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by Dr. Balazs Csorjan, investment promotion specialist
2015 edition
How to select your new electronics
manufacturing site ...
[NOTE]
These slides are
designed not to present
but to read as a
document. Switch to
Fullscreen View, please!
Hungary
Hungary is a low-cost manufacturing location
inside the EU market.
Beside pharmaceutics, automotive, SSC,
tourism ...
Did you know?
Hungary has the largest (25%) share in
2013 in Eastern European electronics
production. The local suppliers,...
HR:
Unemployment
Unemployment is maybe the most relevant
difference between the Eastern and
Western part of Hungary. Weste...
map: KSH
HR: Labor costs
Not independently from unemployment,
Budapest and Western Hungary have
higher labor costs. In num...
Education
The Hungarian vocational education follows the
“German modell”. The so called dual education
means: vocational s...
Labor regulation
The new Hungarian Labor Code has 4 main
benefits for companies:
● it provides more simple termination of
...
Infrastructure: Real
Estate supply
In Central and Eastern Europe, there are approx.
1,000 industrial parks, and 20% of it ...
Real estate costs
Industrial land average sales prices are between 20-30€ per sq.meter in larger cities, and under 20€ in ...
Energy
The Hungarian electricity market is highly regulated by the EU. The EU has a competitive energy
market (theoretical...
Infrastructure:
Motorways
Developed infrastructure makes Central-
and Eastern Europe more attractive location
than other e...
Air access
There are 3 international airports in Hungary.
Budapest Airport: the 2nd largest hub in Eastern
Europe, more do...
Grants by the
Hungarian
government
When it’s about industrial site selection, grants
can be the cherry on the cake. I don’...
Grants by
municipalities
You cannot imagine the creativity of Eastern European
mayors when it’s about investment promotion...
The leading
industry
association
The strongest organization is IVSZ, the
Association of IT, Telecom and Electronics
Compan...
About us
Manufacturing Hungary Blog is an information source about the manufacturing
topics in Hungary and Eastern Europe....
If you liked this presentation,
please do not forget to share
it - maybe your partners will
like it, too.
Otherwise, do no...
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How to select your new electronics manufacturing site in Hungary

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Hungary has the largest electronics manufacturing industry in Eastern Europe, it's point to investigate the country when it's about electronics site selection.

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How to select your new electronics manufacturing site in Hungary

  1. 1. by Dr. Balazs Csorjan, investment promotion specialist 2015 edition How to select your new electronics manufacturing site in Hungary by Dr. Balazs Csorjan, investment promotion specialist 2016 edition
  2. 2. [NOTE] These slides are designed not to present but to read as a document. Switch to Fullscreen View, please!
  3. 3. Hungary Hungary is a low-cost manufacturing location inside the EU market. Beside pharmaceutics, automotive, SSC, tourism and food processing, electronics is undoubtedly one of the leading branches in the country. These few slides try to help you when it’s about electronics industrial site selection.
  4. 4. Did you know? Hungary has the largest (25%) share in 2013 in Eastern European electronics production. The local suppliers, EMS and OEM companies shape two electronics clusters: Eastern Hungarian electronics cluster Bosch, Electrolux, Flextronics, Samsung, National Instruments, Jabil Curcuit, General Electric - just some of the leading elecronics companies which are doing business east from Budapest. The location provides: 30% labour cost discount compared to Budapest; 46% of all Hungarian job seekers live here; 95 developed business parks; 700 kms motorways; awards by Financial Times’ fDi Magaine Next slide: a short company profile: General Electric Hungary Western Hungarian electronics cluster Foxconn, Visteon, Sanmina-SCI, Nokia/Microsoft, Sanyo, Valeo, Phillips - just some of the leading electronics companies which are doing business in the Western- Hungarian electronics cluster, located west from Budapest.
  5. 5. HR: Unemployment Unemployment is maybe the most relevant difference between the Eastern and Western part of Hungary. Western Hungary has shortages in many professions and in many labour market segments, while Eastern Hungary “is a human mine”. With an example: the entire Western Hungarian Region has a similar number of job seekers (30k+) like a single Eastern Hungarian town, Hajduboszormeny and its vicinity (25k).
  6. 6. map: KSH HR: Labor costs Not independently from unemployment, Budapest and Western Hungary have higher labor costs. In numbers, the average monthly gross earnings of employees was 270 thousand HUF (approx. €900) in Budapest, 200 thousand HUF (approx. €670) in Western Hungary, and 180 thousand HUF (approx. €600) in Eastern Hungary, in 2012. In Eastern Hungarian electronics industry, a well-trained, experienced, skilled worker earns monthly gross 150-250k HUF and an engineer between 300-600k HUF. These numbers are similar than in Coastal Chinese cities.
  7. 7. Education The Hungarian vocational education follows the “German modell”. The so called dual education means: vocational school students learn practical skills at companies. There are no relevant differences between Western and Eastern Hungarian vocational education, however the leading universities are in Eastern Hungary (Miskolc, Debrecen, Szeged). Foreign language education at vocational level is an issue, but there are planned projects for low-level, highly industry-specific and large- scale tech language education.
  8. 8. Labor regulation The new Hungarian Labor Code has 4 main benefits for companies: ● it provides more simple termination of employement contract, ● more flexible rules for compulsory minimum salaries, ● more flexible working time, ● and finally: more overtime.
  9. 9. Infrastructure: Real Estate supply In Central and Eastern Europe, there are approx. 1,000 industrial parks, and 20% of it are in Hungary. The number of industrial brown field sites can be estimated for more thousands, however be careful with these old industrial facilities: there can be relevant environmental issues thanks to the communistic heavy industrial track record. Industrial real estate markets are liberalized in Hungary, you can get a property quickly (but hire a local attorney).
  10. 10. Real estate costs Industrial land average sales prices are between 20-30€ per sq.meter in larger cities, and under 20€ in smaller towns. 10€ per sq.meter can be regarded a very good deal, however some municipailities offer a free of charge industrial land. Manufacturing rental market is small outside Budapest, but the average rental fees are between 2.5 and 5 € per sq.meter per month.
  11. 11. Energy The Hungarian electricity market is highly regulated by the EU. The EU has a competitive energy market (theoretically), separating the grid developers and energy providers. (On-site grid development is managed by business parks). As a key account, you can achieve competitive energy prices. EU energy price statistics can be checked here >>
  12. 12. Infrastructure: Motorways Developed infrastructure makes Central- and Eastern Europe more attractive location than other emerging countries of the world. Hungary has 1600 kms (approx. 1000 miles) motorways network, far the largest one in Eastern Europe. The Hungarian motorway system is Budapest-centric, all the ways are going to the capital city.
  13. 13. Air access There are 3 international airports in Hungary. Budapest Airport: the 2nd largest hub in Eastern Europe, more dozen daily flights inside Europe. Debrecen International Airport (Eastern Hungary) has a strong air cargo focus; passenger flights to Western Europe and to Mediterranean Sea. The Fly Balaton Airport in the Western corner of Lake Balaton has a strong low-cost air flight focus.
  14. 14. Grants by the Hungarian government When it’s about industrial site selection, grants can be the cherry on the cake. I don’t suggest to make a decision based on grants only, but why shouldn’t calculate with free money when some governments provide it? The main topics when it’s about grants for manufacturing: job creation subsidies, training subsidies and cash grants. Over €10M investment you can achieve VIP incentives from the Hungarian government.
  15. 15. Grants by municipalities You cannot imagine the creativity of Eastern European mayors when it’s about investment promotion. Some offers a one-year entrance for all your future staff to the matches of local basketball team (“it will support your recruitment”). Others provide international school development projects and family assistance to your expat manager families. The bravest local governments offer special deals. E. g. the municipality of Hajduboszormeny, Hungary, provides a free of charge industrial property for 50 new jobs + a dedicated vice mayor to manage your investment within the Hungarian public administration. By the way, the location is inside the top10 best cost effective regions of Europe (ranked by Financial Times’ fDi Magazine), so beside basketball tickets you can gain pretty good deals on municipal level, too.
  16. 16. The leading industry association The strongest organization is IVSZ, the Association of IT, Telecom and Electronics Companies. Its members cover almost the entire industry, and has working groups for education or EU funding etc. The networking events of IVSZ can be a perfect first step in the Hungarian market.
  17. 17. About us Manufacturing Hungary Blog is an information source about the manufacturing topics in Hungary and Eastern Europe. Our goal is to support site selection team’s job, providing useful information. Dr. Balazs Csorjan, investment promotion specialist, the former regional director of Hungarian governmental investment promotion agency. Dr. Csorjan has taken part in 300+ site selection projects - he knows your questions.
  18. 18. If you liked this presentation, please do not forget to share it - maybe your partners will like it, too. Otherwise, do not hesitate to e-mail your questions: csorjan@m35businesspark.hu or download the file. thnx a lot!

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