american chamber of commerce in hungary

VOICEVol I. issue 09, september 2012 Entrepreneurism and innovation in Hungary

MORE INSIDE: Olympian glow of gold Managing recovery 3 Contents

4 introduction 14 ANALYSIS 30-31 AmCham news Dear Members and Friends… Budapest bourse sees drastic drop in turnover Managing recovery

5 PEOPLE IN THE NEWS 32 AmCham news A more proactive future? 16-20 COVER STORY Europe still relevant Innovation and entrepreneurism: Hungary’s route map to success 6 PEOPLE IN THE NEWS 33 AmCham news Making the law human Regional AmChams at Balaton 22-23 LIFESTYLE Time Out Budapest AmCham news 7 people IN THE NEWS 34 Olympian glow of gold Chamber Corner: Romania

24-25 lifestyle 36-37 AmCham news 8 Inside Out Nick Kós’ Budapest Vulnerable arts? New members on board

AmCham News 38-41 AmCham news ANALYSIS 26-27 9-11 Leadership resilience Business news roundup Photo coverage

42 AmCham news 12-13 analisys 28-29 Amcham News Hungary officially in recession Flagship of the future CEO’s note

Voice is published on behalf of the American Chamber of Commerce by Absolut Media Zrt., Madách Trade Center, 1075 Budapest, Madách Imre út 13-14., Building A, 8th floor Editor-in-chief: ROBIN MARSHALL ([email protected]) • Contributors: GABRIELLA LOVAS, ROBIN MARSHALL, ANDRÁS TÖRÖK, Ágnes Vinkovits, Time Out Budapest Photography: András Hajnal, Lázár Todoroff • Design: ABSOLUT DESIGN STÚDIÓ ([email protected]) • Art director: Tamás Tárczy • CEO: TAMÁS BOTKA Advertising: ABSOLUT MEDIA Zrt. ([email protected]) • Sales and Marketing: Dóra Horváth ([email protected]) Product Director: Vanda Taletovics-Vedres • Subscriptions: [email protected] • Printing: Absolut Print Kft. Websites: www.amedia.hu, www.bbj.hu For AmCham Content: ZSÓFIA JUHÁSZ ([email protected] + 36 1 266-9880/360) Advertising: CSILLA PÁL ([email protected] +36 1 266-9880/319) HU ISSN 2062-1817 VOICE american chamber of commerce in hungary Introduction People in the news 5

The President’s Letter PEOPLE

ummer went by fast at employment, data protection and national AmCham Hungary as we energy strategy. A more proactive future? have been working behind the S scenes all season preparing for The brief from the Taxation committee upcoming advocacy issues and chairman offered a comprehensive analysis Hungary needs to develop a strategy to change from best practices and learn from each others’ events. Several committees held their meetings of the last 24 months regarding taxation mistakes. This will be the main factor that in the hottest months of the year and two changes: invitees included Patron and being reactive to active in integrating into the global will determine the pace of development, of them – Regulatory and Taxation – even Corporate CEOs and CFOs as well as economy, along with renewing its country brand to and the role these countries can play in the decided to invite others from the membership registered committee members. attract and retain FDI, says GE’s Eszter Szabó, who European and global stage” she says. to report on progress and talk about next steps. The board – unlike in previous years – held Now, at the end of a hot summer, we are recently received the Knights’ Cross Order of Merit of “We talk a lot about increasing meetings in July and August, too, but please all getting prepared for the last quarter of the Republic of Hungary. competitiveness, but it has two factors: one is do not worry; we did have a chance to go for a the year lying ahead. For elected officers the ability to compete, the other the ability to short vacation as well. of the chamber, it also means the most collaborate. According to a study the first is important executive body, the Annual If you are interested in running for a board zabó, who joined GE in 1996 55% of the total, the other 45%.” The Regulatory committee reviewed the General Assembly, being convened, with a position, please note that the deadline after a career in government legislative agenda of Parliament for the fall partial renewal of the Board of Governors. for submission to the AmCham office, and a period of study in the GE, with businesses in Czech Republic, season and discussed at its July meeting the As you may know, this year my AmCham including an expression of interest and S United States, is the company’s Poland and Romania, as well as Hungary, focal points for AmCham. The committee presidential term will end, without the other related nomination materials (please corporate communications and employing a total of 26,000 staff, very much looks forward to receiving the possibility of re-election. Four positions check the elections rules) is 2PM local time public affairs leader for CEE. That regional has developed a number of regional opinion and expertise of the members, (Members at Large) will also be open for on Monday, November 5 2012. overview, coupled with her background, initiatives, often partnering AmChams, and will ask for your inputs when the election or re-election. I strongly encourage gives her a wider worldview than many. It such as regional energy forums and AmCham position is discussed on the you to run for opening board positions or If you have any question regarding nominations, please is not that she isn’t a proud Hungarian; it is annual tax conferences. Perhaps most contact Robert Peaslee, chairperson of the AmCham main advocacy issues such as changes to the presidency, as, in my opinion, it is a very Elections Committee (phone: +36/1/475-4090, simply that there is more to her than that. notable, though, is the GE Foundation the tax regime, contributions to vocational rewarding way to spend your volunteer hours, e-mail: [email protected]) or László Metzing Scholar Program, which aims to develop at the AmCham office at +36/1/428-2082 or at Eszter Szabó was presented with the training, copyright issues, how to foster both on a personal and at a professional level. [email protected]. “First I am a human being, then a woman, leadership, community involvement and Knights’ Cross Order of Merit in March then a Hungarian, then someone from a regional network for a new generation 2012 for the scholarship and innovative Central and Eastern Europe, and finally I am education programs she has pioneered, of leaders, and celebrated its 10th AmCham Member’s Board a global citizen,” she explains. “But these are as well as her role in last year’s Ronald anniversary in Budapest on July 9. “It like the layers of an onion, you cannot take Regan centenary events in Hungary. was developed in Hungary, and then President First Vice President Second Vice President Secretary Treasurer István David Dr. Andrea Péter one in isolation from the others.” She was the inaugural winner of the expanded in Poland, Czech Republic and Havas G. Young Jádi Fáth IIE’s European Award of Excellence in Romania,” Szabó explains. She describes Németh GDF SUEZ bpv Jádi Energia December 2011, and is an honorary pro- Ernst & Young Amrop Kohl- She says her country has lost the advantages it as a “high impact program”, run by Németh Holding 1136 mann & Young fessor of Budapest Business School. She Ügyvédi Iroda Hungary Zrt. Eszter utca 6/b, it enjoyed in the aftermath of successful the Institute of International Education. Budapest, 1051 Budapest, 2440 has been a board member of AmCham 1022 Budapest Váci út 20. Vörösmarty Százhalombatta, regime change in 1990. “To build the Hungary for the past two years. The GE Foundation has spent $2 million tér 4. Csenterics u. 8. perception of a location as favorable for FDI on 430 students, and put in 2,500 GE [email protected] [email protected] [email protected] [email protected] Phone: +36 1 451-8701 Phone: +36 1 391-0950 Phone: +36 1 429-4000 Phone: +36 23 502-400 takes a long time, but Hungary was able to leadership hours. Fax: +36 1 391-0951 Fax: +36 1 429-4001 do that from the early ’90s until 2001. Then Crucial to the development of an Board Members at large we had 9/11 and the world changed. After atmosphere that attracts inward investment Seeing an opportunity in the lack of William Norbert László Márk Benkő Fogarasi Drajkó Hetényi that, Hungary was able to give an answer to is a sense of equilibrium. Disagreements firsthand information on the region Morgan Stanley Graphisoft SE Rózsakert Hungary 1031 Flextronics the questions posed by the new situation, but should be settled within countries instead available in English, the company launched Medical Center Analytics Ltd. Budapest, International it could have been better.” of being conducted in international forums its GE for CEE thought leadership blog, 1026, Budapest, 1095 Budapest, Záhony u. 7. 1183 Buda- Gábor Áron u. Lechner Ödön (Graphisoft pest, Hangár unless there is no other way, she argues. The along with a twitter feed, LinkedIn group, 74-78. fasor 8. Park) utca 5-37 Since the political changes, Hungary’s international arena tends to simplify, and Facebook page and YouTube channel; its [email protected] [email protected] [email protected] [email protected] Phone: +36 1 225 7350 Phone: +36 1 881-4113 Phone: +36 1 437 3000 Phone: +36 30 677 5029 approach to attracting FDI has been thus misunderstand, differences of opinion. mission is to provide a platform for dialogue Fax: +36 1 881-3700 reactive, Szabó says; it took what was It also creates a long lingering negative for the economic prosperity of 130 million Board Members at large chief executive officer offered. “What we should do is switch to a feeling about a country that is against the people living in CEE. “It’s about how GE and László Frank Eszter Péter György Klausz III. Szabó Dávid more proactive mind set, we should look interest of its citizens, Szabó says. the region can grow together, and making Cisco Systems at what the country can offer, find a couple the region accessible for outsiders: half of Hungary Telenor Ma- GE AmCham 1123 Budapest, gyarország Zrt. 1138 Bp., 1051 of focus areas and figure out what we need She also makes the point that none of the our readers are in the United States and the Csörsz utca 45. 2045 Török- Duna Tower, Budapest, bálint, Pannon Népfürdő utca Szent István to change as a country to develop faster. countries in the region are particularly UK.” Szabó, who designed the blog and is its út 1. 22. B-C. épület tér 11. This game requires a visionary element. large, and thus lack scale, but all share chief editor, describes the job of publishing [email protected] [email protected] [email protected] [email protected] Phone: +36 1 225-4658 Phone: +36 20 930-4000 Phone: +36 1 237-6811 Phone: +36 1 266-9880 Designing a new Hungary brand that a common history, and all face similar it three times a week as “fun but difficult… Fax: +36 1 225-4611 Fax: +36 20 930-4159 Fax: +36 1 266-9888 would help to keep and attract FDI amid modernization problems. “The govern- It is about leadership, innovation, energy, Ex officio members increased competition would add impetus. ment, NGO and business sectors somehow healthcare: these are the main topics in CEE Robert Peaslee, Gusztáv Bienerth, Les Nemethy, Péter A. Hegedűs, András Sugár , Charles A. Huebner, Péter Kraft, László Czirják, Robert C. Knuepfer Jr., Edward J. Bush Jr., Theodore S. Boone, Steve Bina, Michael J. Shade Global partners, like GE, have valuable have to find how to work together both in terms of sustainability experience we can share.” in-country and across borders, to share and competitiveness.” VOICE american chamber of commerce in hungary People in the news 7

PEOPLE PEOPLE Making the law human Olympian glow of gold

If you have an interest approach to HR throws up similar chal- Even now, Hungarian squeezing state funding, corporate lenges. “When you have outstanding sponsorship becomes ever more impor- in law, but not in being people working for you, there is always Olympic Committee tant; Vodafone, for example, has enjoyed a lawyer, what do you the threat that competitors will try to (MOB) President Zsolt a long association with Hungarian water poach them. It is important both for sus- polo. “The MOB needs sponsors. I hope – do? For Andrea Illés the taining the quality of Kinstellar’s work Borkai seems a little and think – it will come. It is not so im- answer to that particular and the stability of the firm to retain taken aback by the portant at the elite level, but at the grass people. Given the economic situation, it roots. Because of the Olympic successes, conundrum was easy. is a challenge explaining to our col- success of his country’s there are a lot of young people now tak- She took an equal if leagues why we must take some decisions sportsmen and women ing up sports, looking for something to in the interests of the company, but we do. The more young people come into not greater interest in must balance that by developing talented at the London 2012 sports now, the more chances we have of people, and went to work people, making sure they have the right Olympic Games. winning medals in the future.” career path. We liaise with some global for a law firm as an HR law firms on training and secondments, The head of Hungary’s Olympic organi- specialist. She became so which helps, as well as developing train- zation was himself a gold medal winner ing courses in-house. I personally, as a e were not expecting a support staff. The payments for athletes on the pommel horse in the Seoul 1988 good at it, she now holds qualified coach, offer coaching for senior lot of medals, so I am range from Ft 35 million ($158,000) for Olympics, and forms part of a long line a regional position. lawyers, which is a relatively unusual very happy,” Borkai gold medalists to Ft 2 million ($9,000) for of gymnastic champions. “It started approach in law firms. Although it is “W says. He is an extremely those who finished eighth. with Zoltán Magyar [1976 and 80], went time consuming, it is always a pleasure to busy man, and when through me, and now we have Krisztián work with such intelligent people,” Voice is eventually able to catch up with So to what does Borkai attribute the suc- Berki. I think we have special training, him, we end up doing a telephone interview cess? “I’m not sure,” he laughs. A new but maybe also the Hungarian people t’s quite hard to explain, actual- “Being able to communicate and influ- And how does Hungary compare with with him in his car. He confesses to being government-backed program introduced have special bodies! I don’t know.” ly,” the 34-year-old says. “I still ence at every level is key in my role. It other countries in the region? “Hungary’s doubly pleased for his team. “This Olympic in January of this year certainly helped, love law, and was particularly wasn’t always easy, living in a new coun- economy has seen better days, but other squad were not only very good in competi- he says, as it made more training possible. Borkai became President of the MOB in “I fascinated by employment and try, being a woman and managing people countries which went through similarly tion, they were also very good people, good “It is not just about money, of course; the 2010, when his predecessor, Pál Schmitt, criminal law.” Illés had already who were older than me, or who thought challenging times are back on track ambassadors for their country.” system is very important. Five team sports was elected President of Hungary. But why worked in IT, and studied finance and they were more experienced, but we have now,” Illés says. And although this year in particular have been targeted by the did he take up the role? “I got a lot of things accountancy before she realized that excellent people working for Kinstellar, may not be the best for the Hungarian It is worth recapping their achievements. government: basketball, handball, football, from sport, and I thought I must now give career path really wasn’t for her, and and the management have always been market, Kinstellar Hungary is doing The team won eight golds amid a total tally ice hockey and water polo.” something back, to help others,” he says. switched to legal studies. “Soon after supportive,” Illés says. well: It was Hungarian Law Firm of the of 17, enough to place it ninth on the medal that I knew I wanted to work for a law Year at the IFLR European Awards in table, ahead of such sporting giants as firm, but not as a lawyer. My law studies And it was not just people management London in March, managing partner Australia and much larger European coun- Olympic performance help me to understand the way lawyers that required attention. Although it has Csilla Andrékó was named Lawyer of tries like Spain. A statement put out by the think and act and proved to be very use- a firm managing partner, Kinstellar has the Year 2012 for Banking and Finance Prime Minister’s Office made it clear how City gOLD Silver Bronze Total Overall placing ful in my work.” a structure where each of the offices car- in May by Best Lawyers in Hungary, and much the medal haul meant to the country. London 2012 8 4 5 17 9 ries equal weight, and there is no official most recently it was named Tax Firm of Seven years ago she joined the Budapest headquarters. “At the beginning, setting the Year – Hungary at the DealMakers “This is the first time since the 1992 Barcelona Beijing 2008 3 5 2 10 21 office of international law firm Linklat- up the HR and L&D department and its Annual Tax Awards in August. Olympics that Hungary has come in the top Athens 2004 8 6 3 17 13 ers as an office manager and HR advisor. policies took a lot of work, making sure ten. Such Olympic success for Hungary has Sydney 2000 8 6 3 17 13

By 2008, she was in line to become re- we had the same rules and approach in “I think it is just a matter of time for been long awaited: in Beijing the Hungarian Best placing 3rd in 1952 (Helsinki) and 1936 (Berlin), 4th in 1968 (Mexico City), 1956 gional HR manager, but then came news each country. The laws, and especially the Hungary. It has a really great location Olympic Team finished in 21st place, and in (Melbourne) and 1948 (London). Most golds won: 11 (1988, Seoul and 1992, Barcelona). that Linklaters was spinning off four taxation, is different in each jurisdiction, and such talented people. I travel quite 13th place at both the Athens and Sydney regional offices –Bratislava, Bucharest, of course, but we have cover-all ‘umbrella a bit now, and have got to know other games…. Taking population size into ac- Budapest and Prague – into a separate policies’ where possible. Shortly after the nations as well, but I am still a great fan count, Hungary was the most successful na- Money is clearly important, though. The The 47-year-old has been mayor of his firm, Kinstellar, and the promotion was spin off we started to enter new markets of Hungarians. They are perfectionists, tion in Europe, while…worldwide only New UK now pursues a deliberate policy of hometown of Győr since 2006. Do sport and put on hold. Illés quickly found herself which required extra attention, was very really hard working and very clever, Zealand and a handful of Caribbean island directing funding towards those who politics mix? “I think so, yes. Being president fulfilling a quasi-regional role anyway, time consuming and also challenging.” they are capable and want to understand states performed better,” it reads. hit and maintain certain standards. Fall of the MOB is an honorary role, it is not when her Bucharest colleague went on their role in the long-term strategy of below that, and cash is withdrawn. Co- paid; being mayor of Győr is my job. They maternity leave, and before long the The firm now boasts six offices, Serbia the firm. If they could become just a Indeed, the Hungarian government incidence or not, Team GB had its most work together well. I am happy I can help position had been confirmed, and she and Turkey having been added in 2010. little more self-confident, they would has approved Ft 2.2 billion in one-off successful Games in more than a century. sport through being president, and I can moved to Prague. Although each market is different, the become influential leaders.” bonuses to Hungary’s sports stars and With the current economic conditions also help my home through being mayor.” VOICE american chamber of commerce in hungary News & Analysis 9 inside out Business news It isn’t necessarily all doom Vulnerable arts? roundup and gloom out there… A frequent visitor to Hungary, Barbara Compiled from Hungary AM’s news service Lanciers, 32, an Associate Director at the Trust for Mutual Understanding in New and recycling plant in Devecser, York, was able to marry her Hungarian western Hungary, mayor Tamás Toldi told MTI. Deve Select has already heritage with a love of the arts to study in the signed a pre-purchase contract for a country. She passes on her tips to help other 3.5-hectare plot in the city’s industrial expats navigate through life here. park, Toldi said. About 100,000 friges are expected to be disassembled at the plant a year. Construction work is How long did you live and work in Hungary, and scheduled to start in 2013. what brought you here? I lived in Budapest for 10 months during the 2007-08 academic Germany’s Diehl Aircabin has year on a Fulbright Scholarship. My area of study was officially opened its HUF 1.5 bln ($6.4 collaborations between American and Hungarian theatrical mln) aircraft parts manufacturing base professionals and institutions since 1990; I was based at the institutions are finding themselves increasingly vulnerable. As a in Nyírbátor, northeast Hungary, state Hungarian Theater Museum and Institute (OSZMI) in Buda. The foreigner, it can be difficult to traverse this changing terrain. newswire MTI reported. The plant makes deep, recent artistic relationship between Hungary and the United Prime Minister Viktor Orbán signed a strategic partnership agreement with sidewalls and ventilation systems for States was my case study in order to highlight the positive impacts Was there anything you wish you had known at Coca-Cola HBC Magyarország Kft at the soft drink maker’s base near Airbus and Boeing as well as Eurocopter Budapest on July 20. Hungary’s government is building a new economic model, of international cultural exchange. the outset to make life easier? and Coca-Cola will be among its beneficiaries, Orbán said. After signing the and Embraer aircraft. Production started I wish I had known about the Európa Kávéház in Budapest from agreement, Orbán inaugurated what is the country’s highest-capacity canned at the plant, with a single shift of 70 Did you have any experience of Hungary before the moment I set foot on Hungarian soil. drink production line, capable of turning out 110,000 units an hour. Coca-Cola’s workers, in February. The company is coming here for work? unit in Hungary will supply the domest ic market as well as 20 other E uropean planning to employ 160-170 workers by countries. Orbán said Coca-Cola had spent more than HUF 100 bln ($420 mln) on My grandmother fled from Budapest in 1944 and eventually What would you recommend a new expat do in investments in Hungary and provided for the livelihood of 1,250 families. The the end of the year, and 240 by 2015. settled in New Jersey. I had a very peripheral understanding of my order to start making the most of their time in unit’s exports came to HUF 8 bln ($33.6 mln) last year, he added. The HUF 2 bln Hungarian heritage during my childhood. It wasn’t until I was in the country? ($8.3 mln) production line could double the company’s export re venue. “Coca- Hungarian property developer graduate school in my mid-20s and began writing a play about my Begin learning the language. Read the greats of Hungarian Cola has had a fantastic career in Hungary: it was a forbidden drink, then it was Futureal Zrt. is entering the United put into the tolerated category, and now Hungary is placing part of its own grandmother’s life that I traveled to Budapest to interview family literature and poetry. Visit the museums. Go see plays and dance economic hopes in this Coca-Cola plant operating here,” Orbán said. Coca-Cola States home rental market with start-up members and see her beloved home city. That sparked a love of the pieces. Eat authentic cuisine – sample the wine! Hungary is such HBC Magyarország managing director József Tarsoly said the new production capital of $15 mln (HUF 3.4 bln), owner country that continues to thrive in me. In addition to my Fulbright, an incredible place with a complicated and fascinating history. line brings the plant’s capacity to 350,000 units per hour. Gabor Futó said at a press conference I have traveled to Hungary more times than I can count – I visit on Immerse yourself in every way. If you are open, Hungary has on June 13. Futureal has established an average twice a year. I am currently working with a tutor on learning innumerable gifts to give. American unit, Cordia USA, with the the language. The progress is slow but rewarding. Italian-owned Alerion Hungaria technology and evaluate it first- aim of buying 500 homes in four or five Would you recommend Hungary as a good place Energetikai Kft wants to build at most hand at the center and track. Allison U.S. cities, renovating them and renting What most surprised you about life in to be based, and why? 20 wind turbines in the area around inaugurated its 13,000sqm plant in the them out. U.S. home prices have fallen general, and in particular about doing business Emotionally, this is a very difficult question for me to answer. If you Dunaföldvár (central Hungary) for HUF town in the fall of 2011. The investment so much that rental fees can generate in Hungary? had asked me three years ago, I would have said yes. And I even 11 bln ($47.3 mln), a representative of was necessary because of apacity yields of up to 15%, Futó said. The I am always in awe of the incredible talent of Hungarian artists, thought about moving to Budapest full time. But now I don’t see any project company Alerion Földvár expansion at the Opel plant there, company could double its investment particularly in the performing arts. I suppose this shouldn’t openings or opportunities for an American with an arts background Szélerőmű Kft told MTI. The turbines where Allison Transmission has based with the sale of the homes five years have been a shock to me with Hungary’s rich history in music, to make a life in Hungary. I see only opportunities to visit – maybe for would have nominal capacity of 2MW its Hungarian production for ten years. from now, he added. Cordia USA will literature, opera, and theater, but it was nonetheless. Some an extended period of time – but not to create a home base. apiece. The next tender for construction start buying homes in Georgia and of my most incredible theatrical experiences have been in of wind farm capacity in Hungary is not Continental Automotive Michigan. The company estimates that large Hungarian repertory theaters, and, most poignantly, the What one thing would you change about the expected before 2013. The construction of Hungary Kft, the Hungarian unit of to purchase 500 homes, it has to look at smaller, independent venues. My favorite production of all time country, if you could? the park would take about 12 months. German automotive industry supplier 10,000 and make offers for 2,500. All of is Chekhov’s Ivanov, staged by Tamás Ascher at the Katona Stability. Continental, has completed a HUF 2.8 the homes were repossessed by banks József Theater. US-based Allison Transmission bln ($11.9 mln) expansion at its base in and can be bought only for cash. What do you miss most about the country? opened a Customer Experience Center Veszprém, central Hungary, requiring What are the biggest challenges facing a When I am away from Hungary, I miss the incredible people, and Demonstration and Drive Track 150 new hires. Japanese-owned optical lens foreign businessperson? the friends and colleagues that have become so important to me at its base in the Hungary city of manufacturer Hoya Lens Hungary My business is in the arts, and the arts are facing tremendous over the years. I miss running on the beautiful Margaret Island Szentgotthárd (western Hungary) in Hungarian-owned Deve Select Kft Zrt has inaugurated a development challenges in Hungary right now. In the face of a crippled economy in Budapest. Hungary has truly become my second home, which June. Potential customers can learn plans to establish an almost HUF 3 bln worth almost €8 mln (HUF 2.3 bln) and constantly shifting structural landscape, artists and arts means I will never be away for too long. about the company’s transmission ($12.9 mln) refrigerator disassembly in Mátészalka, eastern Hungary. The VOICE american chamber of commerce in hungary News & Analysis 11

new ‘Rx’ laboratory will enable the German logistics company charge for educational institutions, 22,000 tons at its plant in Bábolna, German polymer-based products Property developer Sió Property Mátészalka plant to supply the European Kuehne+Nagel has inaugurated a government spokesman András northwest Hungary. The investment, company Rehau has laid the Invest, a unit of Erste Property, market with special-quality lenses. The HUF 6 bln ($26 mln) base near German Giró-Szász, state secretary Janos which includes a new production line cornerstone of a €60 mln (HUF 17.4 has opened a HUF 5 bln ($22 mln), subsidiary produces four million lenses a carmaker Daimler’s plant in Kecskemét. Lazar and Microsoft Magyarország and cold storage, brings 60 new hires, bln) fender plant in the Győr Industrial 17,000sqm shopping center in Siófok, on year, employing almost 700 workers. It will supply parts to the Daimler plant, managing director István Papp managing director György Erdélyi Park, near the Audi factory. The Lake Balaton. An old department store said Benedek Kis, business development announced. Microsoft’s offer of the told state news wire MTI. McDonald’s 26,000sqm building is expected to at the site was originally demolished in Isoglucose maker Hungrana Kft manager for the company’s Hungarian Digital Education Base Package will buys about 90% of OSI’s output, with start operating in Q2 2013 with about 2008, but construction halted because of inaugurated a HUF 3 bln ($13.2 mln) unit. About 175 people will work at strengthen competitiveness and equal the company supplying the fast food 200 people, turning out half a million the crisis. Erste Bank Hungary, which biomass furnace investment at its plant chain’s restaurants in 16 countries. bumpers a year, said managing director was financing the investment, agreed in Szabadegyháza in June, with Prime Markus Grundmann. A possible a year and a half later to take over the Minister Viktor Orbán participating Poppe+Potthoff Hungária, the second phase of the investment will project company through its property at the inauguration. Austria’s Agrana Hungarian unit of German based depend on demand, he added. The unit. The mall, dubbed Sió Plaza, has a International and Eaststarch, Poppe+Potthoff, will expand its plant fenders will be installed on Audi A3 duplex cinema and a 200-space car park. a joint venture between the Decatur, in Ajka with an investment of more and TT models, made in Győr, as well Illinois-based Archer Daniels than HUF 6 bln ($26 mln), CFO László as on Q models made in Bratislava. Hungarian chemicals company TVK Midland Company and the UK’s Tate Gellén said in early August: work is Nyrt, a unit of oil and gas company & Lyle, have equal shares in Hungrana. due to be completed by the beginning German-owned window systems MOL Nyrt, has decided to build a of 2013, and the company will raise maker Roto Elzett Certa has butadiene extraction plant at its base in German-owned transport industry headcount by 50 to 300. The plant completed the first phase of a HUF 3 Tiszaújváros (northeast Hungary), rather supplier Hübner Hungary Kft has currently exports its production to bln ($12.7 mln) expansion at its plant than in Bratislava, the city’s MP, Roland inaugurated a €11 mln (HUF 3 bln) Austria, Germany and the U.S. and in Lövő, west Hungary, managing Mengyi, told MTI. TVK CEO Zsolt expansion at its base in Nyíregyháza, will take on exports to China, India director Ernő Kocsis said at a press Pethő said in the company’s Q1 report northeast Hungary, news wire MTI and South Korea from 2013. The conference. The second phase of the in May that the HUF 30 bln ($127.5 mln) reported. The firm’s business director company develops and produces tubes, production and warehouse expansion base would have an annual capacity József Dobi said the investment turned parts and components for the will be completed by the end of this of 130,000 tons, and is expected to go Samsonite Hungária, the Hungarian unit of U.S.-based suitcase maker had created 50 jobs, bringing total Samsonite, had revenue of HUF 11 bln ($47.6 mln) in 2011, up from HUF 7.8 bln ($33.8 automobile industry. year, Kocsis added. online at the end of 2014. headcount at the base to 450. mln) in the previous ye ar, production director Joszef Pinczel told MTI. Af ter-ta x profit rose at about the same rate to HUF 1.4 bln. S amsonite Hungária expects revenue of HUF 10-11 bln in 2012, he added. The unit produced 650,000 suitcases at Steel maker ISD Dunaferr Zrt its plant in Szekszárd (southwest Hungary) last year, up from under 500,000 completed a HUF 10 bln ($43.3 mln) a year before. Output is expected to climb at a similar pace in 2012. This year, investment in mid-June, increasing headcount at the unit averages between 360 and 380. The company has also production capacity at its hot-rolling completed a HUF 778 million capacity expansion, part of a HUF 3 bln investment program launched in Hungary in 2009. mill in Dunaújváros, central Hungary. The investment is the first phase of a two-three year modernization program, the 10,000sqm plant by year-end. opportunity among some two million as a result of which the group plans to Kuehne+Nagel already has a 16,000sqm Hungarian students, Giró-Szász said. increase production capacity by up to logistics base in Páty, near the capital. Papp said Microsoft sees the offer 40%, CEO Evgeny Tankhilevich said. The as an investment in the future. The ISD Dunaferr group, one of Hungary’s LuK Savaria, the Hungarian unit of software package allows messaging, biggest exporters, currently employs German automotive industry supplier intranet, distribution of teaching more than 7,000 workers, producing Schaeffler Group is making a materials and webcasts. up to 1.8 million tons of steel products HUF 15 bln ($65 mln) investment a year, 80% of which are exported, at its plant in Szombathely (western Mexican-owned Hungarian cylinder primarily within the European Union. Hungary). The company is building a head maker Nemak on Friday 20,000sqm production hall and will inaugurated a €30 mln (HUF 8.2 A HUF 6 bln ($26.9 mln) innovation move in new equipment by the end of bln) expansion at its base in Győr. center that offers world-class 2013, said managing director Michael The company made 200 new hires, infrastructure to Hungarian SMEs Reining. LuK Savaria plans to make bringing headcount to 800. Nemak doing drug research and development 200 new hires in 2012 and another 500 plans to increase output to 3 million has been inaugurated in Debrecen by the end of 2014. It is looking for annually which will require further (eastern Hungary). The center, dubbed lathe workers, tool makers and metal investment, company director Dávid the Pharmapolis Drug Industry Science workers this year, but will also hire Tóth said. Nemak acquired the Park, is the result of cooperation mechanical engineers, Reining said. company in 2007. between the city, the local business chamber and drugmaker Gedeon The government of Hungary and McDonald’s supplier OSI Food Richter Nyrt. The 10,500sqm park the local unit of Microsoft have Solutions Hungary Kft has is expected to become the workplace of signed an agreement on the use completed a HUF 5.5 bln ($66 mln) 120 researchers. of a software package worth HUF investment to raise its annual poultry 52 bln ($225.3 mln) a year free of processing capacity from 7,000 to VOICE american chamber of commerce in hungary News & Analysis 13

macroeconomics Hungary officially in recession by Gabriella Lovas

The Hungarian economy is by definition in recession after its GDP declined for the second consecutive quarter in 2012.

ollowing a 0.7% drop in the first quarter, Hungary’s GDP decreased by 1.2% in F the second quarter of 2012, according to the preliminary figures of the Hungarian Central Statistical Office (KSH). “Stagnation was recorded in about half of the industries of the national economy,” the KSH said. “The performance of information and communication industry increased, while that of construction declined significantly.” One of the most alarming developments is that the increase of exports-oriented industry, which was the main driving factor of growth in the last two years, is slowing down.

“In the summer, the government announced new growth stimulating and job creating measures, which reflect a shift away from austerity,” Erste Bank analyst Zoltán Árokszállási said. But as about the economy’s short- and mid-term According to the current official forecast, “Investments can hardly pick up when civil engineering works, the two main continue to exceed the MNB’s official 3% the revenues side of the budget remains outlook than the IMF. Hungary’s GDP will stagnate this year Hungary’s economic outlook is still sub-sectors, decreased. On the upside, target due to further fiscal measures. pretty uncertain, he sees a roughly HUF and rise 1.5% next, while analysts think uncertain, the government’s intentions the stock of orders was slightly above 500 billion ($2.2 bln) hole in next year’s Takarékbank analyst Gergely Suppán that the economy will shrink by about are not clear and the performance of the level of the previous year due to an The unemployment rate seems to have budget. “We think that if these measures is optimistic about the outcome of the 1% in 2012 and grow by 1% in 2013. the country’s main export partners is increase in new contracts. Construction stabilized, at least statistically, primarily are not removed, Hungary will not be negotiations, as he believes that in light “Next year’s growth forecast is based weak,” Árokszállási said. In addition, producer prices rose by 1.9% in Q2 due to the public work program, said able to come to an agreement with the of the latest statistics, the government partly on the very low base as well as both demand and supply of credit has compared to the same period of the Árokszállási. At the same time, the IMF,” he stressed. Árokszállási foresees will have to give up its over optimistic on the fact that Audi’s new automobile remained weak, he added. previous year. private sector is still not strong enough an exciting fall season after the lazy macroeconomic outlook, making it production plant will start operations to increase employment. The annual summer months, when Hungary-related easier to reach an agreement with the in 2013,” Suppán said. At the same High indebtedness and the austerity Erste’s average inflation forecast is 5.8% average unemployment rate is expected news could move government security IMF. “Although market financing is still time, Daimler is reportedly considering measures act as barriers to the development for 2012, which it considers quite high to remain a little more than 11% both yields and the forint rate up and down. available, an agreement could restore the plans to double capacity at its Mercedes of domestic demand, according to for an economy in recession. Hungary’s this year and next. confidence of both financial and strategic plant in Kecskemét (90 km southeast of Árokszállási. Erste expects a 1.5% decline consumer price index accelerated to 5.8% “However, before discussing any of investors,” he stressed. This, in turn, Budapest) to 300,000 units per year. in private consumption this year. year-on-year in July from 5.6% in the The budget deficit could nevertheless these measures, the two parties should could further strengthen the forint rate. previous month. Árokszállási pointed remain under 3% this year, at around agree on the underlying macroeconomic The monetary council of the Hungarian Analysts agree that there is no rebound “The performance of the construction out that inflation has been kept high by 2.8-2.9%, according to Árokszállási. projections,” said Árokszállási. Even National Bank (MNB) also urges an in sight in either investments or domestic sector is still catastrophic,” said Suppán. government measures this year, such as However, next year’s deficit could reach before the release of the gloomy second- agreement “in order to achieve a sustained consumption. Erste predicts a 6.5% According to the KSH, construction the increase in the standard VAT rate 3.5%, or even close to 4% without the quarter GDP figure, it had been clear that reduction in the risks associated with decline in investment volume this output decreased by 11.2% year-on-year and in excise taxes. In 2013, the annual transaction tax revenues from the central the government is a lot more optimistic financing government debt”. year, and a mere 0.5% increase next. in June 2012. The output of buildings and average inflation rate is expected to bank, he added. VOICE american chamber of commerce in hungary News & Analysis 15

Stock markets Budapest bourse sees drastic drop in turnover by Gabriella Lovas

Despite every effort to head off the trend, turnover at the Budapest Stock Exchange (BÉT) has shown a continuous decline for two years.

quities turnover on the spot market of the Budapest bourse dropped by more than 50% E year-on-year to HUF 252 billion ($1.1 bln) in July due to a decline According to Pál Richter of Budapest Pál Richter added that domestic in both share prices and trading volumes, Fund Manager, problems in Syria, which sales are expected to further decline, adding according to monthly statistics published by will not be solved anytime soon, remain a that Richter’s Hungarian competitors have the BÉT. Brokers claim that foreign investors heavy burden on the group. Downstream, adopted aggressive pricing strategies. He are avoiding Hungarian assets for the same shrinking margins are not expected to expects slower sales in the highly profitable endlessly repeated reasons, such as the improve during the coming months. United States and CIS markets. uncertainties of the economic environment and the unpredictability of governmental In the case of OTP Bank, the first thing After the release of its second-quarter measures. The stock exchange management an investor looks for in any report is the results, Magyar Telekom chairman-CEO hopes that the introduction of a market quality of the loan portfolio. Despite Christopher Mattheisen said that the making system known as Xetra, which is beating expectations yet again with a company maintains its target of a 4-6% expected to go live in the fall of 2013, will HUF 41 bln ($183.3 mln) after tax profit decline in EBITDA, excluding one-off result in an increase in trading turnover. in the second quarter, the loan portfolio effects, for the full year. However, Somi worsened further. By the end of June, the has doubts about the company’s ability to Of the dominant players on the bourse, ratio of 90 days past due delinquencies had meet the EBITDA target, as it managed the management of Hungarian oil and gas risen to 18.8% from 17.4% three months to avoid a drop in sales revenues only company MOL outlined a gloomy outlook earlier. The bank’s revenues reached HUF by increasing the proportion of low- after the release of the company’s second- 208 bln ($930.3 mln) in the period. profit services. Richter added that the quarter results. Partly due to problems management was forced to launch a related to MOL’s Croatian unit INA, MOL Pharmaceutical producer Richter comprehensive cost-cutting program, too, could not benefit from the favorable business reported better than expected revenues adding that he expects an increase in the environment in the refining segment, and operating profits in Q2, despite a price of certain services. which is expected to deteriorate in the significant increase in costs caused by the second half of the year, said KBC Equitas launch of its new Esmyia product and the The telephone tax will be an extra burden chief analyst András Somi. Potential good clinical trials of the antipsychotic drug on Magyar Telekom in the second half of news from the Kurdistan region of Iraq and Cariprazine, which targets the treatment the year, with the extraordinary levy on recently announced efficiency enhancing of conditions such as schizophrenia and the telecom sector to be scrapped only in measures could be the main drivers of stock bipolar disorder. KBC Equitas’ Somi 2013, Somi pointed out. In addition, the performance. Therefore, despite the short- pointed out that preparation for the market entry of a fourth mobile provider term difficulties, KBC maintains a positive latter’s market introduction (expected is looming. MPVI Mobil, a consortium long-term outlook for MOL. near the end of 2012) could have a positive of postal company Magyar Posta, the impact on the stock price. Despite Hungarian Electricity Works (MVM) and The performance of the upstream Richter’s low exposure in the Hungarian the Hungarian Development Bank (MFB), business line was weighed down by the market, the stock performance could be was announced in January as the winner lack of revenues from Syria and the lower adversely affected by rumors of further of the biggest block – 5MHz – offered in an production in Croatia and Hungary. fiscal tightening. auction of the 900MHz band. VOICE american chamber of commerce in hungary Cover story 17 Innovation and entrepreneurism: Hungary’s route map to success by robin marshall

For all its world-renowned engineering skills and ability but that is relatively easy to do, it is a delegator. And that is what you need to to come from the EU, other companies, been a strategy that gets government, matter of self-improvement. They need to evolve and grow a business.” investors. CEU Business School got a NGOs, entrepreneurs, large MNCs, and to attract companies like Mercedes and Audi, most attend more conferences; go where there $7.5 million gift from George Soros to business angels to buy-in and support observers agree that it is through entrepreneurism and is more money available, go to places like Horwitch says the support network is nurture innovation. In a sense we were entrepreneurism and innovation.” innovation that Hungary will break free of sluggish southern California. I was in NYC in beginning to come together, though much lucky in that we have a benefactor who January for the Kairso summit and saw more needs to happen. “I think that lot of is interested in entrepreneurship. Now Ever more entrepreneurial events are growth, return to its former vigor and influence within the a display of 50 innovative ideas on the what is going on is not recognized yet. At many people want to be entrepreneurs, appearing on the Hungarian calendar, says region, and also have meaningful impact across the world. ground floor of the stock exchange. Of CEU Business School we are now working and several institutions are trying to help. Benkő. “AmCham is trying to get involved But can that really happen? According to three experts those 50 ideas, two were from Hungary; with a number of institutions: at our What is lacking is a strategy that binds with innovation events like the Singularity that is where they need to be showcased, school we don’t have life sciences, design all this together. In all small countries University global challenge (see Positive interviewed by Voice – an academic, an entrepreneur and at events like this where you can just start or engineering, we focus on business, so that have been successful there has impact and other stories in the June an investor – the answer is ‘Yes’. talking to people, because you never know we are joining forces with technology- where it will lead.” based universities and design universities in Budapest. There is a great deal going Some investors have complained that on, but there is no critical mass yet; the one of our three expert should commit itself. “Government there is reluctance among Hungarian ecosystem needs to be created, you have witnesses would claim should provide the infrastructure,” he entrepreneurs to give up control over their to have the networks in place,” Horwitch success for Hungary is says. “It is exactly what it did with the business. Benkő says it is a matter, again, says. “Institutions are trying; universities N a given, but all believe M0 [orbital highway around Budapest]: of education. “One of the things we could and others are creating incubators for the pieces are there; half the battle will 15 or 20 years ago the southern part was all do better is to get success stories like start-ups. We need more resources, clearly. be in lining them up in the right order. built and now there are businesses and the guys from Prezi talking about how Many institutions are doing the best they “Hungarians are very entrepreneurial, factories springing up all around it. That’s much control they gave up. ‘Five years ago can with the resources they have, which are though it has been constrained,” explains what governments should do, provide I had 100% of a company that made no not growing; if anything, these resources László Czirják, co-founder and co- the background and then get the hell out money. Now I have 20% of the company are shrinking. Money is going to have managing partner of private equity of the way and let the markets and the and a net worth of $3 billion. You do the investment company iEurope. “They are businesses create the rest of the stuff.” math.’ We have to overcome resistance Entrepreneurship very technically orientated, but lacking to giving up control by providing lots of Summit in marketing concepts. In other words, Czirják, in particular, identifies two or positive examples, and by walking away before you send your sales force up the hill three related core problems amongst what from deals where they won’t give up Date: Budapest, October 9 2012 to sell your product, do a little research he calls the “nails in the road” that many control,” he says. Time: 8:30am-4pm to see if there are any customers actually other challenges feed from. “What is Venue: CEU Business School, waiting for you at the top.” lacking is not necessarily capital, but the Czirják lists another, possibly related 1051 Budapest, Nádor u. 9. Speakers include: self confidence to compete, and also the problem, which he traces back to that H.E. Eleni Tsakopoulos Kounalakis, Mel Horwitch, the Dean of CEU Business practical best practices of how to run a old question of confidence. “As a com- U.S. Ambassador to Hungary; School agrees with that assessment. business. The old boy network here grew pany grows, a fear of a loss of control Sean Phelan, entrepreneur, angel investor, “Being an entrepreneur today is different up under communism or privatization can be in people’s minds. But if you are and advisor to LBS & Imperial College from 20 years ago,” he says. “It is not (the same could be said of politicians too). founder/entrepreneur/manager a more Incubators, London; Márton Anka, founder enough just to be passionate. You have There is not the same resource base here difficult challenge is whether you can and CTO, LogMeIn; Zoltán Kovács, founder to know how to build an organization, as in the United States of experienced actually manage people. If it is 3-12 peo- and CEO, Kirowski; Levente Zsembery, Faculty of Business how to deal with financial planning, how entrepreneurs that today’s generation can ple you can do it. Once you get over 20 Administration, Corvinus University of to understand supply chains; you need seek advice from.” people, you need a second level of man- Budapest to be able to market a product. Today’s agement. If it is over 100 people it is a Organizers: AmCham, CEU Business entrepreneurs need to be professionals.” Benkő argues that Hungarians also different game; 300 even more different. School, Entrepreneurship Foundation, need to do more in developing their Once you get to the size of a LogMeIn, HVCA, U.S. Embassy But if that is a matter of education, then own networks. “What Hungarian it is a totally different planet. Wherever you also need an ecosystem in which entrepreneurs need to do is to become you are in the world, people confuse lose The working language of the summit is English, and the event is free of charge. entrepreneurism and innovation can better networkers. They also need to of control with the self-confidence to To sign up please visit the AmCham website operate. Entrepreneur Willy Benkő says become more confident in their language delegate. Steve Jobs was heavily involved (www.amcham.hu) that is the one job to which the state use, they need to sharpen their soft skills, in the technical side, but he was a good VOICE american chamber of commerce in hungary Cover story 19

2012 issue of Voice) and co-sponsoring Which is where October’s Entrepre- world, building networks of wise, older, with them to the classroom, ranging from building the self-confidence to say ‘I can do does the march of progress. What fields the upcoming summit in October. With neurship Summit, initiated by Am- experienced people with entrepreneurs. the huge (LogMeIn) to smaller companies. this too’. That is what the summit is about, might the next Prezi or LogMeIn emerge AmCham’s SME committee led by Sándor Cham and jointly organized with CEU This is going to take some time but I am to show it is possible,” explains Czirják. from in the coming 15-20 years, and Erdei (see Bridging the SME-multinational Business School, the Entrepreneurship very optimistic, though we need to change “We want to make the summit accessible, could Hungary realistically be involved? divide in the December 2011 issue of Foundation, the Hungarian Venture a lot of things in the ecosystem.” Speakers we want an entrepreneur just starting out Horwitch, too, has high hopes for the Benkő believes there are two or three Voice), we set up four seminars. It was all Capital Association and the U.S. Em- at the summit are likely to include Márton to believe that success is attainable. We are summit. “It is perfectly timed. At our areas worth keeping an eye on. “One is about whetting the appetite, making them bassy, comes in. The event will provide Anka, founder in 2003 of LogMeIn, a including a smaller case study to which business school we have held a series anything to do with nanotechnology think about the skills they need to develop examples of what is possible, will help company now worth more than $500 people can relate more easily. It helps in of round tables on such topics as being in medicine, nano bots, etc. Another like social media, because like it or not, to build those support networks, and million and traded on the NASDAQ, and a global entrepreneur, life sciences is genetics – I was recently talking to a that’s going to be a big part of how you bring together stakeholders. one of the founders of video streaming innovation, smart cities (you need smart Hungarian guy who has developed an LogMeIn get your idea out there. We also dealt with website UStream, Hungarian Dr. Gyula infrastructure if you are to become an algorithm to help sequence the human presentation skills like public speaking, “I am very excited by the summit,” Fehér. But it will also feature a number of entrepreneurial hub), angel investors, genome much more quickly and ef- Founded in 2003, LogMeIn’s world because there has been no real focus on says Czirjak. “We are finally bridging case studies, so that professors will have headquarters are located just outside and other subjects. We got very good ficiently than we currently can. Another that in Hungary.” the academic and the real, practical actual Hungarian successes to take back Boston, Massachusetts, with European turnouts, with more people attending will be communication between modes headquarters in Amsterdam, the each successive event. There is a lot of transport, cars that will talk to each bios Netherlands, Asia Pacific headquarters in of interest, and people are hungry for other. Bill Ford gave a TED [the cutting Sydney, Australia, and development centers knowledge related to innovation. The edge Technology Entertainment and in Budapest and Szeged, Hungary. Its global dimension of entrepreneurship we Design conference] talk a year ago and vision is to offer worldwide connectivity for found to be particularly relevant, which said currently there are 800 million ve- mobile work and life styles. “Whether you require personal or business remote access, is why Gabor Garai, a renowned high- hicles on the roads; at current rates that remote support or remote administration, tech venture and merger attorney – and will rise to 2-4 billion by 2050, which we have a product designed specifically to Hungarian General Consul – based in is going to present serious problems. In meet your needs.” Boston, and Sean Phelan, an angel investor 2020, according to Ericsson, there will Source: secure.logmein.com/about/ and advisor to university incubators in be 50 billion devices hanging off the aboutus.aspx London, are among our keynote speakers internet. What are we going to do with at the Entrepreneurship Summit.” all that data? I’m now working with some Hungarians who have developed a But while the process of building the means to digitalize the emotions in the life support systems and educating the human voice and convert that into busi- entrepreneurs of Hungary goes on, so ness information. Those emotions have always been there, we have just never been able to do anything with it before. Prezi Ustream So we are talking about nanotechnol- ogy, genetics and communications, all Willy Benkő László Czirjak Mel Horwitch Prezi is cloud-based presentation software. After meeting at West Point in International architect and visual artist 2007, founders John Ham and Brad areas where Hungarians are very well A native of the United States, Benkő Co-founder and co-managing Partner of Mel Horwitch is Dean and University Adam Somlai-Fischer found that a Hunstable joined with Hungarian placed to prosper.” has lived in Hungary since 1990, iEurope Capital, which invests in privately Professor at Central European University zoomable user interface (ZUI) enabled him Gyula Feher to create a means to when he started his own commercial held innovative, fast growing SMEs in the Business School. Previously, he was Professor to explore the “big picture” overview of a allow service men to communicate Will Hungary prosper? Czirják expects real estate company and real estate region that have proprietary products and of Technology Management, Director of floor plan and then zoom into the detail with their families and friends live, the summit to make a difference. “Will of individual rooms, and began working all at once. The founders launched advertising newspaper. Six years services and that seek capital for growth and the Institute for Technology and Enterprise, there be an impact? Yes. We are going later, he joined (as employee number expansion. Previously in his career, he was former Chair of the Department of Technology with zooming presentations in 2001. Ustream in March 2007, and it now With no commercially available zooming has offices in Los Angeles, Tokyo, and to the grass roots level, engaging the 29) a then start-up organization managing director at Bankers Trust London Management, Founding Director of the professors, academia, and providing them called Euronet (NASDAQ: EEFT), where he led investment-banking activities Othmer Institute for Interdisciplinary Studies, presentation editor, each presentation had Budapest. Ustream Asia opened in founded in Budapest, and a global in the region. He also held positions at the and faculty director of the CleantechExecs to be coded by hand. In 2007, Budapest 2010. Ustream’s mission statement and entrepreneurs directly with content to leader in the processing of secure Industrial Bank of Japan and Goldman Executive Program at the Polytechnic Institute University of Technology professor Peter is “To bring people together around educate best practices as early as possible. electronic financial transactions. Sachs in New York. He sits on numerous of New York University. An acknowledged Halacsy convinced Somlai-Fischer to shared interests for amazing live, It is coming – organizations like Colabs, Following that he started a Boards of Directors, including all iEurope expert on entrepreneurship and innovation develop an editor so that anyone could interactive experiences that build and which does some micro angelizing now, make zooming presentations. After creating maintain relationships.” It is now healthcare company, and has portfolio companies, and has also been a management, he has written extensively are great – though the market still needs been involved with telecoms and member of the Board of Directors of MOL on technology strategy, particularly with a prototype, serial entrepreneur Peter Arvai the leading live interactive broadcast joined as the third founder and CEO to help platform. Anyone with an internet to open more, thinking wise. I really renewable energy. In addition to Zrt. (also as Chairman of the Board’s Audit reference to knowledge-intensive sectors, global think this holistic approach of advocating launching Toastmasters in Hungary, Committee). He is Chairman of United Way innovation, and the role of networks and build the product and the company. Prezi connection and a camera can start he is also active in charitable works Hungary. He is also a former President of cross-boundary and multi-sector endeavors was launched in April 2009 from Budapest. engaging with their family, friends or by AmCham will have an impact, through the Fulbright Foundation, AmCham Hungary and is still active as in developing technology. Horwitch has also A San Francisco office was established in fans anytime, anywhere. that we will have a lot more successful Magic Lamp Foundation and chairman of its Governance, Integrity and taught in business schools in France and the November 2009. Source: www.ustream.tv/ entrepreneurs, multiples of what we have the Robert Burns International Entrepreneurship Committee, where he UK, as well as serving on the faculties of the Source: prezi.com/about/ about?rmalang=en_US today, in three-five years.” Foundation. In 2006, Benkő was co-authored both a position paper entitled Sloan School at MIT and Harvard Business given permission to introduce public “Good Corporate Governance in Hungary” School. In December 2011, CEU Business Horwitch also sees plenty of potential. speaking courses to young men in a and a Hungarian English Glossary on School was named the most innovative business “I’m hopeful in general; there is more Hungarian jail. He is currently an relevant terminology (a first in Hungary). school in Central & Eastern Europe, winning AmCham Hungary board member. the prestigious European CEO Global Business work to be done, but I think the pieces are Education Award. there to be put together. A considerable amount of recent research into VOICE american chamber of commerce in hungary

innovation clusters shows that there is no plate, though we all need to work together CEU InnovationsLAB predetermining factor for success. Some for more resources.” Benkő agrees, places are obvious like Silicon Valley, or particularly about human will power. Acts as both a business incubator and a Cambridge in the UK, while others less “I was at Yellowstone National Park a couple bridge between academia and business so like Eindhoven in the Netherlands, of weeks ago: there was not a single piece of in Budapest and the Central and or Seattle in the States. Human will litter, yet hundreds of thousands of people Eastern European region. According power is the important thing. Academic go through there; if you put your mind to it, to its website “It is an environment where entrepreneurs learn from fellow institutions are also stepping up to the anything is possible.” entrepreneurs and mentors as they grow their businesses. Where MBA students and CEU faculty can be start-up founders. Where established firms can try out new ideas to improve their companies. CEU InnovationsLab embraces the spirit of experimentation that is at the heart of great laboratories. We invite you to join us, share what you know, what you do, and what you want to do.” The incubator is a flagship initiative of Central European Business School’s Institute for Entrepreneurship and Innovation, which was established in November 2011 with a grant from philanthropist George Soros. It aims to actively carry out the Institute’s dedication to creating economic opportunity in Hungary and the region by nurturing a culture of entrepreneurship and linking academia and business. Source: business.ceu.hu/innovationslab

Colabs

Colabs, founded in 2009, describes itself is a central hub for tech, design and business talent startups. “Around Colabs you will find the highest concentration of startup experience in Hungary. This supportive environment gives you countless opportunities to learn from fellow entrepreneurs, mentors and investors,” its website says. It also promises “360° startup European Institute of Innovation and Technology support” with a number of targeted events. “Get inspiration at Startup School. Find The EIT is a Budapest-based body of the European Union established in March 2008, with co-founders at Startup Weekend. Build your the mission of increasing European sustainable growth and competitiveness by reinforcing the team with StartupFlyer. Work together at innovation capacity of the EU. This translates into developing a new generation of innovators and the Startup Center. Get your first investment entrepreneurs. To do so, the EIT has created integrated structures (Knowledge and Innovation from the Seed Program and get VC funding Communities), which link the three sides of the so-called “Knowledge Triangle” (higher education, at the Elevator Pitch Competition.” research, and business) to one another thereby boosting innovation and entrepreneurship. The Source: colabs.hu/ KICs focus on priority topics with high societal impact, currently: Climate change mitigation, Information and Communication Technologies, and Sustainable Energies. EIT operations are conducted by a team of 40 in Budapest, Hungary and led by the EIT Director, José Manuel Leceta. Knowledge and Innovation communities gather hundreds of partners in 17 co-location centers in Europe. Source: eit.europa.eu/about-us/ VOICE american chamber of commerce in hungary Lifestyle 23

food & drink time off

North American art trends on Chinese Sport: Art: contemporary art. Halkakas halbisztró The Ernst Museum is at the same time Hungarian The two presenting a completely different picture of Perhaps because the country lacks a Given the quality, it’s amazing that contemporary Chinese artistic sensibility, seacoast, Hungarians aren’t that big on fish. most main courses cost less than Ft1,500. football faces of through Ai Weiwei’s personal selection from The information on these pages is produced by Time Fresh fish here often means carp, a fatty, Interesting appetizers include the mixed 2012-13 Chinese art his archive of photographs taken in New York Out Budapest, available on bony, bottom feeder that can often have a platter: crispy battered carp, slices of between 1983 and 1993. The 227 photographs, newstands every where. For a subscription, write to muddy aftertaste. But the Balaton, Danube, smoked catfish, smoked trout pâté and a Loki, Vidi and ETO are the only names This summer two of the city’s most first presented outside China in 2011, capture [email protected] Tisza, and smaller lakes and streams, harbor baguette, at Ft850 for a single serving or being touted as potential winners of the prominent art spaces are highlighting the the bohemian atmosphere of the East Village, a wealth of good fish: trout, fogas (zander), Ft1,450 for two. upcoming Hungarian championship. accomplishments of Chinese contemporary where Ai Weiwei was a leading member of a catfish and indigenous varieties of perch. For a fancier meal, get a whole trout for Debrecen, Videoton and Győr are the art, with the Museum of Fine Arts hosting a community of expatriate Chinese artists and A relatively new downtown ‘fish bistro’ Ft60 per decagram or a whole zander for provincial trio who finished so far ahead major show from a party-run museum with intellectuals. The photographs document a has been making a splash by using the Ft80 per decagram. of the pack in 2011-12 that no one can the politically-motivated title ‘Openness distinct era in the history of New York before best local fish to turn out truly appetizing They also offer a limited number of well- see beyond them for 2012-13. All backed and Integration’, while the Ernst Museum the age of digital cameras and the internet, dishes at lunch-counter prices. The chosen Hungarian wines. by Hungary’s ruling Fidesz party, they has a solo exhibition of the world’s favorite while at the same time bearing fascinating straightforward and pleasing preparations Like the prices, the décor of the small should easily see off any opposition contemporary artist and thorn in the side of traces of the beginnings of the conceptual art are showing people what can be done with bright dining room with door-sized again this time round. the Chinese authorities, Ai Weiwei. practice that would make the then-unknown the local catch – and providing an excellent windows is a basic, sort of lunch-counter Of the three, Győr have seen the most The show on Heroes Square promises to artist famous. source for affordable fresh fish. look that’s been made more cozy with a pre-season activity. Six signings include be a classic example of the increasingly rare Specifically the photos depict East Village The main ingredients here come straight cheery blue wash over wood paneling and a foreign midfield trio of former Slovene genre of the diplomatic exchange exhibition, poetry readings, the riots in Tompkins from an artificial lake in a remote spot between other homely touches. under-21 international midfielder Rok the Balaton and the Danube: Rétimajor, A young professional crowd has already Kronaveter, Serbian Nemanja Andric where there’s a fish farm run by the father of adopted this Belváros (inner city) spot, and from Rad Belgrade and two-times Czech Halkakas owner Zsuzsanna Lévai. Wild fish many of them greet genial owner Lévai as international Michal Svec. may sound more exciting, but farming seems they come in. She is generally on-site and While transfer irregularities to ensure that the ingredients are consistently working the floor, ensuring top service and keep Győr from current European high quality. The carp they serve tastes a friendly atmosphere. participation, Debrecen and Videoton cleaner and the catfish has a juicy, heavy but The entire experience is enough to are both looking to make progress. Vidi flavorful meat that works in a lot of dishes. change a Hungarian’s attitude about fish, won the pre-season Super Cup between Chef Krisztina Kóbor chooses catfish for her and for those who already are fans of finny the two, albeit at home and on penalties, signature fish and chips. They also show up in food, it’s a godsend. and Portuguese coach Paulo Sousa can the ‘gyros’ platter: chunks of strongly seasoned now count on Cape Verde international grilled catfish that are as hearty as a kebab, V. Veres Pálné utca 33 (06 30 226 0638 defender Stopira from Feirense and with salad, fries, tzatziki, basil and tomato www.halkakas.hu). on the permanent services of former when as a result of bilateral agreements, Square Park, the indispensible drag queens, slices for Ft1,300. Mon-Sat 10am-10pm. Portuguese under-21 international governments agree to put on shows of each as well as artists and intellectuals from Felipe Oliveira, a defensive midfielder other’s contemporary art in major national China, such as filmmaker Chen Kaige and recently on loan from Parma. Senegalese venues. While in 2011 Hungary got to composer Tan Dun. Félix striker Ibrahima Sidibe, who enjoyed showcase its visual arts in Beijing, this time a successful spell there in the mid- round Budapest is obliged to host the return Openness and Integration Hélix noughties, is the only major signing at exhibition from the bombastic National Museum of Fine Arts champions Debrecen. Museum of China, whose current exhibition XIV. Dózsa György út 41 Oran Mac Cuirc, the man who Of the Budapest clubs, most at home celebrates the ‘glorious history of (469 7100/www.szepmuveszeti.hu). founded the old Sixtus, the Csiga is expected from Europa League the People’s Liberation Army under the Ai Weiwei Ernst Museum Café and the 10th floor cafeteria competitors Honvéd. Now under leadership of the Chinese Communist VI. Nagymező utca 8 at CEU, has developed a repu- Italian coach Marco Rossi, last year’s Party’. The official history of contemporary (341 4355/www.mucsarnok.hu). tation for running fun bars and fourth-placed finishers welcome a art in China starts with the end of Maoism Aug 10-Sept 9. making amazing light meals, mixed bag of newcomers to their squad, and the demise of the notorious Gang like his memorable basil chicken, including young Brazilian midfielder of Four in 1978. This, along with the Moroccan-style lamb and hearty Renan Nunes Belotti. The retirement beginnings of the economic liberalization of salads. He’s just opened a tiny of stalwart Romanian defender Sorin the Deng Xiaoping era marked a loosening bar-restaurant with a big terrace, Botis may affect stability at the back, of the ideological grip of the Chinese version next to the terrace of the 400. VII. Kazinczy utca 52/B, on the however. A 4-0 home defeat to Anzhi of Socialist Realism over artistic production. It’s already a key destination for walkway between Kazinczy and of Dagestan in the Europa League is The exhibition focuses on works that food and drink. Holló utca. painful recent evidence. illustrate the influence of European and VOICE american chamber of commerce in hungary Lifestyle 25

interview ick Kós, managing director of PwC Hungary is the happiest of the happy re-immigrants. Having grown up in the second city of Ireland, which is small by Hungarian standards, he always dreamed of travelling to Hungary, the land of his ancestors. He came to Budapest as a young adult for the first time 18 years ago. N By now, he knows Budapest inside out; he has lived in many parts of it. He overlooks the problems, even if specifically asked. He finds Budapest perfect, just like a man in love. He actually is – in love with his chosen city. We Nick Kós’ Budapest recorded this confession on July 31 2012, when we visited many of the sights mentioned in a two-hour car ride.

I came to Hungary for the first time, as immensely, and I could follow that! Parliament is also a favorite building of an adult, in 1994. I grew up in Ireland, Before my kids were born, my wife, my mine. For some years I lived very near, with a very strong awareness of being a father and I went out almost every night. on the corner of Akadémia utca and Hungarian, with a name like “Kós” – it Then we moved to Poland for two years, Garibaldi utca. I could see Parliament is not a very common surname there! I then back to Budapest, then I worked in and had a fantastic view of the river haven’t regretted it for a day. I intended to Moscow, a great challenge, but luckily I from my balcony. The river, the bridges, come for two years to work with PwC. could fly home at the weekends, to my the usual sites keep on enchanting me. family and my Budapest, where I could Recently I was invited to a new luxury It took two years to get to know Budapest; feel at home, really. restaurant in Fishermen’s Bastion, and I started to enjoy the city in the third. Then the view from there – oh my God! I decided to stay in the region, married a The Amusement Park (Vidámpark) is a Hungarian colleague from the office, and place where I came first in the early days, I am a very lucky and fortunate person – I here I am, apparently for good, with three and return with the kids; I hear that the keep on experiencing the good sides of 100% Hungarian kids. city is thinking of relocating it: if they do, I Budapest. I am still thrilled that I could will certainly miss it. rebuild my Hungarian identity, and I have I enjoy Budapest very much, as a city it three beautiful Hungarian children. is just the right size, much bigger than The Zoo is my other favorite, with the My Budapest friends often ask me how I Cork, where I grew up but still with that great Kós Károly pavilions, a world-class see problems in Budapest. I am not a good small community feeling. Here I find all sight; I can hardly wait for the new show subject for that; I am too preoccupied the sophistication of the world, yet it is inside the Grand Rock, called the Magic with its beauty and its charms. I have seen still not too large… Apart from the first Budapest from many angles. For a time I six months, when I lived in Istenhegyi út, lived in Pest and worked in Buda, now I in the first years before I married I lived  It took two years to get to know live in Buda, in a very nice area, in a great downtown, actually in Octogon, then Budapest; I started to enjoy the city in house, basically designed by my wife. I moved to Régiposta utca, to an even I also enjoy the museum scene here in more centrally located area. It was easy to the third. Then I decided to stay in the Budapest; I hear there are more than 80 walk to Cyrano’s to have a great dinner region, married a Hungarian colleague of them, so there are many more to see. practically every second night. I even from the office, and here I am, apparently As a family man, I am fatally attached to celebrated my 30th birthday there. And for good, with three 100% Hungarian kids Vasúttörténeti Park, a nice theme park, celebrated my 40th in Café Kör, my other very popular, and an eternal hit in our favorite place in Pest. family. Oh, and the Museum of Transport was one of the first Hungarian productions Mountain. (We can come in wintertime, and Technology is also a great family place My father moved back in 1995, and we we saw there together. now.) Bagolyvár and Gundel used to be for us. A great collection, well-done shows, often went to the Opera together. Prior to restaurants I often visited in the early days. and dedicated staff – we enjoy it every time. that we were not the greatest opera fans, In the early days here I loved public I tried to be faithful – many Budapest I am not a typical expat – sports play too but the beauty and the magnificence of transport – the kisföldalatti (the Yellow connoisseurs hop from one new and trendy much a part in our family. It comes from the building sort of flabbergasted us. Metro 1 line) was just being renovated place to the next. If I am happy at a place, my father, who was a star rugby player and Then, out of being fans of the Opera, around the time I arrived, and I saw that I will gladly go there regularly. I still enjoy a great javelin thrower and swimmer (a we gradually became real opera fans. It just under the road, they did not dig a the vibrant restaurant scene in Budapest. record holder in Ireland) and showed me was a great feeling of nostalgia for my tunnel, just built a new cover over the Fausto’s is the perfect place for me – food how to be successful in business and in father: when he was a child, they lived on tracks. For me it was fascinating to see that. and service alike – a top place in the region. sports. My rugby career was unfortunately Andrássy and his parents often took him The first underground on the Continent, I often go to its sister institution, Osteria di cut short by injuries. there. We took many dozens of visiting as Budapest people say all the time (the Fausto, which is conveniently located very friends there, all of whom had a hell of London metro, the world’s first, was near to our office. When I first came to Budapest, I was a good time. The highlight for us as a launched 38 years earlier). considered Irish here, while I was family, particularly my father, was taking My sons swim competitively so Császár- Games and turned half way – his usual to admit.) What I also enjoy is that you considered a Hungarian in Ireland. our kids and their grandparents to the Many things have developed here in Komjádi Sportuszoda is a place I often distance… The great enthusiasm for can meet the great champions here every That is no longer the case. Budapest Nutcracker (Diótőrő in Hungarian) at Budapest – especially bike lanes. I don’t go to. When I was a kid there was not swimming and water polo is fantastic day – Gyurta, Darnyi and the others! It is my city now. And it makes me very Christmas. My wife and I also loved the cycle myself – but I could if I wanted. a single Olympic-size pool in Ireland. in Hungary. Swimming is great, and we has a tremendous effect on the kids. They happy, indeed. Operetta Theater in Nagymező utca; Hotel (My kids do with passion, though.). The There was even a joke about the Irish bring our kids to Komjádi every day. (It are in the company of legends – a great Menthol, the Hungarian musical comedy, restaurant scene has also developed swimmer who went to the Olympic needs a bit of renovation, though, I have inspiration for them. Nick Kós was in conversation with András Török. VOICE american chamber of commerce in hungary AmCham news 27

seminar  One additional benefit mentioned by several of the speakers was enhanced recognition of the strategic role Leadership resilience in business planning that HR can play by Robin Marshall

Whether your market which in turn helps generate personal development plans and aids in succession is contracting, or you planning. SSCs have a higher churn rate are going through than many industries, so a future goal will also be a measureable increase in rapid growth, your retention rates. employees remain key attributes. That was Part of the answer in establishing whom Valentinyi should promote one of the fundamental at Havi Logistics (biggest customer messages reaffirmed McDonald’s) was provided by assessment centers dealing with several by the AmCham candidates. But the general manager seminar Leadership said his SpenglerFox consultants were Resilience: Surviving also constantly “challenging me about what was needed. That made me think, and Thriving in Tough and sometimes made me change my Times, sponsored by mind.” A different, outside perspective SpenglerFox. was always useful, he noted. Getting a major project of the ground such as introducing KPIs across a company requires board level buy-in, he executive search and HR Tóth warned, but all key staff should be solutions firm had taken, as involved in the process of establishing its starting point, the idea measurable targets, if only because T that leaders possess endless employees usually have a better grasp of stamina, ideas, and skills and can deliver the day-to-day challenges than senior success year after year is, in fact a fallacy. management. One additional benefit “Thus, resilience, the ability to bounce mentioned by several of the speakers was back, cope, renew, and revitalize, have enhanced recognition of the strategic role become key watchwords for today’s savvy in business planning that HR can play. leaders,” the company notes said. Paying attention (From right): Zoltán Valentinyi, general manager of Havi Logistics; Zoltán Hajtó, Tóth believes resilience is an underrated It had assembled a panel of speakers HR director of ING Bank; Levente Németh, head of service delivery, and Szilvia Bogdán, management skill. SpenglerFox have from firms it has been working with HR director, Avis Budget Group BSC; Marianna Bartos, HR director Sió Eckes. identified eight basic components, from to help develop their staff. Some, such self believe and optimism to vision and as Marianna Bartos, HR director of support. Could these be learned, she was fruit juice manufacturer Sió Eckes, are Thus it was clear that, while their assertive language but otherwise was was in setting out key performance indi- in Budapest to take on both front and asked. “We have all these competences operating in a contracting soft drinks individual situations were very “a very good professional colleague, cators for the first time. “It was impor- back office functions, there are going when we are born, but somehow we lose market. Others, like Szilvia Bogdán different, motivating and engaging respected by clients and partners” was tant that these KPIs were measured and to be “extreme changes in the role of them or forget them. I would not say you and Levente Németh, respectively HR staff, particularly key employees, was a to offer support in the form of coaching. leading in the same direction”, she said. the SSC: the reality for every individual can win back that original status, but you director and head of service delivery common theme. The important thing, The result was clear. “Today we have a And with most managers having been will be a change in skill sets”, Nemeth can improve them,” she said. at Avis Budget Group BSC, are seeing as Zsuzsanna Tóth, the head of human good leader, a good manager who is able at Sió for 5-10 years, there was a “need explained. On top of that, Bogdán rapid growth in numbers at their SSC. capital solutions, CEE for SpenglerFox to meet the market challenges.” for fresh [outside] blood and people who pointed out, the average age of the SSC And that was done through a number Zoltán Hajtó, HR director of ING Bank, said, is to find the right tool for each know the industry benchmark for what workforce is a relatively young 28, which of tools, including conventional had a senior manager who was causing individual problem. “There is no one size For Bartos at Sió, dealing with equally KPIs are used.” means appropriate ways of motivating approaches such as coaching, and less problems, whereas Zoltán Valentinyi, fits all solution.” frustrated management and workers, in the so-called Generation Y have to be obvious methods. “Most are driven by General Manager of Havi Logistics, an environment where the March 2012 With Avis having gone through a merger found. Here assessment centers have the right side of the brain, so if you use needed help in his first MD’s role finding For Hajtó at ING, the solution for figures show a 16% smaller market sec- and the new American owners very keen also helped identify knowledge gaps tools that affect the right hand side, the right staff for the right roles. a manager who had problems with tor compared to March 2011, the answer on developing the SSC already in place among staff, especially middle managers, that is going to help.” VOICE american chamber of commerce in hungary AmCham news 29

Conference

advantage of the electronics industry is If Hungarian market that “if Hungarian market players can  Flagship of the future improve technology, we do not have to players can improve by Robin Marshall feel frightened if the work force is one cent technology, we do not have cheaper in China”. to feel frightened if the The electronics industry is widely considered to be produces almost fully for export, the sector And yet, as AmCham president István work force is one cent one of Hungary’s breakout points. An AmCham does not much depend on local economic Havas pointed out, the sector, is not even circumstances, one of the reasons why it mentioned in Hungary’s state development cheaper in China conference on the subject said the export-oriented is being identified as a possible tool for program, the New Széchenyi Plan (ÚSzT): sector has shown resistance to the crisis and has a Hungary to finally step back onto the path “While the auto industry is nicely presented instead of paying a fee (now obligatory for all the regulation. Nonetheless, Balog added great potential to create jobs. However, in some cases, of long-term economic growth. in the ÚSzT, there is not a single word in the manufacturers of certain products), Ádám on the positive side that the government document about the electronics industry,” Balog, deputy state secretary for taxation at is determined to keep motivating R&D it still needs more support from the state. As AmCham board member Márk Hetényi he said. It is a pity, he pointed out, since the National Economy Ministry asked for activities through tax policies, which will pointed out, “innovation appears in the workplaces could be created in this sector patience from the market players, adding obviously have a favorable effect on the entire electronics manufacturing process” with relatively low financial investment, that there is, as yet, no intention to ease electronics industry as well. hat the American Chamber families and offers business opportunities and such leading edge solutions support while the industry could also employ a wide of Commerce in Hungary to more than 170 companies. cost-efficiency. According to Károly range of people from the semi-skilled to should organize a one-day Bukvai from the Hungarian Investment fully qualified professionals. T conference, entitled The flag- “The sector’s resistance to crisis is and Trade Agency (HITA), the sector ship sector of the future: Electronics in focus clearly shown in its growth data,” attracts investments continuously. This is His criticism was not an isolated one. (held in the Budapest Marriott Hotel on AmCham president István Havas noted no surprise since the world’s aging society Ábrahám also warned that the decreasing June 5) should be of no great surprise. Not when speaking on the sidelines of the is likely to sharply increase demand for quality of science education in Hungary only does the sector attract a lot of Ameri- conference. It is a fact that, when it comes medical electronics devices, both at home might result in serious workforce problems can investment and covers one-third of to electronic manufacturing, Hungary and abroad. Not to mention that Hungary in a few years’ time. “This needs immediate Hungary’s exports, it also generates 3.5% performs well. The country’s electronics already has a good name when it comes to state intervention,” he said. of the country’s GDP. Considering the production is the best in the region and consumer electronics. On another crucial issue, namely indirect effects of the industry, to true hid- in the worldwide comparison of product- recent changes in the regulations of the den total might reach anywhere between complexity index, Hungary ranks 14th in László Ábrahám, the managing director environmental tax, which eliminated the 8-20%, even without automotive electron- the extent of its export products. Also, of hardware and software producer electronics manufacturers’ ability to take ics. It provides livelihoods for 100,000 as the Hungarian electronics industry NI Hungary, pointed out that a major care of the proper waste management

(from left to right) Botond Rencz, CSE Central Cluster Tax Leader; Head of Tax Hungary, Tax Services, Ernst & Young, Chair of AmCham’s Tax Committee; Iván Hutter, General Manager, GE Lighting (from left to right) Europe, Middle East and Africa; János Takács, Regional Chief Administrative Officer, Electrolux Central Eastern Europe; István Dömény, President, ELTEC Group; Iván Hutter, General Manager, GE Lighting Europe, Middle East and Africa; Ádám Balog, Deputy Secretary of State, Ministry Károly Bukvai, Deputy Head of Department, Investment Promotion Directorate, HITA; for National Economy; Péter Lakatos, László Illisz, Editor-in-Chief, Figyelő; CEO, VIDEOTON; Kristóf Szatmáry, Deputy Secretary of State, Ministry for National Economy; Márk Hetényi, Regional Director General, Flex- István Havas, President, AmCham tronics International VOICE american chamber of commerce in hungary AmCham news 31

Forum  I am looking at figures no one else has looked at in the last 20 years. What is the ratio between healthcare Managing recovery workers and patients in Borsod county by Robin Marshall and Budapest, for example?

The immediate pain of reform is obvious if unavoidable, members of AmCham were told at a recent business forum by Minister of Human Resources Zoltán Balog. The mid- to long-term picture will look much better, but only if the Fidesz-led government finds the courage others have lacked.

peaking on Friday June 22 at the Budapest Marriott, Balog described a lengthy period of S systemic failure by successive governments. “False compromises have allowed the status quo to survive the last 20 years,” Balog said. Worse yet, unnecessary jobs were created within the public sector to artificially keep employment levels up. “The same applies to Greece. We all know that the most public servants [in the EU] are in Greece, and Hungary follows that.”

He recalled a New Year greeting parishioners not only a better name, it also better fits government structure”, and a “response to Education was another problem area. useable, relevant to market needs, and patients in Borsod county and would say to his father – like him a pastor; his vision: “The only capital we have are life”. Hungary’s future success would be Balog claimed Hungary’s was the “only the minister said. Teachers ought to Budapest, for example?” Unless and “May the New Year be no worse than the human resources, but we need to use the build around three pillars, he said: economic public education in Europe where teach well, and be paid accordingly. until such detailed analysis is made, old.” It summed up “very negative survival term ‘human capital’ because we need to development; the development of human there is no government, no central “But who is entitled to talk about real reform is a pipedream, he implied. strategies” that had resulted in a culture of consider human beings in their entirety.” resources; and sustainable development. control”. Answering a question on Roma raising the salaries of teachers when “We need a management approach. ever-greater government spending on staff While short-term measures may favor one integration, he said much could be learned we do not know how many there are We have an opportunity, and it is our and subsidies, requiring ever-bigger loans The government website describes his over the other, all three must “always be in from U.S. examples, but early engagement in Hungary?” he asked. In the current responsibility to use it.” to meet the costs and all the while failing to ministry as being responsible for “the harmony in the mid- and long-term”. was key. “The Hungarian education situation the government “cannot overhaul and reform creaking systems. Now functioning of the national healthcare system in Europe presents least chances predict how many teachers we will The minister concluded with an appeal there is a concerted attempt to create a more and welfare system in Hungary, the In response to a question on cuts in the to poor children to do better, whereas our need in 10 years’ time”, he added. to businesses to partner government transparent system that will benefit society development of school education from national drugs budget, he admitted that, kindergartens are very strong in terms of “Once we know this we can talk about in the interests of mutual long-term and business alike, Balog promised. nursery to university, the protection of viewed in isolation, it appeared bad. “There integration, so we need to support that as raising the salaries of teachers. Without gain: “I offer my trust and cooperation our cultural heritage, promotion of the are cuts in drug spending but in next year’s early as possible.” Encouraging parents to this it would simply be an irresponsible but in order to really cooperate we He is a relatively new ministerial interests of children and the young, and the budget, if plans work out, we can introduce spend time with their children in after- approach. And the same applies to need your trust. We need to improve in appointment, following Miklós Réthelyi realization of government aims related to new funds in the health sector in fields we school clubs could also be an effective way health and social care,” he claimed. terms that we do not rush sectors with who resigned as Minister of National sport in Hungary”. feel are especially week, which Hungary has of building community, he said. taxes, but I hope that, as the system Resources in May. At the same time, the not seen since 2006.” More money for staff, “I am looking at figures no one else has is consolidated, we are better able to office was renamed the Ministry of Human Yet Balog described his “meager ministry” hospital renovations and equipment renewal The educational system must produce looked at in the last 20 years. What is coordinate tasks. We are responsible Resources; according to Balog, this is as a “new sort of construction in the were in line, he said. qualifications that are useful and the ratio between healthcare workers for our future together.” VOICE american chamber of commerce in hungary AmCham news 33

Europe regional Europe still relevant Regional AmChams at Balaton by Robin Marshall The annual regional For Jake Slegers, chair of  People quite training course for staff AmChams in Europe, the often make members of AmChams crucial challenge continues the mistake of in Europe was organized to be reminding people that confusing the possible break up this year by AmCham the Old Continent remains of the euro with Hungary and held a vital, rewarding place to the break up of in Balatonfüred. do business. the EU; it is the Colleagues from euro zone that Austria, Poland, Serbia, is in question, Slovakia, and Slovenia not the EU. joined us for four days ACE at Lake Balaton. From as the organization is known, is an umbrella network for more than 40 member and Asia in particular, both to learn from nine in the morning AmChams drawn from across Europe. Its organizations there, and to help members until three in the mission is to “exchange best practice ideas, look beyond Europe. afternoon we held best mutual member company benefits and to provide a forum for discussion, debate When Voice spoke with Slegers, he was in practice sharing and and where necessary representation on trading partners, it is relatively easy to set Hungary for a regional training program brain storming sessions issues relevant to the European business up business and it is conducted based on involving six CEE AmChams. “This has a structured around environment.” Slegers, executive director of broadly similar principals. “Is Europe still very regional focus, having started out as a AmCham Slovakia since December 2000, relevant? Yes, it is,” Slegers insists. According Visegrád Four [Czech, Hungary, Poland and fixed subjects, while began his two-year term on January 1 this to its website, ACE today represents the Slovakia] initiative but over the years has in the afternoons we year, having been elected by his AmCham corporate interests of more than 17,000 expanded to cover the region.” entertained our guests, CEO and executive director peers. American and European companies, based in 41 countries and employing more than 20 Thus it was that representatives from Austria, taking them for a walk The economic outlook isn’t special for anyone million people; member companies account Poland, Serbia, Slovakia, and Slovenia joined in Tihany, invited them in Europe right now, and, as the chairman for more than $1.1 trillion in investment on their Hungarian hosts at Balatonfüred (as to enjoy wine tasting says half in jest, just how bad the news is both sides of the Atlantic. the name might imply, it is close to Lake depends on what week this is. But Slegers, a Balaton) in late August. “It is a really useful and even indulge in native of Tyler, Minnesota, says that makes Advocacy is only a small part of what ACE opportunity to share best practices as it has a a Renaissance dinner the core message even more important. does, however. “Our main function is to much more regional focus but includes staff after a medieval martial serve as an umbrella. We are basically a as well. Indeed, there are only three executive “People quite often make the mistake of venue for sharing best practices,” Slegers says. directors attending, whereas it is we who arts show. We learned confusing the possible break up of the euro There are three annual conferences: Each tend to go to the other conferences. Many of a lot from each other with the break up of the EU; it is the euro year AmCham EU hosts ACE in Brussels the staff might not have peers in their own and had a very good zone that is in question, not the EU,” he to discuss common European matters; country; it is great for them to learn from points out. A Greek exit from the former, Washington D.C. is the venue for discussing others’ experiences, and it also makes it much time together. Regional though unwelcome, does not mean the U.S. issues; the third conference is shared easier to make a phone call once you have cooperation between breakup of the latter, he stresses. “We remain around the members, and it focuses on best that personal contact. I certainly found that of AmChams offers some confident that Europe remains relevant, practices. The next of these will be held in great value when I first joined CA E; I learned and actually that the euro remains relevant, Dubrovnik, Croatia, from September 19-21. so much from others who had been executive great opportunities, and though of course there are forces much bigger directors for years before me.” we discussed possible than us in play on this.” “As chambers we are all facing similar ways of identifying challenges, we are all coping with the Advocacy of Europe as a good place to do economic downturn, all facing a challenge to synergies and working business – in ever growing competition maintain membership and remain relevant more closely together with the likes of China and India – is based to member companies.” These are as much for the benefit of our around well-worked themes. The United global problems as they are regional, however, States and Europe are each other’s biggest and thus ACE is also reaching out to LatAm www.amchamsineurope.com memberships. VOICE american chamber of commerce in hungary AmCham news 35

chamber corner patron profile AmCham Romania IBM Hungary

& Structural Funds, PPP & Infrastructure, A lack of transparency, a high level of Taxation and Tourism. bureaucracy, incertitude and sometimes Company name: IBM Hungary inefficient communication within parties Field of business: Information Technology What have you found to be an have been some of the major problems for When established (parent company and Hungarian company): IBM Co.: 1911, IBM HU: 1936 effective approach? businesses in Romania. Biographical details of person answering questions: AmCham Romania believes in the country’s Zsolt Veres (44) has been the General Manager of IBM Hungary since February 2011. He has spent 12 years at IBM and held various amazing potential to become attractive to what is the Number one challenge sales leadership positions at IBM Hungary and IBM CEMA between 1990 and 2002, then gained experience at SAP and Oracle local and foreign investors, economically facing business today? before returning to IBM in 2011. stable and competitive. None of these would We think the economic crisis highlighted be possible without a real dialogue between some problems Romania had, but were the business environment representatives and not that visible. A lack of predictability and local/foreign authorities. stability in the business environment has the Hungarian government and today we offer some of of Hungarian business Thus, we focus on the effective mix of recently been coupled with political friction will benefit from the most the most advanced services practice. Plenty of EU communication and perseverance and which has an effect on investors’ trust and advanced technologies and in the world based on the resources are at disposal for we bring the most relevant examples, best may lead to reconsideration of business best global practices. latest business processes and improving technologies, for practices or recommendations in supporting development plans in Romania for key technologies, such as cloud smart enterprises or city our points of view. Our goal is to make a companies. The “stand-by” mode due to the How has doing computing and business developments. I think we Ms. Anca Harasim contribution in shaping the public policy upcoming parliamentary elections is another business in Hungary analytics. have to make more efforts to agenda and find the best solutions and challenge to economic growth. changed since the exploit them effectively. Advocacy and lobbying measures that stimulate economic growth company was set Other cities across the Having advocacy as one of the major areas and competitiveness. AmCham Romania aims: up here? country are starting to emerge Why is it important of activity, AmCham Romania remains • To be the leading business association It might be a surprise that as attractive locations for to belong to an committed to helping build a local business What has not worked? of choice for American, local and IBM Hungary was established service center investment. For organization such as environment defined by transparency, We have come to the conclusion that international businesses and to promote in 1936. We were among example, IBM is also present AmCham? predictability and stability. This ideal can reactivity is not a real option when advocating the global competitiveness of the country, the very few companies the in the city of Szekesfehervar AmCham is a community only become tangible through concrete in Romania, therefore we are proactive and • To foster business leadership by communist regime didn’t in central Hungary, where we with well-known members steps, like: ‘ahead of the curve’, so we propose solutions upholding the highest standards of dare to nationalize, as our have a large facility providing from every industry, an • elaborating proposals for the next EU to the authorities that are effective and commercial practice, advance the interests machines were just essential IT services to clients. important organization with a Financial Framework (2014-2020); produce concrete results in the economy. and views of its members providing a How would you to handle the statistic data of healthy diversity of companies • coming up with an anti-bribery and The main challenges AmCham Romania reliable forum through which business describe the current the country in the following What are the in terms of size and operation. corruption set of rules; had to face were instability and insufficient persons come together and exchange business environment decades as well. IBM has greatest challenges It is also a platform for us • advocating for a fair, efficient and accessible transparency in the consultation process. information to promote and develop their in Hungary? been investing in workplaces, in doing business in leaders to get to know one healthcare system; Especially in the areas affected by the ongoing mutual interests in Romania; In recent years the Hungarian professional development and Hungary right now? another more closely, to build • getting involved in the modernization of reform process such as healthcare or taxation, • To express the points of view of government has embarked on partnerships throughout this I think the biggest challenge new relationships, sometimes fiscal administration and fiscal legislation we experienced uncertainties and delays or AmCham to the international many important initiatives, time. A whole ecosystem of is still transforming good initiate new cooperations • supporting education and performance our messages were not always taken into business public; such as a reduction in talent and business revolves ideas into real business as well. I’d also stress how through our Knowledge-Based Export consideration in the way we expected. We • To identify by consensus needed administrative burden, around IBM’s operations in results. A lot of smart startup important it is that non- Services Program. found that our results are not proportional improvements to the business labor code reform and tax Hungary. companies come out with profit organizations are also All these matters benefit from our to the resources and investment we made, so environment and advocate them before reforms. While these actions innovative solutions, but represented in AmCham: that members’ national and international in time we had to be more creative in finding Parliament, the Government, and their will help in a lot of areas and IBM was also one of the they lack the space and gives members a chance to get experience and expertize and are addressed the appropriate leverages for an increased agencies; will increase the strength of first companies to set up a opportunity to build a firm better involved with relevant to the authorities through AmCham’s 11 effectiveness of our work. • To enable and facilitate corporate the country, I see areas for service center in Budapest business on these. And social issues. Committees: Capital Markets, Competition civic initiatives, particularly in terms of improvement in the speed of in 2004. We believe that we the large multinational & State-Aid, Corporate Governance, Historically speaking, what Corporate Social Responsibility and other execution. With more than played an important part companies will need to count Energy & Environment, Healthcare, IT&C, particular problems have faced community engagements. 75 years in the country, IBM in the development of the on them as solid partners in Labor & Education, Public Procurement businesses in your country? is a longstanding partner to country’s economic and the future. the Hungarian government. business environment. The As a significant investor in past ten years have seen What one thing Vital statistics Contact details Hungary, we do believe that the establishment of the would you like to see Name of Chamber: The American Chamber of Commerce in Executive Director: Ms. Anca Harasim Romania (AmCham Romania) E-mail: [email protected] the successful execution of service delivery sector in changed above all When founded: 1993 Postal address: 11 Ion Campineanu St, Union International Center, these actions will be necessary the country. In line with others to improve the Number of members (at foundation and currently): 4th Floor, Bucharest - 010031 22 founding members, 310+ current members. Telephone: + 40 21 312 48 34; + 40 21 315 86 94; + 40 31 2 AMCHAM (26 24 26) to drive further possible the development of local business environment? Website: www.amcham.ro investments and we are keen skills, these centers have Grabbing opportunities is to ensure that Hungary and become more sophisticated still not the biggest strength www.ibm.com VOICE american chamber of commerce in hungary New members 37

New members on board Menedzsmentor corporate

DANA Hungary CEO: Dr. Róbert Dobay Salesianer Miettex Phone: +36 70 430-1222 Gyártó Kft. Magyarországi Kft. E-mail: [email protected] Web: www.menedzsmentor.com

Menedzsmentor is one of Hungary’s leading change management companies. Going against the mainstream, they focus on the organization’s and people’s strengths to make sustainable changes instead of solving problems and curing weaknesses. They are valuable partners for strategic project management, leadership development, coaching or build out and rearrangement of business units.

CEO: Mr. Zoltán Király CEO: Mr. Szilveszter Urbán Address: 9027 Győr, Kardán u. 6. Address: 1119 Budapest, Nándorfejérvári út 42-44. Phone: +36 96 515-847 Phone: +36 1 463-7100 Fax: +36 96 515-862 Fax: +36 1 463-7171 E-mail: [email protected] E-mail: [email protected] Pentolt Kft. Web: www.dana.com Web: www.salesianer.hu

Axle and transmission production for heavy vehicles, oil cooler Founded in 1916 as a family enterprise in Vienna and still under family production for passenger cars, spare part distribution. ownership - a strong foundation for reliable textile-rental solutions. The core business of the company is the supply of a complete range of rented textiles. Our range of products and services comprises a textile-rental service for the hotel and catering trades, workwear for industry, trade and commerce, and textile supply for the health services sector. Also business included are cleanroom textiles, washroom hygiene, as well as mats for CEO: Mr. József Kinpán rent and promotional mats. Address: 1031 Budapest, Nimród u. 3. Phone: +36 1 250-8686 Fax: +36 1 250-8687 AR E-mail: [email protected] Tudásmenedzsment Kft. Web: www.pentolt.hu Customized Pentolt Kft. is a professional engineering company in electronic security systems that protect your buildings against fire, intrusion, theft, and similar hazards. We English provide turnkey solutions in the industrial, official, hotel, and administration fields. We are the representative partner and competence center of major American manufacturers such as Fike and Honeywell. Non-profit CEO: Mr. András Koharek Address: 1139 Budapest, Forgách u.19. Reménység Gyermek- Phone: +36 1 782-8919 Fax: +36 1 782-8919 Virtuális Erőmű Program segély és Rehabilitációs E-mail: [email protected] Nonprofit Kft. Alapítvány Web: www.artudasmenedzsment.hu CEO: Mr. Aaron Muhly ARTudásmenedzsment has created taylor made learning environments Address: 1067 Budapest, Eötvös u. 28 .II/2. and effective e-learning courses since 2006. Our e-learning modules Phone: +36 20 568-1237 combine the design, interactivity and feedback to the learner, making E-mail: [email protected] CEO: Mr. Szilveszter Kiss them much more than a simple e-book. Selecting ARTudásmenedzsment Web: www.customized-english.com Address: 8674 Nágocs, Ady Endre utca 11. as your e-learning partner results in high quality knowledge transfer, Program Director: Mr. Attila Gáspár Phone: +36 20 379-6100 on-demand reports, and full control on your learning activities. Offices choose Customized English when the quality of their Postal address: 1253 Budapest, Pf. 5/4. Fax: +36 84 372-744/20 English writing is important to their business partners. We Phone: +36-30-241-0440, +36-1-787-1870 E-mail: [email protected] specialize in customizing training courses for consultants, lawyers E-mail: [email protected] Web: www.remenyseg.hu and managers. In our courses, the students learn to write in English Web: www.virtualpowerplant.hu using a clear, native style. Virtual Power Plant Program™ helps Hungary to fulfil 1/3 of its Reménység Foundation was established in 1991, and always reacts actual obligation towards the European Union to improve energy efficiency social needs. In 1997, the organization started to care for orphaned by 2020. As part of the program an Energy Efficiency Excellence Award children. The foundation became a public benefit organization in 2006. was launched in 2011 to foster awareness in industrial energy efficiency. It works in Nágocs, in Somogy county. Nowadays the foundation has It also creates a knowledge base of opportunities and methodology to institutes for eldery people and addicts (in Pécs). disseminate national and international best practices. VOICE american chamber of commerce in hungary AmChamxxxxx news 39 AmCham events – photo coverage

Leadership Resilience: Business Forum with Surviving and Thriving Zoltán Balog, Minister in Tough Times of Human Resources Tuesday, July 03, 2012 Friday, June 22, 2012 Location: Kempinski Hotel Corvinus, Location: Budapest Marriott Hotel, 1054 1051 Budapest, Erzsébet tér 7-8. Budapest, Apáczai Csere János u. 4. VOICE american chamber of commerce in hungary AmChamxxxxx news 41

Business After Hours at Hard Rock Cafe The flagship sector Budapest of the future: Tuesday, June 12, 2012 Electronics in focus Location:Hard Rock Cafe Budapest Tuesday, June 05, 2012 Location: Budapest Marriott Hotel, 1052 Budapest, Apáczai Csere János utca 4.

AmCham Staff

Chief Executive Officer VOICE american chamber of commerce in hungary Péter Dávid

CEO’S note [email protected] Phone: +36 1 266-9880 Chief Operating Officer, Committee Coordinator László Party Time! Metzing

[email protected] Phone: +36 1 266-9880/316 Membership Manager

Csilla Pál

[email protected] Phone: +36 1 266-9880/319 Events Manager Anita Árvai

[email protected] Phone: +36 1 266-9880/325 Financial Issues, Charity Erika Bosnyák

[email protected] Phone: +36 1 266-9880/312 Marketing and Communications Manager Zsófia Juhász

Dear Reader, please join us on Tuesday, ers have a say, although indirectly only, in [email protected] November 6 in the Corinthia Hotel Buda- deciding who should be the next tenant of Phone: +36 1 266-9880/360 pest at our U.S. Election Night Party! the White House. Simply put, this is a cor- Project Manager Ildikó Regardless of your nationality or politi- nerstone of parliamentary democracy, a Bryják cal preference, you will be immersed in basic political freedom that people hap- the excitement and fun surrounding the pily exercise (there is always this special last few hours of a long contest. By 6:00 jamboree/festival atmosphere). [email protected] am (local time), we should be able to greet Phone: +36 1 266-9880/310 together the new President of the United Judging by their statements and reactions Events & Project Manager States of America. So let’s follow the last mirrored in media, American citizens are Ildikó few miles of the race together on a huge not less disillusioned or divided than the Takács- screen, indulging in culinary delights, sons and daughters of other nations when it Berka answering the questions of a tricky quiz, comes to politics, politicians, political par- winning raffle prizes and mingling with a ties, ideologies, management of the financial [email protected] crowd of 1,500-odd guests. crisis, etc. And still… Phone: +36 1 266-9880/329 Project Manager I believe that this evening is sending a mes- The presidential election in the United Judit SZILÁGYI sage. The person who will be the leader of States is a phenomenal process, reaching a great nation is someone everybody wants its zenith on November 6. The support- to meet, in person or virtually (i.e. via the ing and the entertainment are great, but screens). A contestant from the other big even greater is the fact that choice is being [email protected] Phone: +36 1 266-9880/332 party challenges the incumbent President, made, that no political party can entrench who has been holding this position for four its dominance forever. So please join us to AmCham office contact info years. The beauty of it is in the competition celebrate choice. Cheer up! H-1051 Budapest, Szent István tér 11. Phone: +36 1 266 9880 Fax: +36 1 266 9888 itself. I like competition in general, and in Email: [email protected] this case I appreciate the fact that that vot- Péter Dávid website: www.amcham.hu