Budapest Business Journal 24/06 by Business Publishing Services Kft.

SPECIAL REPORT:

 14

Report 3Special n istics competitio space seen. Lack of logistics see a brisk business. Logistics centers

BBJ

 16

catch log Hungary tries to

Logistics

Hauling supplies

in Audi Hungary’s

logistics center,

is Although the country well located for there East-West trade, is limited logisticsand space in Hungary the less activity in might sector than there be, experts say.

which the company

built for its own

use. The automotive

to when it comes advantages as Hungary Regional estate and labor. affordable real when it fierce, especially 14-15). competition is space (see pages comes to logistics though, Despite this competition, logistics should be more experts say there country. activity in this

Budapest

industry has increased

the need for logistics

demands “The largest logistics the originate from within within European Union, and largest this Germany, Hungary’s trading partner.”

services in this

country, but thus

heavy the system poses complaints that burdens on companies. administrative Doór, the negative But according to has on the sector is impact that EKÁER changed regulation has negligible. “The its introduction, significantly since burden on companies making the current said. “If we were to he more bearable,” then we could say quantify its impact, the type of company, on that, depending created by the the additional coststo approximately the regulation amount employee for every wage of one additional turnover.” in billion 2 HUF

living up to its potential. the sector is not in the pipeline to sqm. Plans are also by rail in logistics center million development connect the Audi in Ingolstadt, realizing a €10 Doór explained. directly to the headquarters the same area,” to a press release to shifting freight Germany, according last fall, which Intermodality refers of transport, such issued by the company employs rail from various modesto train, and the its said that Audi currently as going from ship measure, to meet smoothly and quickly and road in equal ability to do this logistics. logistics needs. is essential to effective improvements, been Along with these incentives have Breakdown by category recent government aim of improving the is road introduced with including support logistics mode – Hungary’s prime more than 70% competitiveness drivers, reducing traffic, which handledaccording to Doór. for training truck 2014, burdens and making of transport in is that administration a priority, this large share “The reason for infrastructure investments provides door-to-door Doór believes that road transport he said. according to reports. could go be most flexibly,” quite service an increase in wages competitiveness network in Hungary In fact the road effective in improving extensive in the the labor pool. is one of the most and deepening logistics sector European Union. the share of rail For lack of a largercompanies are estimates Doór private is in Hungary, about 18%, which link own logistics centers, transport to be developing their Hungary’s direct improving levels interesting given and its region is with the goal of Group invested for to China. “Záhony a of service. MEC reloading center development of the junction and railways HUF 1 bln in the in logistics center European standard-gauge pharmaceutical system of the CIS Hell Energy Drinks and the wide-gauge Budapest, and to the HIPA report. a capacity states,” according waterway company has undergone center logistics Despite excellent rest of Europe, the expansion at its the Hungary, connections with in Hungary is in Szikszó, northeastern share of water transport on the according to Doór. 4%, depending to handle its between 2% and Audi has also elected Danube, Doór said.and locally. water level of the natural gas own logistics needs company channeling the Pipelines, account for In September, center 10 bln logistics other fuels or chemicals,he added. inaugurated a HUF a carbon in Győr. And it’s 80,000 about 10% of transport, near its factory to boot, spanning neutral building

far, experts say,

Desirable In early 2015, in report published behind its neighbors. of 1,800,000 sqm According to a a total and Eyefortransport Hungary listed space, while Poland February by Prologis Real Estate Networkfifth in logistic-center and Czech Republic in-house logistics entitled “Logistics sqm was ranked the Improvements and had 8,800,000 report Expansion”, Budapest center among according to a not as logistics that Hungary is 4,800,000 sqm, most desirable Hungarian Investment Critics have argued its neighbors and that published by the (HIPA) last year. as CEE countries. business friendly of the Hungarian effect on the demand Promotion Agencychallenges facing this Zoltán Doór, president ANIKO FENYVESI this has had a direct providers, noted that There are three logistics service to Doór. “Firstly, Logistics Association, more for the country’s especially carmakers, country, according centers in Hungary problem might have to Germany and manufacturers, economy, but Doór said the major developments on With its proximity the Hungarian operating logistics of and the Balkans, are are essential to secondly, the main to do with a lack borders with Ukraine market in recent major manufacturers well positioned is not cheap and, centers are situated but none of the That means the foreign the Hungarian logistics up, however, and Hungary is geographicallyEast and West. European logistics looking between and this situation Hungarian firms. goods in years. Things are to facilitate trade environment could here must ship northeast of Hungary by 2020,” he said. encourage firms producing a more stable regulatory so they create a That situation should become permanent in this main country, the process. may the of business out and is historical: The certainly help alongperiod of stabilization a booming logistics outside “The third reason a sector is indeed 5% demand for logistics. providers are were established “This has been country, and the service Vienna, logistics centers up the sector. There more than “Local logistics Bratislava, Kosice, and for building breakthroughs in and storing important, contributing of Hungary, in by some estimates. responsible for moving and parts, and has been no major although two to Hungary’s GDP by the Arad and Temesvár.” administrative raw materials either, report published these, inventories, a to from developments in the derived One is the According Many have criticized of the logistics Statistical Office to the finished products trends can be identified: by developer state-run Central Hungarian logistics of the raw materials burdens as weakening the EKÁER of from the source instance Kft. in increase in intermodality in fall, the revenue he said. “The largest sector here. For as Ekol Logistics HUF 1.085 trillion vehicles hauling the end consumer,”originate from within the port) companies, such companies reached of 2015. system, which tracks effect last year, and is Szabadkikötő (free is also demands logistics Germany, Budapesti quarter into this the came second which within and the and Kft., valuegoods logistics business European Union, authorities collect been and Metrans Danubia But the domestic trading partner.” according meant to help tax have so much more, Hungary’s largest imports. There region could be doing developments and added taxes on countries in the trailing Despite steady to analysts. Otherplaced to facilitate Hungary is still growing demand, same are similarly well and they have the East-West trade,

THE LOGISTICS BUSINESS

BUSINESS JOURNAL BUDAPEST

VOL. 24. NUMBER 06

MARCH 25, 2016 – APRIL 7, 2016

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Bringing them to Hungary

NEWS

Teachers make gains, but still plan strike Although the government agreed to get rid of KLIK, the central authority that runs schools and dictates the national curriculum, the concession did not appear to be sufficient to prevent a March 30 strike. 7

SPECIAL REPORT

Logistics potential left unrealized Hungary is well-situated to become a logistics hub facilitating trade between East and West, but thus far our CEE neighbors seem to be doing better at cashing in on the possibilities. 12

NEWS

Rate cut catches analysts by surprise The central bank had said it would continue to ease the money supply, and cut interest some time soon, but market watchers were caught flat-footed when the base rate was slashed to 1.2%. 3

BUSINESS

NEWS

Getting noticed on the French Riviera

‘Easy money’ from EU is over, Lázár warns

Hungarian real estate is back on the radar of investors, judging by the enthusiasm seen at MIPIM, the biggest commercial property expo in Europe. Hungary set up an official stand there for the first time in years. 11

The cabinet chief acknowledged that the boost to GDP growth Hungary experienced last year will be not be as strong, and said the country must find other ways to stimulate spending, especially after 2020. 6

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HIPA President Róbert Ésik is responsible for helping foreign firms invest here. After a record number of projects last year, he expects even more for 2016. 10

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Budapest Business Journal | March 25 – April 7, 2016

3Special

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SPECIAL REPORT:

SUBSCRIPTIONS

Report

Hungary tries to

Logistics

catch logistics competition

far, experts say, country, but thus services in this the need for logistics industry has increased use. The automotive heavy built for its own the system poses which the company complaints that logistics center, burdens on companies. in Audi Hungary’s administrative Doór, the negative But according to has on the sector is demands when it comes to “The largest logistics advantages as Hungary Regional impact that EKÁER changed estate and labor. regulation has affordable real when it negligible. “The its introduction, from within the fierce, especially 14-15). originate competition is significantly since burden on companies within space (see pages comes to logistics to though, European Union, and largest making the current he said. “If we weresay Despite this competition, logistics more bearable,” should be more then we could this Germany, Hungary’s experts say there quantify its impact, the type of company, country. on activity in this that, depending created by the trading partner.” the additional coststo approximately the regulation amount Desirable Budapest employee for every In early 2015, in wage of one additional report published behind its neighbors. of 1,800,000 sqm turnover.” According to a a total HUF 2 billion in and Eyefortransport Hungary listed space, while Poland February by Prologis Real Estate Networkfifth in logistic-center and Czech Republic in-house logistics entitled “Logistics was ranked the Improvements and had 8,800,000 sqm Expansion”, Budapest center among not as according to a report logistics that Hungary is 4,800,000 sqm, most desirable Hungarian Investment Critics have argued its neighbors and that published by the (HIPA) last year. as CEE countries. business friendly of the Hungarian effect on the demand Promotion Agencychallenges facing this Zoltán Doór, president ANIKO FENYVESI this has had a direct providers, noted that There are three logistics service to Doór. “Firstly, Logistics Association, more for the country’s especially carmakers, country, according centers in Hungary problem might have to Germany and manufacturers, economy, but Doór said the major developments on With its proximity the Hungarian operating logistics of and the Balkans, are are essential to secondly, the main to do with a lack borders with Ukraine market in recent major manufacturers well positioned is not cheap and, centers are situated but none of the That means the foreign the Hungarian logistics up, however, and Hungary is geographicallyEast and West. European logistics looking between and this situation Hungarian firms. goods in years. Things are to facilitate trade environment could here must ship northeast of Hungary by 2020,” he said. encourage firms producing a more stable regulatory so they create a That situation should main the process. may become permanent business in this and out of the country, is historical: The certainly help alongperiod of stabilization a booming logistics outside “The third reason a sector is indeed 5% demand for logistics. providers are were established “This has been country, and the service Vienna, logistics centers up the sector. There more than “Local logistics Bratislava, Kosice, and for building breakthroughs in and storing important, contributing of Hungary, in by some estimates. responsible for moving and parts, and has been no major although two to Hungary’s GDP by the materials Arad and Temesvár.” administrative report published inventories, raw developments either, in the derived from these, One is the According to a Many have criticized of the logistics Statistical Office to the finished products trends can be identified: by developer state-run Central Hungarian logistics of the raw materials burdens as weakening the EKÁER of from the source instance Kft. in increase in intermodality in fall, the revenue he said. “The largest the sector here. For as Ekol Logistics HUF 1.085 trillion vehicles hauling the end consumer,” companies, such (free port) companies reached of 2015. originate from within system, which tracks effect last year, and is logistics demands Germany, into the Budapesti Szabadkikötő the second quarter logistics business and within this Kft., which is also valuegoods and came European Union, authorities collect been and Metrans Danubia But the domestic trading partner.” according meant to help tax have so much more, Hungary’s largest imports. There region could be doing developments and added taxes on countries in the Despite steady trailing to analysts. Other Hungary is still placed to facilitatesame growing demand, are similarly well and they have the East-West trade,

the sector is not

THE LOGISTICS BUSINESS

living up to its potential.

Hauling supplies

is Although the country well located for there East-West trade, is limited logisticsand space in Hungary the less activity in might sector than there be, experts say.

BUSINESS JOURNAL BUDAPEST

VOL. 24. NUMBER 06

MARCH 25, 2016 – APRIL 7, 2016

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

HUF 1,250 | €5 | $6 | £3.5

Bringing them to Hungary

NEWS

Logistics potential left unrealized

NEWS

Getting noticed on the French Riviera

‘Easy money’ from EU is over, Lázár warns

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SPECIAL REPORT

Hungary is well-situated to become a logistics hub facilitating trade between East and West, but thus far our CEE neighbors seem to be doing better at cashing in on the possibilities. 12

HIPA President Róbert Ésik is responsible for helping foreign firms invest here. After a record number of projects last year, he expects even more for 2016. 10

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EDITOR-IN-CHIEF: Tom Popper ASSOCIATE EDITOR: Robin Marshall DEPUTY EDITOR: Aniko Fenyvesi NEWS EDITOR: Christian Keszthelyi EDITORIAL STAFF:

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THE EDITOR SAYS

Predictable, transparent governance pays When Standard & Poor’s explained why they chose to keep this country’s debt rating in junk territory on March 19, they cited a host of risks, including concerns that have become a regular feature in credit assessment reports on Hungary: “a less predictable policymaking environment” and “increasing opaqueness around key institutions, such as the central bank”. Not only does the poor S&P rating mean Hungary must continue to pay more to borrow, it also suggests that outsiders will probably think carefully about investing here. But the government seems perfectly happy to ignore the constant drumbeat of warnings from neutral observers. This is exactly what the ruling Fidesz party did in early March, when it pushed through a law to classify information about how the Hungarian National Bank uses public funds to speculate in the property market. The legislation was arbitrary and unpredictable, and its goal was to increase opaqueness in the central bank. It was as if officials had already read S&P’s March 19 advice and decided to do the exact opposite. Fortunately, President János Áder refused to sign that law, making the obvious point that the public has a right to know how public funds are used. The legislation was sent to the Constitutional Court for a legal review, but that does not mean the law will be rejected. Other state spending has been declared classified, including the €12 billion deal to pay Russian energy firm Rosatom to upgrade Hungary’s sole nuclear power plant at Paks. S&P mentions this as the kind of huge project that can hurt Hungary’s outlook, and European Commission regulators have questioned the economic sense of a deal that they say would produce electricity at more than market cost. The government says the so-called Paks II project makes

sense, but we have no way of knowing for sure, because details about the deal are kept secret. We could mention a long list of information that the government has decided not to share, as well as scores of seemingly arbitrary laws that have been railroaded through Parliament. As soon as Fidesz took over governance of Hungary in 2010, it used its two-thirds majority in the legislature to rewrite the constitution at breakneck speed, without transparent debate, and it has maintained this approach to governance ever since. When people in this country complain about the way Fidesz pushes through seemingly ill-considered legislation, or its lack of transparency, the government may try to dismiss these critiques as opposition politics. But when outside credit ratings constantly bring up the same problem, it is harder to ignore. Transparent, predictable and fair governance is a prerequisite for a healthy competitive market. A lack of transparency is not only bad for democracy; it is also bad for business.

Tragedy in Brussels We share in the sorrow felt around the world because of the horrible March 22 terrorist attacks in Brussels. It was an attempt to wound freedom, understanding and progress. We hope that Europeans can heal together, and work to address this crisis in a spirit of understanding and tolerance. If we let fear and anger divide us, the terrorists have achieved their goal. Although it is hard to remain rational and compassionate in the face of such an attack, we know that Europe’s people and their leaders are capable of doing just that.

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Above, children look for painted eggs in a Budapest garden on Easter Day in 1935. At left is a tree in Nagyatád, ornamented with painted eggs in anticipation of the Easter holiday this year.

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Then and now

MTI/György Varga

2016. 03. 23. 20:08

1 News BBJ

macroscope

NEWS

Teachers defeat KLIK, but still plan strike

7

NEWS

Hungary eyes Google tax

4

Rate cut catches analysts by surprise The central bank had been saying that looser money was coming, but few expected it to come this quickly. The base lending rate was reduced to 1.2%, and the overnight rate was cut too.

Numbers to watch in the coming weeks A relatively calm period is expected in Hungarian macroeconomics: Employment and unemployment figures for the December-February timeframe will be released on March 29, to be followed by industrial producer prices for February a day later. April 1 will shed light on the balance of the general government sector in the fourth-quarter of 2015, and the second estimate of external trade in goods in January will also be published on the first day of April.

ZSÓFIA CZIFRA

Although the Monetary Policy Council of the National Bank of Hungary (MNB) had been timidly floating the idea of restarting another monetary easing cycle, the council surprised everyone with a 15 basis point cut on March 22 – a move that most analysts didn’t expect before summer. The council lowered the key rate to 1.2% from the previous 1.35%, and also narrowed the interest rate corridor, as a result of which the interest on the overnight central bank deposit was cut back to -0.05%, while the interest on the overnight collateralized loan was lowered to 1.45%, down from 2.1%. The Monetary Council said it had decided on the rate cut in the light of the latest inflation forecasts. The central bank revised the inflation outlook as expected: Sharply lower for 2016 (to 0.3% from 1.7%) and less so for 2017 (to 2.4% from 2.6%). “The sustainable achievement of the inflation target has made it necessary to implement a comprehensive easing of monetary conditions,” the MPC said in a statement following the meeting. The statement continues that the council “remains ready to use every instrument at its disposal to contain second-round inflationary effects” and that rate cuts will continue as long as monetary conditions are consistent with the sustainable achievement of the inflation target. The start of another easing cycle has been in the air for a while, Márton Nagy, deputy governor of the MNB told journalists a day after the rate setting meeting. Only the choice of tool had been a subject of hesitation. “We used nonconventional tools for an extended period of time, but when looking at the two main tools, the ‘Funding for Growth Program’ is about to be ended, and the effectiveness of the MNB’s self-financing program has gradually decreased,” Nagy said. “Our inflation forecast remains unchanged: The MNB thinks that the inflation target will only be met in the first half of 2018,” Nagy explained.

No one saw that coming “The Hungarian central bank played a master stroke today, lowering inflation forecasts sharply and cutting rates in

BBJ_2406_news.indd 3

and the Monetary Policy Council should stick to a 15 basis point move. If so, this means the base rate will be cut back to 1.05% in April. Just a little smaller: György Matolcsy, governor of the National Bank of Hungary, speaking at a Hungarian Chamber of Commerce event earlier this month. His bank surprised the market with its March 22 rate cut. (Photo: MTI/Szilárd Koszticsák)

“The Hungarian central bank played a master stroke today, lowering inflation forecasts sharply and cutting rates in response to inflation surprises having overtaken it over the past quarter.” response to inflation surprises having overtaken it over the past quarter,” wrote Commerzbank analyst Tatha Ghose in a press release after the move. “Having earlier signaled that further monetary easing would be done mainly using unconventional tools, it would have been only too easy for the CenBank to have got ‘stuck in’ with such a view – instead, the CB changed its signaling quite quickly, and then followed up with actual rate cuts even before the consensus had fully appreciated that rate cuts were coming – this will likely also boost the efficacy of the policy. But, crucially, the CB averted falling seriously behind the curve. We don’t always see central banks reacting this promptly,” the Commerzbank analysts said. The move was unexpected for others as well. “The surprise decision by the Hungarian MPC to cut its three-month deposit rate by 15bp to 1.20% probably marks the start of a modest easing cycle. As things stand, we expect a

further 20bp or so of cuts in the coming months, bringing the policy rate to 1% by year-end,” commented William Jackson, an analyst with London-based Capital Economics. “Today’s decision was probably triggered by a few factors including additional policy stimulus by the ECB, likely downwards revisions to the national bank’s inflation forecasts (due to be released in this month’s ‘Inflation Report’), and the weaker-than-expected activity and inflation data released over the past month. Looking ahead, we think the economy is likely to slow a little and that inflation will edge lower in the next few months. And against this backdrop, the easing cycle probably has further to run,” Jackson stated. The decision of the central bank surprised market players, said Equilor Zrt. in a note released after the rate setting meeting. “We expect that the MNB, by 10-15 basis point steps, will lower the key rate to around 1% until this fall,” Equilor analysts explained. Citigroup analyst Eszter Gárgyán also expects further rate cuts. She says more monetary loosening may be needed to bring inflation back on target. It suggests that rate cuts are likely to continue – most likely in 15bp steps – in the coming months, unless monetary conditions are eased by weaker FX or core CPI measures show unexpected acceleration, the analyst said. The deputy governor of the MNB said the next reduction of the base rate would need to take place as soon as next month

No outlook change by S&P Mostly in line with expectations, Standard & Poor’s affirmed its “BB+/B” ratings on Hungary on March 18, also leaving the outlook stable. While the rating agency acknowledged that Hungary’s external vulnerabilities have diminished, it emphasized that policy uncertainties nevertheless persist and “could represent fiscal risks to Hungary’s public sector, which remains more indebted than those of regional peers”, hence the affirmation of Hungary’s long- and short-term foreign and local currency sovereign credit ratings. The rating agency also said the stable outlook balances its “assessment of Hungary’s declining external vulnerabilities and steady headline fiscal performance against its still-high general government indebtedness, lesspredictable policymaking, and weak underlying growth potential”. The ratings agency also mentioned the country’s low potential growth among the reasons behind its decision, and repeatedly criticized the MNB. “Increasing opaqueness around key institutions such as the central bank reduces our visibility of future risks both in and outside the financial sector,” S&P wrote in its accompanying note. This remark clearly refers to a government attempt at hiding more than HUF 200 billion worth of central bank profits from the public via a recent law amendment. Hungary already has a positive outlook with Fitch Rating and Moody’s Investments Service, which makes an upgrade by the end of this year likely, and it strengthens the government’s hope for Hungary getting back to investment grade later this year.

2016. 03. 23. 20:08

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04 News

Budapest Business Journal | March 25 – April 7, 2016

NEWS IN BRIEF Government plans to expand e-till system, says EcoMin Varga The Hungarian government is planning to expand the mandatory use of cash registers directly connected to the Hungarian Tax and Customs Authority (NAV) as of September, National Economy Minister Mihály Varga said on March 22. Businesses required to be connected to NAV through the electronic tills would include automotive and motorcycle repair shops and replacement parts retail stores, plastic surgery clinics, dance clubs, dry cleaners and those offering personal training services, according to Hungarian news agency MTI. From January 1, 2017 currency exchange offices will also be required to install such tills, Varga added while speaking at a press conference. The minister said the expansion could result in the number of electronic tills growing by 30,000 and the government could see its revenue rise by HUF 20-30 billion. Hungary made the use of electronic tills connected to the tax office mandatory for a broad range of businesses in 2014, as part of measures to crack down on tax evasion. Varga said talks are still ongoing with taxi drivers. The government would like to include the tills in the new taxi payment system by the start of 2017, but online tills may not be necessary as the tax office is able to receive relevant revenue information directly from taxi companies. The government is considering if those affected by the changes should receive subsidies for installing electronic tills, as circumstances are now different from those in 2014 following increased competition between till manufacturers, he added.

KSH: Retail sales up 1.7% in January Retail sales in Hungary were up 1.7% in January and rose 2.2% adjusted for calendar effects as compared to the same month a year earlier, according to a first release of data published by the Central Statistical Office (KSH) on March 23. According to KSH, sales in the national retail trade network and in mail order and internet retailing were HUF 637 billion at current prices, following the 2.2% increase. In food shops, the volume of sales adjusted for calendar effects was down 1.4% in January, with the high base effect playing a significant role in the change. The volume of sales increased by 6% in non-food retail shops and by 4.4% in automotive fuel retailing. The first estimate of retail trade figures for February will be published by KSH on April 5.

BBJ_2406_news.indd 4

OTP expects clients to request HUF 50 bln in home development loans this year OTP Bank reviewed 4,500 financing applications for home construction for investment purposes in the last two and a half months and, based on this, the bank expects clients will require HUF 40-50 billion in credit for property developments this year, OTPʼs vice-CEO László Wolf said on March 22. OTP analysts see demand for new housing growing as last year 4,100 homes were sold in Budapest, several times the average sales figure of previous years, said Wolf. With the government revamping its home purchase subsidy program for families and reducing the VAT rate for new home construction, home market supply and demand could pick up in the second half of 2017, creating an attractive investment opportunity in property development for companies, he added.

Volán bus drivers to strike March 28-April 1

California here we come

After failing to receive a wage increase, employees of state-owned bus company Volán are planning a five-day partial strike that would halt 20-25% of the bus routes in the countryside between March 28-April 1, regional news portal alon.hu reported on March 17. Zoltán Baranyai, chairman of the Road Transport Union said that Volán bus drivers have requested a 3% wage increase and HUF 5,000 a month in fringe benefits, according to online news portal index.hu. Volán companies are the main bus service providers outside of Budapest and other urban areas in Hungary. Unions representing Volán employees have been in negotiations with the management of Volán and its proprietors (Hungarian National Asset Management Inc.) for several weeks, but have failed to make any progress on the matter, index.hu reported. As a result, union representatives announced yesterday afternoon that employees will not wait any longer and will launch a five-day strike to force the issue, index.hu added.

Levente Magyar, state secretary of Hungary’s Ministry of Foreign Affairs and Trade (KKM) meets Teresa O’Neill, vice mayor of Santa Clara California, in San Francisco on March 22, for the opening of a local representation of Hungary. The representation will be responsible for promoting Hungary to businesses in California. (Photo: MTI/KKM/Márton Kovács)

Austria could seal off Hungary with a fence Austria is considering building a fence on its border with Hungary to limit human trafficking from this country, Johanna Mikl-Leitner, Austriaʼs interior minister, said on March 21, according to Hungarian news agency MTI. In an interview with an Austrian public television channel, the minister confirmed that the borders of Austria will still be protected, and if necessary a fence could be built,

while more police and soldiers could be deployed at the borders, MTI added. Mikl-Leitner said that Austria continues to receive 100 asylum requests every day, and if this tendency remains, it could reach its intake limit of 37,500 by the fall. The minister said further measures could be taken in the future to alleviate these concerns, MTI reported.

Illegal migration increases terrorism in Europe, claims Szijjártó

There is no question that the thousands of illegal migrants arriving on the continent on a daily basis without any sort of control have increased the terror threat in Europe, Hungary’s Minister of Foreign Affairs and Trade Péter Szijjártó said on March 22, commenting on the explosions that took place in Brussels that morning, according to an announcement by the ministry. Szijjártó stressed that the Hungarian government is concerned about the safety of Hungarian citizens and all the necessary measures taken by the government to date have been in support of this aim, the press statement said. He added that reports had surfaced on two Hungarian casualties, whose injuries fortunately are not serious. The foreign ministry said in its statement

that it has been maintaining contact with them. Belgian authorities will provide further information on the condition of casualties to the respective embassies.

Hungary eyes Facebook, Google tax The national economy ministry is currently working on a proposal to tax multinational internet giants such as Google and Facebook, to help defend the interests of domestic internet firms, according to reports. The ministry is working on innovative tax methods to prevent Hungarian internet firms facing unfair competition against global internet firms, online daily vg.hu reported. The ministry says it is planning the measure as global companies have big revenues with their internet-based services, while they do not contribute to infrastructure development and their taxation in Hungary is minimal, the daily reported. No further details have been published by the ministry, however, under a government decree National Economy Minister Mihály Varga is required to put together a report on global internet changes to crack down on tax evasion by June 30, Hungarian online daily hvg.hu reported.

2016. 03. 23. 20:08

News 05

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Budapest Business Journal | March 25 – April 7, 2016

Hungary’s general government runs HUF 14.8 bln surplus at end-February

Hungary’s general government balance, excluding local councils, had a cash flowbased surplus of HUF 14.8 billion at the end of February, the National Economy Ministry said, confirming the figure in a detailed second reading, Hungarian news agency MTI reported on March 21. The central budget ran a HUF 63.7 bln deficit for the period, while the social security funds and the separate state funds had surpluses of HUF 36.3 bln and HUF 42.2 bln, respectively. In February alone, the general government had a HUF 77.4 bln deficit, well under the HUF 256.9 bln deficit in the same month a year earlier. The ministry attributed the big difference to higher tax revenue and lower expenditures on co-financing for European Union-funded projects. The general government balance has not stood in the black at the end of February for more than 15 years, the ministry said. The government targets a HUF 761.6 bln deficit for the full year.

Hungarians buy more bricks; construction boost anticipated In the first few months of the year Hungarians have purchased a record number of bricks, Aladár Kató, the president of the Hungarian Brick Association (Mátész), told Hungarian daily Magyar Idők on March 21. The association noted that construction material manufacturers have been prepared for increased demand, so no lack of products should be experienced. The president added that steps by the Hungarian government to encourage home building could have a beneficial effect on the construction industry. Kató added that he expects a slight price increase in building materials, driven by increasing demand, according to Magyar Idők. In its report from last week, Hungary’s Central Statistical Office (KSH) noted that the volume of Hungary’s construction output was down 20.1% in January as compared to the same month a year earlier.

Hungary expects two credit rating upgrades this year The Hungarian government foresees at least two of the three big ratings agencies issuing upgrades by the end of this year, Hungary’s National Economy Ministry (NGM) said on March 18 after Standard & Poor’s announced it had kept Hungarian debt below investment grade. “The government expects at least two of the three big ratings agencies to put Hungary into the investment-grade category in 2016,” the ministry said in a statement issued on the evening of March 18, according to Hungarian news agency MTI. The ministry said S&P’s affirmation of the rating was expected. The NGM stressed in the statement that the ratings agency had acknowledged Hungary’s good economic performance, reduced external vulnerability and improved fiscal balance, MTI reported. Earlier in March, after Moody’s left Hungary’s credit rating in “junk” territory, one step below investment grade, the ministry said the government expected at least two upgrades this year.

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Irish and proud in Budapest A St. Patrick’s parade makes its way down Budapest’s Nagymező utca on March 20. The parade, organized by expats, was held on a weekend, three days after the saint’s official day. Locals joined the march, which passed through the heart of the capital. (Photo: MTI/Zoltán Balogh)

Government help needed to save dairy sector, warns Lázár The Hungarian government is working on a detailed program to help the country’s dairy industry, and if it does not help, milk production in the country could come to a halt, Cabinet Chief János Lázár said on March 17 at his weekly press conference. The dropping price of 2.8% fat milk in the past year left dozens of dairy farmers feeling uneasy, while Hungarian consumers have opted for cheaper imported milk, online daily index.hu reported. The average price last January was HUF 245 per liter; however, this figure had decreased to HUF 222 per liter by the end of the year. Importing milk from Northern and Western Europe has become much cheaper compared to buying domestically. This trend will eventually lead to the downfall of all dairy producers in Hungary, said Zoltán Harcz, Executive Director of the Dairy Board. Hungarian dairy farmers voiced their concern regarding the high percentage of import dairy products in the country, and were said to be planning a demonstration against major importers. The abolition of EU quotas, the Russian embargo, and tax evaders all played a major role in a massive decrease in domestic milk consumption, according to index.hu. However, the tendency can be seen internationally as well; within the EU and elsewhere, the price of milk has fallen across the board. Minister of Agriculture Sándor Fazekas held a press conference at a local Tesco store, where he vouched that the government would launch a milk ad campaign with a budget of HUF

420 million, index.hu said. Furthermore, during a meeting at the beginning of March, the government discussed plans to create a new business strategy for the dairy industry, sources told index.hu.

State aid saved water companies last year State aid provided to Hungarian stateowned water utility providers saved the companies from booking almost HUF 10 billion in accumulated losses over last year, according to a report published by Hungarian daily Népszabadság on March 22. According to János Fónagy,

state secretary at the National Economy Ministry, who responded to a query by opposition politician Szabolcs Szabó, of the Együtt (Together) party, the losses were chiefly caused by the government’s utility fee reduction and taxes levied on the sector, the daily reported. Népszabadság added, based on the state secretary’s answer, that Hungarian water companies asked for and received state aid amounting to more than their operational losses in general, however, Együtt politician Viktor Szigetváry says it is unclear how these funds were transferred to the companies, as the EU prohibits indirect aid from the state.

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Budapest Business Journal | March 25 – April 7, 2016

Lázár: Days of easy EU funds on the wane The cabinet chief warned that Hungary will slowly lose the crutch that supported last yearʼs impressive growth. CHRISTIAN KESZTHELYI

The days when European Union money could prop up the economy and drive growth will slowly come to an end, Cabinet Chief János Lázár told a March 10 conference about EU funds in Budapest. When deciding what to do with the EU funding that is coming in now, officials will be focusing more on sustainability projects, and those that can give the most bounce to the economy, he told the audience of business people and economists. But the simple fact that there will be less EU funds to pump into the Hungarian economy means that a mild slowing in growth can be expected, Lázár said. Last year was an exceptional one for EU funds in Hungary. The country was able to spend HUF 2 trillion, thereby helping the economy achieve 2.9% GDP growth. In the current cycle of 20142020, there is less EU funding than there was in the previous financing cycle of 2007-2013, Lázár said. “The period of easy money has passed,” warned Lázár, who said he anticipates some industries will be hurt in the future, as support for agricultural and infrastructure projects could cease to exist. Speaking at the same conference, just before Lázár, András Balatoni, Chief Analyst at ING Bank Hungary, said it will be hard for Hungary to maintain the same growth rate in the near future. He said we should expect “slower growth in the next one or two quarters as compared to 2015 and 2016, and hopefully due to EU funding, the central bank’s activities and fiscal support the economy could get back to around 3% in 2017.” Lázár noted that things will be even harder in the 2020 funding period, when Hungary is expected to see even less EU funding.

Cabinet Chief János Lázár speaking at the conference. (Photo: kormány.hu)

“For now it is important to use all the sources as best we can, as we do not know what kind of funds will be available after 2020,” he said. “It is an important responsibility to keep economic development on track after available EU funds run out.” Therefore, Lázár said, those projects that do get funded will need to pay back in jobs and development. “We are expecting real economic productivity,” the cabinet chief said.

Past efficiency In the last couple of years, the government gave much of the EU funding for development as grants to private firms that were building or expanding production halls. It said this kind of support was meant to help fund the private growth that would create jobs. The government was also remarkably efficient when it came to making sure

“For now it is important to use all the sources as best we can, as we do not know what kind of funds will be available after 2020.” that it got its share of funding. In the 2007-2013 European Union financial cycle, Hungary was able to call down HUF 9.2 tln, 108% of the available money for funding, Lázár said. He explained that modifications made to the EU funding system allowed Hungary to apply for 8% more than it was originally allotted. During the previous cycle a total of 70,560 projects were funded, according to Lázár. In the period of 2007-2010 HUF 904 bln was called down, while in 2013 it was HUF 1.7 tln, in 2014 HUF 1.85 tln and in 2015 more than HUF 2 tln was called down.

To give an idea of how well Hungary did at using EU money, Lázár noted that, while this country obtained more funds then were originally available, Slovakia left €1.2 billion unused, Czech Republic left €1 bln unused and Romania was only able to call down 74% of the EU funds made available for that country. Hungarian officials are ready to match their past efficiency, and they have already made plans for spending the funds, the cabinet chief said. “We know what we want to spend the available funds on, and the current money available is clear, but the situation coming after 2020 is still uncertain,” Lázár said. He added that he was convinced that “some kind of funding” would be available after the current cycle, however, he believes that this will be more specific, it would be more difficult to call down and there will be no direct funding for developing the economy as Hungary has been doing thus far.

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Budapest Business Journal | March 25 – April 7, 2016

Despite concessions, teachers’ strike likely The government has promised to close its unpopular centralized authority running schools in Hungary by September, but teachers’ unions says they are still not satisfied.

over education would not end, and the amount of autonomy that would actually be granted to schools is still unclear. She said that as long as central authorities are determining the curriculum, there is still a problem. “It is of vital importance that we decrease the burden on students and that the national curriculum is revised,” Galló warned. “There is a need for legal guarantees that the government will keep its promises.”

Strike likely

CHRISTIAN KESZHELYI

With its March 22 promise to dismantle the centralized school authority and give more autonomy to teachers, the government was apparently acquiescing to the main demands of the tens of thousands of demonstrators who filled the streets on March 15, but teachers say they are not yet satisfied – and at the time of writing some were still planning a March 30 strike. László Palkovics, state secretary of the Ministry of Human Capacities (EMMI) responsible for education, announced on March 22 that new legislation on governance of the school system would be written this spring and put in place by September. One goal of the legislation would be to eliminate the Klebelsberg Institution Maintenance Center (KLIK), which was a source of tension between teachers and the government. Teachers have complained that KLIK officials forced them to teach a politicized and unwieldy curriculum,

At the teachers’ unions press conference in Budapest on March 23 are, from left: Gabriella Hajnal, president of the Trade Union for Leaders of Education; József Tóth, president of the Trade Union for Hungarian Public Education and Specialized Training; and Mrs. István Galló, president of teachers’ union PSZ. (Photo: MTI/Zoltán Máthé) with unnecessary classes and a focus on memorization over analytical thinking. Educators, and textbook publishers, resented the way KLIK would only allow use of a small list of approved textbooks. KLIK, which was created by the current government in 2013, was also apparently out of money, and schools were going without supplies. Several weeks of demonstrations and complaints about KLIK culminated in a mass protest of tens of thousands of demonstrators outside the Parliament building on March 15.

On March 23, the day after the state secretary announced that KLIK would be dissolved and that principals would have more autonomy over running schools, members of the teachers’ union (PSZ) called a press conference in Budapest to say that this was not enough. They said that Palkovics’s surprise announcement addressed only one of the 25 points they have raised with the government. Furthermore, PSZ head Mrs. István Galló maintained that, under the current plan, KLIK would simply be replaced by several smaller government bodies, state control

At the March 23 press conference, Mrs. Galló said that, although there has been talk of a strike, her union is currently neither encouraging nor discouraging such action, which would technically be illegal. While striking may be against the law, a group of educators say that opting for civil disobedience is their best means of action. That group is lead by István Pukli, principal of the Teleki Blanka secondary school. During the March 15 demonstration, Pukli called for teachers to hold a one-hour strike on March 30, and many teachers have expressed support for the plan. Roughly 1,400 people said on Facebook that they would join or support a Tanítanék strike on March 30, from 8-9 a.m. If teachers do go on that one-hour strike, PSZ union chief Galló said it was important that no students were left unattended during that time. She added that, while the PSZ has not officially endorsed this strike, it does not rule out the idea of a future strike if the government does not meet its demands.

EXPERT OPINION

EPSON OFFERS SOLUTIONS FOR SPECIAL PRINTING NEEDS Miklós Fábián National Sales Manager EPSON HUNGARY

The area of logistics has a growing demand for specialized, modern printing technology. We asked Miklós Fábián, National Sales Manager at Epson Hungary about trends and solutions. What kind of printing challenges do logistics companies face? Epson developed and introduced matrix printers, which play an important role

in providing multipart delivery notes and waybills for logistics companies. Nowadays, printing bills and receipts have different regulations and the printing industry has developed new technologies facilitating to print pictures, logos and other nontextual elements. Wrapping and notation techniques require new solutions as well, including production of self-adhesive labels that are produced directly from process control system databases, even among shelves or in the outdoor vehicle park.

Application of several different colors occurs often as well. Not only the contents but the implementation of label printing is also important – including the durability of these labels or their resistance to environmental effects (e.g. in case of storing and transporting frozen goods or chemical products). Decoration of transport vehicles is also a challenge for printing. Epson’s devices are pioneers in up-todate label printing, as well as in foil coating and the production of printed vehicle canopies.

as well, to print self-adhesive labels, both in monochrome and technicolor. We recommend our high-performance printers for the production of decorations and large-sized notations. Storing and transportation processes are easier with our mobile printers, which can also be transported in a vehicle or can even be attached to the operator’s work uniform. These devices work with high precision and reliability, and also use the most environmentally friendly techniques. Epson finds it important to invest in the transformation of printing How did printing expectations What kind of solutions do you technology, in order to develop change? offer for logistics companies? economical and environmentally Automatic processes require the We offer a wide range of devices friendly devices that fit future printing of high resolution labels. for office and industrial use challenges. NOTE: ALL ARTICLES MARKED EXPERT OPINION ARE PAID PROMOTIONAL CONTENT FOR WHICH THE BUDAPEST BUSINESS JOURNAL DOES NOT TAKE RESPONSIBILITY

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2016. 03. 23. 20:08

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COMPANY NEWS

Report: Audi Hungaria employees could go on strike A potential strike is looming at the Hungarian plant of German automaker Audi in Győr, as a result of a disagreement between the management and the Independent Trade Union of Audi Hungaria (AHFSZ) over wage increases, Hungarian online daily index. hu reported on March 22. The union has reportedly established a strike committee. AHFSZ asked for at least a uniform HUF 15,000 rise in basic wages, retroactive to January, the online daily reported. The union also asked for a revision to the current salary system, and called for the creation of a “working group” to decide on a new wage system, index.hu added. Audiʼs executive director of personal affairs was informed of the establishment of the strike committee. For the moment, it is unknown when and under what circumstances a work stoppage would take place, index.hu noted.

No offers for Malév IATA receivables No offers were made for almost $13 million of former national carrier Malév Hungarian Airlinesʼ receivables from the International Air Transport Association (IATA), according to the liquidator, Hungarian news agency MTI reported on March 21. The $12.85 mln in receivables are for revenue from Malévʼs last ticket sales, before it went bust in February of 2012, the National Reorganization Nonprofit Company said, responding to a query by MTI. The money held by IATA is from tickets bought by travelers at travel agents. It is IATAʼs practice to return the money to travel agents within 60 days to refund travelers if ADVERTISEMENT

reported. The company produces a kit for detecting mycotoxin contamination in food, among many other products, MTI said. The company saw revenue of a little more than HUF 400 million in 2014, MTI reported, citing public records.

Hyperloop vacuum rail would put Vienna 20 minutes away an airline goes bust. However, Russia’s Vnesheconombank, Malévʼs biggest creditor, contested that practice in court, and the issue has remained unresolved since. The receivables are the last of Malévʼs assets to be liquidated. The liquidator will announce their sale again, under unchanged conditions.

Hungarian LED firm inks €2.2 mln contract with Sudan

Hungarian LED light company Bereg LED has signed a €2.2 million contract with the government of Sudan to deliver solarpowered street lighting to the country, Hungary’s Ministry of Foreign Affairs and Trade told Hungarian news agency MTI on March 16. The local office of the Hungarian Trading House (MNKH) in Sudan, as well as the Hungarian embassy in Cairo, provided support for the company in realizing the contract, MTI reported. Bereg LEDʼs patented lighting technology will be applied on approximately 20 km of road in Al Fashir, the capital of North Darfur. The ministry believes the deal could pave the way for more businesses in Sudan for Bereg LED, MTI added.

Danish FOSS buys Hungarian peer FOSS Analytical, a Danish manufacturer of food analysis and quality control systems, has purchased local biotech company Soft Flow Hungary, the companies told Hungarian news agency MTI on March 16, without disclosing the cost of the acquisition. Soft Flow began operations in 1992, according to the company’s website, and currently employs a staff of 22, MTI

A private firm said on March 10 it is planning a super-fast train inside a vacuum tube, called a hyperloop, which could make the three-hour trip to Vienna in roughly 20 minutes. The Budapest-BratislavaVienna line would probably be the second such completed in the world and the first in Europe. Hyperloop Transportation Technologies (HTT) announced yesterday that it had signed a declaration of intent with the Slovak government to bring the super rail line to Central Europe. The train would travel at speeds of up to 1,220 km/h, making the journey from Bratislava to Budapest in 10 minutes. It would go from Bratislava to Vienna in only eight minutes, the company said. Elon Musk, president of the electronic carmaker Tesla, had presented his vision for a super fast, vacuum-filled, tube-based, transportation system in 2013. HTT is now planning a five-mile test line in California’s Quay Valley, which could be ready to run by 2018, origo.hu reported.

Daimler to invest €250 mln at Hungarian plant German carmaker Daimler will invest €250 million on technological developments and capacity expansion at its plant in Kecskemét, according to a press release issued by Mercedes-Benz Manufacturing Hungary on March 22. The investment is to be completed in 2018. The new chassis production hall will produce nextgeneration compact car bodies with the help of state-of-the-art technology and will bring the firm’s total investment at the Kecskemét plant to more than €1.3 billion, the press release noted. “The investment is a clear sign of the firm’s commitment to Kecskemét and it will ensure the necessary conditions for the successful production of our nextgeneration compact cars. This decision supports Mercedes-Benz’s long-term plans in Hungary,” said Christian Wolff, the director of Mercedes-Benz Manufacturing Hungary Kft. The Kecskemét plant was inaugurated in the spring of 2012 and launched operations through the manufacturing of compact B-class models, adding the CLA coupe to its product line in 2013 and the CLA Shooting Brake in 2015, Hungarian news agency MTI reported.

Intel Corporation’s Hungarian co-founder dies at 79 Andrew S. Grove (Gróf András), the legendary co-founder and former CEO of Intel Corp. passed away on March 21 at the age of 79, according to reports. He has been referred to by many as the man who transformed Intel into one of the most successful high-

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tech companies. Intel CEO Brian Cranach tweeted: “We stand on the shoulders of giants in our work – none bigger than Andy Grove (1936-2016). You’ll be greatly missed.” Born in 1936 in Budapest, Hungary, Grove left the country for the United States following the 1956 Uprising, and pursued a degree in chemical engineering. In 1968, he founded Intel Corporation with two companions, and the company went on to become one of the world’s largest manufacturers of semiconductors, Hungarian online daily index.hu reported. Grove acted as president of Intel for more than two decades, before becoming the CEO until 2015 when he took over as Chairman of the Board. He remained with the company, albeit merely acting as a senior consultant, according to reports. Among many others, Apple CEO Tim Cook tweeted “Andy Grove was one of the giants of the technology world. He loved our country and epitomized America at its best. Rest in peace.” Microsoft’s Satya Nadella tweeted “Saddened by the passing of Andy Grove… a pioneer, a leader and a great teacher.”

PannErgy sells stake in geothermal heat reseller for HUF 250 mln

Geothermal energy company PannErgy on March 21 announced the sale of an indirectly owned 40% stake in GeoWendung, a company that resells heat from its geothermal wells in Miskolc, to a strategic investor for its HUF 250 million book value, Hungarian news agency MTI reported. The sale is part of a portfolio clean up of non-core activities, PannErgy said. The transaction was carried out with the sale of CSRG Energy, which owns the 40% GeoWendung stake. CSRG Energy was sold by PannErgy Geothermal Power Plants, in which PannErgy holds a 93% stake.

MVM Partner expands business to gas market

MVM Partner, a unit of state-owned Hungarian Electricity Works (MVM) Group, is expanding its current business of supplying electricity to clients to include gas as well, the company said on March 21, according to Hungarian news agency MTI. The company will start signing gas supply contracts with prospective clients for a 12-month period beginning on October 1. “We are seeing from current market trends that an energy trading firm can only stand firmly on its feet if it is present not only on the electricity market but also the gas market,” MVM Partner CEO Attila Bally said. MVM Partner will mainly target medium- and large-sized companies. ADVERTISEMENT FLAT TO RENT from owner in centrally located Ráday Street (IX. district), 3 minutes walking distance from Kálvin Square. Historical building in good condition. 80 m2 elegant, luminous apartment fully renovated in 2015. Living room, two bedrooms, two bathrooms (bath + shower), kitchen equipped, huge built-in wardrobes. Not furnished. Parking in the courtyard included. 3-storey building, 2nd (top) floor. 900 euros/month + charges. Please call: +36 20 392 03 44

2016. 03. 23. 20:08

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2 Business

Budapest Business Journal | March 25 – April 7, 2016

WHO'S NEWS

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

Telenor Hungary appoints new CFO

Nakul Sehgal has joined Telenor Hungary’s leadership team as chief financial officer after holding several senior management positions in finance at Telenor’s Indian business unit prior to moving to Hungary. A qualified chartered accountant, Sehgal began his career at the local branches of the consulting firms EY and PwC in India, and also worked on international projects in Canada. He joined Telenor India in 2010, where he was responsible for financial reporting, accounting, risk management and taxation, and more recently as head of business strategy and performance management. Sehgal succeeds Bjørn Harald Brodersen who has left Hungary to head a global project at the Telenor Group. “It is a pleasure for me to work for Telenor Hungary, a company that has been at the forefront of innovation in recent years with its superfast Hipernet and pioneering digital services. I know that I am joining a team focused on customers’ future needs in a very competitive market environment and I will do my best to contribute with my experience to the continuous development of this company,” said Sehgal.

Oriana welcomes new operative director Richárd Basa was appointed operative director at Hungarian business application developer Oriana, with effect from February 1. Basa, now also one of the owners of the firm, has multinational experience in the field of business development and IT sales, and will be supporting the management’s efforts to develop business operations in Hungary. “I have known Richárd for 20 years and followed his career path. I am extremely happy that we have become business partners. His professional past and new way of thinking supports the further development of the company,” Oriana CEO Péter Kovács said. “My aim is to make more partners and clients realize and experience the advantages among the competition that Oriana’s business model and unique methodology offers,” Basa said.

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NNG welcomes new director of product management

Tamás Szabó was appointed director of product management at Hungarianfounded navigation software company NNG, joining the company from German competitor Here. Szabó, who has more than a decade of experience in software product and sales development, will be responsible for NNG’s product strategy, product management, market analyses, product design, and for establishing profitable business models. Szabó previously worked at Nokia, participating in the introduction of the company’s first internet phone in the United States, Finland and Hungary, and later worked on the Nokia Provisioning Suite solution’s market introduction and product strategy, a press statement said. “My main field of expertise is introducing new solutions to the market. At NNG I will consider the maximization of customer satisfaction as my chief aim,” Szabó said.

Trenkwalder appoints head of new business unit Jacques de Jager was appointed head of staffing and headhunting firm Trenkwalder’s recently launched executive search business, the Hungarian subsidiary of the company announced. Prior to joining Trenkwalder, Jacques de Jager spent ten years with SpenglerFox, an international executive search firm, during which time he participated in the establishment of its professional and financial services practice and its EMEA board solutions practice, according to the press statement. He specialized in board level talent acquisitions; his clientele included some of the leading private equity and venture capital investors as well as multinational banks and Big Four advisory firms operating across CEE. Before entering the executive search industry, he spent 26 years in the banking sector, mainly in treasury, global financial markets and correspondent banking. During the latter part of his banking career he became increasingly involved in major restructuring and turnaround projects with successfully closed mandates in South Africa, Namibia, Swaziland, Mozambique, Malawi and Zambia.

CEU BUSINESS SCHOOL

Used cars in Hungary: Lessons in durable goods Paul Lacourbe Professor CEU BUSINESS SCHOOL

German automakers can protect their market for new vehicles while feeding Hungary’s demand for second-hand cars.

Since new products are needed as the source of used products, the additional demand from the foreign market for pre-owned cars provides a stimulus for new product sales. If managed properly, the cross-border export of used cars can be a very effective tool to improve operations.

then exported outside Germany to the emerging markets of Eastern Europe, such as Hungary, through the program BMW Premium Selection (www. Through a planned program to ship bmw.hu/premiumselection‎ ). Similar used automobiles to Hungary, German schemes also exist for other German carmakers are able to increase demand OEMs, such as Weltauto for the for new cars in their home market Volkswagen group (Audi, VW, Skoda) while feeding the need for affordable and Jahreswagen for Mercedes-Benz. vehicles in Hungary. The cross-border trade of secondAs one of the countries worst hit by hand cars has important implications the recent financial crisis, Hungary for management. First, removing used saw new car sales plummet from products from the home market makes 153,346 in 2008 to 60,189 in 2009 cannibalization between new and used and further to 43,396 in 2010. For products less of a concern. Second, such a small country with only ten since new products are needed as the million people, this sharp decline has source of used products, the additional immediate and visible consequences demand from the foreign market for on the country’s fleet: The average pre-owned cars provides a stimulus age of cars in Hungary has increased for new product sales. If managed from 10.45 years in 2008 to 12.43 in properly, the cross-border export of 2012, and there is a sharp decline in used cars can be a very effective tool the number of domestic secondhand to improve operations. cars available for sale on the used car In durable goods industries, market as people hold onto their autos managing the cannibalization between for longer. new products and used products is Simultaneously, the demand for used always a challenge. Some companies cars in Hungary has increased since go as far as destroying used products fewer people can now afford to buy new to avoid cannibalization, causing huge cars as the economy slowly recovers. losses to the company and to society. The increase in demand and fall in According to my analysis with modeling, the domestic supply of used cars have given mathematical rise to the import of secondhand cars presence of an international market from foreign countries into Hungary, may impact management practices which increased from 17,000 in 2010 concerning durable goods in a to 70,000 in 2013. Unsurprisingly, the very significant way. The presence majority of them are from Germany, of a strong market for pre-owned a prosperous neighbor and also the cars stimulates production of new leading automobile manufacturer and products. A better connection for biggest car market in Europe. used cars to reach the foreign markets German original equipment stimulates domestic production of manufacturers (OEMs) have taken a new products. High quality secondvery proactive role in this cross-border hand autos reinforce the stimulating transaction of pre-owned cars. For effect of the international market. The example, BMW leases new cars to its recent experience with used German employees and car rental companies car imports into Hungary provides in Germany; the leased cars with low valuable lessons for the durable goods mileage (less than 15,000 km) and industry in general regarding how to young age (less than one year) are best manage its product portfolio.

2016. 03. 23. 20:08

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2 Business

Budapest Business Journal | March 25 – April 7, 2016

HIPA keeps foreign investments rolling in

Róbert Ésik, president of the Hungarian Investment Promotion Agency (HIPA), talks to the Budapest Business Journal about how his agency helps pull in investment and its highly successful 2015. He also discusses plans for 2016, which include pushing more investments to the countryside and creating even more high-value jobs. ROBIN MARSHALL

Established by the government to provide professional assistance to foreign companies looking to invest in the country, the Hungarian Investment Promotion Agency (HIPA) works with a broad range of firms. Last year the agency set records as it worked to build up foreign direct investment. HIPA President Róbert Ésik shares details.

HIPA had a record year in 2015. What were the key figures? A: We closed 67 projects, creating 12,995 jobs and with a combined value of €1.4 billion. That’s a 20% increase in terms of new jobs on the previous year, and a record in terms of the number of projects. When we look at where companies come from, Germany was number one, the United States was number two and, for the first time, Hungary was in the top three. The three after that were India, China and Japan, which shows the potential in Asia, and that the “Opening to the East” policy makes sense, from an investment point of view. Automotive continues to be the number one sector, with more than a 50% share of the total investment value and creating one-third of the jobs. In terms of the sectoral distribution of the new jobs, the shared service center (SSC) sector is number two, and the food industry number three.

Of the deals done last year, which are particularly noteworthy? A: We will have our own annual Investor of the Year event on March 29, but two that do stand out are a greenfield investment by SMR [Samvardhana Motherson Reflectec] from India in Kecskemét, creating 450 jobs and worth about €100 million, and Germany’s Continental, which – across several projects – has created close to 900 jobs in Makó (southeast Hungary) and Nyíregyháza (northeast Hungary). In both these cases, Hungary was competing with other locations, but we were able to close the deals successfully.

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Róbert Ésik, president of the Hungarian Investment Promotion Agency (HIPA).

“There is a 43% ratio of projects going into developing regions of Hungary. This is a strategic target for us, as Budapest and northwest Hungary are already quite developed. We would like to see the other regions grow closer to that.”

It is clearly early days, but how does 2016 look in comparison? A: We see that interest toward Hungary as a destination is increasing and higher than a year ago. One year ago we were working on 96 projects, now it is 169. These are generated by investor requests, but before the stage where a decision has been taken. They are, however, active, defined projects with detailed plans, not idle interest. We see a greater proportion of projects with higher value add, or jobs with a higher value add. The share of ICT and SSC jobs has increased by roughly 20%, and we would like to enhance this, as those are jobs where the salaries are higher. There is a 43% ratio of projects going into developing regions of Hungary. This is a strategic target for us, as Budapest and northwest Hungary are already quite developed. We would like to see the other regions grow closer to that.

HIPA was set up to attract foreign direct investment/ reinvestment to Hungary. What is the importance of FDI to the country’s economy? A: Investments and export capability are vital for the economic development of the country since we have a very open economy where the value of exports

exceeds the value of GDP. So if we would like sustainable economic growth we need to be successful in at least two things: Attracting investment and we need companies that are export capable. We have an FDI stock of more than €81 bln, and an FDI/GDP ratio of 78%; that places us in the number one position in Central and Eastern Europe. We are trying to further strengthen the position in that regard, and continue attracting investment and promoting reinvestment. It is generally more difficult to convince a new company to come to a given country than to get an existing company to reinvest, provided they are satisfied, of course. It is important they are happy!

A key part of HIPA’s work is selling the destination. What are the attractions of Hungary as an FDI destination, and what are the hurdles you have to overcome? A: We have a clear focus on FDI. We have a very stable country from a political and economic point of view, and that is important for any investor, from any industry. That we have a pool of office space in the capital is an advantage. The quality of life in Budapest is among the best in Europe, and that is a strong selling point when it comes to SSCs. That we will have highway connections to all the borders by 2018, and have the number three road density in Europe is a strong selling point. That we are a project-specific organization that will help with tailoring the curriculum of the nearest vocational school is something that clients appreciate. Labor we understand is a very critical element, and the government is taking steps to make sure we will continue to be able to meet the highly qualified labor needs. That is why we have introduced dual training based on the German model. The number of spaces funded by the state in universities now features a lot more engineers, IT type professionals, and

natural sciences, to make sure we can secure labor supply. There are also measures when it comes to job mobility. It is true Hungarians have been reluctant to move regions to find work, but you can incentivize that better, by offering financial support for commuting, or greater help in finding accommodation.

And having sold the destination, how can HIPA help companies get started and grow in Hungary? A: Conceptually, what we try to do is have a model based on three principals: 1) we want to be a one-stop shop, whether you are a new player or an existing one; 2) we offer end-to-end support, meaning our advisory services cover all three phases of a project’s lifecycle – decision making, realization, and operational; and 3) our services are free-of-charge, so clients can ask as many questions as they want, and we will try to give satisfactory and good answers! There are also a number of technical changes to the subsidy system this year, and we hope to leverage these to enhance the attractiveness of second tier cities and push more development towards the regions. Looking at the project pipeline, the chances are not bad that we can do that.

HIPA has partnered with the BBJ for the past two years in launching the Expat CEO of the Year awards. Why are they so important to you? A: As I think I said at the event, it is important to recognize the individuals behind the decisions and the numbers, and to pay tribute to people who have come to Hungary as expats but do a lot for the country by helping promote investment and by giving business opportunities to Hungarian suppliers. The awards are very much in line with HIPA’s targets and so it is a natural partnership and cooperation for us.

2016. 03. 23. 20:08

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Budapest Business Journal | March 25 – April 7, 2016

REAL ESTATE NEWS

2 Business

MIPIM: Improved perception of Hungary in Cannes

International interest in this country was evident at Europeʼs largest annual property conference, which featured an official Hungarian stand for the first time in years. GARY J. MORRELL

International sentiment towards Hungary is seen to be improving as the country was represented with an official stand for the first time in years at the 27th MIPIM in Cannes, held March 15-18. The biggest commercial property expo in Europe attracted more than 23,000 delegates from the commercial property, investment and related sectors – representing 90 countries at the fourday event in the Palais des Festivals according to Reed Midem, the organizers of MIPIM. The expo is a good barometer of the state of the real estate markets in various countries and the direction of the flow of international investment capital. That is why it was heartening for the delegates from Hungary to report a renewed interest in their market. CBRE’S 2016 EMEA Investor Intentions Survey, released at MIPIM, reported a big uplift in interest in the region. According to the research, CEE saw its proportion of preferences from investors rise from 6% in 2015 to 23% for this year. At the city level, Budapest featured in the top ten EMEA countries in which to make a property investment purchase. “We can already feel the intensified interest towards Hungary here in Cannes and we are delighted to take part in our capital’s appearance at MIPIM,” commented Lóránt Varga, CEO of CBRE Hungary.

Various experts from Budapest’s real estate world participate in a round-table discussion at the Budapest stand in Cannes. Budapest was promoted by a series of project presentations, roundtable discussions and cocktail receptions at the Budapest stand, organized by the Budapest Municipality, the Hungarian Investment Promotion Agency (HIPA) and the Roundtable Association for Real Estate Developers. Biggeorege Property, Futureal, Horizon Development, Wing, CBRE, JLL, Infogroup and HB Reavis sponsored the stand. Many property professionals have argued for some time that Hungary needs to promote itself better at major international property and investment

fairs such as MIPIM and Expo Real in Munich in order to capitalize on its growing perception as a good investment destination. In contrast to its Polish and Czech neighbors, Hungary has had no official stand in recent years to promote the country despite the perceived need to close the gap between Hungary and its leading regional peers as CEE favored investment destinations. “We come here to communicate with the market. Within two-to-three days we can get a very intensive picture of the position of the markets and at the same time present Hungary and ourselves to

a wider audience,” said Noah Steinberg, CEO & chairman of Hungarian real estate firm Wing. “There are a lot of senior decision makers I can meet who I otherwise would have to go to London or Frankfurt to see. It is very good that we have a stand, as for years an official Hungarian presence has been lacking at the largest property event in Europe. I think that there is a widening recognition among more players in the market that Budapest is now an attractive destination for investment and development, although Hungary is still difficult sell to people who have not been there yet.”

New Office, More Experts, Bright Outlooks DVM group – offering the most comprehensive range of integrated building services in Hungary – has moved its headquarters to Váci 1, an iconic heritage building in the heart of Budapest. The stylish 1,400 sqm office reflects the company’s organic expansion, honours its recent 20-year anniversary and provides a steady base for its future endeavours.

Design goes hand-in-hand with energyefficient solutions in the spacious yet ergonomic two-storey HQ. Visitors are welcomed by a stimulating green wall, an inspiring photo montage of former projects and a shelf full of well-deserved awards. In the elegant office interior, open space zones are separated by lounges and project areas, large meeting halls are complemented by

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internal focus rooms and sound-insulated phone booths, with a roomy kitchen also serving as a lively gathering place. “We are proud of our growing team’s new home from where we provide an even higher quality of service, from design, project and development management to general construction and sustainability consultancy. It is our pleasure to note that

many projects in which we participated have won awards” - commented Massányi Tibor, managing partner of DVM group. “We also have two general design and construction projects in the pipeline: Szervita Square development with high quality office, retail and luxury residential units, and Promenade Gardens, a largescale office building of 25,000 sqm on the Váci corridor.” www.dvmgroup.com

2016. 03. 23. 20:08

3Special Report BBJ

Logistics

Hungary tries to catch logistics

Hauling supplies in Audi Hungary’s logistics center, which the company built for its own use. The automotive industry has increased the need for logistics services in this country, but thus far, e

Although the country is well located for East-West trade, there is limited logistics space in Hungary and less activity in the sector than there might be, experts say. ANIKO FENYVESI

With its proximity to Germany and borders with Ukraine and the Balkans, Hungary is geographically well positioned to facilitate trade between East and West. That situation should encourage a booming logistics business in this country, and the sector is indeed important, contributing more than 5% to Hungary’s GDP by some estimates. According to a report published by the state-run Central Statistical Office in the fall, the revenue of Hungarian logistics companies reached HUF 1.085 trillion in the second quarter of 2015. But the domestic logistics business could be doing so much more, according to analysts. Other countries in the region are similarly well placed to facilitate East-West trade, and they have the same

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advantages as Hungary when it comes to affordable real estate and labor. Regional competition is fierce, especially when it comes to logistics space (see pages 14-15). Despite this competition, though, experts say there should be more logistics activity in this country.

Desirable Budapest

“The largest logistics demands originate from within the European Union, and within this Germany, Hungary’s largest trading partner.”

According to a report published in February by Prologis and Eyefortransport entitled “Logistics Real Estate Network Expansion”, Budapest was ranked the fifth most desirable logistics center among CEE countries. Zoltán Doór, president of the Hungarian Logistics Association, noted that manufacturers, especially carmakers, are essential to the Hungarian economy, but none of the major manufacturers are Hungarian firms. That means the foreign firms producing here must ship goods in and out of the country, so they create a demand for logistics. “Local logistics service providers are responsible for moving and storing inventories, raw materials and parts, and the finished products derived from these, from the source of the raw materials to the end consumer,” he said. “The largest logistics demands originate from within the European Union, and within this Germany, Hungary’s largest trading partner.” Despite steady developments and growing demand, Hungary is still trailing

behind its neighbors. In early 2015, Hungary listed a total of 1,800,000 sqm in logistic-center space, while Poland had 8,800,000 sqm and Czech Republic 4,800,000 sqm, according to a report published by the Hungarian Investment Promotion Agency (HIPA) last year. There are three challenges facing this country, according to Doór. “Firstly, operating logistics centers in Hungary is not cheap and, secondly, the main European logistics centers are situated northeast of Hungary and this situation may become permanent by 2020,” he said. “The third reason is historical: The main logistics centers were established outside of Hungary, in Bratislava, Kosice, Vienna, Arad and Temesvár.” Many have criticized administrative burdens as weakening of the logistics sector here. For instance the EKÁER system, which tracks vehicles hauling goods and came into effect last year, and is meant to help tax authorities collect valueadded taxes on imports. There have been

complaints that the system poses heavy administrative burdens on companies. But according to Doór, the negative impact that EKÁER has on the sector is negligible. “The regulation has changed significantly since its introduction, making the current burden on companies more bearable,” he said. “If we were to quantify its impact, then we could say that, depending on the type of company, the additional costs created by the regulation amount to approximately the wage of one additional employee for every HUF 2 billion in turnover.”

Improvements and in-house logistics Critics have argued that Hungary is not as business friendly as its neighbors and that this has had a direct effect on the demand for the country’s logistics service providers, but Doór said the problem might have more to do with a lack of major developments on the Hungarian logistics market in recent years. Things are looking up, however, and a more stable regulatory environment could certainly help along the process. “This has been a period of stabilization and for building up the sector. There has been no major breakthroughs in developments either, although two trends can be identified: One is the increase in intermodality by developer companies, such as Ekol Logistics Kft. in the Budapesti Szabadkikötő (free port) and Metrans Danubia Kft., which is also

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 14

Logistics centers see a brisk business.

 16

ics competition

t thus far, experts say, the sector is not living up to its potential. realizing a €10 million development in the same area,” Doór explained. Intermodality refers to shifting freight from various modes of transport, such as going from ship to train, and the ability to do this smoothly and quickly is essential to effective logistics. Along with these improvements, recent government incentives have been introduced with the aim of improving competitiveness – including support for training truck drivers, reducing administration burdens and making infrastructure investments a priority, according to reports. Doór believes that an increase in wages could go be most effective in improving competitiveness and deepening the labor pool. For lack of a larger logistics sector in Hungary, private companies are developing their own logistics centers, with the goal of improving levels of service. MEC Group invested HUF 1 bln in the development of a pharmaceutical logistics center in Budapest, and Hell Energy Drinks company has undergone a capacity expansion at its logistics center in Szikszó, northeastern Hungary, according to Doór. Audi has also elected to handle its own logistics needs locally. In September, the company inaugurated a HUF 10 bln logistics center near its factory in Győr. And it’s a carbon neutral building to boot, spanning 80,000

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sqm. Plans are also in the pipeline to connect the Audi logistics center by rail directly to the headquarters in Ingolstadt, Germany, according to a press release issued by the company last fall, which said that Audi currently employs rail and road in equal measure, to meet its logistics needs.

Breakdown by category Hungary’s prime logistics mode is road traffic, which handled more than 70% of transport in 2014, according to Doór. “The reason for this large share is that road transport provides door-to-door service quite flexibly,” he said. In fact the road network in Hungary is one of the most extensive in the European Union. Doór estimates the share of rail transport to be about 18%, which is interesting given Hungary’s direct link to China. “Záhony and its region is the junction and reloading center for European standard-gauge railways and the wide-gauge system of the CIS states,” according to the HIPA report. Despite excellent waterway connections with the rest of Europe, the share of water transport in Hungary is between 2% and 4%, depending on the water level of the Danube, Doór said. Pipelines, channeling natural gas and other fuels or chemicals, account for about 10% of transport, he added.

LEASE AGREEMENTS IN LIGHT OF COMPETITION LAW Dr. Szilvia Andriska Attorney (H)

Noerr & Partners Law Office

In lease agreements we can often face provisions requiring the tenant’s consent to letting other premises within the building or in the nearby area by the landlord to a future tenant of similar or same business activity as that of the already existing tenant. In most cases, these contracts concern commercial, sometimes office buildings. Although such provision may be advantageous for the tenant which results in benefits on the landlord’ side, the possible effect of restricting competition shall also be taken into consideration in applying such condition, according to the judgment of the European Court of Justice (ECJ). The case (C-345/14) which was referred to the ECJ for preliminary ruling, concerned a Latvian entity carrying out business in food retail trade, operating large retail stores and hypermarkets in Latvia. These stores sell FMCG and in most cases occupy a significant part of shopping centers. The food retailer company concluded several lease agreements with shopping centers upon renting commercial premises, some of which agreements included a clause granting the food retailer company the right to provide its consent to the lessor letting those premises to third parties which have not been taken in lease by the food retailer company. The Latvian Competition Council qualified the lease agreements containing this clause as infringing Latvian competition law rules. According to the decision of the competition authority, the object of these agreements was to prevent, restrict and distort competition, therefore it was not necessary to provide evidence with regard to that in fact the lease agreements made it more difficult for a third party to enter the market. A fine was also imposed in the Latvian competition proceeding. The company appealed against the decision and the Latvian Supreme Court referred the case to the ECJ.

The most important question of the Latvian Supreme Court was, if the mere clause of a lease agreement restricting the lessor in deciding to let premises to potential competitors of an existing tenant freely, without the consent of such existing tenant, can be qualified as of aiming at the prevention, restriction or distortion of competition. Once the object of an agreement is demonstrated to be anti-competitive, it is not required to review and demonstrate whether it actually prevented any competitor from entering the market or actually restricted competition. The ECJ ruled that by the mere fact that commercial lease agreements contain a clause granting the tenant the right to protest the rent of commercial premises in the same building to other tenants by the lessor, is not to be considered so that the object of such agreements is to restrict competition according to Article 101 (1) Treaty on the Functioning of the European Union. It was stated by the ECJ that even if the clause could potentially have had the effect of restricting the access of the tenant’s competitors to some shopping centers, the degree of harm of the agreement was not sufficient to constitute a restriction of competition by object in this case. However, the ECJ also stated that the impact of an agreement upon competition must be assessed in its economic and legal circumstances together with the cumulative effect of other agreements. Consequently, the availability of the commercial real estate properties in the vicinity shall be taken into account with any administrative, legal or economic barriers hindering the entry into the market by a competitor. The examination of the relevant market is also necessary, in the course of which the number and size of the operators, customer brand fidelity and consumer habits also have to be reviewed and assessed. If as a result of the assessments these agreements may contribute to the fragmentation of the market, the measurement of such effects have to be decided based on the market position of the parties and the duration of such agreements. In order to avoid a competition law infringement, aspects defined by the ECJ shall not be forgotten in the course of negotiating upon and the drafting of lease contracts.

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

Lack of logistics space seen.

EXPERT OPINION

2016. 03. 23. 20:08

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Budapest Business Journal | March 25 – April 7, 2016

Property: Not enough logistics space

High demand and a limited supply mean Hungary is experiencing record-low vacancies for warehouses and light industrial spaces. GARY J. MORRELL

The demand for logistics space in Hungary is being driven by trends like the increased use of online retailers and a need for inexpensive logistics hubs on the periphery of Western Europe. Couple this with a limited supply of such space, and you find a low vacancy rate and increasing pressure to build. The squeeze is being felt throughout the market for logistics and light industrial real estate. More industrial development in Hungary is required to meet increasing demand as there is a limited supply of quality contiguous space. With regard to vacancy, there has been a remarkable market recovery over the past two years with a fall to 10.6%, driven by a combination of the active occupational market and limited development activity. The limited supply of stock is seen as putting a brake on market activity as international industrial developers are sizing up the market and land banking. Rising demand is mainly driven by the industrial/automotive sector. However, fast moving consumer goods (FMCG) firms are playing a more important role. High demand from occupiers means that almost all the new space coming to the market is occupied within a matter of months. Cushman & Wakefield estimates 350,000 sqm in leasing activity for 2015. Over the past five years there has been no speculative industrial development in Hungary, as developers have their hands full trying to satisfy demand for new buildings. The last speculative project here was delivered in 2012, but a limited number of speculative developments are underway in Central Europe. New industrial supply for Central Europe for 2015 is put at 1.54 million sqm, a record annual delivery since the economic downturn of 2007-8. Average industrial vacancy for Central Europe has been falling since 2009 and fell to 6.8% as of the turn of the year as take up has outperformed development. Rents for Hungary are put at €3-3.5 per sqm per month according to CBRE. “The overall vacancy rate in Hungary is at a historically low 10.6%; while looking at purely warehouse space we are talking about sub-10% levels,” commented Gábor Halász-Csatári, head of industrial at Cushman & Wakefield Hungary. “E-commerce [as elsewhere in Europe] is gaining momentum. Occupier deals that are concluding are driven largely by the automotive, pharmaceutical, electronics and FMCG sectors. The emergence of large e-commerce companies such as Amazon on the Hungarian market still awaited, however.” Logistics center owners are in a strong position as incentives are being

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Prologis Park Hegyeshalom on the Austrian border.

“Occupier deals that are concluding are driven largely by the automotive, pharmaceutical, electronics and FMCG sectors. The emergence of large e-commerce companies such as Amazon on the Hungarian market is still awaited, however.” reduced. Availability in Hungary is seen as very fragmented and a requirement of a total of 10,000 sqm would need to be split into two or three units due to the limited supply of large contiguous units. There is currently one ongoing industrial construction in the Budapest area, a 22,000 sqm built-to-suit scheme in Alsónémed that is due to be delivered this year. Limited rental growth is anticipated in the coming months.

Developers consider the market A number of regional industrial developers and logistics park operators are considering entering the Hungarian market. “Several developers are already testing Hungary by looking at projects, investment opportunities, plots, and clients,” commented, Tamás Beck, head

of industrial at Colliers International Hungary. “These are mainly companies who already have a presence in CEE. Most of them prefer acquisition or single tenant built-to-suit opportunities to start with, not speculative greenfield development.” Prologis currently has the biggest developer market share with 588,000 sqm, and the company has begun the development of an 8,000 sqm buildto-suit facility (DC2) at Prologis Park Hegyeshalom on the Austrian border for the logistics provider, Fiege. Prologis is followed by BILK with 198,000 sqm, Logicor with 119,000 sqm, Wing with 108,000 sqm, Goodman with 67,000 sqm, and CA Immo with 62,000 sqm, according to the Budapest Research Forum (BRF). The largest logistics park in the greater Budapest area is BILK’s International Logistics Center with 200,000 sqm of space, followed by Prologis Park Budapest Gyál at 150,000 sqm and the 130,000 sqm Prologis Harbor Park. Around 30% of the overall Budapest stock is owned by Prologis. The entry of CTP into Hungary is a further indication of the improvement in the industrial sector. Czech-based CTP has extended its presence to Hungary and Romania having already developed parks across Slovakia, and the Hungary portfolio comprises two purchased assets consisting of the 34,000 sqm re-named CTPark Üllő on the M0 Budapest ring road and the 6,000 sqm CTPark Tatabánya warehouse and production facility. Prologis has purchased the M1 Logistics Park from CA Immo and Blackstone has acquired five logistics

assets for its logistics platform, Logicor, as part of a pan-European deal. The deal is an indication that Hungary is regarded as an intrinsic part of the Central European logistics network. One concern expressed about Hungary is the lack of development in regional cities outside of the capital when compared with Poland, Czech Republic and Slovakia. Although Hungary has a very good road network with the highest density of highways in CEE, the country is very capital-centric. In general, manufacturers prefer secondary cities and from a positive perspective Hungary and Central Europe has lower labor costs than Western Europe according to Eurostat and Cushman & Wakefield. However the majority of development outside of Hungary is owner-occupied, with companies such as Audi developing its own facility. The quality of the motorway network allows companies to establish themselves around the capital. In the post-2014 period, industrial development in eastern Hungary dominated the regions. According to CBRE research, in addition to Budapest with two million sqm, there is 530,000 sqm in Tatabanya, 480,000 sqm in Győr, 415,000 sqm in Székesfehérvár, 310,000 sqm in Nyíregyháza and 210,000 in Kecskemét. The level of vacant space is marginal in most of the regional cities outside of Budapest such as Tatabanya, Győr and Székesfehérvár, and it usually requires a major company to leave a warehouse facility to free up what space there is.

2016. 03. 23. 20:08

www.bbj.hu

Budapest Business Journal | March 25 – April 7, 2016

Poland and Czech Republic remain the major CE industrial destinations

With more affordable property and labor costs, Central and Eastern Europe is an excellent location for a logistics firm, but it is mostly Hungary’s neighbors dominating the market. GARY J. MORRELL

The Polish and Czech markets are still the leaders in logistics property activity in Central Europe. “Last year, Poland and Czech Republic were the dominant countries in terms of new construction (1.4 million sqm combined) and a recovery was recorded in Slovakia with 80,000 sqm. Development in Hungary has been minimal in recent years,” said Ferdinand Hlobil, head of CE industrial at Cushman & Wakefield. As of the beginning of the year, total class “A” industrial stock in Poland, Czech Republic, Slovakia, Hungary, and Romania stood at 20 million sqm, compared to 24 million sqm for Germany alone. The Central European market is seen as undergoing diversification as developers differentiate their respective strategies, according to Cushman & Wakefield. Thus companies such as Goodman and Panattoni are focused on developing new projects, while another group consisting of CTP, P3 and Prologis are constructing parks then retaining ownership or expanding their portfolios by acquiring existing facilities. These developers are acquiring land in preparation for construction when market conditions are conducive for either built-to-suit or speculative development. A third group is made up of investors such as Logicor, the logistics platform for Blackstone, that has a preference for acquiring completed parks. “Our strategy for Central Europe (CE) is the same as for wider Europe. The

Logicor’s Tulipán Park in Biatorbágy.

Our strategy for Central Europe is the same as for wider Europe. The company expands through acquisitions and we now have 1.3 million sqm of space in CE.” company expands through acquisitions and we now have 1.3 million sqm of space in CE,” commented Bartosz Mierzwiak, managing director CEE at Logicor. “We recently purchased 300,000 sqm from Immofinanz in CE and now we are present in Poland, Czech Republic, Slovakia, Hungary, and Romania. We are not developers but own and manage properties, as acquisition is more cost effective and quicker.” In terms of new construction Panattoni was the leading CE developer in 2015 with 35% of total delivery, compared to Goodman with 16%, Prologis with 11% and CTP with 10%, according to Cushman & Wakefield figures. “Strong fundamentals and an increasingly attractive investment climate means that CE will continue to feature in the expansion of major

CE industrial stock (millions of sqm)

SOURCE: Cushman & Wakefield

multinationals, with the automotive and e-commerce sectors leading the way. The region still has plenty of room to grow and that is why it is attractive to us,” said Ramon Vos, CEO of CTP. The company has 3.25 million sqm of space in 60 locations in Czech Republic, Slovakia, Hungary, and Romania.

VGP, the European logistics real estate developer has undertaken a €500 million joint venture with Allianz Real Estate. Their collaboration in the venture is aimed at continued growth across several target European countries, including Germany, Czech Republic, Slovakia and Hungary.

Your partner in Europe

National coverage, continuous development, european rail freight logistics solutions.

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2016. 03. 16. 10:22 2016. 03. 23. 20:08

www.bbj.hu

Budapest Business Journal | March 25 – April 7, 2016

Local logistics park operators enjoy the trends

The people behind some of the larger logistics parks companies in Hungary say business is booming and they see reason to expand here. BBJ STAFF

The past year has been a good one for the logistics property business in Hungary, and the next year is looking even better, judging by the comments of people from the firms with some of the more expansive logistics parks holdings in the country. “Prologis leased 1.75 million sqm in CEE in 2015, which is similar to 2014’s record-breaking figure. New lease agreements accounted for 618,000 sqm and lease renewals for 860,000 sqm, with the balance short-term agreements,” said László Kemenes, country manager for Hungary and Romania at Prologis, currently the biggest logistics developer in Hungary, with 588,000 sqm in half a dozen logistics parks here. “Demand continues to be driven by reconfiguration of the supply chains, trade and e-commerce.” Another major player here is Goodman, a firm that has been expanding in Hungary. “We entered the Hungarian market in 2008 and currently we are present in three locations – Üllő, near the airport, and Gyál, in the Budapest area, and in Kecskemet, which is characterized with a low vacancy level,” said Blazej Ciesielczak, Goodman regional director for Central and Eastern Europe. Ciesielczak said his company has seen growth in the logistics business here and is hoping to capitalize on it. “Across the whole region, 2015 was very successful, and we are convinced that this positive

László Kemenes, country manager for Hungary and Romania at Prologis.

“The country is an appealing logistical location, mainly for companies with supply chains covering a pan-European region. Hungary has a stable economy with established infrastructure and quality services.” trend will continue in 2016, including in Hungary. In our view, this is driven by the growth of the Hungarian economy and remarkable increases in the exportdriven automotive industry,” he said. “We recently noticed very positive macroeconomic signals and a significant increase of requests for new space from

Blazej Ciesielczak, Goodman regional director for Central and Eastern Europe. the market. We are considering various options for the development of additional space in one of our logistics centers in Hungary.”

Long-term upward trend According to Kemenes, the improvements in the business here are not simply caused by general economic growth, but are also due to longer-term developments in the Hungarian market. “A lot of new demand is generated by the automotive and electronics sectors in the country. There is a big focus on consolidation of warehouse spaces and reconfiguration of supply chains by manufacturers and 3PLs [thirdparty logistics providers]. E-commerce is also growing and generating new requirements for the region. Also, there is a notable organic growth of existing

operations in established locations, from which quality assets with high quality service will continue to benefit,” he said. “The country is an appealing logistical location, mainly for companies with supply chains covering a panEuropean region. Hungary has a stable economy with established infrastructure and quality services. In a recent survey carried out by EFT and Prologis, Budapest came 15th in Europe’s top 100 logistics locations list. It also scored fifth among 28 markets in CEE. In this survey, companies preferred Budapest for the overall cost efficiency compared to Western European markets. This includes mainly the cost of labor and cost of real estate.” Ciesielczak of Goodman also noted this country’s advantages, saying: “In Hungary, as in the whole region, labor costs are relatively attractive when compared to Western Europe’s markets and there is good availability of a skilled and well educated workforce, which is necessary for the automotive industry— an industry with a strong presence in Hungary. Consequently, logistic service providers always follow the manufactures to provide supporting services, like storing, distribution and other logistics activities.” These existing advantages, coupled with the current growth trend, are seen as a good reason to invest here. “After a couple of quiet years, we see new opportunities in Hungary,” Ciesielczak said. “Given our strategic land banks, near Budapest and in Kecskemet, we will be monitoring the market closely, to take advantage of this growing logistics market.” Prologis has already begun expansion, according to Kemenes. “In Hungary, we started the development of a 8,000 sqm built-to-suit facility in Prologis Park Hegyeshalom in 2015, and acquired 69,000 sqm in five buildings.”

EXPERT OPINION

Brisk business at Airport City Logistic Park Hungary is an important location in companies. This is encouraging for the the sector’s future position.” Central and Eastern Europe in terms Airport Logistic Park has further of its development and its logistics 20,000 sq m development area, and potential. In the case of CPI’s Airport thanks to the excellent location, City Logistic Park, business is brisk, flexible fit-out solutions and marketand the airport region is generally active. leading technology, the storage “We are delighted that the American premises of the Airport City satisfy market leader express delivery service all needs, from “small-unit” storage company has become the tenant of premises with an area of 600 square the Airport City Logistics Park. CPI metres all the way through to the high storage level of ten thousands of started developing a 7000sqm brand new warehouse as part of the Logistic square metres. Park. Further storage and office “As a place of business it provides premises are formed according to our András Bodahelyi, prompt connections to remote points client’s specific needs,” says András Sales and Logistic Manager of the world which provides significant Bodahelyi, Sales and Logistic Manager, market advantage to its clientele, CPI Hungary. “This negotiation means a big step Such well-known companies like Benteler, Panalpina, for us, the new development shows that the airport Trilak, Küehne+Nagel, Agility have found their seats in sector implies business potential for multinational the logistics park.” NOTE: ALL ARTICLES MARKED EXPERT OPINION ARE PAID PROMOTIONAL CONTENT FOR WHICH THE BUDAPEST BUSINESS JOURNAL DOES NOT TAKE RESPONSIBILITY

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2016. 03. 23. 20:08

www.bbj.hu

Budapest Business Journal | March 25 – April 7, 2016

Logistics parks

Where the routes meet

Ranked by total net warehouse space used for logistics warehousing (sqm)

AIRPORT CITY LOGISTIC PARK 2220 Vecsés, Üllői út 807. www.airportcity.hu

depo logisztikai központ kft.

áti depo közRaktáRozási zRt.

pRologis paRk budapest,-gyál

www.depologisztika.hu

www.atidepo.hu

www.prologis.com

–

✓

–

2002

150,000

goodman hungary kft., MOM Park Irodaház, 1123 Budapest, Alkotás út 53., (1) 336-2270, www.goodman.com/hu

✓

–

✓

–

✓

–

2009

Ÿ Ÿ

blazej Ciesielczak – –

2225 Üllő Zsaróka út 8. (1) 336-2270 – info-hu@goodman.com

132,000

prologis hungary, 1095 Budapest, Lechner Ödön fasor 7., (1) 577-7700, (1) 577-7701, www.prologis.com

2001

– Real estate funds (100)

lászló kemenes Karolina Gorgiel Marta Tesiorowska

1225 Budapest, Campona utca 1. (1) 577-7700 (1) 577-7701 info–hu@prologis.com

lászló kemenes Karolina Gorgiel Marta Tesiorowska

2310 Szigetszentmiklós, Leshegy utca 30. (1) 577-7700 (1) 577-7701 info-hu@prologis.com

GOOdMaN Üllő aiRpoRt logisztikai központ www.goodman.com/hu 4

pRologis paRk budapest,-haRboR

pRologis paRk budapest,-sziget

www.prologis.com

128,000

mahaRt ContaineR CenteR kft.

Rail CaRgo teRminal - bilk zRt.

east gate business paRk

pRologis paRk budapest, m1

69,000

euRopolis paRk budapest, aeRozone

65,000

m5-gyál business paRk

60,000

www.containercenter.hu

www.bilkkombi.hu

www.egpb.hu

www.prologis.com

www.caimmo.com

www.businesspark.hu

debReCeni logisztikai központ és ipaRi paRk

99,000

95,000

78,000

51,000

www.trans-sped.hu

Westlog dC

www.westlogdc.com

gebRÜdeR Weiss fReight foRWaRding and logistiCs kft. www.gw-world.hu

BBJ_2406_spec_report.indd 17

prologis hungary, 1095 Budapest, Lechner Ödön fasor 7., (1) 577-7700, (1) 577-7701, www.prologis.com mahaRt Container Center kft., 1211 Budapest, Weiss Manfréd út 5-7., (1) 278-3178, (1) 277-0167, www.containercenter.hu Rail Cargo terminal - bilk zrt., 1239 Budapest, Európa u. 4., (1) 289-6000, www.bilkkombi.hu Wing zrt., 1095 Budapest, Máriássy u. 7., (1) 451-4760, (1) 451-4762, www.wing.hu

prologis hungary, 1095 Budapest, Lechner Ödön fasor 7., (1) 577-7700, (1) 577-7701, www.prologis.com

Ca immo hungary kft., 1074 Budapest, Rákóczi út 70-72., (1) 501-2800, www.caimmo.com

autóker logisztikai kft., 2360 Gyál, Heltai Jenő u. 73., (29) 544-690, www.businesspark.hu delog debreceni logisztikai központ és ipari park kft., 4030, Debrecen, Vámraktár u.3., (52) 510-100, (52) 510-193, www.trans-sped.hu

49,300

hung log two kft., 2051 Biatorbágy, Verebély László utca 2., (23) 804-333, (23) 804-334, www.westlogdc.com

46,000

gebrüder Weiss kft., 2330 Dunaharaszti, Raktár u. 2., (24) 506-700, www.gw-world.hu

–

✓

–

✓

–

✓

–

✓

otheR

majoR Clients in 2015

–

yeaR established

–

✓

–

Customs seRviCe

✓

distRibution

–

✓

–

building management

–

– Real estate funds (100)

✓

domestiC WaRehousing

152,000

prologis hungary, 1095 Budapest, Lechner Ödön fasor 7., (1) 577-7700, (1) 577-7701, www.prologis.com

✓

aCCessible via WateR

153,000

áti depo közraktározási zRt.

✓

aCCessibility to tRuCks

215,000

depo logisztikai központ kft., 2045 Törökbálint, Hosszúrét, (23) 338-044, (23) 334-666, www.depologisztika.hu

Rail logistiCs

opeRating Company, name, addRess, phone and fax no., Website

WaRehouse logistiCs

Company Website

net WaRehouse spaCe used foR logistiCs WaRehousing (sqm)

Rank

seRviCes

oWneRship (%) hungaRian non-hungaRian

top loCal exeCutive Cfo maRketing diReCtoR

addRess phone fax email

1978

(100) –

béla mescsán – –

2045 Törökbálint, Hosszúrét (23) 338-044 (23) 334-666 titkarsag@ depologisztika.hu

1996

Z.I. Logisztikai Zrt. (100) –

józsef földházi Mária Frühwirth Szabóné Györgyi Szabó Kovácsné

1136 Budapest, Pannónia utca 11. (1) 305-2200 (1) 305-2235 mail@atidepo.hu

lászló kemenes Karolina Gorgiel Marta Tęsiorowska

2360 Gyál, Prologis Ipari Park Hrsz: 7100 (1) 577-7700 (1) 577-7701 info-hu@prologis.com

–

✓

–

✓

–

2001

– Real estate funds (100)

–

✓

–

✓

Container loading, warehousing, repair

MAERSK, Metrans, MSC

1998

MSZ-INVEST Kft. (50), WINTCO Kft. (50) –

márta gajdán Anita Györkefalvi Zoltán Fábián

1211 Budapest, Weiss Manfréd út 5–7. (1) 278-0178 (1) 277-0167 mail@containercenter.hu

✓

–

✓

–

2001

– Rail Cargo Terminal-Praha s.r.o. (100)

miklós ágh – –

1239 Budapest, Európa utca 4. (1) 289-6000 (1) 289-6060 bilkkombi@bilkkombi.hu

–

✓

–

✓

–

2006

(100) –

– – –

2151 Fót, Akácos (1) 451-4760 (1) 451-4289 egpb@wing.hu

lászló kemenes Karolina Gorgiel Marta Tesiorowska

2071 Páty, Prologis Ipari Park Hrsz: 0161/26 (1) 577-7700 (1) 577-7701 info-hu@prologis.com

–

✓

–

✓

–

2000

– Real estate funds (100)

✓

–

✓

–

✓

–

✓

–

BMW, Fedex, CH Robinson, Expeditors

2004

– (100)

ede gulyás, markus andreas kuttner – –

2220 Vecsés, Lőrinci út 59–61. (1) 501-2818 (1) 501-2801 office@caimmo.hu

✓

–

✓

–

1989

X Ingatlanfejlesztő és Ingatlanhasznosító Zrt. (100) –

zoltán szabó – Attila Kántor

2360 Gyál, Heltai Jenő utca 73. (29) 544-690 (29) 544-601 info@businesspark.hu

✓

–

✓

–

✓

Back office activity

1990

(100) –

zsolt fülöp Erzsébet Tóth Márta Fogarasi

4030 Debrecen, Vámraktár utca 3. (52) 510-100 (52) 510-193 info@delog.hu

✓

–

✓

–

✓

–

✓

–

DHL / Huawei, Liegl & Dachser, Tatár Pékség, Eurodoc 2000, Willi Betz

2006

– Industrial Securities Europe (Luxemburg) (100)

györgy szucsány – –

2051 Biatorbágy, Verebély László utca 2. (23) 804-333 (23) 804-334 info@westlogdc.com

1989

– GW International Holding GmbH (100)

thomas schauer – –

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

✓

–

✓

–

✓

–

✓

–

2016. 03. 23. 20:08

www.bbj.hu

Budapest Business Journal | March 25 – April 7, 2016

✓

–

pRologis paRk budapest,-batta

39,000

prologis hungary, 1095 Budapest, Lechner Ödön fasor 7., (1) 577-7700, (1) 577-7701, www.prologis.com

–

✓

–

✓

–

pRologis paRk Budapest,-Üllő

dél-pesti Üzleti paRk

Camel paRk

www.prologis.com

www.wing.hu

www.whitestar-realestate.hu

áti-sziget industRial paRk www.atisziget.hu

37,500

34,000

33,958

33,500

áti -sziget kft., 2313 Szigetszentmiklós, Pf. 18., (24) 406-120, (24) 406-110, www.atisziget.hu

33,000

goodman hungary kft., MOM Park Irodaház, 1123 Budapest, Alkotás út 53., (1) 336-2270, www.goodman.com/hu

31,000

Raben trans european hungary kft.

www.goodman.com/hu

Raben tRans euRopean hungaRy kft. www.raben-group.com

aiRpoRt City logistiC paRk

beRtRans logistiCs CenteR

pRologis paRk budapest,-budaöRs

tulipán paRk

pRologis paRk hegyeshalom

shaRk paRk

West gate business paRk

www.bertrans.hu

www.prologis.com

www.whitestar-realestate.hu

www.prologis.com

www.whitestar-realestate.hu

BBJ_2406_spec_report.indd 18

oWneRship (%) hungaRian non-hungaRian

2007

Ÿ Ÿ

2008

– Real estate funds (100)

lászló kemenes Karolina Gorgiel Marta Tęsiorowska

2440 Százhalombatta, Iparos utca 4. (1) 577-7700 (1) 577-7701 info-hu@prologis.com

lászló kemenes Karolina Gorgiel Marta Tesiorowska

2225 Üllő, Viktória Business Park Hrsz. 3382. (1) 577-7700 (1) 577-7701 info-hu@prologis.com

otheR

majoR Clients in 2015

top loCal exeCutive Cfo maRketing diReCtoR

addRess phone fax email

blazej Ciesielczak – –

2360 Gyál, M5 kijárat (1) 336-2270 – info-hu@goodman.com

–

✓

–

2003

– Real estate funds (100)

–

✓

–

✓

–

2004

(100) –

– – –

1097 Budapest, Táblás utca 36. (1) 451-4760 (1) 451-4289 ipari@wing.hu

–

UPS, Opel, Telenor, Vodafone

– (100)

tibor Ráduly – –

2040 Budaörs, Akron utca 1. (1) 382-5100 (1) 382-5101 info@ whitestar-realestate.hu

–

Nilfisk-Advance Kft., Indutrial Technique Hungary Kft., Forest-Papír Kft., PEX Automotive Systems Kft., Draspó-Tempo Kft., Csepel Autó Kft.

2001

Z.I. Logistics Zrt. (100) –

gábor kovács-f. Istvánné Geiszler –

2313 Szigetszentmiklós, Pf. 18. (24) 406-120 (24) 406-110 director@atisziget.hu

2007

Ÿ Ÿ

blazej Ciesielczak – –

6000 Kecskemét, Fuvar utca 1. (1) 336-2270 – info-hu@goodman.com

1989

– Raben Group N.V. (100)

Csaba árvai Noémi Szűcs Ágnes Bolyki

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

mátyás gereben Kristóf Skwarek Bea Déri

1132 Budapest, Váci út 30. (1) 225-6600 (1) 225-6601 hungary@cpipg.com

✓

–

✓

–

✓

–

✓

–

✓

Air and sea transportation

1996

– CPI Property Group (100)

28,000

Cpi hungary kft., 1132 Budapest, Váci út 30., (1) 225-6600, (1) 225-6601, www.airportcity.hu, www.cpigroup.hu

✓

–

✓

–

✓

–

Benteler Distribution Hungary Kft., Agility Magyarország Kft., PPG Trilak Kft., CEVA Logistics Hungary Kft., Panalpina Magyaroszág Kft., NAV Customs Office

28,000

bertrans logisztikai zrt., 6000 Kecskemét, Fuvar u. 1., (76) 999-100, (76) 999-101, www.bertrans.hu

✓

–

✓

–

1989

(100) –

pál Rózsa – –

6000 Kecskemét, Fuvar utca 1. (76) 999-100 (76) 999-101 bertrans@bertrans.hu

–

✓

–

2005

– Real estate funds (100)

lászló kemenes Karolina Gorgiel Marta Tesiorowska

2040 Budaörs, Seregély utca 8. (1) 577-7700 (1) 577-7701 info-hu@prologis.com

–

IKEA, Grundfos, Transdanubia, Aliaxis

– (100)

tibor Ráduly – –

2051 Biatorbágy, Huber utca 5. (1) 382-5100 (1) 382-5101 info@ whitestar-realestate.hu

2006

– Real estate funds (100)

lászló kemenes Karolina Gorgiel Marta Tesiorowska

9222 Hegyeshalom, Prologis Ipari Park, Hrsz. 1073/1. (1) 577-7700 (1) 577-7701 info-hu@prologis.com

– (100)

tibor Ráduly – –

2040 Budaörs, Vas út utca 11. (1) 382-5100 (1) 382-5101 info@ whitestar-realestate.hu

– (100)

tibor Ráduly – –

2045 Törökbálint, Tópark utca 9. (1) 382-5100 (1) 382-5101 info@ whitestar-realestate.hu

www.airportcity.hu, www.cpigroup.hu 24

Wing zrt., 1095 Budapest, Máriássy u. 7., (1) 451-4760, (1) 451-4762, www.wing.hu

White star Real estate kft., 1117 Budapest, Budafoki út 91-93., (1) 382 5100, www.whitestar-realestate.hu

goodman keCskemét logisztikai központ 22

prologis hungary, 1095 Budapest, Lechner Ödön fasor 7., (1) 577-7700, (1) 577-7701, www.prologis.com

Customs seRviCe

✓

distRibution

–

building management

✓

domestiC WaRehousing

–

yeaR established

aCCessible via WateR

✓

www.goodman.com/hu

aCCessibility to tRuCks

44,000

goodman hungary kft., MOM Park Irodaház, 1123 Budapest, Alkotás út 53., (1) 336-2270, www.goodman.com/hu

goodman gyál logisztikai központ

Rail logistiCs

opeRating Company, name, addRess, phone and fax no., Website

WaRehouse logistiCs

Company Website

net WaRehouse spaCe used foR logistiCs WaRehousing (sqm)

Rank

seRviCes

28,000

26,228

24,000

22,592

18,020

prologis hungary, 1095 Budapest, Lechner Ödön fasor 7., (1) 577-7700, (1) 577-7701, www.prologis.com

White star Real estate kft., 1117 Budapest, Budafoki út 91-93., (1) 382 5100, www.whitestar-realestate.hu prologis hungary, 1095 Budapest, Lechner Ödön fasor 7., (1) 577-7700, (1) 577-7701, www.prologis.com

White star Real estate kft, 1117 Budapest, Budafoki út 91-93., (1) 382-5100, www.whitestar-realestate.hu White star Real estate kft., 1117 Budapest, Budafoki út 91-93., (1) 382 5100, www.whitestar-realestate.hu

✓

–

✓

–

✓

–

✓

–

✓

–

Chipita, DSV Hungária, UPS, Sarantis

–

TESCO, Megadyne, BaSys, Renault

2016. 03. 23. 20:08

www.bbj.hu

Budapest Business Journal | March 25 – April 7, 2016

Logistics service providers

magyaR posta ZRt. www.posta.hu

186,644 (2014)

✓

–

✓

–

✓

otHeR

✓

dHl gRoup

www.dhl.hu/hu.html

küHne + nagel kFt. www.kuehne-nagel.hu

Rail CaRgo logistiCs HungaRia kFt.

70,486

61,792

27,459

27,353

61,792

27,459

1,131

117,913

27,500

4,450

–

✓

–

✓

–

✓

–

✓

–

✓

–

✓

–

✓

www.waberers-szemerey.hu

liegl & daCHseR sZállítmányoZási és logisZtikai kFt.

23,644 (2014)

23,041

20,760

120,000

27,005

✓

–

✓

addRess pHone Fax email

1993 30,309

Hungarian state (100) –

Zsolt szarka – –

1138 Budapest, Dunavirág utca 2–6. (1) 767-8200 (46) 320-136 ugyfelszolgalat@ posta.hu

Mol Nyrt., Audi Hungaria Motor Kft., Borsodchem Zrt., ISD Dunaferr Zrt., Mátrai Erőmű Zrt., Magyar Suzuki Zrt.

2005 1,944

(0.01) Rail Cargo Austria AG (99.99)

dr. imre kovács Nathan Zielke, Sándor Gyevnár Kornélia Polcz

1133 Budapest, Váci út 92. (1) 512-7300 (1) 512-7799 cargo.rch@ railcargo.com

1993 1,020

– Deutsche Post AG (100)

Zoltán bándli, Filip budik, Zoltán matisa, attila pál Zoltán Antalffy, Ivo Gruber, Gábor Mitró, Birgit Müller Éva Forgács, Attila Kulcsár, Zoltán Üveges, Irena Mižďochová márton lányi Péter Kisch Ákos Gerébi

2071 Páty, Prologis Park Budapest, M1. (23) 889-000 (23) 889-099 info.Budapest,@ kuehne-nagel.com

–

✓

1992 880

✓

Mátrai Erőmű Zrt., Rail Cargo Logistics - Austria GmbH, BorsodChem Zrt., MOL Nyrt., Primagaz GmbH, Rail Cargo Logistics GmbH

1992 103

– Rail Cargo Logistics - Austria GmbH (100)

andrás vernes Edit Bokori –

1037 Budapest, Montevideo utca 4. (1) 430-8500 (1) 430-8599 office.rcl.hu@ railcargo.com

1991 862

Waberer's International Nyrt. (60), Lóránd Szemerey (40) –

Zsolt barna – –

3527 Miskolc, Fonda utca 1. (1) 421-8505 (1) 421-8504 info@waberersszemerey.hu

1999 289

– Dachser SE (50)EL Holding s.r.o. (50)

szabolcs Czifrik Judit Sövényi Kádárné Tímea Tóth

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

1992

DB Hungária Holding Kft. (100) –

árpád vásárhelyi, sándor barényi Ildikó Kotánczi Zsuzsanna Papp

2310 Szigetszentmiklós, Leshegy utca 30. (1) 278-7878 (1) 278-7888 info@schenker.hu

1989

– GW International Holding GmbH (100)

thomas schauer – –

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

✓

www.dachser.hu

sCHenkeR nemZetköZi sZállítmányoZási és logisZtikai kFt.

19,498

37,000

✓

–

✓

www.dbschenker.com/hu

gebRüdeR Weiss FReigHt FoRWaRding and logistiCs kFt.

12,099 (2014)

61,000

✓

–

✓

–

✓

11,428 (preliminary data)

1,355 (preliminary data)

88,000

✓

Ÿ Ÿ Ÿ Ÿ Ÿ

✓

–

2011 229

GySEV Zrt. (100) –

jános skála Tibor Mayer Adrienn Fleck

9400 Sopron, Mátyás király utca 19. (99) 577-102 (99) 577-401 info@gysevcargo.hu

11,017 (preliminary data)

70,000

✓

–

✓

1998 439

(100) –

István Erős Erzsébet Tóth József Fülep

4030 Debrecen, Vámraktár utca 3. (52) 510-120 (52) 510-197 info@trans-sped.hu

✓

Continental, Bunge Zrt., ENI, Hamburger Hungaria Kft., Nestlé

1989 148

Port Logisztika Kft. (80), individuals (20) –

istván sevecsek Judit Tankovics Zsuzsanna Szemelyácz

1138 Budapest, Szekszárdi utca 14. (1) 450-9003 (1) 450-9090 eurosped@ eurosped.hu

✓

Magyar Suzuki Zrt., Ford Közép-és Kelet-Európai Kft., Porsche Hungária Kft., Mercedes-Benz Manufacturing Hungary Kft., Mercedes-Benz Hungária Kft.

1990 301

– Beteiligungsgesellschaft Lagermax Autologistik International GmbH (99.90), Thomas Baumgartner (0.10)

imre domina, jános molnár Róbert Bálint Karolina Kalla

2040 Budaörs, Vasút utca 3. (23) 506-100 (23) 506-107 lagermax@ lagermax.hu

1989 250

– Raben Group N.V. (100)

Csaba árvai Noémi Szűcs Ágnes Bolyki

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

✓

www.gw-world.hu 10

gysev CaRgo ZRt. www.gysevcargo.hu

tRans-sped logisZtikai sZolgáltató köZpont kFt.

www.trans-sped.hu

euRosped nemZetköZi sZállítmányoZási ZRt.

8,673

297

17,000

✓

–

✓

–

✓

www.eurosped.hu

lageRmax autótRansZpoRt kFt.

8,300

230,000

✓

–

✓

www.lagermax.hu

Raben tRans euRopean HungaRy kFt. www.raben-group.com

BBJ_2406_spec_report.indd 19

www.dhl.hu/hu/ elerhetosegek.html

– Kühne + Nagel Eastern Europe AG (100)

www.railcargologistics.hu

WabeReR'ssZemeRey logisZtika kFt.

top loCal exeCutive CFo maRketing diReCtoR

–

Rail CaRgo HungaRia ZRt. www.railcargo.hu

oWneRsHip (%) HungaRian non-HungaRian

majoR Clients in 2015 distRibution

tRanspoRtation

dutiable goods

WaReHouse seRviCes

domestiC goods

ltl

Ftl

CaRgo Consolidation

domestiC

FReigHt FoRWaRding seRviCes

inteRnational

RailWay

distRibution

WaReHousing

net WaReHouse spaCe used FoR logistiCs WaReHousing (sqm)

net Revenue FRom logistiCs seRviCes in 2015 (HuF mln)

logistiCs seRviCes

yeaR establisHed no. oF Full-time employees on Feb. 1, 2016

Company Website

total net Revenue in 2015 (HuF mln)

Rank

Ranked by total net revenue (HUF mln) in 2015

6,934

31,000

✓

–

✓

–

✓

2016. 03. 23. 20:08

20 3

www.bbj.hu

euRo-log logisZtikai sZolgáltató kFt.

domestiC

CaRgo Consolidation

Ftl

ltl

domestiC goods

dutiable goods

tRanspoRtation

distRibution

5,881

4,788

19,000

✓

–

✓

–

✓

5,586

3,552 (preliminary data)

3,000

logistiCs seRviCes

FReigHt FoRWaRding seRviCes

otHeR

715

6,400

✓

47,100

✓

–

✓

–

✓

290

7,000

✓

–

✓

yeaR establisHed no. oF Full-time employees on Feb. 1, 2016

www.trans-sped.hu

inteRnational

tRans-sped tRint kFt.

RailWay

www.ekol.com

distRibution

ekol logistiCs kFt.

www.bikalogisztika.hu

WaReHousing

bi-ka logisZtika kFt.

net WaReHouse spaCe used FoR logistiCs WaReHousing (sqm)

net Revenue FRom logistiCs seRviCes in 2015 (HuF mln)

Company Website

WaReHouse seRviCes

total net Revenue in 2015 (HuF mln)

Rank

Budapest Business Journal | March 25 – April 7, 2016

oWneRsHip (%) HungaRian non-HungaRian

top loCal exeCutive CFo maRketing diReCtoR

addRess pHone Fax email

1991 97

György Karmazin (100) –

gabriella szécsi László Pálmai –

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

MOL, Robert Bosch, Audi, Samsung

2003 264

– Ekol Lojistik AŞ (100)

ákos kovács Csaba Frigyes –

1211 Budapest, Szikratávíró út (1) 872-6100 (1) 799-8257 info.hungary@ ekol.com

1990 151

(100) –

sándor bátki, István Erős Anasztázia Berecz Ádám Tomkó

2800 Tatabánya Szarkaláb utca 1. (34) 586-600 (34) 309-252 info@trans-sped.hu

1994 32

Tamás Zsolt Dunai (100) –

tamás Zsolt dunai Emese Győri –

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

miklós ágh László Vass Nóra Miklósi

1239 Budapest, Európa utca 4. (1) 289-6000 (1) 289-6060 info.rct.bilk@ railcargo.com 9600 Sárvár, Ikervári út 42. (95) 325-777 (95) 325-888 info@versteijnen.hu

majoR Clients in 2015

www.eurologgroup.com

Rail CaRgo teRminal - bilk ZRt.

2,202

✓

–

✓

2001 88

– Rail Cargo TerminalPraha s.r.o. (100)

veRsteijnen logistiCs kFt.

2,134

2,081

10,000

✓

–

✓

1995 74

– Versteijnen Logistics Group B.V. (100)

sándor voller Zoltán Jobb –

Z.I. Logisztikai Zrt. (100) –

józsef Földházi Mária Frühwirth Szabóné Györgyi Szabó Kovácsné

www.railcargobilk.hu

www.versteijnen.hu

áti depo köZRaktáRoZási ZRt.

1,829

153,000

✓

1,100

✓

–

✓

–

✓

–

✓

–

✓

1989 31

X Ingatlanfejlesztő és Ingatlanhasznosító Zrt (100) –

Zoltán szabó – Attila Kántor

2360 Gyál, Heltai Jenő utca 73. (29) 544-690 (29) 544-601 info@businesspark.hu

1990 39

(100) –

Zsolt Fülöp Erzsébet Tóth Márta Fogarasi

4030 Debrecen, Vámraktár utca 3. (52) 510-100 (52) 510-193 info@delog.hu

www.atidepo.hu 22

autókeR logisZtikai kFt.

delog kFt.

tRans-spedpapiRusZ kFt.

mogüRt keReskedelmi ZRt.

euRo mini stoRage HungáRia kFt.

www.businesspark.hu

www.trans-sped.hu

www.mogurt.hu

www.euroministorage.com

bajai oRsZágos köZFoRgalmú KIKötőműKödtEtő kFt.

997 (preliminary data)

51,000

963 (preliminary data)

–

290

102

10,000

150

7,500

22,400

–

✓

–

Trans-Sped Kft., WKS Ungarn Kft., Alaszka Kft.

Ÿ Ÿ Ÿ

✓

–

✓

–

✓

–

DUNAPACK Kft.

1995 46

(100) –

antal konyári Erzsébet Tóth Antal Konyári

4400 Nyíregyháza, Tünde utca 2. (42) 599-297 (42) 599-297 info@tspapirusz.hu

–

✓

–

✓

–

1946/ 1992 12

Individuals (100) –

lászló lehel – –

1113 Budapest, Bocskai út 77–79. (1) 317-4052 (1) 209-2133 office@mogurt.hu 1097 Budapest, Gyáli út 50. (1) 333-8888 (1) 333-8890 info@ euroministorage.com

✓

–

✓

–

✓

–

✓

–

✓

–

✓

–

✓

2006 4

– (100)

danu m. temelie – –

1999 4

MNV Zrt. (33.33) Baja Municipality (33.33), ÁTI Depo Zrt. (33.33) –

lászló nagy – –

6500 Baja, Szentjánosi utca 12. (79) 422-502 (79) 422-502 info@portofbaja.hu

2001 8

PLIMSOLL Szolgáltató Kft. (33), Európa Rendezvény Iroda Kft. (25), individuals (42) –

botond szalma – –

1139 Budapest, Frangepán utca 7. (1) 237-1100 (1) 237-1091 fluvius@fluvius.hu

CG Invest Kft. (100) –

Csilla gömze – –

1117 Budapest, Hauszmann Alajos utca 3/B (1) 425-2240 (1) 203-0070 info@intercargo.hu 1211 Budapest, Szikratávíró utca 17–21. (1) 278-0951 (1) 278-0807 logisztika@masped.hu

www.portofbaja.hu

Fluvius kFt.

www.fluvius.hu

inteRCaRgo NR HungaRy kFt.

www.intercargo.hu

masped logistiCs NR kFt.

wwwmaspedlogisztika.hu

plimsoll NR sZolgáltató kFt. www.plimsoll.hu

WabeReR's NR inteRnational ZRt. www.waberers.com

Ÿwould not disclose, NR not ranked, NA not applicable

BBJ_2406_spec_report.indd 20

1136 Budapest, Pannónia utca 11. (1) 305-2200 (1) 305-2235 mail@atidepo.hu

1996 133

–

40,000

6,000

–

✓

–

✓

–

✓

–

✓

–

✓

–

✓

–

✓

–

✓

–

✓

–

✓

–

✓

–

✓

–

✓

–

✓

–

✓

1993 8

1992 121

(100) –

marcell kovács – Péter Zoltai

1992 13

Individuals (100) –

botond szalma – –

1046 Budapest, Szőnyi István utca 42. (1) 210-9800 (1) 210-9801 plimsoll@plimsoll.hu

1990 1,900

– CEE Transport Holding B.V. (100)

györgy Waberer – –

1239 Budapest, Nagykőrösi út 351. (1) 421-6666 (1) 421-6699 info@waberers.com

This list was compiled from responses to questionnaires received by March 21, 2016 and publicly available data. Data is based on companies’ own data revelations. To the best of the Budapest, Business Journal’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,, Madách Imre út 13–14., or faxed to (1) 398-0345. The research department can be contacted at research@bbj.hu

2016. 03. 23. 20:08

4 Socialite BBJ

Wine: A preview of the Tokaj auction

Larger and smaller wineries were represented in this tasting of samples from Hungaryʼs most famous wine region. ROB SMYTH

The Tokaj March Great Tasting, the centerpiece of a month of events dedicated to Hungary’s world-class wine region, saw 80 wineries pile down to the capital to provide perhaps the most comprehensive overview yet of Tokaj in one location, beyond going to the region itself. While a lot of the big names were represented, if not there in person, the tasting also provided a great opportunity to sample the rapidly multiplying quality wines of lesserknown and upcoming producers. Held at the Corinthia Hotel Budapest on March 19, the tasting kicked off with a press conference about the upcoming fourth Great Tokaj Wine Auction (Nagy Tokaji Borárverés) – which will see exclusive and limited-release Tokaj wines from 19 producers go under the hammer on April 23. “I believe that Tokajʼs best-ever wines are being made right now,” said Ronn Wiegand, an American who has the rare distinction of holding both the notoriously difficult Master of Wine (MW) and Master Sommelier (MS) titles. He added that some of those best-ever wines are available in the upcoming auction. The lots for sale are selected solely for the auction and are only available in limited quantities: one Gönci barrel (136 liters) for each of the dry wines and either one or a half Gönci barrel (68 liters) for the sweet wines. They comprise a range of Tokaj wine styles from dry, late harvest and sweet Szamorodni to Aszú and the nectar-like Eszencia. This year the wines are made by Béla Baranyai, Barta, Basilicus, Béres, Demetervin, Disznókő, Dorogi, Erzsébet, Füleky, Gróf Degenfeld, Holdvölgy, Kvaszinger, Patricius, Samuel Tinon, Sauska Tokaj, Szent Benedek, Tokaj Kereskedőház (Tokaj Crown Estates), Tokaj-Hétszőlő and Zsirai. This represents a nice spread of larger and smaller producers, as well as established and upcoming winemakers. From the 2016 auction lots, I had a sneak preview of Zsirai’s 2015 Középhegy 2015 25-ös hordó (25th barrel) 2015, a 100% Furmint that was spontaneously fermented. While still a baby (Furmint requires time to settle down), it appeared to have everything in the right place for a prosperous future.

BBJ_2406_socialite.indd 21

Tokaj tipplers at the tasting. In the 2015 auction, three-quarters of the lots were sold raising a total of €100,415, up from €90,433 in 2014 and €67,500 in 2013. Last year, 40% of the lots were sold to buyers from beyond Hungary, while buyers’ groups were on the increase, according to the Tokaji Borlovagrend (Confrérie de Tokaj), which organizes the auction.

An impressive Hárslevelű Wiegand, who resides in Tokaj, and wine educator Gabriella Mészáros AIWS (Associate of the Institute of Wine and Spirits), who is head of the Borkollégium (Wine College), are going to check the quality of the wines at several stages from selection to bottling for next year’s auction. Mészáros delivered one of the seven masterclasses at the Tokaj March Great Tasting, which offered the chance to look back at the dry wines from the 2012 vintage that were sold at the first auction in 2013. While 2012 was a scorching, dry vintage which had initially appeared to offer wines with only a very short time at the top, given their overly candied fruit rather than the desired fresh juiciness, and a lack of acidity, the specimens we examined were in glorious shape and anything but past their best. Interestingly, it was a Kikelet Hárslevelű Váti 2012 that most participants, myself included, found the most impressive, adding more fuel to the argument that Hárslevelű can be every bit the equal of the finest Furmint, if not capable of surpassing the more prestigious grape. While this Hárs was

“I believe that Tokajʼs best-ever wines are being made right now.” honeyed, floral and fruity, it also had plenty of fresh citric bite and very good acidity for the vintage. Many write off Hárslevelű as a serious dry wine due to the often flabby offerings made from it, but pick at the right time – as Kikelet’s Stéphanie and Zsolt Berecz do, before the acidity plummets – and it can easily be in premium dry wine territory. A close second, according to the show of hands of the audience, was Furmint Nyúlászó 2012 from Tokaj doyen István Szepsy, which was a complex, rich but balanced fusion of stony, oily and vegetal notes. What has been especially noticeable over the last couple of years is that winemakers like Szepsy have been branching out to less discovered corners of the region. The El Dorado of Tokaj now the village of Tállya, and a winery of the same name is putting out some great value wines. Tállya Wines has a number of owners who put their grapes to the collective good, as well as making a range of single vineyard wines released under their own labels (such as Zsadányi) but still made by the Tállya wines vintner, István Hudák. Furmint is often priced on the high side but Tállya Wines’ Furmint 2013 puts lots into the bottle for less than HUF 3,000. It oozes quince, which is highly characteristic of Furmint, has a bit of oak and creaminess but finishes nice and fresh. The price rises sharply to around the

HUF 8,000 mark for Zsadányi Dongó Furmint 2013, which stunned with its broad spectrum of aromas and flavors conjuring up stoniness, vegetal hints, lime, pear, green apple and quince, all held together and brought through to a flavorsome and ultra long finish by the tongue-tingling acidity. Other new names to watch from the more outlying Tokaj areas include Norbert Csite from Erdőbénye (Bardon continues to impress from here) and Hársányi from Sárospatak. Meanwhile, the large winery Pajzos from Sárospatak appears to be bang back on form after a few years in the wilderness.

2016. 03. 23. 20:14

4 Socialite

www.bbj.hu

Budapest Business Journal | March 25 – April 7, 2016

WHAT’S

ON HUNGARIAN PRESS PHOTO EXHIBITION From March 25, Robert Capa Contemporary Photography Center Held in Budapest for the 34th year, the Press Photo Exhibition will be on view until May 18. This year’s jury received thousands of entries from Hungarian photojournalists, all vying for top prizes in several categories. The jury selected roughly 300 works to display at the exhibition, from which the winners will be selected. capacenter.hu BOOMERANG BUNNY EXPRESS March 28, Nyugati (Western) Railway Station Hop aboard the Boomerang Bunny Express on Easter Monday, departing from Budapest’s Western Railway Station

Fun things to d o in Budapest for the nex t t wo weeks.

at 11 a.m. and traveling to the Railway Museum where Easter games have been organized for young travelers such as an Easter egg hunt, quizzes, crafting and egg decorating workshops and a petting zoo as well as live music and dance performances. The train departs at 2:15 p.m. on its return to the Western Railway Station. vasuttortenetipark.hu DMITRI HVOROSTOVSKY AND THE URAL PHILHARMONIC ORCHESTRA April 2, Palace of Arts Born in 1962, the athletic baritone starʼs favored outfit is a pair of jeans and a T-shirt, and even on stage he is a great believer in the unaffected approach. Recognizable for his velvety voice and shock of silver hair, Hvorostovsky gained international fame in 1989 when he won

Dmitri Hvorostovsky will perform with the Ural Philharmonic Orchestra. the BBC Cardiff Singer of the World competition. Today he is sought after for leading roles in Russian opera the world over. A regular guest performer at the New York Metropolitan, Berlin State

Opera, Londonʼs Covent Garden, Vienna State Opera and La Scala in Milan, Hvorostovsky will sing at the Béla Bartók National Concert Hall from a repertoire for which he is perfectly suited. He will

Budapest Spring Festival brings big productions to Budapest From April 8-24, Budapest will get a good dose of musical and cultural programs. Festival director Teodora Bán shares her best picks for this year. During the Budapest Spring festival’s two-week run, the city is literally overrun with things to see and hear, performances that Teodora Bán says are sure to appeal to a very wide audience. The festival will kick off with an Opening Parade on April 9 featuring dancers, singers and musicians making stops at various locales of musical significance including Liszt Ferenc tér and Kodály Körönd, explains Bán. The parade will culminate in a performance at Hősök squaret. Every year, the festival highlights a guest country. This year’s guest is China and not only will the country’s music be showcased but audiences can also get a peek at some its contributions to the world of fashion design at the Road of Silk show on April 23. Hungarian fashion designer Kati Zoób will also feature her works inspired by Chinese motifs. Renowned Hungarian composer Franz Liszt will be well represented throughout the festival’s program in particular with a piece composed especially for the festival

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Kodály Quartet. entitled Inspirations: Ferenc Liszt in his Songs and Letters on April 14, says Bán. This selection of Liszt’s lieders, or musical poems will be performed by a cast of talented local singers, musicians and

orators. In the Footsteps of Liszt will honor the great composer with a full day of concerts on April 10 beginning with pianist József Balog at 11 am followed by pianist Gábor Farkas with the Hungarian

Radio Symphony Orchestra at 3 pm, and Kálmán Oláh and guests performing jazz improvizations of Liszt’s music at 7:30 pm. A not to be missed Hungarian production is the piano duo of Dezső Ránki and Edit Klukon. “This unique husband-and-wife pianist duo will celebrate the 150th anniversary of the birth French composer and pianist Erik Satie on April 15,” says Bán. Martin Lubenov will perform with his Jazzta Prasta band on April 20 at the Bálna Budapest. Considered one of the most original accordion players of today, Lubenov mixes comedy and storytelling into his music, which stems from the traditions of Bulgarian Romany music. His influences range from jazz to the South American dances and Irish folk music. The Kodály Quartet will perform on April 21 along with esteemed musical guests including clarinet player Wenzel Fuches and hornist Andrej Žust, both of whom are lead players in the Berlin Philharmonic Orchestra. Also joining the quartet will be bassoonist and teacher Bence Bogányi and double bassist Zsolt Fejérvári of the Budapest Festival Orchestra. Visual arts will also be well represented at the festival. “This will be the first year that we will present Budapest Art Week featuring 60 programs across six days, all of which can be visited with one ticket,” explains Bán.

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Budapest Business Journal | March 25 – April 7, 2016

Beethoven Festival in early April. be accompanied by an orchestra which, though founded in 1936, was only able to acquire an international reputation after 1991 for obvious political reasons. The Yekaterinburg-based Ural Philharmonic Orchestra has performed – and continues to perform – with leading Russian artists. mupa.hu SHINICHI EGUCHI March 30, Museum of Music History Japanese cellist Shinichi Eguchi first began playing cello at the age of eight and by the age of 12 he had already performed with a ten-member ensemble at various venues around the world including Carnegie Hall in New York and the Opera House in Sydney. He completed his studies at the Conservatoire de Paris and has since been a member of the Tokyo Metropolitan Symphony Orchestra, currently as second cellist. On this evening he will perform works by SaintSaens, Popper, Caccini, Kreisler, Fauré, Massenet and Debussy. zti.hu BEETHOVEN FESTIVAL April 2-3, Liszt Academy Concert Center, CEU As part of a two-day concert series, young musicians will tackle Beethoven’s complete symphonic repertoire in a contemporary reinterpretation for the chamber ensemble. The Classicus Ensemble, which will

Hungarian Press Photo Exhibition. (Photo: Zoltán Balogh) perform the works, is made up of young musicians with the sponsorship of the Liszt Academy and CEU. The concert on April 2 will be free to attend. lfze.hu

NATIONAL DANCE HOUSE GATHERING AND ARTS AND CRAFTS FAIR April 2-3, Papp László Budapest Sportaréna

TZUMO QUARTET April 3, Palace of Arts

One of the largest dancehouse and folk festivals of the year features amateur and professional performers of all ages. The event has been around since 1982 and has built a massive following of folk music fans over the past three decades. Alongside dance and musical performances, the event also features the sale of handmade regional crafts and edible delicacies. Audience participation in the dances is highly encouraged. A warmup to the event will take place on April 1 at the Fonó Budai Zeneház. tanchaztalakozo.hu

Young Hungarian pianist Tzumo Árpád Oláh has moved in many exciting musical circles following wins at a number of esteemed competitions at home and abroad and the completion of his studies at two of the most prestigious institutes in the United States: The Berklee College of Music and the Thelonious Monk Institute. He is also fortunate enough to have collaborated with such greats as Wayne Shorter, Herbie Hancock and Terence Blanchard. This performance will feature international musicians playing mostly acoustic contemporary jazz. The members of the quintet include the much sought-after accompanists Josh Ginsburg and Kyle Poole as well as Slovenian-born Jure Pukl. mupa.hu

TITANIC INTERNATIONAL FILM FESTIVAL From April 7, various venues Budapest will host the 23rd annual Titanic International Film Festival from

April 7 to 15 at six Budapest cinemas, with much of the main activities and larger screenings taking place at the Uránia National Film Theater. Recognized as one of the more diverse film festivals in the capital, the Titanic brings dozens of interesting films from all over the world, along with a good selection of more off-beat Hollywood fare. Full details and screening times will soon be available on the festival’s website. titanicfilmfest.hu HUNGARIAN JAZZ FESTIVAL April 7-8, Budapest Jazz Club One of the most important jazz events in the city held every year features many of the more seasoned players on the local scene as well as up-andcoming young musicians and fresh music school graduates. Expect to hear everything from jazz standards to more experimental improvizations. Most of the festival’s events are free to attend. bjc.hu

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