“ A magazine from
SUCCESS STORY: HUNGARY
Gripen offset deal delivers results.
What the magic word The delivery of the ﬁrst
“offset” really means. ﬁve of Hungary’s 14
How it works and Gripen! All delivered
beneﬁts Hungary. during 2006 and 2007.
Tailor made for industrial and economic growth.
Today, offset deals are a natural component of any major defence investment. The Gripen approach
to offset (sometimes called industrial cooperation) is unique. Gripen’s offset philosophy beneﬁts the
entire Hungarian economy, creating a launch pad for sustainable, long term growth. But what does
the magic word “offset” really mean, how does it work and how does it beneﬁt Hungary?
By Tomas Långdahl and Philip Squire
Offset the Gripen way. The Gripen effect.
For Gripen, it’s essential that the oﬀset deal is tailor made By investing in projects with real strategic and commercial
to meet the customer nations’ speciﬁc needs, involving key potential for Hungary, the Gripen oﬀset program contrib-
areas that are important for the nation’s future growth. In utes to the Hungarian economy in ways that go far beyond
close cooperation with their strong network of industrial the measurable generated oﬀset value.
and ﬁnancial partners, they ensure that viable businesses The initial oﬀset investment gets the ball rolling and with
are started, supported and developed within the customer time results can be seen in GDP growth, industrial and
nation. Businesses that, in many cases, are not directly technological development, regional development, new jobs
related to the defence deal. Why? Because Gripen and their and increased tax revenue. As you can see in the diagram
customers want to make sure that the oﬀset program results below, success in one area contributes to growth and
in sustainable, organic growth that beneﬁts the entire nation development for the whole nation. At the end of the aircraft
in a way that will continue to develop and expand, long after agreement Hungary will have beneﬁted by far more than the
the actual oﬀset obligation is fulﬁlled. A long term, tailor 110% of the contract value required by the agreement. As
made commitment to your nation. this growth is the result of a tailor made, sustainable, long
term commitment, the Gripen eﬀect really will continue to
beneﬁt Hungary long into the future.
The Gripen way
Projects using real needs and
business opportunities leading to
sustained organic growth
The traditional approach
Forced or subsidized businesses
which die as soon as the offset
obligation is fulﬁlled
“For many Hungarians the word ‘Gripen’ means
not only a high tech Swedish ﬁghter but also a
fantastic long-term economic development program.
The program is running ahead of schedule and I’m
conﬁdent that the whole country will continue to
beneﬁt, both from the new defence capability that
the Gripen brings and from the long term economic
beneﬁts of the offset program.”
Dr. Szabó Sándor
Head of Offset Section
Ministry of Economy and Transport
Offset in action
Dynamic and adaptable.
A vital part of a successful offset deal is the ability of the supplier to adapt and adjust according
to new business and investment opportunities that will allow Hungary to expand and develop.
This is another area where Gripen excels. In order to take advantage of Hungary’s strategic posi-
tion and skilled and highly qualiﬁed workforce, Gripen has been able to adapt and expand the
offset deal into exciting new areas. The offset program is well ahead of schedule with beneﬁts set
to grow and grow.
By Tomas Långdahl and Philip Squire
Over 70% fulﬁlled. Expansion into new areas.
At the Oﬀset Committee meeting on the 3rd of March 2006, In order to take full advantage of Hungarian strengths:
the Hungarian Ministry of Economy and Transport approved a strategically important position in Europe, excellent
Gripen’s 8th oﬀset claim. According to the decision, the logistics and a highly skilled and rapidly developing work-
oﬀset value approved is worth 57 MEUR. The current status force, the oﬀset deal has been expanded into Information
of the Hungarian Gripen programme now shows that over Technology, Biotech and High Technology. This expansion
70 % of the total obligation has been fulﬁlled, making a into new areas could easily have slowed down the project.
total value of 550 MEUR for the oﬀset activity performed by However, thanks to Gripen’s vast experience and proven
Gripen International in Hungary since December 2001. ﬂexibility, they and their partners were able to move into
these new areas without delay. This meant they were able
to take advantage of new opportunities as they presented
Further development into new sectors.
The Gripen Oﬀset program continues at full speed and is
currently expanding into even more new industry sectors,
such as glass, involving Hungarian small medium enter-
prises (SME) and generating further net export value and
new investments into the Hungarian economy.
Gripen radar PS-05/A-Mk3
provides the Situation Aware-
ness needed for supporting
co-operative and multi-role/
swing-role combat missions.
The radar sensor system
provides data to the onboard
weapons for cueing and
Facts: Ericsson’s multi-mode radar system gives
the Gripen system superior:
• Air-to-air combat, long and short range
(Beyond and Within Visual Range)
• Strike missions over land and sea
• Reconnaissance, mapping, navigation,
• 3rd party, targeting and mid-course updates
• ECCM features (Electronic Counter Counter
Ericsson Hungary is one of the largest companies in the
country and was in fact established as part of another oﬀset
deal in 1991. Since then has it has continued to grow and
today employs some 700 staﬀ, 400 of whom are researchers
in the ﬁelds of mobile telecommunications, the Internet,
and issues concerning traﬃc, structure and the quality of
mobile and traditional telephone networks.
Ericsson is a contributor both to the aircraft itself and to
the Gripen oﬀset program. Ericsson supplies the highly ad-
vanced and proven PS-05/A-Mk3 radar for the Gripen and
the oﬀset program acted as the catalyst for the establishment
of the Ericsson Global Service Delivery Centre (GSDC) in
Budapest in 2004. The centre currently employs 150 experts
and this is set to increase in 2006. The highly qualiﬁed en-
gineers at the GSDC deliver Software Supply & Integration,
Systems Integration Network & Technology Consulting and
Tools & Services Development to the global marketplace.
The Ericsson presence in Hungary is a perfect example of
how oﬀset can act as a catalyst for stable long term develop-
ment. The success story is down to the combination of great
staﬀ, the right products and Hungary’s place in the global
Facts:With over 1,600 employees and sales of SEK 1.5 billion
(2004) Semcon is a leading international design and develop-
ment company. Semcon AB (publ) is listed on the Stockholm
Stock Exchange and has operations in Sweden, Australia,
China, Denmark, Hungary, Malaysia, Norway and UK. In ad-
dition, Semcon AB is represented via partners in seven other
Semcon, a leading international design and development Semcon has partnership deals with Volvo Car Corpora-
company is one of the latest industrial partners to be added tion, Ericsson and General Motors Europe. The company is
to the Gripen oﬀset trade group in Hungary. Setting up an experiencing substantial and stable growth and is an ideal
oﬃce in Budapest is a natural part of Semcon’s strategy for long term partner in Hungary and other markets.
international expansion, recruiting the right people and
providing their customers with the best choice for product Ten Hungarian consultants have been employed and have
development. undergone a ten week training course in Sweden and Sem-
con Hungary has already signed its ﬁrst contract within the
auto industry sector.
Hungary plays a strategic role within the Electrolux Group
both from a production and marketing point of view.
This is proven by the fact that one of the most important
manufacturing bases of the Group is situated in Jászberény.
Today Electrolux Lehel Kft. is one of the biggest industrial
companies in Hungary with a determinant role in the indus-
trial exports of the country.
Facts: In 2005 Electrolux Lehel Kft.’s sales totalled HUF 133
billion.We have manufactured and sold 5.0 million products
for both the export and domestic markets, while we’ve further
increased our proﬁtability. Electrolux Lehel Kft. employs about
3,700 people, making it the largest employer in the Northern
In October 2004, Haldex inaugurated a newly built factory Haldex
in Hungary for ﬁnal assembly and testing. The factory,
Facts:With headquarters in Stockholm, Sweden, Haldex is
which currently covers 5,750 m2, is one of several planned a provider of proprietary and innovative solutions to the
actions to improve the group’s competitiveness and strategic global vehicle industry, with focus on products in vehicles
position. Haldex production and sourcing in Hungary and that enhance safety, environment and vehicle dynamics.
other East European countries is increasing at the same Haldex is listed on the Stockholm Stock Exchange and has
time as the group’s production in Western Europe is being annual sales of nearly 8 billion SEK with 4,600 employees.
reduced. When fully utilized, the factory will employ 140
Halton Clean Air
Halton Clean Air is a leading air ﬁlter manufacturing Halton Clean Air
company and is a market leader in their home country
Facts:The Halton group has some 800 employees,
of Finland. The decision to invest in Hungary and open operations in 15 countries and a turnover of over € 100
a production plant in Vecses made sound sense to this million. Halton Clean Air’s innovative air cleaning solutions
expanding organization. The factory produces air ﬁlters combined with the Halton Group’s global sales network
for central European markets where the main customer and solid customer base means exciting new opportuni-
segments are general industry, commercial buildings and ties for growth in Europe, Asia and the USA.
hospitals. These markets are especially interested in clean
indoor air as a way to protect their most valuable assets:
their staﬀ, machinery and production processes. Hungary’s
ideal geographic situation as well as the highly skilled and
motivated workforce made the choice of Hungary an easy
one for Halton Clean Air.
Take off !
The Gripen aircraft program is right on schedule.
By selecting the Gripen in 2001, Hungary became one of the ﬁrst NATO members to order an
advanced, multi-role, latest generation ﬁghter aircraft for national defence tasks as well as missions
for NATO and the European Union.
By Tomas Långdahl and Philip Squire
The delivery of the ﬁrst 5 of Hungary’s 14 Gripen aircraft
took place in March 2006 and all remaining aircraft will be
delivered during 2006 and 2007.
The Gripen aircraft. Advanced, capable and
The lease of the 14 aircraft will run for 10 years, after which
ownership will pass to the Hungarian government. This
means that Hungary is now one of the ﬁrst nations to have
one of the most advanced combat aircraft in the world.
Gripen is a fully NATO interoperable multi-role ﬁghter,
tailored for the Net Centric Warfare environment of the 21st
Century. Designed to break the cost-curve, it will meet the
demands of current and future threats, be it in the air, at sea
or on the ground. Using the latest available technology, it is
capable of performing an extensive range of air-to-air and
air-to-surface operational missions and employing the latest
Gripen meets the strict requirements of any modern Air
Force for deployability, reliability, and mission eﬃciency
– and to an unbeatable life cycle cost. In addition to the
Hungarian Air Force, Gripen is also in service with the
Swedish and Czech Republic Air Forces and has been
ordered by the South African Air Force. The UK Empire
Test Pilots’ School (ETPS) is operating Gripen as its
advanced ﬁghter platform for test pilots worldwide.
…but still just a part of the total package.
Just like the oﬀset program, the tailor made Gripen aircraft
support program is a large-scale, wide-ranging package. As
well as the actual production, ﬂight testing, and delivery
of the 14 aircraft, the package includes comprehensive
operational and tactical training for pilots and maintenance
technicians. Gripen will also provide Ground Support
Equipment, simulators, Mission Support System (MSS),
spare parts and extensive Integrated Logistical Support
(ILS). The process runs under strict supervision and to the
highest quality standards, ensuring maximum performance,
knowledge transfer and skills within the Hungarian Gripen
team of pilots and ground personnel.
• December 2001 Hungary and Sweden agree to lease Gripen aircraft
• February 2003, Hungary and Sweden agree a lease and purchase contract
• 14 Gripen aircraft, 12 single seat and 2 twin seat to be delivered
• 110% offset program
• January 2005 Roll-out of ﬁrst aircraft
• January 2005 training of the ﬁrst 5 Hungarian Gripen pilots commences in Sweden
• February 2005 ﬁrst ﬂight of Hungarian single seater
• April 2005 training of the ﬁrst 19 Hungarian Gripen technicians commences in Sweden
• October 2005 ﬁrst ﬂight of Hungarian twin seater
• 5 Aircraft delivered March 2006
• Remaining aircraft to be delivered during 2006-2007
The ﬁrst group of 5 Hungarian pilots to start their conversion training to Gripen arrived
in Sweden in January 2005 and the initial group of 19 technicians arrived in Sweden in April
the same year. Both groups worked through a comprehensive program and the Pilots were
trained to become instructor pilots on the Gripen in the Hungarian Air Force. This means
they will be able to return to Hungary and train Hungarian pilots, providing a large degree
of independence for the Hungarian Air Force.
By Tomas Långdahl and Philip Squire
The pilots were based at the Swedish Air Force F 7 wing at
Såtenäs, which is the Swedish training centre for Gripen. They
completed their training in Sweden during January-February 2006
at the Defence Materiel Administration (FMV) test centre at
Malmen. This ﬁnal phase in their Gripen training was the conver-
sion to the latest, most up to date C and D versions of the Gripen,
which is the version the Hungarian Air Force has received. They
also ﬂew their own Hungarian Gripen aircraft before returning
to Hungary. The second group of Hungarian pilots will come to
Sweden for the initial Gripen training in August 2006. As they
will be able to receive instruction on their own Gripen aircraft
from Hungarian pilots in Hungary, they will spend less time in
Sweden than the ﬁrst group.
Training of the ﬁrst 19 Hungarian technicians started in
April 2005 at the SwAF technical school outside Halmstad
in Sweden. Here they commenced their training on Swedish
During January-February 2006 the technicians trained
on their own Hungarian Gripens at the FMV test centre
Malmen, before returning to Hungary. The second group of
Hungarian technicians will come to Sweden in August 2006
to start their training on Gripen aircraft.
The Gripen ﬂight experience
Major General Sági János, Chief of Staff of the Hungarian Army Air Force, had an early chance to
ﬂy a Gripen. This is what he had to say after his ﬁrst ﬂight.
“Gripen is cost effective, safe and easy to operate.
Gripen’s new ergonomic concept means dynamic
manoeuvres are rapid and precise and the aircraft
reacts faster to control inputs, yet you know that
you’re protected by the safety systems at all times. Major General Sági János
In my opinion, it’s the perfect aircraft for the Chief of Staff of the
Hungarian Air Force.” Hungarian Army Air Force
Gripen News is published by Gripen International. Published by Owe Wagermark, Gripen International
Opinions expressed in this magazine are not necessarily those Gripen News, Gripen International, Communications Department,
of the Company. Reproduction of any article is permitted by SE-581 88 Linköping, Sweden • E-mail email@example.com
acknowledgement. Phone +46 13 18 4000 • Telefax +46 13 18 0055 www.gripen.com
Photography: Page 1, Pia Ericsson, FMV. Page 8, Zord Gábor.