Transcript Document 7161703

Hungary –
the added value
Budapest, 6 June 2006
Presentation by
Ildikó KUKUCSKA
Senior Consultant
ITD Hungary
Agenda
1. About ITD Hungary, what can we offer?
2. Hungarian Economy, Foreign Direct Investments in
Hungary
3. Is Hungary still competitive?
4. Which sectors are perspective?
5. New Economic Policy in Hungary
ITD Hungary
The Hungarian Investment and Trade Development Agency is the agency
of the Hungarian Government for foreign investment promotion and trade
development.
Network:
•
Central Office in Budapest
•
6 Regional Offices
•
54 Foreign Trade Offices
•
8 Representative Offices in the border regions of neighbouring countries
Main Tasks of ITDH
1. Investment promotion
2. Trade development
3. EU integration-oriented SME development
4. Hungarian capital export promotion
Complimentary services for foreign investors:
In the preparatory phase:
 General and detailed information
 Tailor-made site proposals
 Organizing detailed program for the investors’ visits in Hungary
– site visits
– meetings
– reference visits
– introducing potential Hungarian suppliers
In the realization phase of the project:
 Accelerating permitting procedures
 Assistance in incentive applications
 Organizing press conferences, ground breaking ceremonies
Follow-up services
Some important features of
Hungarian economy

Heavy reliance on FDI as a driving force in the economy

High integration with the EU in terms of trade

Gross output per worker grew 2.4 times since 1989

Hungarian financial system is one of the most developed ones in
Central Europe

Legal framework conforms to international standards

Well-prepared and motivated labour force provides a strong base
for foreign business operations
Source: WIIW
Dynamic Macroeconomic Growth
2001
2002
2003
2004
2005
Gross domestic product
(%)
3.8
3.5
3.4
4.6
4.1
Industrial production (%)
3.6
2.8
6.4
7.4
7.3
Exports (% - volume)
7.7
5.9
9.1
18.4
10.8
Imports (% - volume)
4.0
5.1
10.1
15.2
5.3
Consumer prices (%)
9.2
5.3
4.7
6.8
3.6
Balance of foreign trade*
-2.5
-3.4
-4.2
-3.9
-2.8
Current account balance*
-2.0
-5.0
-6.4
-7.1
-5.1
Unemployment rate
5.7
5.9
5.8
6.1
7.2
* in billion Euro
Source: Hungarian Central Statistical Office
Commodity pattern of external trade
export
Agricultural products
6,1 %
Raw materials
2,1 %
Energy
2,7 %
Manufactured goods 28,0 %
Machinery, equipment 61,1 %
import
4,0 %
1,7 %
10,3 %
33,4 %
50,6 %
Foreign trade turnover by trading
partners
4,4%
0,7%
3,6%
Exports
11,9%
8,7%
70,8%
EU-15
New EU-Members
Extra-EU (Europe)
Asia
America
Others
2,2%
14,5%
11,5%
62,5%
9,2%
EU-15
New EU-Members
Extra-EU (Europe)
Asia
America
Others
Imports
Cumulated FDI* in Hungary
1990-2005, in million euros
51525
45 000
40 000
35 000
30 000
25 000
20 000
15 000
10 000
5 000
0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Source: National Bank of Hungary, Ministry of Economy and Transport
* Including reinvested earnings from 1995
Annual FDI inflow to Hungary, in million
euros
6000
5500
5000
4500
4000
3500
3000
2500
2000
1500
1000
500
0
-500
1995
1996
1997
1998
1999
2000
reinvested earnings
Source: National Bank of Hungary
2001
2002
2003
total FDI inflow
2004
2005
FDI Stock in Hungary by Sectors
Services
49%, out of
which:
Other
3%
Trade: 10.1%
Transport, telecom: 9.9%
Finance: 10.5%
Manufacturing,
44%, out of
which: Food: 5.2%
Chemical: 5.7%
Electronics: 8.8%
Automotive: 10.9%
Business services: 16.8%
Source: National Bank of Hungary
Energy, water
supply
4%
FDI stock in Hungary
FDI stock
Denmark
million euro
200
150
100
50
0
1998 1999
2000
2001 2002
year
2003
2004 2005
Major Danish investors in Hungary
•
•
•
•
•
•
•
•
•
Velux –
Grundfos –
Coloplast –
Nordisk-Wavin –
SOS/Falck –
Inreco –
Rockwool –
Danaeg Products –
Novo-Nordisk –
sky-lights
electric engines
plastic health care products
rubber and plastic products
ambulance service
road construction
insulation material
pasteurised liquid eggs
pharmaceutical products
Central Hungary Wins Award for
Second Best Location in Europe
CATEGORIES & CRITERIA:
• Economic potential
Economic potential
GDP
Level of inward investment
• Cost effectiveness
Office & Industrial rent
Salaries
Manual labour availability
• Human resources
Universities
Percentage of the population with a degree
• Telecommunications and IT infrastructure
Telecommunication charges
Telephone and broadband internet usage
• Quality of life for expatriates
Natural & cultural heritage
Entertainment & Leisure Facilities
Educational, healthcare & accommodations services for expatriates
• Transport
• Security
• Best FDI promotion strategy
Promotion strategy
FDI deals
Infrastructure and urban planning projects
Source: fDi Magazine
Overall Competitiveness, 2006
USA
1 (1)
Finland
10 (6)
13 (17)
Austria
Czech Republic
31 (36)
France
35 (30)
Spain
36 (38)
Slovakia
39 (40)
Hungary
41 (37)
Portugal
43 (45)
45 (52)
Slovenia
56 (53)
Italy
Poland
58 (57)
0
(2005 rankings are in brackets)
20
40
60
Source: IMD
80
100
FDI Confidence Index, 2005
China
1 (1)
United States
3 (2)
Hungary
11 (19)
Czech Republic
12 (14)
France
14 (6)
0
(2004 rankings are in brackets)
0,5
1
1,5
Source: AT Kearney
2
2,5
Ease of Doing Business
Business legislation evaluated by 4,000 senior executives
in 60 countries and regional economies worldwide
6.14
Hungary
6.08
Austria
6.00
Slovakia
4.52
Czech Republic
0
1
2
3
4
5
Source: IMD
6
7
Major Electronics Parts
Manufacturers
Cca. 42% of total Hungarian export in 2005
Production value: 18.8 billion EUR (28% of the total)
Serbia & Montenegro
Nearly 500 foreign electronic and optical
equipment producers are present in Hungary,
employing more than 100,000 people.
Source: Hungarian Central Statistical Office, 2005
Major Automotive
Manufacturers in Hungary
SAPU/Schefenacker
Alu-Öntő Kft.
Autokut
Avvc
Beroha
Excel Csepel
Fémalk
GE
Ikarus
Perion
Tauril
Temic Telefunken
UBP Csepel
Webasto
Vogel&Noot
Audi
Erbslöh
Magna Steyr
Philips APM
Rába
Semperform
Ortech
SEWS
Autoliv
Borg Warner
Wescast
Asahi Glass
Bridgestone
Euro Exedy
Souftec
Diamond Elec.
Suzuki
Pemü,
Johnson
Controls
Prec-Cast
Saia-Burgess
Bosch
Mitsuba, Salgglass
Delphi-Calsonic
Lear,
Stanley Electric
Bosch
Zollner
Bombardier Saia-Burgess Akzo-Nobel Coating
EMT Clarion
Lear
Zeuna Starker
Schwarzmüller
Hokushin
Ibiden
Le Bélier
Eybl
Delco-Remy, Exir
FAG
Eagle Ottawa
Isringhausen
Le Bélier
Daewoo
Ballbearings
Vogel-Sitze
Emika
Eybl
Bakony Rt.
Continental
Teves
Valeo
Autoelectric
Eismann
Hübner
Michelin
Phoenix
Vibroacustic
Musashi
GM Opel
BPW-Rába
Delphi-Packard
Eybl
LuK Savaria
Bosch
Firth Rixton
Leoni
ZF Hung.
Mezőgép-Linamar
Benteler
Hammerstein
Michels
SEWS
Alcoa
Denso
Loranger
Videoton
Visteon
Eckerle
Knorr-Bremse
ThyssenKrupp
Major Shared Service Centers in
Hungary
Hungary is an ideal site for conducting
clinical research
Hungary has a solid record of attracting and conducting
international clinical trials, with over 250 clinical trials performed
each year – an outstanding number compared to Hungary’s
population.
Reasons for conducting clinical trials in Hungary:
• Rapid and reliable recruitment of study population
• Investigators are motivated and qualified
• High Quality of Data
• Reasonable price advantage
• Qualification of local study monitors is above international
average
Clinical Research CEE Center of AstraZeneca Hungary co-ordinating the work of
 160 well-trained AstraZeneca experts located in seven countries of the region.
 AstraZeneca spends approx. € 6 million on clinical research in Hungary alone,
 which also covers the work of 1,000-1,200 colleagues.
Hungary an ideal location for
biopharmaceutical manufacturing
Sanofi-Aventis
 The Hungarian research unit is currently involved,
 in 45 Sanofi-Aventis development projects,
 Including initial research and clinical testing,
 The company employs 2,300 people in Hungary,
 invested more than €400 million in its Hungarian subsidiary since 1991.
Teva Hungary, a subsidiary of number two generic company Teva Pharmaceuticals,
 is to build a €75 million factory for the production of active pharmaceutical ingredients
(APIs) in Sajobabony, Hungary,
 60-100 people will be employed at the facility,
 and its production will be mostly exported,
Teva started manufacturing in Hungary in 1995 and now employs 2,300 people there.
Multinational Companies
conducting R&D in Hungary
Automotive
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Audi
Continental Teves
Denso
Draxlmaier
EDAG
General Motors
Knorr – Bremse
Magna Steyr
Michelin
Remy Automotive
Temic-Telefunken
ThyssenKrupp
Valeo Auto-Electric
Visteon
W.E.T.
Zeuna Stärker
ZF Hungária
Electronics
•
•
•
•
•
•
•
Elcoteq
Electrolux
Flextronics
GE Lighting
Philips
Samsung
Solectron
ICT
•
•
•
•
•
•
•
•
Cisco
Ericsson
IBM
Nokia
SAP
Siemens/Sysdata
TATA-Consulting
T-Systems
Life science
•
•
•
•
•
•
Astra-Zeneca
GE Medicor
Novartis-Sandoz
Sanofi-Aventis
(Chinoin)
Servier (Egis)
Teva-Biogal
Machinery
• AFT
• Bosch Power Tool
• Zenon
Logistic Centres in Hungary
Investment Incentive System I.
I. Direct Subsidies for Investments
1.
Tender applications in the framework of the
Economic Competitiveness Operative Program (ECOP)
2.
Special incentive package for strategic investors
3.
Subsidy for employment creation and training
(in the responsibility of the Ministry of Employment and Labour)
II. Tax-related Incentives
(in the responsibility of the Ministry of Finance)
III. Supplier Development Program
Extent of Government Support by Hungarian Regions
Investment Incentive System II.
Special Incentive Package for Strategic Investments
If the investment volume reaches
• EUR 10 millions of projects of the manufacturing industry, logistics and
in case of establishing regional corporate service centers
The Hungarian Government may decide on granting
a customized incentive package and VIP treatment
Within the customized incentive package more favourable and significant
subsidy is available than through ECOP tender applications.
Important condition: in the field of LOGISTICS at least 10 persons should be
employed
New Government in June 2006
PROGRAM of the NEW GOVERNMENT
Investment Promotion Remains one of the Main Goals of
the Economic Policy
- Infrastructure Development
- Labour Force Development Meeting Requirements of
Companies
- Incentives, concentrating on priority sectors
Priority Sectors
● Electronics
● Automotive industry
● Pharmaceautical industry
● Biotechnology
● Bioenergy
● ICT
● Finacial and Logistical Services
● Tourism
Environmental protection in the Program
of the New Government
There are 13 points for the cleaner and healthier
environment in the new Program . Among others:
● Increase of share of renewable energy sources
● Development of
- drinking water’s quality in different regions
- Sewage water treatment
- Solid waste treatment
- safety from floods and inland waters
● Elimination of remains of old pollutions
etc.
Contact:
ITD Hungary
1061 Budapest, Andrássy út 12.
Mrs. Ildikó KUKUCSKA
Senior Consultant
Phone: 473-82-14
E-mail: [email protected]