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/ 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
/ 2Finpro/Insight to Hungary / © Finpro ry
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.
• Best expertise in internationalization processes• Hundreds of success stories completed• Global industry teams
• Great value for money• Cost-efficient pricing in multi-country projects• Strong drive for results and success
• Reliable partner in all stages of internationalization
• Independent, positively Finnish, honest, professional and success-oriented organisation
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Finpro – opens opportunities worldwide!
/ 3Finpro/Insight to Hungary / © Finpro ry
Prague
Vienna
Bucharest
Budapest
Istanbul
Finpro Central and Southeast European Region (CSE)
Sofia
/ 4Finpro/Insight to Hungary / © Finpro ry
Hungary
Land: 93,030 km²Population: 10,1 million
GDP/capita, at PPP: EUR 16,040
Hungary in the Heart of Europe
SKUA
RO
YUHRSL
A
/ 5Finpro/Insight to Hungary / © Finpro ry
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
/ 6Finpro/Insight to Hungary / © Finpro ry
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%
/ 7Finpro/Insight to Hungary / © Finpro ry
• 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
/ 8Finpro/Insight to Hungary / © Finpro ry
Another Financial crisis used as transformation agent?
/ 9Finpro/Insight to Hungary / © Finpro ry
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
/ 11Finpro/Insight to Hungary / © Finpro ry
Hungary ranks also relatively well among OECD countries in ease of doing business
/ 12Finpro/Insight to Hungary / © Finpro ry
IT Competitiveness: Hungary ranks well
Hungary globally #28Finland # 13
Source: Economist Intelligence Unit, 2008.
/ 13Finpro/Insight to Hungary / © Finpro ry
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!
/ 14Finpro/Insight to Hungary / © Finpro ry
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
/ 15Finpro/Insight to Hungary / © Finpro ry
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
/ 16Finpro/Insight to Hungary / © Finpro ry
Finno-Hungarian trade balance
/ 17Finpro/Insight to Hungary / © Finpro ry
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
/ 18Finpro/Insight to Hungary / © Finpro ry
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
/ 19Finpro/Insight to Hungary / © Finpro ry
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!
/ 20Finpro/Insight to Hungary / © Finpro ry
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