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

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BUSINESS JOURNAL BUDAPEST

VOL. 26. NUMBER 6

MARCH 23 – APRIL 5, 2018

SPECIAL REPORT Logistics

NEWS

High Turnout, Hard Bargaining Needed to Beat Fidesz Hungarians go to the ballot box on April 8. With government officials embroiled in a spate of alleged corruption scandals, and a municipal election upset, the outcome is harder to call than many had expected.  4-5

SPECIAL REPORT

Hungary’s Logistics Market to Grow 6% This Year

Hungary’s logistics providers are likely to stay on a growth path this year and remain a key driver of the economy, but the lack of skilled professionals continues to be a risk and protectionist steps on Western European markets pose a danger.  11

SOCIALITE

Women Winemakers

The “Look for the Women, are They Weaker? No” tasting hosted by Borsmenta Magazin on International Women’s Day showcased Hungary’s considerable female winemaking talents.  23

Moving the Economy Forward

I N ES BUS

S

AmCham Hungary President Farkas Bársony and CEO Írisz Lippai-Nagy on the ground covered, and the work entailed, in sharing the chamber’s third competitiveness recommendation package with the government.  7

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THE EDITOR SAYS

EDITOR-IN-CHIEF: Robin Marshall EDITORIAL STAFF: Zsófia Czifra, Kester Eddy, David

Holzer, Levente Hörömpöli-Tóth, Christian Keszthelyi, Gary J. Morrell, Rob Smyth, Ágnes Vinkovits. LISTS: BBJ Research (research@bbj.hu) NEWS AND PRESS RELEASES:

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ADVOCACY ORGANIZATIONS MUST PLAY A LONG GAME Many years ago, I was reporting on a meeting where an awardwinning businessman proclaimed that lobbying by chambers of commerce did not work. Given that he was speaking as guest of honor at the annual meeting of one of the international chambers of commerce, it was not a message that was universally well received. He left the meeting before I could speak to him, and then did not return my calls, so I never had the chance to clarify his exact intention. The annual meetings of chambers are not always the most thrilling of events, so perhaps he merely intended to be provocative. Perhaps what he actually meant is that lobbying does not bring about quick results. What is beyond doubt is that chambers of commerce consider their advocacy work to be among the most important roles they play. And central to that is the need to play a long game. I’m sure it is true of all the chambers, but I do know that the two largest bodies, the American and German, are careful to pursue cooperative relationships with the government of the day, precisely because they do not expect to achieve overnight success. If a government, any government, is to listen to the advice proffered by the business world (and I have yet to meet a business person who does not think he or she has something of value to tell those in government, at least where it concerns the field of their own business), it has to be built on a basis of trust and shared experience. In one sense, at least, the eight-year period of Fidesz government from 2010 has made that easier. BBJ-PARTNERS

CORRECTION

In the Book of Lists 2017-2018, some of the data of Gosselin Mobility Budapest Kft. was not printed correctly in the list of international moving companies. The correct data is the following:

What We Stand For: The Budapest Business Journal aspires to be the most trusted newspaper in Hungary. We believe that managers should work on behalf of their shareholders. We believe that among the most important contributions a government can make to society is improving the business and investment climate so that its citizens may realize their full potential. The Budapest Business Journal, HU ISSN 1216-7304, is published bi-weekly on Friday, registration No. 0109069462. It is distributed by HungaroPress. Reproduction or use without permission of editorial or graphic content in any manner is prohibited. ©2017 BUSINESS MEDIA SERVICES LLC with all rights reserved.

As AmCham President Farkas Bársony makes clear in our interview with him and CEO Írisz Lippai-Nagy on page 7, successful advocacy can take a long time indeed. The current government introduced a 9% corporate income tax rate 13 years after the American chamber first suggested it. AmCham did not give up when it was initially rebuffed, but continued to press the issue, and in doing so was praised for being a “persevering partner, which had consistently urged such a reduction”. While some governments may be seen as being more pro-business than others, that distinction is not of much help to the chambers once the elections are over, the people have spoken and a government elected. At that stage business organizations and advocacy groups must deal with the party in power. Fidesz built a reputation for passing laws in a hurry – initially often without doing much in the way of consulting – but being slow to reconsider them. It was a year before the deeply unpopular Sunday shopping ban was lifted. The only time I recall it moving quickly happened, ironically, before it had passed a law, back in October 2014 when a proposed internet tax prompted mass demonstrations. Hungary’s government was painted as being out of touch, but the proposed law was dropped, and Fidesz is now something of an internet evangelist. That’s a long way from where it started, but then governing, just as with advocacy, is a long game indeed. Robin Marshall Editor-in-chief

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Total net revenue in 2016 (HUF mln): 212 Top local executives: Stephan Joseph Jacques Alphonse Marie Geurts, and Zsolt Sárándi Address: 1094 Budapest, Liliom utca 1/b The editorial staff of the Book of Lists apologizes for the error.

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News

///macroscope

Economy Kick Starts in January

6%

In the light of the latest macroeconomic data, there are good reasons for optimism: analysts now say that Hungary’s GDP growth could again exceed 4% in 2018, and many expect a two-digit growth rate in wages. However, some warn of inflationary pressure.

real wage

ZSÓFIA CZIFRA

The Hungarian economy kicked off 2018 on a strong note with some better-than-expected data for the first few months. In January, retail trade grew a notable 7.5% from the same month in the past year, while industry produced a 6.9% increase year-on-year. Construction sector output was a whopping 43.2% higher than a year ago, tourism is soaring at a more than 10% increase in guest nights from the previous January, and even new car sales produced a remarkable result with a 38.5% yearly increase. Domestic consumption and investments also grew notably, which boosted imports, but exports have also grown dynamically. Based on all the good news, Takarékbank analyst Gergely Suppan predicts that the GDP growth in January could have exceeded 5.5% and might have even been close to 6%. For the full year, Suppan expects GDP growth of 4.5%, but he doesn’t exclude that it could grow even more. The latest data to come to light was the second reading of January’s industrial output. The volume of industrial production increased by

6.9%

year-on-year,

the Central Statistical Office (KSH) reported in mid-March. There was no change compared to the data in the first estimate. The output – according to the seasonally and working-day adjusted index – was above the previous month’s level by 1.5%. Within industry, production rose by 8.4% in manufacturing (representing a decisive, 95% weight) and by 94% in mining and quarrying (the latter having little weight, though). The output of the energy industry (electricity, gas, steam and air-conditioning supply) fell by 18.1%, mainly as a result of much warmer weather compared to the previous year.

at Takarékbank predict an annual wage hike of more than 9% for 2018. Paired with the expected annual inflation of 2.5%, that means more than

Continuing Trends

In light of the latest wage statistics, the positive trends in domestic consumption are thought likely to continue. The average gross monthly wage in Hungary grew by an annual 13.8% to HUF 310,800 in January, KSH reported on March 20. Calculating with an annual inflation rate of 2.1%, real earnings increased by 11.5% in January. Excluding Hungarians in so-called “fostered” (public) work programs, the average gross wage

increased by

12.7%

to HUF 323,600. According to KSH, average gross earnings were highest in the financial and insurance sectors (HUF 570,000) and lowest (HUF 203,100) in accommodation and food service activities. Commenting on the data, Minister for National Economy Mihály Varga told public television channel M1 that wages had risen for the 61st consecutive month, and the trend was likely to continue in the coming months. He noted that wage increases were most visible in the transport, warehousing, health and construction sectors. Varga also said that wage hikes were partially the result of the six-year wage agreement the government signed with employees and unions in November 2016, however the rate of wage growth exceeded expectations. Varga also emphasized that average net wages, including family tax allowances, had increased to more than HUF 215,000 per month, and thus net wages have gained 62.3% since 2010.

Analysts Surprised

The extent of the growth also surprised analysts. The rate of the wage growth might slow a little from the second quarter

of the year, but full year data is expected to lag behind last year’s only slightly, according to their unanimous opinion. According to Péter Virovácz, head analyst at ING Bank, January’s wage data exceeded the 12% expansion the market expected and was mainly driven by the 8% and 12% increase in minimum wages for unskilled and skilled workers. The labor shortage could also be contributing to the wage hike. As for the rest of the year, Virovácz foresees a stronger increase in the first quarter, due to the low base effect; however, on average, he expects a double-digit wage increase. Takarékbank analyst András Horváth agrees that the persistent labor shortage – especially in the area of skilled workforce –, the minimum wage increase, and the pay rise in the public sector all lifted the rate of the January wage increase above the previously expected level. Analysts ADVERTISEMENT

growth for the full year. The pressure brought by the labor shortage could result in an even higher growth rate in wages. K&H Bank head analyst Dávid Németh also predicts that the wage hike will continue through the year; he calculates with a net wage hike of about 10%, while real wages could go up by about 8% on a yearly basis. However, he warns that continuous and significant wage rises could pose a possible risk to the performance of the Hungarian economy. For one thing, productivity must keep up the wage rise, otherwise the Hungarian economy could lose its competitive edge. And although it cannot be seen at the moment, inflationary pressure could also be a risk; namely, that increasing consumer consumption could lift prices sooner rather than later. On the other hand, companies now need to pay their employees more, and the rising expenses will likely force them to raise the price of their products and services. At the end of the day, this will also contribute to increasing inflation.

Numbers to Watch in the Coming Weeks The next two weeks will not be all that exciting in terms of macroeconomic data. Employment and unemployment figures will be published on March 28, when KSH will be scrutinizing the DecemberFebruary period. On April 5, the statistical office releases February retail trade data, followed by the first estimate of February’s industrial output figures.


4 | 1 News

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Budapest Business Journal | March 23 – April 5, 2018

Ferenc Gyurcsány, the former Socialist ​prime minister (2004-2009), leads the Democratic Coalition, a social democratic party that has a small, but dedicated following. However, he is anathema to many Hungarians on the right. His party commands 9% support of decided voters, according to the latest Median opinion poll.

Viktor Orbán, Hungarian PM 1998-2002 and 2010-2018, is seeking a record third consecutive term. Orbán inspires tremendous loyalty from his national-conservative voter base, but opponents are sharply critical, denouncing him for what they see as autocratic policies, alleged cronyism and friendship towards states such as Russia and China.

Hungarians go to the ballot box on Sunday, April 8, coincidentally the eighth general election since the end of communism in 1990. With government officials embroiled in a spate of alleged corruption scandals, and a municipal election upset, the outcome is harder to call than many had expected. KESTER EDDY

“It’s exciting!” says Róbert László, “In January, I was thinking the election would be a boring affair, a foregone conclusion, with Fidesz as the sure winners. Now, nothing’s certain.” László, a political scientist and election expert with Political Capital, a Budapest think tank, is not alone: despite opinion polls indicating the governing FideszChristian Democrat (KDNP) alliance has some 50% of decided voters, politicians

Gábor Vona, the leader of Jobbik. Once shunned by all democratic parties for its far-right, anti-Semitic and antiRoma statements, Vona has sought to make Jobbik more mainstream in the past two years. However, the jury is out on how much his membership has followed. Jobbik has 16% support of committed voters according to the latest Median poll.

of all hues have redoubled their efforts to make meaningful gains on April 8. The catalyst for this surge of enthusiasm was the shock result of the mayoral by-election in Hódmezővásárhely, the hometown of Minister of the Prime Minister’s Office János Lázár, arguably second only to Prime Minister Viktor Orbán in the hierarchy of the governing Fidesz party. On February 25, the electorate in this southeastern city, previously a Fidesz and Christian Democrat stronghold, gave independent candidate Péter Márki-Zay

57.5% of the vote,

trouncing his Fidesz rival, on 41.6%. The key to this remarkable upset? The normally disparate, bickering opposition, from the Socialists (MSZP) on the left to Jobbik on the right, had united in support of Márki-Zay, a deeply Catholic local, who attracted almost three times the combined vote of the opposition candidates in the previous mayoral contest.

Cooperation

The knock-on effect was equally sudden: overnight, political leaders, most notably Bernadett Szél, of the green LMP, who had previously shunned cooperation with “tainted” opposition parties, now favor cooperation in a bid to defeat Fidesz at the polls. To the uninitiated in Hungarian politics – especially those from the Englishspeaking world used to simpler “first-pastthe-post” election systems – such political manoeuvers may seem baffling. But the Hungarian election system both magnifies the voting result of the largest party while leaving the fragmented opposition parties – as in today’s Hungary – scrambling for the crumbs in terms of parliamentary seats, if not for their very survival (see explainer article opposite). The Hódmezővásárhely result also

Photo: Párbeszéd.hu

Photo: LMP

Photo: jobbik.hu

Photo: Belish/Shutterstock.com

Photo: DK

High Turnout, Hard Bargaining Needed to Beat Fidesz

Bernadett Szél is co-president of the Politics Can Be Different (Lehet Más a Politika; LMP) party, and has been an MP since 2012, having joined the party in 2010. In September 2017 she was nominated as the LMPʼs candidate to the position of prime minister for the upcoming parliamentary election.

shocked Fidesz: Prime Minister Orbán has apparently ordered all hands to the pumps, and unashamedly used the commemoration of the 1848 Hungarian Revolution against Habsburg rule on March 15 to deliver a speech threatening opponents and rallying support for government policy. But does Orbán really have to fear defeat? The latest opinion polls, taken in early March, all indicate Fidesz has the support of 50% or more of decided voters, leaving its nearest rivals – Jobbik, on the right, and the Socialist Party on the left – battling between themselves with between 10-19% of committed voters, depending on the pollster. (As is normal, Hungarians have a high propensity to avoid commitment: “don’t knows” measure between 30-40% of the electorate.) For comparison, in 2014, when Fidesz

garnered

44.9%

of the vote, it won 67% of parliamentary seats – a two-thirds “super majority”.

City Specific

Moreover, the Hódmezővásárhely result was specific for that city. It coincided with a financial scandal involving the high-profile Lázár, and Márki-Zay is a well-known conservative (and former Fidesz member). Had the challenger been from the left, the outcome would likely have been far closer, if not the reverse. “What happened in Hódmezővásárhely could be a kind model, but there is no Péter Márki-Zay in every constituency,” László told the Budapest Business Journal. Nonetheless, if opposition parties can reach more agreements on single constituency challengers, or if voters themselves swallow personal dislike and support a rival party’s candidate of their own volition, Fidesz could have a fight on its hands.

Gergely Karácsony is the leader of Dialogue for Hungary (Párbeszéd Magyarországért) and the joint PM candidate of the Socialists and Párbeszéd. He won the mayoral election in Zugló in 2014 as a joint candidate of opposition leftist-liberal parties. He was previously an MP for LMP from 2010-14, but left when it refused to cooperate with other parties.

This would be especially true in the case of a high turnout – 65% or more will favor the opposition. Less than three weeks before the election, the MSZP-Dialogue alliance is firm and has agreed with the Democratic Coalition (DK) on candidates for individual constituencies (MSZP-Dialogue are standing in 59, DK in 45, with both backing independents in two), but the two camps have no agreement on a joint party list. As this paper went to press, talks between LMP leader Bernadett Szél and the left-liberal alliance appeared stalled. Szél’s willingness to reach a compromise – and get her party’s backing for that – could be crucial to the final result, as LMP has candidates in all 106 constituencies, but is polling only 5-8% of support from decided voters. Jobbik – now presenting itself as a moderate national party – is also competing for all

106

individual

seats. It has refused cross-party cooperation prior to the elections – though analysts note that its supporters have proved adept at tactical voting in the past to oust an incumbent. Együtt (Together) – a liberal party polling a mere 1% support - has unilaterally pulled out of most single constituencies, but insists on fighting a handful of key seats, such as Csepel, where it has strong challengers. It, too, could have an impact on the final result out of all proportion to its vote. With potential cooperation deals still in the air, the many uncertainties of the complex election system along with a series of alleged financial scandals being published in opposition media, have led analysts to agree that, despite the massive Fidesz lead in the polls, the result on April 8 probably remains too close to call.


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Budapest Business Journal | March 23 – April 5, 2018

Hungary’s Voting System: a Challenge to Understand The complexity of the Hungarian election system is already the stuff of legend: according to one tale, after an expert had outlined the intricacies to American observers in Budapest for the 1990 elections, one visitor supposedly retorted: “Now I understand why a Hungarian invented the Rubikʼs Cube.” KESTER EDDY

In 2010, after Fidesz’ sweeping election victory, the governing party unilaterally introduced a new election law in 2011. Among the key elements, the new system has one round of voting (previously two), while it has reduced the number of individual constituencies to 106 (was 176) and slashed the parliamentary seats to 199 (from 386), The government championed the new system as fairer, cheaper and less complicated. Critics, while welcoming a smaller parliament, accused the government of systematically gerrymandering the new constituencies in favor of Fidesz. Whatever the truth, many ordinary Hungarians (let alone foreigners) have an unclear understanding of the new system, along with its electoral implications. “The system has many majoritarian elements, meaning it favors the largest party, even if it only wins a minority [i.e. less than 50%] of the constituency votes,” says Róbert László of Political Capital.

A Simplified Explanation

Hungarians with a registered address in the country receive two votes. One is for their choice of candidate for their individual constituency. It is a first-pastthe-post race, meaning the candidate with the most votes wins the seat. The second vote is for the so-called “party list”. Citizens vote for the party of their choice, which is added to a pot. Up to

93 MPs

are then chosen according to the proportion of votes in the pot. Parties must achieve a threshold of at least 5% of the total list vote to qualify for seats. Also added to the pot are the “surplus” votes of the losing candidate(s) in the individual constituency fights. This practice is quite common in European elections, the whole purpose of the list being to compensate losers in the first-past-thepost individual constituency vote and give them some representation in parliament.

However, in an element unique to Hungary, the new election system includes what might be called the winner’s “surplus booster” component, whereby the excess votes of the winning candidate are also added to the pot. As an example of how it works, let us consider the result of the constituency vote for the fictitious seat of Margitváros. Candidate Party Votes Ágnes Blues 20,001 Balázs Greens 15,000 Csilla Independent 10,000 Dénes Reds 1,000

Csilla, as an independent, does not have a party list, so her 10,000 votes are lost, yielding no result whatsoever. In addition, according to the new election rules, Ágnes would only have needed 15,001 votes to beat Balázs and win this seat. Therefore, if you subtract that amount from what she actually polled you arrive at 5,000 “surplus” votes. These 5,000 votes are therefore also added to the pot for the Blues.

Hungarians Abroad

In this example, Ágnes becomes the new MP as the individual winner, with 20,001 votes. It is also clear how multiple candidates divide the opposition vote: Ágnes wins the seat with just 43.5% of the total vote. The votes for Balázs and Dénes go to the compensation pot for their parties, Greens and Reds.

Those Hungarian citizens living abroad but with a registered address in Hungary get two votes (like their compatriots at home) but they can only vote at an embassy or consulate. Hungarian citizens with no registered address in Hungary may vote by post, but only receive one vote – for the party list. Complicated as it is, the above is only a simplified explanation and does not list all the elements.

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IF PARLIAMENTARY ELECTIONS WERE TODAY, WHICH PARTY WOULD YOU VOTE FOR?

49

50 40

36

36

(MARCH 2018)

30 27

22

20 12

15

18 12

14

17 6 7

10 0 Fidesz-KDNP MSZP-P All interviewed

8 0 0 1

Jobbik

LMP-ÚK

Definite voter

Együtt

4 4 5 DK

1 1 1

0 1 1

1 1 1

Kétfarkú Momentum Others Uncertain

Definite voter with party preference Source: publicus.hu

Elections: an Uncertain, Unsettling Time for Business Opposition politicos may be buzzing after events in Hódmezővásárhely and the corruption scandals surrounding some senior government officials, yet the ratings for Prime Minister Viktor Orbán’s personal standing and that of his Fidesz party – both around the 50% mark – are about as high as it gets. KESTER EDDY

These should mean what would be a record-setting third consecutive term for the pugnacious former anti-communist student activist. Yet despite this popularity, business is wary. “I know of several deals which are on hold until after April 8,” one lawyer active in the Budapest corporate world told the Budapest Business Journal on condition of anonymity. To an extent, this is normal. Business likes predictability, and any election risks an upset – so unless an incumbent

government is messing up big time, there is a tendency to go for “the devil you know”. And as one Western observer and former banker says; this devil appears to be delivering the goods. “I don’t like him [Orbán]; there’s corruption for sure, but hey, he’s got 4% growth, low unemployment, personal income tax at 15% and corporate tax at 9%. It all seems to be working for now, so who’s gonna want to throw him out?” In most pre-election speeches, the prime minister has largely stressed the “threat” of the so-called “Soros Plan” and mass migration “overwhelming” Magyar culture. When he speaks on the economy, he

emphasizes future growth and more efforts to improve competitiveness in a “workbased” culture. It sounds good. Independent (and opposition) economists note, however, that the current growth is below average for the region and is boosted by European Union subsidies and a benign world economic environment. The implication is that, without either, Hungary might not fare as well. Meanwhile, the pension system is unsustainable, the healthcare system is expensive, inefficient and bleeding staff, while the education system is failing all but the upper and middle classes.

What If?

So, what if the opposition should win? Gergely Karácsony, the prime ministerial candidate of the Socialist-Dialogue electoral alliance, currently appears the most likely man to head a new government in the event of what would be an electoral upset. A somewhat self-effacing political scientist, Karácsony has by many accounts been an effective mayor of Zugló, Budapest’s District XIV, and is seemingly untainted by corruption. He has named Tamás Mellár, a respected professor of economics, as his shadow minister of finance. Mellár, 64, was an

adviser to the center-right government of József Antall in 1992-’94, and later head of the Central Statistical Office, is as sober as they come without being dour. His name should inspire confidence in the business and financial community. Yet Karácsony also appears unable to resist some electoral populism, promising to reinstate the emotive “13 month” pension, and criticizing the economic policies of preFidesz governments for focusing on attracting “low-added value” Western manufacturing business. When challenged by the BBJ as to why anyone should vote for him, he replied: “So that we can raise wages, pensions, and we can put the health system and public education into proper shape.” To get the chance to try, however, Karácsony – or any other claimant for prime minister – has first to win againstthe-odds on April 8, and then in all likelihood conduct a very tricky series of negotiations with a panoply of political parties, possibly including Jobbik, in order to form a government. Both steps appear near-Herculean tasks. The worst result of all for business might be Karácsony achieving the first, but not the second.


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Budapest Business Journal | March 23 – April 5, 2018

Business

DUIHK Hands Over Vocational Awards for 5th Time

The GermanHungarian Chamber of Industry and Commerce (DUIHK or AHK Ungarn) awarded its Vocational Training Prize on March 8 for the fifth time, selecting two companies and a vocational school in three categories, from 39 applicants. CHRISTIAN KESZTHELYI

Penta Unió Zrt. Pécs’ project won the “Innovation” category for an application used in vocational training for bookkeepers and accountants.

The jury, winners and nominees for the DUIHK Vocational Training Prize. MuzixGroup Kereskedelmi Szolgáltató Kft. was scooped the “Cooperation” category for its project entitled “The Rise of Interest in Robotics – or are Robots Already in the Pantry?” In the “Motivation” category, Győr’s SzC Lukács Sándor Mechatronics and Engineering Grammar School, Secondary School and College was named for a project called “Challenging Learning”. Two special awards were also made. Bordodnádasd’s Farkas Elek (Rotekom) was nominated for its “Virtual Evaporation” project, as was Gödöllő’s National Association of Agricultural Equipment and Machinery Distributors (Megfosz) for its “Become a Field Engineer Program and Field Machine Parts Game”. The awards were presented by Mihály Varga, Hungary’s Minister for National Economy, Dale A. Martin, the president of

DUIHK (and president & CEO of Siemens Zrt.), and Tamás Bihall vice president of vocational training at the Hungarian Chamber of Commerce and Industry. “Like the German dual vocational training system, we would like to achieve that even closer links are formed between vocational training and companies,” Varga said at the presentation of the prizes. He added that the Hungarian vocational training system needs as many training companies as possible, and noted that the government’s goal is to increase the number of such training places

by

40%

by 2022. “Training is clearly one of the most important tools to alleviate the shortage of professionals,” Martin pointed out. “As such, not only vocational training

Hungarian CEOs Focused on Labor Issues general elections, focused on their Hungarian CEOs are markedly more concerned about 2018 employees. They selected the availability of qualified staff; a clearly understood, stable the labor shortage than their global peers (95% and and effective tax system; and the good 79%, respectively) according to the seventh PwC health and well-being of their workforce. Hungarian CEO survey. But this year the tone of the Marked Difference One area of marked difference between survey was more upbeat than 12 months earlier. Hungarian and global CEOs comes in ROBIN MARSHALL

Nick Kós, PwC Hungary’s country managing partner, noted in a press release issued to accompany the survey: “While last year expectations were driven by risks, this year CEOs, both in Hungary and worldwide, are rightfully optimistic in their outlook for the global economy. I expect CEOs’ optimism to continue, as we look forward to a more peaceful and predictable year.” Speaking exclusively to the Budapest Business Journal after the release of the survey results, Kós reflected further on the positive impression given. “It is definitely more optimistic than last year, and it is not just in terms of business questions, but also for the future of the human race, and the direction in which we, as senior managers, think we are moving in the next two or three or five years.”

The fears connected to automatization and digitization and robots taking our jobs have softened, Kós believes. “I think CEOs have realized they will need to adapt and embrace a future that will be different.” That may also hold a better future for younger workers. Speaking last year, the PwC boss said he feared for a “lost generation” of talents who would not or could not stick around long enough to build up experience. Whatever the future does hold, it will involve new technologies. “That ‘lost generation’ are among the most avid users of that technology, so perhaps there is some hope there. The roles may be different, but still something productive and worthwhile.” When asked where government priorities should lie, the 165 Hungarian CEOs participating in the survey, questioned against the backdrop of the run up to the

the area of external threats. Globally, the percentage of respondents citing either terrorism or climate change as the chief threat to their growth prospects increased by 20 percentage points compared to last year. In Hungary, the availability of key skills, changing workforce demographics, and an increasing tax burden on labor are the greatest challenges to chief executives, who seem much less troubled by global problems. The global reaction puzzled Kós, who told the BBJ that CEOs worrying about terrorism was exactly what the terrorists wanted. For Hungarian companies, Germany remains the most important target for market growth, while Romania has climbed to second place, displacing the United States. Eighty-nine percent of Hungarian CEOs are confident about their own revenue growth (the same as last year); their outlook for the Hungarian economy has not changed significantly, while the

should be considered, but also corporate training and higher education,” he added. Martin also noted that the DUIHK supports the mitigation of labor shortages in other areas. As such, he mentioned the “Techgirls” series of events in adult education, which seeks to attract young girls across cities in Hungary to a technical career and also the “Reliable Employer” award, decided on by a professional jury, for companies that provide exemplary working conditions.

Benefit All

DUIHK vice president Péter Kásler pointed out that the organization has dealt with vocational training since its foundation 25 years ago. “We are convinced that a good, practiceoriented vocational training system can benefit everyone: the youth, because they are competitive; the companies as they get motivated and also trained staff; as well as society as a whole, because competitive companies and highly skilled workers contribute to stability and growing prosperity,” he stressed. He also noted that, in presenting the awards, the chamber hopes to gain wider publicity for projects and initiatives that promote practice-oriented domestic vocational training in a substantial and exemplary manner, and thereby encourage companies, not just members of the chamber, to actively engage in youth training.

percentage of CEOs confident about global economic growth has increased to 47% (up from 39% last year). “For Hungarian companies, Germany has traditionally been the most important target for market growth. Romania now ranks as the second most important country…. In addition to geographical proximity, the key drivers here are easier networking among the Hungarian minority, and a market twice the size of the Hungarian market,” commented economist László Urbán. The PwC survey was conducted in cooperation with the Confederation of Hungarian Employers and Industrialists (MGYOSZ). In parallel to the Hungarian survey, PwC also conducted nearly 1,300 interviews for its 21st Annual Global CEO Survey.

PwC Country Managing Partner Nick Kós. Photo by Szilárd Nagyillés.


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www.bbj.hu

Budapest Business Journal | March 23 – April 5, 2018

Business

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The American Chamber of Commerce, representing more than 360 businesses, published its third “Cooperation for a More Competitive Hungary” recommendation package this January. The document was sent to Prime Minister Viktor Orbán and his cabinet shortly after, as part of an ongoing dialogue. AmCham President Dr. Farkas Bársony and CEO Írisz LippaiNagy talked to the Budapest Business Journal about the work behind the scenes. ROBIN MARSHALL

BBJ: For those who are not AmCham members and may not know, what exactly is the “Cooperation for a More Competitive Hungary” recommendation package? Farkas Bársony: It is a consensus-based compilation of much needed improvements, that we believe will move Hungary’s economy forward in the coming years. It is the essence of our year-round advocacy work. We treat it as a living document, a basis for debate and dialogue with our members and the government. The recommendation package has four chapters (General Business Climate, Competitive Workforce and Education, Innovation, and R&D and Digitalization) and 16 recommendations altogether. Írisz Lippai-Nagy: AmCham’s advocacy activity is based on an annual cycle, where our members are invited to provide input through AmCham’s committees, projects or events. This advocacy input is further developed at regularly organized platforms and at AmCham’s annual flagship events, such as the “Business Meets Government Summit”. The recommendation package, along with our community’s commitments, are compiled based on inputs from all these sources. It is a meticulous but

Photo by Lázár Todoroff

AmCham Aims to Move Hungary’s Economy Forward

AmCham Hungary President Farkas Bársony and CEO Írisz Lippai-Nagy. rewarding job and our success stories testify that it is a worthwhile effort. FB: We have been working for a more competitive Hungary for more than 29 years, so the fact that we are vocal about the business community’s needs is not new. Let me give you an example. In 2004, we published a position paper on taxation, highlighting that the most immediate improvements to national competitiveness may be made through reform of the taxation system and urging a reduction of the Corporate Income Tax (CIT). Thirteen years later, the government announced a 9% CIT rate – the lowest among OECD member states – and Minister [of Foreign Affairs and Trade Péter] Szijjártó referenced and thanked AmCham as a persevering partner, which had consistently urged such a reduction. The above example is only one of the dozens of advocacy recommendations AmCham Hungary’s community has proposed to the government since 1989. BBJ: Beyond AmCham members, who are the other stakeholders involved? FB: AmCham functions as a multistakeholder platform, therefore we engage not only our 360 plus members, but also the business community at large, our government partners (such as the Hungarian Investment Promotion Agency, or HIPA), NGOs and our academic partners. ÍLN: We also engaged 450 plus high school students two years ago in the “Tudsz jobbat!” nationwide campaign, where we asked them to design their dream schools and dream jobs. They came up with wonderful and constructive ideas, so their inputs were summarized and, as an appendix of our second recommendation package, were shared with the Minister of Human Capacities. BBJ: How long did it take to pull together this latest version? FB: 411 days! We completed the previous recommendation package in midDecember 2016, and ever since we have

been consciously channeling advocacy inputs into this new document. Of course, if an issue is more urgent, it is shared immediately with the government. As our goal is to reach a consensus on the issues listed in the recommendation package, we always leave plenty of time for an open discussion in our Policy Task Forces (PTF) and for the Board of Directors before the material is considered final. BBJ: How does this 2018 version differ from the previous package? ÍLN: Each year we have robust recommendations in the areas of education, digitalization, taxation or the widening of the labor pool, as these issues continue to be most critical for our members. This year we also put a heavy emphasis on business-university cooperation, as it is a key element of an innovation-friendly ecosystem and a high added-value economy. We have already conducted a survey and number of interviews with our university partners and will continue the dialogue in 2018. BBJ: It is too early to talk about the latest package, but what has the government reaction been to the idea of the recommendation package in general. FB: I believe what they appreciate most is receiving structured feedback on a regular basis in a concise, yet meaningful format. It is something they now anticipate, it is part of a routine so to say. And we also value the strong and structured working relationship we have established with our government partners. In 2017 we consulted with Minister Szijjártó, Minister [of Justice László] Trócsányi, had regular professional discussions with State Secretary István Lepsényi and the representatives of the Ministry for National Economy, HIPA, the Ministry of Human Capacities and the Ministry of National Development. We are also active members in the National Competitiveness Council, established by Minister [for National Economy Mihály] Varga in 2017.

BBJ: What success stories can you point to from the first package? FB: We are proud to report that several new policy measures and government initiatives are in line with our recommendations, in areas such as R&D, taxation, labor mobility and Industry 4.0. To give you some examples, we see a very positive trend in making Hungary an attractive location for R&D centers and value-added investments, for instance by the recently introduced favorable changes in the non-refundable cash incentive system with the purpose of supporting R&D activities and technology-intensive investments, an initiative driven by our Innovation PTF. There are also clear and tangible changes, such as lifting the simplified licensing procedure threshold from 5% to 10% on employment of non-EU (third country) residents, something that will positively affect a number of large employers. ÍLN: We also made some progress in education, where a lot remains to be done. However, we appreciate the increased focus on raising the efficiency of language learning in public education and the introduction of a Career Orientation Day. We are also part of the industry specific Sector Skill Councils, established so that industry players can provide regular and structured input for a more competitive and up-to-date (vocational) training system and curricula. BBJ: What are the next steps from here? FB: We will continue our annual advocacy work, initiate meetings with the government, while preparing for the next set of recommendations and driving positive change. And when I say we drive change, I mean that in line with our recommendations our community made several commitments – such as developing an online career orientation platform or enabling business-university dialogue, as we strongly believe that a more competitive Hungary can only be realized if all players go the extra mile.


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Business

www.bbj.hu

Budapest Business Journal | March 23 – April 5, 2018

PRESENTED CONTENT

From the Birth of Hungary’s Market Economy to Space Law Sárhegyi and Partners Law Firm, led by husband and wife team Dr. Zoltán Sárhegyi and Dr. Beatrix Bártfai, has left its mark on Hungary’s recent evolution. The firm, offering a full range of services in corporate law across several sectors, has taken part in major legislative works and contributed to the country’s biggest investments since it was established 25 years ago. To mark that anniversary, Zoltán Sárhegyi spoke with the BBJ about a company history that has seen the country shift from a hybrid socialist-capitalist system to today’s market economy.

BBJ: Another interesting period, I suppose. Z S: Oh, yes. Privatization gave us the most varied legal tasks. In most cases, we had to transform state companies into incorporated companies in order to make it interpretable for investors. A state-owned socialist company was not something that foreign capital could understand or relate to, but stocks and shares were more their kind of language. Our contracts came from a wide range of sectors, from agriculture to production or services. As I see it, the Alpha of the legal profession is to get a client and the Omega of it is to keep that client, but I can proudly say that we already had a name by that time; we were passed from client to client. Then, from the mid-’90s, we played a hand in the country’s infrastructural developments, which engaged a higher gear in ’98 with the motorway construction. In the meantime, financial service providers appeared in the late-’80s. At first, we worked with private companies, later with the banks who then bought them up. It was a very interesting task and an exciting challenge and, again, something that had not been taught at the universities not only in 1981, when I graduated, but even ten years after.

ÁGNES VINKOVITS

BBJ: Your law firm was established 25 years ago but you have actually been practicing law for more than 30 years. What are you proudest of in the past three decades? Zoltán Sárhegyi: I am very glad that our work played a significant role in Hungary’s progress through numerous projects. Representing the Hungarian state in several cases has been a great honor for us, but the fact that in the early days we took part in the establishment of the two-tier banking system, in the legislative tasks of the corporate law, or in the regulation on financial leasing and factoring makes me as proud as the infrastructural developments that have come with our legal contributions. I could also mention our professional participation in some special fields; for example, we had several international arbitration cases (ICSID, ICC) in the last decade but we also took part in the creation of the forestry and game law, in the framework of the Act on State Assets. Moreover we are also proud that, in addition to numerous Hungarian private clients, our firm has several international clients too, and we provide legal services in major and less known languages. So, as you can see, our portfolio varies a lot as well as the range of legal services we provide. BBJ: Are you a hunter, too? Z S: Yes; my trophies around the wall speak for me. BBJ: I am a vegetarian, but I assume there must be some aspects of wildlife management that justify this activity. Z S: Definitely. As I often say, no negative judgement should be made without first becoming aware of as many details and circumstances as possible. Wildlife management is a very complex task, and hunting is part of it. BBJ: Are you from a family of lawyers? Z S: Absolutely not. Apart from my father, who was a teacher, my ancestors were peasants. Originally, I wanted to be a doctor but the science of physics kept me away from this noble profession. Finally, as I always had a passion for literature and history but there was no literature major at the university that year, I went for law. And then it grabbed me. BBJ: Was there a strong sense of justice that arose in you during those studies? What has been your biggest personal motivation?

environment in Hungary, as it allowed private entrepreneurship to a certain degree. This was the world of the so-called “economic work-teams” (GMKs), which required legal services from our side that were very original at that time. Until ’88, limited companies had been established according to a law from the 1930s, while incorporated companies were formed based on a law from the late 19th century! Most interestingly, we did not learn a single word about these things at the university, since entrepreneurship was allowed but not supported, a very typical duality of Socialism. So, we had to invent and learn right there and then in the market. This was an extremely exciting decade, with the establishment of the two-tier banking system and the so-called spontaneous privatization. Then we arrived at the change of regime.

Dr. Zoltán Sárhegyi, managing partner. Z S: The gist of this profession is merely reliable professional knowledge and its use at the highest quality for the good of the law seekers. I wouldn’t use the buzzword of “truth seeking” in relation with jurisdiction, which is not to say that in some extreme cases a lawyer might face an inner conflict themselves. Yet, it rather occurs in penalty law praxis. In our field, in economic and trade law, the most important aspect is that what we do for our clients can enable the given projects. BBJ: Such cases can serve as good indicators when looking back on a country’s different periods. What have been your typical cases in the past three decades?

Z S: Let’s start from the present. Nowadays we provide a full range of legal services for our clients. Our working groups take part in real estate projects, M&A, transactions, company establishments, restructuring projects, etc. In the 2000s, we were involved in major infrastructural projects in Hungary. In recent years we have gained the trust of international clients and we give legal corporate law services to them in Hungary, but as we have international partners such as Bredin Prat (one of the largest law firms in France), we also provide services abroad. But to understand today’s legal environment, we must look back to the early years, the soft dictatorship of the 1980s created a very special economic

BBJ: What were your main sources for this knowledge you had to find on the hoof? Z S: First of all, foreign literature and Hungary’s old legal patterns, similar to the process we followed with the corporate law: find a foreign example and see if it had a local instance. And, of course, many things simply had to be found out. Things that worked out in the economy had to be made to fit into the substantive law and the procedural law, and later we had to try to catch up with legislative work. The law often tries to get ahead of the economic processes, but usually it only waits on them. Not to mention that Hungarian people have always been quite creative with a lot of fantastic ideas, many of which were not covered by the actual regulations at that time. BBJ: Hungary’s accession to the European Union, the global economic crisis, Hungarian government crisis: what was most memorable for you from the 2000s? Z S: This was a demanding time for our firm, too, but we carried on with the infrastructural developments and also managed to enter a new sector: market researchers and political analysis companies.


www.bbj.hu

Budapest Business Journal | March 23 – April 5, 2018

PRESENTED CONTENT

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Business | 9

These are special services, which had to find their place in our legal system. BBJ: A new government came in 2010. What have been the challenges since then? Z S: The screening and due diligence of state-owned companies has been an outstanding task, where we had the opportunity to coordinate a superb group of lawyers and economic experts. With that work, we managed to establish long-term development that I believe we are still witnessing. BBJ: How has legal morale changed in the past decades? Z S: Within the legal profession, I can say that it has not strengthened. There used to be some kind of togetherness, meaning that lawyers were not aiming to sew up the stockings of colleagues from the other side by, for example, procrastination. This seems to have changed. Luckily, however, it is regulated by the new Code of Civil Procedure. BBJ: Is this change the result of growing competition, or a more general collapse in morals? Z S: Of course, intensifying competition makes some people use ignoble actions but I don’t think there would be a general moral downfall. It is another question how much a society is able to stay loyal to its own traditions and keep a standard of values where people respect one another. In our everyday life, we have to focus on real values instead of over emphasizing the unimportant. BBJ: How do you see the pool of legal workers? Are you experiencing a labor shortage too? Z S: We have the chance to meet inquisitive young talents as we are tied to the universities with several bonds: I used to teach on a leasing and factoring special course, while my younger son, who also works with us, has been the head of a law students’ self-improvement group in university. We try to raise our own professionals but, of course, sometimes we go for “less young” talents with an already impressive background. Luckily, we are also successful with that. The core of our firm is a group of professionals with international experience and, of course, foreign language command. In addition to them, we have a group of young professionals who are in their late 20s and early 30s, like my elder son. Our youngest colleagues are the clerks, who are in their mid-20s. We fully support our colleagues to permanently educate

From left: Dr. Balázs Rábely, Dr. Beatrix Bártfai, Dr. Zoltán Sárhegyi, Dr. Kornél Szabó. themselves, either with professional or language courses. Foreign languages are very important in our work; we provide daily legal services in English and German but, for instance, we also have a colleague who speaks Chinese. BBJ: Aren’t you suffering from workforce emigration then? Z S: A legal education is not as “easily” convertible as an IT degree or a medical training. As such, workforcemigration leaves us untouched. However, international experiences are extremely useful. In the case of huge projects and international tenders, cooperation with foreign legal offices is inevitable. One of my favorite examples of this is when my wife managed to get the concept of nullity across to an American colleague. The fact that she could make something understood that is completely unknown in the Anglo-Saxon legal world tells a lot about her professionalism, as well as personal skills, not to mention that it was crucial in the given case. BBJ: The past decades seem to be full of inspiring stories. Will the upcoming 25 years be that exciting?

Sárhegyi and Partners Fact File 1993

Sárhegyi and Partners Law Firm founded

32

Number of lawyers at the firm

45

Number of all workers at the firm

8

International arbitration cases in the past five years

14

Number of practice areas

Z S: Definitely. Legal services overseas as well as in Europe will face new directions. As economy-related legal services have been taking a bigger slice of the cake, I experience an increasing need for lawyers to act not simply like a lawyer, but also like a legal and economic consultant.

“As economy-related legal services have been taking a bigger slice of the cake, I experience an increasing need for lawyers to act not simply like a lawyer, but also like a legal and economic consultant.” To be honest, we had to work a lot in order that the clients do not look at lawyers simply as conflict solvers. Instead of coming to us for help to collect their loans, they should come for advice at a very early stage of their businesses, in order to see how it can work in the given environment. I enrolled on several postgraduate courses and I personally found the corporate law specialist course the most important. BBJ: It seems clear that the broader the insight you have, the more grounded the advice you are able to give. Z S: This trend is not out of the blue, of course, but it is becoming stronger. Also, we will get more harmonized with the Anglo-Saxon legal system of solicitors and barristers. The latest modifications of the Code of Civil Procedure, and the hard deadlines it sets, open new perspectives, while also imposing an obligation at the same time. Cases virtually have to be solved in the preparatory phase with so many preparatory documents to be submitted by the lawyer that, in my opinion, it will basically evolve into a separate profession

in Hungary, too. And, of course, IT and the online space itself will be of increasing importance in legal services as well. BBJ: Will there be fewer personal meetings? Z S: I believe that as long as there are lawyers and clients, this has to remain a relationship deeply based on trust. Personal meetings are inevitable parts of this profession, but in other aspects of case and office management the trend of digitalization will be on the rise, just like in any other field in our lives. BBJ: Is it possible to get ahead of trends and make realistic plans for the medium- and long-term? Z S: It is not only possible, but a must. We are under permanent pressure to meet the challenges of the latest trends while providing the highest professional quality. This is achievable only if we are already prepared for the future. In addition to what I said about the strengthening consultancy function of the legal profession, which is already a trend, the world constantly creates new circumstances to adapt to. For example, my younger son, who also works with us at the firm, has finished a course in Ireland specialized in space law. Many people dismiss such things, saying that it is so far away, but just think about how many possible aspects space law might have, including mobile phones and GPS-systems. Hereby I would suggest to those people that they look at the number of Hungarian engineers taking part in Mars research projects, and also think about what challenges this field, which is currently a white spot from a legal point of view, can impose in 5-10-20 years’ time.

www.sarhegyi.hu


Business

10 | 2

www.bbj.hu

Budapest Business Journal | March 23 – April 5, 2018

M LIN E O T T O B E H T

2nd district

2nd district

2nd district

74 sqm – 3 rooms, TárogaTó sTreeT

85 sqm – 3 rooms, LövőHáz sTreeT

150 sqm – 4 rooms, széHer sTreeT

In a very quiet area, this completely renovated, very spacious and bright apartment benefits of a fully fitted kitchen, a wardrobe room and a balcony.

This renovated apartment benefits of a beautiful view over the Millenáris Park, living room with open kitchen, 2 separate bedrooms and balcony. It is located in a pedestrian street.

In a very nice villa house, this spacious, top floor, mansard apartment in good condition benefits of a terrace and a parking space in the courtyard of the condominium.

54.900.000 HUF

61.900.000 HUF

99.000.000 HUF

+36.70.376.4138

2nd district

+36.1.336.1706

2nd district

+36.70.376.4138

2nd district

200 sqm – 6 rooms, szeréna sTreeT

132 sqm – 4 rooms + HaLL, nagyajTai sTr.

300 sqm – 6 rooms, TárogaTó sTreeT

Breathtaking panorama over the Danube, this four storey, very bright apartment has 3 terraces, 3 bathrooms and 3 garages. It is located in a very quiet and green side street.

In a nice, Bauhaus style building, this sunny, garden facing apartment has 3 separate bedrooms, a living room, two bathrooms, terrace, balcony and parking space in the courtyard.

This two storey Bauhaus style family house built on 1078 sqm of lot, has big terrace, garage and separate entrance to the ground floor. It is located in a quiet and green area.

110.000.000 HUF

115.000.000 HUF

+36.1.336.1706

3rd district

+36.1.336.1706

3rd district

198.000.000 HUF

+36.70.376.4138

3rd district

49 sqm – 2 rooms, Hévízi sTreeT

62 sqm – 2 rooms + HaLL, szépvöLgyi sTr.

54 sqm – 2 rooms, CsiLLagHegy

This well divided, quiet and sunny, park facing apartment has separate rooms and private gas heating. Good connection to public transport.

In a well maintained building with elevator, this street and garden facing apartment, that needs renovation, has big kitchen with dining room, separate rooms and air conditioning system.

In a quiet side street, this bright, garden facing apartment has private gas heating, 200 sqm of private garden and parking space. It is situated in a well maintained villa house.

27.900.000 HUF

34.500.000 HUF

34.900.000 HUF

+36.1.430.1403

3rd district

+36.1.430.1403

3rd district

+36.70.669.5350

3rd district

50 sqm – 2 rooms, CsiLLagHegy

85 sqm – 3 rooms, Lajos sTreeT

58 sqm – 3 rooms, római-parT

In a new built subdivision with well kept garden, this bright apartment benefits of a living room with fully fitted kitchen, separate bedroom, wardrobe room, terrace and private garden.

This spacious, street and garden facing, high floor apartment has separate rooms, big dining room, 2 balconies and parking space in the garden. It is situated in a building with elevator.

Next to the Danube, in a subdivision with swimming pool, this renovated apartment has living room with fully fitted open kitchen, 2 separate bedrooms, terraces and private garden.

36.490.000 HUF

39.000.000 HUF

43.900.000 HUF

+36.70.669.5350

6th district

+36.1.430.1403

7th district

+36.70.669.5350

9th district

87 sqm – 2 rooms, andrássy boULevard

111 sqm – 5 rooms, rákóCzi sTreeT

58 sqm – 2 rooms, ráday sTreeT

This very sunny and spacious apartment in good condition has separate rooms, sleeping gallery and private gas heating. It is located at the Kodály Circus.

This very spacious and bright, high floor apartment in good condition has balcony and it is situated in a well maintained period building with elevator.

In a beautiful, renovated period building with elevator, this completely renovated, very bright, high floor apartment has living room with fully fitted open kitchen and separate bedroom.

63.000.000 HUF

45.900.000 HUF

49.900.000 HUF

+36.1.351.0446

13th district

+36.1.351.0446

13th district

+36.1.351.0446

13th district

70 sqm – 2 rooms, visegrádi sTreeT

71 sqm – 2 rooms, raoUL WaLLenberg sTr.

85 sqm – 3 rooms, + HaLL, bUdai nagy a. sTr.

Close to the Lehel Market Hall, this completely renovated, very sunny apartment has private gas heating and balcony. Ideal for investment.

This very bright and quiet, street facing apartment has separate rooms and it is situated in a very nice period building with elevator.

This renovated, bright, street and garden facing apartment has balcony and is situated in a very nice, Bauhaus style building with elevator.

44.000.000 HUF

45.500.000 HUF

62.900.000 HUF

+36.70.414.7759

+36.70.414.7759

+36.70.414.7759

grUppo T.F.m. kFT. 1068 bUdapesT, kiráLy U. 102. each agency independently owned and operated. • these offers are valid, till the apartments are sold. • these information do not constitute a contractual element.

Making Sure Crime Doesn’t Pay: It Takes all Sorts Like many Budapest residents, on the eve of the March 15 holiday, I was shopping for last-minute provisions. I also had to pay some bills, but I didnʼt know where the post office was in the Kőbánya-Kispest mall. our last survey.” Wow! This is surely not a statistical error. Previous surveys were all around the 25-28% mark. Interestingly, Outside the Tesco store stood a security incidents of crime have jumped in the guard. “Excuse me, where’s the post past two years – both in Central Europe office please?” I asked, in the vernacular. and globally - but Hungary out-jumped The guy stared back at me, coldly, and the lot. replied, in robot-like montone: “I’m Have Magyar companies gotten better at waiting for a robber.” detecting fraud, or has crime gone up? Frankly, I thought he was just being Then there is the table (page 8) showing difficult. Whatever, I wandered on to find 31% of Hungarian respondents reported the someone more helpful. Only then, a few cost of crimes to be in the range of USD meters away, did I spot another guard, who, 100,000-USD 1,000,000. like the first, was standing behind a pillar. This is far higher than the global figure So, I moved aside to watch. Sure enough, (19%) – indeed significantly higher than the a minute later, the security men approached regional average (at 21%). So, what makes a couple, around 30-ish, leaving the self Hungarian companies vulnerable to this check-out area. Within seconds, the man – level of loss – when CE peers are near the a tall fellow – was protesting loudly, before global level? “doing a runner” up the mall, pursued by at These are just two points which the least one guard and two policemen, who report does not really explain. (To be fair, appeared as if by magic. PwC burnt the midnight oil to respond to The woman, meanwhile, was (firmly, if my questions – but these have to now wait gently) frog-marched, struggling, back for space reasons.) into the store. I doubt Tesco needs to be reminded that By a remarkable coincidence, I was “Economic Crime is a persistent Threat”, planning this column on the economic and it’s clear PwC themselves don’t crime report recently published by PwC do all this work (71 firms surveyed in (and reproduced in part by Budapest Hungary, 7,200 worldwide) merely to help Business Journal), which talks at length on catch shoplifters – that’s not the kind of the threat of fraud and cybercrime. crime that pays a “Big Four” professional services firm’s advice. Interesting Trends But, despite the PwC’s stress on “fraud” But this study - it’s on the PwC website and “cyber crime”, as the report states, the – also reveals some interesting trends largest single class of economic crime – apparently specific to Hungary. at 42% – was “asset misappropriation”. In First, as it states on page 5: “More than case you don’t know, that is consultanta half of Hungarian organizations have speak for “stolen”. It seems the simple experienced economic crime in the past Tesco security guard has no need to fear 24 months…. a 100% increase compared to for his job just yet. KESTER EDDY


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www.bbj.hu

Budapest Business Journal | March 23 – April 5, 2018

Special Report Logistics Hungary’s Logistics Market Could Again Rise by 6% This Year Hungary’s logistics providers are likely to stay on a growth path this year and remain a key driver of the economy, but the lack of skilled professionals continues to be a risk and protectionist steps on Western European markets pose a danger. VERONIKA GULYÁS

Unless an extraordinary event occurs, a 4-6% increase in growth is once again on the cards, Zsolt Fülöp, the chairman of industry alliance MLSZKSZ told the Budapest Business Journal. Logistics market participants contribute about HUF 2 trillion to domestic GDP annually, which comes to 6.5% of the total. This makes logistics the fifth biggest total revenuegenerating sector. The largest privately-owned participant of the Hungarian market, Waberer’s International Nyrt. is looking to repeat its

18% annual

revenue growth registered last year. It is also set to strengthen its activity within the automotive and e-commerce sectors, and is actively seeking acquisition targets in the region, the company’s CEO Ferenc Lajkó said in the firm’s latest annual report. DHL Express, a global shipping firm and logistics provider is also positive about expected growth. It forecasts a boom in online shopping in both developed and emerging markets with a 25% annual average increase in the coming years in e-commerce, Zoltán Bándli, managing director of DHL Express Magyarország Kft. told the BBJ. “About 8% of all retail turnover is online. This could grow to 30% by 2025 in emerging markets,” Bándli said. But maintaining the sector’s aboveaverage growth rate hinges on an array of factors such as the national and EU regulatory environment, a nationwide lack of workforce, or major international events that affect the economy of the entire EU, such as Brexit, since most major Hungarian logistics providers are also active in neighboring countries and the European Union. The greatest challenge for Hungarian logistics providers with international activities is that some Western European countries have introduced protectionist measures, Hungary’s state secretary responsible for transport policy claims.

Strategic Area

“This is a strategic area for the government, which is therefore ready to use any measures to increase the competitiveness of Hungarian logistics providers and strengthen or maintain their position within the European Union,” Róbert Homolya, State Secretary for Transport at the Ministry of National Development said at a press conference earlier. Hungary is set to cooperate with its allies in the region and act shoulder-toshoulder with the other members of the Visegrad Four (Czech Republic, Poland and Slovakia) to persuade the EU that its Western European members are acting against common values.

“This is a strategic area for the government, which is therefore ready to use any measures to increase the competitiveness of Hungarian logistics providers and strengthen or maintain their position within the European Union.” Taking up a lead role in keeping the issue on the agenda, Hungary was the organizer of a summit on March 8 with the participation of

14

EU members.

Those present also discussed the European Commission’s Clean Mobility package, which instead of helping market participants would increase burdens – mainly on small- and medium-size companies – and increase administration, Hungary claims.

Zoltán Bándli, managing director of DHL Express Magyarország Kft. The package would introduce new carbon-dioxide standards, promote clean mobility solutions in public procurement tenders, foster innovation in new technologies and encourage alternative fuel use throughout the EU. To widen the currently narrow pool of available professionals, the government introduced a Logistics Action Plan in 2015, pledging to train 6,000 new truck drivers. This stood at 2,000 new drivers last year, at the time of the latest update on the program.

Blindside Fears

The market has been on a steady growth path since the financial and economic crisis of 2008, but players are still wary of another huge blow that could take them on the blind side. These worries should ease, since the industry will have gained enough strength to persist any unexpected events without heavy losses, Fülöp said, if the current market growth rate persists for at least two to three more years. To maintain balanced growth, however, state funding would also be needed, he added. DHL Express’ Bándli said risks to the industry over the coming period in the region could be the expected measures of the European Union and Great Britain related to Brexit. International challenges lingering around the industry also include countries further away, such as China, which is aggressively boosting its international trade and Hungary hopes to become a regional hub for the Far-Eastern country’s trading companies. But the whopping

economic growth may eventually prove a bubble, and if so, a burst would indeed pose a risk for Hungary’s market participants. The conflict between Russia and Ukraine is another area of concern for Hungary. Shipping Chinese goods to the EU through Ukraine would be a nuisance for Russia, which is in turn a negative for Hungary’s rail transport. Areas where market players expect the government to take steps also include the development of rural logistics centers, where infrastructure needs to be improved to attract further companies. Logistics hubs around Budapest and the country’s biggest cities, as well as those located in the proximity of motorways or busy ports, are all now more or less full. Secondary locations, however, must upgrade their range of services to increase occupancy, industry onlookers said. The state claims it is applying measures to boost this fruitful industry and is listening to logistics service providers and haulers. A range of measures introduced last year are bearing fruit, Homolya said, such as higher fines and regulations that crack down on tax evasion or irregular international hauling. László Mosóczi, a deputy state secretary at the transport ministry, has said the parallel development of water, air routes, rail and road transport are key for longterm growth. The government is making

László Mosóczi, a deputy state secretary at the transport ministry, has said the parallel development of water, air routes, rail and road transport are key for long-term growth. The government is making efforts to modernize trade harbors, build and reconstruct motorways (especially those close to the borders), and welcomes infrastructure developments at the Budapest Airport efforts to modernize trade harbors, build and reconstruct motorways (especially those close to the borders), and welcomes infrastructure developments at Budapest Airport (for more on this, see page 15). Hungary has earmarked HUF 2.5 tln for road development by 2022, of which 52% will be covered by the state.


Special Report

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www.bbj.hu

Budapest Business Journal | March 23 – April 5, 2018

Development Needed to Meet Rising Demand The Hungarian industrial and logistics market is recording high demand for a limited supply of welllocated, quality contiguous space, so that tenants have to plan far in advance in order to source space. Annual take-up for 2017 reached a record 618,000 sqm. East Gate Business Park.

GARY J. MORRELL

The speculative development option has been slow to take off as the major developers and logistics park operators (Prologis, BILK, CTP, Logicor, Wing and Goodman) who own the majority of space have opted for the built-to-suit (BTS) projects. Another obstacle to market growth is that, in contrast to Poland, Czech Republic and Slovakia, a functioning industrial market has not developed outside the capital city. A shortage of labor and the rising price of construction materials has also made construction more expensive and resulted in construction periods of 8-10 months. “Currently more than 110,000 sqm is being developed, which is a positive aspect; however, it has no real effect on the market as the demand for new properties towers above supply, and a large part of the new development is pre-leased,” says Gábor Halász-Csatári, head of industrial at Cushman & Wakefield Hungary. “As for the stable demand and tenant activity, there is a huge need for speculative developments. Expectedly, after the beginning of the first speculative development, others are going to start, nonetheless building costs are still causing delays on the market. In the short run, we expect a slow rise in rents, also ‘B’ and ‘C’ category stock is expected to be oversubscribed until there is new development to meet demand,” Halász-Csatári adds. Colliers International estimates the

2018 pipeline

at 130,000 sqm, however 90% of this is preleased or BTS. The company says that there are currently only three logistics parks that have space of more than 5,000 sqm available. The Budapest Research Forum (consisting of CBRE, Colliers International, Cushman & Wakefield, Eston International, JLL and Robertson Hungary) has traced

2.04 million sqm of modern industrial space in the Budapest area as of the turn of the year. Around 90% of stock is located in logistics parks and 10% in city logistics facilities. Vacancy has plummeted

from

23%

in 2013 to an all-time low of 4%. Prime rents are estimated at EUR 4 per sqm per month for BTS space, and EUR 3.75 for existing space. “Prime rents are now close to levels that make speculative development feasible, yet the cost of construction and related services remains a limiting factor,” Cushman & Wakefield cautions.

Largest of its Kind

In the largest recent transaction, the international industrial park operator and developer Goodman has started construction of a logistics center for Auchan Retail Hungary at the Üllő Airport Logistics Center. The logistics park is owned and operated by Goodman, who will manage the new facility. The 87,000 sqm center will be the largest of its kind yet built in Hungary, according to Auchan and will handle the retail chain’s food and nonfood logistics while also supporting the company’s online commerce in Hungary. “Goodman’s ‘own, develop and manage’ business model has proven to be successful in delivering a highquality logistics facility,” said István Kerekes, country manager of Goodman Hungary. Goodman’s current portfolio in Hungary comprises more than 88,000 sqm of warehouse and office space in two locations in Gyál and Üllő. The Üllő Airport Logistics Centre is located next to the M4 highway and M0 ring road. BTS remains the most favored development option. CTP, for example, has agreed a 10,000 sqm BTS development with GSI at CTPark Biatorbágy. Prologis, the leading logistics/industrial developer

in Hungary and Central Europe has agreed a new 19,000 sqm letting with Pepkor at Prologis Park Budapest-Gyál.

“Prime rents are now close to levels that make speculative development feasible, yet the cost of construction and related services remains a limiting factor.” Companies need to plan far ahead in the current low availability market, with any available space taken up early in the development process. “The difference between BTS and speculative is a bit misleading nowadays, as most of the delivery is taken by tenants at the planning stage or during the construction phase. So, there is not as much typical speculative construction as there was in the past,” commented Ferdinand Hlobil, head of Central European industrial at Cushman & Wakefield.

Truly Speculative

The only truly speculative project announced thus far is the construction of two 14,000 sqm and 11,000 sqm phases of a double warehouse at the East Gate Business Park by Wing. The multi-sector developer is expanding its activity in the industrial sector in recognition of high demand. “In contrast to the company’s practices to date, it has launched development of the property without any preliminary lease agreement in hand, taking the cue from a prospering market in which intense interest towards the park was seen. The market has confirmed the need for this development through the lease agreements that were confirmed before inauguration,” says Wing.

Both Prologis and Goodman are reportedly considering speculative developments, although no plans have been announced. Potential market entrants such as P3 Logistics Parks require a large letting agreement in order to enter the market. New market entrants tend to enter the market based on a large requirement. However, CTP entered Hungary through 130,000 sqm in acquisitions, M7 made a

113,000 sqm acquisition

and the Chinese Investment Corporation entered Hungary through the purchase of the Logicor portfolio. The Hungarian state-owned developer NIPÜF Zrt. (National Industrial Park Management & Development Company) has agreed a 12,000 sqm BTS deal with Euronics at Inpark, close to Páty. This reflects the perception by the state of the need for modern logistics and light industrial space. “Inpark was founded by the Hungarian state but operates as a classic property developer on a market basis,” says Inpark of its operating model. Unlike other Central European countries, a functioning logistics market has yet to develope outside the capital. Prologis has sold Prologis Park Hegyeshalom, located on the Austrian and Slovak borders, to the logistics service provider, Horváth Rudolf Intertransport Kft. “Our strategy is to focus on high-barrier markets that show strong demand amid low vacancy. In line with this principle, we will continue to focus on core locations in the greater Budapest area,” said László Kemenes, country manager at Prologis Hungary. However, due to the saturation of the Budapest market, regional locations are increasingly attracting the focus of investor/developers and hence the market is slowly becoming less Budapest-centric according to Colliers International.


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www.bbj.hu

Budapest Business Journal | March 23 – April 5, 2018

Industrial Park Investments Boom in Hungary Industrial-logistics investments are promising, said Zsolt Fülöp, chairman of the Association of Hungarian Logistics Service Centers (MLSZKSZ), portfolio.hu reported. Investments are expected to increase in the next one-to-two years, he said, but international events may impact on the sector. In Hungary there are 196 industrial parks, and two types of logistics centers. There are some 200-250 centers used by single companies, and there are 41 logistics service centers, which provide services to various businesses at the same time. Most industrial parks are in Central Hungary, located in and around Budapest, and this is where 70% of the logistics capacity can also be found.

fewer passengers in Q4. Performance of the segment however climbed 4.4%. In the long-distance passenger transport segment, companies carried 163 million passengers during the period, down 2%. Performance of the segment rose 5.9% to 7.1 bln passengerkilometers, according to unadjusted data. Airlines’ passenger numbers jumped 25%. Among domestic long-distance passenger numbers, buses accounted for 77% of the total and railways made up 23%. For the full year, revenue of passenger transport, freight and logistics companies rose 6.3% to HUF 4.973 tln. Performance of the sector climbed 3.4% to 60 bln freight-ton-kilometers. In the passenger transport segment, passenger numbers fell 1.1% to 642 mln, while performance rose 5.6% to 29 billion passenger-kilometers.

Prologis Sells Prologis Park Hegyeshalom

Waberer’s net Income Doubles in 2017

Logistics real estate company Prologis, Inc. has announced the sale of Prologis Park Hegyeshalom in Hungary to Horváth Rudolf Intertransport Kft., a Hungarian logistics services provider. The transaction includes a fully leased Class “A” logistics facility totaling 32,300 square meters and 24 hectares of land, a press release sent to the Budapest Business Journal says. Prologis Park Hegyeshalom is the first Class “A” logistics park in northwestern Hungary, in the so-called “magic triangle” that comprises the Hungarian, Austrian and Slovak borders. The park has easy motorway access to Bratislava (M15), Vienna and Budapest (M1). “Our strategy is to focus on highbarrier markets that show strong demand amid low vacancy,” said László Kemenes, senior vice president and country manager of Prologis Hungary. “In line with this principle, we will continue to focus on core locations in the greater Budapest area.”

Net income of listed road haulage company Waberer’s doubled to EUR 18.4 million last year, an earnings report released yesterday shows, privatbankar.hu reported. Revenue climbed 18% to EUR 674.4 mln, lifted in part by Waberer’s acquisition of Polish peer Link. Gross profit rose 17% to EUR 140.6 mln. Operating profit jumped 56% to EUR 26.7 mln. CEO Ferenc Lajkó said Waberer’s planned to “step up on the organic and inorganic fronts as well”, boosting efficiency through better use of technology and data, and expanding the customer base by targeting the auto and e-commerce sectors. Lajkó said he expects the group can “perform at least at a similar rate of annual growth as in 2017”.

Revenue of Passenger Transport, Logistics Sector up 6.6% in Q4 Revenue of passenger transport, freight and logistics companies in Hungary reached HUF 1.3 trillion in the fourth quarter, up 6.6% from the same period a year earlier, a summary of data published by the Central Statistical Office (KSH) shows, Hungarian news agency MTI reported. Road haulage revenue climbed 3.7% to HUF 389 billion during the period. Trucks and lorries accounted for about 62% of the sector’s total 14.4 billion freight-ton-kilometers in Q4. Railways accounted for 21%, pipelines for 14% and ships and barges for 3.8%. Passenger transport companies carried 1.5%

Budapest Airport Starts Building Cargo City Air cargo turnover at Ferenc Liszt International Airport climbed 11.5% year-on-year to more than 10,000 tons in February, operator Budapest Airport announced on March 12, portfolio.hu reported. Air cargo turnover in JanuaryFebruary was up 17.4%. The expansion in the European market was 8.4% in January 2018. In 2017, a total of 127,000 tons of cargo was moved at Budapest Airport, up 13.4% compared to the previous year. TNT and DHL Express used a 16,000 sqm ultramodern logistics center last year at the airport. This year a 20,000 sqm Cargo City will be built near Terminal 2 expressly for cargo airlines. Cargo City is to be completed in Q2 2019, making the airport’s cargo capacity 250,000 tons per year. The project is part of the five-year BUD 2020 airport development program, which is worth HUF 50 billion.

INSIDE VIEW

Transfer Pricing: Too Expensive to Ignore Judit Jancsa-Pék Tax Advisor, Partner LeitnerLeitner

comprise for each transaction under control (e.g. obtaining services, acquiring goods, selling products, providing services or financial guarantees, licensing intangible assets and the presentation of the actual market environment): the amount of payments effected; a copy of all versions of the contracts; detailed functional and risk analyses; and a description of the most appropriate transfer pricing method.

Up to now, very complex transfer pricing requirements pertained Beware! This is still not a complete to affiliated companies, which list! Thus, it is worth preparing these are also common in the logistics documents in good time, and it should sector. Whether a transportation not be put off. However, TP-files must company is part of an international not only fulfil the increasing statutory group, or operates as an affiliate requirements, but should also be of a commercial chain, or separates tailored to your business, saving time the different business lines into and money. In present times, the subsidiaries, they are equally subject reasonability of the transfer prices is to transfer pricing. Therefore, groupmore often required to be substantiated pricing should be measured in line with the applicable databases, like with the arm’s length principle and AMADEUS which is widely used by tax be strictly documented. Moreover, authorities too. unlike in international practice, the Hungarian transfer pricing Efficient transfer pricing documentation obligations cover documentation greatly reduces the domestic intragroup transactions too. risk of double taxation, as well as As tax authorities examine transfer costly and time-consuming discussions prices very closely, it has become with the tax authorities involved. vital for groups to have a consistent, Thus, it is essential to place your reliable TP-system. This is especially so, transfer pricing issues in the hands of considering the record high Hungarian experienced specialists who provide penalties for non-compliance comprehensive, competent support. that amount to HUF 2 million per Even a transfer pricing quick check can transaction per year. identify the risks and offer tailored solutions to reduce them. Although the rules have been changed many times in the past, they have Transfer pricing may be simplified and become stricter again. Hungary has higher confidence could be achieved already adopted the BEPS Action by using the official Advance Pricing 13 pertaining to Master Files/Local Agreement (APA) system. This gives a Files in its legislation, which requires guarantee on the acceptance of the a more complex presentation of tax authority over the transfer prices the TP-related information in the applied by your company and fixes it documentations. for 3-5 (+3) years, during which period no TP-documentation updates are You can find the whole content list of needed and the price-determination the two files on the taxationhungary. related uncertainties can also be blogspot.hu LeitnerLeitner blog, eliminated. but here are just a few examples. The Master File, for example, has to touch LeitnerLeitner is one of the most upon the organization structure of influential tax consulting, accounting the group; the supply chain for the and auditing companies in Central five largest products and services, Europe; in Hungary we work in the list of significant service agreements Hungarian, German and English between the group members; languages. You may rely on our major business reorganizations; specialized full-scope transfer pricing the development, ownership and service-package: quick checks, utilization of intangible assets; a documentations, advisory, benchmark presentation of the group’s financing; studies, AMADEUS database searches, and the consolidated financial and representation in transfer pricing statements for the financial year. disputes, MAP and APA processes. And you can take advantage of our The Local File is not simple either. renowned international Tax advisory It has to detail the structure of the service and network covering more affiliate’s management including than 40 locations. the persons they are reporting to; the business activity and strategy and list of the most important competitors; and data for each controlled or aggregated transactions. The TP-documentation should also

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

Logistics ///briefs

Special Report | 13


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Special Report

www.bbj.hu

Budapest Business Journal | March 23 – April 5, 2018

Market Must Adapt to Changing Requirements As with other market sectors, specification, sustainability, interior design and fit-out are increasingly central issues for industrial project owners in attracting tenants. GARY J. MORRELL

With built-to-suit (BTS) development the preferred option, developers and tenants can agree on specifications at the initial design stage of a development. This is important as the requirements of e-commerce, retail and automotive companies are increasingly sophisticated. Logistics park owners such as Prologis, CTP, Logicor and Goodman apply similar specification and sustainability policies throughout Western Europe, Central Europe and Hungary. “Due to e-commerce, automotive changes, automatization and robotization changes in the production industry, there will be a continuous requirement for modern or upgraded industrial and logistics space,” comments Ferdinand Hlobil, head of CE industrial at Cushman & Wakefield. The CTP portfolio, for example, has mainly grown through new construction. “This has positively influenced CTP’s buildings’ average age, which remains at a stable eight years. E-commerce, production and logistics have dominated the real estate market,” CTP says. Most industrial activities require very similar types of properties and it is usually in the additional (tenant specific) fit-out that variations will be evident. This is generally labelled as “above-standard tenant improvements” and, according to the agreement, may be charged fully or partially on the tenant according to Gábor Halász-Csatári, head of industrial at Cushman & Wakefield Hungary. E-commerce, for example, needs a very modern and automatized internal sorting and shipping system; these are usually tailor made and require additional electrical capacity. Retailers tend to require ambient and some cold storage space: 10-12 degrees centigrade for fruit and vegetables, 0-4 degrees for meat and dairy, and often companies will also require freezing units of

-20 degrees C

or more to ensure they can cover the entire spectrum of goods. These constructions require special fit-out, electrical capacity, cooling equipment and hazmat storage, etc.

Prologis Park Sziget has obtained BREEAM new construction certification.

Above Average

“Automotive firms generally require a higher than average power capacity, room for machines and equipment, perhaps higher floor loading capacity, hazardous waste management and larger social areas for workers to change and eat,” explains Halász-Csatári. With regard to the development process, Hlobil sees the fit-out charge as constituting the largest part of the budget. This is needed to achieve a standard of product that conforms to the needs of automotive and e-commerce companies. Wing has undertaken construction of the East Gate Business Park that, on completion, will consist of

140,000 sqm of logistics

and industrial space, according to the development plans. According to the developer, the complex will offer custom solutions, flexible choices of hall size, consultation from the design phase, tailored architectural and interior design solutions, visualization of custom corporate identity and meeting rooms and community space, all according to needs. As for the specification differentiation between BTS and speculative builds, Halász-Csatári argues: “BTS will always focus more on tenant specific requirements to meet their needs more. Speculative developments aim to deliver a standard property which will be suitable (if with minor alterations) to a wide range of users, be that logistics, retail, etc. BTS is much more specific and, as a result, often requires a longer commitment term from the tenant.” As the Central European industrial markets are dominated by international industrial and logistics park operators serving international tenants, the quality

of space and the requirements on the demand side are generally regarded as being of a similar quality to that found in Western Europe.

“BTS will always focus more on tenant specific requirements to meet their needs more. Speculative developments aim to deliver a standard property which will be suitable (if with minor alterations) to a wide range of users, be that logistics, retail, etc. BTS is much more specific and, as a result, often requires a longer commitment term from the tenant.” “I believe the logistics side of industrial is of similar quality. And investors are coming to expect that. Some have achieved BREEAM ‘Outstanding’ certification,” says Mark Robinson, CEE research specialist at Colliers International.

State-of-the-Art

“The increase in stock in the region seen in recent year implies that a lot of brand new buildings have been constructed and likely thus fitted out according to the latest customer demands. This is including, for example, the Amazon fulfillment centers in Czech Republic and Poland that are serving Germany and Western Europe; Amazon are state-of-the-art. On top of

that, the portfolio purchases of P3 by GIC and Logicor by CIC in the last two years were Europe-wide transactions; similar standards of operation exist across their portfolios,” Robinson says. The number of certified industrial properties in Hungary has increased considerably according to Colliers International. Prologis Park Sziget has obtained BREEAM new construction certification and the new plant of Becton Dickinson Tatabánya is LEED certified. Prologis has been awarded BREEAM “Outstanding” certification for a facility built for the sports retailer, Sportisimo at prologist Park Prague-Rudná. All Prologis facilities in CEE Europe are being submitted for BREEAM accreditation upon completion according to the company. CTP has more than 4.5 million sqm of class “A” industrial and logistics properties in CEE and is now committed to developing BREEAM accredited buildings. Two buildings at CTPark Plzeň in Czech Republic have already received BREEAM “Very good” certification. “CTP continues in its efforts to support sustainable long-term development and continues to build efficiently to ensure the least negative impact on the environment,” says the company. “In the past year, CTP has installed innovative systems to measure consumption, and more effective ventilation units for better heat transfer. It also continued with LED lighting installation across its entire portfolio.” Remon Vos, CEO of CTP, sees companies adapting to the new market conditions, such as

industry

4.0,

increasing automation, IoT, and other new technologies. “These trends will require smarter buildings, higher standards, and greater customization,” he says.


Special Report | 15

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www.bbj.hu

Budapest Business Journal | March 23 – April 5, 2018

Budapest Airport Keeps Cargo Figures Flying High

97,500 65,000 32,500

2015

Besides the United States, the cargo reach from Budapest airport is visibly vast. “Our cooperation agreement with STO Express and EKOL last year is testament to our continuous commitment to strengthening links between China and the European Union,” said René Droese, director of the property and cargo business unit at Budapest Airport. “As a result of being designated the preferred hub for air cargo by STO Express, e-commerce is set to experience a notable upswing at Budapest,” he added.

2016

Source: Budapest Airport

130,000 tons

127,145

Budapest Airport, the operator of the Ferenc Liszt airport, which has the stated aim of becoming the Central European hub, handled a total of 127,145 tons of cargo in 2017, growing by 13.4% from the preceding year’s then record of 112,143, and by 39.1% when compared to 2015’s total of 91,422 tons. And such progress shows no immediate signs of slowing: the Hungarian airport saw record figures of cargo volume in the beginning of 2018 too. Figures for the first two months of the year came to 21,750 tons, which constitutes a 17.4% rise in volume as compared to the same two months of the previous year. The Hungarian hub wound up 2017 with a balanced market share, with imports at 47.8%, and exports at 52.2%, according to data recently published by the operator. Budapest Airport is preparing for direct flights to the United States of America from May of this year, which is seen as likely to give a further boost to figures.

RECORD TRAFFIC DEVELOPMENT 39.1% IN 2 YEARS

112,143

CHRISTIAN KESZTHELYI

BUDAPEST AIRPORT CARGO

91,422

Following the record set in 2016, Budapest’s Ferenc Liszt International Airport again carried previously unseen amounts of cargo volumes during 2017. The airport’s operations seem to be flying high on all fronts, with growing passenger numbers, and continuous developments.

2017

Developing Fast

Beyond developments related to commercial flying – such as the expansion of the terminals, addition of new parking places and the recently opened ibis Styles hotel for the airport – the so-called Cargo City project is also developing fast, with further expansion in store. “Thanks to our development program, we will be able to cover the entire cargo catchment zone, from Ukraine to Czech Republic, and from Poland to Bulgaria,

Budapest Airport Refurbishing Runways Budapest Airport has announced the refurbishment of the second section of Runway One at the capital’s Ferenc Liszt International Airport through an investment of EUR 5.2 million, financed from the operator’s own resources. The project is yet another part of the BUD:2020 Development Program. The works are taking place between March 12 and June 30, during which time the airport will be operating a single runway. The project includes the refurbishment of the concrete pavement and most of the ground lighting system: cables, electric manholes, and lights will be replaced. In the first stage of the reconstruction, Budapest Airport replaced a 900-meter section last year in the so-called touchdown zone.

In the second stage, works will affect the next 1,400-meter length in the middle of the runway, a total of almost 33,000 sqm of concrete surface. Beyond the replacement of the concrete pavement, several other important developments will be completed on the runway, including the upgrading of ground lighting systems. A total of 160 lamps and almost 90 ground lighting manholes will be replaced or reconstructed in line with the latest European standards, and the cables of the primary electric loop supplying runway lights will also be replaced (300 kilometers of cables combined), the operator says. In the last phase of the works, the instrument landing system will be upgraded on the south-

where the relevant air cargo industrial production is booming,” Droese said. With the anticipated twice-a-week flights of LOT Polish Airlines’ cargo to Chicago and four per week to New York, not to mention the American Airlines’ daily service to Philadelphia, the cargo hub of the Budapest airport has leveraged a strong network, creating direct links between the USA and Hungary. “We expect further growth of 20,000 tonnes of belly cargo capacity annually thanks to the belly capacity on flights from Qatar Airways, LOT Polish Airlines, and American Airlines,” Droese explained. As part of the current EUR 160 million BUD:2020 Development Program, Budapest Airport opened two new express facilities with a total of 16,000 sqm in the summer of 2017. Cargo City — a

20,000 sqm dedicated

freight center that is also part of the BUD:2020 project – will be handed over in the second quarter of 2019, and will expand the hub’s cargo handling capacity to 250,000 tons per year, according to the operator.

eastern landing area of the runway. As with the previous system, the new ILS will aid pilots to approach and land on the runway in lowvisibility conditions, but is capable of significantly more precise operation than the previous system, Budapest Airport added. During the development, “350 people as well as 250 vehicles and machines will be working on site to ensure that the airport can be operated with two runways again from the beginning of the peak summer season in July”, said Stephan Schattney, chief technical officer of Budapest Airport. He added that the quality of the surface of the runway as well as the related complex infrastructure demanded by contemporary aviation require continuous maintenance and renewal.

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Where the routes meet +36 1 225 66 00 www.airportcity.hu


16 | 3

Special Report

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Budapest Business Journal | March 23 – April 5, 2018

Central Europe Logistics Market Booming Demand for Central European industrial space is continuing to rise with the industrial and logistics market recording positive indicators across the region: Hungary, Czech Republic, Poland, Romania and Slovakia. GARY J. MORRELL

Total Central European industrial stock increased to 26 million sqm with record development levels as of the turn of the year, and the region now has the lowest vacancy for the last ten years at 5%. CE take-up was 6.6 million sqm for 2017, of which 3.6 million sqm was new development; supply is not able to keep up with demand, according to Cushman & Wakefield. Total CE stock could potentially reach that Germany, which stands at 30.8 million sqm. Poland and Czech Republic are the dominant industrial markets regarding take-up and delivery, while the Hungary market is going through a resurgence and the emerging Romania industrial market is now booming. “The average occupancy rate reached a record-breaking 95.1%; in effect, take-up is greater than ever and new additions have no problem finding their occupiers before or during development,” commented Ferdinand Hlobil, head of CEE industrial at Cushman & Wakefield. “The greatest amount of industrial space in history was leased in Central Europe in 2017: 6.7 million sqm, one million more than the previous year. Although development in the region is unprecedented and the Central European region’s steep growth rate is approaching its maximum, we are not afraid of a major reversal. One principal indicator has been decreasing - and that is the vacancy rate. Offer meets demand and in this respect the current market is much sounder, even though it may appear overheated,” Hlobil added. Prologis recorded a CEE occupancy of 97.4%

for

2017

as it leased 1.6 million sqm with a regional portfolio of 4.4 million sqm. Another leading CEE logistics park developer and operator, CTP, increased its portfolio by approximately 680,000 sqm and reached a total stock of 4.5 million sqm as occupancy stood at 97.7%.

Prologis Park Chorzów, Upper Silesia, Poland.

Speculative Demand

Reflecting market demand, Prologis has undertaken speculative developments at Prologis Park Nitra in Slovakia and at Prologis Park-Uzice and Prologis Park Prague-Airport in Czech Republic. In Poland, logistics market stock is approaching 12 million sqm, more than 3.2 million sqm of which is located in the Warsaw area. These figures reflect the large number of industrial parks that have been established in strategically located cities throughout the country. Total supply in the Warsaw zone amounted to more than 3.5 million sqm. Upper Silesia, the second largest market, has a total supply of more than 2.5 million sqm, stock in central Poland (the Lodz region) reached almost 1.6 million in 2017, said Colliers International. The second largest CE logistics market is Czech Republic with more than

6.6 million

sqm of logistics and industrial space, 2.5 million sqm of which is located in the Prague area. The greatest demand, however, is along the German border. This includes, for example, the Amazon fulfillment centers in Czech Republic and Poland that are serving Germany and Western Europe. “Yet again it was another strong year for the industrial sector, seeing the comeback of speculative construction; 2018 has started well and there is no sign of a slow down at this point,” said Harry Bannatyne, head of JLL industrial agency. “Tenants will need to think further ahead due to restricted land availability, especially with the much higher demands of electricity, gas and clear height. Within the first quarter of 2018, stock should pass the 7 million sqm mark,

securing Czech as the second largest market within CEE,” Bannatyne, predicted.

Different Fundamentals

The Hungarian market has different fundamentals from those in Czech Republic and Poland. “The Polish market…. is four times larger than the Hungarian in terms of size and population, while Czech Republic has a great advantage over Hungary, due to its historically strong industrial background and its proximity to Germany,” said Tamás Beck, head of industrial at Colliers International Hungary.

“The average occupancy rate reached a recordbreaking 95.1%; in effect, take-up is greater than ever and new additions have no problem finding their occupiers before or during development.” “Therefore, these markets are rather multipolar, while the Hungarian market, from a developer perspective is still quite unipolar, meaning it is mainly concentrated in Budapest and its surroundings, however, due to the saturation of the Budapest market, countryside locations are increasingly the focus of investors and developers, hence the market is becoming more bipolar,” Beck explained. Romania with its network of large regional cities was just behind the Czech market with regard to new construction in 2017. CTP is extending CTPark Bucharest West. The company acquired 100,000 sqm of warehouse space at the complex in 2015

and has subsequently constructed a further 100,000 sqm. CTP says it plans to extend the park and make it one of the largest business parks in the region. Investment into industrial properties

reached

EUR 2.2 bln

for 2017, 19% of the total CEE investment volume for 2017. In what is described by JLL as “the largest single asset industrial transaction ever closed in CEE in terms of both investment volume and leasable area” the 240,000 sqm Logistics Park GalantaGan was acquired by the Chinese CNIC from Prologis. “Western Slovakia as a production hub is an extremely attractive and liquid investment destination,” commented JLL, who advised the vendor, Prologis on the transaction. Most of the stock and pipeline is located in the Bratislava and Western Slovakia region. Slovakia has established a thriving light industrial and logistics network based on the automotive and retail sectors. Industrial stock in Slovakia stands at circa two million sqm with a vacancy rate of 2.25%. One perceived problem with industrial development in CEE is the labor shortage. “But in another way, this is not a problem, as the pressure for expansion or to move to CEE is so big that new investors are prepared to move and fight,” said Hlobil of Cushman & Wakefield. “The labor shortage is pushing development costs upwards and the usual construction time is now four-to-six months. A strong 2018, both in terms of new construction and continuously strong demand is expected. CEE still benefits from low wage costs and an excellent location in Europe. Changes in the retail structure the further expansion of e-commerce - will also support the further growth in demand for industrial real estate. Developers are therefore expected to further build in large volumes,” Hlobil concluded.


Special Report | 17

3

www.bbj.hu

Budapest Business Journal | March 23 – April 5, 2018

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

depo inteRmodális táRsas logisztikai központ kft.

Ÿ

1978

2

pRologis paRk budapest-sziget

201,700

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

Ÿ

2001

Real estate funds (Ÿ) Real estate funds (Ÿ)

lászló kemenes – Marta Tesiorowska

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

3

áti depo közRaktáRozási zRt.

4

pRologis paRk budapest-gyál

5

pRologis paRk budapest-haRboR

www.prologisceesearch.com

153,000

áti depo közraktározási zRt.

1996

Z.I. Logisztikai Zrt (100) –

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

152,000

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

józsef földházi Mária Szabóné Frühwirth Györgyi Szabó Kovácsné

www.atidepo.hu

2002

Real estate funds (Ÿ) Real estate funds (Ÿ)

lászló kemenes – Marta Tęsiorowska

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

www.prologisceesearch.com

lászló kemenes – Marta Tesiorowska

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

Customs seRviCe

distRibution

building management

domestiC WaRehousing

www.depologisztika.hu

aCCessible via WateR

(100) –

aCCessibility foR tRuCks

215,000

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

Rail logistiCs

oWneRship (%) hungaRian non-hungaRian

WaRehouse logistiCs

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

yeaR established

1

Company Website

net WaRehouse spaCe used foR logistiCs WaRehousing (sqm)

Rank

seRviCes

majoR Clients in 2017

Ÿ

Ÿ

top loCal exeCutive Cfo maRketing diReCtoR

addRess phone fax email

béla mescsán – –

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

132,000

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

Ÿ

2001

Real estate funds (Ÿ) Real estate funds (Ÿ)

131,730

goodman hungary kft., 1123 Budapest, Alkotás u. 53., (1) 336-2270, www.goodman.com/hu

Ÿ

2009

Ÿ Ÿ

– – –

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

7

mahaRt ContaineR CenteR kft.

104,000

mahaRt Container Center kft., 1211 Budapest, Weiss Manfréd út 5-7., (1) 278-0178, (1) 277-0167, www.containercenter.hu

1998

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

zoltán fábián Etelka Pongor Siposné István Hajdú

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

8

east gate business paRk

103,000

Wing zrt., 1095 Budapest, Máriássy u. 7., (1) 451-4780, (1) 451-4782, www.wing.hu

2006

(100) –

– – –

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

9

Rail CaRgo teRminal - bilk zRt.

95,000

Rail Cargo terminal–bilk zrt., 1239 Budapest, Európa u. 4., (1) 289-6000, www.bilkkombi.hu

2001

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

miklós ágh László Vass Nóra Miklósi

10

login business paRk

75,000

Wing zrt., 1095 Budapest, Máriássy utca 7., (1) 451-4760, (1) 451-4289, www.wing.hu

1239 Budapest, Európa utca 4. (1) 289-6000 (1) 289-6060 info.rct.bilk@railcargo.com

– – –

1044 Budapest, Ezred utca 2. (1) 451-4760 (1) 451-4289 ipari@wing.hu

11

pRologis paRk budapest m1

6

www.prologisceesearch.com

Goodman Üllő airport logisztikai központ

http://hu.goodman.com/ingatlanok/ kiado-ingatlanok/ullo-airportlogistics-centre

www.containercenter.hu

www.egbp.hu

www.railcargobilk.hu

www.loginbusinesspark.hu

www.prologisceesearch.com

12

CtpaRk budapest West 1.

13

m5-gyál business paRk

14

debReCeni logisztikai központ és ipaRi paRk

15

pRologis paRk budapest-batta

16

pRologis paRk Budapest-Üllő

www.ctp.eu

www.businesspark.hu

www.delog.hu

www.prologisceesearch.com

www.prologisceesearch.com

67,000

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

MAERSK, MSC, Evergreen, Hapag

Ÿ

Ÿ

Ÿ

(100) –

Ÿ

2000

Real estate funds (Ÿ) Real estate funds (Ÿ)

lászló kemenes – Marta Tesiorowska

2071 Páty, Szent József utca 4. (1) 577-7700 (1) 577-7701 info-hu@prologis.com

Ÿ

2000

– CTP Invest, spol. s r.o. (100)

Rudolf patai – –

2051 Biatorbágy, Verebély László utca 2. (30) 694-1001 (30) 694-1001 david.huszlicska@ctp.eu

Ÿ

1989

X Ingatlanfejlesztő és Ingatlanhasznosító Zrt. (100) –

zoltán szabó – –

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

Ÿ

1990

(100) –

zsolt fülöp Julianna László Zsuzsa Szilágyi

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

2008

Real estate funds (Ÿ) Real estate funds (Ÿ)

lászló kemenes – Marta Tesiorowska

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

2002

Real estate funds (Ÿ) Real estate funds (Ÿ)

lászló kemenes – Marta Tesiorowska

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

62,812

Ctp management hungary kft., 2051 Biatorbágy, Verebély László utca 2., (30) 694-1001, www.ctp.eu

60,000

autóker logisztika kft., 2360 Gyál, Heltai Jenő u. 73., (29) 544-690, www.businesspark.hu

54,300

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

39,000

37,500

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

Ÿ

Ÿ

Ÿ


18 | 3

Special Report

www.bbj.hu

Budapest Business Journal | March 23 – April 5, 2018

majoR Clients in 2017

yeaR established

Customs seRviCe

distRibution

building management

32,844

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

domestiC WaRehousing

33,500

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

aCCessible via WateR

34,000

diófa ingatlankezelő Kft., 1013 Budapest, Krisztina tér 2., (1) 888-4120, (1) 888-4171, www.diofaalapkezelo.hu

aCCessibility foR tRuCks

34,500

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

2008

– CPI Property Group (100)

mátyás gereben Kristóf Skwarek Bea Déri

2200 Vecsés, Üllői út 807. (1) 225-6600 (1) 225-6601 hungary@cpipg.com

– – –

1097 Budapest, Táblás utca 36-38. (1) 888-4120 (1) 888-4171 alapkezelo@ diofaalapkezelo.hu

aiRpoRt City logisztikai paRk www.airportcity.hu, www.cpigroup.hu 17

18

dél-pesti Üzleti paRk

19

áti-sziget ipaRi paRk

20

Camel paRk

21

pRologis paRk hegyeshalom

www.diofaalapkezelo.hu

www.atisziget.hu

www.logicor.eu

www.prologisceesearch.com

22

tulipán paRk

23

beRtRans logisztikai központ

23

pRologis paRk budapestbudaöRs

25

masped poRt logisztikai központ

26

City point 9 váRosi logisztikai központ

27

shaRk paRk

28

29

30

31

www.logicor.eu

www.bertrans.hu

www.prologisceesearch.com

www.maspedlogisztika.hu

www.citypoint.hu

www.logicor.eu

goodman gyál logisztikai központ

http://hu.goodman.com/ingatlanok/ kiado-ingatlanok/gyali-logisticscentre

loGicor Győr www.logicor.eu

West gate business paRk www.logicor.eu

masped észak-pesti logisztikai központ “b” teRminál www.maspedlogisztika.hu

32,000

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

Agility, Airmax, Benteler, Fedex, Jas, Kühne+Nagel, Panalpina, UPS

Ÿ

2004

Ÿ Ÿ

Nilfisk Production Kft., Atlas Copco Hungary Kft., DraspóTempo Kft., Csepel Autó Kft.

2001

Z.I. Logistics Zrt. (100) –

gábor kovács-f. Andrea Tornyossy –

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

Opel, UPS, Telenor, Vodafone

1990

Ferenc Daróczi (Ÿ) Bartosz Michal Mierzwiak (Ÿ)

ferenc daróczi, bartosz michal mierzwiak – –

2040 Budaörs, Akron utca 1. (1) 382-5100 (1) 382-5101 info@whitestar-realestate.hu 9222 Hegyeshalom, Prologis Ipari Park Hrsz:1073/1. (1) 577-7700 (1) 577-7701 info-hu@prologis.com

Ÿ

2007

Real estate funds (Ÿ) Real estate funds (Ÿ)

lászló kemenes – Marta Tesiorowska

Ÿ

Ferenc Daróczi (Ÿ) Bartosz Michal Mierzwiak (100)

ferenc daróczi, bartosz michal mierzwiak – –

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

1989

(100) –

pál Rózsa – –

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

2005

Real estate funds (Ÿ) Real estate funds (Ÿ)

lászló kemenes – Marta Tesiorowska

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

2001

Ÿ Ÿ

marcell kovács – Péter Zoltai

1211 Budapest, Szikratávíró út 17–21. (1) 278-0951 (1) 278-0807 logisztika@masped.hu

2010

OTP Ingatlanbefektetési Alap (100) –

– – –

1097 Budapest, Gubacsi út 24. (1) 336-0900 (1) 201-9322 alapkezelo@ otpingatlanalap.hu

ferenc daróczi, bartosz michal mierzwiak – –

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

29,253

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

28,000

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

Aliaxis Kft., Gefco Magyarország Kft., Grundfos Magyarország Gyártó Kft., IKEA, Transdanubia Kft., UTT Europe Kft.

Ÿ

28,000

23,300

23,200

prologis hungary, 1095 Budapest, Lechner Ödön fasor 7., (1) 577-7700, (1) 577-7701, www.prologisceesearch.com masped logisztika kft., 1211 Budapest, Szikratávíró 19–21., (1) 278-0951, (1) 278-0807, www.maspedlogisztika.hu

otp ingatlan Befektetési alapkezelő Zrt., 1012 Budapest, Pálya u. 4–6., (1) 224-7790, (1) 201-9322, www.otpingatlanalap.hu

Ÿ

Ÿ

Ÿ

Chipita, DSV Hungária, UPS, Sarantis, Hardsonic

Ÿ

Ferenc Daróczi (Ÿ) Bartosz Michal Mierzwiak (Ÿ)

Ÿ Ÿ

– – –

2360 Gyál, Hrsz. 7000/15 (1) 336-2270 (1) 336-2270 info-hu@goodman.com

22,463

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

22,200

goodman hungary kft., 1123 Budapest, Alkotás u. 53., (1) 336-2270, www.goodman.com/hu

Ÿ

2007

19,509

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

Hungarian Alliance Logistic Kft.

Ÿ

Ferenc Daróczi (Ÿ) Bartosz Michal Mierzwiak (Ÿ)

ferenc daróczi, bartosz michal mierzwiak – –

9027 Győr, Platánfa utca 1. (1) 382-5100 (1) 382-5101 info@whitestar-realestate.hu

Ÿ

Ferenc Daróczi (Ÿ) Bartosz Michal Mierzwiak (Ÿ)

ferenc daróczi, bartosz michal mierzwiak – –

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

2001

Ÿ Ÿ

marcell kovács – Péter Zoltai

2151 Fót, Keleti Márton utca 12. (1) 278-0951 (1) 278-0807 logisztika@masped.hu

17,737

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

13,300

masped logisztika kft., 1211 Budapest, Szikratávíró 19–21., (1) 278-0951, (1) 278-0807, www.maspedlogisztika.hu

BaSys Magyarország, Argento Kereskedelmi Kft., Brammer Magyarország Kft., Galika Szerszámgépek Kft., Mlinar H Kft., Oberthur Technologies Kft., LKW Blattfeder Zrt., Xylem Kft.

Ÿ


www.bbj.hu

Budapest Business Journal | March 23 – April 5, 2018

3

Special Report | 19

Development Hampered by Labor Crisis but Growing section of the Danube [which severely hampers navigation]. But logistics companies everywhere suffer from a labor shortage, and that is restricting growth. As a result, in order to recruit and retain their workforce, more and more companies are offering fringe benefits. For example, by taking over a share of their mortgage loans, or supporting their children’s private tuition.

Logistics sector development is hampered by labor shortages, but most segments are growing in an increasingly legal market Zsolt Fülöp, president of the Association of Hungarian Logistics Service Centers (MLSZKSZ) tells the Budapest Business Journal. His association represents nearly 90% of the Hungarian logistic centers, covering the entire area of services. It has 74 members, whose total revenues in 2016 were some HUF 410 billion (EUR 1.3 bln). KESTER EDDY

BBJ: How is the logistics sector performing to date? Zsolt Fülöp: Nearly all the logistic subsectors grew in 2017: rail was up 5.5%, water by 2.6%, air 12.6% and combined transport 3.8%. At the same time, road freight volumes were down by 5.3%, which meant domestic goods delivered by road shrank by 10 million tons. In international road transport there were no substantial changes in volumes. By comparing figures of the last two years, we can see that the long-distance freight is tending to slowly shift from road to the more efficient modes of rail and water. We cannot speak of a permanent tendency as yet, but we hope that cooperation between transport modes will become even stronger, making better use of each other’s synergies. Another characteristic here is that logistic centers are highly utilized, at an unprecedented scale; the vacancy rate is below 4%. And around Budapest you cannot find property of more than 5,000 square meters in a good location for logistics purposes, so developers need to site new logistics parks in the provinces, where there is still free land. BBJ: How would your members like to develop the sector? ZF: There are good opportunities in the Hungarian logistics market, however, the

BBJ: So how can your association help solve these problems? ZF: The MLSZKSZ, together with several other professional organizations, has submitted a joint set of proposals to the government. We are continually working on possible solutions. In addition, our association knows this sector. We have market intelligence, a strong communication background and we offer support to our members in all sorts of ways, e.g. by offering information and practical solutions, providing professional expertise and professional forums. On top of this, we have arranged joint procurement of energy for our members.

companies involved are not always able to exploit them. The sector still needs some more years of growth, as well as a support system tailored for its needs to catch up [with the best in the EU].

“But logistics companies everywhere suffer from a labor shortage, and that is restricting growth. As a result, in order to recruit and retain their workforce, more and more companies are offering fringe benefits. For example, by taking over a share of their mortgage loans, or supporting their children’s private tuition.” BBJ: What challenges do your members face in realizing these developments? ZF: Practically, there are three main pillars for determining development. We need: a) the industrial partners and customers; b) for logistics, the commodities [to be transported]; and c) the workforce, area and infrastructure.

Zsolt Fülöp, president of MLSZKSZ. If one of these factors is missing or is not of the right quality, there is little chance of development. And there are various obstacles. As mentioned, it’s difficult to find suitable plots around Budapest. In the provinces, land is available, but there is a shortage of suitable labor. BBJ: I presume the issues vary with the form of transport used within the sector? ZF: The situation of road hauliers is aggravated by the growing number of abuses related to transport authorization, i.e. CEMT licenses [permits needed for international loads]. On rail, the main concern is to reduce the effects of the extensive railway modernization – track works – in the coming years. We face diversions, and this means longer delivery times. A continuous problem with water transport is the unpredictable fluctuation of the water level in the Hungarian

BBJ: You mean diesel, or electricity and gas? What sort of discounts? ZF: Electricity and gas, at a discount of between 20-30%. And we are also lobbying so that up to 50% of the TAO support (Company Tax Support) can be used by the companies themselves to protect their employees’ health. BBJ: What about government regulations, for example the EKÁER customs reporting system? And EU regulations? ZF: Government regulations like EKÁER, the usage-based [road] tolls and the introduction of online cash-registers have all proved successful. These all resulted in substantial tax revenues, the economy has become whiter and the conditions for fair competition have significantly improved. With the introduction of the electronic e-CMR [waybill], e-invoice and the e-delivery note, the financial aspects of logistics will become even whiter in the near future. Therefore, the competitiveness of companies working legally and above board will be further improved.

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2018. 02. 22. 10:18


20 | 3

Special Report

www.bbj.hu

Budapest Business Journal | March 23 – April 5, 2018

Logistics service providers

2

magyaR posta ZRt.

3

4

www.waberers.com

www.posta.hu

Rail CaRgo HungaRia ZRt. www.railcargo.hu

dHl CsopoRt www.dhl.hu

5

küHne + nagel kFt.

6

Rail CaRgo logistiCs HungaRia kFt.

7

www.kuehne-nagel.hu

www.railcargologistics.hu

sCHenkeR nemZetköZi sZÁllítmÁnyoZÁsi és logisZtikai kFt.

191,106 (2016)

74,491

66,199

31,357 (2016)

26,131

22,624

Ÿ

Ÿ

66,005

Ÿ

1,524

Ÿ

199

Ÿ

Ÿ

117,213

Ÿ

3,900

37,000

otHeR ✓

majoR Clients in 2017

Ÿ

distRibution

tRanspoRtation

WaReHouse seRviCes ✓

dutiable goods

ltl

Ftl

CaRgo Consolidation

domestiC

inteRnational

RailWay –

domestiC goods

logistiCs seRviCes ✓

distRibution

WaReHousing

EUR 122(1) million

net WaReHouse spaCe used FoR logistiCs WaReHousing (sqm)

EUR 644(1) million

FReigHt FoRWaRding seRviCes

Ÿ

MOL Nyrt., Audi Hungária Motor Kft., BorsodChem Zrt., ISD DUNAFERR Zrt., Mátrai Erőmű Zrt., Magyar Suzuki Zrt.

Ÿ

Ÿ

MOL Nyrt., ISD Dunaferr Zrt., BorsodChem Zrt., Mátrai Erőmű Zrt., PRIMAGÁZ CE, Hungrana Kft.

Ÿ

www.dbschenker.com/hu

8

liegl & daCHseR sZÁllítmÁnyoZÁsi és logisZtikai kFt.

18,927

Ÿ

62,905

Ÿ

www.dachser.hu

yeaR establisHed no. oF Full-time employees on FebRuaRy 1, 2018

1

WabeReR's inteRnational nyRt.

net Revenue FRom logistiCs seRviCes in 2017 (HuF mln)

Company Website

total net Revenue in 2017 (HuF mln)

Rank

Ranked by total net revenue (HUF mln) in 2017

oWneRsHip (%) HungaRian non-HungaRian

top loCal exeCutive CFo maRketing diReCtoR

addRess pHone Fax email

1948 7,653

(29.700) CEE Transport Holding B.V. (70.300)

Ferenc lajkó – –

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

Hungarian State (100) –

Zoltán illés – –

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

(0.01) Rail Cargo Austria AG (99.99)

dr. imre kovács Román Kotiers Boglárka MondvayNémeth

1133 Budapest, Váci út 92. (1) 512-7323 (1) 512-7789 cargo.rch@ railcargo.com

– Deutsche Post AG (100)

attila pál, Zoltán gáldi, Zoltán bándli Zoltán Antalffy, Gábor Mitró, Birgit Müller, Pribus Péter Éva Forgács, Csaba Tavaszi, Andra Ligi, Irena Mižďochová

www.dhl.hu/hu/ elerhetosegek.html

1993, 1868

Ÿ

2005 1,878

1993 1,061

1992 1,551

– Kühne + Nagel Eastern Europe AG (100)

márton lányi Péter Kisch Szilárd Paál

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

1982 95

– Rail Cargo Logistics Austria GmbH (100)

andrás vernes, Árpád vásárhelyi Edit Bokori –

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

1992

– Schenker AG (100)

sándor barényi – –

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

1999

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

Roman stolicny – –

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

(100) –

Zsolt Fülöp Julianna László Zsuzsa Szilágyi

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

GySEV Zrt. (100) –

jános boda – –

9400 Sopron, Mátyás király utca 19. (99) 577-206 (99) 577-401 info@gysevcargo.hu

2013 370

– Ekol Lojistik AŞ (100)

Ákos kovács Andrea Hertelendy –

1211 Budapest, Szikratávíró út Hrsz.: 210023 (1) 872-6100 (1) 799-8257 hungary@ekol.com

1990 297

– Beteiligungsgesellschaft Lagermax Autologistik International GmbH (100)

jános molnár Bálint Hetyei Attila Novák

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

Ÿ

Ÿ

9

tRans-sped kFt.

17,351

Ÿ

185,000

Ÿ

1998 651

10

gysev CaRgo ZRt.

13,383

1,591

88,000

Ÿ

2011 225

11

www.trans-sped.hu

www.gysevcargo.hu

ekol logistiCs kFt. www.ekol.com

lageRmax 12 autótRansZpoRt kFt. www.lagermax.hu

12,300

8,950

4,590

Ÿ

11,000

230,000

MOL, Robert Bosch, Audi, Samsung

Porsche Hungaria Kft., Ford Közép- és KeletEurópai Kft., MercedesBenz Hungária Kft., Kia Motors Hungary Kft., Mercedes-Benz Manufacturing Hungary Kft., Eurasia Logistics Kft.


3

www.bbj.hu

euRosped nemZetköZi 13 sZÁllítmÁnyoZÁsi ZRt. www.eurosped.hu

Raben tRans euRopean HungaRy 14 kFt.

8,292

185

6,000

Ÿ

bi-ka logisZtika kFt. www.bikalogisztika.hu

Áti depo

16 köZRaktÁRoZÁsi ZRt. www.atidepo.hu

Rail CaRgo 17 teRminal - bilk ZRt. www.railcargobilk.hu

veRsteijnen logistiCs 18 kFt. www.versteijnen.com

19

masped logisZtika kFt. www.maspedlogisztika.hu

plimsoll

20 sZolgÁltató kFt. www.plimsoll.hu

21

Fluvius kFt.

inteRCaRgo HungaRy 22 kFt. www.intercargo.hu

23

delog kFt. www.delog.hu

bajai oRsZÁgos köZFoRgalmú 27 KiKötőműKödtető Kft.

NR not ranked, NA not applicable

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

– Raben Group N.V. (100)

Csaba Árvai Noémi Szűcs Ágnes Bolyki

2330 Dunaharaszti, Jedlik Ányos utca 31. (24) 502-000 (24) 491-820 hungary.info@ raben-group.com

Ÿ

6,850

Ÿ

19,000

Ÿ

1991 194

Anita Bíró Karmazinné (100) –

gabriella szécsi László Pálmai Attila Katkics

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

2,289

2,010

153,000

Ÿ

1996 140

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

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

miklós Ágh László Vass Nóra Miklósi

1239 Budapest, Európa utca 4. (1) 289-6000 (1) 289-6060 info.rct.bilk@ railcargo.com

– Versteijnen Logistics Group B.V. (100)

sándor voller Zoltán Jobb –

9600 Sárvár, Ikervári út 42. (95) 325-777 (95) 325-888 info.hu@ versteijnen.com 1211 Budapest, Szikratávíró út 17–21. (1) 278-0951 (1) 272-0807 logisztika@ masped.hu

2,228 (2016)

2,064

Ÿ

2,064

Ÿ

10,000

1,937

Ÿ

46,000

1,724

1,724

Ÿ

Ÿ

Ÿ Ÿ Ÿ Ÿ

Ÿ

Ÿ

2001

Ÿ

1995 65

Ÿ

2001 140

(100) –

marcell kovács Szilárd Lette Péter Zoltai

Ÿ

1992 9

Individuals (49) TTS S.A. (51)

botond szalma Mariann Sánta András Kiss

1139 Budapest, Frangepán utca 7. (1) 210-9800 (1) 210-9801 plimsoll@plimsoll.hu

Ÿ

2001 7

PLIMSOLL Zrt. (100) –

botond szalma Kruppa Ferenc –

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

1993

1,163 (2016)

Ÿ

Ÿ

Ÿ

1,157

Ÿ

55,300

Ÿ

1990 45

Zsolt Fülöp (50.03), DELOG Kft. (39.97), individuals (10) –

Zsolt Fülöp, szabolcs Zsolt Fülöp Julianna László Zsuzsa Szilágyi

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

Ÿ

1995 46

DELOG Kft. (61.97), Dunapack Kft. (38.03) –

antal konyári Julianna László Zsuzsa Szilágyi

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

X Ingatlanfejlesztő és Ingatlanhasznosító Zrt. (100) –

szabó Zoltán – –

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

– (100)

danu m. temelie – –

1097 Budapest, Gyáli út 50. (1) 333-8888 (1) 333-8890 info@ euroministorage.com

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

200

65 (2016)

Ÿ

Ÿ

200

Ÿ

Ÿ

7,500

22,400

www.portofbaja.hu

Ÿwould not disclose,

istván sevecsek Judit Tankovics Zsuzsanna Szemelyácz

587 (2016)

www.euroministorage.com

Port Logisztika Kft. (100) –

autókeR 25 logisZtikai kFt.

euRo mini stoRage 26 HungÁRia kFt.

addRess pHone Fax email

26,000

1,078

www.businesspark.hu

top loCal exeCutive CFo maRketing diReCtoR

6,855

tRans-sped-papiRusZ 24 kFt. www.trans-sped.hu

Ÿ

oWneRsHip (%) HungaRian non-HungaRian

6,855

1,433

www.fluvius.hu

1989

Special Report | 21

1989 200

www.raben-group.com

15

yeaR establisHed no. oF Full-time employees on FebRuaRy 1, 2018

otHeR ✓

majoR Clients in 2017 distRibution

tRanspoRtation

WaReHouse seRviCes ✓

dutiable goods

ltl

Ftl

CaRgo Consolidation

domestiC

inteRnational

RailWay

FReigHt FoRWaRding seRviCes

domestiC goods

logistiCs seRviCes ✓

distRibution

WaReHousing

net WaReHouse spaCe used FoR logistiCs WaReHousing (sqm)

Company Website

net Revenue FRom logistiCs seRviCes in 2017 (HuF mln)

total net Revenue in 2017 (HuF mln)

Rank

Budapest Business Journal | March 23 – April 5, 2018

Ÿ

Ÿ

Ÿ

Ÿ

1989

Ÿ

2006 4

1999

Ÿ

This list was compiled from responses to questionnaires received by March 21, 2018 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

NOTES: (1) Data of business year October 1, 2016-September 30, 2017.


4

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Socialite

Budapest Business Journal | March 23 – April 5, 2018

An old Rocker Adrift in Budapest

around the Kunsthalle itself. If you haven’t already done so, I’d suggest you visit. There’s an exhibition of work by Hungarian artists who’ve either received or who are hoping to win what’s called a Derkovits Prize award this year.

David Holzer meets up with his brother and heads out for a Budapest reunion full of rock and roll, culture and food.

More Provocation

DAVID HOLZER

Fifteen years ago, I was in a band with my younger brother. What I did was like singing, only different. He was, and remains, an excellent guitarist and songwriter. He’s also a great cook and a beer aficionado. When he announced he was coming to see me in Hungary, I knew I had to find some live rock and roll, great food and a decent beer bar for my brother in Budapest. I managed to find all those things, but our day didn’t quite go according to plan. The live music was going to be the grand finale of our day. I’d arranged for us to go the filming of a TV show called Akusztik at the

far as I can hear, there’s no “…and roll” to it. Their songs featured folk chords rather than those derived from the blues. Alongside standard rock instrumentation – guitar, bass, drums – you’ll hear all kinds of stringed instruments. This gives the music a mournful, keening feel even when the band is rockin’.

moored on the Danube just by the Petofi Bridge. The band doing their stuff was called Republic. All I knew about them was that they’re a Hungarian rock band and they were my partner’s father’s favorites. It was only when I double-checked the email from Petőfi TV that I realized filming started at two in the afternoon. On a Tuesday. This is not a “mad, bad and dangerous to know” rock and roll time of day. If Republic are typical of the form, the thing about Hungarian rock is that, as

There’s no doubt that Republic are a tight, slick band. They mix flamenco-style guitar in with the rock and folk and some of their songs were almost memorable. The audience of around 100 knew the words, clapped and swayed and generally enjoyed themselves. While little brother checked out Republic’s gear and tried to stop himself from being too sniffy and dismissive, I zoned out. A38 is an excellent little venue and I imagined how great it would be to see a band that rolled as well as rocked and whose lyrics and between song banter

A38 boat

The A38 cultural venue on the banks of the Danube.

Excellent Venue

I could understand. Looking at the listings for March, it seems like there’s plenty of opportunity to let it rock. I have to admit that we crept out before the band finished, hopped on a tram and headed back into the city. It was a perfect day to show my brother Hősök tere (Heroes’ Square) and I wanted to see the Sando Miller “Malkovich, Malkovich, Malkovich” exhibition at Műcsarnok (the Kunsthalle). “Malkovich…etc.” features the actor reproducing classic photos with Miller adopting the iconic style of people like Warhol, Diane Arbus and so on. It’s a nicely post-modern idea and I guess that, if you know your photography, you will have fun seeing how Miller does it. I couldn’t quite see the point, although I was impressed by Malkovich’s willingness to enter into the spirit of the project. His Marilyn is unnerving. The best thing about visiting “Malkovich... etc.” was, for me, wandering

GRL_bbj_252x77_Layout 1 2018. 03. 06. 14:03 Page 2

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One of the best place to eat and stay.

Budapest, V. Gerlóczy u. 1.

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Much of the work was bright and colorful and there was very little conceptual art, thankfully. The only slight disappointment was how safe the work was. I could have done with rather more provocation. Mind you, after our walk up through the strange canyons of streets between Erzsébet krt. and Hősök tere I don’t think I could have taken much more excitement. We took the weirdly quaint Metro One line back to Deák Ferenc tér and went looking for the Fülemüle restaurant. One of the many things I love about Budapest is that it’s possible to find excellent traditional Jewish cooking. This is extremely hard to do in London, at least in the center of the city. My brother had never tasted Hungarian Jewish food and I’ve recently discovered cholent. This is the incredibly rich Jewish bean and smoked meat stew often served with a hardboiled egg. The cholent at Fülemüle is the best I’ve ever tasted, even if my experience is limited to two occasions. I made a decent dent in the version served with the restaurant’s own home-hickory-smoked beef and a delicious liver sausage. My brother had duck with red cabbage and onion mashed potato. We waddled out of the restaurant utterly contented, managed to stroll very slowly back to our hotel as night fell on Budapest. It wasn’t exactly a rock and roll day but we certainly enjoyed it.

To discover more about these venues, visit www.a38.hu, www.mucsarnok.hu and the Fülemüle Étterem Facebook page.


4

www.bbj.hu

Budapest Business Journal | March 23 – April 5, 2018

Socialite | 23

Women Winemakers a Force to be Reckoned With The “Cherchez la femme, avagy Gyengébb? Nem” (“Look for the Women, are They Weaker? No”) tasting held at Sofitel Budapest Chain Bridge and hosted by Borsmenta Magazin on International Women’s Day, March 8, showcased Hungary’s considerable female winemaking talent. ROBERT SMYTH

While Hungary may have performed very poorly in the updated 2017 version of the Gender Equality Index, with only Greece rated worse among EU member states, women winemakers are making some of the country’s finest wines. Also, albeit without number crunching and no suitable stats to hand, and with quite probably nothing concrete in existence anyway, my gut feeling is that women do appear to be fairly well represented in the Hungarian wine industry. The tasting was organized by Borsmenta Magazin’s Edit Szabó, who published the book “Gyengébb? Nem” last November featuring profiles of 26 women winemakers, all of whom were present at the tasting, along with a couple of others. While her charismatic husband Zoltán is the figurehead of Szekszárd’s Heimann family winery, it has actually been Ági Heimann who has been quietly making the excellent wines for years, although her son Zoltán junior is now also strongly involved in the winemaking. The Heimanns have been showing just how complex Kadarka and Kékfrankos can be from Szekszárd’s loess and red clay soil. Over in the Zala region, it was a question of what would happen to the Bussay family winery after the passing of winemaker László Bussay in 2014. His daughter, Dorottya, has done a very good job since taking over the keys of the winery.

Killer Rosé

Close to Budapest at Szigetcsép on Csepel island, Éva Gálné Dignisz of Gál Szőlőbirtok és Pincészet, who makes killer, award-winning rosé and solid, fruity whites, became the first woman to win the Hungarian Wine Academy’s Winemaker of the Year award back in 2013. It’s not just at family wineries where women rule the winemaking roost. Beáta Böröczki (who also goes by the surname of Nyúlné Pühra) is the chief winemaker at the sizable, quasi cooperative Nyakas Pince

in Tök, in the Etyek-Buda region, which is also close to the capital. Nyakas’ Sauvignon Blanc 2017, made in part from grapes coming from old vines, was vibrant and balanced between the aromatic nose and fruity palate. 2017 looks a stellar vintage in much of Hungary, although a very wet spell going into harvest did rain on the parade – quite literally – around Lake Balaton. A large concentration of female winemakers is to be found in the Tokaj wine region. Stéphanie Berecz of Tokaj Kikelet may hail from the Loire in France, but she has lived and worked in Tokaj since the

at Hangavári Pincészet in Bodrogkisfalud. Dorottya Homoky (Homoky pincészet) and Kata Zsirai (Zsirai pincészet) are among the region’s promising young talents. While her father János makes the wines for Árvay Családi Pincészet, Angelika Árvay tirelessly sells them and served as the president of the Junibor association for seven years. Sarolta Bárdos makes some really distinctive wines in Bodrogkeresztúr, including a delicious Sárgamukotály from

the 2017 vintage, which has a touch of sweetness with its residual sugar, but it is nicely cut through by acidity. It captures the grape’s fruity-floral character in a subtle rather than overpowering manner, but it is also ripe, round and substantial on the long palate. Dorottya Homoky (Homoky pincészet) and Kata Zsirai (Zsirai pincészet) are representative of Tokaj’s promising young female winemakers. Vivienn Ujvári makes wine for the Barta Winery in Mád, but also has less than a hectare of her own wines in the Badacsony region. A wine made by her – Öreg Király Dűlő Furmint 0929 2017 – from rhyolite tuff, zeolite and red clay soil, seriously impressed at the press tasting for the upcoming sixth Great Tokaj Wine Auction. Young dry Furmints are often imbalanced and sharp and need to time to round out, but this one is already bang on the money. The annual Tokaj auction will see a record number of lots (31 wines from 24 producers with an estimated value of HUF 70 million) of unique, one-off wines go under the hammer and will be held at the synagogue in the town of Tokaj on April 21 at 3:30 p.m. The wines can be tasted blind earlier on the same day. Dry lots are a Gönci barrel (136 liters), sweet wines are one or a half (68 liters) Gönci barrel and Eszencia are 10 liters, according to Laurent Comas, member of the Confrérie de Tokaj board. All lots will be bottled and labelled for the buyer.

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early

1990s

Művészeti Szalon és Kávéház 1052 Budapest, Szervita tér 5. Jegypénztár: 06-1-266-8337 jegy@rozsavolgyi.hu www.szalon.rozsavolgyi.hu

and has shown that the Hárslevelű grape can make dry wine to rival, if not surpass, dry Furmint. Furthermore, she has done this from the supposedly inferior loess soil around the town of Tarcal, smashing the assumption that Tokaj’s best wines come only from the purely volcanic soils around the town of Mád. One of the most appealing Furmints that I’ve tasted lately comes from Sanzon Tokaj and the capable hands of Erika Rácz. Sanzon Tokaj’s single vineyard Rány Furmint 2016 comes from a vineyard that is characterized by its firm acidity and this wine is no exception, although it is also really elegant with lots of soft fruitiness to take the edge off the acidic bite. It was made only in the tank, which helps seal in the considerable zesty freshness, but it doesn’t miss the body or texture that many believe can only come from vinifying in oak.

Deft Exponent

Edit Bai is the chief winemaker at Tokaj’s second largest winery (Dereszla Pincészet), yet still manages to do her own thing, along with her brother István, at their familyowned Carpinus winery. Meanwhile, Judit Bodó of Bott Pince fame is a deft exponent in capturing the nuances of different vineyards via her adored Furmint grape. Márta Wille-Baumkauff (Tokaj Pendits) is a pioneer of biodynamic winemaking in Tokaj and Hungary and carried on admirably after the loss of her husband. The wines made by Fruzsina Osváth travel far and wide under the internationally renowned Royal Tokaji label. Anita Magyar is the “hostess with the mostess” (sorry to sound sexist, but the lunch is lovely) and some fine aszú

Henrik Ibsen

ROSMERSHOLM Cast: Béla Fesztbaum, Annamária Láng, József Gyabronka, Andor Lukáts, Vince Zrinyi Gál, Erzsébet Kútvölgyi Directed by: Béla Fesztbaum

Premiere: April 5., 2018


Budapest Business Journal 2606  
Budapest Business Journal 2606