Rail Cargo Hungaria will look for opportunities to cooperate with the Corvinus University of Budapest and other institutions of higher education in order to support the professional development of as many students as possible. The company uses its own means to actively participate in talent management. Rail Cargo Hungaria (RCH) is a special company regarding its areas of activity: it needs to train its own qualified workforce. This is also an advantage, since getting familiar with the services first-hand makes later performance more efficient, too. RCH considers it its mission to nourish the careers of young people interested in the railway profession. The invested time and energy will pay off eventually. Those whose attention has just been brought to the railway profession have a good chance to work with the company one day as serious professionals, and they may count on RCH’s support to do so. We have recently launched an internship program for eight graduates. As part of the project, in the first two months they took part in professional and language courses and competence-development training, and then carried out work at Rail Cargo Hungaria in Budapest, and in Vienna at various departments and positions at the Rail Cargo Austria. They are gaining practice-oriented experience in both companies. They are learning about operational tasks, corridor management and certain groups of products. Rail Cargo Hungaria needs colleagues who can think in European terms, since a large part of RCH traffic is international. The RCH internship program of a few years back has already proven successful; the majority of interns have joined the company. The expectations concerning the program are high now, too, in order to help every talented, committed and motivated young person find their way in the railway industry. The company has worked a lot to improve its competitiveness; the size of the company has been optimized. We are happy to see development in focus: our aim is to make RCH a truly European corporation.

www.railcargo.hu

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

MONEY FOR THE ROAD Hungary is making slow headway in fully tapping the potential in its geographic location, and companies have mostly been left to their own devices. Now, they can hope that the state will get more involved, but any desired infrastructural developments would only come from EU funding.

Budapest Business Journal | March 28 – April 10

WWW.BBJ.HU

Budapest Business Journal | March 28 – April 10

THE BEIJING-BELGRADE-BUDAPEST AXIS During his visit to Beijing this February, Hungarian Prime Minister Viktor Orbán concluded an agreement on the construction of a high−speed rail line from Budapest to Belgrade and about the so−called V0 rail cargo line bypassing Budapest. Both projects would be built by the Chinese State Railway Company, and co−financed by the China Exim Bank and the Hungarian Development Bank. As the Budapest Business Journal has learnt, the total value of the enterprise would amount to nearly $3 billion. ANDRÁS ZSÁMBOKI

“The financial plan of the Budapest−Belgrade railway line has been completed. The experts have been working on the technical details since the end of February, so that Serbia’s Prime Minister Ivica Dačić and Premier Viktor Orbán can sign the treaty,” Péter Szijjártó, state secretary of foreign trade and commissioner of Hungarian−Chinese relations has declared. THE BALKANS STRATEGY The Hungarian Investment and Trade Agency (HITA) answered a BBJ question about the aims of economic policy by saying: “The enterprise has a double strategic role: on the one hand, it is going to be the epitome of cooperation between the Central European region and the West Balkans; on the other hand, it will strengthen Hungary’s efforts to become the main transit country of Chinese goods in the direction of Western Europe.” Hungary hopes to assume a greater role in the distribution of Chinese goods transported to Europe via sea routes. “Athens’ sea port Piraeus is already operated by the Chinese. So is Thessaloniki’s multi−nodal hub,” a source unwilling to be identified told the BBJ. ADVERTISEMENT

Chinese goods arriving into these ports will be transferred to Western Europe through a distribution node operating in Budapest. The Hungarian capital city will thus occupy a key position in a two−step logistics process. The existing railway line between Belgrade and Budapest needs to be expanded and modernized. Some 334 km of the existing 374 km line has to be converted into a two−track, high−speed electrified railway route. The Hungarian National Railway Company and the Serbian Railway Company agreed upon the new development in May 2013. Subsequently, a Central Eastern European Countries−China conference was organized on November 25 last year in Bucharest. As part of this conference, a meeting took place between Hungarian Prime Minister Viktor Orbán, his Chinese colleague Prime Minister Li Keqiang, and Serbia’s Prime Minister Ivica Dacic. On the occasion of Viktor Orbán’s visit to Beijing in February this year, Hungary and China’s prime ministers agreed upon ways of carrying out and financing their joint railway construction project. As far as the Hungarian part of the project is concerned, the costs of the enterprise would be provided by the China Exim Bank, which would provide credit to the Hungarian Development Bank. The Hungarian−Serbian−Chinese railway plans are important for China, as they can later serve as reference projects, paving the route for the Asian country’s further penetration into the European railway construction market. WHAT IS V0? The V0 plan is often mentioned together with the Budapest−Belgrade railway line project. The name is modeled after M0, the Hungarian orbital motorway that encircles Budapest. The V0 railway ring around Budapest would have a similar function; namely, it would make it possible for railway cargo traffic to bypass Hungary’s capital city. V0 would run near Martonvásár, Ercsi, Kiskunlacháza, and Dabas, which means that two new bridges would have to be constructed across the Danube in order to lead railway traffic through Csepel Island. According to an announcement by the Hungarian National Ministry of Development

POSSIBLE AND RECOMMENDED TRACK LINES OF V0

Source: FŐMTERV

(NFM), V0 would cost €1.2 bln, and it would be completed by 2017. The transportation development profession is, however, divided about the assumed importance of the V0 project. A source who asked not to be identified told the BBJ that Hungary had applied for funding to the EU’s ‘Connecting European Facilities’ (CEF) transportation development fund. “The EU, however, is willing to finance the project only if it fits into a long−term development strategy, for example, into the establishment of a trans− European corridor. That is not the case with V0,” our source pointed out. According to NFM, the railway construction credit provided by the Chinese could cover the establishment of the V0 ring. It is an open question, however, whether the project would be reasonable at all.

According to NFM, V0 could complement the railway lines currently crossing Budapest, which function together as a bottleneck. Transportation experts, however, doubt that. “The most serious argument is that the capital city should be avoided by cargo traffic. In this case, the railway section between Kelenföld and Ferecváros railway stations could be used exclusively as a suburban railway line,” a source told the BBJ. According to a real estate expert unwilling to go on the record, the real aim of the V0 plan is in fact the liquidation of the Ferencváros cargo railway station. At the location of the railway station thus made redundant, state−financed real estate development could begin.

A serious problem with Hungary’s plans is that Brussels does not approve of the participation of Chinese railway builders in the development of European railway lines. “This is a kind of commercial ban, a response to China having prevented European firms from participating in Chinese railway line construction tenders,” a transportation expert told the BBJ. In 2012, at the Central Eastern Europe-China summit then organized in Warsaw, China offered to create a $10 bln fund for the infrastructural development in the region. The first element of this would be the Budapest-Belgrade railway line, which is unproblematic as Serbia is not yet a member of the EU. The Hungarian section of the line, however, might raise serious concerns.

WWW.BBJ.HU

Budapest Business Journal | March 28 – April 10

IT LOGISTICS: CATCHING ON LIKE WILDFIRE IT solutions are becoming indispensable, and not only in sectors producing high− value products and operating complex supply chains. Demand for intelligently planned logistics is on the rise in any sector trying to slim down its costs. LEVENTE HÖRÖMPÖLI-TÓTH

The supply chain management (SCM) software industry has no reason to be blue. Growth rates of 12.3% and 7.1% in the previous two years, respectively, reflect exactly what Jones Lang LaSalle established in a survey. According to the findings, cutting supply chain costs will be an absolute priority in the next five years for most economic players, and IT will be part of the magic money− saving formula. BREAKTHROUGH Key areas to curb costs can be identified such as optimizing stocks, routes and task schedules; however, there is no one− size−fits−all method out there. “In the case of every business the possibilities for loss reduction must be explored on an individual basis and by taking into account their role within the global chain as well as their industry−specific features,” Csaba Lóka deputy head of competence center at T−Systems Hungary told the Budapest Business Journal. “Logistics is pretty much where corporate governance systems were

STORY HIGHLIGHTS ■

Cost-effectiveness is at the core of mid-term logistics planning, with IT to play a crucial part ■ Integrated systems offer the most beneﬁt for leaner logistics management

Performance f of leading supply chain management software suppliers (USD mln)

2010

2011

2012 44

2000

43.25

1500

20 years ago. Essentially separate systems communicate with each other with more or less success,” László Duma, board member of the Hungarian Association for Logistics, Purchasing and Inventory Management said. “The real breakthrough will come as a result of automatic information exchange and business intelligence built thereupon.” INTEGRATION “The separate systems typically focus on a certain target area and if we have more such systems, data may be recorded in a duplicate manner because of a lack of integration,” Lóka added. “By building a coordinated and integrated system, we can react to the most delicate changes in every key field in our business.” Warehousing is crucial in this regard. As warehouse surfaces have been growing lately, their optimal use will gain in importance. It takes considerable time to figure out through the careful analysis of diagrams exactly what the ideal location of a particular product is in the warehouse. This is connected to the frequency at which an item is needed during a shift. For movement of vehicles and staff in the warehouse should be kept to the minimum. COST-EFFECTIVE “As long as production, transport, customs clearance, storage and

HARD TO PLAY IT SAFE Attitudes need to change in relation to managing network security of supply chains. For such systems facilitate the dissemination of shipment-level information that, due to the large number of mobile and GPS devices in play, is exposed to a great extent, John Manners-Bell, CEO of Transport Intelligence UK pointed out in the ‘Outlook on the Logistics and Supply Chain Industry 2013’ report published by the World Economic Forum. The threat is real. A major cyber-attack on one of the big ‘gateway hubs’ such as Rotterdam or L.A. could hit entire regions by disrupting supply chains. “The logistics industry faces not so much to the control of transport assets, but to the goods themselves which are being moved or stored,” MannersBell noted. The EU could well have a say soon as well. Transport operators should expect to be obliged to install backup systems for their digital networks to allow quick recovery of core activities.

Total markket share of T T Top 3 SCM software suppliers (%)

42.5

1000

41.75

500 0

41 SAP

Oracle

JDA Software

2010

2011

2012

Source: Gartner Statistics 2013

Espionage attacks by industry

15% 28%

24%

Transportation Professional services Manufacturing All others

33%

Source:Verizon Data Breach Investigations Report 2013

distribution take weeks in the case of a product, efficiency has a long way to go,” Duma said. Priority is given to minimize stocks not used or sold as they tie up key resources. Coordinated transport routes can improve efficiency and with real− time traffic data the impact should be even more dramatic. The wildfire of IT logistics seems unstoppable. “Now it is not only ADVERTISEMENT

businesses manufacturing high− value products from the automotive or pharmaceutical sectors that are interested in our solutions, but also SMEs from transport or the food industry that must meet stringent quality requirements and would like to measure the performance of their resources and workers or make them more cost− effective”, Lóka said.

WWW.BBJ.HU

Budapest Business Journal | March 28 â€“ April 10

Logistics service providers

70,744

DHL CSOPORT

RAIL CARGO LOGISTICS HUNGARIA KFT

www.dhl.hu, www.dhl.hu/express

55,422

66,307

51,808

Âť

126,913

â€“

SCHENKER NEMZETKĂ–ZI SZĂ LLĂ?TMĂ NYOZĂ SI Ă‰S LOGISZTIKAI KFT

TOP LOCAL EXECUTIVE CFO MARKETING DIRECTOR

ADDRESS PHONE FAX EMAIL

2005

â€“ Rail Cargo Austria AG (99.99)

Imre KovĂĄcs, Clemens FĂśrst SĂĄndor GyevnĂĄr MĂłnika NahalkĂł-Kurdi

1133 Budapest, VĂĄci Ăşt 92. (1) 512-7300 (1) 512-7789 cargo@railcargo.hu

1993

â€“ Deutsche Post AG (100)

ZoltĂĄn Rezsek, PĂŠter Bartha, John Lucas, Filip Budik ZoltĂĄn Antalffy, GĂĄbor MitrĂł, Birgit MĂźller, BalĂĄzs Janositz Ă‰va ForgĂĄcs, Attila KulcsĂĄr, ZoltĂĄn BĂĄndli, Ferenc UjszĂĄszi JĂłzsef Bor, AndrĂĄs Vernes Edit Bokori â€“

1037 Budapest, Montevideo utca 4. (1) 430-8500 (1) 430-8599 RIĂ€FH UFO KX# railcargo.com

Âť

1972

â€“ Rail Cargo Austria (100)

1999

DB HungĂĄria Holding Kft (100) â€“

Ă rpĂĄd VĂĄsĂĄrhelyi, SĂĄndor BarĂŠnyi IldikĂł KotĂĄnczi Zsuzsanna Papp

1239 Budapest, EurĂłpa utca 5. (1) 278-7878 (1) 278-7888 schenker@schenker.hu

1999

â€“ Dachser GmbH & Co. KG (50), Engelbert Liegl (50)

Szabolcs Czifrik â€“ â€“

2085 PilisvĂśrĂśsvĂĄr, Ipartelep utca 1. (26) 532-000 (26) 532-005 customer.pilisvorosvar@ dachser.com

JĂĄnos SkĂĄla Zsolt Szalai GĂĄbor MĂĄrta

9400 Sopron, MĂĄtyĂĄs kirĂĄly utca19. (99) 577-139 (99) 577-401 info@gysevcargo.hu

30,625

1,713

4,250

â€“

MOL, Borsodchem, ISD Dunaferr, Hungrana, Electrolux, TVK

19,380

Âť

â€“

Âť

www.schenker.hu

LIEGL & DACHSER SZĂ LLĂ?TMĂ NYOZĂ SI Ă‰S LOGISZTIKAI KFT

17,909

16,860

33,900

â€“

Âť

2009

GySEV Zrt (100) â€“

1990

(100) â€“

,VWYiQ (UĹƒV ErzsĂŠbet TĂłth MĂĄrta Fogarasi

4030 Debrecen, VĂĄmraktĂĄr utca 3. (52) 510-120 (52) 510-193 info@trans-sped.hu

1989

(100) â€“

â€“ â€“ â€“

1138 Budapest, SzekszĂĄrdi utca 14. (1) 450-9000 (1) 450-9090 eurosped@eurosped.hu

1989

â€“ Raben Group N.V. (100)

Gyula MĂŠszĂĄros 1RpPL 6]Ĺ?FV Ă gnes Bolyki

2330 Dunaharaszti, Jedlik Ă nyos utca 31. (24) 502-000 (24) 502-113 hungary.info@ raben-group.com

Gabriella SzĂŠcsi LĂĄszlĂł PĂĄlmai Kinga MĂĄtrai

5000 Szolnok, VĂĄrosmajor Ăşt 23. (56) 524-050 (56) 524-040 info@bi-ka.hu

www.dachser.hu

GYSEV CARGO ZRT

TRANS-SPED LOGISZTIKAI SZOLGĂ LTATĂ“ KĂ–ZPONT KFT

www.gysevcargo.hu

12,711

1,292

28,000

â€“

IKEA, VELUX, HEINEKEN

8,900

Âť

â€“

Âť

www.trans-sped.hu

EUROSPED NEMZETKĂ–ZI FUVAROZĂ“ Ă‰S SZĂ LLĂ?TMĂ NYOZĂ“ ZRT.

8,894

Âť

17,000

â€“

Âť

www.eurosped.hu

RABEN TRANS EUROPEAN HUNGARY KFT

8,192

50,000

â€“

www.raben-group.com

BI-KA LOGISZTIKA KFT www.bi-ka.hu

Âť

4,725

4,541

15,000

â€“

Âť

1991

GyĂśrgy Karmazin (100) â€“

3,473

Âť

7,000

Âť

1994

(100) â€“

â€“ â€“ â€“

1107 Budapest, CeglĂŠdi Ăşt 19. (1) 433-3030 (1) 433-3040 info@eurologgroup.com

1990

â€“ Austrian family company (100)

Thomas Schauer â€“ â€“

2330 Dunaharaszti, RaktĂĄr utca 2. (24) 506-700 (24) 506-705 gw.hungary@ gw-world.com

(OHPpU eOĹƒ PĂŠter Kisch MiklĂłs Csaba

2071 PĂĄty, M1 Business Park (23) 889-000 (23) 889-099 info.budapest@ kuehne-nagel.com

Zsolt Szarka â€“ â€“

1138 Budapest, DunavirĂĄg utca 2â€“6. (1) 333-7777 (1) 321-3210 logisztika@posta.hu

EURO-LOG LOGISZTIKAI SZOLGĂ LTATĂ“ KFT 11

www.eurologgroup.com

GEBRĂœDER WEISS SZĂ LLĂ?TMĂ NYOZĂ SI Ă‰S NR LOGISZTIKAI KFT

Âť

50,000

â€“

Âť

Mercedes-Benz Manufacturing Hungary Kft, Tetra Pack Hungary Zrt, Egis GyĂłgyszergyĂĄr Nyrt, ABB Kft

www.gw-world.hu

KĂœHNE + NAGEL KFT NR www.kuehne-nagel.com

MAGYAR POSTA ZRT NR www.posta.hu

www.dhl.hu/hu/ elerhetosegek.html

www.railcargologistics.hu

MOL Nyrt, Audi Hungaria Motor Kft, Borsodchem Zrt, ISD Dunaferr Zrt, 0iWUDL (UĹƒPĹ? =UW Magyar Suzuki Zrt

OWNERSHIP (%) HUNGARIAN NON-HUNGARIAN

www.railcargo.hu

YEAR ESTABLISHED

RAIL CARGO HUNGARIA ZRT 1

MAIN CLIENTS IN 2013 DISTRIBUTION

TRANSPORTATION

DUTIABLE GOODS

DOMESTIC GOODS

LTL

FTL

CARGO CONSOLIDATION

DOMESTIC

INTERNATIONAL

RAILWAY

DISTRIBUTION

WAREHOUSING OTHER SERVICES

FREIGHT FORWARDING SERVICES

LOGISTICS SERVICES

WAREHOUSING

NET WAREHOUSE SPACE USED FOR LOGISTICS WAREHOUSING (SQM)

COMPANY WEBSITE

NET REVENUE FROM LOGISTICS SERVICES (HUF MLN) IN 2013

TOTAL NET REVENUE (HUF MLN) IN 2013

RANK

Ranked by total net revenue

Âť

61,000

Âť

â€“

Âť

1992

1993

KĂźhne + Nagel Eastern Europe AG (100)

Hungarian State (100) â€“

7KLV LV QRW D IXOO OLVW ,W LV HGLWHG DQG Ă€OWHUHG E\ WKH UHVHDUFK VWDII RI WKH %XGDSHVW %XVLQHVV -RXUQDO )RU D PRUH FRPSUHKHQVLYH LQGXVWU\ OLVW FKHFN WKH ODWHVW LVVXH RI WKH %RRN RI /LVWV

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

This list was compiled from responses to questionnaires received by March 16, 2014 and publicly available data from MNB. To the best of the Budapest Business Journalâ€™s knowledge, the information is accurate as of press time. While every effort is made to ensure accuracy and thoroughness, omissions and typographical errors may occur. Additions or corrections to the list should be sent on letterhead to the research department, Budapest Business Journal, 1075 Budapest, MadĂĄch Imre Ăşt 13â€“14., or faxed to (1) 398-0345. The research department can be contacted at research@bbj.hu

WWW.BBJ.HU

Budapest Business Journal | March 28 – April 10

BBJ Research Markets in numbers

HUNGARY UP IN WORLD BANK’S LOGISTICS PERFORMANCE RANKINGS The World Bank has released its biennial Logistics Performance index for 2014, and Hungary’s own industry may take pride in its performance this time around: the country moved up seven spots from its 40th position of 2012 to reach 33rd out of 166 nations enumerated on this year’s list, ranking just behind Poland and Czech Republic. Further breaking down the numbers, Hungary ranked 20th for timeliness, 37th for quality control, 40th for infrastructure, and 48th for customs performance. Germany is still the best performing country on a global scale, according to the survey.

WHAT IS LPI?

The logistics performance index (LPI) is the weighted average of the country scores on six key dimensions: 1. Efficiency of the clearance process (i.e., speed, simplicity and predictability of formalities) by border control agencies, including customs; 2. Quality of trade and transport related infrastructure (e.g., ports, railroads, roads, and information technology); 3. Ease of arranging competitively priced shipments; 4. Competence and quality of logistics services (e.g., transport operators, customs brokers); 5. Ability to track and trace consignments; 6. Timeliness of shipments in reaching destination within the scheduled or expected delivery time.

Your partner in rail freight logistics The no. 1 rail freight operator in Hungary backed by the Austrian shareholder Rail Cargo Austria AG. Operates in the perfect intersection of EU corridors (IV, V, VII, X) As a member of Rail Cargo Group, connects the West, South and South West European markets Together with its subsidiaries covers the full chain of rail freight and combined transport

BBJ

4 Socialite RESTAURANT REVIEW

FROM KYOTO TO TOKYO Being close to the business district, Tokyo is a cool choice for business lunches or casual meetings. In the evenings, as the neighborhood turns into one of the most popular entertainment and clubbing areas in Budapest, Tokyo becomes a perfect location for eating out before the parties start. The eatery was formerly called Kyoto, and run by the same management. It was a quite pricey Japanese restaurant, mainly targeting tourists and business people. After rebranding – with a new name using the same letters – Tokyo reopened as a cool, fancy, Asian fusion restaurant and bar. The menu

is a mix of the most popular Japanese and Thai dishes, with some recipes inherited from the former Kyoto. The neon−like decoration reminded us being in a Japanese movie scene, and the well dressed, often good− looking clientele made us feel that this is one of the most fancy spots in town. Our table was next to the window, looking at the beautiful Danube panorama. We could watch the passers by, and they also peeped in, so quite often we found ourselves saying ‘hello’ to someone. We started our dinner with hot salmon chips: a delicious, crispy snack, and a must try. The recipe falls under the ‘waste not, want not’ ﬁle, but it results in a treat all will enjoy. Basically crispy−fried salmon skin is like salmon bacon, or salmon rinds, and it is seasoned with chili powder. We also had a salad called Reddish3, which is a great spring salad made of three kinds of reddish, black sesame and edamame

beans seasoned with a wasabi−yuzu and soy sauce dressing. We chose three kinds of rolls also as a starter: Sunshine, Hana maki and Krush. Sunshine was ﬁlled with salmon, tuna, sea bass, avocado and it was fried in tempura dough. Hana maki came with marinated eels, salmon and cucumbers, and was topped with salmon caviar. Krush, from the old Kyoto heritage, was a bit tricky. It was made of shrimp tempura, tuna, salmon teriyaki, avocado, shallots, Japanese mayo, very hot cheese sauce, tempura crust and masago caviar. For the main course we ordered two dishes: Suzuki grill and Samui. Suzuki grill is a light and nicely composed dish with a slice of grilled sea bass, sweet potato mash and wasabi spinach sauce. The great quality ﬁsh was succulent and juicy; the sides were modest and harmonic. Samui, a Thai wok dish is made of baby squid seasoned with garlic, ginger, chili

and cilantro. It was jolly colorful, and had a balanced taste built up of some sweet parts, some hot, some salty and some sour. We enjoyed both dishes a lot. For dessert we took our waitress’ advise and ordered a portion of Dragon ball: small cottage cheese dumplings with black sesame and white chocolate mousse with fresh marachuya; and something called Kango, which is a mango mousse with pistachio, pomegranate and black sesame. The cottage cheese was maybe a bit too heavy after a rich dinner like ours, but Kango was light and exotic, a perfect ﬁnish of the dinner. RATATOUILLE

TOKYO

Ajtósi Dürer sor 3. 061 788 73 36

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 is organized in Saint Stephen’s Basilica of Budapest on Mondays. The events of the Cathedral Organ Concerts begin at 5 p.m. on Mondays, with the exception of October when the concerts start at 7 p.m. Organ concerts will be organised on Friday too begin at 8 p.m.

Dates of the Cathedral Organ Concerts in 2014: April 4, 7, 11, 25 and 28.

THE ARTIST AND HIS TIMES

2014

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. · www.organconcert.hu

HUNGARIAN NATIONAL GALLERY

3 APRIL27 JULY 2014. WWW.MNG.HU

WWW.BBJ.HU

4 Socialite

Budapest Business Journal | March 28 – April 10

OUT OF THE OFFICE The BBJ gets personal WHAT IS YOUR GREATEST REGRET? That I was not born in Germany; I love my country, but the approach and the way of thinking of the German people are closest to my style. Thank God, at least I work for a German company! WHAT IS YOUR GREATEST FEAR? That there will be a time when I will need to live too far from my kids.

CV Károly Csongor Német has been managing director of Media Markt – Saturn Holding since 2011. Between 2005 and 2011, he was sales director at Sony Central and Southeast Europe. In the previous year, he worked as consumer head at Pfizer, and handled sales and trade marketing at Unilever – Bestfoods between 1997 and 2003. He graduated from the College for Commerce and Catering in Budapest.

WHAT DO YOU CONSIDER YOUR GREATEST ACHIEVEMENT? My family: the great characteristics of my kids and the quality of the relationship within the family, which is based on strong respect and an absolute essential sense of humor. WHAT IS YOUR MOST MARKED CHARACTERISTIC? Most probably the people around me would all tell you a different answer, some talking about my commitment for quality, some my seamless work capacity, my wife would probably talk about my self−irony. WHO IS YOUR FAVORITE FICTIONAL HERO? It is more the hero of my childhood, Petrocelli, the advocate, who protects people without self−interest, is smart, has a sense of humor and loves his wife. WHAT KIND OF JOB DID YOU DREAM OF DOING WHEN YOU WERE A CHILD? I wanted to be a lawyer like Petrocelli. ADVERTISEMENT

WHAT IS THE MOST EXTRAVAGANT THING YOU’VE DONE IN YOUR LIFE? I made a lifetime commitment to my wife after a three−month relationship. That was 14 years ago, and I do not regret it. WHAT ACTIVITIES HELP YOU TO COPE WITH STRESS? Of course I enjoy nature, sport, activities with my kids, but if I have real stress, I simply work even more, that seems to help. WHAT IS YOUR MOTTO? Do everything you can, and be happy with everything you get. WHAT WOULD YOU DO WITH €1 MILLION? Some donations, a really exotic trip to fulfill the desire of my wife and build the house I have had in my mind for years. WHAT IS YOUR FAVORITE GADGET? I would not say it is my favorite gadget, but truly my Sony Z1 is a great support all day. HOW WOULD YOUR DREAM DINNER PARTY LOOK? Close friends and family around us in our garden facing the vineyards and Lake Balaton. A huge wooden table is located under big, old trees; we drink wine and eat grilled food. WHAT IS IT YOUR DREAM TO LIVE TO SEE? Drive across the Unites States on Route 66 in a huge old American cabriolet. WHAT THREE THINGS WOULD YOU TAKE WITH YOU TO A DESERTED ISLAND? An MP3 player with billions of pieces of music, an e−book reader with thousands of books, and a media player with thousands of films.

At the steering wheel MY FIRST CAR... It was obviously a Trabi, full of holes at the bottom; this was something I liked during summer, since it provided ongoing fresh air circulation, and disliked in winter since my feet were always freezing. TOP 3 THINGS TO CONSIDER ABOUT A CAR... Functionality/safety; comfort; and some emotional link. MOST ADMIRED FEATURES OF THE TEST CAR... It was a car that was easy to love and drive from the very first second. I have always appreciated the comfort of Volvo seats, and the one in this car felt to be even more comfortable, combined with impressive design and high quality material. GENERAL IMPRESSIONS OF THE TEST CAR... It was a car equipped with all the state-of-the-art technology that make driving a joy and reduces stress. It is clear that safety is the backbone of Volvo cars with all the functions that protect you and your loved ones, but there is even more. It is extraordinarily comfortable, all the equipment functions very simply and very well, the interior is youthful and dynamic; a good choice for those who prefer real values instead of simply brands.

The test car was a Volvo XC60.

WHICH LIVING OR FICTIONAL PEOPLE DO YOU DESPISE MOST? Those lacking respect towards others, cheating others and taking themselves far too seriously. WHICH LIVING OR FICTIONAL PEOPLE DO YOU MOST ADMIRE? Angela Merkel: I really love that a lady (who is by the way an Osti – someone who lived in the former East German state) has such an important role in Europe; she is a great example of a smart and respectful leader, and the fact is that business and politics need many more such women.