O PPORTUNITIES W ORLDWIDE
Hungary:
Business opportunity for
Finnish companies?
Tommi Pelkonen
Business Consultant
Finpro Central & Southeast Europe
Finpro/Insight to Hungary / © Finpro ry / 1

FINPRO – Your Partner in International Success
• Our services are based on recognized expertise.
• The International Trade Center chose Finpro as
the best of the best Trade Promotion
Organizations in the world in 2007
• Excellent local market knowledge;
• Over 50 Trade Centers in over 40 countries. Information and Consulting
Networking Services
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• Hundreds of success stories completed
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• Reliable partner in all stages of
internationalization
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professional and success-oriented organisation
Finpro – opens opportunities worldwide!
Finpro/Insight to Hungary / © Finpro ry / 2

Finpro Central and Southeast European Region (CSE)
Prague
Vienna Budapest
Bucharest
Sofia
Istanbul
Finpro/Insight to Hungary / © Finpro ry / 3

Hungary in the Heart of Europe
Hungary
UA
SK
A
SL RO
HR
YU
Land: 93,030 km²
Population: 10,1 million
GDP/capita, at PPP: EUR 16,040
Finpro/Insight to Hungary / © Finpro ry / 4

Hungary – Historical Backgrounds
At the beginning of the 20th century the level of development
of the Hungarian economy equalled that of Austria, Italy,
Spain
after WW I. ⇒Disintegration
after WW II. ⇒Treaty of Yalta with enforced
inward-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 ECU
Italy:15 000 ECU Spain: 9,950 ECU
In 2002 GDP/capita measured in PPP by World Bank
Hungary: 13 070 USD Austria: 28 910
Italy: 26 170 Spain: 21 210
Finpro/Insight to Hungary / © Finpro ry / 5

Price of Fast Transformation
GDP dropped by Real wages decreased by
21% 11 - 17%
Unemployment increased from
0,5% to 12%
Hardest hit: pensioners, families with many children
Finpro/Insight to Hungary / © Finpro ry / 6

Growth and Development continues 2008 - b
Economy • Sustainable macroeconomic growth, EU-member
since 2004
• GDP growth of 1.5% is expected this year with a 3%
GDP improvement of the business sector’s performance
• Industrial production growth is estimated to keep
Output its pace at over 4%
• Export growth will be sustained above 10%
Employment • Unemployment rate is expected at 7.4%
and wages • Average wage: € 712
Inflation • Average inflation rate will be around 6%
Finpro/Insight to Hungary / © Finpro ry / 7

Another Financial crisis used as transformation agent?
Finpro/Insight to Hungary / © Finpro ry / 8

Well-Developed Infrastructure
Highway Constructions Until 2015
Motorways Motorways under construction
Motorways finished until 2007
Expressways under constructions
Expressways finished until 2007
Source: Ministry of Economy and Transport Finpro/Insight to Hungary / © Finpro ry / 9

Hungary Boasts Moderate level of corruption in the CEM region
Source: Transparency International, 2008 Finpro/Insight to Hungary / © Finpro ry / 10

Hungary ranks also relatively well among OECD
countries in ease of doing business
Finpro/Insight to Hungary / © Finpro ry / 11

IT Competitiveness: Hungary ranks well
Hungary globally #28
Finland # 13
Source: Economist Intelligence Unit, 2008. Finpro/Insight to Hungary / © Finpro ry / 12

Budapest can expect a strong inform of companies in the next 5 years
The number of companies expecting to locate in European cities
NOTE ALSO: Budapest ranked among top20 favourable
expatriate locations globally!
Source: European Cities Monitor, Cushman and Wakefield, 2007; FDi Magazine, 2008
Finpro/Insight to Hungary / © Finpro ry / 13

Debrecen – leading ”business-driven” community
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
Business-minded Mayor made the change!
Yet, among total of ~3100 communities,
Debrecen has become the model to follow
Finpro/Insight to Hungary / © Finpro ry / 14

Hungary is a Front-Runner as regards to FDI Potential and Performance
Cumulated FDIs in Hungary & Finland
in million euros
~68000
Sources: ITD Hungary 2008, , Invest in Finland, 2007 Finpro/Insight to Hungary / © Finpro ry / 15

Finno-Hungarian trade balance
Finpro/Insight to Hungary / © Finpro ry / 16

Finnish Business Presence in Hungary
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
Finpro/Insight to Hungary / © Finpro ry / 17

Finnish Business Presence in Hungary
Productional Sales offices R&D / Planning
Nokia Mobile Phones UPM Nokia R & D
Elcoteq M-Real Elcoteq
Sanoma Budapest Stora Enso 3C Hungary (CCC)
Perlos Martela Agil Eight
Savcor Rannila ICM
Stora Enso Packaging Tikkurila
Mecanova Kone
Ruukki Construction Fiskars
Ruukki Engineering Wärtsilä
Scanfil Ensto
Lindström Etc.
Helkama Forste ~170 Finnish-originated companies
Clairia ~20k employees in these
Hansaprint
Raflatac
Huurre
Finpro/Insight to Hungary / © Finpro ry / 18

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! / © Finpro ry / 19
Finpro/Insight to Hungary

We are happy to work with you in all your
business challenges.
Let’s get into international business!
www.finpro.fi
Tommi Pelkonen
tommi.pelkonen@finpro.fi
+36 20 250 10 77
http://www.netvibes.com/tommipelkonen
Finpro/Insight to Hungary / © Finpro ry / 20