Insight To Hungary Finpro Pelkonen 311008

/ 1Finpro/Insight to Hungary / © Finpro ry

O P P O R T U N I T I E S W O R L D W I D E

Hungary:Business opportunity for

Finnish companies?

Tommi PelkonenBusiness ConsultantFinpro Central & Southeast Europe


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Finpro Central and Southeast European Region (CSE)

Sofia


Hungary

Land: 93,030 km²Population: 10,1 million

GDP/capita, at PPP: EUR 16,040

Hungary in the Heart of Europe

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At the beginning of the 20th century the level of development of the Hungarian economy equalled that of Austria, Italy, Spain

after WW I. ⇒Disintegrationafter WW II. ⇒Treaty of Yalta with enforcedinward-looking, protectionist, alien economic system, highly distorted economic structure, isolation from international trends

In 1989 the GDP/capita of these countries were Hungary: ca.2 000 USD Austria: 16 000 ECUItaly:15 000 ECU Spain: 9,950 ECU

In 2002 GDP/capita measured in PPP by World BankHungary: 13 070 USD Austria: 28 910Italy: 26 170 Spain: 21 210

Hungary – Historical Backgrounds


Hardest hit: pensioners, families with many children

Price of Fast Transformation

Unemployment increased from

0,5% to 12%

Real wages decreased by

11 - 17%GDP dropped by

21%


• Sustainable macroeconomic growth, EU-member since 2004

• GDP growth of 1.5% is expected this year with a 3% improvement of the business sector’s performance

• Industrial production growth is estimated to keepits pace at over 4%

• Export growth will be sustained above 10%

• Unemployment rate is expected at 7.4%• Average wage: € 712

• Average inflation rate will be around 6%

GDP

Output

Inflation

Employment and wages

Economy

Growth and Development continues 2008 - b


Another Financial crisis used as transformation agent?


Highway Constructions Until 2015

Motorways

Motorways finished until 2007

Expressways finished until 2007

Motorways under construction

Expressways under constructions

Well-Developed Infrastructure

Source: Ministry of Economy and Transport

/ 10Finpro/Insight to Hungary / © Finpro rySource: Transparency International, 2008

Hungary Boasts Moderate level of corruption in the CEM region


Hungary ranks also relatively well among OECD countries in ease of doing business


IT Competitiveness: Hungary ranks well

Hungary globally #28Finland # 13

Source: Economist Intelligence Unit, 2008.


The number of companies expecting to locate in European cities

Source: European Cities Monitor, Cushman and Wakefield, 2007; FDi Magazine, 2008

Budapest can expect a strong inform of companies in the next 5 years

NOTE ALSO: Budapest ranked among top20 favourable expatriate locations globally!


Debrecen – leading ”business-driven” community

Business-minded Mayor made the change!

Yet, among total of ~3100 communities, Debrecen has become the model to follow

Cívis House" Property Management Inc. Debrecen Heating Service Inc Debrecen Public Transport Inc

Debrecen Medical Bath Ltd DV Info Informatics Ltd

Debrecen City Television Ltd Debrecen Regional Innovation and Industrial Park Ltd

Debrecen Municipal Publishing House AIRPORT-DEBRECE

Friss Radio DEHIR


Cumulated FDIs in Hungary & Finlandin million euros

Sources: ITD Hungary 2008, , Invest in Finland, 2007

Hungary is a Front-Runner as regards to FDI Potential and Performance

~68000


Finno-Hungarian trade balance


350 Exporters to Hungary

Almost 200 companies with Finnish capital

Appr. 20 manufacturing companies

Finnish-Hungarian trade exceeds 1 bn. euro

Total Finnish investments stock to Hungary exceeds

1000 million euros

Finnish companies employ close to 20,000 persons in

Hungary

Finnish Business Presence in Hungary


Nokia Mobile PhonesElcoteqSanoma BudapestPerlosSavcorStora Enso PackagingMecanovaRuukki ConstructionRuukki EngineeringScanfilLindströmHelkama ForsteClairiaHansaprintRaflatacHuurre

Nokia R & DElcoteq3C Hungary (CCC)Agil EightICM

UPMM-RealStora EnsoMartelaRannilaTikkurilaKoneFiskarsWärtsiläEnstoEtc.

Productional R&D / PlanningSales offices

Finnish Business Presence in Hungary

~170 Finnish-originated companies~20k employees in these


Some considerations for Finns

• Competition in Hungary is many sectors is intense• Early FDIs brought multinationals to Hungary

• E.g. retail far more competitive than in Finland•

Financial crisis affecting Hungary – but can also lead to positive change

•Finns are regarded in Hungary very positively (northern cousins)in all areas of business

• YET – Hungarian business culture and habits differ from Finnish in many ways• Negotiations, agreements, language skills, business drive,

personal relationships etc.

Hungary is a very good stepping stone location for central European Regional operations!


Tommi [email protected]

+36 20 250 10 77

http://www.netvibes.com/tommipelkonen

We are happy to work with you in all your business challenges.

Let’s get into international business!www.finpro.fi

Insight To Hungary Finpro Pelkonen 311008

Business

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